Opinion ID: 2772691
Heading Depth: 2
Heading Rank: 3

Heading: Was Removal Warranted?

Text: [¶94] The ultimate question is whether the district court correctly removed Cam and Julia as BRT trustees. We find that the district court based that decision on a number of clearly erroneous findings of fact. The water rights that were moved to Cam’s property did not come from BRT lands. Julia did not gain $376,226 from the Nature Conservancy transaction. The Jeffries 80 property could have four houses built on it. The value of the Jeffries 80 in 2013 is not a reliable measure of its value in 2007. The district court also applied an incorrect legal standard to the trustees’ duty, and allowed evidence and testimony without explanation or a discernible basis. [¶95] Remand would serve no purpose under these circumstances, where the facts are sufficient for a final determination. As discussed above, we find that trustees Cam and Julia did engage in self-dealing in the 2007 Cam land exchange, the conservation easement transactions, and the water rights changes in place of use. Removal of a trustee, however, “usually will not be grounded on a mere error of judgment or conduct even though there is a technical breach of the trust, if the trust estate does not suffer.” Schildberg v. Schildberg, 461 N.W.2d 186, 191 (Iowa 1990) (citing 76 Am. Jur. 2d Trusts § 130, at 370 (1975)). “Generally, the court will not remove a testamentary trustee absent a demonstrated abuse of power.” In re Estate of Klarner, 113 P.3d at 157 (citing Copley v. Copley, 178 Cal.Rptr. 842, 866 (1981); Culver v. Culver, 169 N.E.2d 486, 489 (1960) (so long as trustee executes trust in good faith and sound discretion, court has no right to interfere)). Although Cam and Julia engaged in self-dealing, there is no evidence the trust estate suffered, nor is there a demonstrated abuse of power. [¶96] Spike suggests that hostility alone is a basis for removal of the trustees. But, while it is apparent that Spike feels hostile toward the trustees (for example, referring to their actions as “[a]bsolute idiocy,” “where selfish pursuit of getting the personal max they can out of every situation is the modus operandum” in an e-mail to Edith), there is no evidence that hostility is reciprocated. Hostility may naturally exist in trust relationships since trusts are usually created to withhold control of the trust principal from the beneficiaries. Hostility between the trustee and the beneficiaries of the trust alone is insufficient to require the removal of the trustee. To be sufficient to require removal, the hostility must interfere with the proper administration of the trust. 29 In re Trust Created by Hill for Benefit of Schroll, 499 N.W.2d 475, 485 (Minn. Ct. App. 1993) (citations omitted). We held in Kerper, that: Generally, social or familial hostility, between the trustee and one or more beneficiaries of a trust is insufficient in and of itself to warrant removal of a trustee. The real question in these situations is whether or not the hostility, in combination with existing circumstances, materially interferes with the administration of the trust or is likely to cause that result. Kerper, 780 P.2d at 938. See also Schildberg, 461 N.W.2d at 192 (“[H]ostility . . . which results from the acts or conduct of the beneficiary, has been held not to be sufficient ground for removal.”); Symmons v. O’Keeffe, 644 N.E.2d 631, 637 (Mass. 1995) (if mere fact of friction between the trustee and beneficiaries were basis for removal, “an obstreperous malintentioned beneficiary could cause the removal of a competent trustee through no fault on the latter’s part”). [¶97] We do not find there exists hostility between the trustees and Spike such that it interferes with the proper administration of the BRT, and we conclude that Cam and Julia’s self-dealing caused no serious harm, and did not establish dishonesty or want of capacity. [¶98] It is unnecessary to address the trustees’ remaining issue regarding the district court’s failure to address their affirmative defenses. We also do not address Spike’s issue on his cross appeal, because his argument for removal of Sarah and Edith is based on a finding that Cam and Julia should be removed, which we now reverse.