Wilson v. Dallas
403 S.C. 411
| S.C. | 2011Background
- James Brown died December 25, 2006; his estate size ranged widely, with disputes over distribution to charitable and family trusts.
- Brown’s will (2000) left personal effects to six children and poured remainder into The James Brown 2000 Irrevocable Trust, funded with Brown’s residence and other assets.
- The 2000 Irrevocable Trust and will contained no-contest clauses disfavoring challenged beneficiaries; brown intended the bulk of wealth for the Charitable Trust.
- Appellants Buchanan and Pope served as special administrators and later as personal representatives and trustees; the Attorney General (AG) intervened to protect charitable interests.
- A settlement agreement was negotiated (Aug. 10, 2008) under AG direction; it was submitted for court approval under § 62-3-1102 after four months of hearings (2009).
- Circuit court approved the settlement May 26, 2009, created a Settlement Entity and a New Charitable Trust, and provided for AG-controlled trustee appointments; Appellants were removed as fiduciaries.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to appeal the settlement and removals | Appellants have fiduciary standing to appeal under trust provisions and § 62-7-405(c). | Appellants lack direct stake; no consent or vote in the settlement; standing questioned. | Appellants have standing to appeal in fiduciary capacity. |
| Authority and eligibility of § 62-3-1102 to approve a settlement | Moran allows trust beneficiaries to participate; AG represents charitable beneficiaries; notice given; all interested parties signatories required. | Trust did not participate; AG authority to direct settlement; trustees cannot veto. | Settlement eligible for court consideration under § 62-3-1102; AG represented charitable beneficiaries. |
| Two-part test: good faith controversy and just and reasonable | Contests were in good faith and the settlement was just and reasonable to prevent litigation. | Good faith dubious; even if good faith existed, the agreement was not just and reasonable given Brown’s intent. | Circuit court erred in finding a just and reasonable settlement; good faith controversial and not just or reasonable. |
| Removal of Appellants and appointment of Bauknight | Removal justified by irreconcilable fiduciary conflicts and need for professional management. | Removal procedures followed; court can replace fiduciaries; Bauknight interim role valid. | Removal affirmed; however, Bauknight’s appointment is voided pending proper fiduciary succession on remand. |
Key Cases Cited
- In re Estate of Riley, 266 P.3d 1078 (Ariz. Ct. App. 2011) (settlement eligibility requires good faith and proper compliance with statute)
- University of Southern California v. Moran, 365 S.C. 270, 617 S.E.2d 135 (S.C. Ct. App. 2005) (trust beneficiary vs. estate; trustee can compromise but notice required)
- In re Estate of Birch, 50 A.D.2d 475, 378 N.Y.S.2d 792 (N.Y. App. Div. 1976) (trustee’s duty to defend; Attorney General represents charitable beneficiaries)
- Russell v. Wachovia Bank, N.A., 353 S.C. 208, 578 S.E.2d 329 (S.C. 2003) (testator’s opportunity to change will negates undue influence claim)
- In re Last Will and Testament of Smoak, 286 S.C. 419, 334 S.E.2d 806 (S.C. 1985) (will contests and testamentary intent considerations)