Harell v. Badger

171 So.3d 764 (2015)

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Nature of the Case

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Facts

Rita devised the remainder of her estate to a Trust for the specified purpose of benefitting Ps' adopted brother, David Wilson. The Trustees were to pay over and distribute, free from any trust, the entire net income of the trust on a monthly basis for the benefit of David. The trustees were given the full power and authority, exercisable in their sole and uncontrolled discretion, to pay to or for the benefit of David such amount or amounts of the principal of the Trust as the Trustees shall determine to be proper and necessary. The will provided that if David predeceased Ps, the remaining Trust principal would be distributed to them. Eventually, David petitioned the trial court to appoint David's neighbor, D, as trustee. D was appointed as trustee. D was to obtain a $300,000 trustee bond and to file semi-annual accountings. D eventually got the bond and filed only one accounting. Before obtaining the bond, D allegedly incurred $34,021 in personal expenses for David's support. D filed a motion seeking reimbursement and approval to employ his wife as the realtor for the sale of Rita's house-the sole remaining asset of the Trust. The trial court never entered an order approving D's requests. D approached Ross and Linda Littlefield about transferring the Trust's assets into a 'special needs' trust designed to qualify David for various government benefits. Badger retained Linda as counsel for the Trust. David signed a 'joinder agreement' to create a sub-account of the Florida Foundation for Special Needs Trust (FFSNT), a 'pooled trust' administered by the Littlefields. Ross Littlefield was trustee and David the beneficiary of the sub-account. Any funds remaining in the sub-account on David's death would be subsumed into the FFSNT and used to provide for other beneficiaries of the pooled trust. The joinder agreement did not list Ps as remainder beneficiaries or otherwise consider their interest in the original Trust. D sold the house-employing his wife as realtor, without court-approval, for a five-percent sale commission-and immediately wired the net proceeds to the FFSNT. The Littlefields transferred all funds from the FFSNT into another trust-the JNN Trust. The Littlefields were arrested, convicted, and sentenced to prison for the misappropriation of funds in the JNN Trust. D filed a motion to terminate the Trust, and for the first-time notified Ps of the agreements, the sale of the house, and the transfer of all funds into the FFSNT. Ps filed a counter-petition seeking damages. The trial court concluded that the terms of Rita's will allowed D to invade the principal of the Trust 'to any extent he felt was in the best interests of David.' It found that D reasonably relied on the advice of his attorneys and the Littlefields and, therefore, did not breach any fiduciary duty to the Trust. The trial court terminated the Trust, retroactively approved the employment of D's wife and dismissed Ps' claims for damages. The court awarded $85,005.50 in attorneys' fees to D. Ps appealed.