Title: Matter of: Ethel F. Peierls Charitable Lead Unitrust
Citation: N/A
Docket Number: 11, 2013, 12, 2013, 13, 2013
State: Delaware
Issuer: Delaware Supreme Court
Date: October 4, 2013

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
IN THE MATTER OF:  
 
) 
 
 
 
 
 
 
)  No. 12, 2013 
ETHEL F. PEIERLS CHARITABLE ) 
LEAD UNITRUST 
 
 
)  Court Below:  Court of Chancery 
 
 
 
 
 
 
)  of the State of Delaware 
 
 
 
 
 
 
) 
 
 
 
 
 
 
)  Case No.: 16811 
 
 
 
Submitted:  July 10, 2013 
Decided:  October 4, 2013 
 
Before STEELE, Chief Justice, HOLLAND, BERGER, JACOBS, and 
RIDGELY, Justices, constituting the Court en Banc. 
 
 
Upon appeal from the Court of Chancery.  AFFIRMED. 
 
 
Peter S. Gordon (argued), Gordon,   Fournaris & Mammarella PA, 
Wilmington, Delaware for appellant. 
 
Collins J. Seitz (argued), Seitz Ross Aronstam & Moritz LLP, Wilmington, 
Delaware for appellee. 
 
 
 
STEELE, Chief Justice: 
 
 
2 
 
This Opinion is one of a trilogy of opinions, issued concurrently, addressing 
issues arising out of Petitions, filed by members of the Peierls family, requesting 
the Court of Chancery to accept jurisdiction over, and then modify, thirteen (13) 
trusts created during the period 1953 through 2005.  None of these trusts were 
created or settled under Delaware law, and none were ever administered in 
Delaware.  The Petitioners sought relief under recently-adopted Court of Chancery 
Rules 100-103, inclusive, which were designed to create an orderly procedure for 
entertaining petitions to modify a trust.  No respondent was named in the Petitions, 
which the Court of Chancery denied on various grounds, including lack of 
jurisdiction.  The Petitioners appealed to this Court, which appointed Collins J. 
Seitz, as amicus curiae to brief and argue in opposition to the Petitions.1  
 
This Opinion, in No. 12, 2013, addresses the issues arising out of the Ethel 
F. Peierls Charitable Lead Unitrust.  Our opinions in the companion cases, Nos. 11 
and 13, 2013, respectively, address the seven (7) Peierls testamentary trusts and the 
five (5) Peierls inter vivos trusts.  For the reasons next discussed, we affirm the 
judgment of the Court of Chancery. 
 
 
 
                                          
 
1 The Court appreciates Mr. Seitz’s service as amicus curiae, and commends him for the quality of his presentation, 
which is in the finest tradition of the Delaware Bar. 
3 
 
I. 
FACTUAL AND PROCEDURAL HISTORY 
 
Appellants, Brian E. Peierls and E. Jeffrey Peierls are the current trustees of 
the Ethel F. Peierls Charitable Lead Unitrust.  The facts, which are set forth in the 
Vice Chancellor’s opinion, are adopted in large part in this Opinion as well. 
A. The Charitable Trust 
 
On September 12, 1994, Ethel F. Peierls settled a charitable trust and named 
her sons, Brian and Jeffrey, as initial trustees (the “Trust”).  The Trust Agreement 
provides that each taxable year the Trust will pay an amount equal to six percent of 
the net fair market value of the Trust estate to the Peierls Foundation (the 
“Foundation”).  The Foundation is a charitable organization qualified under 
Section 170(c) of the Internal Revenue Code.  Should the Foundation fail to 
qualify as a Section 107(c) charitable organization, the Trust Agreement authorizes 
the trustees to designate alternative Section 170(c) organizations to receive all or 
part of the Trust’s disbursements. 
 
The Trust Term is 35 years and will expire on September 12, 2029.  Upon 
the term’s expiration, the Trust Agreement grants Brian a limited testamentary 
power of appointment to direct the Trust’s remaining funds to either his children, 
to one or more qualifying organizations, or to Brian’s father’s issue.  The Trust 
Agreement further outlines a distribution plan in the event that Brian fails to 
exercise his power of appointment. 
4 
 
 
At this time, the Foundation is the Trust’s sole beneficiary, though the 
trustees are empowered to select additional qualifying organizations as 
beneficiaries.  Brian and Jeffrey currently serve as trustees, and the Trust 
Agreement provides a specific succession plan should either of them cease to serve 
as trustee.  The Trust Agreement also grants the trustees the power to appoint a 
successor or a co-trustee. 
B. The Trust Petition 
 
As is the case with the other Petitions in this Peierls trust trilogy, the 
Petitioners request that the Court of Chancery: (1) approve the resignation of the 
current trustees; (2) confirm the appointment of Northern Trust Company as the 
sole trustee; (3) determine that Delaware law governs the administration of the 
Trust; (4) confirm Delaware as the situs for the Trust; (5) reform the Trust’s 
administrative scheme; and (6) accept jurisdiction over the Trust.2  The 
resignations of the Trust’s current trustees accompany the Petition and are 
expressly conditioned on the Court of Chancery’s approval.  Northern Trust’s 
acceptance of its appointment as the new corporate trustee is also expressly 
conditioned on the Court of Chancery’s approval. 
 
                                          
 
2 The Court of Chancery opinion contains a comprehensive description of the requested new 
administrative structure and requested modifications. 
 
5 
 
II. 
STANDARD OF REVIEW 
The Court of Chancery recently adopted Rules 100-103 to provide a new 
avenue for Petitioners to utilize that court’s equitable powers to reform a trust 
instrument.3  We review cases involving the Court of Chancery’s exercise of its 
equitable powers for abuse of discretion.4  In doing so, we review its legal 
conclusions de novo.5 
 
III. 
ANALYSIS 
A. The Vice Chancellor Properly Concluded That No Actual 
Controversy Exists Related to the Approval of Trustee Resignations, 
the Appointment of a New Corporate Trustee, the Confirmation of 
Delaware as the Situs, or the Declaration that Delaware Law 
Governs the Administration of the Trust, And That Any Such 
Judicial Decision Would Constitute an Advisory Opinion. 
 
 
The Petition requests that the Court of Chancery (i) approve the resignations 
of Brian and Jeffrey as trustees; (ii) confirm Northern Trust as the newly appointed 
                                          
 
3 App. to Opening Br. at A42 (citing Consent Petition Committee of the Delaware Bar 
Association, Report to the Court of Chancery of the State of Delaware on the Matter of Consent 
Petitions (Mar. 8, 2010) (“[Chancery Court’s] equitable power . . . allows it to reform a trust.”). 
 
4 Reserves Dev. LLC v. Severn Sav. Bank, FSB, 961 A.2d 521, 523 (Del. 2008); In re Unfunded 
Ins. Trust Agreement of Capaldi, 870 A.2d 493, 497 (Del. 2005). 
 
5 Lawson v. Meconi, 897 A.2d 740, 743 (Del. 2006); see also Scion Breckenridge Managing 
Member, LLC v. ASB Allegiance Estate Fund, 68 A.3d 665, 675 (Del. 2013); SV Inv. Partners, 
LLC v. Thoughtworks, Inc., 37 A.3d 205, 209-10 (Del. 2011). 
 
6 
 
trustee; (iii) declare that Delaware is the situs of the Trust; and (iv) declare that 
Delaware law governs the Trust.   
 
As we have earlier stated, in the inter vivos context “a case must present an 
actual controversy in order to obtain a declaratory judgment.”6  The Vice 
Chancellor noted the risk of addressing issues in the absence of an actual 
controversy: “It constitutes reversible error for a trial court to have ‘addressed 
issues as to which there was no actual controversy.’”7  We consider the Petitioners’ 
requests with that precept in mind. 
 
The Vice Chancellor properly concluded that no actual controversy exists 
with respect to the requested approval of the trustees’ resignations and the 
confirmation of Northern Trust as the successor trustee.  Section 6.3.2 of the Trust 
Agreement provides: “Any individual co-Trustee may, by written instrument 
delivered to all other then acting co-Trustees, relinquish his or her powers, rights or 
                                          
 
6 In re Peierls Family Inter Vivos Trusts, at *34.  This Court adopted the following prerequisites 
necessary for an “actual controversy” to exist: 
 
(1) It must be a controversy involving the rights or other legal relations of the 
party seeking declaratory relief; (2) it must be a controversy in which the claim of 
right or other legal interest is asserted against one who has an interest in 
contesting the claim; (3) the controversy must be between parties whose interests 
are real and adverse; (4) the issue involved in the controversy must be ripe for 
judicial determination. 
 
Rollins Int’l. Inc. v. In’l Hydronics Corp., 303 A.2d 660, 662-63 (Del. 1973). 
 
7 In re Ethel F. Peierls Charitable Lead Unitrust, 59 A.3d 464, 469 (Del. Ch. 2012) (citing 
Garnett Co., Inc. v. Bd. Of Managers of the Del. Criminal Justice Info. Sys., 840 A.2d 1232, 
1238 (Del. 2003)). 
 
7 
 
duties, to any extent and upon any terms.”  As common sense dictates, and the 
Vice Chancellor found, a “complete relinquishment of powers rights, and duties is 
synonymous with resignation.”8  Nowhere does the Trust Agreement expressly or 
implicitly require judicial approval for the resignations to become effective.  The 
trustees here have essentially attempted to create their own controversy by 
conditioning their resignations on the express approval of the Court of Chancery—
an approval that the Trust Agreement does not require. 
 
Similarly, Section 6.1 of the Trust Agreement provides an express 
authorization for the current trustees to appoint a successor.  That provision states 
that “Jeffrey . . . and Brian [may] jointly designate[], by an instrument in writing 
filed with the trust records, one or more persons and/or a corporation to do a trust 
business to serve as successor to [Jeffrey] as trustee . . . .”  Again, nowhere in the 
Trust language can a requirement that the appointment be conditioned on judicial 
approval be found. 
 
The Petition also requests that the Court of Chancery declare Delaware the 
situs of the Trust.  Section 7.1 of the Trust Agreement governs the Trust’s situs: 
The situs and place of administration (“situs”) of the trust created 
under this Trust Agreement shall, as to real property held in trust, be 
the jurisdiction where such property is located.  The situs of this trust 
shall, as to personal property, be (i) the location of the main business 
office of the Trustee who then has custody of the trust records, 
wherever the Trustee may locate that office, or (ii) any other situs 
                                          
 
8 Charitable Lead Unitrust, 59 A.3d at 468. 
8 
 
(designated by the Trustee in a writing filed with the trust) that has 
sufficient contact with the trust to support jurisdiction of its courts 
over the trust.  These provisions shall apply regardless of the Settlor’s 
domicile at the execution of this instrument or the domicile or 
residence of any Trustee or beneficiary. 
 
The Trust holds no real property.  “The Trust consists of a diverse portfolio of 
marketable securities, as well as a significant amount of cash.”9  Thus, personal 
property is the only asset of concern.  Assuming that Northern Trust has an office 
in Delaware that would take custody of the trust records, it would appear that upon 
the appointment of Northern Trust, coupled with the resignations of Jeffrey and 
Brian, the situs of the Trust would automatically move to Delaware under the 
express terms of the Trust.   
 
If Petitioners are not convinced that this would be the case, they may instruct 
Northern Trust to file with the Trust a written declaration that the Trust’s situs is 
Delaware.  Conceivably Petitioners may be uncomfortable filing such a 
declaration, without Northern Trust in place as a trustee out of concern that the 
Trust lacks sufficient contacts with Delaware to justify designating Delaware as the 
Trust’s situs.  But there is precedent for proceeding in this manner.  Should the 
Petitioners redraft and execute their resignations and appoint Northern Trust, and 
then instruct the new corporate trustee to file a written instrument transferring the 
Trust’s situs, they will follow the same course of action adopted by the Peierls 
                                          
 
9 App. to Amicus Br. at B335. 
9 
 
when they named Washington as the Trust’s situs in 1994, without any judicial 
approval.  Because “[Brian and Jeffrey] can readily designate the State of 
Delaware as the situs of the Trust, or Northern Trust can do [it] as successor 
trustee,”10 we conclude that there is no “actual controversy” related to the Trust’s 
situs.  We therefore affirm the Vice Chancellor’s judgment on this request.  
 
Lastly we address the Petitioners’ request that the Vice Chancellor declare 
that Delaware law governs the administration of the Trust.  Section 7.2 of the Trust 
provides that: 
Washington law shall govern the execution and construction of this 
Trust Agreement.  The administration of this trust, however, shall be 
governed first by the provisions of this Trust Agreement, including 
any laws incorporated in this Trust Agreement by reference or 
otherwise made applicable to this Trust Agreement, and second, to the 
extent consistent with such provisions, the laws of the trust’s situs. 
 
In the inter vivos context this Court was required to dissect each trust 
instrument’s language to discern the settlor’s intent that the law governing 
administration be able to change.11  Here, however, it is clear on the face of 
the Trust Agreement that the settlor expressly “contemplates that the law 
governing administration will change with the situs of the trust, subject to 
                                          
 
10 Charitable Lead Unitrust, 59 A.3d at 469. 
 
11 In re Peierls Family Inter Vivos Trusts, No. 13, 2013 at *12-32 (Del. 2013). 
 
10 
 
the requirements of Section 7.2.”12  That is, upon changing the Trust’s situs 
to the State of Delaware, which the trustees may undertake without court 
approval, the Trust Agreement recognizes that Delaware law will govern the 
Trust’s administration. 
 
The preceding analysis demonstrates that Petitioners or their successor 
trustee may unilaterally make the changes that they request the Court to 
approve.  For this reason, any grant by the Court of Chancery, or any other 
Delaware court of the relief requested, would amount to an impermissible 
advisory opinion.  Accordingly, we affirm the Vice Chancellor’s denial of 
the Petitioners’ requests that the Court of Chancery (i) approve the 
resignations of Brian and Jeffrey as trustees; (ii) confirm Northern Trust as 
the newly appointed trustee; (iii) declare that Delaware is the situs of the 
Trust; and (iv) declare that Delaware law governs the Trust. 
B. The Vice Chancellor Properly Denied The Requests to Reform the 
Trust Agreement. 
 
 
Initially, we address Petitioners’ contention that it was “unwarranted . . . to 
treat the petition as to the Charitable Lead Unitrust to be seeking ‘reformation’ and 
then find it defective for failing to allege facts and reasons meeting the standard for 
the equitable remedy of reformation.”13  Jeffrey and Brian’s use of the term 
                                          
 
12 Charitable Lead Unitrust, 59 A.3d at 469. 
13 Opening Br. at 30. 
11 
 
“reform” was, in their own words, “obviously unwise.”14  Petitioners and litigants 
alike should recognize that how they choose to frame the issues for the court to 
consider is critical.  Although semantic differences occasionally do shape a court’s 
perception of an issue, in this case substituting the word “modify” for “reform,” as 
Petitioners would have us do, would not lead to a different result.  In either 
instance, Petitioners are seeking to invoke the Court of Chancery’s equitable 
powers to change the terms of the Trust Agreement.  They must have a legitimate 
basis for doing so.  As an appellate court we may affirm a trial court’s judgment on 
a different basis than that on which the judge decided the case.15  Rather than rely 
on the law governing the court’s equitable powers of reformation, we shift the 
focus to the law governing a trust’s administration.  We do so because the 
substance of Petitioners’ requests for reformation are matters of trust 
administration. 
 
In our discussion of the Peierls inter vivos trusts, we noted that the Court of 
Chancery’s power to reform a trust depends on which state’s law governs the 
administration of the trust.16  In this instance, we need not march through the 
Restatement (Second) of Conflict of Laws to determine which state’s law applies to 
                                                                                                                                        
 
14 Id. at 31. 
 
15 Unitrin, Inc. v. Am. Gen. Corp., 651 A.2d 1361, 1390 (Del. 1995) (citation omitted).  
16 In re Peierls Family Inter Vivos Trusts, No. 13, 2013 at *33, *39 (Del. 2013). 
12 
 
the administration of this charitable Trust.  The reason is that the situs of the Trust 
has never changed, as it did in those cases.  Section 7.2 of the Trust Agreement 
expressly states that when the situs of the Trust moves, so too does the law 
governing its administration.  The settlor, Ethel Peierls, clearly intended under 
Section 6.2 of the Trust Agreement that the situs could freely move and that the 
law governing administration follows under Section 7.2. 
 
On September 12, 1994, Brian and Jeffrey executed a written “Designation 
of Trust Situs,” under to the authority delegated by Section 7.2.  In that document, 
they named the State of Washington as the Trust’s situs for “all purposes of its 
administration.”  Under Section 7.2 of the Trust Agreement, at the time of that 
document’s execution the Trust’s administration became subject to the laws of the 
State of Washington.  Here, the trustees chose to condition designating Delaware 
as the situs of the Trust upon a judicial confirmation that never occurred.  The 
designation of Delaware as the Trust’s situs is therefore ineffective.  At this time, 
Washington State law continues to govern the Trust’s administration. 
 
That being the case, whether or not the Vice Chancellor could reform the 
Trust Agreement is a matter governed by Washington State law.  The Petition fails 
to address reformation according to the law that actually governs administration of 
the Trust.  The Petitioners asked the Vice Chancellor to rule on a request without 
citing proper legal authority.  We have no doubt, however, that once the trustees 
13 
 
effect a proper transfer of the Trust’s situs to the State of Delaware (and the 
accompanying change in the law governing administration under the Trust 
Agreement), the Court of Chancery will be in a position to reconsider Petitioners’ 
requests for reformation.  But, based on the current record and the arguments 
presented to him, the Vice Chancellor properly concluded that he could not reform 
the Trust. 
C. The Vice Chancellor Properly Refused to Retain Jurisdiction Over 
the Trust. 
 
Petitioners fail to address whether the Vice Chancellor properly declined to 
accept jurisdiction over the Trust.  We remind Petitioners that, except where the 
interests of justice compel us, we will consider arguments not raised in an 
appellant’s opening brief as waived.17  There is no compelling reason to address 
this issue sua sponte.  We therefore affirm the Vice Chancellor’s conclusion that 
the Court of Chancery could not retain continuing jurisdiction over the Trust.  
Again, however, once the Trust is properly sitused in Delaware, is under the 
supervision of a Delaware trustee, and its administration is governed by Delaware 
                                          
 
17 See Smith v. Delaware State University, 47 A.3d 472, 479 (Del. 2012); Roca v. E.I. DuPont de 
Nemours and Co, 842 A.2d 1238, 1242 (Del. 2004) (“The rules of this Court specifically require 
an appellant to set forth the issues raised on appeal and to present an argument in support of 
those issues in their opening brief.  If an appellant fails to comply with these requirements on a 
particular issue, the appellant has abandoned that issue on appeal irrespective of how well the 
issue was preserved at trial.”). 
 
14 
 
law, the Court of Chancery will be able to fully consider whether it can accept 
jurisdiction over the Trust. 
 
IV. 
CONCLUSION 
 
Accordingly, we AFFIRM the decision of the Court of Chancery.  
Jurisdiction is not retained.