Wilbourn v. Wilbourn
106 So. 3d 360
Miss. Ct. App.2012Background
- Deanna Wilbourn and her son Richard III were co-trustees of Marital Trust B, holding 41,910 shares of the holding company stock; income to Deanna, remainder to Richard III, Elizabeth, and Garnett.
- Richard III’s secret tape recordings of Deanna and alleged mistrust of management led to family disputes over control of the Bank and voting of the Trust B shares.
- After 1999–2003 restructuring, the Wilbourns controlled the Bank and holding company; Richard II appointed Richard III to the board and as chair, with Deanna and siblings supporting the family’s control.
- In 2007, after a voting impasse, Deanna, Elizabeth, and Garnett attempted to remove Richard III as co-trustee; Richard III sought to be removed instead, or for Deanna to be replaced.
- April 2007 written notice of removal of Richard III as co-trustee was issued; May 2007 suit followed, seeking declarations, removal, accounting, and fees.
- Chancellor’s 71-page judgment (affirmed on appeal) found multiple grounds for removing Richard III due to breach of fiduciary duties and hostility that defeated the trust’s purpose.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Richard III’s removal as co-trustee was proper | Richard III argues no valid basis; evidence shows bias and irrelevant input; removal improper | Chancellor properly found breaches and hostility justifying removal | Removal affirmed |
| Whether Richard III’s secret tape recordings justified removal | Recordings were improper and unethical | Recordings showed breach of loyalty and undermined trust administration | Secret recordings supported removal |
| Whether the January 30, 2007 settlement letter was admissible | Letter should be barred under Rule 408 as compromise evidence | Letter relevant as instrumentality showing misuses of co-trustee power | Admissible for purposes of proving breach of fiduciary duties |
| Whether the 1999 Memorandum of Agreement improperly imposed duties on Richard III | Agreement cannot create extra co-trustee duties | Evidence of context; did not add duties but showed intent | Properly considered for context; did not abrogate terms; removal affirmed |
| Whether hostility between Richard III and beneficiaries defeated the trust’s purpose | Hostility was created by family; not a basis for removal | Hostility evidenced breach of duties; defeats trust purpose | Hostility supported removal under governing standards |
Key Cases Cited
- Walker v. Cox, 531 So.2d 801 (Miss.1988) (hostility of trustee toward beneficiaries can justify removal)
- Magee v. Estate of Magee, 236 Miss. 572, 111 So.2d 394 (Miss.1959) (court may remove testamentary trustee to protect beneficiaries)
- McWilliams v. McWilliams ex rel. Weathersby, 994 So.2d 841 (Miss.Ct.App.2008) (conflict of interest may warrant removal; hostility context considered)