Atwood v. Atwood, No. 94,393.

CourtUnited States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma
Writing for the CourtRAPP, ACTING PRESIDING
Citation2001 OK CIV APP 48,25 P.3d 936
PartiesAllen A. ATWOOD III; Peter M. Atwood; and Philip A. Atwood and Perry A. Atwood, minors by and through their parents and next friends, Peter M. Atwood and Adina A. Atwood, Plaintiffs/Appellants. v. Roger M. ATWOOD, Individually and as Trustee of the Allen A. Atwood and Ferne Atwood Trust Dated February 1, 1957, Defendant/Appellee.
Decision Date03 April 2001
Docket NumberNo. 94,393.

25 P.3d 936
2001 OK CIV APP 48

Allen A. ATWOOD III; Peter M. Atwood; and Philip A. Atwood and Perry A. Atwood, minors by and through their parents and next friends, Peter M. Atwood and Adina A. Atwood, Plaintiffs/Appellants.
v.
Roger M. ATWOOD, Individually and as Trustee of the Allen A. Atwood and Ferne Atwood Trust Dated February 1, 1957, Defendant/Appellee

No. 94,393.

Court of Civil Appeals of Oklahoma, Division No. 4.

April 3, 2001.


James C. Hodges, Eller and Detrich, Tulsa, OK, for Plaintiffs/Appellants.

Jeffrey D. Hassell, Julie C. Doss, Gable & Gotwals, Tulsa, OK, for Defendant/Appellee.

Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 4.

25 P.3d 939
RAPP, ACTING PRESIDING JUDGE

¶ 1 The trial court plaintiffs, Allen A. Atwood III, Peter M. Atwood, Philip A. Atwood, and Perry A. Atwood ("Beneficiaries"), appeal an order granting summary judgment in favor of the trial court defendant, Roger M. Atwood ("Trustee"), individually and as Trustee of the Allen A. Atwood and Ferne Atwood Trust dated February 1, 1957 ("Trust"). This aspect of the appeal is reviewed as Part I of this Opinion.

¶ 2 Next, by supplemental appeal, the Beneficiaries appeal the trial court's decision which awarded attorney fees, expenses, and expert witness fees on behalf of Trustee. This aspect of the appeal is reviewed in Part II of this Opinion.

25 P.3d 940
PART I

BACKGROUND

¶ 3 In 1957, Allen and Ferne Atwood established the Trust to pay education and other benefits for the Beneficiaries. They funded the Trust primarily with stock in the AMP company, a publicly traded company. After Allen Atwood died, the Trustee became the active Trustee.

¶ 4 Roger Atwood and Allen Atwood, Jr. are the children of the Settlors. Allen, Jr. died in 1992. The Beneficiaries Allen Atwood III and Peter Atwood are the children of Allen, Jr. and, at time of trial, were approximately 39 and 42 years of age. The remaining Beneficiaries are the minor children of Peter Atwood. Prior to his death in 1992, Allen, Jr. dealt with the Trustee on behalf of his children.

¶ 5 In this action, the Beneficiaries have sued Trustee claiming that he mismanaged the Trust by failing to diversify its holdings and that he failed to account to them as Beneficiaries for his actions as Trustee. They also sought his removal as Trustee and damages for losses from the alleged mismanagement.1

¶ 6 The Trustee kept the AMP stock as approximately 70-80% of the Trust's assets until 1998, when much of it was sold. The gist of Beneficiaries' contention is that Trustee breached his duties by failing to diversify and had he done so the Trust's value would have been substantially higher. It was undisputed that the Trust began with a value of approximately $75,000.00, and that on May 4, 1999, the value was approximately $514,591.00. In addition to its present value, approximately $600,000.00 had been distributed to Beneficiaries, or for their benefit, over the life of the Trust. The major recipient was Peter Atwood. One minor was born after the case was filed and the record does not indicate that any distribution has been made for that child as yet.

¶ 7 Trustee filed a motion for summary judgment. He contended that the Trust instrument precluded liability because it granted Trustee power and discretion to retain any asset for as long as he deems advisable and to make investments without being limited to any rule of law or statute. Next, he argued that he had not violated either the Prudent Man Rule or the Prudent Investor Rule, but in either case the Trust granted authority and discretion beyond those Rules.

¶ 8 In support of his motion, Trustee submitted the findings of his expert showing that over various time frames, all ending May 4, 1999, the rate of return experienced by the Trust ranged from just under 14% for the longest term to just over 22% for the shortest term. This expert also calculated returns using different scenarios of diversification, including one urged by Beneficiaries. This calculation reflected that the Trust would have realized a value ranging from zero to approximately $354,000.00 compared to the actual value of approximately $514,000.00.2

¶ 9 Beneficiaries countered with their own experts. These experts opined that the failure to diversify increased the risk to the Trust and reduced the present value of the Trust by approximately $440,00.00 and cost the Trust $1,696,000.00 in future value. Further, Beneficiaries pointed to the return of the AMP stock as being only 8.75% during the five years prior to the suit being filed. They compared this return to the much greater return from other Trust assets and to other indices. They concluded that Trustee violated his duties as Trustee and his responsibilities under the Oklahoma Prudent Investor Act. Last, they maintain that Trustee failed to use the skills he possessed, and that he used for his own investments, for the benefit of the Trust.

25 P.3d 941
¶ 10 In summary, under the Trustee's scenario the portfolio, as a whole, outperformed the scenario proposed by Beneficiaries and, at the same time distributed substantial sums. The Beneficiaries argued that their evidence shows that, had the Trustee diversified, the present and future values of the Trust would have been substantially higher and that the Trust has lost substantial future value. In response, Trustee asserted that regardless of the outcome of his investment choices and his decision to retain the AMP stock, the Trust document not only gave him unlimited discretion but also exonerated him from liability for claims such as urged by Beneficiaries. The trial court sustained Trustee's motion for summary judgment. Beneficiaries appeal

STANDARD OF REVIEW

¶ 11 The appellate standard of review in summary judgment is de novo. Kirkpatrick v. Chrysler Corp., 1996 OK 136, ¶ 2, 920 P.2d 122, 124. This means without deference. Hulett v. First Nat. Bank & Trust Co. in Clinton, 1998 OK 21, 956 P.2d 879; see Salve Regina College v. Russell, 499 U.S. 225, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991). The pleadings and evidentiary materials will be examined to determine what facts are material and whether there is a substantial controversy as to one material fact. Sperling v. Marler, 1998 OK 81, 963 P.2d 577; Malson v. Palmer Broadcasting Group, 1997 OK 42, 936 P.2d 940. All inferences and conclusions to be drawn from the materials must be viewed in a light most favorable to the non-moving party. Carmichael v. Beller, 1996 OK 48, 914 P.2d 1051. Even though the facts may not be controverted, if reasonable persons may draw different conclusions from these facts summary judgment must be denied. Bird v. Coleman, 1997 OK 44, 939 P.2d 1123. Summary judgment is proper only if the record reveals uncontroverted material facts failing to support any legitimate inference in favor of the nonmoving party. N.C. Corff Partnership, Ltd. v. OXY, USA, Inc., 1996 OK CIV APP 92, 929 P.2d 288. When genuine issues of material fact exist summary judgment should be denied and the question becomes one for determination by the trier of fact. Brown v. Oklahoma State Bank & Trust Co. of Vinita, 1993 OK 117, 860 P.2d 230; Flowers v. Stanley, 1957 OK 237, 316 P.2d 840. Because the trial court has the limited role of determining whether there are any such issues of fact, it may not determine fact issues on a motion for summary judgment nor may it weigh the evidence. Stuckey v. Young Exploration Co., 1978 OK 128, ¶ 15, 586 P.2d 726, 730.

¶ 12 One who defends against a claim and who does not bear the burden of proof is not required to negate the plaintiff's claims or theories in order to prevail on motion for summary judgment. When a defendant moves for summary judgment without relying upon an affirmative defense the defendant must show: 1) that no substantial factual controversy exists as to at least one fact essential to plaintiff's theory of the cause of action; and, 2) that the fact is in defendant's favor. Once a defendant has introduced evidentiary materials to establish these points, the plaintiff then has the burden of showing that evidence is available which justifies a trial of the issue. Akin v. Missouri Pacific R.R. Co., 1998 OK 102, ¶ 8, 977 P.2d 1040, 1044; Stephens v. Yamaha Motor Co., Ltd., Japan, 1981 OK 42, ¶ 11, 627 P.2d 439, 441; Runyon v. Reid, 1973 OK 25, ¶¶ 12-13, 510 P.2d 943, 946. On the other hand, when the defendant relies upon an affirmative defense then the defendant, as the party with the burden of proof, must meet the same standards as a plaintiff movant. Akin v. Missouri Pacific R.R. Co. ., 1998 OK 102, ¶ 9, 977 P.2d 1040, 1044.

ANALYSIS AND REVIEW

¶ 13 This Court views the Trustee's motion for summary judgment as a two-sided attack upon the Beneficiaries' claim: one involving breach of trust duty by a failure to diversify, and the second one being more complex and involving affirmative defenses of exoneration and authorization.

Summary Judgment Predicated Upon Beneficiaries' Claims

¶ 14 The first aspect of the Trustee's motion examines the elements of Beneficiaries' claim of breach of trust duty by failure

25 P.3d 942
to diversify. This claim challenged the prudence and advisability of Trustee's actions, who admits that he retained a single asset in the Trust as its principle investment and only minimally diversified its portfolio. Trustee sought to demonstrate in regard to this lack of diversification under the Trust that no action exists because the performance of the Trust, including its distributions, equaled or excelled the performance which conservative diversification under either the Prudent Man Rule or the Prudent Investor Rule would have produced. Under this theory, whether the trust instrument provided for exoneration or authorization for acts by the Trustee is immaterial

¶ 15 The Trustee, as a moving defendant, is not required to negate the Beneficiaries' claims or theories in order to prevail....

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  • Skyline Potato Co. v. Hi-Land Potato Co., No. CIV 10-0698 JB/LAM
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • May 24, 2016
    ...exception to the American Rule ... when justice and equity may require that fees, costs, and expenses be awarded." Atwood v. Atwood, 25 P.3d 936, 947 (2001 Okla.Civ.App.). The phrase "as justice and equity may require" has been interpreted to "serve two functions, first as a criterion for e......
  • Silver Creek Invs., Inc. v. Whitten Construction Management, Inc., No. 109,168.
    • United States
    • Court of Civil Appeals of Oklahoma
    • March 15, 2013
    ...See also Peters v. American Income Life Ins. Co., 2003 OK CIV APP 62, ¶ 71, 77 P.3d 1090, 1102;Atwood v. Atwood, 2001 OK CIV APP 48, ¶ 75, 25 P.3d 936, 952. In all instances, however, the final calculation of the fee must bear some reasonable relationship to the amount in controversy. See A......
  • SFF-Tir, LLC v. Stephenson, No. CIV 14-0369 JB\FHM
    • United States
    • United States District Courts. 10th Circuit. Northern District of Oklahoma
    • April 3, 2020
    ...Dep't of Transp. v. Cedars Grp., L.L.C., 2017 OK 12, ¶ 22, 393 P.3d 1095, 1103, and citing Atwood v. Atwood, 2001 OK CIV APP 48, ¶ 77, 25 P.3d 936, 952 ). The Plaintiffs argue that "Westlaw costs should be considered part of the [Defendants’ attorneys’] firm's overhead, and the Court should......
  • Silver Creek Invs., Inc. v. Whitten Constr. Mgmt., Inc., Case Number: 109168
    • United States
    • United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma
    • March 15, 2013
    ...also Peters v. American Income Life Ins. Co., 2003 OK CIV APP 62, ¶ 71, 77 P.3d 1090, 1102; Atwood v. Atwood, 2001 OK CIV APP 48, ¶ 75, 25 P.3d 936, 952. In all instances, however, the final calculation of the fee must bear some reasonable relationship to the amount in controversy. See Arko......
  • Request a trial to view additional results
43 cases
  • Skyline Potato Co. v. Hi-Land Potato Co., No. CIV 10-0698 JB/LAM
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • May 24, 2016
    ...exception to the American Rule ... when justice and equity may require that fees, costs, and expenses be awarded." Atwood v. Atwood, 25 P.3d 936, 947 (2001 Okla.Civ.App.). The phrase "as justice and equity may require" has been interpreted to "serve two functions, first as a criterion for e......
  • Silver Creek Invs., Inc. v. Whitten Construction Management, Inc., No. 109,168.
    • United States
    • Court of Civil Appeals of Oklahoma
    • March 15, 2013
    ...See also Peters v. American Income Life Ins. Co., 2003 OK CIV APP 62, ¶ 71, 77 P.3d 1090, 1102;Atwood v. Atwood, 2001 OK CIV APP 48, ¶ 75, 25 P.3d 936, 952. In all instances, however, the final calculation of the fee must bear some reasonable relationship to the amount in controversy. See A......
  • SFF-Tir, LLC v. Stephenson, No. CIV 14-0369 JB\FHM
    • United States
    • United States District Courts. 10th Circuit. Northern District of Oklahoma
    • April 3, 2020
    ...Dep't of Transp. v. Cedars Grp., L.L.C., 2017 OK 12, ¶ 22, 393 P.3d 1095, 1103, and citing Atwood v. Atwood, 2001 OK CIV APP 48, ¶ 77, 25 P.3d 936, 952 ). The Plaintiffs argue that "Westlaw costs should be considered part of the [Defendants’ attorneys’] firm's overhead, and the Court should......
  • Silver Creek Invs., Inc. v. Whitten Constr. Mgmt., Inc., Case Number: 109168
    • United States
    • United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma
    • March 15, 2013
    ...also Peters v. American Income Life Ins. Co., 2003 OK CIV APP 62, ¶ 71, 77 P.3d 1090, 1102; Atwood v. Atwood, 2001 OK CIV APP 48, ¶ 75, 25 P.3d 936, 952. In all instances, however, the final calculation of the fee must bear some reasonable relationship to the amount in controversy. See Arko......
  • Request a trial to view additional results

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