Opinion
NUMBER 2012 CA 1382
04-24-2013
IN THE MATTER OF THE MASHBURN MARITAL TRUST
L. Kevin Coleman Mandeville, LA Attorney for Appellants Joseph Patton "Pat" Mashburn and Richard Anthony Mashburn, in their capacities as the Co-Trustees of the Mashburn Family Trust, and Joseph P. Mashburn and Don Mashburn, in their capacities as Co-Trustees and Managing Trustees of the Jack and Sadie Pugh Mashburn Marital Trust Walter Antin, Jr. Hammond, LA Attorney for Appellee Timothy R. Mashburn
NOT DESIGNATED FOR PUBLICATION
Appealed from the
21st Judicial District Court
In and for the Parish of Tangipahoa, Louisiana
Trial Court Number 2001-003363 c/w 71,685
Honorable Ernest G. Drake, Jr., Judge
L. Kevin Coleman
Mandeville, LA
Attorney for Appellants
Joseph Patton "Pat"
Mashburn and Richard Anthony
Mashburn, in their capacities as the
Co-Trustees of the Mashburn Family
Trust, and Joseph P. Mashburn and
Don Mashburn, in their capacities as
Co-Trustees and Managing Trustees
of the Jack and Sadie Pugh Mashburn
Marital Trust
Walter Antin, Jr.
Hammond, LA
Attorney for Appellee
Timothy R. Mashburn
BEFORE: PARRO, WELCH, AND KLINE, JJ.
Hon. William F. Kline, Jr., retired, is serving as judge ad hoc by special appointment of the Louisiana Supreme Court.
WELCH, J.
In this appeal, Joseph Patton ("Pat") Mashburn and Donald J. ("Don") Mashburn, in their capacities as the managing co-trustees of the Jack and Sadie Pugh Mashburn Marital Trust ("marital trust"), and Pat Mashburn and Richard A. Mashburn, in their capacities as the co-trustees of the Mashburn Family Trust ("family trust"), appeal a trial court judgment granting a motion to compel an accounting and the distribution of trust incomes for 2011 filed by Timothy R. ("Tim") Mashburn and taxing all costs of the proceedings to Pat Mashburn, Don Mashburn, and Richard Mashburn. In accordance with Uniform Rules—Courts of Appeal, Rule 2-16.1(B), we reverse the judgment of the trial court and remand with instructions.
The background facts of this case are more fully set forth in the seven previous opinions by this court in this matter. Essentially, John S. ("Jack") and Sarah ("Sadie") Pugh Mashburn had nine children: Helen Mashburn Penton, John S. Mashburn, Jr., Pat Mashburn, Don Mashburn, Michael F. Mashburn, Rita A. Mashburn, Tim Mashburn, William T. Mashburn, and Richard Mashburn. By an authentic act executed on December 18, 1975, Jack and Sadie Mashburn created the family trust, with their nine children designated as both the income and principal beneficiaries of the trust. By an authentic act executed on June 8, 1984, Jack and Sadie Mashburn also created the marital trust. With regard to the marital trust, Jack and Sadie Mashburn were the initial income beneficiaries, and upon their death, their nine children were to succeed to their interests as the secondary income beneficiaries. Jack and Sadie Mashburn's nine children were also designated as the principal beneficiaries of the marital trust. These two trusts each contained nine separate trusts, one for each of the settlors' nine children who are income and principal beneficiaries of their respective trusts. The assets of each group of trusts may be and are comingled for management as a whole, and the cotrustees must provide one annual account for each of the two groups as a whole.
In Re Mashburn Marital Trust 2004-1678 (La. App. 1st Cir. 12/29/05), 924 So.2d 242, writ denied, 2006-1034 (La. 9/22/06), 937 So.2d 384 ("Mashburn Marital Trust (I)"); In Re Mashburn Marital Trusts, 2006-0741, 2006-0742, 2005-0887 (La. App. 1st Cir. 12/28/06), 951 So.2d 1136, writs denied, 2007-0403, 2007-0446 (La. 4/20/07), 954 So.2d 164, 167 ("Mashburn Marital Trust (II)"); In Re Mashburn Marital Trust, 2006-1753, 2006-1754, 2005-0887 (La. App. 1st Cir. 12/28/06), 947 So.2d 852 (unpublished opinion),writ denied,2007-0403 and 2007-0446 (La. 4/20/07), 954 So.2d 164 and 167 ("Mashburn Marital Trust (III)"); In Re Mashburn Marital Trust, 2008-0450 (La. App. 1st Cir. 10/31/08), 994 So.2d 157 (unpublished opinion) ("Mashburn Marital Trust (IV)"); In Re Mashburn Marital Trusts, 2010-0278 (La. App. 1st Cir. 12/22/10), 52 So.3d 1136, writ denied, 2011-0177 (La. 5/20/11), 63 So.3d 978 ("Mashburn Marital Trust (V)"); In Re Mashburn Marital Trust, 2010-1104 (La. App. 1st Cir. 12/22/10), 52 So.3d 1127, writs denied, 2011-0474, 2011-0490 (La.5/20/11), 63 So.3d 981 ("Mashburn Marital Trust (VI)"); and In Re Mashburn Marital Trusts, 2010-1819 (La. App. 1st Cir. 3/25/11), 58 So.3d 1154 (unpublished opinion),writ denied, 2011-0818 (La. 5/20/11), 63 So.3d 988 ("Mashburn Marital Trust (VII)").
Following the deaths of Jack and Sadie Mashburn, the two trusts they established have been the subject of extensive litigation in both the trial court and this court. The latest dispute involves a motion filed by Tim Mashburn on February 1, 2012, to compel the trustees to render accounts and distribute the 2011 income of both Tim Mashburn's individual marital trust and his individual family trust. Following a hearing on March 12, 2012, the trial court signed a judgment on the same day granting the motion to compel; ordering the trustees to render accounts and distribute the 2011 income from both individual trusts to Tim Mashburn before May 1, 2012; and taxing all costs of the proceedings to Pat Mashburn, Don Mashburn, and Richard Mashburn. From this judgment, Pat Mashburn and Don Mashburn, in their capacities as the managing co-trustees of the marital trust, and Pat Mashburn and Richard Mashburn, in their capacities as the co-trustees of the family trust, appeal asserting that the trial court erred in: (1) granting Tim Mashburn's motion and assessing costs to the co-trustees and (2) failing to impose sanctions on Tim Mashburn and/or his attorney.
See Footnote 2; see also In Re Mashburn Marital Trust, 2005-1343 (La. App. 1st Cir. 8/8/05) (unpublished writ action);In Re Mashburn Marital Trust, 2005-1759 (La. App. 1st Cir. 10/17/05) (unpublished writ action);In Re Mashburn Marital Trust, 2005-1785 (La. App. 1st Cir. 10/17/05) (unpublished writ action); In Re Mashburn Marital Trust, 2008-0534 (La. App. 1st Cir. 3/20/08) (unpublished writ action); In Re Mashburn Marital Trust, 2008-1619 (La. App. 1st Cir. 4/9/09) (unpublished writ action).
Paragraph 1.3 of the family trust provides that "[t]he property delivered to the Trustee under this Trust, shall be divided into equal shares, one share for the benefit of each of the Settlors' children, as beneficiaries of both principal and income. Each share shall be held as and shall constitute a separate trust." Additionally, paragraph 1.4 of the family trust provides that "[a]ll of the income of each Trust shall be paid to the beneficiary of that Trust annually, or such more frequent intervals as the Trustee may see fit."
Paragraph 4.05 of the marital trust provides that:
Upon termination of the interest of the first income beneficiaries, SETTLORS['] children (or, if any be deceased, their children per stirpes) shall succeed to such interest and become secondary income beneficiaries. At that point, the TRUSTEE shall distribute to or for the benefit of the secondary income beneficiaries: all of the income of the trust, the frequency of such payments to be at least annually.
Thus, both the family trust and marital trust instruments provide that the income from each trust shall be distributed at least once "annually." Furthermore, neither trust instrument sets forth a specific date for that distribution of income.
As previously noted, Tim Mashburn filed his motion to compel the distribution of 2011 income on February 1, 2012, and the hearing was held on March 12, 2012. At the hearing, the testimony of Pat Mashburn, who is a managing co-trustee of the marital trust and a co-trustee of the family trust, and the documentary evidence established that, since 2003, the annual income from both sets of trusts has always been distributed in April of the following year and that the last distribution of income (for the year 2010) was on April 7, 2011. Thus, when Tim Mashburn filed his motion to compel approximately 10 months later (and by the time of the March 12, 2012 hearing), there had been no failure by the co-trustees of each trust to distribute the income of the trusts at least once "annually." Accordingly, we must conclude that, at the time Tim Mashburn filed his motion to compel, the motion was premature.
The only exception occurred in 2007 when the income for 2006 was distributed on March 24, 2007.
However, the trial court, despite recognizing that Tim Mashburn was "jumping the gun" when he filed his motion, did not dismiss the motion, but rather, granted the motion, ordered the co-trustees to render accounts and distribute income from both trusts to Tim Mashburn before May 1, 2012, and taxed all costs to the co-trustees. As we have concluded that the motion to compel was premature, we reverse the March 12, 2012 judgment of the trial court in its entirety.
See La. R.S. 9:2115.
In addition, we note that in Tim Mashburn's motion to compel, he sought (and the trial court ordered) the distribution of income from both Tim Mashburn's individual family trust and his individual marital trust. However, in In Re Mashburn Marital Trusts, 2010-0278 (La. App. 1st Cir. 12/22/10), 52 So.3d 1136, 1146 writ denied, 2011-0177 (La. 5/20/11), 63 So.3d 978 ("Mashburn Marital Trust (V)"), In Re Mashburn Marital Trust, 2010-1104 (La. App. 1st Cir. 12/22/10), 52 So.3d 1127, 1131, writs denied, 2011-0474, 2011-0490 (La. 5/20/11), 63 So.3d 981 ("Mashburn Marital Trust (VI)"), and In Re Mashburn Marital Trusts, 2010-1819, p. 4 (La. App. 1st Cir. 3/25/11), 58 So.3d 1154 (unpublished opinion), writ denied, 2011-0818, 2011-0490 (La. 5/20/11), 63 So.3d 988 ("Mashburn Marital Trust (VII)"), we clearly held that Tim Mashburn was not entitled to the distribution of any income from the marital trust until the amount of the principal previously (and improperly) advanced to him ($41,848) had been repaid. Tim Mashburn has not repaid this sum to his marital trust, and therefore, he is not entitled to an order compelling the distribution of any income from that trust. Therefore, to the extent that Tim Mashburn's motion to compel sought the distribution of income from the marital trust, we find that the motion was without any legal basis and in disregard of this court's previous rulings.
Prior to the appeal in Mashburn Marital Trust (II), the trial court ordered the managing cotrustees of the marital trust to distribute the sum of $2,000.00 per month to Tim Mashburn from the income of his marital trust, and if necessary, from its principal. Mashburn Marital Trust (II), 951 So.2d at 1139. In Mashburn Marital Trust (II), 951 So.2d at 1145-1146, we reversed that judgment of the trial court, concluding that Tim Mashburn was not entitled to distributions from the principal of his marital trust. However, prior to the managing co-trustees of the marital trust perfecting a suspensive appeal of the trial court's judgment ordering the monthly payment, distributions from the principal of Tim Mashburn's marital trust were made to him. Id. at 1145.
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With regard to sanctions under La. C.C.P. art. 863 against Tim Mashburn and/or his counsel with regard to the motion to compel, we recognize that the cotrustees of the trusts did not move for or request such sanctions in the trial court, and thus, there was no hearing on sanctions in the trial court. Louisiana Code of Civil Procedure article 863(E) clearly provides that any sanction authorized by that article "shall be imposed only after a hearing at which any party or his counsel may present any evidence or argument relevant to the issue of imposition of the sanction." However, given that the trial court had granted the motion to compel, any motion for sanctions by the co-trustees at that time would have been a vain and useless act.
Although we have concluded that Tim Mashburn's motion to compel was premature and, in part, unfounded and without any basis, based on the record before us, we do not have sufficient information relevant to the issue of sanctions. Therefore, we remand this matter to the trial court to consider on its own motion, or on motion of any party, whether a hearing under La. C.C.P. art. 863 for the imposition of any sanctions is appropriate.
Additionally, in Mashburn Marital Trust (V), 52 So.3d at 1144-1145, although we recognized that Tim Mashburn had been litigating against the trustees for his own personal benefit (at the expense of trust assets), we concluded that the past litigation expenses should be assessed pro rata from the income (and if necessary from the principal) of all nine marital trusts and all nine family trusts. However, we also noted that, if a trust beneficiary instigated an unfounded or frivolous proceeding against a trust or trustee in bad faith, that the trial court had the power to charge the reasonable and necessary fees incurred by the trustee in opposing that proceeding against that beneficiary's individual share of the trust estate. Mashburn Marital Trust (V), 52 So.3d at 1145 n.6. Therefore, because we have concluded that Tim Mashburn's motion herein was unfounded, in part, and premature, we also remand this matter to the trial court to consider whether the reasonable and necessary fees incurred by the co-trustees in opposing Tim Mashburn's motion to compel (including those arising from this appeal) should be charged against Tim Mashburn's individual trust estates. See Mashburn Marital Trust (V), 52 So.3d at 1145 n.6.
For all of the above and foregoing reasons, the March 12, 2012 judgment of the trial court is reversed and this matter is remanded for consideration of the issues of sanctions and the assessment of fees in accordance with the views expressed in this opinion.
All costs of this appeal are assessed to Timothy R, Mashburn.
REVERSED AND REMANDED WITH INSTRUCTIONS.