Greider v. Bradkin (In re Greider Family Tr.)

In re: the matter of THE GREIDER FAMILY TRUST

SEBASTIAN EUGENE GREIDER, a single man,andBYRNE MARIE GREIDER, a single woman,As Beneficiaries of the Greider Family Trust, Appellants. v. CHERYL GREIDER BRADKIN and WILLIAM BRADKIN, wife andhusband, a marital community, Respondents.

No. 81194-1-I

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

March 15, 2021

UNPUBLISHED OPINION

ANDRUS, A.C.J. — Siblings Sebastian and Bryne Greider appeal the superior court's order on cross motions for summary judgment dismissing their Trust and Estate Dispute Resolution Act (TEDRA), ch. 11.96A RCW, petition with regard to the Greider Family Trust, a testamentary trust established by their grandparents. Because the trial court correctly determined there was insufficient evidence of breach of the Trustee's fiduciary duty or abuse of her discretion to warrant a trial, we affirm.

FACTS

In 1988, Eugene and Norma Greider created the Greider Family Trust (the Trust) for their benefit during their lifetimes and then for the benefit of their four children: Cheryl Greider Bradkin, Brett Greider, Buff Greider, and Laurey Greider. In October 2010, Norma, the Sole Trustor, passed away.¹ Cheryl began to administer the Trust as the Successor Trustee (the Trustee) and divided the Trust into four equal shares.

As Trustee, Cheryl began to pay estate expenses and prepare assets for distribution and sale. At the time of Norma's death, the Trust owned two parcels of real property in California: the 408 Oceanview property and the Los Altos property. In 2010, Brett was living at the 408 Oceanview property. The Trust sold the 408 Oceanview property in November 2011 and the Los Altos property five years later, in November 2016. Between 2011 and 2018, the Trustee made periodic partial distributions to and for the benefit of Brett and the other beneficiaries. The Trustee maintained an accounting spreadsheet to keep track of each beneficiary's distributions and share of costs. The Trustee also maintained a contemporaneous log to document her actions in administering the Trust.

Brett passed away unexpectedly in May 2018 in Guatemala, leaving his two adult children, Sebastian and Bryne Greider, as his sole heirs. Within days of Brett's death, Sebastian's and Bryne's stepfather requested Brett's financial information and directed the Trustee to treat him as the children's representative and to communicate only with him.

In July 2018, Sebastian and Byrne (Brett's heirs) filed a TEDRA petition, demanding an accounting and the distribution of Trust income. A year later, they filed a second amended petition, adding claims that the Trustee breached her fiduciary duty in various ways in administering the Trust and that those breaches resulted in damages of more than $289,000.

Brett's heirs then filed a motion for partial summary judgment. The Trustee also moved for summary judgment with respect to all claims. Both motions primarily relied on the same documentary evidence including the Trust document, the Trustee's accounting spreadsheet, the Trustee's log, and documentation of Brett's debt to the Trustors that was offset against his Trust share. In addition, the Trustee relied on professionally prepared forensic accounting documents spanning from October 2010 until September 2019 and on her own declaration.

Following a hearing, the court entered an order granting the Trustee's motion and denying Brett's heirs' motion. The court issued a separate letter ruling, explaining the basis for its decision. Brett's heirs appeal.

ANALYSIS

We review summary judgment orders de novo. In re Estate of Hambleton, 181 Wn.2d 802, 817, 335 P.3d 398 (2014). Summary judgment is proper only if there are no genuine issues of material fact and a party is entitled to judgment as a matter of law. CR 56(c). A genuine issue of material fact exists where "reasonable minds could differ on the facts controlling the outcome of the litigation." Ranger Ins. Co. v. Pierce County, 164 Wn.2d 545, 552, 192 P.3d 886 (2008). In determining whether an issue of material fact exists, the court must construe all facts and inferences in favor of the nonmoving party. Id.

As an initial matter, we can easily dispose of two of the arguments advanced by Brett's heirs. First, Brett's heirs focus on the trial court's letter ruling, characterizing the explanation of the court's reasoning as "findings," and arguing that in making those findings, the court improperly resolved factual disputes against them. But the function of a summary judgment proceeding is to determine whether a genuine issue of fact exists, not to determine issues of fact. Davenport v. Wash. Educ. Ass'n, 147 Wn. App. 704, 715 n. 22, 197 P.3d 686 (2008). As a result, our Supreme Court has "'held on numerous occasions that findings of fact and conclusions of law are superfluous in both summary judgment and judgment on the pleadings proceedings."' Id. at 715 n. 23 (quoting Wash. Optometric Ass'n v. Pierce County, 73 Wn.2d 445, 448, 438 P.2d 861 (1968)). To the extent that the trial court made any findings, they are superfluous and because our review is de novo, we do not consider them.

Second, Brett's heirs claim that the Trustee was not entitled to a Trustee's fee, in addition to reimbursement of her expenses. But although the Trustee submitted a declaration in support of such a fee, she withdrew the request. There is no ruling on the issue for this court to review.

Fiduciary Duty to Brett's Heirs

Brett's heirs contend that the court erred in granting summary judgment because (1) they were owed fiduciary duties under the Trust equivalent to those owed to the primary beneficiaries named in the Trust, and (2) the Trustee breached those duties.

A trustee is a fiduciary for a trust's beneficiaries and owes them the "highest degree of good faith, care, loyalty and integrity." Esmieu v. Schrag, 88 Wn.2d 490, 498, 563 P.2d 203 (1977). "It is the duty of a trustee to administer the trust in the interest of the beneficiaries." Tucker v. Brown, 20 Wn.2d 740, 768, 150 P.2d 604 (1944). A trustee's duties and powers are determined by the terms of the trust, by common law, and by statute. In re Estate of Ehlers, 80 Wn. App. 751, 757, 911 P.2d 1017 (1996).

Since Brett did not predecease the Trustors, the Trust makes no express provision for his heirs.² Nevertheless, Brett's heirs contend that, as "qualified beneficiaries," as defined by RCW 11.98.002(2)(b), they are also "contingentbeneficiaries" who are "entitled to the same fiduciary duty as primary beneficiaries."³

Brett's heirs cite no authority for this proposition. They rely on case law involving the interpretation and application of the prudent investor rule. See In re Estate of Cooper, 81 Wn. App. 79, 88, 913 P.2d 393 (1996) (the focus in applying the prudent investor rule is the trustee's conduct; the trust's performance is not controlling). Cooper involved a trust from which the decedent's surviving spouse only had the right to receive income from the trust during his lifetime with the corpus being distributed to her children upon the father's death. The children were thus named beneficiaries with a remainder interest in the trust corpus, significantly different circumstances from those here. Brett's heirs had no legal right to any portion of the Trust until Brett's death at which time they only had a right to whatever remained of Brett's share after the Trustee had offset Brett's share for expenses and advances.

Brett's heirs also cite commentary in the Restatement of Trusts which provides that the duty of impartiality in the case of multiple beneficiaries applies whether the beneficiaries' interests are "simultaneous or successive." See RESTATEMENT (SECOND) OF TRUSTS: DUTY TO DEAL IMPARTIALLY WITH BENEFICIARIES § 183 cmt. a. This does not further Brett's heirs' argument because a trusteeonly has a duty to successive beneficiaries when the trust is explicitly created for beneficiaries in succession. RESTATEMENT (SECOND) OF TRUSTS: IMPARTIALITY BETWEEN SUCCESSIVE BENEFICIARIES § 232. Specifically, a duty of impartiality applies when terms of a trust direct a trustee to pay income to one beneficiary for a designated period of time, and then to pay principal to another beneficiary. RESTATEMENT (SECOND) OF TRUSTS § 232 cmt. b. And even in those circumstances, the duty to balance potentially competing interests of beneficiaries does not equate to a duty to treat them equally; the trustee must be guided by the terms and purposes of the trust in weighing and prioritizing the interests of multiple beneficiaries. See RESTATEMENT (SECOND) OF TRUSTS § 232 cmt. c; RESTATEMENT (THIRD) OF TRUSTS: DUTY OF IMPARTIALITY; INCOME PRODUCTIVITY § 79 cmt. b. The Trust did not name Brett's heirs as successive beneficiaries. And while Brett's heirs' status as qualified beneficiaries gave them a right to receive limited information about the trust under RCW 11.98.072(1), they do not allege a violation of their rights under this provision.

Breach of Fiduciary Duties

Although Brett's heirs fail to establish that the Trustee owed fiduciary duties to them before May 2018 that were equivalent to the duties owed to the primary beneficiaries of the Trust, we nevertheless address their contention that the evidence demonstrates that the Trustee abused her discretion and/or violated her fiduciary duty by: (1) failing to immediately distribute each beneficiaries' Trust share upon the surviving Trustor's death, (2) disproportionately allocating expenses of the Trust, (3) reducing Brett's Trust share based on prior loans and(4) distributing Trust funds to third parties on Brett's behalf, and (5) failing to provide an accounting.

A trustee is a fiduciary who owes the highest degree of good faith, diligence, and undivided loyalty to the beneficiaries. Estate of Jordan v. Hartford Accident & Indem. Co., 120 Wn.2d 490, 502, 844 P.2d 403 (1993). A trustee's duties and powers are determined by the terms of the trust, by common law, and by sta...