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

Heading: The Water Rights Transactions

Text: [¶56] The district court found that, as a result of the water rights petitions executed by Cam: 19. . . . Trustee Defendants Cam Forbes and Julia Forbes each received 70 acres of BRT water, with 1881 and 1884 priority dates. BRT did not receive any payment, or other assets, in exchange for these water rights being transferred to Defendants Cam and Julia Forbes, in their individual capacities, respectively. 20. Trustees Cam Forbes and Julia Forbes additionally received 20 acres of supplemental water supply, with an 1881 priority date, from the BRT without any consideration given. 21. Trustee Cam Forbes received an additional 36 acres of surplus water from the BRT, with a priority date of 1891, without giving the BRT any consideration in return. All parties concede that these findings by the district court were in error. In fact, 70 acres of 1891 water rights from Big Goose Creek (the Strang Appropriation) were transferred from the Tracy7 property to BRT lands, in exchange for 70 acres of 1881 and 1884 BRT water rights out of Park Creek, and 20 acres of 1884 supplemental supply rights out of Big Goose Creek. The approximately 36 acres of water rights that ended up on lands owned by Cam came from the Tracy property. 7 The Tracy property is owned by Julia, Cam, and three other family members. 17 [¶57] Cam testified extensively about the reason for the water rights petitions. The Board of Control had contacted him to request that permits be corrected to reflect the actual use of water on the BRT lands. The decisions on changes in place of use had a logical basis―to put water in places where it could best be used, either under existing pivots, or in locations best suited to the means of conveyance. And Cam testified that, when he worked with Prestfeldt Surveying to achieve the best allocation of the water resource, it was for the benefit of the entire family, without consideration for “any boundary of who owned what acres on the map.” This attitude is reflected in the fact that the Petitions for Change of Place of Use filed with the Board of Control on behalf of the BRT and the HST, and signed by Cam as trustee of both Trusts, include property that is owned privately by Cam as well as Cam and Julia in partnership with other family members. [¶58] The result of treating all family property without consideration for different ownership is that, when the dust settled, Cam’s private property, which had never had water rights, now has 36 acres of 1891 water rights.8 While Cam may have acted with the best interest of the trust in mind; his error was in failing to distinguish between property held by the BRT and property held by individual Forbes family members, including himself. That failure inevitably results in a breach of the duty of loyalty, which requires that “[a] trustee shall invest and manage the trust assets solely in the interest of the beneficiaries.” Wyo. Stat. Ann. § 4-9-105 (repealed 2003, replaced by Wyo. Stat. Ann. § 4-10-905, which has identical language)). Under principles of equity, a trustee bears an unwavering duty of complete loyalty to the beneficiary of the trust, to the exclusion of the interests of all other parties. To deter the trustee from all temptation and to prevent any possible injury to the beneficiary, the rule against a trustee dividing his loyalties must be enforced with ‘uncompromising rigidity.’ Concrete Pipe & Products of California, Inc. v. Constr. Laborers Pension Trust for Southern California, 508 U.S. 602, 616, 113 S.Ct. 2264, 2276, 124 L.Ed.2d 539 (1993) (quoting NLRB v. Amax Coal Co., 453 U.S. 322, 329-32, 101 S.Ct. 2789, 2794-95, 69 L.Ed.2d 672 (1981)). [¶59] The duty of loyalty prohibits self-dealing by trustees, because “[i]t is not possible for any person to act fairly in the same transaction on behalf of himself and in the interest 8 Because the district court misunderstood the exchange of water from BRT property to the Tracy property, it made no finding as to the relative value of those water rights, and we find insufficient evidence in the record to make any such finding on review. Seniority alone is insufficient to establish relative value of water rights. Other important factors include the priority of the water rights, the reliability of the source of supply, and the ability to deliver the water to its desired place of use. 18 of the trust beneficiary.” Bogert, supra, § 543, at 227. Any transaction involving trust property and an entity in which the trustee has an interest raises conflict of interest concerns. “Self-dealing by a trustee or any fiduciary is always suspect, and it is a universal rule of equity that a trustee shall not deal with trust property to his own advantage without the knowledge or consent of the cestui que trust.” Hosey v. Burgess, 890 S.W.2d 262, 265 (Ark. 1995). The trustee’s duty of loyalty “prohibits both selfdealing and conflicts of interest. Thus, the trustee must neither 1) deal with trust property for the benefit of himself or third parties, nor 2) place himself in a position inconsistent with the interests of the trust.” In re Paxson Trust, 893 A.2d 99, 121 (Pa. Super. Ct. 2006) (quoting Estate of McCredy, 470 A.2d. 585, 597 (Pa. Super. Ct. 1983) (internal citations omitted)).9 This court held in 1927 that: “A trustee is bound to act with good faith. He is not to use the trust property in his own private business, nor is he to make any incidental profits for himself in its management, nor is he to acquire pecuniary gains from his fiduciary position. An important duty of good faith prohibits the trustee from mixing the trust property and his own property together in one amount, the depositing of trust moneys in his own personal account with his own moneys in bank, and all similar modes of combining or failing to distinguish between the two funds. This rule is designed to protect the trustee from temptation, from the hazard of loss, and of being a possible defaulter, as well as to protect the trust fund.” In re Reed’s Estate, 259 P. 815, 817 (Wyo. 1927) (quoting In re Hodges’ Estate, 28 A. 663, 663-64 (Vt. 1894)). [¶60] We hold that, in entering into a transaction on behalf of himself and as a trustee, Cam breached his duty of loyalty to the BRT’s beneficiaries. [¶61] The trial court abused its discretion in allowing evidence relating to an unpled claim and exhibits that were not timely identified. We must also ask “if the error was prejudicial.” Gonzalez-Ochoa v. State, 2014 WY 14, ¶ 11, 317 P.3d 599, 603 (Wyo. 2014). An error is prejudicial if: [T]he error affected [the appellant’s] substantial rights[.] . . . . The error is [prejudicial] if there is a reasonable possibility 9 Restatement (Second) of Trusts § 170, cmt. b explains: “A trustee with power to sell trust property is under a duty not to sell to himself either by private sale or at auction, whether the property has a market price or not, and whether or not the trustee makes a profit thereby.” 19 that the verdict might have been more favorable to [the appellant] if the error had never occurred. To demonstrate [prejudicial] error, [the appellant] must prove prejudice under circumstances which manifest inherent unfairness and injustice, or conduct which offends the public sense of fair play. Singer v. Lajaunie, 2014 WY 159, ¶ 31, 339 P.3d 277, 286 (Wyo. 2014) (quoting Proffit v. State, 2008 WY 103, ¶ 12, 191 P.3d 974, 977-78 (Wyo. 2008) (internal citations omitted)). [¶62] Although we have concluded that Cam breached the duty of loyalty in the water rights transactions by the mere fact that the changes in place of use included some selfdealing on his part, that finding is only prejudicial if we also conclude that the breach is a sufficient basis for his removal as trustee. As discussed further below, we do not conclude that removal is warranted. See infra ¶ 97. II. Was the district court’s finding that Julia profited from the transactions that were undertaken to place a conservation easement on the BRT property clearly erroneous? [¶63] Spike did not challenge the trustees’ decision to place a conservation easement on 1,020 acres of the BRT property, nor does he challenge the amount of compensation obtained by the BRT for the easement. Instead, he objects to the transactions which the BRT entered into with Julia so that she could obtain enough BRT shares to convert them into 1,020 acres outright. This in turn allowed the NRCS review to proceed in a timely fashion, because only Julia’s eligibility pursuant to 7 C.F.R. §1491 et seq. had to be reviewed, instead of the eligibility of all 19 beneficiaries. [¶64] The district court found that, after the complicated series of land and BRT share transactions that culminated in placing the conservation easement on BRT lands, “Julia Forbes, in her individual capacity, gained an additional 22 shares in the transaction, at a total value of $376,222.00.” It went on to hold that Julia’s profit from the conservation easement transaction “falls within the framework of self-dealing,” and that such conduct warranted her removal as a trustee. [¶65] In arriving at its conclusion that Julia profited from the conservation easement transaction, the district court apparently overlooked the fact that, in return for the 22 additional shares in the BRT, Julia had contributed 320 acres of real property to the BRT. That property, according to the trustees’ calculations, was valued at $1,120,000. The 20 trustees satisfied themselves at the time that the transaction was fair. They contend on appeal that in fact, Julia had lost $428,000 as a result of the transaction.10 [¶66] While it seems clear that the district court’s conclusion that Julia profited to the tune of 22 shares or $376,222 is in error, the record does not allow us to make a determination whether she profited at all, or, as the trustees now contend, lost money, because there is no complete and timely appraisal done of the property at issue. Sarah, who is an attorney, advised her co-trustees in a 2006 email that: Because the IRS applies very strict scrutiny to transactions between “related parties” (especially family members), and because of the values involved, any gifting of CC [Cave Creek, where their mother’s home was] or any part of it would have to have a gift tax return filed; and to satisfy the IRS would have to be appraised by an independent certified appraiser[.] [¶67] Yet when the time came to issue new BRT shares and to add and subtract real property from the BRT, the trustees relied on a number of appraisals done on different and overlapping parcels of land at different times, a market analysis, and Cam’s discussions with appraisers. We decline to attempt the exercise in extrapolation that the parties urge upon us to conclude that Julia either profited or did not profit from the transaction. We simply find there is no support in the record to conclude that Julia either intended to, or did, achieve personal gain from it. [¶68] However, as discussed, see supra ¶ 59, self-dealing alone constitutes a breach of the duty of loyalty. In addition, the trustees not only failed to obtain an accurate appraisal of the specific lands at issue, they did not retain separate counsel to advise the BRT, they made no effort to obtain court approval for the transactions, and they did not obtain prior approval of these specific transactions from the beneficiaries. 11 [¶69] Whether or not Julia profited from the transaction, she engaged in land and money exchanges with the BRT, which were compounded by the absence of objective advice or third-party review, thus breaching her duty of loyalty. However, a finding that there was 10 Cam testified that “the number of shares that Julia received back was less than what she surrendered. The difference in value was she effectively paid capital gains tax out of her pocket.” In addition to the 22 BRT shares, Julia had also retained the “Polo Field,” which the trustees valued at $316,000. The testimony at trial was that she was retaining that property only until this lawsuit was resolved. We expect the Polo Field will be promptly conveyed to the BRT or a BRT entity. 11 The BRT does not require beneficiary approval; however, under the circumstances, it might have been one approach to lifting the clouds over these transactions. 21 a breach of the duty of loyalty does not necessarily lead to the conclusion that the trustees should be removed, an issue which we will discuss further below. See infra ¶¶ 94-97. III. Did the district court err in when it found that Cam and Julia improperly issued new shares in the BRT? [¶70] The district court held that the “Trust Instrument does not give the trustees broad discretion to create new shares.” It went on to conclude that, “in creating additional shares and distributing such shares to” Julia, the trustees breached their duty and Julia should be removed as trustee. Julia and Cam contend on appeal that they had a goodfaith basis for believing that they could issue new shares in the BRT. [¶71] The parties no longer dispute that the BRT is a Massachusetts Business Trust. The ‘Massachusetts Trust’ is a form of business organization, common in that State, consisting essentially of an arrangement whereby property is conveyed to trustees, in accordance with the terms of an instrument of trust, to be held and managed for the benefit of such persons as may from time to time be the holders of transferable certificates issued by the trustees showing the shares into which the beneficial interest in the property is divided. These certificates, which resemble certificates for shares of stock in a corporation and are issued and transferred in like manner, entitle the holders to share ratably in the income of the property, and, upon termination of the trust, in the proceeds. Navarro Savings Ass’n v. Lee, 446 U.S. 458, 468, 100 S.Ct. 1779, 1785, 64 L.Ed.2d 425 (1980). The Massachusetts Business Trust was used as a form of business organization, “to secure corporate advantages without incorporation.” Bogert, supra, § 247, at 182, 189. [¶72] We look to the language of the trust instrument to determine whether it authorizes the issuance of new shares. Interpretation of an unambiguous trust agreement is a matter of law for the court. Rock Springs Land and Timber, Inc. v. Lore, 2003 WY 100, ¶ 12, 75 P.3d 614, 619 (Wyo. 2003). The meaning of a trust is determined by the same rules that govern the interpretation of contracts. In interpreting a trust, our primary purpose is to determine the intent of the settlor. Wells Fargo Bank Wyoming, N.A. v. Hodder, 2006 WY 128, ¶ 21, 144 P.3d 401, 409 (Wyo. 2006); 22 First Nat’l Bank & Trust Co. v. Brimmer, 504 P.2d 1367, 1369 (Wyo. 1973). We construe the trust instrument as a whole, attempting to avoid a construction which renders a provision meaningless. Id. “We strive to reconcile by reasonable interpretation any provisions which apparently conflict before adopting a construction which would nullify any provision.” Wells Fargo, ¶ 21, 144 P.3d at 409. See also, Purcella v. Purcella, 2011 WY 124, ¶ 14, 258 P.3d 730, 73435 (Wyo. 2011). Evans, 2012 WY 111, ¶ 21, 282 P.3d at 1210. [¶73] The Trust provides: EIGHTH – The trustees for the time being hereunder shall have full power to sell, lease, mortgage, pledge, lend or exchange free and clear of the trust any and all portion or portions of the trust estate at such time, for such considerations, and upon such terms and conditions as they deem advisable. This power shall extend to everything which shall hereafter be added to the trust estate or received in exchange for the premises hereby conveyed. (Emphasis added.) [¶74] This language clearly contemplates that property could be added to the trust estate, and that the trustees may make exchanges in order to acquire additional property. Read in conjunction with the broad general grant of power to the trustees,12 the provision authorizes the BRT trustees to acquire additional lands in exchange for shares, and it necessarily gives them the power to create new shares. (Spike expressed the same opinion in an e-mail of March 12, 2011, in which he stated, “The trustees of the BRT have broad enough powers that there probably is no legal jeopardy . . .” and only expressed a concern about the possible tax consequences of a share-for-asset exchange.)13 This conclusion is consistent with the purpose of a business trust, which functions like a 12 Any two trustees shall have power to do any such things and execute any such instruments and take any such action as they deem wise in relation to the granted premises and the trust estate for the time being to the same effect and to the same extent as if they held the same free of any trust whatsoever. 13 Spike’s position, in addition to advice that Cam received from his counsel that the BRT had the authority to issue shares, would establish that even if the trustees were mistaken, they acted in the goodfaith belief that they were authorized to issue shares in the BRT. 23 corporation, and issues certificates “which resemble certificates for shares of stock in a corporation and are issued and transferred in a like manner[.]” Navarro Sav. Ass’n, 446 U.S. at 468, 100 S.Ct. at 1785. [¶75] The district court erred as a matter of law when it found that the trustees did not have the discretion to create new shares in the BRT. IV. Did the district court commit reversible error when it allowed undesignated expert testimony, concluded property deeded to Cam was not suitable for development in spite of Spike’s expert’s testimony otherwise, and based its finding on difference in value by comparing a 2007 value of one property to a 2013 value of another? [¶76] Cam exchanged an undivided 31 percent interest in an 80-acre tract of land (the Jeffries 80) for 36.88 acres of BRT property upon which he had built his house.14 The district court found that: 13. The trial testimony established that the property was not physically inspected and driven over as large parts of the property is impossible to drive over due to its steep terrain. Testimony further established that the property deeded by Cam Forbes to BRT is not suitable for development due [to] the steep character of the land. 14. The 36.88 acres of property deeded in fee simple to Cam Forbes in 2007 was valued at $320,000.00. The property the BRT received as tenants-in-common was a 31% interest in 80 acres valued at $205,000.00 in 2013. 15. The value of the 31% interest in the 80 acres the BRT received as tenants-in-common translates to approximately 25 acres and is valued at approximately $63,550.00. The difference in value between the fee simple property Defendant Cam Forbes received in the transaction and the tenants-in-common property he provided in the exchange was approximately $256,450.00. [¶77] The district court held that the transaction “benefited [] Cam Forbes at the expense of all other beneficiaries,” that the “trustees misrepresented facts to the beneficiaries,” and that the trustees “breached their duty of loyalty and their duty to act in good faith to the beneficiaries by approving the land exchange.” 14 The Trust authorizes beneficiaries to build homes on BRT property. 24 [¶78] Julia and Cam challenge the factual basis for these findings, asserting that the undesignated expert witness should not have been allowed to testify regarding the value of the exchanged land; that it was error to compare a 2007 appraisal of one property to a 2013 appraisal of the exchanged property; and that the conclusion the property exchanged by Cam was unsuitable for development was contrary to the testimony of Spike’s own (undesignated) expert. We address each of these in turn. A. The Undesignated Expert [¶79] The district court ordered Spike to designate expert witnesses by March 8, 2013. Although James Urbatchka had completed his appraisal of the Jeffries 80 in January 2013, he was not designated as an expert.15 After Spike listed Mr. Urbatchka’s 2013 appraisal as an exhibit in his final pretrial memo, the Sarah P. Forbes Revocable Trust (which was a defendant at the time but would be dismissed from the case prior to trial) filed a motion in limine to bar Mr. Urbatchka from testifying to any opinion set forth in his January 2013 appraisal.16 The BRT trustees raised their objection to Mr. Urbatchka’s testimony regarding the 2013 appraisal in their Response to Plaintiff’s Pretrial Memorandum, filed May 28, 2013. The district court denied the motions in an August 13, 201317 ruling, stating: The Court finds that any testimony by Mr. Urbachka’s [sic] regarding appraisals he did on behalf of Plaintiff is proper regardless of Mr. Urbachka’s [sic] designation or not as an expert. The Court notes that Mr. Urbachka [sic] provided both parties with appraisals in his professional capacity, and his testimony would therefore appear to be relevant to both parties. [¶80] The parties do not dispute that, as to the 2013 appraisal, Mr. Urbatchka was testifying as an expert who was subject to the expert designation requirements and deadlines. Mr. Urbatchka’s testimony regarding his 2013 appraisal formed the basis for the district court’s finding that the BRT trade for a 31 percent interest in Cam’s property was not fair. Julia and Cam argue that this testimony should not have been admitted, because it violated both the district court’s scheduling order and W.R.C.P. 26(a)(2). They contend that W.R.C.P. 37(c)(1) requires that “A party that without substantial justification fails to disclose information as required by Rule 26(a) or 26(e)(1) or to amend a prior response to discovery as required by Rule 26(e)(2) is not, unless the error is harmless, permitted to use as evidence at trial, at a hearing, or on a motion any witness 15 Mr. Urbatchka had been listed as a “may call” fact witness by Spike, and earlier appraisals he had done (not for purpose of trial) had been identified by the trustees as exhibits. 16 The BRT trustees filed a joinder to this motion in limine on May 28, 2013. 17 Trial began August 19, 2013. 25 or information not so disclosed.” Spike contends there was no surprise or prejudice to the trustees because they planned to have Urbatchka testify about other appraisals anyway. [¶81] “A ruling on the admission or exclusion of expert witness testimony based on a violation of a pre-trial order is within the trial court’s discretion, and we will not overturn the decision absent a showing of an abuse of that discretion.” Smith v. Paiz, 2004 WY 14, ¶ 15, 84 P.3d 1272, 1277 (Wyo. 2004) (citing Winterholler v. Zolessi, 989 P.2d 621, 624-25 (Wyo. 1999)). We are not informed why the district court ruled as it did, and we can discern no reasonable basis for doing so. [¶82] We have held that when a party claims an error in the admission of evidence on the basis of unfair surprise and prejudice, we will not consider the alleged error unless the party sought a continuance upon learning of the alleged surprise. Miller v. Beyer, 2014 WY 84, ¶ 56 329 P.3d 956, 972 (Wyo. 2014); Parrish v. Groathouse Constr., Inc., 2006 WY 33, ¶ 15 n.4, 130 P.3d 502, 507 n.4 (Wyo. 2006); Meyer v. Rodabaugh, 982 P.2d 1242, 1245 (Wyo. 1999). However, in each of these cases, the district court had offered a continuance which the objecting party declined. In Betts v. Crawford, 965 P.2d 680, 685 (Wyo. 1998), the case in which we first applied the rule to expert witness designation, we found that the plaintiff’s case was not harmed by the expert testimony. In Morris v. State ex rel. Wyo. Workers’ Safety & Comp. Div., 2012 WY 71, ¶ 30, 276 P.3d 399, 407 (Wyo. 2012), we backed away from a strict requirement that the party must request a continuance in order to preserve the issue for appeal, holding that where a party clearly identifies its objection to the evidence, moves for its exclusion, and the objection is preserved in the record, we will consider the claim of error under our Winterholler analysis. Id. While it would always be prudent to request a continuance, both to allow the district court the opportunity to cure the surprise and to preserve the issue on appeal, here, as in Morris, the trustees made reasonable efforts to preserve the issue.18 They filed a motion in limine immediately upon receiving notice that Spike intended to use Mr. Urbatchka’s 2013 appraisal, and objected again in their Response to Plaintiff’s Pretrial Memorandum. The district court did not rule on those motions until six days before trial. We hold that, under these circumstances, the failure to request a continuance is not an absolute bar to the trustees’ appeal of the issue, and we will instead analyze it by applying the Winterholler factors. [¶83] In Winterholler, we adopted the following factors for evaluating whether the district court abused its discretion in admitting or excluding a party’s supplementation of its disclosures after the conclusion of expert discovery: (1) whether allowing the evidence would incurably surprise or prejudice the opposing party; 18 Contrast In re MC, 2013 WY 43, ¶ 48, 299 P.3d 75, 85 (Wyo. 2013) (in which objecting party took no steps to attempt to correct or preserve the issue of claimed undesignated witnesses). 26 (2) whether excluding the evidence would incurably prejudice the party seeking to introduce it; (3) whether the party seeking to introduce the testimony failed to comply with the evidentiary rules inadvertently or willfully; (4) the impact of allowing the proposed testimony on the orderliness and efficiency of the trial; and (5) the impact of excluding the proposed testimony on the completeness of the information before the court or jury. Winterholler v. Zolesssi, 989 P.2d 621, 628 (Wyo. 1999) (quoting Dada v. Children’s Nat’l Med. Ctr., 715 A.2d 904, 909 (D.C. 1998); see also Morris, 2012 WY 71, ¶ 31, 276 P.3d at 407. [¶84] First, allowing the evidence of Mr. Urbatchka’s 2013 appraisal six days before trial provided no opportunity for the trustees to find or designate an expert to counter his testimony. There is no question that the testimony was prejudicial to the trustees, since it formed the basis for the district court’s conclusion that the land exchange was unfair to the BRT beneficiaries. [¶85] Second, excluding the evidence would not have incurably prejudiced the party seeking to introduce the 2013 appraisal. The evidence of the Jeffries 80’s value in 2013 is of questionable relevance or reliability, and should not have been admitted in any case. The district court compared a 2007 appraised value of the land Cam acquired from BRT ($320,000.00) to a 2013 appraised value of the interest in land Cam traded to the BRT ($63,550.00). Julia and Cam contend that it is improper to compare property values with such a lapse of time, particularly when there was a “major stock market crash and decline in real estate values, and the extended recession” in the interim. We agree that an appraisal of the property’s value as of 2013 is a poor indicator of its value in 2007, and should not have been relied upon by the district court.19 See Anderson v. Bauer, 681 P.2d 1316, 1325 (Wyo. 1984) (error for the plaintiffs to use a 1983 appraisal for claim of diminished value arising from a 1978 injury). [¶86] Third, the record does not indicate whether Spike failed to designate Mr. Urbatchka as an expert with respect to the 2013 appraisal inadvertently or willfully. We only know that the appraisal was completed in January of 2013, and the expert witness 19 A retrospective appraisal, valuing the property as of 2007, would have been the appropriate measure and is an accepted method employed by professional appraisers. Day v. Stascavage, 251 P.3d 1225, 1230-31 (Co. App. 2010). 27 designation deadline was March 8, 2013. Spike has presented no explanation for the failure to designate, and this factor weighs against him. [¶87] Fourth, allowing Mr. Urbatchka’s testimony had minimal impact on the orderliness and efficiency of trial, as he was likely going to be called in any case as a fact witness. [¶88] Finally, in this case, excluding the evidence would have resulted in a great deal more accurate information for the district court’s consideration, in view of the fact the 2013 appraisal has very little relevance to the 2007 property values. [¶89] Applying the Winterholler factors to these facts, we must conclude that the district court abused its discretion in admitting and relying on the expert testimony concerning the 2013 value of the Jeffries 80. B. Suitability for Development [¶90] The district court found that the Jeffries 80 property exchanged by Cam to the BRT “is not suitable for development due to the steep character of the land.” It further concluded the parcel “is steep, inhospitable and most certainly not fit for any other purpose than what it is being used for now, which as far as this Court can tell, is nothing.” [¶91] The record does not support this conclusion. In fact, Mr. Urbatchka testified “I think there was enough relatively flat land that you could put four houses there, sure.” The district court’s findings of fact as to the Jeffries 80 suitability for development are clearly erroneous. [¶92] Our conclusions regarding the district court’s errors in evaluating the 2007 land transaction between Cam and the BRT do not, however, exonerate the trustees. The fact remains that Cam as trustee entered into a transaction with the BRT, which alone raises questions regarding his duty of loyalty. Although the trustees insist that Cam recused himself as a BRT trustee prior to the decision being made, his recusal at the last leg of the negotiation does not satisfy his duty of loyalty. “Where there are several trustees, one of them cannot properly purchase trust property for himself, although his co-trustees are not personally interested in the purchase and consent to the sale.” Restatement (Second) of Trusts § 170, cmt. b. [¶93] We conclude once again, that the BRT trustees were careless in allowing the individual trustees to enter into deals with the Trust, especially with no safeguards in place to ensure the fairness of the transactions. While we recognize that this may have been the acceptable way of doing business for the BRT trustees for many years, such conduct does not meet the duty of loyalty. As a practical matter, as soon as a single 28 beneficiary becomes adverse, as Spike apparently did after 2007, anything short of strict adherence to the duties imposed by the Trust and the law will result, at the very least, in the type of litigation we see here.