Lucas v. Acheson

A. JOHN LUCAS; GEORGE M. TAYLOR, III,

as Designated Co-Trustee of the Thomas M. Acheson Revocable Trust;

THE THOMAS M. ACHESON REVOCABLE TRUST, Plaintiffs, v. DAVID J. ACHESON; SHEREE N. ACHESON, Defendants.

SHEREE N. ACHESON, Cross Claimant, v. DAVID J. ACHESON, Cross Defendant.

CASE NO. 2:14-CV-0856-SLB

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

February 18, 2015

MEMORANDUM OPINION

This case is presently pending before the court on defendant/cross defendant David Acheson's Motion to Dismiss or, in the Alternative, Motion to Abstain, (doc. 14),¹ and Motion to Dismiss Crossclaim, (doc. 18). Plaintiffs, A. John Lucas, George M. Taylor, III, and the Thomas M. Acheson Revocable Trust, filed the instant interpleader and declaratoryjudgment action seeking to determine the amount of David Acheson's share of the Thomas M. Acheson Revocable Trust ["Revocable Trust"] following the death of Thomas Acheson.² Defendant/cross claimant Sheree Acheson has filed a cross claim based on outstanding promissory notes payable by David Acheson to Thomas and Sheree Acheson. Upon consideration of the record, the submissions of the parties, the arguments of counsel, and the relevant law, the court is of the opinion that David Acheson's Motions to Dismiss, (docs. 14, 18), are due to be denied and his Motion to Abstain (doc. 14), is due to be denied.

I. STATEMENT OF FACTS

Plaintiffs' Complaint in Interpleader and for Declaratory and Equitable Relief contains the following factual allegations, which the court assumes are true for purposes of deciding David Acheson's Motions:

PARTIES

5. Plaintiff A. John Lucas is an individual resident-citizen of Jefferson County, Alabama. He is a successor trustee of The Thomas M. Acheson Revocable Trust (the "Revocable Trust"). Mr. Lucas has served as Mr. Thomas Acheson's companies' Secretary/Treasurer and Controller for over 30 years and has extensive knowledge of the Acheson companies' financial affairs.

6. Plaintiff George M. Taylor, III, is an individual resident-citizen of Jefferson County, Alabama. He is a successor trustee of the Revocable Trust. Mr. Taylor has served as Mr. Acheson's general counsel and trusted legal advisor for over 20 years.

7. Plaintiff The Thomas M. Acheson Revocable Trust is a trust created by Thomas M. Acheson on October 10, 2000. It was amended several times during Mr. Acheson's lifetime, with the last such amendment occurring on May 6, 2010 (the "Sixth Amendment and Restatement of The Thomas M. Acheson Revocable Trust" . . .). The Revocable Trust is currently being administered by plaintiffs Lucas and Taylor.

8. Both Lucas and Taylor became the successor trustees of the Revocable Trust upon the death of the settlor of that Trust, Thomas M. Acheson. Mr. Acheson died on January 14, 2014. Since then, Lucas and Taylor have accepted their roles as trustees of the Revocable Trust and have performed various acts in their roles as trustees of that trust.

9. Defendant David J. Acheson is a resident-citizen of Ft. Myers, located in Lee County, Florida. He is a qualified beneficiary under the Revocable Trust. David Acheson is the son of Thomas M. Acheson and, upon information and belief, was estranged from his father at the time of his [father's] death.

10. Defendant Sheree N. Acheson is a resident-citizen of Vestavia Hills, located in Jefferson County, Alabama. She is a qualified beneficiary under the Revocable Trust. She was married to Thomas M. Acheson at the time of his death.

GENERAL ALLEGATIONS

A. CREATION OF THE REVOCABLE TRUST

11. Over several decades, Thomas M. Acheson successfully owned and operated several automobile dealerships in Hoover, Alabama, Memphis, Tennessee, Jackson, Mississippi, and Daphne, Alabama. For more than a decade, Mr. Acheson undertook a long and evolving process of planning his significant estate. His desire was to provide some money to his two children, David and Cameron Acheson, and his grandchild, Paige Acheson. Mr. Acheson, however, desired that the bulk of his assets and money go to his current wife, Sheree N. Acheson, to whom he was married for the last sixteen (16) years.

12. Throughout his life, Mr. Acheson remained in charge of his business empire and made major strategic decisions with respect to each of hisbusinesses, including decisions as to borrowing and investment of funds, the sale and purchase of dealerships, hiring and firing of employees, and relationships with manufacturers. Mr. Acheson remained active in his business and in charge of major decisions with respect to them until his death.

13. During his lifetime, Mr. Acheson established several inter vivos trusts in the course of implementing his estate plan. Mr. Acheson sought the advice of several estate planning professionals with respect to the creation, maintenance, and funding of these trusts. While several trusts were created, they all were part of a comprehensive estate plan that Mr. Acheson, with the assistance of his professional advisors, designed, implemented, and altered over time.

14. Mr. Acheson exercised a meticulous degree of control over the planning and drafting process for his estate plan. Planning was based both on his desires for distribution of his assets after his death and also on his desire to minimize tax consequences to the trusts and the beneficiaries.

15. Mr. Acheson created the Revocable Trust on October 10, 2000. He conveyed substantial assets to the Revocable Trust over a period of years, beginning in 2006. During the latter part of 2010 and in 2012, shares of stock owned by Mr. Acheson in automotive dealerships operating in Hoover, Memphis, Jackson, and Daphne were conveyed to the Revocable Trust. These transfers were done with prior approval of each of the manufacturers whose vehicles are sold by those dealerships, as required by existing Dealer Sales and Service Agreements. Each of the manufacturers duly approved the transfer of the shares and none has questioned the validity of the Revocable Trust, or the capacity of Mr. Acheson to establish the Revocable Trust or to convey the shares to the Revocable Trust. The position of Mr. Acheson as "dealer "principal" of each of the dealerships was critical to the business relationship between the dealerships and the manufacturers, and Mr. Acheson at all times prior to his death maintained good relations with the manufacturers, none of whom questioned his capacity or skill in acting as the chief executive officer of each dealership.

B. APPOINTMENT OF THE TRUSTEES

16. Mr. Acheson initially appointed himself as trustee of the Revocable Trust. Pursuant to Section 3 of the trust agreement, Mr. Acheson reserved the right to amend, modify, or revoke the trust. Mr. Acheson exercised hisprerogative under Section 3 by amending the Revocable Trust six times during his lifetime. Upon Mr. Acheson's death, the trust became irrevocable and is not subject to further amendment or revocation by anyone.

17. Pursuant to Section 17(c) of the Revocable Trust, upon the death of Mr. Acheson, A. John Lucas and George M. Taylor, III, were appointed by Mr. Acheson to serve as successor trustees and to exercise all powers granted to the trustees under the Revocable Trust.

18. Mr. Acheson died on January 14, 2014. A. John Lucas and George M. Taylor, III, thereafter accepted the position of successor trustees of the Revocable Trust and have taken actions in their capacity as successor trustees under that trust.

C. BENEFICIARIES OF THE REVOCABLE TRUST

19. The Revocable Trust had two principal beneficiaries. Sheree Acheson, as Mr. Acheson's wife, was the primary beneficiary. His son, David Acheson, was also provided for in the Revocable Trust.

20. Essentially, the [Revocable] Trust provides for the distribution of an amount to be made to David Acheson, which was described in the [Revocable] Trust as the "David Acheson Share." After distributing the David Acheson Share, the rest of the trust estate in the Revocable Trust is to be administered by the trustees for the benefit of Sheree Acheson.

D. THE PROMISSORY NOTES

21. Over the course of the past seven (7) years, David Acheson attempted to pursue various business ventures, and to do so he frequently borrowed money from Mr. Acheson and his wife, Sheree. A large portion of the money borrowed by David Acheson was used to acquire and run a restaurant in Destin, Florida, which operated under several different names. The restaurant lost hundreds of thousands of dollars and eventually went out of business.

22. The indebtedness of David Acheson to Mr. Acheson and his wife, Sheree, was evidenced by a series of promissory notes (the "David Acheson Notes"). . . .

23. Each of the David Acheson Notes was made payable to "Thomas M. Acheson and Sheree N. Acheson" and each included a specified interest rate. Several of the notes . . . were made payable in fifteen (15) annual installments. Two notes . . . were payable on demand.

24. Upon information and belief, not a single payment was ever made under any of the David Acheson Notes and they remain unpaid and outstanding, except that Mr. Acheson and his wife, Sheree, forgave certain amounts of indebtedness due, as set forth below:

DATE OF

PROMISSORY NOTE

AMOUNT OF

DEBT

FORGIVENESS

DATE OF

FORGIVENESS

September 22, 2006

$14,352

December 31, 2007

September 22, 2006

$19,176

December 31, 2008

September 22, 2006

$19,176

September 15, 2009

As of the end of April 2014, the current amount in principal and interest owed under the David Acheson Notes was approximately $2,923,944.

25. The Revocable Trust addresses the David Acheson Notes in Section 6(a)(i). This section directs the trustee to set aside the David Acheson Share, with such share "valued at $3,000,000 plus all promissory notes and other indebtedness owed by David J. Acheson to Grantor [Thomas M. Acheson] at the time of Grantor's death." The Revocable Trust further provides in Section 9 that the David Acheson Share is to be transferred, paid over and distributed to defendant David Acheson by the

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