Summary
denying plaintiff's motion for summary judgment because the plaintiff failed to file a memorandum of law, and failed to provide the court with any citations to evidence
Summary of this case from Ogier v. JohnsonOpinion
CIVIL ACTION NO. 1:06-cv-00804-GET.
June 1, 2007
ORDER
The above-styled matter is presently before the court on:
1) plaintiffs Frank R. Hill, William R. Hill, and Alexander S. Hill's motion for summary judgment [docket no. 39];
2) plaintiffs' second motion for an extension of time to complete discovery [docket no. 48];
3) plaintiffs' first motion for oral argument on their motion for summary judgment [docket no. 49];
4) defendant Bank of America, N.A.'s motion for summary judgment [docket no. 50]; and
5) plaintiffs' second motion for oral hearing on all parties' motions for summary judgment [docket no. 51].
Plaintiffs Frank R. Hill, William R. Hill, and Alexander S. Hill filed the instant action on March 1, 2006, in the Superior Court of Fulton County, Georgia. Defendant removed the case on April 5, 2006, pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. Plaintiffs filed a motion for leave to amend their complaint on June 28, 2006, which the court granted on August 25, 2006. Plaintiffs filed their amended complaint on August 25, 2006. Plaintiffs' amended complaint asserts a claim for breach of fiduciary duty against defendant with regard to several trust accounts for which defendant served as corporate trustee and fiduciary.
Plaintiffs filed their motion for summary judgment on September 8, 2006. Defendant filed its response on September 28, 2006. On October 23, 2006, plaintiffs filed a motion for extension of time to complete discovery. On the same date, plaintiffs filed a motion for oral argument on their motion for summary judgment. Defendant filed its motion for summary judgment on October 31, 2006. Plaintiffs filed a second motion for oral argument on both parties' motions for summary judgment on November 22, 2006. As of the date of this order, plaintiffs have not filed a response to defendant's motion for summary judgment.
Plaintiffs' Motions for Oral Hearings
Plaintiffs filed a request for oral argument on plaintiffs' motion for summary judgment on October 23, 2006. On November 22, 2006, plaintiffs filed a second request for oral argument on both plaintiffs' and defendant's motions for summary judgment.
L.R. 7.1E states: "Motions will be decided by the court without oral hearing, unless a hearing is ordered by the court." The court concludes that oral argument is not required or necessary in the present case. Accordingly, plaintiffs' motions for oral argument [docket nos. 49 and 51] are DENIED.
Plaintiffs' Motion for Extension of Discovery
On October 23, 2006, the date discovery closed in the present case, plaintiffs filed a motion for second extension of time to complete discovery. The court has considered plaintiffs' request and hereby DENIES plaintiffs' motion for extension of time to complete discovery [docket no. 48].
Plaintiffs' and Defendant's Motions for Summary Judgment
Standard
Courts should grant summary judgment when "there is no genuine issue as to any material fact . . . and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party must "always bear the initial responsibility of informing the district court of the basis of its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). That burden is `discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Id. at 325; see also U.S. v. Four Parcels of Real Property, 941 F.2d 1428, 1437 (11th Cir. 1991).Once the movant has met this burden, the opposing party must then present evidence establishing that there is a genuine issue of material fact. Celotex, 477 U.S. at 325. The nonmoving party must go beyond the pleadings and submit evidence such as affidavits, depositions and admissions that are sufficient to demonstrate that if allowed to proceed to trial, a jury might return a verdict in his favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). If he does so, there is a genuine issue of fact that requires a trial. In making a determination of whether there is a material issue of fact, the evidence of the non-movant is to be believed and all justifiable inferences are to be drawn in his favor. Id. at 255; Rollins v. TechSouth, Inc., 833 F.2d 1525, 1529 (11th Cir. 1987). However, an issue is not genuine if it is unsupported by evidence or if it is created by evidence that is "merely colorable" or is "not significantly probative." Anderson, 477 U.S. at 249-50. Similarly, a fact is not material unless it is identified by the controlling substantive law as an essential element of the nonmoving party's case. Id. at 248. Thus, to create a genuine issue of material fact for trial, the party opposing the summary judgment must come forward with specific evidence of every element essential to his case with respect to which (1) he has the burden of proof, and (2) the summary judgment movant has made a plausible showing of the absence of evidence of the necessary element. Celotex, 477 U.S. at 323.
Facts
In light of the foregoing standard, the court finds the following facts solely for the purpose of deciding this motion for summary judgment. Plaintiffs are three of the many grandchildren of Alex W. Smith and Laura P. Smith, a married couple, both deceased. Plaintiffs are three of the five children of Emily Smith Hill, a daughter of Alex W. Smith and Laura P. Smith.
Laura P. Smith died in 1954, leaving a Last Will and Testament that created six separate trusts for her six children. Through a series of bank consolidations, defendant served as co-trustee, along with Alex W. Smith, Jr., of the Laura P. Smith Trust. The Laura P. Smith Trust provided that encroachments upon the corpus of the trust could be made in the discretion of defendant, as the corporate trustee, as necessary to provide for the proper support of Laura P. Smith's children, to meet any emergencies arising out of illness, and to provide for support and education of Laura P. Smith's grandchildren. Laura P. Smith's will required defendant to provide an annual "statement of receipts and disbursements to each person then entitled to income from [her] estate or any trust."
Emily Smith Hill, as the daughter of Laura P. Smith, was entitled to a one-sixth (1/6) share of the net income from the Laura P. Smith Trust. The Emily Smith Hill Trust (the "ESH Trust") was established from Emily's one-sixth (1/6) share of the Laura P. Smith Trust. Upon the death of Emily Smith Hill, the entire ESH Trust was distributable to her descendants, per stirpes.
Alex W. Smith died in 1964, leaving a Last Will and Testament that created a residuary trust for the benefit of his five daughters (the "AWS Trust"). Through a series of bank consolidations, defendant is the current co-trustee, along with Alex W. Smith, Jr., for the AWS Trust. Emily Smith Hill was the daughter of Alex W. Smith and entitled to a one-fifth (1/5) share of the net income generated from the AWS Trust. Upon the death of Emily Smith Hill, a one-fifth (1/5) share of the corpus of the AWS Trust was to be distributed to Emily Smith Hill's descendants, per stirpes. The will of Alex W. Smith required defendant to "furnish at least annually a statement of receipts and disbursements to each person then entitled to income from [his] estate or any trust."
Emily Smith Hill, the mother of plaintiffs, died on February 24, 2005. In 1991, the market value of the ESH Trust was $82,881.77. When the Trust terminated in May 2005, the market value was $122,644.53. In 1977, the market value of the AWS Trust was $157,495.92. By 2005, the market value of this Trust was $327,713.48.
Discussion
Plaintiffs' Motion for Summary Judgment
Plaintiffs filed a motion for summary judgment on September 8, 2006. The motion seeks summary judgment on plaintiffs' claim for breach of fiduciary duty. Along with the motion, plaintiffs filed a document entitled "Separate and Concise Statement of Material Facts as to which there is No Genuine Issue to be Tried and Each Theory of Law Underlying Plaintiffs' Motion." Plaintiffs' contend that defendant breached the duty owed to plaintiffs as the remainder beneficiaries of the ESH Trust and the AWS Trust because defendant failed to preserve and protect the corpus of both trusts. In support of its contention, plaintiffs assert that the theory of res ipsa loquitor "permits an inference of breach that establishes a prima facie case as a matter of law."In its response, defendant objects to plaintiffs' motion for summary judgment on the grounds that the motion violates this court's Local Rules. Specifically, defendant contends that plaintiffs failed to include a memorandum in support of their motion for summary judgment, and that plaintiffs failed to provide citations to evidence to support the validity of their statement of material facts. Defendant also argues that plaintiffs fail to provide the court with any evidence that defendant breached its fiduciary duties to plaintiffs. Finally, defendant maintains that res ipsa loquitor is an evidentiary presumption which cannot support an award of summary judgment to plaintiffs in the present case.
L.R. 7.1 A states that "[e]very motion presented to the clerk for filing shall be accompanied by a memorandum of law which cites supporting authority." LR 56 B(1) provides that a motion for summary judgment shall also include a statement of the material facts to which there are no genuine issue to be tried. "Each material fact must be numbered separately and supported by a citation to evidence proving such fact. The court will not consider any fact: (a) not supported by a citation to evidence (including page or paragraph number) . . ." L.R. 56 B(1). The court finds that plaintiffs failed to comply with the above-referenced Local Rules when they submitted their motion for summary judgment. Plaintiffs did not file a separate brief in support of their motion for summary judgment and further failed to provide the court with any citations to evidence to support their statement of material facts. Accordingly, the court DENIES plaintiffs' motion for summary judgment [docket no. 39].
Defendant's Motion for Summary Judgment
Defendant filed its motion for summary judgment on October 31, 2006. Defendant's motion argues that it is entitled to summary judgment on plaintiffs' claim for breach of fiduciary duty because plaintiffs must allege and prove a specific breach of duty and that plaintiffs' general claim that the trusts did not appreciate sufficiently cannot form the basis of a breach of fiduciary duty claim. Defendant further contends that plaintiffs' claims are barred by the statute of limitation and the theory of laches. Defendant finally maintains that it was under no obligation to provide an accounting of the trusts to plaintiffs prior to the termination of the trusts. As of the date of this order, plaintiffs have not filed a response to defendant's motion for summary judgment.
The relevant statute of limitations for breach of trust claims against a trustee is outlined in O.C.G.A. § 53-12-198. For claims accruing after July 1, 1991, the statute provides:
[I]f a beneficiary has received a written report that adequately discloses the existence of a claim against the trustee for breach of trust, the claim is barred as to that beneficiary unless a proceeding to assert the claim is commenced within six years after receipt of the report. . . . If the beneficiary has not received a report which adequately discloses the existence of a claim against the trustee for breach of trust, the claim is barred as to that beneficiary unless a proceeding to assert the claim is commenced within six years after the beneficiary discovered, or reasonably should have discovered, the subject of the claim.
O.C.G.A. § 53-12-198(a). For claims accruing prior to July 1, 1991, the statute provides that the claims are barred if they are not brought before July 2, 1997. O.C.G.A. § 53-12-198(d); see also Ludwig v. Ludwig, 218 Ga. 724, 724 (2007) ("Pursuant to O.C.G.A. § 53-12-198(d), [plaintiffs'] claims relating to dates pre-dating July 1, 1991 are barred because they were not brought before July 2, 1997.").
To determine which statute of limitation applies in the present case, the court must decide when plaintiffs' right of action accrued. Georgia courts have specifically rejected application of the continuing tort theory to breach of trust cases, finding that the theory is only applicable to cases involving personal injury.Allen v. Columbus Bank Trust Co., 244 Ga. App. 271, 272 (2000) (citing Corp. of Mercer Univ. v. Nat. Gypsum Co., 258 Ga. 365, 366 (1988)). Thus, a plaintiff alleging a breach of fiduciary duty on the part of a trustee must make specific claims of acts of mismanagement and these allegations determine when the statute of limitation begins to run. Id. "A cause of action for breach of fiduciary duty in the management of a trust, as we have here, begins to run at the time the wrongful act accompanied by any appreciable damage occurs." Id.
With regard to the AWS Trust, plaintiffs' complaint fails to identify specific instances of mismanagement of the trust by defendant. The amended complaint alleges that plaintiffs' respective shares from the AWS Trust are inappropriate "[f]or a trust under corporate management for over forty (40) years given its level of initial funding." The statute of limitation has run for any claim of mismanagement of the AWS Trust occurring prior to July 1, 1991, as those claims were barred after July 2, 1997.See O.C.G.A. § 53-12-198(d).
For claims of mismanagement of the AWS Trust after July 1, 1991, the record does not indicate that plaintiffs received any written reports from defendant regarding the AWS Trust prior to the filing of the present lawsuit. Under the terms of both Alex Smith's will and Laura Smith's will, defendant was only required to give an annual accounting to income beneficiaries of the trusts. Accordingly, plaintiffs claim of mismanagement is barred pursuant to O.C.G.A. § 53-12-198(a) only to the extent that plaintiffs reasonably should have discovered the subject of the claim before March 1, 2000, six years prior to filing the present case. Georgia law permits a beneficiary of a trust to request the trustee to provide the beneficiary with a report "about the assets, liabilities, receipts, and disbursements of the trust, the acts of the trustee, and the particulars relating to the administration of the trust, including the terms of the trust that describe or affect the beneficiary's interest." O.C.G.A. § 53-12-190(b)(1). Plaintiffs contend that the AWS Trust was mismanaged by defendant from its inception, yet failed to request an accounting of the AWS Trust from defendant until after filing the present lawsuit. There being no evidence of fraud on the part of defendant which would toll the statute of limitation, the court finds that plaintiffs reasonably should have known about the claim for breach of fiduciary duty before March 1, 2000. Accordingly, plaintiffs' claim for breach of fiduciary duty with regard to the AWS Trust is barred under both statutes of limitation set forth in O.C.G.A. § 53-12-190.
With regard to the ESH Trust, which was established sometime after the death of Laura P. Smith in 1954, plaintiffs' amended complaint specifically alleges several instances of mismanagement of the trust, including the sale of trust property in 1955, 1974, and 1998. Plaintiffs' claims with regard to mismanagement of the ESH Trust for events occurring prior to July 1, 1991 are barred by the statute of limitation. See O.C.G.A. § 53-12-198(d). For claims of mismanagement occurring after July 1, 1991, the court finds that plaintiffs failed to ask defendant to provide plaintiffs with an accounting of the ESH Trust at any time before filing the present lawsuit and that plaintiffs should have reasonably discovered any claim for mismanagement prior to March 1, 2000. As with the AWS Trust, the court finds no evidence showing fraud on the part of defendant which would toll the statute of limitation, and thus plaintiffs' claim for breach of fiduciary duty with regard to the ESH Trust is barred under both statutes of limitation set forth in O.C.G.A. § 53-12-190.
In addition to finding that the statute of limitation bars plaintiffs' claim, the court further finds that defendant is entitled to summary judgment on the merits of the breach of fiduciary duty claim. "It is well settled that a claim for breach of fiduciary duty requires proof of three elements: (1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage proximately caused by the breach." Griffin v. Fowler, 260 Ga. App. 443, 445 (2003). While a trustee is not generally liable for losses or depreciation in the value of the trust, liability may attach if there is a breach of trust. Citizens Southern Nat'l Bank v. Haskins, 254 Ga. 131, 133 (1985) (citingRestatement of Trusts 2d, § 204 (1959)). A breach of trust occurs when there is "[a] violation by the trustee of any duty that the trustee owes the beneficiary." O.C.G.A. § 53-12-191. A trustee may breach the beneficiary's trust by failing to exercise the degree of care and skill that a person of ordinary prudence would exercise in administering the trust. Haskins, 254 Ga. at 133 (citation omitted); see also O.C.G.A. § 53-12-287(b).
After reviewing the evidence, the court finds that defendant presents sufficient evidence to entitle it to summary judgment on plaintiffs' claim for breach of fiduciary duty. With its motion for summary judgment, defendant submitted the affidavits of Michael Pond and Jose Araoz, both stating that defendant did not breach any of its fiduciary duties and properly managed the trusts in accordance with Georgia law and bank policy. Plaintiffs fail to provide the court with any evidence to support a finding that defendant breached its duties owed to plaintiffs. Even plaintiffs' expert report, filed with the court on September 8, 2006, which states that more money could have accrued in the ESH Trust if defendant had invested the trust funds in a different manner, does not provide any evidence that defendant breached its duty of trust to plaintiffs or that a prudent person would have acted differently.
Summary
1) Plaintiffs Frank R. Hill, William R. Hill, and Alexander S. Hill's motion for summary judgment [docket no. 39] is DENIED;
2) Plaintiffs' second motion for an extension of time to complete discovery [docket no. 48] is DENIED AS MOOT;
3) Plaintiffs' first motion for oral argument on their motion for summary judgment [docket no. 49] is DENIED;
4) Defendant Bank of America, N.A.'s motion for summary judgment [docket no. 50] is GRANTED;
5) Plaintiffs' second motion for oral hearing on all parties' motions for summary judgment [docket no. 51] is DENIED.