Betty C. Goff Cartwright v. Jackson Capital ( 2012 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
March 20, 2012 Session
BETTY C. GOFF CARTWRIGHT v. JACKSON CAPITAL, ET AL.
Direct Appeal from the Chancery Court for Shelby County
No. CH-04-1266-2 Arnold Goldin, Chancellor
No. W2011-00570-COA-R3-CV - Filed June 5, 2012
This appeal involves various claims by a beneficiary of several trusts against his sister and
her husband, who serve as the trustee and co-trustee of some of the trusts. The
defendants/trustees filed a motion for partial summary judgment, claiming that they had
followed the terms of the trusts and paid the beneficiary all distributions to which he was
entitled pursuant to the trust documents. In response, the beneficiary asserted that the trust
documents were void either because they were fabricated, or because he executed them due
to undue influence. The trial court granted the defendants’ motion for partial summary
judgment, and the beneficiary voluntarily dismissed all of his remaining claims. The
beneficiary appeals. We affirm in part, reverse in part, and remand for further proceedings.
Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Affirmed
in Part, Reversed in Part, and Remanded
A LAN E. H IGHERS, P.J., W.S., delivered the opinion of the Court, in which D AVID R. F ARMER,
J., and H OLLY M. K IRBY, J., joined.
Jerry E. Mitchell, Justin E. Mitchell, Memphis, Tennessee, for the appellant, Alan C.
Cartwright
David Wade, Andrew Gardella, Memphis, Tennessee, for the appellees, Jackson Capital, et
al
OPINION
I. F ACTS & P ROCEDURAL H ISTORY
In the early 1950's, James and Betty Cartwright adopted two children, Alan and Alice.
James Cartwright was an attorney, and over the years, he placed the wealth that he and his
wife accumulated into numerous trusts for the benefit of his family members and others.
James Cartwright died in 1994. In 2004, Betty Cartwright remarried and initiated this case
by filing a complaint in the chancery court of Shelby County, naming as defendants her
children Alan and Alice, Alice’s husband, eighteen trusts, and two entities involved with the
family limited partnership. Alice served as trustee of several trusts of which Betty was a
beneficiary, and the complaint alleged that Alice had breached fiduciary duties, engaged in
self dealing, and created impermissible conflicts of interest. Accordingly, the complaint
sought to have Alice removed as trustee. The complaint also alleged that Alice and her
husband had breached their fiduciary duties as general partners of the family limited
partnership, and it sought to have the family limited partnership dissolved. Betty’s complaint
further alleged fraud, breach of contract, and breach of the duty of good faith and fair
dealing. The complaint listed Betty’s son Alan and the eighteen trusts simply as “Declaratory
Defendants.”
Alan Cartwright subsequently filed an answer and cross-claim against the other
defendants, which stated, “To the extent that the allegations in the Complaint are found to
be true, they are equally applicable to Alan Cartwright, and therefore, they are adopted and
incorporated herein by reference as completely and fully as if restated herein verbatim[.]”
Alan alleged that he had also been deprived of assets as a trust beneficiary, and he sought
removal of Alice as trustee, in addition to access to the trust corpus to the extent that the
court deemed appropriate.
Betty Cartwright died in May 2005, and thereafter, an order was entered dismissing
with prejudice all of the claims set forth in her complaint against the original defendants.
However, the cross-claim filed by Alan remained pending.
In 2007, Alan filed, in the circuit court of Shelby County, a “Complaint for
Conspiracy to Commit the Tort of Conversion of Property of Plaintiff.” The circuit court
complaint named as defendants the same individuals, trusts, and entities that were named as
defendants in the chancery court action, and the chancery court complaint was attached as
an exhibit and incorporated by reference. The circuit court complaint alleged a conspiracy
to convert Alan’s trust funds to the defendants’ own benefit, and a conspiracy to cause a
breach of the fiduciary duties owed to him in order to deprive him of his property. It sought
$50 million in damages.
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The defendants in the circuit court case filed a motion to dismiss or transfer the matter
to chancery court, asserting that the circuit court case was “against the same basic parties for
the same basic purpose as the Original Suit which [was] still pending in Chancery Court.”
Alan opposed the motion to dismiss or transfer by emphasizing the differences in the subject
matter of the two lawsuits. He insisted that the chancery court suit sought equitable relief
due to trust mismanagement, which “revolved around allegations that [Alan] had not received
sufficient distribution of assets” from the trusts. By contrast, Alan claimed, the tort suit
sought damages due to an alleged conspiracy to convert assets from a number of different
trust properties. Despite Alan’s objections, however, the circuit court concluded that a
“related matter” between the same parties had been pending in chancery court for several
years, and it entered an order transferring the matter before it to chancery court.
In the chancery court, an order was entered dismissing the transferred circuit court
matter without prejudice, but granting Alan permission to file an amendment to his chancery
court complaint to include the additional allegations. Alan then amended his complaint to
allege conspiracy to commit the tort of conversion of his property, and to request $50 million
in damages.
Defendants later filed a motion to bifurcate the issues, for discovery and for trial,
pursuant to Tennessee Rule of Civil Procedure 42.02. Defendants sought to separate from
the other issues in the case the issue of whether Alan had received the distributions to which
he was entitled under the various trust documents. Alan filed a response opposing the
bifurcation of the issues. The trial court ultimately granted the motion to bifurcate the issues,
concluding that “the issues of (1) the adequacy of distributions from the Trusts to the
Plaintiff and (2) the tort claims seeking direct recovery under tort theories are so distinct and
separable from one another that a trial of the first issue alone may be had without injustice.”
The trial court noted Alan’s previous characterization of the claims as separate and distinct,
when before the circuit court, in addition to the risk of juror confusion, and the fact that
“substantial discovery” remained on the manipulation and self-dealing allegations. In sum,
the court ordered that the issues regarding the express terms of the trust and partnership
documents, and whether Alan had received the distributions owed to him according to those
documents, would be tried first. The court ruled that “[t]estimony [could] be elicited, if
necessary and appropriate, regarding the circumstances surrounding the creation and
distributions from the various Trusts to the Plaintiff.”
Alice and her husband, who served as co-trustee of some of the trusts, filed a motion
for partial summary judgment with respect to Alan’s claim for breach of fiduciary duty,
asserting that they had fully complied with the terms of the trust documents and that Alan had
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received all distributions to which he was entitled.1 According to the defendants, the benefits
and payments which Alan sought were contrary to the terms of the trust documents. The
defendants argued that, as a matter of law, the trustees could not be found to have breached
their fiduciary duties when the undisputed facts demonstrated that they had followed the
directions of the trusts. They cited several provisions of the Tennessee Uniform Trust Code,
including Tennessee Code Annotated section 35-15-801, which directs a trustee to follow the
terms and purposes of the trust, and section 35-15-1006, which states, “A trustee who acts
in reasonable reliance on the terms of the trust as expressed in the trust instrument is not
liable to a beneficiary for a breach of trust2 to the extent the breach resulted from the
reliance.” In sum, the defendants argued that Alan could not prove that they had violated the
terms of the trust documents or failed to pay him what he was due under the trust documents,
and therefore, there was no basis for removing them from their position as trustees.3
In support of their motion for partial summary judgment, the defendants submitted
numerous trust documents, interrogatory responses, and testimony by affidavit and
deposition. This evidence showed that on June 30, 1978, James Cartwright and Alan
Cartwright executed the “Alan Cook Cartwright Grantor Trust Agreement,” which created
1
Although the motion was titled “Defendants’ Motion for Summary Judgment,” it sought summary
judgment only “as to this issue.” The motion did not address all of the issues before the court, and the parties
later referred to the motion as one for partial summary judgment.
We note that Alan also filed two motions for partial summary judgment, regarding whether Alice
and her husband were general partners of the family partnership, and whether Alan was owed for overdue
distributions from various trusts. These motions were heard along with the defendants' motion for partial
summary judgment, and they were eventually denied. The denial of Alan's motions for partial summary
judgment was not challenged on appeal.
2
“A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.” Tenn.
Code Ann. § 35-15-1001(a).
3
The defendants also argued in their motion for partial summary judgment that to the extent that
Alan was challenging their decision to invest trust assets in the family limited partnership, he similarly could
not prove that their decision constituted a breach of fiduciary duty because the trust documents and the
Tennessee Uniform Trust Code authorized them to make such an investment. For example, the ACC Grantor
Trust expressly authorized the trustee “to invest and reinvest all or any part of the corpus of the trust hereby
established in such . . . investments, or other property as to him seem[s] advisable and proper, irrespective
of whether the same are authorized for the investment of trust funds by the laws of the State of Tennessee
or otherwise.” The trustee was also empowered “[t]o invest in . . . partnership interests (whether general,
special, or limited), or other securities or property . . . without being limited by any statute or rule of law
governing investments by Trustee.” Alan’s response to the motion for partial summary judgment did not
address these issues. The trial court’s order granting partial summary judgment expressly stated that it
encompassed the issues surrounding the family limited partnership documents, and Alan does not address
that portion of the order on appeal. Thus, we will not discuss it further in this opinion.
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what the parties commonly refer to as the ACC Grantor Trust. The Trust Agreement
provided that the ACC Grantor Trust would “provide for [Alan's] personal financial security
by preserving his property against his own spend thrift actions,” as Alan was “not
experienced in financial matters.” According to the Trust Agreement, Alan was limited to
drawing 75% of the net income of the ACC Grantor Trust for his use or benefit. The Trust
Agreement provided that the ACC Grantor Trust was irrevocable, and that the Trust
Agreement could only be amended or terminated upon written agreement of the trustee and
Alan.4 James Cartwright was named as the trustee, and Betty was named as the successor
trustee. Pursuant to a later amendment, Alan’s sister Alice was named as an alternate
successor trustee, who would serve in the event that Betty became unwilling or unable to act
as trustee.
James Cartwright died on September 11, 1994. “Amendment Number One” to the
ACC Grantor Trust was executed by Alan, who was about 43 years old at the time, and his
mother Betty, who had assumed the position of trustee, on or about September 7, 1995. The
Amendment stated, in relevant part:
During Settlor's [Alan’s] lifetime, the Trustee shall pay (i) the lesser of
$84,000 per year or one hundred percent (100%) of the net annual income of
the trust in convenient installments, or otherwise, to or for the benefit of
Settlor, plus (ii) such additional amount as the Trustee determines is necessary
to pay the federal and state income tax of the Settlor[.] In computing the
annual net income of the trust, any distributions of income from the trusts
identified on Exhibit A which are added to this trust shall be considered
income. . . .
The Settlor directs the trustees of the trusts listed in Exhibit "A" hereto to pay
all amounts distributed to the Settlor under such trusts to the Trustee
hereunder, such amounts to be added to the corpus of the Trust and distributed
in accordance with its terms, and the Trustee hereby consents to such
additions.
The referenced “Exhibit A” to the Amendment listed 15 other trusts of which Alan was a
beneficiary. Therefore, pursuant to the terms of the Amendment, all amounts to be
distributed to Alan from the 15 trusts would instead be added to the corpus of the ACC
4
The Tennessee Uniform Trust Code similarly provides that, "during the settlor's lifetime, a
noncharitable irrevocable trust may be modified or terminated by the trustee upon consent of all qualified
beneficiaries, even if the modification or termination is inconsistent with a material purpose of the trust if
the settlor does not object to the proposed modification or termination." Tenn. Code Ann. § 35-15-411(a).
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Grantor Trust, and therefore, subject to distribution under its terms. According to Alice’s
testimony, her mother directed the family attorney to prepare this Amendment, requiring all
distributions to Alan to be made through the ACC Grantor Trust, in order to carry out the
desire of Alan’s recently deceased father to protect the assets from Alan’s spendthrift
tendencies, but also to ensure that there would be enough assets available to pay Alan his
increased “allowance” of $7000 per month pursuant to the Amendment.
According to Alice’s affidavit testimony, her mother later learned that Alan had
acquired several vehicles, and she became upset about his high-interest car notes and
speeding tickets. Betty then informed Alan that he would have to sell some of the vehicles
and reimburse the Trust for the excessive expenses associated with them, such as auto
insurance, which the Trust was paying on Alan’s behalf. The Trust would also pay off the
car notes. Consequently, Betty and Alan executed another amendment to the ACC Grantor
Trust on April 29, 1996, which reduced his monthly distribution to $5000. The second
amendment was inadvertently also titled “Amendment Number One,” and it contained the
same language quoted above, regarding the monthly allowance, and the addition of any
distributions from the trusts in Exhibit A to the ACC Grantor Trust. However, it substituted
$60,000 for the $84,000 figure in the first Amendment.
In December 1999, another amendment was executed by Alan and Betty, naming
Alice as co-trustee of the ACC Grantor Trust, effective January 1, 2000. After Alice was
named co-trustee, she and her mother increased Alan’s monthly distribution to $7000 again,
but the parties never executed another amendment to reflect this change.
According to Alice’s testimony, her practice over the years, as trustee of the ACC
Grantor Trust, was to treat the specific dollar amounts listed in the Amendments as the
amount that Alan would receive, even though the language of the Amendments provided that
he would receive the lesser of 100% of the trust income or $84,000 per year. She explained
that even when there was a substantial market downturn, or little to no income for
distribution, she paid Alan a direct distribution of the amount referred to in the trust
documents. As a result, she explained, Alan had received direct distributions of either $5000
or $7000 per month since 1995. Alice testified that over the years, the ACC Grantor Trust
had also paid for Alan’s major expenses, including all taxes, insurance (home, health, and
automobile), medical costs, and home maintenance costs, and the ACC Grantor Trust also
acquired and owned the home where Alan lived. She produced a spreadsheet indicating that
Alan had received distributions of $592,477 in the past five years, and also, $696,437 in
expenses were paid on his behalf during that time. In sum, Alice testified that all required
distributions had been made to Alan through the ACC Grantor Trust, in accordance with the
controlling trust documents.
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Alan filed a response to the defendants’ motion for partial summary judgment with
the following three-paragraph argument:
1. Since the death of Betty Goff Cook Cartwright in May of 2005, in addition
to the Amended and Restated Alan Cook Cartwright Grantor Trust from which
he receives an allowance, Cross-Plaintiff, Alan Cartwright, has been a primary
beneficiary of [15 other trusts.] Contrary to the intent of the grantors and
contrary to the terms of these trusts, Alan Cartwright has received no
distributions from them for over five (5) years due to the [defendants’]
knowing, intentional and improper manipulation of investments and
distributions at the Partnership level to dry up the income stream by diverting
any such trust funds away from income producing investments and into long
term growth investments, contrary to the fiduciary obligations owed to him as
imposed by the prudent investor requirement.
2. The [defendants] have systematically knowingly acted with malicious intent
to subvert and ignore their duties as trustees by violating their fiduciary duty
to put the interests of the primary beneficiary ahead of their own interests and
the interests of the [family limited partnership], as evidenced by their own
admissions in sworn testimony that their obligations as trustees have been
superseded by their loyalty to [the family limited partnership], which they
control.
3. The [defendants], both directly and indirectly by employing duress and
undue influence by others, knowingly and maliciously defrauded the
beneficiary of these trusts, Alan Cartwright, by trickery and by deception in
failing to present alleged "Exhibit A" for review and in failing to explain the
practical operation and consequences of the First Amendment(s) to the
Amended and Restated Alan Cook Cartwright Grantor Trust at the time
Cartwright was urged to sign the amendments to his Grantor Trust while under
economic duress and/or by creating a false "Exhibit A" at a later time, all in
contravention of the fiduciary duties owed to him at those times and all
subsequent times thereto. As a result, the existence and operation of the so
called "Exhibit A" is void and the First Amendment(s) are void as being made
by the Grantor being led into a clear mistake of law and fact as to the meaning
and consequences of executing the signature page that day.
In response to the defendants’ statement of undisputed facts, Alan disputed one statement
regarding “Exhibit A” to the Amendments, which listed the 15 trusts to be added to the ACC
Grantor Trust. Alan contended that “reasonable minds could very well conclude that no such
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document existed until sometime later and that it is a fake.” As support for this assertion,
Alan pointed to the following facts: Exhibit A appears to be a copy of a typewritten
document, not an original; there are no signatures on Exhibit A; it does not contain a page
number; the notary who attested to Alan’s signature testified that she does not recall meeting
him; and the family attorney did not produce Exhibit A when he brought other trust
documents to his deposition.
Alan also submitted several excerpts from his depositions, apparently in an effort to
demonstrate undue influence. Alan testified that when he signed the first Amendment
Number One to the ACC Grantor Trust, he did not understand that he would be limited to the
lessor of $84,000 per year or the income from the trust because no one told him. When asked
whether he asked his mother what he was signing, Alan replied, “I didn't ask her anything.
You don't ask questions in my family. You just do what they tell you to do.” Alan conceded
that he received $7000 per month in distributions from the ACC Grantor Trust until the issue
arose about his ownership of numerous vehicles. Alan recalled his mother telling him that
he was going to receive less money each month until the trust was reimbursed for the cost
of his additional vehicles. However, Alan testified that he did not remember if he was with
his mother when he signed the second Amendment Number One, and he also said, “I don’t
remember anybody telling me about 60,000 a year.” Alan testified that he did not remember
reading the document or having anyone explain it to him. He said,
I didn't read this, but then again if I – I don't even remember – I don't know
what this is. I never have seen this. I mean, I might have signed it, but maybe
the rest of it wasn't there or something like this. I didn't - I don't know – I don't
remember Mom signing it. When she signed it, she didn't tell me what it was.
I don't know what -- what else do I say here. I don't know how else to explain
it.
Despite these protestations, Alan submitted a statement of undisputed facts in which he
admitted that Betty, Alice, and the family attorney were present in the room with him when
the second amendment to the ACC Grantor Trust was signed.
In reply to Alan’s response, the defendants contended that there was no genuine issue
of material fact regarding the validity or authenticity of Exhibit A. They submitted Alice’s
deposition testimony in which she testified that Exhibit A was found in the file folder that
contained the other trust documents, although it was not attached to the Amendments. Alice
acknowledged during her deposition that Exhibit A appears to be a photocopy of a
typewritten document. She testified that she could not recall who prepared the original, and
she said that she may have typed it herself. Nevertheless, the defendants contended that it
was not necessary for Exhibit A to be an original document in order to be a valid document,
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and they argued that whether the original was prepared by Alice, the family attorney, or
someone else, was of no legal significance. The defendants also pointed out that the family
attorney was never asked during his deposition about Exhibit A, and he testified that the
documents he produced were in response to a query in which he searched his computer for
documents containing the term “Alan C.” Exhibit A does not contain Alan’s name; it simply
states, “Exhibit ‘A’” and lists the fifteen trusts. There are no signature lines on Exhibit A to
require a signature, and the other pages of the Amendments are not page numbered either.
The notary’s testimony cited by Alan was apparently from a deposition that was never filed
in the trial court.
The defendants also argued that, despite Alan’s conclusory assertions, the undisputed
facts did not establish undue influence. They submitted Alice’s deposition testimony
wherein she suggested that the first Amendment may have been sent to Alan at his home in
Hendersonville, because his signature was notarized in Sumner County, Tennessee, while
Betty’s signature was notarized five days earlier in Shelby County, Tennessee. With regard
to the second Amendment, Alice testified that she specifically recalled the meeting at which
Alan and her mother signed the Amendment. She testified that the meeting took place in
Memphis, and that she was present, along with Alan, Betty, and the family attorney, Shellie
McCain. Alice recalled that her mother got “really mad” because after she had increased
Alan’s monthly distribution, she found out that he had acquired three trucks and was paying
notes on a couple of them. Alice recalled her mother telling Alan that he had to sell one of
the trucks and that she was going to reduce his monthly distribution in order for him to repay
the trust for paying off the balance on one of the notes. Alice testified that she did not recall
a situation in which her mother instructed Alan to “just sign it.” She said that Mr. McCain
was there “to go over things with [Alan],” and that Mr. McCain “told Alan what we were
doing.” She also testified that Exhibit A was discussed at the meeting.
The defendants submitted testimony from the deposition of the former family attorney,
Shellie McCain, as well. At Mr. McCain’s deposition in 2009, he testified that, to the best
of his recollection, he was present for at least one meeting when Alan signed amendments
to the ACC Grantor Trust. Mr. McCain could not recall how many of such meetings he
attended. However, he stated that his “most vivid memory” was “sort of a family sit down
presided over by Mrs. [Betty] Cartwright” to discuss Alan’s spending, and particularly his
acquisition of a number of automobiles and the cost of keeping those automobiles insured.
He recalled that “Alan arrived in a somewhat non-communicative mood with anyone in the
office,” but when Betty arrived, “Alan was suddenly communicative and yes ma’am, no,
ma’am and very much acknowledging his mother’s concerns.” Mr. McCain testified that
Alan essentially wanted to know how many cars he could keep. He explained, “Mrs. [Betty]
Cartwright was a very nice lady, but when she wanted to exercise her authority, she was
fairly formidable.” Mr. McCain said he did not remember the specifics of what he discussed
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with Alan during the meeting “other than if he signed documents in my presence, I’m certain
that, you know, any questions he had I would have answered about those documents.” Mr.
McCain went on to say,
It is my recollection hazy as though it may be, that the purpose of inviting me
to the office when Alan was there was to give Alan the opportunity to ask me
questions. I don't remember if I gave preliminary overview to Alan about what,
you know, at any point was being done in connection with the family's overall
estate planning. I just don't remember. What I do remember is generally when
I was in Alan's presence or when Alan was in my presence, he was generally
and frankly somewhat indifferent to what was going on in the family business,
if you will.
Mr. McCain testified that when he sat down with someone to present a document for his or
her signature, it was his normal practice to explain what it was he or she was signing. He
said he could not remember the specifics of what he discussed with Alan, but, he said, “if I
was present when a document was signed, then if Alan Cartwright wanted to, I’m assuming
that I probably explained what the document was he was signing and if he had questions,
answered it.”
During Alan’s deposition, he testified that he did recall attending a meeting with Mr.
McCain, Betty, Alice, and Alice’s husband. He said, “I think they just told me $84,000 a
year and sign it.” When asked whether he agreed for the trust to pay him that amount, he
replied, “Yeah, I – I agreed, and I did sign this,” but, he said he did not think that was all of
the money that he would receive. He conceded that he did not ask whether he would receive
any more money, stating, “like again they might have told me – or this, but the main thing
they just told me was to sign the paper. Here, sign the paper.” Alan initially testified that no
one told him, beforehand, that his annual distribution was going to be reduced to $60,000,
and that he called Betty for an explanation when he received his first “light” check.
However, Alan later testified that when he had the conversation with Betty about the trust
paying off his car notes, he was in Memphis, and “[Alice and her husband] . . . they were all
in there.” As noted above, his own statement of undisputed facts admitted that Betty, Alice,
and the family attorney were present in the room with him when he signed the second
amendment to the ACC Grantor Trust.
The trial court ultimately entered an order granting the defendants’ motion for
summary judgment. The court found that the trust documents expressed the intention of Alan
and his parents to provide for him but also to limit his access to unlimited funds. The court
noted that Alan admittedly signed the original and all Amendments to the ACC Grantor Trust
Agreement. The court noted that the Amendments set specific limitations on Alan’s
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distributions and required that distributions from other trusts be added to the ACC Grantor
Trust. The court found that the trustees were entitled to rely upon the terms of the trust
documents, and that they had “done what they were entrusted to do.” The court found “no
dispute that the Trustees paid out to [Alan] the amounts to which he was entitled under the
documents as written.” The court found it undisputed that the trustees had relied upon the
terms of the trust, and it found that they were entitled to do so pursuant to Tennessee Code
Annotated section 35-15-1006. Regarding the allegations of undue influence, the trial court
noted that many years had passed since Alan and his parents signed the trust documents, and
that his parents were no longer living. The court stated, “In light of the language of the
documents and the passage of time, the Court cannot give weight to [Alan’s] allegations of
undue influence against his parents.” Therefore, the court entered partial summary judgment
in favor of the defendants on the issues surrounding the terms of the family limited
partnership documents and the trust documents; whether Alan received the distributions to
be made to him under the trust documents; and whether the defendants breached their
fiduciary duties in conducting their responsibilities as trustees.
All remaining claims asserted by Alan, not resolved by the motion for partial summary
judgment, were voluntarily dismissed without prejudice. Alan timely filed a notice of appeal
of the order granting partial summary judgment to defendants.
II. I SSUES P RESENTED5
Alan presents the following issues on appeal:
1. Whether the trial court erred in granting the defendants’ motion for summary
judgment;
2. Whether the trial court abused its discretion in granting the defendants’ motion for
5
Although the record on appeal consists of 39 volumes, and over 3000 pages of technical record
alone, the facts section of Alan’s brief on appeal did not contain a single citation to the record. In addition,
the argument section did not contain citations to the record or citations of appropriate authority with regard
to some issues. As such, this Court entered an order granting the defendants’ motion to strike the deficient
portions of Alan’s brief. As a result, some arguments raised in Alan’s brief on appeal will not be discussed
in this opinion. The reply brief filed by Alan also contained very few citations to the record, and it attempted
to present arguments not advanced in his initial brief or in the trial court below. Those assertions will
likewise not be considered on appeal. “A reply brief is a response to the arguments of the appellee. It is not
a vehicle for raising new issues.” Owens v. Owens, 241 S.W.3d 478, 499 (Tenn. Ct. App. 2007) (citing
Tenn. R. App. P. 27(c); Denver Area Meat Cutters & Employers Pension Plan v. Clayton, 209 S.W.3d 584,
594 (Tenn. Ct. App. 2006)). “A reply brief is limited in scope to a rebuttal of the argument advanced in the
appellee's brief.” Clayton, 209 S.W.3d at 594. It would be fundamentally unfair to permit an appellant to
advance new arguments in the reply brief, as the appellee may not respond to a reply brief. Id.
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bifurcation.
For the following reasons, we affirm the decision of the chancery court in part, and we
reverse in part and remand for further proceedings.
III. S TANDARD OF R EVIEW 6
A motion for summary judgment should be granted only “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that the moving party is entitled to
a judgment as a matter of law.” Tenn. R. Civ. P. 56.04. “When ascertaining whether a
genuine dispute of material fact exists in a particular case, the courts must focus on (1)
whether the evidence establishing the facts is admissible, (2) whether a factual dispute
actually exists, and, if a factual dispute exists, (3) whether the factual dispute is material to
the grounds of the summary judgment.” Green v. Green, 293 S.W.3d 493, 513 (Tenn. 2009).
“The party seeking the summary judgment has the burden of demonstrating that no
genuine disputes of material fact exist and that it is entitled to a judgment as a matter of law.”
Green, 293 S.W.3d at 513 (citing Martin v. Norfolk S. Ry., 271 S.W.3d 76, 83 (Tenn. 2008);
Amos v. Metro. Gov't of Nashville & Davidson County, 259 S.W.3d 705, 710 (Tenn. 2008)).
“The moving party may make the required showing and therefore shift the burden of
production to the nonmoving party by either: (1) affirmatively negating an essential element
of the nonmoving party's claim; or (2) showing that the nonmoving party cannot prove an
essential element of the claim at trial.” Martin, 271 S.W.3d at 83 (citing Hannan, 270
S.W.3d at 5). In order to negate an essential element of the claim, “the moving party must
point to evidence that tends to disprove an essential factual claim made by the nonmoving
party.” Id. at 84 (citing Blair v. W. Town Mall, 130 S.W.3d 761, 768 (Tenn. 2004)). “If the
moving party is unable to make the required showing, then its motion for summary judgment
will fail.” Id. (citing Byrd v. Hall, 847 S.W.2d 208, 215 (Tenn. 1993)).
6
We note that in their brief on appeal, the defendants asked us to apply the summary judgment
standard set forth in Tennessee Code Annotated section 20-16-101. They acknowledged that the language
of the original bill provided that this standard would apply to actions filed on or after July 1, 2011, and the
instant case was filed in 2004. However, the defendants claim that because the statute as published does not
contain the effective date referred to in the bill, we must apply the statute. We disagree. “When conflicts
arise between an Act as adopted by the legislature and the same Act as subsequently published, the version
adopted by the legislature controls.” Kaiser v. State, No. 01-A-019110BC00359, 1992 WL 141014, at *2
(Tenn. Ct. App. M.S. Jun. 24, 1992) (citing Weaver v. Davidson County, 104 Tenn. 315, 321-323, 59 S.W.
1105 (1900)). Therefore, we must apply the summary judgment standard set forth in Hannan v. Alltel
Publ’g Co., 270 S.W.3d 1 (Tenn. 2008), and its progeny.
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If the moving party does make a properly supported motion, “[t]he non-moving party
must then establish the existence of the essential elements of the claim.” McCarley v. West
Quality Food Serv., 960 S.W.2d 585, 588 (Tenn. 1998)). The nonmoving party is required
to produce evidence of specific facts establishing that genuine issues of material fact exist.
Martin, 271 S.W.3d at 84 (citing McCarley, 960 S.W.2d at 588; Byrd, 847 S.W.2d at 215).
“The nonmoving party may satisfy its burden of production by: (1) pointing to evidence
establishing material factual disputes that were over-looked or ignored by the moving party;
(2) rehabilitating the evidence attacked by the moving party; (3) producing additional
evidence establishing the existence of a genuine issue for trial; or (4) submitting an affidavit
explaining the necessity for further discovery pursuant to Tenn. R. Civ. P., Rule 56.06.” Id.
(citing McCarley, 960 S.W.2d at 588; Byrd, 847 S.W.2d at 215 n.6). “The nonmoving party's
evidence must be accepted as true, and any doubts concerning the existence of a genuine
issue of material fact shall be resolved in favor of the nonmoving party.” Id. (citing
McCarley, 960 S.W.2d at 588).
The resolution of a motion for summary judgment is a matter of law, which we review
de novo with no presumption of correctness. Id. However, “we are required to review the
evidence in the light most favorable to the nonmoving party and to draw all reasonable
inferences favoring the nonmoving party.” Id. (citing Staples v. CBL Assocs., Inc., 15
S.W.3d 83, 89 (Tenn. 2000)).
IV. D ISCUSSION
A. Summary Judgment
As Alan explained early in these proceedings, this case revolves around allegations
that Alan had not received sufficient distributions of assets from the trusts. The defendants
argued in their motion for partial summary judgment that Alan could not prove that they had
failed to pay him the amounts required by the trust documents, or that they had otherwise
failed to comply with the trust documents. According to the defendants, the undisputed facts
demonstrated that they had followed the trust terms, and therefore, they could not be held to
have breached their fiduciary duties. They cited several provisions of the Tennessee Uniform
Trust Code, including Tenn. Code Ann. § 35-15-801, which directs a trustee to follow the
terms and purposes of the trust, and § 35-15-1006, which states, “A trustee who acts in
reasonable reliance on the terms of the trust as expressed in the trust instrument is not liable
to a beneficiary for a breach of trust to the extent the breach resulted from the reliance.”
In support of their motion, the defendants submitted evidence establishing that in
1995, while Betty was the trustee, Alan signed the first Amendment to the ACC Grantor
Trust, increasing his distribution from 75% of the income of the trust to 100% of the income
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of the trust, but not to exceed $84,000 per year. The Amendment further provided that all
amounts to be distributed to Alan from the 15 trusts listed on Exhibit A would instead be
added to the corpus of the ACC Grantor Trust. In 1996, Alan signed the second Amendment,
lowering the limit on his annual distribution to $60,000 per year. Alice became a co-trustee
of the ACC Grantor Trust effective January 1, 2000. She testified that since 1995, Alan had
received either $5000 or $7000 per month, meeting or exceeding the amounts required by the
trust documents, in addition to the payment of his major expenses. Based on this evidence,
we conclude that the defendants’ motion for summary judgment was properly supported, and
the burden of production shifted to Alan to demonstrate that a genuine issue of material fact
existed.
Alan’s response to the defendants’ motion for partial summary judgment consisted of
a three paragraph argument that was riddled with legal conclusions and conclusory
assertions. However, he basically argued before the trial court, and now argues on appeal,
that Exhibit A was void either because it was a fabrication, or because he signed the
Amendments due to undue influence.7 On appeal, Alan continues to argue that a fact
question exists as to whether Exhibit A was ever actually a part of the Amendment
documents. He points to several facts which, he contends, raise a question as to the
genuineness of the document: Exhibit A appears to be a photocopy of a typewritten
document, not an original document; there are no signatures on Exhibit A; it does not contain
a page number; and the family attorney did not produce Exhibit A when he brought other
7
Alan argued in his response:
The [defendants], both directly and indirectly by employing duress and undue influence by
others, knowingly and maliciously defrauded the beneficiary of these trusts, Alan
Cartwright, by trickery and by deception in failing to present alleged "Exhibit A" for review
and in failing to explain the practical operation and consequences of the First Amendment(s)
to the Amended and Restated Alan Cook Cartwright Grantor Trust at the time Cartwright
was urged to sign the amendments to his Grantor Trust while under economic duress and/or
by creating a false "Exhibit A" at a later time, all in contravention of the fiduciary duties
owed to him at those times and all subsequent times thereto.
His response did not elaborate on the factual basis for his assertions. “When the party seeking summary
judgment makes a properly supported motion, the burden then shifts to the nonmoving party to set forth
specific facts, not legal conclusions,” to establish a genuine issue of material fact. Byrd, 847 S.W.2d at 215.
“Mere conclusory generalizations will not create a material factual dispute sufficient to prevent the trial court
from granting a summary judgment.” Davis v. Campbell, 48 S.W.3d 741, 747 (Tenn. Ct. App. 2001); see
also Mechanics Laundry Serv. v. Auto Glass Co. of Memphis, Inc., 98 S.W.3d 151, 158 (Tenn. Ct. App.
2002) (“Mere conclusory allegations will not suffice to support or defeat a motion for summary judgment.”)
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trust documents to his deposition.8 We agree with the defendants’ argument that these
circumstances fail to demonstrate a genuine issue of material fact regarding whether Exhibit
A is genuine.
“A disputed fact presents a genuine issue if ‘a reasonable jury could legitimately
resolve that fact in favor of one side or the other.’” Martin, 271 S.W.3d at 84 (quoting Byrd,
847 S.W.2d at 215). In other words, “[i]f reasonable minds could justifiably reach different
conclusions based on the evidence at hand, then a genuine question of fact exists.” Green,
293 S.W.3d at 514 (citing Martin, 271 S.W.3d at 84; Louis Dreyfus Corp. v. Austin Co., 868
S.W.2d 649, 656 (Tenn. Ct. App. 1993)). “If, on the other hand, the evidence and the
inferences reasonably drawn from the evidence would permit a reasonable person to reach
only one conclusion, then no material factual dispute exists, and the question can be disposed
of as a matter of law.” Id. (citing Godfrey v. Ruiz, 90 S.W.3d 692, 695 (Tenn. 2002); Seavers
v. Methodist Med. Ctr. of Oak Ridge, 9 S.W.3d 86, 91 (Tenn. 1999)).
Here, it is undisputed that Exhibit A was found in the file folder containing the other
trust documents, although it was unattached. Both Amendments clearly refer to Exhibit A.
It is undisputed that Exhibit A appears to be a photocopy of a typewritten document. Exhibit
A is simply titled “Exhibit A” at the top, and it lists the names of the 15 trusts. There are no
signatures on Exhibit A, but there are no signature lines requiring a signature. Similarly,
Exhibit A does not contain a page number, but the Amendments to the ACC Grantor Trust,
which Alan admittedly signed, did not contain page numbers either. The family attorney
produced numerous trust documents at his deposition, which he testified were produced in
response to a query for his computer to identify documents containing the phrase “Alan C.”
Exhibit A does not contain that phrase. The family attorney was not asked any questions
about Exhibit A, and to our knowledge, he did not mention it during his deposition. We are
also unaware of any testimony by Alan specifically mentioning Exhibit A. However, Alan
later admitted before the trial court that the distributions he had received from the ACC
Grantor Trust were consistent with Exhibit A. Considering all of these circumstances, we
find no genuine issue of material fact regarding the authenticity of Exhibit A. The evidence
and the inferences reasonably drawn from the evidence permit but one conclusion, that
Exhibit A is authentic. As such, we affirm the trial court’s decision to grant partial summary
judgment to the defendants on the issues surrounding the terms of the trust documents, and
8
Alan also makes several arguments on appeal that are not supported by the record. He claims that
the notary who attested to Alan's signature on the second Amendment testified that she does not recall
meeting him. We note that Alan does not dispute that he signed the Amendment. In any event, however,
the notary’s testimony is not in the record before us, and therefore, we will not consider it for purposes of
summary judgment. In addition, we will not consider the assertions in Alan’s brief regarding his opinion as
to the apparent age and quality of the documents, nor will we consider, for purposes of summary judgment,
the issue of whether Exhibit A was not produced until the later stages of discovery.
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whether Alan received the distributions to be made to him under the trust documents as
written.
Next, we must address Alan’s allegation of undue influence. A trust can be set aside,
in whole or in part, or reformed, on the same grounds as those which apply to a transfer of
property not in trust. Official Comment to Tenn. Code Ann. § 35-15-406. As such, “[a] trust
is void to the extent its creation was induced by fraud, duress, or undue influence.” Tenn.
Code Ann. § 35-15-406.
The evidence submitted by Alan regarding undue influence is somewhat unclear due
to the inconsistencies in his testimony during his two depositions, in 2007 and in 2009.9 At
one point, Alan testified that when he signed the first Amendment, he did not understand that
it meant that he would receive the lesser of $84,000 or all of the income from the trust,
because no one told him that information or instructed him to read the document. He stated
that he did not ask his mother anything when he signed the document, stating, “You don't ask
questions in my family. You just do what they tell you to do.” He concedes in his brief on
appeal that he executed this Amendment at his home in Sumner County, where he had it
notarized before he returned it to his mother in Memphis.
Regarding the second Amendment, which contained the same language but reduced
the cap to $60,000, Alan initially testified that he could not remember if he was with his
mother when he signed it, stating:
I didn't read this, but then again if I – I don't even remember – I don't know
what this is. I never have seen this. I mean, I might have signed it, but maybe
the rest of it wasn't there or something like this. I didn't - I don't know – I don't
remember Mom signing it. When she signed it, she didn't tell me what it was.
I don't know what -- what else do I say here. I don't know how else to explain
9
We also note that in Alan’s brief, reply brief, and supplemental statement of facts on appeal, he
has pointed to many facts in the voluminous record in an effort to demonstrate a genuine issue of material
fact. However, many of these facts were not brought to the trial court’s attention in Alan’s response to the
defendants’ motion for summary judgment, and some of the “facts” he mentions were not even included in
the record before the trial court. In considering whether the trial court erred in granting summary judgment,
we will look to the evidence that the parties presented to the trial court at each stage of the summary
judgment proceedings in order to decide whether the parties met their burden of production and whether a
genuine issue of fact existed. See Martin, 271 S.W.3d at 84 (explaining that the nonmoving party may
satisfy its burden of production by pointing to evidence that was over-looked or ignored by the moving party,
producing additional evidence, rehabilitating the evidence attacked, or explaining the necessity for further
discovery).
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it.10
He said “they never told me what I signed, and they just said sign it.” However, Alan later
admitted that he signed the second Amendment during a meeting attended by Betty, the
family attorney, and Alice. Alan testified about his recollection of the meeting as follows:11
Q. Well, was your mother there at the time that you signed this document?
A. I guess. I don't – I don't remember – I don't remember. If it had – if it
was the same time th[at] Shellie McCain was in there, the only one time
I saw it, I think it was me and Shellie and Mom and Alice and [Alice’s
husband].
Q. Well, whether or not McCain —
A. I think.
Q. – was there at this time, do you remember discussing with your mother
that the trust was going to be set up in this way so that you would get
$7,000 a month?
A. I think they just told me $84,000 a year and sign it.
Q. And did you sign it?
A. Yeah. Well, I signed right here. I guess I did. Yeah, that's right, I signed
it.
Q. And did you agree that that is – that this trust was going to then pay you
$7,000 a month?
A. Yeah, I – I agreed, and I did sign this and –
Q. Okay.
A. But I didn't – let's see. That was – that was – I guess that's – I didn't
think that was all I could – all I was going to get though. I guess –
Q. Did you ask her that question whether that would be all you would get?
A. No, no, like again they might have told me – or this, but the main thing
they just told me was to sign the paper. Here, sign the paper.
Q. And do you remember having a discussion with your mother about the
number of automobiles you had?
A. Oh yeah. Oh, yeah.
10
Here, Alan was only questioned regarding the text of the Amendment itself, not Exhibit A. Alan
was not asked any questions concerning Exhibit A during this deposition.
11
This excerpt is from Alan’s first deposition, and he mentioned the $84,000 figure when discussing
the meeting he attended with his mother, Alice, and the family attorney. However, Alan now admits that he
signed the first Amendment, referencing $84,000, in Hendersonville, and it was the second Amendment,
referencing $60,000, that was signed at the family meeting.
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(Emphasis added). In sum, Alan’s insistence that no one told him anything is contradicted
by his own testimony. Alan’s own brief on appeal explains that “Alan was summoned to
Memphis, where he was advised that his theretofore monthly stipend of $7,000 was being
reduced to $5,000 in order to pay off the vehicles.” Thus, it is undisputed that he was told
the amount of money that he would receive pursuant to the Amendment. Although Alan
initially testified that he did not think that was all of the money he would receive, he admitted
that he did not ask any questions, and he conceded that “they might have told me.” Alice
testified affirmatively that Exhibit A was discussed at the family meeting, and that Mr.
McCain explained to Alan what the parties were doing. Mr. McCain, testified that he had
a “vivid memory” of the meeting attended by Alan and his mother, in which the parties
discussed Alan’s spending and his acquisition of numerous vehicles, and he also recalled
being present when Alan signed an amendment to his ACC Grantor Trust. Mr. McCain
could not specifically recall what he discussed with Alan, but he said that “if Alan Cartwright
wanted to, I'm assuming that I probably explained what the document was he was signing and
if he had questions, answered it.” Mr. McCain noted, though, that Alan was “generally and
frankly somewhat indifferent to what was going on in the family business.”
On appeal, Alan’s sole argument regarding the issue of undue influence is that the
burden is on the dominant party in a confidential relationship to prove that a transfer was in
fact the conscious desire of the beneficiary. The case cited by Alan for this assertion actually
stated,
Tennessee cases have consistently held that the existence of a confidential or
fiduciary relationship, together with a transaction by which the dominant party
obtains a benefit from the other party, gives rise to a presumption of undue
influence that may be rebutted.
Matlock v. Simpson, 902 S.W.2d 384, 385 (Tenn. 1995) (emphasis added); see also
Richmond v. Christian, 555 S.W.2d 105, 107 (Tenn. 1977) (“when two parties enter into a
confidential or fiduciary relationship and the dominant party receives a gift or other benefit
from the other party a presumption arises that some improper advantage was taken”)
(emphasis added). Here, Betty was the trustee of the ACC Grantor Trust at the time of
execution of the Amendments. As such, a confidential relationship existed between her and
Alan, but Alan has failed to demonstrate how Betty benefitted from the transactions. This
does not end our analysis, however. When the first and second Amendments to the ACC
Grantor Trust were executed, Alice held the position of trustee of some of the trusts listed on
Exhibit A. Therefore, a confidential fiduciary relationship also existed between Alice and
Alan at the time of the signing of the Amendments. It is undisputed that Alice was a
contingent beneficiary of the ACC Grantor Trust. Under the terms of the ACC Grantor
Trust, if Alan died without a surviving spouse or descendent, the trustee was directed to
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distribute the remaining corpus of the trust to Alice.12 Still, it is not clear from the record
before us whether the execution of the Amendments would constitute “a transaction by which
the dominant party [Alice] obtain[ed] a benefit from the other party [Alan],” which would
give rise to a presumption of undue influence that could only be rebutted by clear and
convincing evidence of fairness. Matlock, 902 S.W.2d at 385. The effect of the
Amendments was to increase Alan’s distributions from 75% to 100% of the income of the
trust, but subject to the annual “cap.” There is no evidence in the record regarding the
amount of trust income generated in any given year, other than Alice's undisputed testimony
that during the years when the trust had little to no income, Alan received the “lump sum”
figure stated in the Amendments. In other years, however, it is not clear how much money
Alan would have received if the “cap” had not been imposed on his annual distributions. It
is reasonable to infer, for purposes of summary judgment, that because of the cap on Alan’s
annual distributions, there is the potential for more money to remain in the corpus of the
ACC Grantor Trust for potential future distribution to Alice as a contingent beneficiary. At
the very least, we conclude that a genuine issue of material fact exists with respect to this
issue.
In sum, we find that a genuine issue of fact exists regarding the ultimate issue of
whether undue influence was used to accomplish these transactions. “The determination of
whether the dominant party exerted undue influence is a question of fact.” In re Estate of
Copas, No. E2010-00877-COA-R3-CV, 2012 WL 171966, at *10 (Tenn. Ct. App. Jan. 20,
2012) (citing Waller v. Evans, No. M2008-00312-COA-R3-CV, 2009 WL 723519, at *9
(Tenn. Ct. App. Mar. 17, 2009)). If the presumption of undue influence arises, then the
dominant party bears the burden to prove by clear and convincing evidence that the
transaction was the result of the other party’s free will and not a result of his or her influence.
Id. at *11. A lack of suspicious circumstances can rebut the presumption, as can a showing
of independent advice. In re Estate of Murdaugh, No. W2011-00041-COA-R3-CV, 2011
WL 6141067, at *3 (Tenn. Ct. App. Dec. 8, 2011) (citing Parish v. Kemp, 308 S.W.3d 884,
891 (Tenn. Ct. App. 2008); Matter of Estate of Depriest, 733 S.W.2d 74 (Tenn. Ct. App.
1986)). In this case, however, viewing the evidence in the light most favorable to Alan, and
allowing all reasonable inferences in his favor, as we are required to do at this stage of the
proceedings, we find that “reasonable minds” could draw more than one conclusion as to
whether these transactions were the product of Alan’s free will or the product of undue
influence.
We note the defendants’ argument that if undue influence existed, it was due to
Betty’s actions rather than their own. Nevertheless,
12
Alan was unmarried and had no children at the time of these proceedings.
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‘It is immaterial whether undue influence is exercised directly or indirectly. In
determining whether undue influence is present, a central focus is on the
means used and the effect upon the donor. The underlying theory of the
doctrine is that the donor is induced by various means to execute an instrument
that, in reality, is the will of another substituted for that of the donor. We
specifically reject the contention that a beneficiary must be the one who exerts
the undue influence.’
In re Estate of Norton, No. E2010-02304-COA-R3-CV, 2012 WL 587481, at *6 (Tenn. Ct.
App. Feb. 23, 2012) (quoting Estate of Glasgow v. Whittum, 106 S.W.3d 25, 31 (Tenn. Ct.
App. 2002)).
We also recognize that the defendants argued on appeal that even if summary judgment
was improper on the aforementioned grounds, it should have been entered on the alternative
bases of the statute of limitations, waiver or estoppel. Given Alan’s assertion that he did not
fully understand the consequences of executing the Amendments until this litigation arose,
and considering the trustee/beneficiary relationship that existed here, we cannot say that there
is no genuine issue of material fact regarding the elements of these defenses. See
SecurAmerica Business Credit v. Schledwitz , 2011 WL 3808232 (Tenn. Ct. App. Aug. 26,
2011) (" Absent a trust relationship or fraud, contracting parties are charged with the duty
of looking out for themselves.") (emphasis added).
In conclusion, we find that the defendants properly supported their motion for
summary judgment by establishing that they had complied with the terms of the trust
documents, and specifically, the Amendments to the ACC Grantor Trust.13 The burden then
shifted to Alan to establish that genuine issues of fact existed. He attempted to demonstrate
that the trust documents were void, either because Exhibit A was fabricated or because he
executed the documents due to undue influence. We conclude that Alan failed to present
evidence establishing a genuine issue of material fact with respect to the authenticity of
Exhibit A. As such, we affirm the trial court’s decision to grant partial summary judgment
on the issues surrounding the terms of the family limited partnership documents and the trust
documents, and whether Alan had received the distributions to be made to him under the trust
documents as written. However, we find that genuine issues of material fact remain with
regard to the issue of undue influence. Therefore, we reverse in part the trial court’s order
granting partial summary judgment to the defendants and remand for further proceedings.
13
“A trustee who acts in reasonable reliance on the terms of the trust as expressed in the trust
instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted from the
reliance.” Tenn. Code Ann. § 35-15-1006.
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B. Bifurcation
Alan also argues on appeal that the trial court abused its discretion in bifurcating the
issues on appeal. Again, the trial court ruled that “the issues of (1) the adequacy of
distributions from the Trusts to the Plaintiff and (2) the tort claims seeking direct recovery
under tort theories are so distinct and separable from one another that a trial of the first issue
alone may be had without injustice.” The trial court eventually granted partial summary
judgment in favor of the defendants on the first set of issues, regarding the terms of the
family limited partnership documents and the trust documents; whether Alan received the
distributions to which he was entitled under the trust documents; and whether the defendants
breached their fiduciary duties in conducting their responsibilities as trustees. Thereafter,
Alan voluntarily dismissed all remaining claims not addressed by the order granting partial
summary judgment.
On appeal, Alan argues that the trial court abused its discretion in bifurcating the
issues, and he asks this Court to remand for a single jury trial on all issues. In response, the
defendants argue that the issue regarding bifurcation is now moot, due to the subsequent
voluntary dismissal of the bifurcated claims. Defendants claim that “there are no bifurcated
claims to address” at this point, and they point out that it would be impossible for this Court
to remand for a trial on all of the issues.
As we explained in Davis v. McGuigan, No. M2007-02242-COA-R3-CV, 2008 WL
4254150, at * (Tenn. Ct. App. W.S. Sept. 10, 2008) rev’d on other grounds 325 S.W.3d 149(Tenn. 2010):
A plaintiff is generally permitted to take a voluntary nonsuit of his case.
See Tenn. R. Civ. P. 41.01. Upon doing so, however, there is no longer any
existing controversy regarding those claims which the plaintiff voluntarily
dismissed. Accordingly, this Court cannot entertain an appeal related to the
claim [] which the [plaintiffs] voluntarily dismissed. See City of Johnsonville
v. Handley, No. M2003-00549-COA-R3-CV, 2005 WL 1981810, at *11
(Tenn. Ct. App. Feb. 6, 2005) (citing to . . . Martin v. Washmaster Auto Ctr.,
Inc., No. 01-A-01-9305-CV-00224, 1993 WL 241315 (Tenn. Ct. App. July 2,
1993) (“No present controversy exists after the plaintiff takes a nonsuit.”)[.]
Because there is no longer any controversy with regard to the previously bifurcated, and now
dismissed, tort claims, we will not consider whether the trial court abused its discretion in
bifurcating those claims in the first place.
C. Attorneys’ Fees
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The defendants have requested that we award them all attorneys’ fees, costs and
expenses incurred on this appeal, to be paid either by Alan Cartwright and/or his beneficial
interest in the ACC Grantor Trust. As the basis for this request, the defendants cite
Tennessee Code Annotated section 35-15-709, which provides that a trustee is entitled to be
reimbursed out of the trust property, with interest as appropriate, for expenses that were
properly incurred in the administration of the trust, and they also cite section 35-15-1004(a),
which provides, “In a judicial proceeding involving the administration of a trust, the court,
as justice and equity may require, may award costs and expenses, including reasonable
attorney's fees, to any party, to be paid by another party or from the trust that is the subject
of the controversy.”
We also note that after portions of Alan’s initial brief were stricken due to its lack of
appropriate citations to the record and relevant authority, he was permitted to file a
supplemental statement of facts, and the defendants submitted a separate request for an award
of the attorneys’ fees they incurred in responding to that supplemental statement of facts.
Exercising our discretion, in the interest of justice and equity, we hereby award the
defendants the reasonable attorneys’ fees and costs they incurred in responding to the
supplemental statement of facts, with this amount to be paid by Alan Cartwright personally.
The chancellor should determine a reasonable award of fees for this purpose on remand. As
for the remaining attorneys’ fees, given the issues in this case and the fact that we are
remanding for further proceedings, we believe that it would be premature for us to determine
at this point who should be responsible for the parties’ attorneys’ fees. Therefore, the request
for an award of the remaining attorneys’ fees, costs and expenses is respectfully denied.
V. C ONCLUSION
For the aforementioned reasons, we affirm the decision of the chancery court in part,
and we reverse in part and remand for further proceedings, to include the determination of
a reasonable award of attorneys’ fees and expenses to the defendants. Costs of this appeal
are taxed equally to the appellant, Alan Cartwright, and his surety, and to the appellees, Alice
Cartwright Garner, et al., for which execution may issue if necessary.
_________________________________
ALAN E. HIGHERS, P.J., W.S.
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