Reliance Trust Co. v. Candler

• Decision Date: 12 April 2012
• Docket Number: No. A11A1807.,A11A1807.
• Citation: 726 S.E.2d 636,12 FCDR 1257,315 Ga.App. 495
• Parties: RELIANCE TRUST COMPANY v. CANDLER et al.
• Court: Georgia Court of Appeals

315 Ga.App. 495

726 S.E.2d 636

12 FCDR 1257

RELIANCE TRUST COMPANY

v.CANDLER et al.

No. A11A1807.

Court of Appeals of Georgia.

March 26, 2012.

Reconsideration Denied April 12, 2012.

Bryan, Cave, Powell & Goldstein, William V. Custer IV, Nicole Jennings Wade, Luke A. Lantta, Atlanta, appellant.

Gaslowitz Frankel, Craig M. Frankel, Brian Michael Deutsch, Kathy R. Bess, Robert Peter Marcovitch, Atlanta, for for appellees.

MILLER, Judge.

Reliance Trust Company (“Reliance”) was a co-trustee, along with Charles Howard (“Buddy”) Candler III, of a revocable marital trust created by Buddy's late wife. Pursuant to the provisions of the marital trust, Buddy was to receive the income generated by the trust; under certain circumstances, and in the discretion of the trustee, Buddy was also entitled to receive distributions from the corpus of the trust. Before his death, Buddy exercised his limited power of appointment pursuant to the trust and appointed any remaining corpus to his eight grandchildren, who are the plaintiffs/appellees in this case.¹Buddy subsequently died in 2005. The grandchildren filed suit against Reliance for making improper distributions from the trust corpus. Reliance moved for summary judgment, asserting in part that the grandchildren's claims were barred because there was no evidence that Reliance abused its discretion in making the distributions. The trial court denied Reliance's motion for summary judgment. The grandchildren's claims proceeded to a jury trial, following which a verdict and judgment were entered in favor of the grandchildren. Reliance filed a motion for new trial, which the trial court denied. Reliance appealed, contending that the trial court erred in (1) denying Reliance's motion for summary judgment; (2) entering judgment on the verdict and denying Reliance's motion for new trial because there was no evidence to support the verdict and the damages award; (3) excluding certain testimony concerning the details about prior litigation between Buddy and his children; (4) instructing the jury that it was not bound to use the former statutory definition of “income” and denying Reliance's request to charge the jury on the former statutory definitionof “ principal”; and (5) calculating interest awarded to the grandchildren.

Where a jury returns a verdict, the same must be affirmed on appeal if there is any evidence to support it, and the evidence is to be construed in a light most favorable to the prevailing party with every presumption and inference in favor of sustaining the verdict. We review a denial of a motion for a new trial according to this same standard. Thus, a jury verdict, after approval by the trial court, and the judgment thereon will not be disturbed on appeal if supported by any evidence, in the absence of any material error of law.

(Citations and punctuation omitted.) Green v. Key Custom Homes, Inc., 302 Ga.App. 800, 802–803(1), 692 S.E.2d 56 (2010).

So viewed, the evidence shows that Buddy Candler and Claire Clement Candler were married in 1951. They had four children together and eight grandchildren. In 1996, the year before Claire's death, she established a marital trust identifying Buddy as the lifetime beneficiary of any income generated by the trust. With respect to the corpus of the marital trust, the trust instrument set forth the following encroachment provision:

Whenever in the sole judgment of the [t]rustee the income being paid to [Buddy], together with any other income or periodic payments known to the [t]rustee that are being received by [Buddy] shall be insufficient for his proper support, maintenance, or to enable him to meet any difficulty produced by sickness, accident, or similar cause, such portion of the corpus of this trust estate as in the discretion of the [t]rustee is deemed appropriate shall be paid to him or for his benefit.

The trust instrument also gave Buddy limited power of appointment to designate who, as between his children and grandchildren, would receive the remaining trust corpus upon his death. The marital trust was funded upon Claire's death in 1997, at which time Buddy succeeded Claire as co-trustee along with Jack Sawyer. Wachovia Bank succeeded Sawyer as co-trustee in May 2000, and Reliance succeeded Wachovia Bank as co-trustee in June 2001. At the time Reliance became co-trustee, the corpus of the marital trust contained $2.1 million. Pursuant to the encroachment provision of the marital trust, Reliance authorized over $1 million worth of Buddy's distribution requests before his death in December 2005. At the time of Buddy's death, the corpus of the marital trust contained only $838,762. Pursuant to Buddy's will, his eight grandchildren were appointed as the remainder beneficiaries of the marital trust. In 2007, Buddy's grandchildren filed suit against Reliance, alleging that Reliance improperly invaded the corpus of the marital trust and raising claims against Reliance for breach of trust, waste of trust assets, and attorney fees.

1. Reliance first contends that the trial court erred in denying Reliance's motion for summary judgment because there was no evidence that Reliance abused its discretion in making distributions to Buddy from the corpus of the marital trust. “When the case has proceeded to trial and the verdict and judgment is before us for review, if the evidence supports the verdict, the issue of an earlier denial of summary judgment is moot.” (Citations omitted.) Schirmer v. Amoroso, 209 Ga.App. 682, 683(2), 434 S.E.2d 80 (1993). Here, Reliance sought summary judgment on the same issue considered and decided by the jury. Cf. Malcom v. Morgan County Bd. of Tax Assessors, 308 Ga.App. 61, 62, 706 S.E.2d 583 (2011). As addressed in Division 2 below, we affirm the trial court's denial of Reliance's motion for new trial, because there was evidence to support the jury's verdict. Thus, the propriety of Reliance's summary judgment is a moot issue. Contra Schirmer, supra, 209 Ga.App. at 683–684(2), 434 S.E.2d 80 (“We reverse the denial of appellants' motion for new trial as there is no evidence to support the verdict, so the issue of summary judgment is not moot.”). “Because the denial of [Reliance's] motion for summary judgment presents nothing for us to review, this enumeration of error lacks merit.” (Citation and punctuation omitted.) Blazi v. Rich, 306 Ga.App. 529, 530(1), 702 S.E.2d 768 (2010).

2. Reliance next contends that the trial court erred in denying Reliance's motion for new trial because there was no evidence to support the verdict and the damages award. We disagree.

Reliance moved for a new trial under both OCGA §§ 5–5–20 and 51–12–12(b). OCGA § 5–5–20 authorizes a trial court to grant a new trial “[i]n any case when the verdict of a jury is found contrary to evidence and the principles of justice and equity[.]” OCGA § 51–12–12(b) also authorizes a trial court to grant a new trial “[i]f the jury's award of damages is clearly so inadequate or so excessive as to any party as to be inconsistent with the preponderance of the evidence[.]” Under either ground, “[t]he grant or denial of a motion for new trial is a matter within the sound discretion of the trial court and will not be disturbed if there is any evidence to authorize it.” (Punctuation and footnote omitted.) Beckett v. Monroe, 249 Ga.App. 615, 616(2), 548 S.E.2d 131 (2001); see also Green, supra, 302 Ga.App. at 803(2), 692 S.E.2d 56;ARA Health Svcs. v. Stitt, 250 Ga.App. 420, 424(2), 551 S.E.2d 793 (2001) ( “[T]he trial court's decision on a motion for a new trial will be upheld on appeal unless it was an abuse of discretion.”) (citation and punctuation omitted).

Here, we cannot say that the trial court abused its discretion in denying Reliance's motion for new trial since the evidence, when viewed in the light most favorable to the grandchildren, supported a finding that Reliance breached its fiduciary duties as co-trustee and was liable to the grandchildren for resulting damages in the amount of $1,140,924.41.

“The trustee shall be accountable to the beneficiary for the trust property. A violation by the trustee of any duty that the trustee owes the beneficiary shall be a breach of trust.” OCGA § 53–12–300.² In order to recover for a trustee's breach of trust, a beneficiary must show proof of damages proximately caused by the breach. See SunTrust Bank v. Merritt, 272 Ga.App. 485, 489(2), 612 S.E.2d 818 (2005)(“Establishing a claim for breach of fiduciary duty requires proof of three elements: (1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage proximately caused by the breach.”) (punctuation and footnote omitted).

First, there was evidence that Reliance owed a fiduciary duty to the grandchildren, who were the remainder beneficiaries of the marital trust. “In trusts like the present one with successive beneficiaries, that is[,] income to a beneficiary for life and the principal later to other beneficiaries, the interests of the two beneficiaries are to a certain extent antagonistic, and the trustee is under a duty so to administer the trust as to preserve a fair balance between them.” (Citation, punctuation and footnote omitted.) Suntrust Bank, supra, 272 Ga.App. at 488(1), 612 S.E.2d 818. Here, the trust language made clear that Buddy was entitled to the income, and that the remainder beneficiaries—later designated as the grandchildren—were entitled to the corpus. “Under these circumstances, the duty owed to the remainder beneficiaries [was] to preserve and protect ... the corpus of the trust.” (Punctuation and footnote omitted.) Id.

Second, there was evidence that Reliance violated the fiduciary duty owed to the grandchildren by abusing its discretionary powers under the encroachment provision of the marital trust.

(1) A discretionary power conferred upon the trustee to determine the benefits of a trust beneficiary is subject to judicial control only to prevent misinterpretation or abuse of the discretion by...