Category Archives: Updates on the Law

Factual Background:

In 1997, the settlor, Stephen M. Gunther, established the Stephen M. Gunther Revocable Living Trust and named J. Barry Gunther as the initial trustee.  In 2006, the settlor amended the trust, naming himself as the trustee and changed the residuary beneficiary upon his death to his then-living descendants, subject to a contingent trust for any beneficiaries under the age of 25.  The settlor died in March 2009, leaving his wife, Angel, and two minor children beneficiaries.  One year after the settlor’s death, the beneficiaries filed a petition for accounting. They sought accounting of the trust from its inception on 1997 until its amendment in 2006 and from settlor’s death to date.                    

St. Louis County Circuit Court, J. Ross, Held:

The trial court concluded that the trustee had no fiduciary relationship with the beneficiaries before the settlor’s death, and therefore, the beneficiaries were not entitled to an accounting of trust transactions prior to that date.  Summary judgment was awarded against the plaintiff beneficiaries and in favor of the defendant trustee.  The beneficiaries appealed.

Court of Appeals, J. Mooney, Held:

Affirmed.  While finding no Missouri case addressing the precise question of whether the beneficiaries are entitled to an accounting covering the years the settlor was alive, the Court looked to Section 456.6-603.1 of the Missouri Uniform Trust Code which provides, “while a trust is revocable and the settlor has capacity to revoke the trust, rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.”  Therefore, while a trust is revocable, all rights that beneficiaries would otherwise possess are subject to settlor’s control.

While pointing out it has no precedential value, the reasoning in the Alabama case of  Ex parte Synovus Trust Co., 41 So.3d 70, 74 (Ala. 2009) was found to be persuasive in this case as well.  In Synovus, the parents, who were settlors and beneficiaries of two revocable trusts, and their children, who were also beneficiaries of the two trusts, sued the trustee and other defendants for breach of fiduciary duty and other claims.  The Alabama Court found that regardless of whether the children had suffered injuries to their rights as trust beneficiaries, the defendants owed duties exclusively to the settlors/parents during this time.

Similarly in this case, the Court found the trial court was correct in determining the trustee had no fiduciary relationship with the beneficiaries until settlor’s death, and thus, owed no duty to the beneficiaries to give them an accounting before that date.

Factual Background:

Brother and Siblings were beneficiaries of a trust.  Brother filed a petition seeking an accounting, removal of one sibling as trustee, and appointment of a new trustee.  The parties attended a mediation and agreed to a settlement whereby $475,000 and a ranch would be given to Brother in exchange for giving up all further interest in the trust.  Siblings gave brother title to the ranch and were prepared to give him the money upon execution of formal settlement documents.  Brother never executed the documents.

Siblings filed a petition for specific performance to enforce the settlement and Brother counterclaimed for his initial demands.  Brother filed a motion to dismiss the Siblings’ petition; the motion was denied.  Siblings then filed a motion for summary judgment on their specific performance claim.

St. Louis County Circuit Court, Whittington, J., Held:

The court granted Siblings’ motion for summary judgment.  Brother appealed.

Court of Appeals, Romines, J., Held:

Affirmed.  Brother argued the trial court erred in denying his motion to dismiss the petition for specific performance.  First, he argued that because the trial court dismissed the underlying suit without prejudice, the settlement agreement was no longer valid.  However, no authority suggests a valid agreement is nullified merely by a dismissal without prejudice.  In fact, Rule 67.01 specifically permits bringing another action to enforce an agreement.

Second, Brother argued Siblings abandoned the settlement agreement by requesting additional terms or it was improper because the terms of the settlement were disputed.  However, the facts show Siblings intended to be further bound by the settlement upon formal execution of the settlement.  Further, while the settlement did not specify whether the $475,000 would come from the trust or one of the siblings, this does not render the entire settlement unenforceable.  The court can supply this missing provision by reviewing the evidence in record.

Factual Background:

Settlor executed a revocable living trust in 1992.  In 2009, Defendants filed suit to remove Plaintiff as trustee.  The action was resolved by consent judgment signed by the parties.  The consent judgment warranted that there were no amendments to the trust.  In 2010, Plaintiff filed suit to determine the validity of an amendment to the trust he allegedly found after signing the consent judgment.  Defendants filed a motion for judgment on the pleadings.

St. Louis County Circuit Court, Ross, J., Held:

The court granted Defendants’ motion for judgment on the pleadings based on judicial estoppel.  Plaintiff appealed.

Court of Appeals, Romines, J., Held:

Affirmed.  Plaintiff argued the trial court erred in that there were genuine issues of material fact.  Judicial estoppel prevents parties from taking one position in one proceeding to obtain benefits from that position in a later proceeding.

The court found the trial court’s decision was flawed because judicial estoppel does not apply where the party’s prior position was taken due to a good-faith mistake rather than a scheme to mislead and manipulate the court.  However, the court’s result was correct because the purported amendment was not properly delivered according to the terms of the trust.  Therefore, there was no proper amendment and the case was affirmed.