276 So.3d 626
La. Ct. App.2019Background
- Sally Pulver Dalesandro (settlor) created the Sally H.P. Ruel Inter Vivos Revocable Trust in 1994; Dr. Robert Ruel Jr. was income beneficiary and plaintiffs (his children) were principal beneficiaries; James Scott Ruel became trustee in 2002.
- Section 2.1 provided trust termination upon the death of the Settlor's husband or when beneficiaries attained age 35, whichever last occurred; Dr. Ruel died on Oct. 10, 2011 and plaintiffs were then over 35, so plaintiffs contend the trust terminated then and trust property vested in them.
- In Jan. 2012, documents purporting to revoke the trust and transfer trust immovables to Dalesandro were executed; she later sold one property and attempted to sell another, but title problems arose prompting plaintiffs to sue (2013) for declaration that the trust terminated at Dr. Ruel's death and to recover property/proceeds.
- Dalesandro filed reconventional demands alleging reformation/correction of the trust (Act of Correction executed in 2016 adding “the Settlor”) and, in an October 11, 2016 reconventional demand, asserted claims for breach of warranty, breach of fiduciary duty, and attorneys' fees against trustee Scott Ruel and the other plaintiffs (as co-conspirators).
- Plaintiffs moved for partial summary judgment; the trial court granted summary judgment dismissing most of Dalesandro's October 11, 2016 claims against plaintiffs; later a jury found the Act of Correction did not correct a clerical error and that Dalesandro failed to prove she intended the trust to continue for her life, but the trial court granted JNOV for Dalesandro; this court reinstated the jury verdict in a companion appeal, rendering the Act of Correction invalid.
- Because the trust terminated at Dr. Ruel's death, the Fifth Circuit held Dalesandro's claims based on trustee actions after termination (including asserted fiduciary-duty claims against plaintiffs) were without merit and affirmed the partial summary judgments dismissing those claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trustee owed fiduciary duty to settlor of a revocable trust | Dalesandro: trustee owed fiduciary duty to settlor (she could revoke per §1.3); other jurisdictions/Restatement/UTC support duty to settlor | Plaintiffs: Louisiana Trust Code does not create fiduciary duty from trustee to settlor; trustee duties run to beneficiaries; no basis for fees | Court: Did not decide novel duty question; held unnecessary because trust terminated at decedent's death, so settlor's post-termination fiduciary claims fail |
| Whether plaintiffs are solidarily liable for trustee's alleged breaches | Dalesandro: plaintiffs colluded with or induced trustee to breach duties and thus are solidarily liable | Plaintiffs: once trust terminated, Dalesandro had no trust-based rights; claims baseless | Held: Claims dismissed—plaintiff rights ceased at termination, so solidarity theory fails |
| Validity of Act of Correction to add "the Settlor" to §2.1 | Dalesandro: Act corrected clerical error to preserve trust until her death | Plaintiffs: Act is invalid; trust terminated per original wording | Held (in companion appeal reinstated): Act did not correct a clerical error; trust terminated at decedent's death; therefore Dalesandro's related claims fail |
| Entitlement to attorneys' fees and other new tort claims raised on appeal | Dalesandro: asserted abuse of process, malicious prosecution, estoppel by warranty, and fees under CCP art. 863 | Plaintiffs: those theories were not raised below and are not proper on appeal | Held: Court declined to consider new theories raised for first time on appeal and affirmed dismissal of fee/tort claims pleaded below as tied to post-termination trust rights |
Key Cases Cited
- Bell v. Parry, 61 So.3d 1 (La. App. 5 Cir. 2010) (summary judgment standard explained)
- Babino v. Jefferson Transit, 110 So.3d 1123 (La. App. 5 Cir. 2013) (summary judgment burdens and proof obligations)
- Breaux v. Fresh Start Properties, L.L.C., 78 So.3d 849 (La. App. 5 Cir. 2011) (appellate de novo review of summary judgment)
- Quality Paint Hardware & Marine Supply, Inc. v. [unnamed party], 123 So.3d 780 (La. App. 5 Cir. 2013) (issues not raised below generally not considered on appeal)
- L.R.F. v. A.A., 133 So.3d 716 (La. App. 5 Cir. 2014) (preservation rule for appellate review of new claims)