Case Title: WELLS FARGO BANK WYOMING, N.A., V. EDWIN C. HODDER; KATHERINE E. PULS; CECILY A. ELLIS; MARK OWEN KRUEGER; DAVID EARL KRUEGER; WILLIAM KENT KRUEGER; and MARGARET McKINNEY, Beneficiaries of the Lierd-Miracle Trust

Citation: 

Docket Number: 05-256

State: wyoming

Court: Wyoming Supreme Court

Date: 2006-10-13T00:00:00Z

Document:
WELLS FARGO BANK WYOMING, N.A., V. EDWIN C. HODDER; KATHERINE E. PULS; CECILY A. ELLIS; MARK OWEN KRUEGER; DAVID EARL KRUEGER; WILLIAM KENT KRUEGER; and MARGARET McKINNEY, Beneficiaries of the Lierd-Miracle Trust2006 WY 128144 P.3d 401Case Number: 05-256, 05-257Decided: 10/13/2006
OCTOBER 
TERM, A.D. 2006

 
 
WELLS 
FARGO BANK WYOMING, N.A.,

 
 
Appellant

(Defendant),

 
 
v.

 
 
EDWIN C. 
HODDER; KATHERINE E. PULS; CECILY A. ELLIS; MARK OWEN KRUEGER; DAVID EARL 
KRUEGER; WILLIAM KENT KRUEGER; and MARGARET McKINNEY, Beneficiaries of the 
Lierd-Miracle Trust,

 
 
Appellees

(Plaintiffs).

 
 

Appeal 
from the DistrictCourtofNatronaCounty

The 
Honorable David Park, Judge

 
 

Representing 
Appellant:

            
Gary R. Scott of Hirst & Applegate, P.C., Cheyenne, Wyoming.

 
 

Representing 
Appellees:

            
Frank R. Chapman of Chapman Valdez, 
Casper, Wyoming. 

 
 
Before 
VOIGT, C.J., and HILL*, KITE, BURKE, JJ., and DONNELL, 
D.J.

 
 
*Chief 
Justice at time of oral argument.

 
 

KITE, 
Justice.

[¶1]  The beneficiaries of a trust filed a 
complaint against their trustee, Wells Fargo Bank Wyoming, N.A. (Wells 
Fargo), claiming it breached its fiduciary duties.  After a bench trial, the district court 
held generally for the beneficiaries.  
Wells Fargo appealed, asserting several points of error in the trial 
court's findings.  The beneficiaries 
filed a cross-appeal claiming error in the trial court's failure to award 
attorney fees and prejudgment interest.  
We generally affirm, although we arrive at that result by applying a 
different standard than the trial court used.  Addressing specifically the trial 
court's holding that Wells Fargo improperly withheld $120,000 of trust funds, 
however, we reverse to the extent the holding did not allow the bank to retain 
trust funds to cover expenses associated with correcting a fuel spill and 
drainage problem on trust property.  

  

ISSUES

 
 
[¶2]      In its appeal, 
Wells Fargo presents the following issues:

 
 

Case No. 
05-256

 
 
1.         
Did the trial court err in failing to enforce the good faith provision of 
the original trust agreement?

 
 
2.         
Did the trial court err in its finding that the sale of the five lots to 
Quality Stores by Wells Fargo was not a market value sale?

 
 
3.         
Did the trial court err when it failed to find that Wells Fargo was [an] 
"innocent owner" and when it made Wells Fargo the guarantor for remediation of 
the Mini-Mart real property, and did the trial court have subject matter 
jurisdiction over that contamination issue?

 
 
4.         
Did the trial court err in its finding that Wells Fargo improperly paid 
$10,000 to beneficiary Tim Miracle for his participation in Wells Fargo's sale 
of trust real estate[?]

 
 
5.         
Did the trial court err in its finding that Wells Fargo Bank improperly 
withheld $120,000 from its final distribution, to cover closing expenses and 
contingent liabilities of the trust?

 
 
6.         
Did the trial court err in ordering Wells Fargo to mitigate the drainage 
problem at its expense?

 
 

Case No. 
05-257

 
 
1.         
Did the trial court err by not awarding attorney's fees to the 
plaintiffs?

 
 
2.         
Did the trial court err by not awarding prejudgment interest to the 
plaintiffs?

 
 
In their 
cross-appeal, the beneficiaries present these issues: 

 
 
1.         
Did the district court err by not awarding attorneys' fees to the 
beneficiaries after they prevailed on claims for multiple breaches of fiduciary 
duties by the trustee?

 
 
2.         
Did the district court err by not granting an award of prejudgment 
interest on the amount which the court found trust property had been undersold 
by the trustee?

 
 
FACTS

 
 
[¶3]  Floyd E. Miracle and Clifton L. Lierd 
owned real estate in east Casper.  
In 1968, they deeded their holdings into a revocable trust naming Wyoming 
National Bank as trustee.  Norwest 
Bank Wyoming, 
N.A., subsequently purchased Wyoming National Bank and assumed the duties as 
trustee.  Norwest Bank then sold its 
assets and liabilities to Wells Fargo which has since acted as trustee. 

 
 
[¶4]  The original trust authorized the 
trustee to exercise its powers during the grantors' lifetimes only in accordance 
with their written directions.  Upon 
the death of one grantor, the agreement authorized the surviving grantor and 
trustee to dispose of the property "at any time and from time to time."  Upon the death of the second grantor, 
the trust directed the trustee to distribute any remaining trust property in 
kind to the beneficiaries or, in its sole discretion, sell the property and 
distribute the proceeds.  It also 
authorized the trustee:

 
 
To use 
its best judgment in exercising the powers, discretions and rights conferred by 
this agreement or in performing the duties imposed upon the Trustee by law, and, 
in order to feel free in doing so, to be exempt from liability for any action 
taken or omitted in good faith.

 
 
[¶5]  The original trust inadvertently 
neglected to name any beneficiaries and so, in 1974, the grantors amended the 
trust to identify the beneficiaries.  
The amendment referenced the original trust and stated it "is amended and 
superseded by this amendatory contract."   The amendment further stated the 
grantors "agree with one another and request said trustee to accept this 
agreement as an amendment to said trust agreement as follows and to the 
following extent."  Substantively, 
in addition to identifying the beneficiaries, the amendment clarified and 
changed what was to occur upon the grantors' deaths.  Upon the death of one grantor, the 
trustee and surviving grantor were to distribute by the end of each year any 
income received by the trust.  Upon 
the death of the surviving grantor, the trustee was to distribute the property 
or sell the property and distribute the proceeds.  The latter provision reiterated that the 
decision whether to sell or distribute the property was left to the trustee's 
discretion depending upon which alternative was in the beneficiaries' best 
interests.  The final paragraph of 
the amendment stated:  ". . . it is 
agreed that the original [of this amendment] shall be attached to the original 
trust agreement so as to become part thereof."  

 
 
[¶6]  Two years later, the trust was amended a 
second time.  This amendment 
referenced the original trust, as amended, and stated:

 
 
The 
parties to said Trust Agreement, being desirous of further amending the same, do 
hereby amend, supplement and modify said original revocable trust, as amended, 
to the extent specified and provided herein . . . ."

 
 
The 1976 
amendment changed the trust to an irrevocable trust and gave the trustee the 
authority to act on behalf of and make decisions for the trust on a variety of 
matters without direction from the grantors or beneficiaries.  The second amendment also named two of 
the beneficiaries as special trustees to assist the trustee with income 
distribution and real estate management decisions.  The second amendment provided the 
trustee would take over full administration of the trust upon resignation of the 
special trustees and also provided for termination of the trust.   Neither the 1974 amendment nor the 
1976 amendment specifically referenced the original trust provision exempting 
the trustee from liability for actions taken or omitted in good faith.     

 
 
[¶7]  In 2002, the beneficiaries filed a 
complaint against Wells Fargo.  The 
complaint was followed a year later with an amended complaint and in 2004 with a 
second amended complaint.  The 
complaints alleged Wells Fargo breached its fiduciary duties in numerous ways1 and sought compensatory and 
punitive damages. 

 
 
[¶8]  Five of the allegations are relevant to 
this appeal.  First, the 
beneficiaries claimed Wells Fargo sold five parcels of trust real estate to 
Quality Stores for less than market value without their unanimous consent and 
without obtaining an appraisal, attempting to market the property or consulting 
experienced real estate professionals to assist with the sale.  The beneficiaries also claimed Wells 
Fargo failed to properly address a drainage problem that Quality Stores created 
on the five lots, which caused runoff on property purchased from the trust by 
another buyer and 6.7 acres of undeveloped property still owned by the 
trust.  Also at issue on appeal are 
the beneficiaries' claims that Wells Fargo failed to adequately address a fuel 
spill on trust property leased to Mini-Mart for a convenience store and gas 
station and paid beneficiary Ted Miracle more for services the bank hired him to 
perform for the trust than his services were worth.  Wells Fargo answered the amended 
complaint by generally denying the claims and asserting, among other affirmative 
defenses, it was exempt from liability under the terms of the trust because it 
acted in good faith. 

 
 
[¶9]  After the beneficiaries filed the 
initial complaint but before they filed the second amended complaint, the trust 
terminated by its own terms on June 23, 2003.  Wells Fargo liquidated the stocks and 
other securities and distributed $848,000 to the beneficiaries.  Wells Fargo withheld $120,000 to cover 
expenses and continued to hold two parcels of trust real estate  the land 
leased to Mini-Mart on which the fuel spill occurred and the undeveloped 6.7 
acre piece of property affected by the drainage problem.  In their second amended complaint, the 
beneficiaries added the claim that Wells Fargo breached its fiduciary duty by 
holding trust assets after the trust terminated, including the $120,000 and the 
two parcels of trust property.      

 
 
[¶10]  In 2005, a bench trial was held on the 
beneficiaries' claims.  After the 
trial, the district court issued a twenty-eight page decision letter.  In summary, the trial court found the 
second amendment to the trust superseded the original trust agreement.  Because the second amendment did not 
contain a good faith exemption from liability clause, the trial court concluded, 
Wells Fargo was not exempt from liability for actions taken in good faith.  Instead, the trial court held the 
trustee owed the beneficiaries a fundamental fiduciary duty of loyalty which 
included the duty to exercise the care and skill a person of ordinary prudence 
would use in dealing with his or her own property.  Applying that duty to the beneficiaries' 
claims, the trial court concluded Wells Fargo breached its fiduciary duty by 
failing to obtain the best price for the five lots sold to Quality Stores, 
ensure the fuel spill on the property leased to Mini-Mart was remedied and 
correct the drainage problem affecting trust property.  The trial court also found the trustee 
breached its fiduciary duty by paying beneficiary Tim Miracle more for services 
than they were worth and retaining $120,000 in trust funds for legal fees and 
expenses. 

 
 
[¶11]  The trial court awarded judgment to the 
beneficiaries in the amount of $330,000 (the difference between the sale price 
and market value of the five lots sold to Quality Stores) together with post 
judgment interest at the rate of ten percent, plus $7,500 (the beneficiaries pro 
rata share of the commission paid to Tim Miracle), and the $120,000 retained by 
Wells Fargo as legal fees and expenses.  The trial court also ordered Wells Fargo 
to take any and all action necessary to clean up the fuel spill on the leased 
property in the event neither the State of Wyoming2 nor Mini-Mart accepted the 
responsibility.  Addressing the 
drainage problem, the trial court ordered Wells Fargo, which conceded it was 
responsible for correcting the problem, to obtain and implement an engineering 
plan within ninety days to mitigate drainage from the Quality Stores' lots.3  The trial court awarded the 
beneficiaries their costs, but declined to award attorney fees.        

            

STANDARD 
OF REVIEW

 
 
[¶12] In 
considering trust agreements, we have said:       

 
 
The 
meaning of a trust instrument is determined by the same rules that govern the 
interpretation of contracts. The intent of the settlor is determined, if 
possible, from the trust document itself.  
The determination of whether the agreement is ambiguous on its face does 
not require extrinsic evidence and is therefore a question of law which we 
review de novo.  The interpretation of an unambiguous 
trust instrument likewise does not require consideration of evidence and is 
reviewed de novo.  The interpretation of an ambiguous 
instrument is a mixed question of law and fact, which will be reversed only if 
it is clearly erroneous or contrary to the great weight of the evidence.  

 
 

Woods v. 
Wells Fargo Bank Wyoming, 2004 
WY 61, ¶ 42, 90 P.3d 724, 736-37 (Wyo. 2004) (citations omitted).  

 
 
[¶13]  We have stated the standard of review 
for factual findings of a judge as follows:

 
 
The 
factual findings of a judge are not entitled to the limited review afforded a 
jury verdict.  While the findings 
are presumptively correct, the appellate court may examine all of the properly 
admissible evidence in the record.  
Due regard is given to the opportunity of the trial judge to assess the 
credibility of the witnesses, and our review does not entail re-weighing 
disputed evidence.  Findings of fact 
will not be set aside unless they are clearly erroneous.  A finding is clearly erroneous when, 
although there is evidence to support it, the reviewing court on the entire 
evidence is left with the definite and firm conviction that a mistake has been 
committed.  Findings may not be set 
aside because we would have reached a different result.  Also, in reviewing a trial court's 
findings of fact, we assume that the evidence of the prevailing party below is 
true and give that party every reasonable inference that can fairly and 
reasonably be drawn from it

            

Fraternal 
Order of Eagles Sheridan Aerie No. 186, Inc. v. State ex rel. 
Forwood, 2006 
WY 4, ¶ 24, 126 P.3d 847, 857 (Wyo. 2006) (citations 
omitted).

 
 
DISCUSSION

 
 
Wells 
Fargo's 
Appeal

 
 
1.         
The Good Faith Provision

 
 
[¶14]  Wells Fargo contends the trial court 
erred when it did not enforce the provision of the original trust agreement 
exempting the trustee from liability for good faith acts or omissions.  Pursuant to that provision, Wells Fargo 
asserts it had no liability to the beneficiaries absent a showing it failed to 
act in good faith in carrying out its duties as trustee.  Wells Fargo argues the trial court's 
conclusion that the second amendment rewrote the trust to such an extent the 
good faith clause was not carried over is contrary to the plain language of the 
amendment, which clearly stated it was intended to supplement and modify the 
original trust "to the extent specified."  
Because no language in the second amendment altered or deleted the good 
faith provision, Wells Fargo asserts, the second amendment did not modify that 
provision.     

 
 
[¶15]  The beneficiaries contend the trial 
court correctly concluded the amendments wrote the good faith exemption out of 
the trust.  They argue the plain and 
ordinary meaning of the language of the 1974 amendment showed the grantors 
intended the amendment to "supersede" the original trust.  Thereafter, the 1976 amendment further 
demonstrated the grantors intent to replace the original trust because it 
altered the trust agreement in every important respect, including the terms, 
conditions, obligations, rights, duties, powers and beneficiaries.  Of particular significance, the 
beneficiaries argue, the amendment removed the earlier limitations on the 
trustee's authority to act only with the direction of the grantors.  Given this change, the beneficiaries 
argue, the good faith exemption was no longer appropriate and the grantors 
clearly intended to supplant it.

 
 
[¶16]  In accordance with the applicable 
standard of review, we begin our analysis by considering de novo the plain language of the trust 
documents.  We construe the language 
in the context in which it was written, looking to the surrounding 
circumstances, the subject matter, and the purpose of the trust to ascertain the 
intent of the parties at the time the agreement was made.  Carlson v. Flocchini Invs., 2005 WY 19, 
¶ 15, 106 P.3d 847, 854 (Wyo. 2005); Hickman v. Groves, 2003 WY 76, ¶ 7, 71 P.3d 256, 258 
(Wyo. 2003).

 
 
a.         
The Original Trust Agreement

 
 
[¶17]  The original trust document created the 
trust, set forth its purpose, identified the trust property, designated the 
trustee and enumerated the trustee's powers.  In exercising the enumerated powers, the 
trustee was subject to the following limitation:  

 
 
During 
the lifetime of [the grantors], the Trustee shall exercise the foregoing powers 
and particularly the power of sale of assets constituting a corporate trust only 
in accordance with the written directions of the Grantors.

 
 
In the 
event the grantors did not jointly instruct the trustee or give identical 
instructions, the trustee was empowered to act in its discretion as it deemed in 
the best interests of the grantors.  
Otherwise, during the grantors' lifetimes, the agreement required the 
trustee to follow their instructions and provided:

 
 
[the 
trustee] shall not be liable for depreciation or loss incurred by reason of 
sales, exchanges, purchases or other action taken pursuant to such directions or 
by reason of inaction on its part should the Grantors fail to give such 
directions.

 
 
The 
plain language of this provision reflects that the grantors intended the trustee 
would not be liable for actions taken or not taken pursuant to their directions. 

 
 
[¶18]  Upon the death of one of the grantors, 
the trustee and the surviving grantor had the authority under the original 
agreement to dispose of the trust assets "at any time and from time to 
time."  Upon the death of the second 
grantor, the trustee was directed to distribute the assets to the beneficiaries 
or sell the assets and distribute the proceeds.  The determination as to whether to 
distribute the assets or sell them and distribute the proceeds was left to the 
trustee's sole discretion.  In a 
separate paragraph, the original trust agreement provided the trustee was to use 
its best judgment in exercising the powers conferred and, "in order to feel free 
in doing so," was exempt from liability for actions "taken or omitted in good 
faith."  The plain language of the 
original trust clearly reflects the grantors' intent that the trustee be free 
from liability for actions taken in accordance with their instructions and 
otherwise so long as it acted in good faith. 

 
 
b.         
The 1974 Amendment

 
 
[¶19]  By its express terms, the 1974 amendment 
was intended to clarify the original trust agreement in two respects:  first, to identify the beneficiaries, 
which the original trust inadvertently did not do, and, second, to change the 
directives concerning disposal of trust property upon the death of the 
grantors.  In regard to the latter 
clarification, while the original trust authorized the trustee and surviving 
grantor to dispose of trust assets "at any time and from time to time" after the 
death of one grantor, the 1974 amendment expressly directed the surviving 
grantor and trustee instead to distribute any net income received by the trust 
by the end of each calendar year following the grantor's death.    

 
 
[¶20]  Upon the death of the second grantor, 
the original trust required the trustee to distribute the assets in kind to the 
beneficiaries or, in its sole discretion, sell the assets and distribute the 
proceeds.  The 1974 amendment 
changed the language of that provision to require the trustee to "give careful 
attention to the timeliness of liquidating any and all property remaining in the 
trust" either by selling it and distributing the proceeds or distributing the 
property in kind, whichever the trustee concluded in its judgment was in the 
best interest of the beneficiaries.  
In the event the trustee decided to sell the property and distribute the 
proceeds, the amendment required the trustee to provide the beneficiaries notice 
and an opportunity to be heard.  As 
in the original trust agreement, however, the amendment left the ultimate 
decision whether to sell or distribute the property in kind after the grantors' 
deaths within the trustee's sole discretion.  The 1974 amendment to the trust 
agreement made no mention of trustee liability.   

 
 
[¶21]  The beneficiaries argue the 1974 
amendment by its own terms superseded the original trust agreement, thereby 
extinguishing the exemption from liability provision. We disagree.   In interpreting a contract, our 
primary purpose is to determine the true intent and understanding of the parties 
at the time and place the contract was made. Hickman, ¶ 6, 71 P.3d  at 257-58.  We construe the contract as a whole, 
attempting to avoid a construction which renders a provision meaningless.  Id.  We strive to reconcile by reasonable 
interpretation any provisions which apparently conflict before adopting a 
construction which would nullify any provision.  Id.

 
 
[¶22]  Despite use of the term "superseded" in 
the amendment, the grantors' express purpose was to clarify the original trust, 
not to create a new trust taking the place of the original.  The opening paragraph of the amendment 
references the original trust.  The 
third paragraph requests the trustee to accept the document "as an amendment to 
said trust agreement . . . to the following extent . . . ."  The next two paragraphs expressly change 
the original trust provisions concerning distribution of the assets upon the 
death of one and then both of the grantors.  The remaining paragraphs clarify the 
original trust by identifying the beneficiaries.  The closing paragraph provides the 
amendment "shall be attached to the original trust agreement so as to become a 
part thereof."  To ignore these 
provisions and focus exclusively on the term "superseded" would be to nullify 
much of the plain language of the amendment.  Construing the term "superseded" as 
applying only to those provisions expressly changed by or in direct conflict 
with the amendment gives meaning to that term while at the same time 
effectuating other provisions indicating the amendment was intended to add to, 
rather than replace, the original trust document.    

 
 
[¶23]  Considering the amendment in its 
entirety, the clear intent of the grantors was to amend the original trust to 
the extent provided.  As a matter of 
law, the 1974 amendment did not supersede or take the place of the original 
trust but added to it to the extent provided.  An amendment or modification to an 
agreement leaves intact those provisions of the original agreement not expressly 
or impliedly superseded.  O'Donnell v. Blue Cross Blue Shield of 
Wyoming, 
2003 WY 112, ¶ 13, 76 P.3d 308, 313-14 2003).    Because the amendment did 
not expressly or impliedly change the exemption from liability provisions 
contained in the original trust, they remained intact after the 1974 amendment. 

 
 
c.         
The 1976 Amendment

 
 
[¶24] 
The 1976 amendment, like the 1974 amendment, referenced the original trust.  It also referenced the 1974 
amendment.  The 1976 amendment 
stated it amended, supplemented and modified the original trust as amended "to 
the extent specified and provided herein."  
The express purpose of the 1976 amendment was to make the trust 
irrevocable and provide for the disposition of trust income by the trustee, 
management of trust property and termination of the trust.  Like the first amendment, the second 
amendment did not specifically refer to the exemption from liability provisions 
contained in the original trust.  
The trial court concluded the second amendment changed the original trust 
so significantly that it essentially rewrote the trust and the good faith 
exemption from liability clause was not carried over.  Because our review is de novo, we give no deference to the 
trial court's conclusion.  Mueller v. Zimmer, 2005 WY 156, ¶ 35, 
124 P.3d 340, 359 (Wyo. 2005). 

 
 
[¶25]  There is no question the second 
amendment expanded the authority of the trustee. Unlike the original trust, the 
second amendment contained no provision limiting the trustee during the 
grantors' lifetimes to acting only in accordance with their written 
directions.  Rather, the second 
amendment gave the trustee uncontrolled discretion to determine how much of the 
net income to pay to or apply for the use of the beneficiaries.4  It also gave the trustee broad authority 
to make decisions concerning trust property, including the authority to repair, 
build and make improvements, enter into lease agreements, employ and compensate 
accountants, attorneys, rental agents and other specialists necessary to 
administer the trust, obtain insurance, borrow money and negotiate sales.  Although the second amendment appointed 
special trustees with whom the trustee was required to confer concerning income 
distribution, the amendment provided the trustee was not bound by their wishes, 
recommendations or demands.  The 
amendment limited the special trustees' power to make decisions without the 
consent of the trustee to expenditures less than $50,000 and leases for less 
than five years.  All other 
decisions were required to be submitted to the trustee in writing for its 
approval.     

 
 
[¶26]  Like the first amendment, the second 
amendment did not reference the exemptions from liability contained in the 
original trust agreement.  The 
second amendment did, however, add a new provision concerning trustee 
liability.  Paragraph 5(e) of the 
amendment stated:

 
 
As a 
condition to acceptance by the trustee of any designation as trustee hereunder, 
it is expressly understood and agreed that the trustee shall have no 
responsibility or liability for any sale, exchange, expenditure, contract, 
commitment, obligation or liability of any kind authorized or undertaken by the 
special trustees either of them, either within or beyond the authority granted 
them hereunder, and the special trustees hereby jointly and severally agree, 
individually and on behalf of their respective heirs, successors and assigns, to 
wholly indemnify the trustee and hold it harmless from and against the claims of 
any and all persons whomsoever asserting any claims against the trust or the 
trustee for any interest in the income or principal of the trust or for 
mismanagement, lost opportunities, or any other basis for any claim of any kind 
or for any liability which could be imposed upon the trustee by virtue of 
actions or omissions of the special trustees or either of them, including any 
imprudent act or the consummation of a transaction which results in any claim 
against the trust. The indemnity shall extend to the claims of any person ever 
having a right to receive any income or principal hereunder and any credit or 
claimant of the special trustees or the trust.

 
 
The 
plain language of this provision shows the grantors considered trustee liability 
in the course of drafting the 1976 amendment.  In adding the new provision, however, 
the grantors gave no indication they intended the later exemption to replace the 
earlier provisions.  The 1976 
provision exempted the trustee from liability for acts of the special 
trustees.  The earlier provisions 
exempted the trustee from liability for acts taken at the direction of the 
grantors and for acts otherwise taken or omitted in good faith. 

 
 
[¶27]  We find nothing in the language of the 
trust documents, the context in which they were written or the surrounding 
circumstances to suggest the grantors expressly or impliedly intended the later 
provision or the amendment in general to supersede the earlier provisions.  The later provision is not in conflict 
with the earlier provisions such that the three provisions cannot stand together 
nor does the later provision raise the legal inference of substitution since it 
addresses trustee liability in a different context than the earlier 
provisions.  We hold the original 
trust provision exempting the trustee from liability for acts taken or omitted 
in good faith remained intact.

 

 [¶28]  In reaching this result, we find 
determinant the express language of the 1976 amendment stating the grantors 
desired to "further amend" the original agreement and "hereby amend, supplement 
and modify" the original trust as amended "to the extent specified and provided 
herein."  The plain meaning of this 
language is that the amendment modified the original trust to the extent 
provided, not that it supplanted or took the place of the original in its 
entirety or of particular provisions not addressed by the amendment.  Our conclusion that the original 
exemption from liability provisions remained in effect is also compelled by our 
rule that an amendment or modification to an agreement leaves intact those 
provisions of the original agreement not expressly or impliedly superseded.   O'Donnell, ¶ 13, 76 P.3d  at 314-15.  
We find nothing in the trust documents suggesting the grantors 
intended to replace the good faith liability exemption. 

 
 
[¶29]  In construing the 1976 amendment as 
altering the original document so significantly as to supplant it, the trial 
court was persuaded the grantors must have intended to remove the liability 
exemption when they granted the trustee unlimited discretion to act on behalf of 
the trust.  The trial court 
concluded:  "Because the Trustee was 
granted substantial discretion and additional authority, an exculpatory clause 
is less appropriate than it would have been under the terms of the original 
trust."  We have said:  the parties to an agreement are free to 
incorporate whatever lawful terms they desire, and the courts are not at 
liberty, under the guise of judicial construction, to rewrite the 
agreement.  Cathcart v. State Farm Mut. Auto. Ins. 
Co., 2005 WY 154, ¶ 18, 123 P.3d 579, 587-88 (Wyo. 2005).  Absent some clear indication the 
grantors intended the 1976 amendment to replace the original trust agreement in 
its entirety or rescind the good faith provision specifically, we cannot agree 
with the trial court.  The plain 
language of the amendment states it was intended to modify the original 
agreement to the extent provided, not to replace it or modify provisions not 
referenced in the amendment. 

 
 
[¶30]  In addition to the foregoing, our 
conclusion that the good faith provision remained intact is influenced by other 
language indicative of the grantors' intent throughout the process of creating 
and amending the trust.  Reading the 
original trust and the amendments together, we do not find the changes to be 
quite as substantial as the trial court concluded they were.  From the beginning, the trustee was 
authorized to use its discretion to act or decline to act in accordance with the 
grantors' instructions in the best interest of the beneficiaries in instances 
where the grantors did not jointly provide instructions or provided differing 
instructions.  The trustee also was 
authorized from the beginning to act in its sole discretion upon the death of 
the grantors to sell the property and distribute the proceeds.  In so acting, the trustee was expressly 
exempted from liability so long as it acted in good faith.  The 1974 amendment continued the 
trustee's discretion with the caveat that the beneficiaries be notified and 
heard concerning any decision to sell the property.  There is no question the 1976 amendment 
increased the trustee's authority to act on behalf of the trust.  However, the plain language of the 
documents demonstrates that the grantors intended from the time the trust was 
created to give the trustee the sole discretion to act under specified 
circumstances.  One of those 
circumstances was their deaths.  
With this discretion, the grantors also clearly intended the trustee to 
be exempt from liability for actions taken or omitted in good faith.  We find it significant they did not 
rescind the exemption when they increased the trustee's authority and added 
another exemption from liability provision (i.e., for acts of the special 
trustees).              

 
 
[¶31] We 
make one additional point concerning the trial court's conclusion.  In reaching the result it did, the trial 
court did not address in its decision letter whether the trust documents were 
ambiguous and yet it considered, in addition to the writings themselves, 
extrinsic evidence unrelated to the facts and circumstances surrounding the 
execution of the document.  
Specifically, the trial court referenced a letter written by a Wells 
Fargo trust officer in 1990, fourteen years after the trust was amended, 
advising the beneficiaries the amendment virtually rewrote the original trust. 
 The trial court also referenced 
expert testimony presented at trial to the effect that a reasonably trained 
trust officer would conclude the second amendment was a complete rewrite and 
replacement of the original trust instrument.  Extrinsic evidence can be considered in 
interpreting an unambiguous contract only to the extent it involves facts and 
circumstances surrounding execution of the contract.  Hickman, ¶ 11, 71 P.3d at 259-60; Mullinnix LLC v. HKB Royalty Trust, 
2006 WY 14, ¶ 6, 126 P.3d 909, 915 (Wyo. 2006).5  Only when the document is ambiguous do 
we look to parol evidence to understand the parties' intent.  In this case, neither the parties nor 
the district court identified any ambiguity in the document and, therefore, 
evidence concerning how a trained trust officer may have interpreted the 
document should not have been considered.

 
 

2.                  
Breach 
of Duty of Good Faith

 
 
[¶32]  Upon concluding the good faith provision 
did not survive the amendments to the original trust agreement, the trial court 
applied the reasonably prudent person standard to determine whether Wells Fargo 
was liable to the beneficiaries.  We 
have said when a trust agreement by express provision relaxes or modifies the 
standard of care required of a trustee the failure to give effect to such 
provision is error.  Kerper v. Kerper, 780 P.2d 923, 931 
(Wyo. 
1989).  Our conclusion that the good 
faith provision remained in effect after the amendments requires application of 
that standard rather than the prudent person standard to the facts 
presented.  The question for 
determination was whether or not, based upon the evidence presented, the trustee 
acted in good faith.  Ordinarily, 
that is a determination for the fact finder.  However, considering the record before 
us, including the complete trial transcript and the trial court's twenty-eight 
page decision letter, we conclude for reasons of judicial economy the better 
course in this particular case is for this Court to apply the applicable 
standard to the facts presented.6  We are able to do so because the trial 
court's decision letter sets forth detailed findings of fact, including its 
assessment of witness credibility, making it possible for this Court to review 
without re-weighing disputed evidence.   

 
 
[¶33]  Before we can decide whether Wells Fargo 
breached its duty of good faith, we must determine what the term "good faith" 
means in the context of a trust.   
In other contexts, we have defined "good faith" to mean "an honest 
intention to abstain from taking any unconscientious advantage of another, even 
through the forms or technicalities of law, together with an absence of all 
information or belief of facts which would render the transaction 
unconscientious."  Mayland v. Flitner, 2001 WY 69, ¶ 16, 28 P.3d 838, 845 (Wyo. 2001).  We have 
also defined it as "being honest, lawful intent, and the condition of acting 
without knowledge of fraud and without interest to assist in fraudulent or 
otherwise unlawful scheme."  
Id.  In the context of the duty of good faith 
and fair dealing recognized in contracts, we have defined "good faith" in accord 
with Restatement (Second) of Contracts, § 205, comment a, (1981) 
as:

 

faithfulness 
to an agreed common purpose and consistency with the justified expectations of 
the other party; it excludes a variety of types of conduct characterized as 
involving "bad faith" because they violate community standards of decency, 
fairness or reasonableness. 

 

Scherer 
Const., LLC v. Hedquist Const., Inc., 2001 WY 
23, ¶ 18, 18 P.3d 645, 653 (Wyo. 2001); Wilder v. Cody Country Chamber of 
Commerce, 868 P.2d 211, 220 (Wyo. 1994). We conclude the Restatement 
definition is applicable in the context of trust agreements, which are subject 
to the same rules as contracts.7 

 
 
[¶34]  One other matter requires clarification 
before we apply the good faith standard to the trial court's factual 
findings.  We must determine whether 
the grantors intended the good faith limitation of liability to apply to all, or 
only some, of the trustee's acts.  A 
provision in a trust fixing a standard of care lower than that otherwise 
required of a trustee is strictly construed.   Kerper, 780 P.2d  at 930.  Such limitations on liability do not 
modify the ordinary fiduciary duties of a trustee except as expressly provided 
in the trust agreement.  Id.  

 
 
[¶35] 
The good faith standard appeared in the original trust agreement in a section 
identified as:  III. Investment 
Control.  By itself, the 
location of the provision suggests the good faith standard was intended to apply 
only to investment decisions of the trustee.  However, the language of the good faith 
provision was quite broad, and expressly applied to "the powers, discretions and 
rights conferred by this agreement" and the "duties imposed upon the Trustee by 
law."  The provision further stated 
the Trustee was "exempt from liability for any action taken or omitted in good 
faith." (emphasis added).  In light 
of the broad language of the provision, we conclude the grantors intended to 
modify trustee liability in administering the trust generally and did not intend 
the good faith standard to apply only to investment 
decisions.

 
 
[¶36]  Applying the prudent person standard, 
the trial court held the trustee breached its duty to the beneficiaries in five 
ways:  1) by failing to obtain the 
best price for trust real estate; 2) by failing to ensure a fuel spill on trust 
property was remedied; 3) by failing to correct a drainage problem on trust 
property; 4) by paying beneficiary Tim Miracle more for his services than they 
were worth; and, 5) by retaining $120,000 in trust funds for legal fees and 
expenses.  We address each of these 
factual determinations separately with regard to whether the good faith standard 
of "faithfulness to an agreed common purpose and consistency with the justified 
expectations of the other party" was met.  

 
 
 
 

a.      
Failure 
to Obtain the Best Price For Trust Real Estate

 
 
[¶37]  At trial, the beneficiaries claimed 
Wells Fargo sold five lots owned by the trust for less than its market 
value.  They sought to recover the 
difference between the sale price and appraised value.  We paraphrase relevant portions of the 
trial court's factual findings on this issue as follows:

 
 

1.                  
In July 
of 1999, Casper 
realtor Betty Luker presented an offer from Quality Stores to Wells Fargo to 
purchase five lots owned by the trust for $575,000.  It is not clear on whose behalf Luker 
was acting; the written purchase offer was altered to reflect she was an 
intermediary.

 
 

2.                  
Wells 
Fargo did not accept the purchase offer but signed an agreement with Luker 
authorizing her to convey a sales price of $655,000 to Quality Stores.  Luker obtained an offer from Quality 
Stores to purchase the lots for $655,000 and Wells Fargo accepted the 
offer.

 
 

3.                  
Wells 
Fargo's policy manual required the bank to obtain an appraisal within one year 
prior to the sale of trust property; Wells Fargo did not obtain an appraisal 
within one year prior to the sale of the five lots.

 
 

4.                  
The 
Wells Fargo policy manual also required:  
a recommendation to the Trust Oversight Committee for sale of trust 
property; the trust officer's written approval of the sale of trust property; 
and, when high risk assets were involved, the Trust Oversight Committee's 
approval of the sale. The trust officer did not approve the sale in writing and, 
although Wells Fargo claimed the sale was approved by the Trust Oversight 
Committee, no records exist to confirm the claim.

 
 

5.                  
Wells 
Fargo did not follow its own policies in selling the five 
lots.

 
 

6.                  
The lack 
of a current appraisal meant Wells Fargo acted without the benefit of 
information as to the current market value of the property. 

 
 

7.                  
Wells 
Fargo had no other information from which to determine the market value for the 
five lots; the trust officers involved relied on the price brought to them by 
Luker.  No evidence was presented as 
to how Luker arrived at the price.

 
 

8.                  
Wells 
Fargo did very little to promote or market the property, having listed the 
property twice in the early 1990s, distributed fliers once and placed a sign on 
the property with Tim Miracle's phone number. 

 
 

9.                  
Wells 
Fargo sold the trust property without obtaining a current appraisal or testing 
the market to determine the reasonable value of the real 
estate.

 

10.             
  All three Wells Fargo trust 
officers acknowledged their lack of real estate expertise; however, no expert 
help was hired.  Instead the trust 
officers relied on Tim Miracle, who admitted he had not been involved in a 
profitable development, and Betty Luker, without determining on whose behalf she 
was acting or how she arrived at the selling price for the 
property.

 
 
[¶38]  Mindful of the rule that factual 
findings of a trial court are presumptively correct, giving due regard to the 
trial court's assessment of witness credibility and adhering to the principle 
that we do not re-weigh disputed evidence, we conclude these findings are 
supported by the record and are not clearly erroneous.  The question for our determination is 
whether they support the legal conclusion that Wells Fargo acted or failed to 
act in good faith in selling the five lots belonging to the trust.  Because the facts demonstrate Wells 
Fargo did not act in a manner conducive to obtaining a market value price for 
the property and we can assume the common purpose and justifiable expectations 
of the parties was to do so, we hold the findings of fact are sufficient to 
demonstrate Wells Fargo did not act in good faith in carrying out the sale.8  In failing to obtain a current appraisal, 
market or promote the property, obtain approval of the sale from the trust 
oversight committee or employ real estate experts to assist with the sale, Wells 
Fargo as a matter of law did not act faithfully to the agreed purpose of the 
trust or the justified expectations of the beneficiaries. 

 
 
[¶39] On 
appeal, Wells Fargo claims the trial court erred as a matter of law because it 
did not make a finding as to whether the sale was a market value sale and 
applied Allard v. Pac. Nat'l Bank, 
663 P.2d 104 (Wash. 1983) rather than this Court's holding in Rock Springs Land and Timber v. Lore, 
2003 WY 100, 75 P.3d 614 (Wyo. 2003).  
Wells Fargo also claims the trial court's factual finding that the market 
value of the property was $985,000 was clearly erroneous.  We address the claimed error in 
application of Allard first.  

 
 
[¶40]  In Allard, the Washington court held a 
trustee breached its fiduciary duty in failing to obtain the best price possible 
for trust property either by obtaining an independent appraisal of the property 
or by testing the market to determine what a willing buyer would pay.  Wells Fargo contends this holding is 
contrary to this Court's holding in Rock 
Springs Land and Timber, ¶ 17, 75 P.3d  at 621 where we stated:  

 
 
The 
standard governing the trial court's consideration of the request to confirm the 
sale should be whether the trustee was acting in a reasonable and prudent manner 
at the time the agreement was executed, not whether it had obtained the highest 
price possible.   

   

[¶41]  We do not agree with Wells Fargo's 
reading of the Allard court's 
holding.  The bottom line in Allard was that by failing to obtain an 
independent appraisal or testing the market to determine what a willing buyer 
would pay, the trustee breached the duty imposed upon it by the express terms of 
the trust, i.e., to exercise the care a prudent person would exercise in the 
management of his or her own affairs.  
That is not inconsistent with our holding in Rock Springs Land and Timber which dealt 
with the standard that should apply when a third party is attempting to set 
aside a sale made by the trustee.  
Furthermore, in light of our holding in the instant case that the good 
faith provision governed Wells Fargo's conduct, neither Allard nor Rock 
Springs is directly on point.  

 
 
[¶42]  Wells Fargo also asserts the trial court 
erroneously found the market value of the property was $985,000, the amount at 
which the beneficiaries' appraiser valued the property.  In addition to citing its own expert's 
appraisal value of $637,000, Wells Fargo cites evidence to the effect that other 
more appealing property in the immediate area was appraised at or sold for 
less.  In accepting the 
beneficiaries' appraisal value, the trial court made extensive factual findings, 
which we summarize as follows:

 
 
1.         
A significant factor in appraisals is the selection of comparable sales 
to determine the value of property.

 
 
2.         
The appraisals offered by the parties differed in their selection of 
comparable sales. 

 

3.         
The beneficiaries' appraiser used six comparable sales, two of which took 
place after the Quality Stores sale and four of which preceded the Quality 
Stores sale. The four included three sales within the same subdivision as the 
Quality Stores sale and one on property immediately adjacent to the trust 
property sold to Quality Stores.

 
 
4.         
Wells Fargo's appraiser used only two comparable sales neither of which 
was in the same addition as the trust property. The comparable sale 
geographically closest was property not subdivided at the time of the sale. The 
appraiser used the pre-subdivision value. Immediately after the sale, the 
property was subdivided and the value increased significantly.  The post-subdivision value of the 
comparable sale would appear to be more similar than the pre-subdivision value 
used by the appraiser. The second comparable sale was on the west side of 
Casper and 
removed from an interstate; the trust property was on the east side and adjacent 
to I-25. The court finds the comparables in the beneficiaries' appraisal were 
more similar to the trust property than Wells Fargo's appraisal comparables and 
more indicative of market value. 

 
 
5.  Wells Fargo's appraiser was critical of 
the beneficiaries' appraiser for appraising the property as five lots rather 
than a single parcel. The beneficiaries' appraiser defended his appraisal by 
stating this provided more flexibility and thus a higher value. The flexibility 
comes from the fact that the lots could be sold as one parcel, separate lots or 
a combination of lots. His opinion was supported by the testimony of an 
experienced Casper real estate broker and developer. The 
court accepts the logic of the beneficiaries' appraiser as being more 
persuasive.

 
 
6.  In using a discounted cash flow method 
to value the property, Wells Fargo's appraiser used a discount rate of 15% 
derived from data pertaining to the Front 
Range. When asked how the discount rate would change when applied to 
Casper, he 
stated the appropriate discount rate would be above 10.75% and would probably 
fall in the midrange between 11-20%. For these additional reasons, the court 
rejects the cash discount flow appraised value.

 
 
7.  The beneficiaries' appraisal was done 
closer in time to the actual sale. Wells Fargo's appraiser conceded the closer 
in time to the actual event an appraisal is, the more accurate it tends to be. 
The beneficiaries' appraisal was more consistent with other evidence received 
and was buttressed by trust records kept by Wells Fargo. The court finds the 
beneficiaries' appraisal to be more credible. Based on this appraisal, the court 
finds Wells Fargo sold the 5 lots for less than fair market 
value.

 
 
8.  Additionally, there is evidence that the 
low price of the property was obtained because Wells Fargo failed to properly 
develop and sell the real estate. The three trust officers involved with the 
trust conceded they were not experts in the area but had the ability to hire 
professionals to assist in development and sale of the property. No expert was 
ever hired. Instead, they relied on beneficiary Tim Miracle, who admitted he had 
not been involved in a successful profitable development, and Betty Luker, 
without determining on whose behalf she was acting or how she determined the 
sale price. The combination of all these facts and the lack of current appraisal 
resulted in a sale for less than fair market value. As a result of the improper 
sale, the beneficiaries were damaged in the amount of the difference between the 
sale price and their appraisal value.

 
 
[¶43]  A finding is clearly erroneous when, 
although there is evidence to support it, this Court upon review of all of the 
evidence is left with the definite and firm conviction that a mistake was 
made.  Carlson, ¶ 10, 106 P.3d  at 852.  The parties presented two appraisals 
valuing the trust property.  They 
also presented evidence of sales and appraisals of other property in the 
area.  From the evidence before it, 
the trial court concluded the appraisal obtained by the beneficiaries best 
reflected the market value of the property.  In reaching that conclusion, the 
decision letter clearly demonstrates the trial court thoughtfully and carefully 
analyzed the evidence.  There is 
nothing clearly erroneous about the trial court's findings concerning the value 
of the property.  

 
 

b.                 
Failure 
to Ensure a Fuel Spill on Trust Property was 
Remedied

 
 
[¶44]  The trial court also held Wells Fargo 
breached its fiduciary duty by failing to ensure a fuel spill on trust property 
was remedied.  In reaching this 
result, the trial court made detailed findings of fact which we summarize as 
follows:

 
 
1.         
On July 21, 1987, Ned Hodder, one of the beneficiaries, wrote to Wells 
Fargo advising that over 200 gallons of diesel fuel had been spilled on property 
owned by the trust and leased to Mini-Mart for a convenience store. Mr. Hodder 
repeated his concerns to Wells Fargo on April 12, 2000. Mini-Mart conducted an 
investigation and confirmed the presence of hydrocarbon contamination on the 
site. 

 
 
2.         
Wells Fargo did nothing about the concern except to photograph excavation 
on the site on one occasion and insert a clause in the lease renewal. Otherwise, 
Wells Fargo relied on the State of Wyoming to address the problem. 

 
 
3.         The 
Wyoming 
Department of Environmental Quality confirmed the State would rehabilitate the 
site at no cost to the owner if the contamination proved to be from a leaking 
underground tank or pipe or from a combination of a spill and leak. If the 
contamination originated from a surface spill, however, the State would not pay 
for remediation and the cost would fall to the property 
owner.

 
 
4.         
Wells Fargo policies required the bank to keep a list of problem 
properties, including those where a spill, leak or other contamination occurred. 
The policies further required Wells Fargo to take whatever action was necessary 
to address the problem if it was one requiring immediate environmental 
attention.   

 
 
5.         
Wells Fargo took no action to address the contamination problem on trust 
property despite its obligation to do so. If neither the State nor the current 
lessee remediate the property within a reasonable time, then Wells Fargo is 
responsible for taking all action necessary to remediate. 

 
 
[¶45] On 
appeal, Wells Fargo claims the trial court did not have subject matter 
jurisdiction over the contamination issue.  
Citing Wyo. Stat. Ann. § 35-11-1428(b) (LexisNexis 2005) of the Wyoming 
Environmental Quality Act, Wells Fargo asserts the beneficiaries were required 
to serve the attorney general for the State of Wyoming with a copy of their 
complaint against Wells Fargo.  The 
statute provides in relevant part as follows:

 
 
§ 
35-11-1428.  Uses of financial 
responsibility account monies.

 
 
            
* * *

 
 
            
(b)  The attorney general 
shall be served by certified mail return receipt requested with a copy of the 
complaint filed in any suit initiated against an owner or operator for third 
party property damage or personal injury. Service of the complaint on the 
attorney general is a jurisdictional requirement in order to maintain the 
suit.  * * *

 
 
The bank 
claims this is "a suit initiated against an owner or operator of an underground 
storage tank for third party property damage or personal injury" and, under § 
35-11-1428(b) service of the complaint on the attorney general is a 
jurisdictional requirement in order to maintain the suit.

 
 
[¶46]  The fallacy in Wells Fargo's argument is 
that this is not a suit initiated against an owner or operator of an underground 
storage tank for third party property damage or personal injury.  Rather, this is a suit initiated by the 
beneficiaries of a trust against the trustee for breach of its duties under the 
trust, including the duty to act in good faith with respect to trust 
property.  Section § 35-11-1428(b) 
does not apply to this proceeding.

 
 
[¶47]  Wells Fargo also argues Wyo. Stat. Ann. 
§ 35-11-1802 (LexisNexis 2005) of the Wyoming Environmental Quality Act applies 
to protect it from liability for failing to remedy the fuel spill.  That statutory provision states: 

 
 
§ 
35-11-1802.  Immunity for innocent 
owners.

 
 

(a)               
An 
innocent owner is not liable for investigation, monitoring, remediation or other 
response action regarding contamination attributable to a release, discharge or 
migration of contaminants on his property.

(b)               
To be 
eligible for immunity under this act, the person shall:

(i)                 
Grant to 
the department or to a person designated by the department reasonable access to 
the land for purposes of investigation, monitoring or 
remediation;

(ii)               
 Comply with any requirements established 
by the department that are necessary to maintain state authorization to 
implement federal regulatory programs;

(iii)             
Not use 
the real property in a manner that causes exposure of the public to harmful 
environmental conditions; and

(iv)              
Comply 
with any engineering or institutional controls applicable to the real 
property.

 
 
Wells 
Fargo's argument in this regard suffers from the same failure of reasoning as 
the immediately preceding argument.  
Beneficiaries under a trust brought this action against the trustee for 
breach of its duty under the trust documents.  The statutory immunity provision has no 
bearing on the agreement entered into between the grantors of the trust and the 
trustee.     

 
 

c.      
Failure 
to Correct Drainage Problem

 
 
[¶48]  
The trial court held Wells Fargo breached its fiduciary duty by 
failing to correct a drainage problem on trust property.  We summarize the trial court's factual 
findings on this issue as follows:

 
 
1.         
The property held in trust includes Texas Street, an undedicated street. Runoff 
water flows down the street onto 6.7 acres of undeveloped trust property and 
another property owner's land at the bottom of the street, creating a drainage 
problem.

 
 
2.         
Wells Fargo conceded there was a drainage problem and it had some 
responsibility to fix it. However, Wells Fargo asserted Texas Street was 
planned to be deeded to the Town of Evansville and the Town would address the 
problem. 

 
 
3.         
At the time of trial, Evansville had not accepted the street nor had 
the town agreed to correct the drainage problem. 

 
 
4.         Wells 
Fargo's own policies and the trust agreement required the bank to act to protect 
trust property. In failing to act to correct a problem for which it concedes it 
has been responsible since 1999, Wells Fargo failed to fulfill its duty as 
trustee.

 
 
5.         Since 
it failed to take action to correct the problem during the life of the trust, 
Wells Fargo bears the responsibility to do so. The bank is ordered to develop a 
plan by an engineer licensed by the State of Wyoming to mitigate the drainage 
problem and to implement the plan within 90 days unless within that time Texas 
Street is deeded to and accepted by the Town of Evansville and the municipality 
commits to address the problem, in which case Wells Fargo is relieved of this 
obligation. 

 
 
[¶49]  Based upon our review of the record, 
these factual findings are not clearly erroneous and were sufficient to support 
the conclusion that Wells Fargo breached the duty of good faith by failing to 
take any action at all to fix the drainage problem on trust property.  In failing to do so, Wells Fargo did not 
act faithfully to the agreed purpose of the trust or in accordance with the 
justified expectations of the beneficiaries. 

 
 
[¶50]  Wells Fargo contends the trial court 
erred in ordering it to mitigate the drainage problem at its expense.  In making this claim, the bank asserts 
if it had addressed the problem when it arose prior to termination of the trust, 
the expense related to the repair would have been charged to the trust and it 
was improper after termination of the trust for the trial court to charge the 
bank with the expense.  Wells 
Fargo's argument has merit. Although, the bank did not address the problem 
during the life of the trust, there was no evidence presented that the delay in 
correcting the drainage issue caused any additional damage.  Unless the bank's failure to act in a 
timely fashion, in and of itself, caused the beneficiaries damage, simply 
directing the bank to correct the drainage problem at this time sufficiently 
addresses the beneficiaries' claims.  
Had the bank performed its duties during the life of the trust, the cost 
of doing so would have been borne by the trust.  Neither of the parties, or our own 
research, has identified any basis upon which the trustee can now be held liable 
for those costs.  Given the trial 
court's factual findings and conclusion, we find no error in the order requiring 
Wells Fargo to correct the drainage problem, assuming the cost of doing so is 
borne by the trust, not by Wells Fargo.

 

d.      
Overpayments 
to Beneficiary Tim Miracle

 
 
[¶51]  Wells Fargo claims the trial court erred 
in finding it improperly paid $10,000 to Mr. Miracle.  Regarding that payment, the trial court 
found Mr. Miracle received $10,000 for the sale of trust property to Applebee's; 
there was no indication the beneficiaries were told of this payment and so they 
did not have the opportunity to approve, object to or receive an explanation for 
it as was the case with other payments; there was little or no evidence to 
justify the payment; and one beneficiary testified he was told fees would be 
paid only to licensed real estate professionals, which Mr. Miracle was not.  Having reviewed the evidence on this 
issue, we do not find these factual findings clearly erroneous.  It is reasonable to assume that the 
beneficiaries would be justified in expecting the trust would not expend funds 
without obtaining a corresponding benefit. We conclude, on the basis of the 
evidence in the record, Wells Fargo did not act in good faith in making the 
payment of $10,000 to Mr. Miracle.

 
 

e.      
Retention 
of $120,000 in Trust Funds 

 
 
[¶52]  Wells Fargo contends the trial court 
erred in ruling it improperly withheld $120,000 of trust funds to cover 
attorneys' fees and costs associated with defending the claims made by it 
against by the beneficiaries in this case.  
Wells Fargo claims it informed the beneficiaries the 
$120,000 was being retained not only to cover litigation expenses but for other 
costs relating to the trust, closing expenses and contingent liabilities.  Wells Fargo asserts the trial court did 
no analysis and provided no opinion as to whether the trustee could properly 
retain funds for expenses unrelated to the instant case.  If the trial court had considered that 
question, Wells Fargo contends, it would have concluded the bank properly 
withheld funds to cover contingent liabilities associated with the trust 
property still held by the bank and the drainage problem on Texas Street. 

 
 
[¶53]  The beneficiaries respond that Wells 
Fargo initially stated it was withholding the funds to reimburse the bank for 
attorneys' fees and litigation expenses incurred in defending this action.  They assert that Wells Fargo changed its 
theory and claimed it was entitled to the funds for other expenses only after 
the trial court ruled the bank was not entitled to retain funds for litigation 
expenses.

 
 
[¶54]  In its decision letter, the trial court 
stated:  "The Bank contends that 
these monies [the $120,000] may be properly withheld to reimburse their attorney 
fees and costs incurred to defend this lawsuit."  The trial court concluded:  

 
 
To allow 
recovery of attorney's fees in this case would permit invasion of the Trust 
corpus for an unwarranted purpose, where the litigation has conferred no benefit 
on the Trust. Plaintiffs' complaint alleged malfeasance. The resulting trial was 
for the personal protection of the bank. It cites no authority to justify 
recovery [of] its legal fees and expenses from the trust fund. Therefore, its 
retention of the $120,000 was improper. 

 
 
Clearly, 
the trial court's understanding was Wells Fargo retained the funds to cover 
legal fees and costs incurred in defending the claims alleged in this 
lawsuit.  Although Wells Fargo 
claims in its appellate brief it informed the beneficiaries by correspondence it 
was holding the funds to cover litigation costs and "closing expenses and 
contingent liabilities," the bank fails to cite to the record to support the 
claim.  Absent a showing the 
argument was properly made to the trial court, we affirm the trial court's 
ruling to the extent it held Wells Fargo was not entitled to withhold trust 
funds to cover costs associated with this litigation.  

 
 
[¶55] 
However, the trial court's order made Wells Fargo the "guarantor" for 
remediation of the fuel spill and the drainage problem that occurred during the 
life of the trust.  In other words, 
in the event other potentially responsible parties  i.e. the State of 
Wyoming, Mini-Mart or the Town of Evansville  did not act 
to remedy the problems, the trial court's order made Wells Fargo responsible for 
ensuring the problems were corrected. Wells Fargo was entitled to use trust 
funds to carry out this portion of the trial court's order unless the trustee's 
delay increased those costs.  To 
that extent, the trial court was justified in holding Wells Fargo 
responsible.  To the extent the 
trial court's holding required Wells Fargo to be responsible for the costs 
associated with remedying the fuel spill and drainage problem, we reverse.  Wells Fargo was entitled to retain trust 
funds to cover expenses incurred in remedying the fuel spill and drainage 
problem.     

 
 
The 
Beneficiaries' Cross-Appeal

 
 

1.         
Attorney  
fees

 
 
[¶56]  In their cross-appeal, the beneficiaries 
claim the trial court erred in declining to award attorney fees.  The trial court noted in its decision 
letter the beneficiaries' claim that other jurisdictions have awarded attorney 
fees in cases holding a trustee acted improperly in administering the 
trust.  The trial court stated:  "Wyoming has not recognized the exception urged 
by the [beneficiaries].  If this 
additional exception is to become the law of Wyoming, it should occur through decision of 
the Wyoming Supreme Court or by legislative fiat."  On that basis, the trial court applied 
the American rule, which generally requires each party to pay his own attorney 
fees and costs absent an express statutory or contractual provision authorizing 
an award or circumstances of fraud and an award of punitive damages.  Finding none of these exceptions 
applied, the trial court ordered the parties to pay their own attorney fees and 
costs. 

    

[¶57]  On appeal, the beneficiaries acknowledge 
Wyoming 
generally follows the American rule for recovery of attorney fees.  Citing Snodgrass v. Rissler & McMurry Co., 
903 P.2d 1015 (Wyo. 1995) and Alexander v. Meduna, 2002 WY 83, 47 P.3d 206 (Wyo. 2002), however, they argue this Court has recognized attorney fees may 
be appropriate in cases involving fraud, malice, oppression or willful 
wrong.  Citing other authorities, 
they further argue attorney fees are appropriate in cases where a trustee is 
involved in self-dealing and breaches its fiduciary duty.  76 Am. Jur. 2d Trusts § 736; Hughes, 89 P.3d  at 152. 

 
 
[¶58]  Three years ago, in Rock Springs Land and Timber, ¶ 37, 75 P.3d  at 628, we reaffirmed our precedent holding the American rule applicable in 
this jurisdiction. Pursuant to that rule, all parties are responsible for their 
own fees and costs.  In reaffirming 
the rule in Rock Springs Land and 
Timber, we noted the request for attorney fees was made in that case 
"without a clear articulation" of the basis for the claim.  In contrast, the beneficiaries in the 
instant case clearly articulate the basis for their claim as one of justice and 
public policy requiring trustees who commit willful misconduct to be charged 
with the costs of their wrongdoing. 

 
 
[¶59] In 
Alexander, ¶ 49, 47 P.3d  at 220-21, 
we affirmed an award of attorney fees based upon the punitive damage exception 
to the American rule.  In Schlesinger v. Woodcock, 2001 WY 120, ¶ 
21, 35 P.3d 1232, 1239 (Wyo. 2001), and Cline v. Rocky Mt., Inc., 998 P.2d 946, 
949 (Wyo. 2000), we affirmed attorney fee awards where contracts provided for 
such an award.  In Olds v. Hosford, 354 P.2d 947, 950 
(Wyo. 1960), 
we indicated a party may be awarded attorney fees upon showing fraud, malice, 
oppression or willful wrong in a replevin action.  In Snodgrass, 903 P.2d  at 1017, we 
suggested an award of attorney fees might be appropriate in other types of 
actions where fraud, malice, oppression or willful wrong can be shown.  However, we have never ordered payment 
of attorney fees in a case that did not involve either punitive damages or a 
statutory or contractual provision for fees.  Despite the beneficiaries compelling 
argument in their cross-appeal, we are not persuaded this is the case in which 
to move beyond precedent and order payment of attorney fees when punitive 
damages were not awarded and no contract or statute provides for such fees.  We affirm the trial court's order 
denying the request for fees.     

 
 

2.                              
Prejudgment 
Interest

 
 
[¶60]  The beneficiaries also claim error in 
their cross-appeal in the trial court's refusal to award prejudgment 
interest.  Prejudgment interest is 
an appropriate element of damages in some cases.   Millheiser v. Wallace, 2001 WY 40, ¶ 11, 
21 P.3d 752, 755 (Wyo. 2001).  We 
have approved the award of prejudgment interest on liquidated sums in breach of 
contract actions when the amount due is readily computable by simple 
mathematical calculation.  
Id.  The beneficiaries argue this is an 
appropriate case for prejudgment interest because the amount owed was readily 
computable by simple mathematical calculation  that is, the trial court 
subtracted the sale price from their appraisal value to arrive at the amount 
owed. 

 
 
[¶61]  The beneficiaries misunderstand the 
applicable test for determining an appropriate case for prejudgment 
interest.  In United Pac. Ins. Co. v. Martin & Luther 
Gen. Contractors, Inc., 455 P.2d 664, 677 (Wyo. 1969), the defendant 
protested the allowance of prejudgment interest because prior to the entry of 
judgment there was no fixed and determined amount owed.  We agreed, stating a claim requiring a 
lengthy trial and involving myriad, perplexing problems did not constitute a 
claim readily computable by simple mathematical calculations.  In Laramie Rivers Co. v. Pioneer Canal Co., 
565 P.2d 1241, 1245 (Wyo. 1977), we clarified that a mere difference of opinion 
as to the amount due or as to liability does not preclude prejudgment interest 
if the amount sought to be recovered is a sum certain and the party from whom 
payment is sought receives notice of the amount sought.  In Laramie Rivers, the amount sought to be 
recovered was established prior to entry of judgment by a written billing 
statement for a fixed amount. This Court remanded the case to district court for 
determination of when the debtor received notice of the fixed amount claimed. 

 
 
[¶62]  In the instant case, the amount sought 
to be recovered was not a sum certain of which Wells Fargo had notice prior to 
the trial court's decision.  Rather, 
the amount to be recovered was determined only after a lengthy, complex trial 
involving extensive and conflicting evidence.  We have said an unliquidated claim 
cannot be converted into a liquidated claim unless the amount claimed can be 
determined without reliance on opinion or discretion.  Cargill, Inc. v. Mountain Cement Co., 
891 P.2d 57, 66 (Wyo. 1995).  The beneficiaries' unliquidated claim in 
this case became a sum certain only after the trial court considered the opinion 
testimony of the various witnesses as to the market value of the trust property, 
weighed that testimony and made a determination on the basis of the evidence as 
to the amount owed.  This was not an 
appropriate case for prejudgment interest and the trial court's ruling in that 
regard is affirmed.  

 
 
CONCLUSION

 
 
[¶63]  While the trial court applied the 
incorrect contractual standard to the trustee's actions, the evidentiary record 
supports the conclusion Wells Fargo did not act in good faith when it failed to 
take the ordinary steps a trustee should take in selling trust property.  The trial court's finding that Wells 
Fargo's breach of its duty of good faith caused damages to the beneficiaries was 
supported by the record and is affirmed.  
With regard to remedying the fuel contamination and drainage problems, 
the trial court's order holding the trustee responsible for accomplishing 
correction of those problems is affirmed.  
However, the cost of those efforts should be borne by the trust and paid 
for with the funds retained by the bank unless the delay in correcting the 
problems caused additional costs to be incurred.  To the extent the delay caused 
additional costs, the bank must bear those costs.  The trial court's order denying interest 
and attorney fees is affirmed.

            
         

FOOTNOTES

 
 

1The second 
amended complaint alleged breach of the duties of loyalty, impartiality, prudent 
administration, giving personal attention to and not delegating trust matters, 
accounting to the beneficiaries, controlling and protecting trust property, 
investing trust property, carrying out the terms of the trust and exercising 
special skills to administer the trust.

 
 

2Evidence was 
presented showing the State of Wyoming would handle the cleanup if the 
contamination resulted from leaking tanks or underground pipes, but not if it 
resulted from a spill.

 
 
  3The evidence 
showed Quality Stores did not follow its own engineering plan after purchasing 
the five lots from the trust resulting in excessive runoff from its parking 
lot.  The water ran down an 
undedicated street owned by the trust, onto the trust's 6.7 acres of undeveloped 
property and property at the bottom of the street formerly owned by the trust 
but purchased by another buyer.  
There was also evidence of a plan to deed the street to the Town of 
Evansville, in 
which case the town would address the drainage problem. At the time of trial, 
however, the street had not been deeded to the town.  The trial court's order provided Wells 
Fargo was not required to mitigate the drainage problem if within ninety days 
the street was deeded to Evansville and the town agreed to correct it. 

  

4Neither 
party raises the point, but at the time the 1976 amendment was written, the 
grantors were nearing the end of their lives.  Floyd Miracle died in 1980, Clifton Lierd 
in 1981.  This may have been an 
important factor in the 1976 amendment, particularly in regard to the increased 
authority and discretion granted to the trustee.  With the grantors' deaths, the provision 
in the original agreement limiting the trustee's power to act without their 
written direction was no longer practicable.  Provision had to be made giving some 
other party full authority to act on behalf of the trust. 

 
 

5As we 
discussed in Hickman, ¶ 11, 71 P.3d  
at 259-260, evidence of circumstances surrounding the execution of a contract 
may always be shown and is always relevant in determining the contracting 
parties' intent.  The term 
"surrounding circumstances" refers to the commercial or other setting in which 
the contract was negotiated and other objectively determinable factors that give 
a context to the transaction between the parties.  Parol evidence, on the other hand, is 
not admissible to establish contracting parties' intent unless the contract 
itself is ambiguous.  "Parol 
evidence" refers to prior or contemporaneous collateral agreements of the 
parties or their understanding of what particular terms in their agreement 
mean.        

 
 

6This is not 
the only case this Court has resolved in this way.  In Kerper, the Court held the trial court 
improperly applied the prudent person standard when the trust imposed a duty of 
good faith.  We then proceeded to 
apply the proper standard to the record before us.  While noting it was a departure from 
this Court's usual appellate review role, the Court concluded the record would 
sustain only one conclusion, i.e. that the trustee's administration of the trust 
was fully consistent with the good faith standard.  Kerper, 780 P.2d  at 931. 

 
 

7Citing Kerper, 780 P.2d  at 929, and the 
Restatement (Second) of Trusts § 2 (1959), the trial court defined the prudent 
person standard as follows:

 
 
The common 
law duty of loyalty is the fundamental duty from which each more specific 
trustee's duty is derived. A trustee is under a duty to the beneficiary in 
administering the trust to exercise such care and skill as a man of ordinary 
prudence would exercise in dealing with his own property.  

 
 
Looking at 
the definitions, the prudent person test does not appear to impose a higher duty 
than the good faith standard.  The 
term "good faith" even appears in the definition of the trustee's duty used by 
some courts and legal scholars.  See for example, Estate of Bonin, 457 A.2d 1123, 1124 
(Maine 1983); 
Harris v. McIntyre, 2000 Mass. Super. 
LEXIS 181; George G. Bogert, Trusts and 
Trustees, § 544, at 407-08 (2d ed. 1978). Even so, there is general 
agreement that the common law duty owed by a trustee goes beyond mere "good 
faith" unless otherwise provided by express terms of the trust. As stated by one 
court:

 
 
Many forms 
of conduct permissible in a workaday world for those acting at arm's 
length, are forbidden to those bound by fiduciary ties. A trustee is held to 
something stricter than the morals of the market place. Not honesty alone, but 
the punctilio of an honor the most sensitive, is then the standard of 
behavior.  

 
 
Malachowski 
v. Bank One, Indianapolis, 
590 N.E.2d 559, 567 (Ind. 1992). 

 
 

8We would 
have reached the same result applying the prudent person test. Under either the 
common law duty or the good faith duty imposed by the express terms of the 
instant trust, the record supports the conclusion that Wells Fargo breached its 
duty.