Rucker v. Branch Banking & Tr. Co.

ELIZABETH (BETSY) RUCKER, et al., Plaintiffs, v. BRANCH BANKING AND TRUST COMPANY, Defendant.

Case No.: GJH-20-0881

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND Southern Division

March 14, 2021

MEMORANDUM OPINION

Plaintiffs Elizabeth (Betsy) Rucker, Sally K. Renuart, Robert F. Trotter, Jr., Dell H. Ross, Katherine Erwin, John Gray Bynum Erwin, Anne-Marie Trotter Grill, Constance K. Camunas, and David J. Kitchin, III (collectively, "Plaintiffs"), as beneficiaries of a testamentary trust created by William Y. Kitchin ("the WYK Trust"), bring this action against Branch Banking and Trust Company ("BB&T" or "Defendant"), now Truist Bank, as trustee of the WTK Trust. ECF No. 2. Plaintiffs bring six state law claims against BB&T: breach of fiduciary duty (Count I), negligence (Count II), conversion (Count III), negligent misrepresentation (Count IV), fraud (Count V), and specific performance (Count VI). Id. Pending before the Court is Defendant BB&T's Motion to Dismiss Plaintiffs' Complaint, or in the Alternative, Motion for Summary Judgment. ECF No. 4. No hearing is necessary. See Loc. R. 105.6 (D. Md. 2018). For the following reasons, Defendant's Motion to Dismiss is granted.¹

I. BACKGROUND²

William Y. Kitchin, Plaintiffs' uncle (or great uncle), passed away on April 5, 1982. ECF No. 2 ¶ 7. Mr. Kitchin's Last Will and Testament (the "Last Will and Testament"), ECF No. 4-2,³ was dated October 29, 1980, and his Last Will and Testament, First Codicil (the "First Codicil"), ECF No. 4-3—which amended the Last Will and Testament—was dated May 20, 1981. ECF No. 2 ¶ 8, ECF No 4-2; ECF No. 4-3. Mr. Kitchin's Last Will and Testament was subject to probate from 1982 to 1988. ECF No. 2 ¶ 9.

The First Codicil states in paragraph eight (b) that: "The trustee shall pay quarter-annually the income from 711 shares of United Technologies stock to the discretionary fund of William H.G. Ticknor, Rector of St. James Episcopal Church at Lothian Parish, so long as he is Rector or dies." ECF No. 2 ¶ 11; ECF No. 4-3 at 3.⁴ Then, in paragraph nine, the First Codicil states: "When the life tenancies of . . . my United Technologies stock . . . be terminated, said stocks are to be distributed to my brothers and sisters or their heirs as above stipulated." ECF No. 2 ¶ 12; ECF No. 4-3 at 4. Plaintiffs allege they are beneficiaries under paragraph nine of the First Codicil. See generally ECF No. 2.

Farmers National Bank of Maryland, along with two lawyers who are now deceased, was the original trustee and managed the WYK Trust created by Mr. Kitchin's Last Will andTestament and First Codicil. ECF No. 2 ¶ 13. Farmers National Bank of Maryland merged into BB&T on or about October 11, 2003, and subsequently operated as part of BB&T. Id. ¶ 15. As a result of the merger, BB&T became the trustee and has since maintained and executed on the other sections of the Last Will and Testament. Id.

The United Technologies Corporation ("UTX") stock referenced in the First Codicil split on June 10, 1984. Id. ¶ 22. Consequently, on August 17, 1988, the WYK Trust was funded with 1,422 shares of UTX stock, instead of 711 shares. Id. ¶ 14. The UTX stock split again on December 10, 1996, and a third time on May 17, 1999. Id. ¶ 22. As of the time the Complaint was filed, the original 711 shares of UTX stock referenced in the First Codicil would total 11,376 shares if they had been retained by the trustee. Id. ¶ 23,

Mr. Tickner,⁵ Rector of St. James Episcopal Church at Lothian Parish, retired on or about April 19, 2018. Id. ¶ 16. After learning of Mr. Tickner's retirement, on May 18, 2018, Plaintiff Rucker went to the Annapolis, Maryland branch of BB&T to determine the next steps that BB&T would take to distribute the shares of UTX stock to the beneficiaries identified in paragraph nine of the First Codicil. Id. ¶ 17. An employee of BB&T, Jason Haddaway, indicated that he would forward Plaintiff Rucker's information to BB&T's Wealth Management Department. Id.

According to Plaintiff Rucker's understanding, BB&T began researching the Last Will and Testament in June 2018. Id. On February 21, 2019, another employee of BB&T, Sarah Hancock, stated that BB&T could not locate the UTX stock and told Plaintiff Rucker that BB&T had no records of ever having managed the WYK Trust. Id. ¶ 18. However, later, on March 1, 2019, BB&T admitted that it was the trustee. Id. ¶ 19; ECF No. 7 at 9-10. Plaintiff Ruckersubsequently learned from BB&T that, between November 1988 and June 1992, BB&T's predecessor, acting as trustee, had sold the 1,422 shares of UTX stock used to fund the WYK Trust and purchased mutual funds, which diminished the distributions to the Plaintiffs. ECF No. 2 ¶¶ 20, 21. Plaintiffs allege that BB&T and its predecessor sold the UTX stock "only to enrich itself from the sales" and that the "sales did not benefit the Plaintiffs and, in fact, deprived them of the significant value of the stock today. Id. ¶ 31.

Plaintiffs filed this civil action in the Circuit Court for Prince George's County, Maryland on February 27, 2020, alleging BB&T, as trustee, is liable to Plaintiffs for breach of fiduciary duty, negligence, conversion, negligent misrepresentation, fraud, and specific performance. ECF No. 1 at 2; ECF No. 2. BB&T timely removed the action to the United States District Court for the District of Maryland, Southern Division on April 2, 2020, ECF No. 1, and filed the instant Motion to Dismiss, or in the Alternative, Motion for Summary Judgment on April 8, 2020, ECF No. 4. Plaintiffs responded in opposition on July 15, 2020, ECF No. 7, and BB&T replied on July 29, 2020, ECF No. 10.

II. STANDARD OF REVIEW

To survive a Rule 12(b)(6) motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555 ("a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels andconclusions, and a formulaic recitation of a cause of action's elements will not do.")).

The purpose of Rule 12(b)(6) "is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (citation and internal quotation marks omitted). When deciding a motion to dismiss under Rule 12(b)(6), a court "must accept as true all of the factual allegations contained in the complaint," and must "draw all reasonable inferences [from those facts] in favor of the plaintiff." E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations and internal quotation marks omitted). The Court need not, however, accept unsupported legal allegations, see Revene v. Charles Cty. Comm'rs, 882 F.2d 870, 873 (4th Cir. 1989), legal conclusions couched as factual allegations, Papasan v. Allain, 478 U.S. 265, 286 (1986), or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters of Norfolk v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979).

When ruling on a motion to dismiss, a court's evaluation is generally limited to allegations contained in the complaint. Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016). However, courts may also consider documents explicitly incorporated into the complaint by reference. Id. at 166 (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)). In addition, a court may "consider a document submitted by the movant that was not attached to or expressly incorporated in a complaint, so long as the document was integral to the complaint and there is no dispute about the document's authenticity." Id. (citing Sec'y of State for Defence v. Trimble Nav. Ltd., 484 F.3d 700, 705 (4th Cir. 2007)). A document is "integral" when "its 'very existence, and not the mere information it contains, gives rise to the legal rights asserted.'" Chesapeake Bay Found. Inc., v. Severstal Sparrows Point, LLC, 794 F.Supp. 2d 602, 611 (D. Md. 2011) (citation and emphasis omitted). Considering such documents does not convert a motion to dismiss to one for summary judgment. Goldfarb v. Mayor & City Council of Balt., 791 F.3d 500, 508 (4th Cir. 2015).

Defendant's Motion is styled as a Motion to Dismiss or, in the Alternative, Motion for Summary Judgment. Here, however, the Court does not consider matters outside the pleadings and thus will treat BB&T's motion as a motion to dismiss. See Fed. R. Civ. P. 12(d).

III. DISCUSSION

In its Motion to Dismiss, BB&T raises five arguments that it believes are fatal to Plaintiffs' claims: (1) the Complaint is procedurally defective because it fails to request that the Court assume jurisdiction over the WYK Trust as required by the Maryland Trust Act, ECF No. 4-1 at 5-7; (2) Plaintiffs failed to bring the claims within the 3-year statute of limitations period, id. at 9-10; (3) the trustee has the authority to diversify the WYK Trust assets, id. at 7-9; (4) the allegations in the Complaint do not satisfy the pleading standard required by Twombly/Iqbal, id. at 10-16; and (5) the Complaint fails to state a claim for a jury trial and punitive damages, id. at 16. The Court addresses Defendant's first four arguments separately below. Because the Court finds that Plaintiffs fail to state a claim for relief and dismisses Plaintiffs' Complaint on that ground, the Court does not consider BB&T's final argument regarding Plaintiffs' requests for a jury trial...