WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Terry C. Danziger, ) 

) 

 Plaintiff, ) 

) 

vs. ) 

) 

University of Louisville, et al., ) No. 2:18-cv-0198-HRH

) 

Defendants. ) 

_______________________________________) 

O R D E R

Allocation of Interest

Plaintiff Terry C. Danziger, is the residual beneficiary of her husband, Dr. Franklin

S. Danziger’s revocable living trust IRA. Defendant Merrill Lynch, Pierce, Fenner &

Smith, Inc., administered the Danziger IRA and, a dispute having arisen between

Mrs. Danziger and defendants University of Louisville and University of Louisville

Foundation, Inc., $500,000 was deposited in the Registry of the Court by Merrill Lynch to

fund Dr. Danziger’s gift of $500,000 to the University defendants if they prevailed. In due

course, the parties reached a binding settlement with respect to distribution of the

$500,000 held by the court: the University defendants are to receive $350,000 and

Mrs. Danziger is to receive $150,000. 

Funds held in the Registry of the Court earn interest; and, as of September 23,

2019, interest in the amount of $7,464.58 had accrued on the funds held by the court. In

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reaching their settlement, the parties apparently did not realize that funds deposited in the

Registry of the Court would earn interest. The parties have endeavored but have failed to

resolve their differences concerning the earned interest. Each of plaintiff and the

University defendants contend that they should receive all of the interest. A brief

telephonic conference with the court led to the establishment of a briefing schedule with

respect to accrued interest.1 But before taking up the substance of the parties’ briefing,

there are procedural matters which have intervened. 

Following the court’s conference with counsel, Terry C. Danziger, pro se trustee,

moved to compel distribution of interest earned on the deposit with the court to

Mrs. Danziger as trustee.2

 Mrs. Danziger as trustee would have all the interest disbursed

to seven sub-trusts and eight qualified beneficiaries.3 Mrs. Danizger as trustee moves to

be allowed to file with the court electronically,

4

 and seeks pro se party electronic

notification.5 The University defendants move to strike6 Mrs. Danziger’s motion as trustee

for distribution of interest. Taking a cue from the latter motion, Mrs. Danziger as trustee

filed a motion to intervene with respect to the interest dispute.7 The latter motion was

followed by a second motion by Mrs. Danziger as trustee, to allow electronic filing.8

1See Docket No. 81. 

2Docket No. 77. 

3

Id. at 10. 

4Docket No. 78. 

5Docket No. 82. 

6Docket No. 83. 

7Docket No. 84. 

8Docket No. 85. 

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Mrs. Danziger as trustee next filed a brief9

 in support of her motion for distribution of

interest10 and motion to intervene.11 The University defendants have filed a motion to

strike the trustee’s brief,

12

 and have responded to the trustee’s motion to intervene.13

Mrs. Danziger as trustee opposed the University defendants’ motion to strike.14 

Finally, the University defendants request that the court enter a scheduling order

with respect to the foregoing.15 The University defendants seek expedited consideration of

the foregoing request.16 Expedited consideration is granted. However, the University

defendants’ request for a scheduling order is denied. At this point, a scheduling order is

not necessary. 

The University defendants’ several motions to strike17 are granted. Mrs. Danziger

as trustee’s motion to compel distribution of interest to her as trustee and to several trusts

and her motion to intervene, as well as the related motions having to do with electronic

filing, are denied.18 

A non-lawyer trustee cannot appear pro se to represent a trust or trust beneficiaries. 

Alpha Land Co. v. Little, 238 F.R.D. 497, 502 (E.D. Cal. 2006); Knoefler v. United Bank

9Docket No. 89. 

10Docket No. 77. 

11Docket No. 84. 

12Docket No. 93. 

13Docket No. 94. 

14Docket No. 95. 

15Docket No. 97. 

16Docket No. 98. 

17Docket Nos. 83 and 93. 

18Docket Nos. 77, 84, 78, and 85. 

Order – Allocation of Interest - 3 -
of Bismark, 20 F 3d 347, 348 (8th Cir. 1994); and C.E. Pope Equity Trust v. United States,

818 F.2d 696, 697 (9th Cir. 1987). The trust and/or trust beneficiaries must be represented 

by an attorney. Mrs. Danziger has an obvious interest in these proceedings and is

represented by an attorney with respect to her claim for distribution of interest earned on

funds held in the registry of the court. 

Consistent with the briefing schedule established by the court,19 the court has

received statements of position with respect to the interest dispute from the University

defendants,20 plaintiff Terry C. Danziger,21 and the University defendants’ opposition22 to

plaintiff’s position statement. Terry C. Danziger, trustee, pro se, has also filed a response

to the University defendants’ position paper with respect to the distribution of interest,23

and a reply with respect to distribution of interest.24 These filings by Mrs. Danziger as

trustee are stricken for the same reason that the trustee’s other, like filings were stricken. 

The court has carefully considered the plaintiff’s and University defendants’

respective arguments concerning the division of accrued interest. Neither party relies upon

any legal authority but, rather, expressly or by inference suggests that an equitable division

of the accrued interest should be accomplished. Plaintiff contends that she should receive

all of the interest money because – but for the deposit of $500,000 with the Registry of the

Court – she would have had the benefit of the earnings of those funds until such time as

19Docket No. 81. 

20Docket No. 86, styled as a motion. 

21Docket Nos. 87 and 90. 

22Docket No. 91. 

23Docket No. 92. 

24Docket No. 96. 

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the dispute with respect to the 500,000 gift was resolved. Similarly, the University

defendants argue that they should receive all of the accrued interest because they should

have received “the $500,000 [gift] from Dr. Danziger’s IRA three years ago.”25

If there had been no disagreement about the $500,000 gift, the University

defendants would have received the $500,000 and would have invested it. The University

defendants would have been entitled to all of those earnings. On the other hand, had there

been no gift to the University defendants, or if the final outcome of this litigation were that

the University defendants should receive no part of the $500,000, plaintiff would have

been in a position to benefit from all of the earnings of the $500,000. This case did not

follow either of those possible courses; and, as a consequence, neither plaintiff nor the

University defendants are entitled to all of the interest which the $500,000 has earned. 

If, as the parties apparently supposed, the deposit of funds with the court had not

earned interest, then the parties would presumably proceed with their settlement, with

plaintiff receiving $150,000 and the University defendants receiving $350,000. In fact, the

money available for distribution exceeds the parties’ expectations as to the total amount of

money they would receive as a result of the settlement. In consideration of the foregoing

and the parties’ respective arguments, the University defendants’ motion for an award of

accrued interest26 is granted in part and denied in part. The court concludes that the

equitable resolution here is to divide the interest money earned while the parties negotiated

on the same 70%-30% basis agreed to for the division of the $500,000. 

If not already done, the parties shall promptly proceed to document their settlement

and provide the court with specific instructions regarding the payees of the $350,000 and

25Docket No. 91 at 2. 

26Docket No. 86. 

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$150,000. Upon receipt of that information, the court will direct the distribution of the

funds presently held in the Registry of the Court, including accrued interest, 70% to the

University defendants’ designee and 30% to Mrs. Danziger. 

DATED at Anchorage, Alaska, this 10th day of October, 2019. 

/s/ H. Russel Holland 

United States District Judge 

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