Opinion ID: 1218284
Heading Depth: 2
Heading Rank: 2

Heading: Liquidating Trustee and Ruby Enterprises, Inc.

Text: The circuit court's finding that the duties of the liquidating trustee had terminated is clearly wrong. The record reveals that on the same day ALPOA instituted its suit, October 6, 1983, the liquidating trustee was still carrying out his duties, making a final distribution of $219,712.59 to Ruby Enterprises, Inc. The record further reveals that the trust's term did not expire until October 8, 1983. Thus, the circuit court erred in ruling that ALPOA could not maintain its action against the liquidating trustee in his representative capacity. There is no dispute that the liquidating trustee owed a fiduciary obligation to all creditors of Mountaintop. ALPOA maintains that the liquidating trustee breached that duty. Because a trustee is personally liable for breach of a fiduciary duty, 76 Am.Jur.2d Trusts § 304 (1975), a creditor like ALPOA may elect to hold the trustee personally accountable for damages resulting from the breach or he may elect to pursue the trust property by suing the trustee in his representative capacity. 76 Am.Jur.2d Trusts § 253. In an attempt to set aside the distributions made by the trustee to Ruby Enterprises, Inc. as fraudulant conveyances, we find that ALPOA has elected to proceed against the liquidating trustee in his representative capacity. ALPOA claims that Mountaintop transferred its assets to Ruby Enterprises, Inc. with intent to delay, hinder or defraud ALPOA, and that Ruby Enterprises, Inc. accepted the transfers with notice of Mountaintop's fraudulent intent. Mountaintop and Ruby Enterprises, Inc. deny these contentions. Clearly, then, genuine issues of material fact concerning motive and intent exist with respect to the fraudulant conveyance portion of ALPOA's amended complaint. This Court concludes that the liquidating trustee is a necessary party to the fraudulent conveyance action insofar as it was the liquidating trustee who held legal title to the assets prior to conveyance, [15] see Bankers Pocahontas Coal Co. v. Flanagan Coal Co., 100 W.Va. 707, 131 S.E. 545 (1921), and that the fraudulent conveyance action brought by ALPOA under former West Virginia Code § 40-1-1 (1982 Replacement Vol.) raises factual questions. Because these issues must also be tried by a jury, the circuit court's summary judgment in favor of the liquidating trustee and Ruby Enterprises, Inc. is hereby reversed.