Giller v. Slosberg

• Decision Date: 27 April 2021
• Docket Number: A21A0001
• Citation: 858 S.E.2d 747
• Parties: GILLER et al. v. SLOSBERG.
• Court: Georgia Court of Appeals

858 S.E.2d 747

GILLER et al.
v.
SLOSBERG.

A21A0001

Court of Appeals of Georgia.

April 27, 2021
Reconsideration Denied June 18, 2021

858 S.E.2d 749

Tyler Charles Dixon, Leah Ward Sears, Sasha Nina Greenberg, Atlanta, for Appellant.

Tyler Charles Dixon, Janet Litt Litt, Kevin Timothy O'Sullivan, Atlanta, Atlanta Frederick Skip Sugarman, Matthew Greer Hawk, for Appellee.

Phipps, Senior Appellate Judge.

This contentious case involves a family dispute among siblings which arose after their elderly father revoked an existing power of attorney, executed a new power of attorney, and made changes to certain financial accounts relating to his estate-planning strategy. See Slosberg v. Giller , 341 Ga. App. 581, 801 S.E.2d 332 (2017) (affirming in part and reversing in part the superior court's grant of summary judgment to both parties on various issues). The case is now before this Court a second time. In this appeal, sisters Suzanne Giller and Lynne Amy Seidner¹ seek to reverse a jury verdict and superior court judgment in favor of their brother, Robert Slosberg. For the reasons that follow, we reverse the judgment of the superior court and remand the case for further proceedings consistent with this opinion.

This case does not involve a will. Rather, it concerns three documents which purported to distribute much of the assets of the father, David K. Slosberg: the David K. Slosberg Asset Protection Trust II, dated January 17, 2014 (Trust #2), a beneficiary form designating Giller and Seidner as beneficiaries of their father's IRA Account with First National Bank & Trust ("FNBT") (the "IRA Account"), and a beneficiary form designating Giller, Seidner, and Slosberg as beneficiaries of their father's Agency Account with FNBT (the "Agency Account"), with Giller and Seidner each receiving forty percent of the assets and Slosberg receiving twenty percent. Slosberg believed that Giller and Seidner exerted undue influence over their father and caused their father to execute these three documents, drastically reducing his right to their father's assets.

Approximately one year before their father died, Slosberg filed suit against Giller and Seidner. After their father's death, Slosberg filed his third amended complaint, which is the operative pleading for this appeal. The amended complaint included a number of claims, including claims for undue influence, fraud, conversion, and trover against Giller and Seidner based on allegations that their father's actions were the result of diminished mental capacity and undue influence. The complaint sought, among other relief, the imposition of a constructive trust to the extent Giller and Seidner had absconded with assets to which Slosberg was entitled, and injunctive relief to prohibit Giller and Seidner from transferring or receiving any assets of their father, including, inter alia, Trust #2, the IRA Account, and the Agency Account until the court determined whether the execution of these document was the result of undue influence. Giller and Seidner answered and asserted counterclaims against Slosberg for defamation and tortious interference, seeking both a declaratory judgment and equitable relief.

Following a two and one-half week trial, the jury found in favor of Slosberg on his claims for undue influence as to all three documents: Trust #2, the IRA Account, and the Agency Account.² The superior court entered final judgment on the jury's verdict,

858 S.E.2d 750

ruling "that the challenged documents pertaining to the Accounts are void and are hereby set aside, as are any transfers made pursuant to those documents." The superior court further noted that the evidence produced at trial demonstrated that the total amount contained in the accounts at the time of the father's death was $2,372,000.01, and that all assets contained in these three accounts "had been distributed by FNBT, either to [Giller and Seidner] or into the registry of the Court, apart from $140,413.67 held in the IRA account as of December 31, 2018." The superior court, therefore, imposed a constructive trust in favor of Slosberg for $1,056,482.31, which the court determined was Slosberg's one-third share of the accounts, plus prejudgment interest, post judgment interest, and costs. Specifically, the superior court's judgment stated:

The Court directs that the Clerk distribute to [Slosberg] all monies held in the registry of the Court with respect to this matter, totaling $568,919.96 as of June 28, 2019. The Court further directs that any monies retained by FNBT in the Accounts be distributed to [Slosberg]. To the extent that these monies are insufficient to satisfy this Judgment, [Giller and Seidner] are liable as constructive trustees for any unpaid balance.

Giller and Seidner filed a motion for judgment notwithstanding the verdict and for new trial, which the superior court denied. This appeal followed.

We first note that Giller and Seidner do not claim that the evidence was insufficient to support the jury's findings or in any way challenge the jury's findings that they wrongfully procured the three documents and their assets through the exercise of undue influence over their father. Rather, they attack the superior court's final judgment, arguing that (1) the in terrorem clause contained in Trust #2 precluded Slosberg from receiving any assets from that trust, (2) the superior court's imposition of a constructive trust in Slosberg's favor usurps the probate court's jurisdiction, and (3) the final judgment awarded damages above those to which Slosberg was entitled.³ These issues appear to raise mixed questions of fact and law. With mixed questions of fact and law, this Court accepts the trial court's findings on disputed facts and witness credibility unless clearly erroneous, but independently applies the legal principles to the facts. Garden Club of Ga. v. Shackelford , 274 Ga. 653, 655 (1), 560 S.E.2d 522 (2002) ; Suggs v. State , 272 Ga. 85, 88 (4), 526 S.E.2d 347 (2000).

1. Giller and Seidner assert that the superior court erred in allowing Slosberg to "enjoy the benefits he forfeited by initiating actions disallowed by the no-contest clause" in their father's trust. Specifically, they argue that the superior court's final judgment is inconsistent with the valid and enforceable in terrorem clause⁴ contained in Trust #2, which provides that benefits revoked under the clause become a part of the remainder of the Trust Estate. They further assert that not only was Slosberg not entitled to benefits under Trust #2 because of the in terrorem clause, but they were entitled to judgment in their favor on the undue influence claim as to the trust.⁵ We conclude that Slosberg forfeited any benefits under Trust #2 by violating the trust's in terrorem clause, and the superior court erred in not only awarding a constructive trust based on any benefits he would have received under the trust, but also in permitting the claim to proceed to the

858 S.E.2d 751

jury. We note that neither the IRA Account nor the Agency Account contained in terrorem clauses, and our decision in this division, therefore, is limited to Trust #2.

The statute addressing the rules for trust in terrorem clauses when the trust at issue was executed in 2014 stated:

(a) A trust may be created for any lawful purpose.

(b) A condition in terrorem shall be void unless there is a direction in the trust instrument as to the disposition of the property if the condition in terrorem is violated, in which event the direction in the trust instrument shall be carried out.

OCGA § 53-12-22 (2014).⁶ "[A]lthough in terrorem clauses are permitted by statute ... they are not favored in the law. Furthermore, because in terrorem clauses result in forfeitures, they must be strictly construed." Callaway v. Willard , 321 Ga. App. 349, 353 (1), 739 S.E.2d 533 (2013) (citations and punctuation omitted).

The in terrorem clause at issue here in Trust #2 provided:

[S]hould my son, Robert Kenneth Slosberg, or his legal representative, or either of my daughters, or their legal representatives[,] contest or initiate legal proceedings to contest the validity of this Trust or my Last Will and Testament executed by me and dated October 31st, 2013, or any provision from being carried out in accordance with its terms as I expressed (whether or not in good faith and with probable cause), then all the benefits provided herein for my son and/or for my daughters are revoked and annulled. Such benefits, if not a part of the residue of my estate, shall go over to and become a part of the remainder of my Trust Estate.

Giller and Seidner argue that the in terrorem clause reflects their father's "plain and unambiguous intent ... to preserve the sanctity of the plan he, over a period of years, created for his assets and his children." While this argument ignores Giller and Seidner's undisputed role in unduly influencing their father to secure the trust containing the in terrorem clause, we are constrained to conclude that Slosberg's "initiation of legal proceedings triggered the [trust's] in terrorem clause[.]" Norman v. Gober , 292 Ga. 351, 354 (1), 737 S.E.2d 309 (2013).

Although Slosberg attempts to distinguish Duncan v. Rawls , 345 Ga. App. 345, 812 S.E.2d 647 (2018), that case is...