Opinion ID: 3009550
Heading Depth: 3
Heading Rank: 2

Heading: Value of the Trust Res

Text: Plaintiffs seek removal of Corestates as trustee pursuant to 20 Pa.C.S.A. § § 3173, 7121 which allow removal in the case of a breach of fiduciary duty. They submit that their request to enjoin Corestates from charging excessive fees in the future places the corpus of their trusts, each in excess of $50,000,2 into controversy. They distinguish our opinion in Packard since in that action injunctive relief against the future imposition of allegedly excessive fees was not sought. In injunctive actions, it is settled that the amount in controversy is measured by the value of the right sought to be protected by the equitable relief. See Smith v. Adams, 130 U.S. 167, 175, 9 S. Ct. 566, 569 (1889); Spock v. David, 469 F.2d 1047, 1052 (3rd Cir. 1972) (In cases where there is no adequate remedy at law, the measure of jurisdiction is the value of the right sought to be protected by injunctive relief.), rev'd on other grounds Greer v. Spock, 424 U.S. 828 (1976). In other words, it is the value to plaintiff to conduct his business or personal affairs free from the activity sought to be enjoined that is the yardstick for measuring the amount in controversy. 14A C. Wright et al. Federal Practice and Procedure, § 3708 at 143-44 (2d ed. 1985) (citations omitted). 2 . Harrison's trust is valued at $902,844, Robin's at $98,741. App. at 50a. The Supreme Court applied this principle in McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S. Ct. 780 (1936), where the plaintiff sought to enjoin the enforcement of an allegedly unconstitutional regulation of its business. The Court held that the amount in controversy was not, as the plaintiffs contended, the entire value of the business, but instead the value of the right to be free of the particular regulation, which may be measured by the loss, if any, which would follow the enforcement of the rules prescribed. Id. at 181, 56 S. Ct. at 781. While some support would appear to exist for plaintiffs' contention that the entire corpus of a trust is placed in controversy where a breach of fiduciary duty is alleged, see Urbano v. Board of Managers of New Jersey State Prison, 415 F.2d 247, 249 n.8 (3d Cir. 1969) (Although we do not decide the issue, there is support for the proposition that where a breach of fiduciary duty is alleged, the corpus of the trust is the amount in controversy.), cert. denied 397 U.S. 948 (1970), it is the logic of McNutt that we find applicable to this case. In McNutt the Supreme Court made clear that the amount in controversy in an injunctive action is measured by the value to plaintiff to conduct his business or personal affairs free from the activity sought to be enjoined. The value to the plaintiffs in this action therefore is the cost to them of the continued imposition of the allegedly excessive sweep fees. The cost of these fees to date has not exceeded $2500. The plaintiffs are unable to set forth any calculation establishing that the continued imposition of such fees would bring a sum in excess of the jurisdictional amount into controversy. In reserving the question of the measurement of the amount in controversy in the case of an allegation of a fiduciary breach, the Urbano panel was apparently concerned with an alleged fiduciary breach that could place the entire corpus of a trust in jeopardy. In Urbano, prison inmates alleged a fiduciary breach on the part of prison officials in the administration of trust funds on behalf of the inmates, asserting that the officials were using the trust money for their own benefit. Urbano 415 F.2d at 249. Given these allegations, the prisoners apparently could have successfully alleged that the continued fiduciary breach on the part of prison officials placed the entire trust corpus into jeopardy. The Urbano panel never reached this question because it instead dismissed the case on the basis of abstention. Urbano, 415 F.2d at 250. In contrast, plaintiffs in the case at bar have failed to allege in any way a breach of fiduciary duty which threatens an amount of the trust corpus in excess of $50,000. Unlike Urbano, plaintiffs do not seek protection from any alleged conduct on the part of Corestates which threatens the entire trust corpus. Plaintiffs only seek protection from the continued imposition of sweep fees, which alone do not threaten an amount in excess of $50,000 per plaintiff. In addition to contending that Corestates' future actions somehow threaten the entire trust corpus, the plaintiffs argue that title to the entire trust is in controversy by the mere equitable request for removal of the trustee. The plaintiffs contend that, because a trustee holds legal title to the trust corpus, a request for removal of a trustee is equivalent to a suit brought to determine title to property. We disagree. Corestates, while vested of legal title, does not claim ownership of the entrusted funds. See Restatement (Second) of Trusts § 2 comment (d) (1959) (The term 'title,' unlike 'ownership' is a colorless word; to say without more that a person has title to certain property does not indicate whether he holds such property for his own benefit or as trustee.). The cases cited by the plaintiffs all involve situations where the real equitable ownership of property was at stake, not mere legal title. See, e.g., Sanchez v. Taylor, 377 F.2d 733 (10th Cir. 1967) (holding that in a suit seeking a declaration of title the amount in controversy is governed by the value of the property). Since the equitable ownership of trust property is not at issue, we conclude that plaintiffs' injunctive request does not place the jurisdictional amount into controversy. In sum we conclude that plaintiffs' requested injunctive relief does not, to a legal certainty, place an amount in excess of $50,000 into controversy. The mere request for removal of a trustee does not place the entire trust corpus into controversy; instead plaintiffs must seek by way of an injunction protection from an activity which threatens in excess of $50,000 of the trust corpus. Plaintiffs have failed to allege any such conduct on the part of Corestates.