In re Eleanor Pierce (Marshall) Stevens Living Trust

• Decision Date: 04 October 2017
• Docket Number: 17–112,17–111
• Citation: 229 So.3d 36
• Parties: IN RE: ELEANOR PIERCE (MARSHALL) STEVENS LIVING TRUST In re: Eleanor Pierce (Marshall) Stevens Living Trust and Eleanor Pierce Stevens Revocable Gift Trust
• Court: Court of Appeal of Louisiana — District of US

229 So.3d 36

IN RE: ELEANOR PIERCE (MARSHALL) STEVENS LIVING TRUST In re: Eleanor Pierce (Marshall) Stevens Living Trust and Eleanor Pierce Stevens Revocable Gift Trust

17–111

17–112

Court of Appeal of Louisiana, Third Circuit.

October 4, 2017

Hunter W. Lundy, Rudie R. Soileau, Jr., T. Houston Middleton, IV, Daniel A. Kramer, Lundy, Lundy, Soileau & South, L.L.P., Post Office Box 3010, Lake Charles, LA 70602, (337) 439–0707, COUNSEL FOR OTHER/APPELLEE: Preston L. Marshall

Kenneth Michael Wright, Kenneth Michael Wright, L.L.C., 203 West Clarence Street, Lake Charles, LA 70601, (337) 439–6930, COUNSEL FOR OTHER APPELLEE: Preston L. Marshall

L.J. Hymel, Jr., Michael Reese Davis, Tim Hartdegen, Hymel Davis & Petersen, LLC, 10602 Coursey Boulevard, Baton Rouge, LA 70816, (225) 298–8118, COUNSEL FOR OTHER APPELLEE: Elaine Marshall

Leslie J. Schiff, Schiff, Scheckman & White, Post Office Box 10, Opelousas, LA 70571–0010, (337) 942–9771, COUNSEL FOR OTHER APPELLEES: Bradley J. Trevino, Shayna Sonnier

Scott J. Scofield, Robert E. Landry, Phillip W. DeVilbiss, Peter J. Pohorelsky, Scofield, Gerard, Pohorelsky, Gallaugher & Landry, Post Office Drawer 3028, Lake Charles, LA 70602, (337) 433–9436, COUNSEL FOR OTHER APPELLEES: E. Pierce Marshall, Finley Hilliard

Court composed of Marc T. Amy, Elizabeth A. Pickett, and Billy Howard Ezell, Judges.

AMY, Judge.

The trial court rendered a 2013 judgment ordering the appellant, a former trustee of the subject trust to, among other things, deliver property of the trust and collect trust files, records, and property held by himself as well as third-parties, including attorneys. Following the appellant's production of certain items, the trust, through its current co-trustee, filed a rule for contempt, alleging that the appellant failed to satisfactorily comply with that underlying judgment. After extensive proceedings, the trial court found both a lack of compliance with the judgment and the appellant's willful disregard in terms of lack of compliance. Accordingly, the trial court entered a judgment of contempt, imposing costs and attorney fees as sanctions. The trial court ruling included the granting of a motion to compel and an order to comply with the prior order, as further delineated in the contempt ruling. The appellant filed this matter, seeking review of both the contempt ruling and the denial of a motion to recuse filed during the proceedings. The appellee has filed motions to strike and to dismiss the appeal. For the following reasons, we affirm the denial of the motion to recuse, but reverse the finding of contempt and the granting of the motion to compel.

Factual and Procedural Background

The contempt proceedings at issue follow a series of disputes arising from the administration of The Eleanor Pierce (Marshall) Stevens Living Trust. The record indicates that the Trust was created by Eleanor Stevens (formerly Marshall) in 1979 as a Louisiana Trust and that Finley Hilliard began serving as the sole Trustee in 2000. A certified public accountant, Mr. Hilliard and his firm rendered accounting services to the Trust, Ms. Stevens, various members of the Marshall family, and the Estate of Eleanor Pierce Stevens, following her 2007 death.

As discussed in a prior opinion of this court, and as reflected in the present record, the Trust was repeatedly amended. Ms. Stevens' grandson, Preston Marshall was appointed as Trust Protector in 2006 and as Co–Trustee in 2009. See In Re: Eleanor Pierce (Marshall) Stevens Living Trust , 14-697 (La.App. 3 Cir. 2/18/15), 159 So.3d 1101. Following that appointment, and by a series of resignations, withdrawals, and related litigation, Preston, in his role as Trust Protector, ultimately removed Mr. Hilliard as Trustee/Co–Trustee of the Trust in 2013. Id.¹ At the time of the proceedings now at issue, Preston served as both Trust Protector and Co–Trustee.²

The determination of contempt now under review stems from litigation commenced in April 2013 when Preston, as Trustee, filed a "Petition for Instructions^{[3 ]} Regarding the Eleanor Pierce (Marshall) Stevens Living Trust and to Compel Delivery of Trust Records to Successor Trustees." Therein, Preston alleged that before removal as Trustee, Mr. Hilliard "retained several law firms, including Vamvoras, Schwartzenberg and Hinch, LLC, Rusty Hardin & Associates, LLP, Hunter, Hunter & Sonnier (and its predecessor Hunter & Blazier, APLC), and Thompson & Knight LLP to represent the Trust in various matters, including the trial and appeal of the Federal Suit."⁴ Preston alleged that he made "formal demand" upon Mr. Hilliard and "upon several law firms he knew Hilliard retained to provide legal services to the Trust, demanding that they produce the Trust's files and records."

Preston contended in the petition, however, that Mr. Hilliard "invoked privilege on behalf of the Trust, and only one firm [had] produced any documents" at that time. Citing La.Code Evid. art. 506(D),⁵ Preston asserted that any privilege to the documents belonged to the Trust, not to Mr. Hilliard, who was a former Trustee by that time. He alleged, in turn, that "the law firms will not deliver the files without Hilliard's consent or notice that he does not retain the privilege on behalf of the Trust[,]" but that Mr. Hilliard had a continuing duty to deliver such files to the successor Trustee(s). Therefore, Preston requested that the trial court issue instructions and an order, among other things, that "[a]ll Trust property and powers are vested with him" and that he "is entitled to have control of the Trust's legal files, records, pleadings, documents, communications, notes, and work product[.]" The petition further asked that Mr. Hilliard be ordered to "deliver all of the Trust's legal files, records, pleadings, documents, communications, notes, and work product" to Preston. The petition also requested that Mr. Hilliard be ordered to "contact all attorneys, accountants and other professionals," to "request the return of all Trust files, records, pleadings, documents, communications, notes, and work product," and to, finally, return all of such to Preston. Preston further requested an instruction and/or order that he "is a current holder of any privilege related to [the] Trust's legal files, and may request and receive those files directly from the Trust's legal representatives."

The trial court conducted June 2013 hearings, during which various motions and petitions were argued, including the Petition for Instructions, as well as a Petition for Intervention filed by E. Pierce Marshall, Jr., "individually, as Executor of the Estate of Eleanor Pierce (Marshall) Stevens, and as the provisional tutor of Megan Marshall, the ultimate beneficiary of the Megan Marshall Charitable Remainder Unitrust ("Intervenor")[.]" The resulting judgment continued the motion to file that petition for intervention, the associated petition, and the Trust's exceptions to the petition for intervention "without date, pending discovery[.]"

However, the judgment granted the Petition for Instructions and associated Motion to Compel Production of Trust Records.

By that July 22, 2013 judgment, the trial court ordered Mr. Hilliard to:

1. Deliver to his counsel all documents, records, communications and files related in any way to the Trust, its current or former Trustees, its assets, liabilities, or business (collectively, the "Trust Records") in his possession within ten (10) days of the signing of this Judgment. Thereafter, Finley Hilliard's counsel will deliver these Trust Records to counsel for Preston within thirty (30) days of the signing of this Judgment. In the event a privilege is claimed, Finley Hilliard will deliver to the Court, for an in camerainspection, all documents for which privilege is claimed and a Privilege Log meeting the requirements of Louisiana Code of Civil Procedure article 1424(C). The Privilege Log will concurrently be delivered to all counsel of record.

2. Obtain, within ten (10) days of the signing of this Judgment, all Trust Records, original Trust files, and other Trust property from attorneys or other third parties who may hold them that were prepared or dated at any time within the last ten (10) years, including, without limitation, those in the possession of Vamvoras, Schwartzenberg and Hinch, LLC; Rusty Hardin & Associates, LLP; Hunter, Hunter & Sonnier, L.L.C. (and its predecessor Hunter & Blazier, APLC); and Thompson & Knight LLP. Hilliard will demand delivery of the Trust Records from the holders and present a copy of this Judgment ordering such production.

3. Delivery, within thirty (30) days of the signing of this Judgment, to counsel for Preston Marshall all Trust Records, original Trust files, and other Trust property obtained from attorneys and other third parties in response to the preceding paragraph, unless a privilege is claimed on a particular record, file or property in question. In the event a privilege is claimed, Finley Hilliard will deliver to the court, for an in camera inspection, all documents for which privilege is claimed and a Privilege Log meeting the requirements of Louisiana Code of Civil Procedure article 1424(C). The Privilege Log will concurrently be delivered to all counsel of record.

....

IT IS FURTHER ORDERED that, pursuant to Louisiana Code of Professional Conduct Rule 1.16(d), all attorneys possessing any Trust Records, Trust files, or Trust property are required and hereby ordered to deliver them, in their entirety, to Finley Hilliard upon request and upon Hilliard's presentation of this Judgment.

IT IS FURTHER ORDERED that the documents and records will be subject to a reasonable protective order negotiated between the parties, which will not limit the ability of the Trustees to use the documents or records for Trust related purposes.

The record contains no indication that either party sought review of the July 22, 2013, judgment. Rather, Mr. Hilliard, through counsel, sent a letter dated the same day as the signing...