Summary
The Vermont Supreme Court affirmed summary judgment for Frank Lamson in a dispute involving alleged breaches of fiduciary duty concerning a revocable trust and the use and purchase of vehicles. The court held that Roger Lamson’s claim for damages based on Frank’s personal use of the vehicles was unsupported because the vehicles were not shown to be trust assets and trust-funded operating expenses were not established. The court also held that the transaction funding the 2009 Subaru was not voidable because Virginia Newman consented to and ratified it.
Topics
Practice areas
Questions Presented
- Whether Roger presented sufficient evidence to recover damages for Frank's alleged personal use of the 2000 and 2009 Subarus as trust assets.
- Whether the transfer of trust funds to Virginia and Frank's joint account and the subsequent purchase of the 2009 Subaru constituted a voidable self-dealing transaction under the Florida Trust Code.
- Whether Virginia's consent to and ratification of the transfer and vehicle purchase prevented the transaction from being voidable.
Holdings
- Roger's claim for damages based on Frank's use of the vehicles failed as a matter of law because he presented no evidence that either vehicle was a trust asset or that trust assets paid the gas and maintenance expenses included in his mileage-based damages calculation.
- Even assuming Frank participated in the transfer and purchase for his own benefit, the transaction was not voidable because the undisputed evidence showed that Virginia consented to and ratified the transfer of funds, purchase of the vehicle, Frank's use of it, and later transfer of title.
- Roger failed to establish that the distribution violated the trust's written-request requirement, and any claim that the bank improperly distributed the funds was directed at the bank rather than Frank.
Key quotations
“We hold that Roger’s claims for damages based on Frank’s use of Virginia’s cars fail as a matter of law, and that Roger cannot prevail on his breach of trust claim relating to the initial purchase of the car because the undisputed evidence is that Virginia ratified the disputed transaction.” (2017 VT 41, ¶ 15)
“In the face of this undisputed evidence of Virginia’s consent to and subsequent ratification of the transfer of funds and purchase of the vehicle—even if Frank did participate in the transaction for his own benefit—Roger has not proffered evidence or even argued that Virginia did not, in fact, consent to the transfer of funds for her purchase of the car, Frank’s use of the car thereafter, or the transfer of title to Frank.” (2017 VT 41, ¶ 25)
Factual background
Virginia Newman established a revocable trust of which she, Roger Lamson, Frank Lamson, and a bank were co-trustees during the relevant period. In January 2009, $25,941 was transferred from a trust account to a joint account held by Virginia and Frank, and the money was used the next day to purchase a 2009 Subaru titled in Virginia's name; Virginia already owned a 2000 Subaru. Frank occasionally used the 2009 Subaru for personal purposes, and Virginia transferred title to him in 2011. Roger sought $44,580 based on an accountant's estimate of Frank's personal use of both vehicles, but presented no evidence that either vehicle was a trust asset or that trust funds paid the vehicles' fuel and maintenance costs.
Procedural history
Roger initially petitioned in the probate division for an accounting and later alleged that Frank breached his fiduciary duties by using trust funds and trust-related property for personal purposes. The probate division awarded Roger $44,580 based on Frank's alleged personal use of two vehicles. Frank appealed that award to the civil division, where both parties moved for summary judgment; the civil division granted summary judgment to Frank. Roger appealed to the Vermont Supreme Court, which affirmed.