329 Ga. App. 768
Ga. Ct. App.2014Background
- Four Rollins siblings sue their father Gary W. Rollins, uncle R. Randall Rollins, and trustee Henry B. Tippee for breach of trust and fiduciary duty, seeking an accounting of trust assets.
- Trusts at issue include the Rollins Children’s Trust (RCT) and nine Subchapter S-Trusts; Family Entities (ROL, Inc.; LOR, Inc.; Rollins Grandchildren’s Partnership; Rollins Holding Company; Rollins Investment Fund) are held within these trusts and funded by minority interests.
- Supreme Court of Georgia held that, where the trustee controls a corporate entity in which the trust owns a minority interest, the trustee is held to a corporate-level fiduciary standard for corporate duties/actions, not a trustee-level standard.
- Before remand, lower court had granted summary judgment denying accounting for Family Entities and applying trustee-level standards; on remand, the court must apply the corporate-level standard to determine duties.
- There is ambiguity as to the capacity in which Gary and Randall acted (trustees, managing partners, or corporate officers/directors) when amending the RIF partnership and approving distributions, requiring factual questions for the jury.
- The case has a lengthy history of prior rulings (Rollins I and Rollins II) and centers on whether an accounting to beneficiaries is proper and whether distributions were made in good faith under an equitable framework.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What fiduciary standard applies to actions at the Family Entity level? | Beneficiaries urge corporate-level standard via Rollins II. | Appellees argue ordinary trust/managerial standards or business judgment. | Corporate-level standard applies; fact questions remain. |
| Did unilateral amendments to the RIF partnership violate fiduciary duties or require all-partner consent? | Beneficiaries contend amendments were outside authority and misleading. | Gary/Randall contend consent not required under partnership/indentures. | Fact questions preclude summary judgment; capacity (trustee vs managing partner) unresolved. |
| Does the business judgment rule shield the Appellees’ distributions at the entity level? | Distributions were altered to benefit certain lines; lack of due care/diligence. | Decisions were made in good faith and with diligence; protected by rule. | Incorporates corporate-level standard; requires fact-finding on good faith/diligence. |
| Was there bad faith or breach of trust in the code of conduct distribution program and related distributions? | Program conditioned distributions on attendance and conduct; misrepresented trustees. | Program framed as discretionary corporate-like governance within trust. | Fact questions remain; jury must determine roles and bad faith. |
| Should the trial court be allowed to reconsider an accounting of the Family Entities? | Beneficiaries seek accounting of Family Entities within trusts. | Equitable discretion governs; prior ruling may be reconsidered under new standard. | Remand to reassess accounting under corporate-level fiduciary standard. |
Key Cases Cited
- Rollins v. Rollins, 294 Ga. 711 (2014) (corporate-level fiduciary standard for corporate duties/actions; remand)
- Rollins v. Rollins, 321 Ga. App. 140 (2013) (initial opinion applying trustee-level standard; reversed/remanded)
- Cowart v. Widener, 287 Ga. 622 (2010) (de novo review of summary judgment on fiduciary issues)
- SunTrust Bank v. Merritt, 272 Ga. App. 485 (2005) (elements of breach of fiduciary duty)
- Hanson v. First State Bank and Trust Co., 259 Ga. 710 (1989) (fiduciary duties of managers/directors; utmost good faith and loyalty)
- Conner v. Hart, 252 Ga. App. 92 (2001) (partnership fiduciary duties; utmost good faith)
- Meinhard v. Salmon, 249 N.Y. 458 (1928) (duty of candor and information within joint ventures)
- Shadix v. Carroll County, 274 Ga. 560 (2001) (remittitur/consistency with Supreme Court rulings on remand)