William C. Forbes and Julia Forbes, Trustees of the Beckton Ranch Trust U/A/D April 1, 1920
2015 WY 13
| Wyo. | 2015Background
- Beckton Ranch Trust (BRT) formed in 1920 to hold land and water interests in Sheridan County for Forbes descendants.
- Spike Forbes challenged trustees Cam, Julia, Sarah, and Edith after Cam and others took actions following Spike’s 2007 resignation as trustee.
- District court removed Cam and Julia based on alleged breaches of the duty of loyalty; it did not remove Sarah and Edith.
- Key transactions at issue include the 2007 Cam land exchange, the 2010 Cave Creek land purchase via new shares, and the 2010–2012 conservation easement and related share-water dealings.
- Water-right petitions (place-of-use changes) were undisclosed in discovery and not pled in the complaint; the district court admitted related exhibits, which on appeal were deemed an abuse of discretion.
- Wyoming Supreme Court reverses removal of Cam and Julia, affirming no removal of Sarah and Edith, while recognizing breaches of loyalty but finding no demonstrated abuse of power or serious harm to the trust estate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was removal of Cam and Julia reversible due to unpled water-right claims? | Spike asserted breach of loyalty; water rights were part of the claim. | Trustees did not plead water rights as grounds; admissibility and notice issues undermine removal. | Removal reversed; water-right issue not properly pled. |
| Did Julia profit from conservation easement transactions? | Julia monetized via additional shares in the BRT through the easement sequence. | Record shows no proven personal profit; appraisals inconclusive, but no intent to gain. | No proven personal profit; breach of loyalty established but not removal. |
| Did district court err in finding Cam and Julia improperly issued new BRT shares? | Trustees exceeded powers; shares were issued improperly in breach of loyalty. | Trustees had broad authority to issue shares under the trust instrument. | District court erred; issuance of new shares was within trustee powers. |
| Was admission of undesignated expert testimony and valuation methods reversible error? | 2013 appraisal should have been designated and excluded; valuation was unfair. | Appraisal testimony relevant and within trial strategy; designation not strictly required. | Court abused discretion admitting 2013 appraisal; however, this did not mandate reversal of removal outcome. |
Key Cases Cited
- In re Hartt Estate, 295 P.2d 985 (Wyo. 1956) (removal uses Hartt standard; removal is harsh and should be for gross misconduct)
- Kerper v. Kerper, 780 P.2d 923 (Wyo. 1989) (good-faith standard; trust provisions limit liability and affect duties)
- Navarro Savings Ass’n v. Lee, 446 U.S. 458 (U.S. 1980) (Massachusetts Trust framework; certificates resemble stock; broad-power interpretation)
- Restatement (Second) of Trusts § 170, not applicable (not applicable) (duty of loyalty to administer trust solely in beneficiaries’ interest; self-dealing prohibition)
- Lynch v. Patterson, 701 P.2d 1126 (Wyo. 1985) (notice pleading sufficiency when facts lie in defendant's knowledge; broad breach allegations allowed)