National Bank of Detroit v. Shelden, 82-1905

• Decision Date: 08 March 1984
• Docket Number: 82-1905,Nos. 82-1737,No. 82-1905,No. 82-1737,82-1737,s. 82-1737
• Citation: 730 F.2d 421
• Parties: NATIONAL BANK OF DETROIT, Plaintiff, v. Francis D. SHELDEN, et al., Defendants. The TRUST COMPANY OF the VIRGIN ISLANDS, LTD., () and Peter J. Cipollini, (), Defendants-Appellants, v. L. Bennett YOUNG and Detroit Bank and Trust Company, Second Successor Co- Trustees, Intervening Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 421

730 F.2d 421

NATIONAL BANK OF DETROIT, Plaintiff, v. Francis D. SHELDEN, et al., Defendants.

The TRUST COMPANY OF the VIRGIN ISLANDS, LTD., (No. 82-1905) and Peter J. Cipollini, (No. 82-1737), Defendants-Appellants, v. L. Bennett YOUNG and Detroit Bank and Trust Company, Second

Successor Co- Trustees, Intervening Defendants-Appellees.

Nos. 82-1737, 82-1905.

United States Court of Appeals Sixth Circuit.

Argued Dec. 1, 1983.

Decided March 8, 1984.

Peter J. Cipollini, Charles E. Wilson, Jr. (argued), Cincinnati, Ohio, for plaintiff.

Michael Golob (argued), Ivan E. Barris, Detroit, Mich., for defendants.

Before JONES and KRUPANSKY, Circuit Judges, and PHILLIPS, Senior Circuit Judge.

PHILLIPS, Senior Circuit Judge.

This litigation began with the filing of a complaint in the nature of an interpleader by the National Bank of Detroit pursuant to 28 U.S.C. Sec. 1335.

Francis D. Shelden, a native of Michigan, established a revocable inter vivos trust on September 18, 1976, naming as trustee the Trust Company of the Virgin Islands, Ltd. (sometimes referred to herein as the Virgin Islands Trust Company.) The trustee was identified as having been organized in the British Virgin Islands. The principal question presented in this litigation is who are the present trustees of this trust.

I.

The complaint stated that as of May 1, 1978, the National Bank of Detroit held the sum of $218,900.07 on deposit in the corporate account of Windigo Ranch, Inc. and $4,955.25 on deposit in the corporate account of FDS Land Company; these funds were claimed by defendant the Trust Company of the Virgin Islands, Ltd. as trustee of the Shelden trust; and that the funds also were claimed by defendant Alger Shelden, Jr. (brother of Francis D. Shelden) and L. Bennett Young as officers of the two corporations.

The trust instrument ¹ was filed as an exhibit to the complaint, together with a list of shares of marketable securities in twenty-four corporations constituting the corpus of the trust. The securities were valued by Shelden at approximately two million dollars. In his de bene esse deposition, Shelden testified that he delivered these securities to Adam Starchild, founder and original owner of the Virgin Islands Trust Company. ² Included in the corpus of the trust were all the issued and outstanding stock of defendants FDS Land Company, a Michigan Corporation, and Windigo Ranch, Inc., a Colorado Corporation. All the corporate stock of both these corporations were owned by Shelden at the time of the establishment of the trust.

The Trust Company of the Virgin Islands averred that as Trustee it had removed Alger Shelden, Jr. and Young as officers of both corporations and had elected defendant Samuel Glasser of Michigan as president and treasurer and defendant Ronald J. Zadora as secretary of the two corporations. Glasser claimed to be the sole designated beneficiary of both bank accounts.

Alger Shelden, Jr. and L. Bennett Young averred that The Trust Company of the Virgin Islands, Ltd. had been replaced as trustee of the Shelden trust before its purported action attempting to remove them as corporate officers.

Francis D. Shelden was named as party defendant to the interpleader action. He filed no pleading, but was not dismissed as a party defendant. His de bene esse deposition is a part of the discovery evidence. The complaint also averred on information and belief that Francis D. Shelden currently was being sought by the Federal Bureau of Investigation under a fugitive warrant and that his whereabouts were unknown to the plaintiff bank.

Also named as a defendant to the interpleader action was Edward Brongersma of the Netherlands, who was found by the district court to have been appointed first successor trustee of the trust, replacing The Trust Company of the Virgin Islands, Ltd. as trustee. His affidavit was filed in the discovery proceedings and is a part of the record.

L. Bennett Young and the Detroit Bank and Trust Company were permitted by the district court to intervene as defendants in the interpleader action in their capacities as second successor co-trustees of the Shelden trust.

In its interpleader complaint, National Bank of Detroit tendered all funds in the two bank accounts for deposit with the clerk of the district court and prayed that the defendants be required to answer and settle their respective claims to the bank accounts on deposit by the two corporations. The district court authorized the clerk to receive these funds.

An answer to the complaint was filed by L. Bennett Young and the Detroit Bank and Trust Company, asserting that they are the second successor trustees of the trust; and that as successor trustees they are entitled to both bank accounts. The answer of The Trust Company of the Virgin Islands, Ltd. claimed that it is the trustee of the trust and is entitled to the funds in both bank accounts. Appellant Peter J. Cipollini filed an answer asserting that he is the duly elected president and treasurer of both Windigo Ranch, Inc. and FDS Land Company and the duly authorized signatory of both corporations and prayed that all the funds of the two corporations be transferred to him.

II.

After discovery proceedings, including the deposition of Francis D. Shelden de bene esse, a motion for summary judgment was filed on May 17, 1982 by L. Bennett Young and the Detroit Bank and Trust Company in their asserted capacities as second successor trustees of the trust. The motion for summary judgment was opposed vigorously by the Virgin Islands Trust Company.

District Judge Charles W. Joiner on August 20, 1982 granted the motion for summary judgment, finding that L. Bennett Young and the Detroit Bank and Trust Company are lawful and proper second successor trustees of the Francis D. Shelden Revocable Inter Vivos Trust; that the second successor trustees are the rightful owners of all the outstanding shares of stock of FDS Land Company and Windigo Ranch, Inc.; and that the two second successor trustees are entitled to the funds on deposit with the Clerk of the Court on behalf of Windigo Ranch, Inc. and FDS Land Company. The findings of fact and conclusions of law of Judge Joiner are made Appendix No. 2 to this opinion. On August 23, 1982, Judge Joiner entered a judgment that the Clerk of the Court pay to L. Bennett Young and Detroit Bank and Trust Company on behalf of FDS Land Company and Windigo Ranch, Inc., the funds on deposit, together with all accrued interest.

On August 24, 1982, Judge Joiner received a mailgram from Adam Starchild, Box 1608 Tarpon Springs, Florida, attacking L. Bennett Young and charging that "he will resort to any method to illegally obtain the funds to which he knows he has no entitlement, and no money should be handed over to him." Judge Joiner ordered the parties to respond to this mailgram. After considering the responses and the deposition of L. Bennett Young, taken on August 19, 1982, in other litigation ³ between the parties in the United States District Court of Puerto Rico, Judge Joiner on October 4, 1982 denied the motion for rehearing filed by the Trust Company of the Virgin Islands.

The Trust Company of the Virgin Islands, Ltd. and Peter J. Cipollini appeal. We affirm.

III.

A party seeking summary judgment bears the burden of proving there is no genuine issue of material fact. The evidence must be viewed in the light most favorable to the non-movant. In Glenway Industries, Inc. v. Wheelabrator-Frye, Inc., 686 F.2d 415, 417 (1982), this court wrote:

The court of appeals is mandated to apply the same test in passing upon an award of summary judgment as that utilized by the trial court to grant the motion. Howard v. Russell Stover Candies, Inc., 649 F.2d 620 (8th Cir.1981). Accordingly the conclusions of the trial court are not protected by the "clearly erroneous" rule, Luckett v. Bethlehem Steel Corp., 618 F.2d 1373 (10th Cir.1980), but rather the appellate tribunal, viewing the evidence in the light most favorable to the party opposing judgment, must determine if a genuine issue of material fact exists. Smith v. Hudson, 600 F.2d 60 (6th Cir.1979), cert. denied, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979). See also Security National Bank v. Belleville Livestock Commission Co., 619 F.2d 840 (6th Cir.1980).

Accord: New Jersey Life Insurance Co. v. Getz, 622 F.2d 198, 200 (6th Cir.1980).

In applying this standard, we look to the record to determine whether there are any genuine issues of material fact.

IV.

We reemphasize that the controlling issue presented by the interpleader complaint is who are the trustees of the trust established by Francis D. Shelden. The district court found: (1) that the original trustee named by the settlor was the Trust Company of the Virgin Islands, Ltd.; (2) that the original trustee was removed legally and in accordance with the provisions of the trust instrument and on April 13, 1978 Edward Brongersma of the Netherlands was named as first successor trustee; (3) that thereafter, the first successor trustee was removed legally and in accordance with the trust instrument; (4) that L. Bennett Young of Michigan and the Detroit Bank and Trust Company were named second successor co-trustees; (5) that the settlor, in his de bene esse deposition, reaffirmed the fact of each of the foregoing steps; and (6) that L. Bennett Young and the Detroit Bank and Trust Company are the lawful and proper second successor co-trustees.

Viewing the evidence in the light most favorable to Appellants, we conclude that there is no genuine issue of material fact as to the identity of the present trustees of the trust. The trust instrument (See Appendix No. 1 hereto) gave both the settlor and the protector of the trust express authority to remove trustees and appoint successor trustees. Each of the changes in trustees was made in accordance with the provisions of the trust instrument; they were verified by documentary evidence, and ratified by ...