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Peterson v. Peterson

Court of Appeals of Georgia, Fourth Division

October 29, 2019

PETERSON et al. (two cases).

          DOYLE, P. J., COOMER and MARKLE, JJ.

          COOMER, JUDGE

         One case comes to us for a second time on appeal and the other was previously appealed to the Supreme Court of Georgia. See Peterson v. Peterson, 344 Ga.App. XXVIII (Case No. A17A2025) (February 27, 2018) (unpublished) ("Peterson I"); Peterson v. Peterson, 303 Ga. 211 (811 S.E.2d 309) (2018) ("Peterson II"). Brothers and co-trustees Charles Alexander Peterson ("Alex") and Hugh David Peterson ("David") (collectively, "Appellants") appeal from the trial court's order granting summary judgment in favor of their mother and co-trustee Mary Jeannette Willcoxon Peterson ("Mary") and brother and co-trustee Cleveland Calhoun Peterson ("Calhoun") (collectively, "Appellees"). Appellants challenge the trial court's finding that Mary did not owe Appellants a fiduciary duty when she exercised her power of appointment under two trusts and ordered Appellants to execute all conveyance documents submitted to them. Appellants further contend the trial court erred in concluding that Mary could act exclusively in her capacity as a beneficiary of both trusts in exercising her appointment power to convey trust assets. Lastly, Appellants contend the trial court erred in granting summary judgment in favor of Appellees on Appellants' claims for breach of fiduciary duty with respect to both trusts. For the reasons that follow, we reverse.

         "Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the non-movant." BBL-McCarthy, LLC v. Baldwin Paving Co., 285 Ga.App. 494, 494-495 (646 S.E.2d 682) (2007) (citations omitted).

         Prior Appeals

         In Peterson I and Peterson II, the relevant background was described as follows:

         Charles Hugh Peterson died testate in 1994 and was survived by his wife, Mary, and their three sons Alex, David, and Calhoun. Mr. Peterson's will, which was probated in 1995, created two testamentary trusts: a marital trust for the primary benefit of Mary, and a residual "by-pass" trust for the benefit of Mary and the couple's three sons. Mary and her three sons were each designated co-executors of the will and co-trustees of both the marital and by-pass trusts. Item 5 of Mr. Peterson's will created a marital trust for Mary, while Item 6 created a bypass trust for Mary and their three sons. The relevant portion of the will creating the terms of the by-pass trust reads as follows:

Trustees shall hold and manage the property in this trust and . . . may encroach on such part of the principle thereof as the Trustees may deem necessary to provide for the support in reasonable comfort of my wife and to provide for the proper support and education of my descendants[.] To the extent practicable, however, I request the Trustees in making encroachment for the benefit of my wife to encroach first on any trust created for my wife . . . before encroaching on this trust for my wife[.]
My primary desire is that my wife be supported in reasonable comfort during her lifetime and that my children be supported in reasonable comfort during their lives; my secondary desire is that the principal of this trust be preserved as well as possible consonant with the consummation of my primary objective[.]
[My wife] shall have no power to appoint [trust] property to herself, to her estate, to her creditors, or to the creditors of her estate.

         Under the terms of the will, all decisions made by the majority of the executors or trustees would control, provided that said majority included Mary. Other than some specific personal property, all the real and personal property of the estate was to be placed in either the marital trust or the bypass trust, and the bypass trust was designed to have a value of $600, 000. Item 5 of the will provides that all of the income from the marital trust goes to Mary for her life and that Mary has "the power at any time and from time to time ... to direct the Trustees to turn over any part of the property in this trust to my said wife or to or among such of my descendants or spouses of such descendants." At Mary's death, in the event that she has not disposed of the marital trust property in her will or by her power of appointment, it will become part of the bypass trust if it is still in existence. If it is not, the property is to be divided between Alex, David, and Calhoun or their descendants.

         Sometime after the will was probated, a dispute arose between the co-executors and co-trustees over the administration of the estate and the by-pass trust, pitting Mary and Calhoun against Alex and David. Alex and David filed petitions for accounting and damages for breach of duties as executors and trustees against Mary and Calhoun, and sought the removal of Mary and Calhoun as executors and trustees in probate court. Mary and Calhoun each moved for summary judgment on all claims and the superior court granted their motions. Alex and David appealed those rulings.[1]

         In the first appearance of this case before this Court, we reversed the trial court's grant of summary judgment to Calhoun in an unpublished opinion. See Peterson I. One month later, the Georgia Supreme Court in Peterson II reversed the trial court's grant of summary judgment to Mary for similar reasons. Both cases held that material issues of fact remained with respect to Appellees' failure to fully fund the trusts at issue in the case and whether Appellees wasted assets. See Peterson I, at page 7-8, 10; Peterson II, 303 Ga. at 215-217.

         Current ...

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