Bunn v. Delaney

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Marilyn W. Bunn, a person non compos mentis by and
through her guardian, Denise Suddes, and Margaret Bunn
Lochmandy, Respondents,

v.

Douglas S. Delaney, as Trustee and in his individual
capacity, Alan Wilson, the South Carolina Attorney
General, Sacred Heart-Griffin High School, St. Joseph's
Home, Quincy University, Notre Dame, The
Lawrenceville School, All Saints Catholic Church, and
Habitat for Humanity c/o All Saints Catholic Church,
Defendants,

Of whom Douglas S. Delaney is the Appellant.

Appellate Case No. 2015-001813

Appeal From Beaufort County
Marvin H. Dukes, III, Master-in-Equity

Unpublished Opinion No. 2017-UP-434
Submitted September 8, 2017 – Filed November 22, 2017

AFFIRMED AS MODIFIED

Sean Michael Bolchoz, of Bolchoz Law Firm, PA, of
Bluffton, for Appellant.
Robert Ernest Sumner, IV and E. Brandon Gaskins, of
Moore & Van Allen, PLLC, of Charleston, for
Respondent.

PER CURIAM: In this action to remove Douglas Delaney as the independent
successor to the corporate trustee of the John M. and Marilyn W. Bunn Charitable
Remainder Trust (the Trust), Delaney appeals the master-in-equity's grant of partial
summary judgment in favor of Marilyn Bunn (Mother), through her guardian,
Denise Suddes (Guardian), and her daughter, Margaret Bunn Lochmandy.
Delaney argues the master-in-equity erred in (1) finding no question of material
fact existed regarding whether Lochmandy accepted the role of successor
individual trustee; (2) finding the terms of the Trust gave Lochmandy and
Guardian the authority to remove the successor independent trustee; (3) finding no
vacancy occurred in the trusteeship and Lochmandy and Kelly Bunn (collectively,
the Daughters) automatically became successor individual trustees upon Mother's
incapacity; and (4) disregarding legal presumptions in favor of the nonmoving
party. We affirm as modified.1

I. Vacancy in the Individual Trusteeship

Delaney asserts the master-in-equity erred in finding the Georgia probate court's
appointment of Guardian did not result in a vacancy in the trusteeship. We agree.

A vacancy in a trusteeship occurs if:

(1) a person designated as trustee rejects the trusteeship;

(2) a person designated as trustee cannot be identified or
does not exist;

(3) a trustee resigns;

(4) a trustee is disqualified or removed;

(5) a trustee dies; or

1
We decide this case without oral argument pursuant to Rule 215, SCACR.
(6) a guardian or conservator is appointed for an
individual serving as trustee.

S.C. Code Ann. § 62-7-704(a) (Supp. 2017). "The cardinal rule of statutory
construction is to ascertain and effectuate the intent of the legislature." Hodges v.
Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000). "Whe[n] the statute's
language is plain and unambiguous, and conveys a clear and definite meaning, the
rules of statutory interpretation are not needed and the court has no right to impose
another meaning." Id.

Based upon Delaney's failure to present evidence that either Bunn or Lochmandy
rejected the trusteeship, the master-in-equity found, "[a]s a matter of law, no
vacancy occurred in the present case; and upon the incapacity of [Mother], [the
Daughters] became the successor [i]ndividual [t]rustees." The master explained
that under section 62-7-704(a), a vacancy occurs upon rejection of the trusteeship
by the successor trustee, the resignation of the successor trustee, or the removal of
the successor trustee. However, section 62-7-704(a) also provides a vacancy is
created upon the appointment of a guardian or conservator for an individual
serving as trustee. Therefore, a vacancy was created in the trusteeship when
Mother was appointed a guardian.

II. Successor Individual Trustee

Although a vacancy was created upon Guardian's appointment, we find the
master-in-equity properly determined the Daughters did not vacate the trusteeship.
Thus, the master did not err in finding the Daughters automatically became
successor individual trustees upon Guardian's appointment and the Daughters
accepted the trusteeship.

A vacancy in a trusteeship of a charitable trust that is
required to be filled must be filled in the following order
of priority:

(1) by a person designated in the terms of the trust to act
as successor trustee;

(2) by a person selected by the charitable organizations
expressly designated to receive distributions under the
terms of the trust if the Attorney General concurs in the
selection; or
(3) by a person appointed by the court.

S.C. Code Ann. § 62-7-704(d) (Supp. 2017).

Except as otherwise provided . . . a person designated as
trustee accepts the trusteeship:

(1) by substantially complying with a method of
acceptance provided in the terms of the trust; or

(2) if the terms of the trust do not provide a method or the
method provided in the terms is not expressly made
exclusive, by accepting delivery of the trust property,
exercising powers or performing duties as trustee, or
otherwise indicating acceptance of the trusteeship.

S.C. Code Ann. § 62-7-701(a) (Supp. 2017). "A designated trustee who does not
accept the trusteeship within a reasonable time after knowing of the designation is
deemed to have rejected the trusteeship." S.C. Code Ann. § 62-7-701(b) (Supp.
2017).

Pursuant to the terms of the Trust, the vacancy created upon Guardian's
appointment was required to be filled by the Daughters. The Trust provided the
following rules for succession if Mother vacated the trusteeship:

In case of the resignation, refusal or inability to act of
either individual trustee, the survivor shall act as the sole
individual trustee hereunder. In case of resignation,
refusal or inability to act of the survivor of the individual
trustee, [the Daughters] shall act as the successor
individual co-trustees hereunder. In case of resignation,
refusal or inability of either [Lochmandy] or Kelly
Kathleen Bunn, the survivor of [Lochmandy] or Kelly
Kathleen Bunn shall act as the successor individual
trustee hereunder.

Because the Trust did not require any formal action for acceptance of the
trusteeship, the Daughters could accept the trusteeship simply by "exercising
powers or performing duties as trustee[s], or otherwise indicating acceptance of the
trusteeship." See S.C. Code Ann. § 62-7-701(a)(2) (recognizing that "if the terms
of the trust do not provide a method or the method provided in the terms is not
expressly made exclusive," a person designated as trustee accepts a trusteeship "by
accepting delivery of the trust property, exercising powers or performing duties as
trustee, or otherwise indicating acceptance of the trusteeship").

Under the Trust agreement, the powers of the individual trustee include the power
to "hold, manage, care for[,] and protect the trust property," which includes the
power to "[t]o compromise, contest, prosecute[,] or abandon claims in favor of or
against the trust." Accordingly, we find the Daughters sufficiently accepted the
trusteeship by requesting a trust accounting and trust documents, in continuing to
request trust information in anticipation of this action, and in bringing this action.
The Guardian's appointment triggered the vacancy in the trusteeship then filled by
Lochmandy and Bunn. Delaney contends the Daughters failed to act for over eight
months after the Guardian's appointment. By Delaney's own admission, however,
the attorney representing the Daughters and Mother contacted him seeking trust
documents in November 2013 (less than two months after Guardian's
appointment). Further, Delaney attached to his affidavit a letter addressed to his
attorney from the Daughters and Mother, in which their attorney references an
October 2013 correspondence from Delaney's attorney regarding the Trust.

Evidence in the record establishes that as early as April 2013, the Daughters made
several requests for a trust accounting and trust documents from Delaney, which he
refused, and they informed him an application for a guardianship for Mother was
pending. After several attempts to obtain the requested trust documentation, the
Daughters and Guardian (on Mother's behalf) brought this action in July 2014.
Consequently, the record establishes the Daughters accepted the trusteeship by
acting to "hold, manage, care for[, or] protect the trust property" in requesting
documentation from Delaney and in filing this action to remove Delaney as
corporate trustee and modify the trust. When viewed in the light most favorable to
Delaney, no genuine dispute as to material fact exists regarding the successor
individual trusteeship because no evidence exists showing Lochmandy rejected the
trusteeship due to a failure to act. See Rule 56(c), SCRCP (noting a trial court may
grant a motion for summary judgment if there is no genuine issue of material fact
and the movant is entitled to a judgment as a matter of law). Therefore, we find
the master-in-equity properly granted summary judgment on this issue.

III. Removal of Successor Independent Trustee
We find the master-in-equity did not err in finding Lochmandy, as individual
trustee, and Mother, as settlor, could remove Delaney as successor independent
trustee. The Trust provides:

[T]he settlors during their lifetime, the survivor of them
after one of their deaths, or the individual trustee, may
remove the corporate trustee at any time or times, with or
without cause, and appoint an individual or corporation
as successor independent trustee but no corporation
controlled by the settlors or controlled by any person
legally obligated to the settlors or no person legally
obligated to the settlors or subservient to the settlors shall
be a successor independent trustee hereunder.

Because the Trust does not differentiate between original trustees and successor
trustees in describing the rights and duties of the trustees, the plain language of the
Trust evidences the settlors' intent to treat original trustees and successor trustees
the same. See Bowles v. Bradley, 319 S.C. 377, 380, 461 S.E.2d 811, 813 (1995)
("The primary consideration in construing a trust is to discern the settlor's intent.");
Holcombe-Burdette v. Bank of Am., 371 S.C. 648, 658, 640 S.E.2d 480, 485 (Ct.
App. 2006) ("In ascertaining a settlor's intent, if the language of the trust
instrument is perfectly plain and capable of legal construction, such language
determines the force and the effect of the instrument.").

Most importantly, the Trust specifically provides that "[e]very successor trustee
shall have all the powers given the originally named trustees," and "all other
discretionary decisions not otherwise delineated under this agreement may be
performed by the individual trustees." Based on this statement and the Trust's
failure to differentiate between original and successor trustees throughout the trust
instrument, the settlors intended to treat original trustees and successor trustees in
like manner. See Holcombe-Burdette, 371 S.C. at 657, 640 S.E.2d at 484 ("Intent
is to be ascertained upon consideration of the entire will."). This intent includes
the application of the removal provisions. See Epworth Children's Home v.
Beasley, 365 S.C. 157, 166, 616 S.E.2d 710, 715 (2005) ("A court may not
consider the will piecemeal, but must give due weight to all its language and
provisions, giving effect to every part when, under a reasonable interpretation, all
the provisions may be harmonized with each other and with the will as a whole.").

Therefore, the Trust authorizes Guardian, on behalf of Mother as settlor, and
Lochmandy, as successor individual trustee, to remove the successor independent
trustee without cause because the Trust allows for removal of the corporate trustee
with or without cause. Accordingly, we find the master-in-equity properly granted
summary judgment on this issue. See Rule 56(c), SCRCP.

IV. Conclusion

For the foregoing reasons, the master-in-equity's order granting partial summary
judgment is

AFFIRMED AS MODIFIED.

WILLIAMS, THOMAS, and MCDONALD, JJ., concur.