RELIANCE TRUST CO. v. Candler
315 Ga. App. 495
| Ga. Ct. App. | 2012Background
- Reliance Trust Co. served as co-trustee with Buddy Candler of a revocable marital trust; Buddy had income and limited corpus encroachment rights.
- The encroachment provision gave the trustee discretion to pay corpus to Buddy when needed for support, with discretion over the corpus at death.
- Buddy exercised encroachment requests repeatedly before his 2005 death, depleting the trust corpus from $2.1M to $838,762.
- Buddy's eight grandchildren were designated as remainder beneficiaries; they sued Reliance in 2007 for breach of trust, waste, and attorney fees.
- A jury awarded the grandchildren $1,140,924.41; Reliance moved for new trial and appealed on multiple grounds, including validity of the verdict and the trial court’s rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the trial court err in denying summary judgment on abuse of discretion? | Reliance abused discretion; there was evidence of arbitrariness and oppression. | No abuse; distribution decisions were within trustee discretion. | No reversal; summary-judgment issue moot after trial. |
| Was the denial of Reliance's motion for a new trial an abuse of discretion? | Evidence supported breach and damages; new trial should have been granted. | There was substantial evidence of breach; denial was proper. | No abuse; damages supported by evidence ($1,140,924.41). |
| Was excluding testimony about Buddy's competency litigation proper? | Prior litigation relevant to credibility of trustee. | Not probative to encroachment issue; risk of prejudice. | Proper exercise of trial court discretion; not reversible. |
| Did the trial court err by directing the jury not to be bound by the former income definition and by refusing to charge on former principal? | Definitions crucial to determining breach under encroachment. | Jurisdiction allowed flexible construction; not legally erroneous. | No reversible error; instruction aligned with trust intent. |
| Was interest calculated from each encroachment date rather than Buddy's death correct? | Damages accrue from breach per OCGA; interest should run from breach. | Interest analogized to breach-date rule. | Correct to apply legal rate from each breach date. |
Key Cases Cited
- Green v. Key Custom Homes, Inc., 302 Ga.App. 800 (2010) (standard for reviewing a denied new trial; evidence sufficient to sustain verdict)
- McPherson v. McPherson, 307 Ga.App. 548 (2011) (trustee abuse of discretion includes arbitrariness and oppression; encroachment standards)
- Smith v. Saulsbury, 286 Ga.App. 322 (2007) (relevance and admissibility of evidence; discretionary powers in trusts)
- Trotman v. Velociteach Project Mgmt., LLC, 311 Ga.App. 208 (2011) (proper scope of charges and adjustments to evidence; not reversible error)
- Allen v. Allen, 198 Ga. 269 (1944) (date from which interest accrues in breach of trust (breach-rate rule))