2014 UT App 269

_________________________________________________________

THE UTAH COURT OF APPEALS

IN THE MATTER OF THE ANNA BLACKHAM AAGARD TRUST, ET AL.

W. KIM AAGARD,

Petitioner and Appellant,

v.

DIANE A. JORGENSEN,

Respondent and Appellee.

Opinion

No. 20120789-CA

Filed November 14, 2014

Sixth District Court, Manti Department

The Honorable Marvin D. Bagley

No. 113600013

Thomas A. Mecham, Alexander Dushku, and 

Christopher S. Hill, Attorneys for Appellant

Clark R. Nielsen and Kathryn J. Steffey, Attorneys

for Appellee

JUDGE J. FREDERIC VOROS JR. authored this Opinion, in which 

JUDGE MICHELE M. CHRISTIANSEN and SENIOR JUDGE PAMELA T.

GREENWOOD concurred.

1

VOROS, Judge:

¶ 1 This case involves a dispute among family members over 

control of ranch land in Northern Utah. Diane A. Jorgensen 

 

1. The Honorable Pamela T. Greenwood, Senior Judge, sat by 

special assignment as authorized by law. See generally Utah R. 

Jud. Admin. 11-201(6).
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raises sheep on the land. Her brother, W. Kim Aagard, is the sole 

manager of the Aagard family company and the sole trustee of 

more than a dozen Aagard family trusts. Kim sought court 

approval of a modification to the Company’s operating 

agreement that would strip Diane of her power to veto any sale 

of land. The district court ruled that the modification would 

create a conflict of interest. Kim appeals. We reverse.

BACKGROUND

The Ranch, the Trusts, and the Company

¶ 2 The Aagard ranch covers nearly nine thousand acres of 

land spanning the border of northeast Utah and southwest 

Wyoming. To manage and transfer ownership of the ranch land, 

Welby and Opal Aagard created an LLC (Company) and a set 

of family trusts. Welby and Opal created trusts for themselves 

and for many family members, including their children (Kim 

and Diane), their children’s spouses, and each of their 

grandchildren.2 Welby and Opal originally served as co-trustees 

of the two trusts created for their own benefit. Kim served as 

sole trustee of the remaining trusts. When Welby and Opal died, 

Kim succeeded them as trustee of the Welby and Opal trusts.

¶ 3 The dispute between Kim and Diane hinges on the 

relationship between the Aagard trusts and the Company. The 

Company owns the Aagard ranch land. Kim owns an undivided 

interest in the Company as trustee of the Aagard trusts; he holds

the balance of the interest in his personal capacity. Kim thus 

controls and manages the Company.

 

2. Because individuals discussed here have the same last name, 

and the trusts and Company all use that last name, we refer to 

these individuals and the parties by their first names for clarity. 
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The Veto Provisions

¶ 4 As originally drafted, both the Company’s operating 

agreement (Operating Agreement) and the Aagard trust

documents granted Kim and Diane veto power over property 

sales. The trusts’ veto provision barred the trustee (now Kim)

from selling or exchanging ranch-related property unless both 

Kim and Diane ‚consent*ed+ in writing.‛ In a similar provision, 

the Operating Agreement barred any sale of ranch-related 

property without the written consent of both Kim and Diane.

3

¶ 5 Before their deaths, Welby and Opal modified the veto 

provision in the Aagard trust documents by deleting the 

provision granting Diane veto power. But Welby and Opal never 

modified the Operating Agreement’s veto provision.

Modification of that provision requires consent of ninety percent

of the capital interests of the Company; counting interests Kim 

owns personally and interests he owns as trustee of the Aagard 

trusts, Kim owns 100 percent of the capital interests of the 

Company.

Kim’s Modification Petition

¶ 6 After Welby and Opal died, Kim and Diane could not 

agree on how best to manage the Aagard ranch. Though he had 

not begun negotiating a sale, Kim considered selling the ranch 

and distributing the proceeds. Kim believed that he could 

negotiate a better sale if he first modified the Operating 

 

3. The Operating Agreement also allows the manager to sell 

ranch property if the Company ‚has insufficient liquid assets to 

manage the ranch‛ or if the sale is intended to balance the 

interest held by Diane’s and Kim’s families. But only the veto 

provision is at issue here.
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Agreement to remove the requirement that Diane consent. As 

trustee and individual owner of the Company, Kim could 

unilaterally modify the Operating Agreement. But Kim 

nevertheless sought the district court’s approval before making 

the modification that would strip Diane of her veto power. Kim’s 

modification petition acknowledged the possibility of a conflict 

of interest and asked the court to preapprove the modification.

¶ 7 The district court denied Kim’s request, concluding that 

Kim’s ‚individual ownership‛ of the Company ‚creates a 

presumption of being affected by a conflict of interest.‛ The 

district court also concluded that Kim failed to prove ‚that he 

[would] not improperly derive some benefit as an individual 

from a sale‛ and ‚that the beneficiaries of the Trusts [would] be 

benefitted‛ by the proposed modification. 

ISSUE ON APPEAL

¶ 8 Kim contends that the district court erred in concluding 

that the proposed modification is subject to a conflict of interest. 

First, Kim argues that section 75-7-802(3) of Utah’s Uniform 

Trust Code does not apply to his proposed modification. Second, 

Kim argues that because the proposed modification does not sell

any trust property or create a conflict of interest, section 75-7-

802(2) of the Trust Code does not apply.

ANALYSIS

¶ 9 Kim maintains that his individual interest and the 

interests of the trust beneficiaries coincide rather than conflict. 

He argues that Diane’s veto power granted in the Operating 

Agreement thus serves no purpose and creates ‚an impediment 

to the sale‛ of Company property. In Kim’s view, because the 

modification benefits the Company and its member trusts, Kim’s 

individual interests and the interests of the trusts ‚are 
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compatible.‛ Further, Kim argues that neither section 75-7-802(3) 

nor section 75-7-802(2) applies to his proposed modification.

¶ 10 Diane responds that the proposed modification creates a 

conflict of interest and thus the Utah Uniform Trust Code

renders the modification voidable under section 75-7-802(2). And 

even if the proposed modification is not voidable under section 

75-7-802(2), Diane argues that Kim invited the district court to 

presume a conflict of interest under section 75-7-802(3).

¶ 11 The district court’s denial of Kim’s modification petition 

included both factual findings and legal conclusions. We will 

reverse a district court’s factual findings only if they are clearly 

erroneous. Swallow v. Jessop (In re United Effort Plan Trust), 2013 

UT 5, ¶ 17, 296 P.3d 742. By contrast, we afford no deference to 

the lower court’s analysis of ‚abstract legal questions.‛ Id. ¶ 18

(citation and internal quotation marks omitted). We thus review 

the district court’s legal conclusions, including its interpretation 

of statutes, for correctness. Id.

¶ 12 The Trust Code requires a trustee to ‚administer the trust 

solely in the interests of the beneficiaries.‛ Utah Code Ann. § 75-

7-802(1) (LexisNexis Supp. 2011). ‚‘[T]he term ‚interests of the 

beneficiaries‛ means the beneficial interests as provided in the 

terms of the trust, not as defined by the beneficiaries.’‛ Rapela v. 

Green (In Re Estate of Kampros), 2012 UT 57, ¶ 22, 289 P.3d 428 

(emphasis omitted) (quoting Uniform Trust Code § 706 cmt.).

¶ 13 The parties agree that Kim must administer the trusts 

solely in the interests of the beneficiaries as required by section 

802(1) of the Trust Code. The dispute arises from the next two 

subsections. We first consider section 802(3).

¶ 14 Section 802(3) presumes a conflict of interest if the trustee 

enters into a ‚sale, encumbrance, or other transaction‛ involving 

trust property with any one of four enumerated categories of 

third parties, including ‚a corporation or other person or 
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enterprise, in which the trustee, or a person that owns a 

significant interest in the trustee, has an interest that might affect 

the trustee’s best judgment.‛ Utah Code Ann. § 75-7-802(3)(d).

Based at least in part on this section, the district court concluded 

that Kim’s proposed modification created a conflict of interest.

But on appeal, the parties agree that this section does not apply 

to the proposed modification.

¶ 15 Kim argues that section 802(3)(d) does not apply, because 

the proposed modification ‚is an agreement among the

[Company]’s owners—the trustee of the Trusts and Kim 

individually—and not with the [Company] itself.‛ Diane agrees: 

on appeal, she acknowledges that ‚Kim is correct . . . that the 

rebuttable presumption of section 75-7-802(3) does not apply.‛ 

Because the parties agree that section 802(3) does not govern, we 

address it no further.4

 

4. Diane does argue that even if the district court erred in 

applying section 802(3), Kim ‚is precluded from challenging the 

district court’s application . . . under the invited error doctrine.‛ 

The invited-error doctrine ‚prevents a party from taking 

advantage of an error committed at trial when that party led the 

trial court into committing the error.‛ Tschaggeny v. Milbank Ins. 

Co., 2007 UT 37, ¶ 12, 163 P.3d 615 (citation and internal 

quotation marks omitted). Kim did not lead the district court 

into its erroneous interpretation of section 802(3). Though Kim 

agreed that Diane ‚could . . . argue*+‛ that the modification 

created a conflict of interest, he insisted in the same breath that 

his ‚individual *post-modification] interests . . . appear to be 

perfectly aligned with those of the beneficiaries of the Trusts.‛ 

Kim did not concede that his dual roles may affect his best 

judgment. He conceded only that Diane may raise that 

argument. That concession did not lead the district court into 

erroneously applying section 802(3), and the invited-error 

(continued...)
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¶ 16 Accordingly, the principal issue on appeal concerns 

section 802(2). Subject to enumerated exceptions, that section 

makes ‚voidable‛ a sale, encumbrance, or other transaction 

affected by a conflict between the trustee’s fiduciary and 

personal interests: 

Subject to the rights of persons dealing with or 

assisting the trustee as provided in Section 75-7-

1012, a sale, encumbrance, or other transaction 

involving the investment or management of trust 

property entered into by the trustee for the 

trustee’s own personal account or which is 

otherwise affected by a conflict between the 

trustee’s fiduciary and personal interests is 

voidable by a beneficiary affected by the 

transaction unless:

(a) the transaction was authorized by the 

terms of the trust;

(b) the transaction was approved by the 

court;

. . . .

Utah Code Ann. § 75-7-802(2) (LexisNexis Supp. 2011). The 

district court concluded that this provision applied to the 

modification of the Operating Agreement as ‚a sale of trust 

property.‛

¶ 17 Kim contends that, for several reasons, section 802(2) does 

not prohibit the proposed modification to the Operating

Agreement. First, he asserts that the modification of the 

 

doctrine thus does not prevent Kim from arguing that error now 

on appeal.
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Operating Agreement does not fit the statutory category of ‚a 

sale, encumbrance, or other transaction involving the investment 

or management of trust property.‛ See id. He also asserts that the 

modification is not affected by a conflict between his fiduciary 

and personal interests.

¶ 18 Diane responds that ‚entering into an agreement, both

individually and as trustee of the Trust to amend the 

[Company’s+ Operating Agreement to allow for an unrestricted 

sale of the Trust property qualifies as a ‘transaction involving the 

investment or management of trust property.’‛ See id. She 

further maintains that ‚because the proposed amendment of the 

[Company’s] Operating Agreement requires Kim to act in both 

his individual and fiduciary capacities, the amendment creates 

an irrebuttable presumption of a conflict of interest.‛

¶ 19 First, we agree with Kim that the modification of the 

Operating Agreement does not fit within the statutory category 

of a ‚sale, encumbrance, or other transaction involving the 

investment or management of trust property‛ and, thus, section 

802(2) does not apply. See id. A ‚sale‛ involves the exchange of 

property or services for a price. Merriam-Webster Online, 

http://www.merriamwebster.com/dictionary/sale (last visited 

Oct. 8, 2014) (first definition: ‚the transfer of ownership of and 

title to property from one person to another for a price‛); Black’s 

Law Dictionary 1454 (9th ed. 2009) (‚The transfer of property or 

title for a price.‛). Here, Kim seeks to modify the Operating 

Agreement, not transfer the trust property for a price. Thus, the 

proposed modification does not constitute a ‚sale.‛ See Utah 

Code Ann. § 75-7-802(2).

¶ 20 Nor does the proposed modification of the Operating 

Agreement qualify as an ‚encumbrance.‛ Our supreme court has 

defined an ‚encumbrance‛ as ‚any interest in a third person 

consistent with a title in fee in the grantee, if such outstanding 

interest injuriously affects the value of the property or 

constitutes a burden or limitation upon the rights of the fee title 
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holder.‛ Holmes Dev., LLC v. Cook, 2002 UT 38, ¶ 44, 48 P.3d 895 

(citations and internal quotation marks omitted). Because 

modifying the Operating Agreement would not create a 

property interest in a third person that injuriously affects the 

value of the property or burdens the Company’s title, Kim’s 

proposed modification does not constitute an ‚encumbrance.‛

¶ 21 Nor does the modification qualify as an ‚other transaction 

involving the investment or management of trust property.‛ 

Utah Code Ann. § 75-7-802(2) (LexisNexis Supp. 2011). 

A ‚transaction‛ is defined as ‚a business deal: an occurrence 

in which goods, services, or money are passed from one 

person, account, etc., to another.‛ Merriam-Webster Online, 

http://www.merriam-webster.com/dictionary/transaction (last 

visited Oct. 8, 2014); see also Macmillan Dictionary, 

http://www.macmillandictionary.com/us/dictionary/american/tr

ansaction (last visited Oct. 8, 2014) (first definition: ‚the action or 

process of buying or selling something‛). Furthermore, where, as 

here, ‚a nonexhaustive enumeration of specific items is followed 

by a general term that suggests a class,‛ the interpretive canon of 

ejusdem generis applies. Turner v. Staker & Parson Cos., 2012 UT 

30, ¶ 14, 284 P.3d 600. ‚Under the ejusdem generis canon, 

catchall elements of statutory lists may be understood as 

restricted to include things of the same kind, class, character, or 

nature as those specifically enumerated, unless there is 

something to show a contrary intent.‛ State v. Bagnes, 2014 UT 4, 

¶ 19, 322 P.3d 719 (emphasis, citation, and internal quotation 

marks omitted). Thus, to fit within the catchall category, the 

modification would have to qualify as a business deal similar to 

a sale or encumbrance. But the proposed modification to the 

Operating Agreement accomplishes nothing akin to transferring

an interest in property or burdening the title to property; nor 

does it involve an exchange of property for a price. Therefore, 

Kim’s proposed modification does not constitute a ‚transaction‛

within the meaning of the statute. And because the modification

does not qualify as a ‚transaction,‛ the Trust Code does not 
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prohibit the modification. On this ground alone, the judgment of 

the district court must be reversed.

¶ 22 However, we also note that the proposed modification is 

not ‚otherwise affected‛ by a conflict of interest. Utah Code 

Ann. § 75-7-802(2). Section 75-7-802(8), defining a trustee’s duty 

of loyalty, does not prohibit the trustee from ‚acquiring an 

undivided interest in a trust asset in which the trustee, in any 

trust capacity, holds an undivided interest.‛ Id. § 75-7-802(8)(g).

Our supreme court has held that, under the Trust Code, a trustee 

‚did not violate his duty of loyalty to the Trust’s beneficiaries, 

even though he and the Trust both own interests in [certain] 

LLCs.‛ Rapela v. Green (In re Estate of Kampros), 2012 UT 57, ¶ 28, 

289 P.3d 428. Thus, the Utah Trust Code ‚expressly permits *a 

trustee] to retain the Trust’s LLC interests until, in his judgment, 

they should be disposed of, even though he owns a personal 

interest in them.‛ Id. (citing Utah Code Ann. § 75-7-802(8)(f)).

¶ 23 A conflict of interest exists when the interests in question 

are ‚inconsistent‛ or ‚incompatible.‛ Angel Investors, LLC v. 

Garrity, 2009 UT 40, ¶ 30, 216 P.3d 944; In re S.A., 2001 UT App 

308, ¶ 25, 37 P.3d 1172. Diane hypothesizes several scenarios in 

which Kim’s interest as trustee and his personal interest might 

be inconsistent. For example, ‚if Kim were in personal financial 

distress and in need of cash quickly,‛ she argues, ‚he could 

direct the sale of the Ranch Land at a time when its value is 

suppressed.‛ Or Kim could sell ranch property ‚only to generate 

cash to pay Kim’s manager salary, a salary set and determined 

solely by Kim.‛ But these scenarios are hypothetical; nothing in 

the record suggests that Kim in fact contemplates selling the 

ranch land at fire-sale prices. Such hypothetical conflicts are 

always conceivable when a trustee holds undivided interests in 

an LLC both as trustee and on his own account, yet holding such 

undivided interests does not breach a trustee’s duty of loyalty. 

See Utah Code Ann. § 75-7-802(8)(g); Rapela, 2012 UT 57, ¶ 28.
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20120789-CA 11 2014 UT App 269

¶ 24 Furthermore, if a hypothetical conflict were to materialize, 

Kim’s statutory duty of loyalty would protect the beneficiaries. 

As Kim acknowledges, even after the modification he will ‚still 

need to conduct his affairs according to the fiduciary duties that 

he owes to Diane and all of the Trusts’ beneficiaries.‛ See Utah 

Code Ann. § 75-7-801. Under the Trust Code, Kim owes a 

fiduciary duty to the beneficiaries, and he acknowledges that the 

Trust Code grants the beneficiaries ‚an avenue to seek redress‛ 

if they object ‚to the manner or terms of a sale of the Ranch 

Land.‛ But because Diane is not a trustee, the Trust Code offers 

the beneficiaries no similar protection against Diane’s veto. The 

Trust Code would not, for example, prevent her from exercising 

that veto to block a sale favored by all the other beneficiaries. 

Consequently, Kim’s proposed removal of Diane’s veto power 

from the Operating Agreement likely grants the remaining 

beneficiaries greater, not less, protection.

CONCLUSION

¶ 25 In sum, we conclude that Kim’s proposed modification to 

the Operating Agreement does not qualify as a sale, 

encumbrance, or similar transaction and, in any event, creates no 

inconsistency or incompatibility between his personal and 

fiduciary interests. Accordingly, the district court’s order is 

reversed and the case remanded for further proceedings 

consistent with this opinion.5

____________

 

5. Because we conclude that the proposed modification does not 

run afoul of the Trust Code, we do not reach the parties’ second 

set of arguments concerning Welby’s and Opal’s reasons for 

declining to modify the Operating Agreement and their intent to 

have Kim modify the agreement after their deaths.