Court Opinion

ID: 4016509
Source: CourtListenerOpinion
Date Created: 2016-07-18 07:05:57.318358+00
Date Added: 2024-06-11T12:17:44.755226
License: Public Domain

THIRD DIVISION
                                 MILLER, P. J.,
                              RAY, and BRANCH, JJ.

                    NOTICE: Motions for reconsideration must be
                    physically received in our clerk’s office within ten
                    days of the date of decision to be deemed timely filed.
                                http://www.gaappeals.us/rules

                                                                       July 15, 2016

In the Court of Appeals of Georgia
 A12A2516. ROLLINS et al. v. ROLLINS et al.

      RAY, Judge.

      This case involves a dispute over trusts associated with a large estate. It comes

to our Court for the third time, having also twice visited the Supreme Court of

Georgia.1 The case began in 2010 when four of the nine beneficiaries2 of trusts set up

by their grandfather, successful businessman O. Wayne Rollins (the “Settlor”), sued

their father, Gary W. Rollins, and their uncle, R. Randall Rollins, individually and as

      1
        Rollins v. Rollins, 321 Ga. App. 140 (741 SE2d 251) (2013) (Rollins I),
reversed in part, vacated in part, and remanded by Rollins v. Rollins, 294 Ga. 711
(755 SE2d 727) (2014) (Rollins II); Rollins v. Rollins, 329 Ga. App. 768 (766 SE2d
162) (2014) (Rollins III), vacated and remanded by Rollins v. Rollins, 298 Ga. 161
(780 SE2d 328) (2015) (Rollins IV).
      2
        Glen W. Rollins, Ruth Ellen Rollins, Nancy Louise Rollins, and O. Wayne
Rollins II (collectively, “the Plaintiffs”).
trustees; and Henry B. Tippie, as trustee (collectively, the “Defendants”). Their

amended complaint alleged, in brief, breaches of trust and of fiduciary duty regarding

a failure to make proper accountings, making trust investments in illiquid family-

owned entities, creating a conduct-based distribution scheme, creating conflicts of

interest, and failing to maximize income distributions. They also asserted claims for

an accounting, constructive fraud/recision, and fraudulent misrepresentation. Rollins

IV, supra at 163-164. The parties filed cross-motions for summary judgment. The trial

court ruled in the Defendants’ favor on each of the Plaintiffs’ claims, except for a

breach of trust claim related to the Defendants’ failure, at any time prior to the filing

of the suit, to make required periodic accountings to the Plaintiffs of the assets held

in the trusts. See id. at 164 and n. 6. The Plaintiffs filed the instant appeal, which

continues to wend its way between our appellate courts.

      In their original appeal before this Court, see Rollins I, supra, the Plaintiffs

argued that the trial court erred in not granting them an accounting of the business

entities, held within the trusts, which hold trust assets. They also argued that the trial

court erred in failing to rule that: the Defendants breached their fiduciary duties or

duties of trust by their conduct at the business entity level, rather than at the trust

level; in creating a “false and misleading” distribution scheme imposing conduct-

                                            2
based requirements not found in any trust instrument; by replacing marketable

securities in the trusts with illiquid investments in debt-ridden trust entities under the

trustees’ permanent control; in ruling that the Plaintiffs had to show actual harm to

prevail on their fiduciary duty claims and in finding that they were not harmed by

being “cut off” from trust distributions and assets; and in granting summary judgment

to the Defendants because material factual disputes remained.

      The further procedural history of the case is rather involved, and as the

Supreme Court outlines this in Rollins IV, supra at 164-167, we will not unnecessarily

repeat it here. Rather, we will simply note that in Rollins IV, the Supreme Court

determined, inter alia, whether the applicable Defendants were to be held to a

corporate- or partner-level fiduciary standard or to a trustee-level fiduciary standard

related to the actions and decisions about which the Plaintiffs complain.3 The

      3
       The Supreme Court most recently granted certiorari to determine whether this
Court erred in determining that a jury must decide which fiduciary standard applies.
When the Supreme Court

      considers only a portion of a Court of Appeals’ opinion and reverses, it
      is for the Court of Appeals to determine on remand whether the portions
      of its earlier opinion that were not considered by this Court are
      consistent with this Court’s ruling. If such portions are consistent with
      this Court’s ruling, then they become binding upon the return of the

                                            3
Supreme Court vacated our opinion in Rollins III and remanded the case to us with

direction. See Rollins IV, supra. We thus proceed accordingly.

      Summary judgment is proper “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that the moving party is entitled

to a judgment as a matter of law[.]” OCGA § 9-11-56 (c).

      Summary judgments enjoy no presumption of correctness on appeal, and
      an appellate court must satisfy itself de novo that the requirements of
      OCGA § 9-11-56 (c) have been met. In our de novo review of the grant
      [or denial] of a motion for summary judgment, we must view the
      evidence, and all reasonable inferences drawn therefrom, in the light
      most favorable to the nonmovant.

(Citations and punctuation omitted.) Cowart v. Widener, 287 Ga. 622, 624 (1) (a)

(697 SE2d 779) (2010). See also Morgan Enterprises, Inc. v. Gordon Gillett Business

      remittitur. If, however, such portions are not consistent with this Court’s
      ruling, the Court of Appeals must enter an appropriate disposition
      concerning those portions that reconciles them with this Court’s ruling.

Shadix v. Carroll County, 274 Ga. 560, 563 (1) (554 SE2d 465) (2001). See also
Rollins IV, supra at 166, n. 8.

                                           4
Realty, Inc., 196 Ga.App. 112, 112 (395 SE2d 303) (1990) (defining standard on

cross-motions for summary judgment).

      This case turns on claims of breach of fiduciary duty and breach of trust. “It is

well settled that a claim for breach of fiduciary duty requires proof of three elements:

(1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage

proximately caused by the breach.” (Citations omitted.) Griffin v. Fowler, 260 Ga.

App. 443, 445 (1) (579 SE2d 848) (2003). “A breach of trust is a violation by the

trustee of any duty which as trustee he owes to the beneficiary.” (Citation omitted.)

Citizens and Southern Nat. Bank v. Haskins, 254 Ga. 131, 134 (I) (1) (327 SE2d 192)

(1985).

      As outlined by the Supreme Court, the facts are as follows:

      Each of the four [P]laintiffs/appellees is (or was until age 45 when the
      trust assets were transferred to him or her) the beneficiary of a
      Subchapter S-Trust established by their grandfather O. Wayne Rollins
      in 1986. Defendant Gary Rollins (Wayne’s son and plaintiffs’ father) is
      the trustee of these S-Trusts. Although at least two of the S-Trusts have
      now terminated as a result of the age of the beneficiary, and the assets
      of those trusts have been transferred to the individual beneficiary, for
      simplicity’s sake we will refer to the interests originally held in these
      trusts as the S-Trusts.

                                           5
In 1968, in what became an ongoing effort to establish a network of
entities to preserve and convey assets to his heirs, Wayne first
established the Rollins Children’s Trust (“RCT”), and each of his
grandchildren are the beneficiaries of RCT. Wayne created several
family entities to hold RCT’s assets, including Rollins Holding
Company (“RHC”) and LOR, Inc. (“LOR”). The S-Trusts hold minority
interests in these family entities, and defendants Gary Rollins and his
brother Randall Rollins are the managers of these entities. Later, in
1988, Wayne created a general partnership, Rollins Investment Fund,
known as RIF. Each plaintiff’s S-Trust is a partner in RIF, along with
the S-Trusts of the other grandchildren; Gary, Randall, and the Estate of
O. Wayne Rollins are also partners. Upon reaching age 45, a
beneficiary’s S-Trust is terminated and the beneficiary becomes a
partner in RIF. As a result of this structure, most of the family-owned
assets in dispute in this case are ultimately held in the RIF partnership
and, until a plaintiff reaches age 45, each plaintiff’s partnership interest
is held in trust. The original partnership agreement authorized only pro
rata distributions of cash flow to the partners “at such times as the
[p]artners shall reasonably decide” to make distributions.

Wayne died in 1991. In 1993, the RIF partnership agreement was
amended so that, inter alia, for the first time since its inception, non-pro
rata distributions could be made in the form of redemptions from a
partner’s capital account. The amendment also changed the structure of
the partnership by vesting exclusive authority to manage the partnership
and make distribution decisions in Gary and Randall, who were named
managing partners. . . .

                                     6
      Gary and Randall contend that the primary purpose of this amendment
      was to permit Wayne’s estate to redeem assets to fulfill a charitable
      pledge in a manner that permitted the remaining partners to avoid capital
      gains taxes on the assets that were liquidated. Several years after this
      amendment, Gary and Randall created a distribution program whereby
      the two of them, in their capacities as RIF managing partners, may
      authorize non-pro rata distributions from the partnership capital
      accounts of the S-Trusts, or directly to the partnership accounts of the
      grandchildren if their S-Trusts have terminated by virtue of their age,
      based upon a formula that includes a personal code of conduct for
      eligibility. Gary and Randall also created several new family entities
      controlled by them and funded by RCT assets. Gary and Randall
      contend these new entities were established primarily for the purpose of
      estate planning for future generations and also to minimize tax liability.

Rollins IV, supra at 162-163.

      1. We first address the questions of whether Gary and Randall, acting as

partners, breached their applicable duties when they executed the RIF amendment;

and whether Gary, acting as a trustee of his children’s S-Trusts, breached his trustee-

level duties when he voted on behalf of the S-Trust partners to execute the

amendment. See Rollins IV, supra at 170-171 (1) (c) (i).4

      4
         Because the arguments in this case have evolved somewhat over its history,
it is important to note that supplemental briefs, while useful to the Court, may not be
used to expand the issues beyond those identified in the original enumerations of

                                          7
       Specifically, the Plaintiffs argued that in 1993, Gary and Randall executed a

“unilateral” amendment to the RIF partnership agreement, which, as noted above,

allowed non pro rata redemptions from partners’ capital accounts, named Gary and

Randall as managing partners, and gave them exclusive authority to manage the

partnership and make distribution decisions. As the Supreme Court noted, “[t]his

amendment to the partnership agreement is the catalyst around which all the disputes

in this case revolve.” Id. at 163.

       (a) Gary’s actions as trustee of his children’s S-Trusts. The Supreme Court

held that in voting for the amendment as a trustee for the Plaintiffs’ S-Trusts, Gary

is to be held to the applicable duty a trustee owes to beneficiaries, in light of the terms

of the trust instrument and the Settlor’s intent. Rollins IV, supra at 171-172 (1) (c) (i).

Because fact questions remain, we find that the trial court erred in granting summary

judgment on this point.

       Georgia trust law requires trustees to “administer the trust[s] solely in the

interests of the beneficiaries[,]” OCGA § 53-12-246 (a), and imposes upon them a

error. Blockum v. Fieldale Farms Corp., 271 Ga. App. 591, 592 (1) (610 SE2d 82)
(2005).

                                            8
duty of impartiality unless the “trust instrument clearly manifests an intention that the

trustee shall or may favor one or more of the beneficiaries[.]” OCGA § 53-12-247.

      Evaluating this question in light of the trust instrument and the Settlor’s intent,

our law is clear that a trustee has a duty to exercise discretionary powers in good

faith. OCGA §§ 53-12-7 (a) (4), 53-12-260. Further, “[n]o provision in a trust

instrument shall be effective to relieve the trustee of liability for a breach of trust

committed in bad faith or with reckless indifference to the interests of the

beneficiaries.” OCGA § 53-12-303 (a). As noted above, each beneficiaries’ S-Trust

is or was a partner in RIF. When a beneficiary reaches age 45, his or her S-Trust

terminates, and the beneficiary him- or herself becomes a partner in RIF. Rollins IV,

supra at 162-163. Thus, under the original RIF agreement, when each beneficiary

reached the age of 45 and became an RIF partner, that beneficiary would have had a

say in any distribution plan.5

      When Gary and Randall amended the RIF, they concentrated all voting power

in themselves and removed it from the beneficiaries, putting themselves exclusively

in charge of non pro rata distributions. The amended RIF agreement provides that the

      5
        The original RIF partnership agreement provided that “‘Cash Flow’ for any
year . . . shall be distributed to the Partners at such times as the Partners shall
reasonably decide, pro rata to each Partner’s interest.” (Emphasis supplied.)

                                           9
partnership “intends to make periodic distributions of cash to the Partners at such

times, in such amounts, and among the Partners in such proportions as the Managing

Partners may determine in their sole and absolute discretion.” (Emphasis supplied.)

The amendment also provides that the managing partners, Gary and Randall, “shall

have complete and exclusive authority to manage and conduct the Partnership’s

business and affairs. No other Partner shall participate . . . or have any right or

authority[.]” (Emphasis supplied.) As the Supreme Court noted, the Plaintiffs’ S-

Trusts, whose partner interests Gary voted to amend the RIF agreement, granted

broad discretion to Gary as trustee. He was able

      to do all things . . . as may be deemed necessary and proper, including
      . . . [t]o retain and carry on any business in which the trust acquires an
      interest, . . . to join with other owners in adopting any form of
      management for any business or property in which the trust may have an
      interest, [and] to become or remain a partner, general or limited, in
      regard to any such business or property . . .

Rollins IV, supra at 169 (1) (b) (ii) (citing the S-Trust indenture). The Supreme Court

has noted that a trustee’s duty is to administer the trust in accordance with its terms

and purposes. Hasty v. Castleberry, 293 Ga. 727, 733 (3) (749 SE2d 676) (2013). So,

although there can be no debate that Gary as trustee had the power to agree to an

                                          10
amendment of the RIF partnership on behalf of the S-Trusts, this does not foreclose

the requirement under general trust law that Gary, in his role as trustee, had to do so

in good faith and consistent with the trust’s terms and purposes.

      “Notwithstanding the breadth of discretion granted to a trustee in the trust

instrument, including the use of such terms as ‘absolute,’ ‘sole,’ or ‘uncontrolled,’ the

trustee shall exercise a discretionary power in good faith.” OCGA § 53-12-260

(emphasis supplied). The trust instrument at issue here does not use such terms,

though it does grant the trustees the power to adopt “any form of management.” See

also Harp v. Pryor, 276 Ga. 478, 479 (578 SE2d 424) (2003) (“Generally, it is not

permitted for a fiduciary to be in a position where his interests might conflict with

that of a beneficiary”) (citation omitted).

      The Plaintiffs point to Gary and Randall’s post-amendment execution of a

“Unanimous Consent of the Managing Partners of Rollins Investment Fund to Action

Without a Meeting,” in which they decided to distribute $9 million to “certain

partners in RIF.” The Plaintiffs contend that neither they nor their S-Trusts received

any part of this distribution; that the money was distributed to Randall’s children,

who did not sue; and that absent the amendment, they would have been entitled to

these and other distributions pro rata. They also contend that by dismantling the

                                           11
Settlor’s pro rata structure, Gary and Randall created a conflict of interest under

which they could favor themselves and others over the Plaintiffs when making

distributions from RIF. They point out, for example, that in 2009, S-Trust

distributions between partners varied widely, including a $1 million distribution to

Gary, while plaintiff Wayne Rollins’s S-Trust received nothing.

      Gary and Randall counter that the agreement was amended “with expert legal

advice and assistance from King & Spalding” to provide for non pro rata distributions

so that the estate of O. Wayne Rollins, which was a partner, could redeem stock to

fulfill a charitable pledge. They contend that the amendment’s purpose was to

minimize capital gains taxes for all partners and to allow them to make distributions

to the beneficiaries’ S-Trusts but not their own. They also contended that, following

the amendment, they made a significantly greater proportion of distributions from RIF

to the Plaintiffs than they have taken for themselves.

      In assessing Gary’s intent at the time the amendment was made, a jury would

look not just at the bare language of the amendment itself and Gary’s use of his

authority in making it, but also at the subsequent fruits of that amendment and what

they reveal about Gary’s intent at the time he executed the amendment. For example,

Gary and Randall later implemented a code of conduct which applied to the

                                         12
beneficiaries, but not to Gary and Randall. This code conditions distributions –

whether pro rata or not – from various entities on the beneficiaries’ adherence to

behavioral strictures. As Gary testified, he and Randall made non pro rata

distributions from RIF in which they sometimes gave money to themselves but not

to the Plaintiffs’ S-Trusts. Gary further acknowledged telling the Plaintiffs, in relation

to the instant lawsuit, “[a]ny litigation and there will be no distribution.” Gary and

Randall also caused formerly marketable assets to be invested in illiquid family

entities and altered the power structure of RIF such that the beneficiaries lost the

right, granted in the original amendment, to vote their own interests once they turned

45. In depositions, Gary acknowledged wanting to lock up trust assets and saying that

the Plaintiffs were “not going to get the assets that are in this trust” in reference to the

S-Trusts and “any” other trust in which Plaintiffs had an interest. Further, the RIF

amendment limited Gary and Randall’s liability in their new roles as managing

partners to a greater extent than under the original RIF’s partnership liability

standard. For example, the original RIF agreement limited each partner’s liability to

the partnership only for acts within the scope of authority conferred by the

agreement, whereas the amended RIF agreement limits the managing partners’

liability to both the partnership and the individual partners.

                                            13
      From these facts, a jury could find that Gary and Randall acted against the

interests of the Plaintiffs in bad faith, and even in an arbitrary or retaliatory manner.

A jury could believe that differential distributions indicated a conflict of interest, and

that the Plaintiffs were harmed not just by loss of access to assets but also by a loss

of voting rights and power that would have accrued when they turned 45. As Gary

and Randall sought “expert legal advice and assistance from King & Spalding” in

their quest to amend the partnership agreement, a jury could decide that they had both

the time and means to structure the amendment in an attempt to disguise improper

motives.

      As the Revised Trust Code and the common law agree, ... a court may
      interfere with an exercise of discretion by a trustee only if that discretion
      is ‘infected with fraud or bad faith, misbehavior, or misconduct,
      arbitrariness, abuse of authority or perversion of the trust, oppression
      of the beneficiary, or want of ordinary skill or judgment.’

(Emphasis supplied.) McPherson v. McPherson, 307 Ga. App. 548, 552 (1) (b) (705

SE2d 314) (2011), citing Haskins, supra at 142 (II) (9). For example, our Supreme

Court has determined that a trial court had the authority to intervene in the

administration of a trust where the primary trust purpose was to provide for the

beneficiary’s welfare, but the trustees arbitrarily limited support payments because

                                           14
they disliked the beneficiary’s wife and wanted to preserve the corpus for residual

beneficiaries. Citizens & Southern Nat. Bank v. Orkin, 223 Ga. 385, 390-391 (1) (156

SE2d 86) (1967). See also Wachovia Bank of Ga., N. A. v. Namik, 275 Ga. App. 229,

234 (3) (b) (620 SE2d 470) (2005) (bad faith is not merely bad judgment or

negligence, but imports, inter alia, some “moral obliquity” and breach of duty through

a motive of interest or ill will).

       On the other hand, Gary and Randall presented testimony that there were

legitimate bases for the RIF amendment’s provision for non pro rata distributions that

related to tax advantages and/or liability and to fulfill a charitable pledge, and that the

concentration of management power was a benefit to their descendants. Again, those

decisions were supposedly made with expert advice from King & Spalding,6 and in

considering this and other factors, a jury could find that Gary and Randall made every

possible effort to act appropriately, with proper motives, and in the utmost good faith.

Namik, supra. Because fact questions exist, we again find that the trial court erred in

its summary judgment decision.

       6
        In volunteering information about the advice they received from King &
Spalding, and also from Arthur Andersen, in connection with certain relevant
transactions, it is unclear to this Court if the Defendants mean to waive or have
waived attorney-client and accountant-client privilege, thus making such information
discoverable at trial. This issue remains for the trial court to resolve.

                                            15
      (b) Gary and Randall’s decision, as individual RIF partners, to vote in favor

of the amendment. OCGA § 14-8-18 provides that “[t]he rights and duties of the

partners in relation to the partnership shall be . . . subject to any agreement between

them[.]”

      The original RIF partnership agreement states that it may be amended with the

“consent of all Partners,” and it was amended through a unanimous vote of the

partnership interests of Gary and Randall, and their voting, as trustees, of the

beneficiaries’ S-Trust partnerships and the O. Wayne Rollins’s estate partnership.7

See Rollins IV, supra at 170 (c). The original partnership agreement also authorizes

“[a]ny one of the Partners . . . to execute documents on behalf of the Partnership.”

Additionally, the original partnership agreement gives the partners the authority and

discretion to “deal with themselves or one another in the conduct of the Partnership’s

business and affairs and no prohibition or restriction shall be deemed to be placed

thereon” and to “take any actions . . . that the Partners deem reasonably appropriate

to carry out the objectives of the Partnership.” While the agreement does not

specifically list “objectives,” it states, in pertinent part, that the “character of the

      7
        The beneficiaries, as individuals, initially were not partners in RIF. Rather,
each S-Trust was an RIF partner, and the trustee had the authority to vote on behalf
of his children’s S-Trusts.

                                          16
business of the Partnership shall be to make, acquire, hold, manage, assign, convey

and dispose of investments on behalf of the Partners[.]” The agreement also states

that the partners are not liable to the partnership for any acts within the scope of their

authority under the agreement, other than their own acts of “malfeasance, gross

negligence or intentional misrepresentation.” As the Supreme Court found,

       any duty owed by Gary and Randall [in their role as RIF general
       partners] to disclose the terms and consequences of the amendment to
       the other RIF partners was owed to the S-Trusts and not the
       beneficiaries themselves. Since Gary is the trustee of each of his
       children’s S-Trusts he would have owed this partnership duty of
       disclosure to himself as the representative authorized to act and make
       decisions on behalf of each of these S-Trust partners.

(Footnote omitted.) Rollins IV, supra at 172 (1) (c) (ii).

       For this reason, and also given the terms of the original agreement, there can

be no debate that Gary and Randall had the power to agree, as partners, to the

amendment of the RIF partnership on behalf of the S-Trusts, and no fact question

remains as to whether they are liable to the partnership itself in this regard, as the

Plaintiffs acknowledge. However, while the original partnership agreement limits an

individual partner’s liability to “the Partnership,” it does not limit a partner’s liability

to his or her individual partners as does the amended agreement. See Rollins IV, supra

                                            17
at 173 (1) (c) (ii), n. 16. And, although the duties of partners are subject to anything

on which they agree, OCGA § 14-8-18, partners still must act toward other partners

with the “utmost good faith and with the finest loyalty.” (Citations and punctuation

omitted.) AAF-McQuay, Inc. v. Willis, 308 Ga. App. 203, 211 (1) (c) (707 SE2d 508)

(2011).

      As we determined in Division (1) (a), above, fact questions remain as to

whether Gary acted in good faith in executing the amendment in his role as trustee.

Even though in this iteration of the claim Gary has donned his partner cloak,8 logic

of course dictates that those same fact questions would arise in his decision to execute

the amendment as an RIF partner. As discussed above, the Supreme Court has

determined that Gary owes partnership duties only to the Plaintiffs’ S-Trusts and

owes duties of disclosure only to himself as trustee. Unsurprisingly, the record

contains no indication that Gary has taken any action as trustee on behalf of the S-

Trusts in challenging the RIF amendment. The Plaintiffs argue that, notwithstanding

this determination, as beneficiaries of trusts that are partners in RIF, they may sue

      8
       Compare Saltzman v. Commr. of Internal Revenue, 131 F.3d 87, 90 (I) (2d
Cir.1997) (“A trustee cannot alter his legal position by changing his cloak”) (citation
and punctuation omitted).

                                          18
Gary and Randall directly for violation of their fiduciary duties because they have no

one else to protect their rights.9

       As an initial matter, to the extent that certain Plaintiffs have reached age 45 and

become partners, there would of course be a partnership duty of good faith owed

directly to those beneficiary-partners, and no longer to their S-Trusts. As a result, in

this context and for the reasons outlined above, we find that issues of fact remain and

the trial court erred.

       As for those Plaintiffs who have yet to reach age 45, as the Plaintiffs argue,

there still might be a right of action. See Restatement (Second) of Trusts § 282 (2)

(1959) (“If the trustee improperly refuses or neglects to bring an action against the

third person, the beneficiary can maintain a suit in equity against the trustee and the

third person.”) There is support for this idea in Georgia law. “As a general rule, where

the legal title is in a trustee, such trustee is the proper person to maintain or defend

actions involving the trust estate. An exception to this rule is where the trustee refuses

to act.” (Citations omitted.) Stout v. Mass. Mut. Life Ins. Co., 183 Ga. 649, 658 (3)

(189 SE 248) (1936). See also Field v. Mednikow, 279 Ga. App. 380, 381 (1) (a) (631

SE2d 395) (2006) (“[W]here the executor refuses to pursue a claim by the estate to

       9
           Indeed, the Plaintiffs sued Gary and Randall in their individual capacities.

                                            19
set aside an allegedly invalid deed, the beneficiaries of the estate may assert the

claim”).

      However, the trial court never has ruled on the issue of whether the trustee

refused or failed to act on the Plaintiffs’ behalf or on whether the individual

beneficiaries must show or have been relieved of showing a failure to act in the face

of any demand for action made upon the trustee. Nor did the trial court’s order

discuss any statute of limitation issues that may exist. See Mayfield v. Heiman, 317

Ga. App. 322, 325 (1) and 329 (4) (b) 730 SE2d 685) (2012). As a result, we must

remand this matter to the trial court for consideration.

      2. The Plaintiffs also argue that the trial court erred in failing to find that Gary

and Randall breached their fiduciary duties when they implemented a “false and

misleading distribution scheme” with no basis in any trust instrument. The Plaintiffs

argue that the “scheme” conditioned financial distributions on the Plaintiffs’

adherence to a behavioral code of conduct and, thus, allowed the trustees to

manipulate income distributions.

                                           20
      The distributions came from the Plaintiffs’ own trust assets, according to

Randall’s testimony.10 Those accounts are assets of each Plaintiff’s S-Trust, if he or

she has not yet reached age 45. As we noted in Division (1) (a), above, Gary and

Randall did not subject themselves to this code of conduct. As a result, under the RIF

amendment allowing non pro rata distributions, Gary and Randall sometimes gave

themselves distributions through RIF, but did not make distributions to the Plaintiffs’

S-Trusts. As the Supreme Court determined, Gary and Randall implemented these

conduct-based criteria in their capacity as managing partners of the amended RIF

partnership agreement and, thus, must be held to the partnership standard of duty. See

Rollins IV, supra at 173-174 (2).

      The amended RIF agreement gives Gary and Randall as managing partners

“complete and exclusive authority” to manage and conduct the partnership’s business

and affairs. The amendment also gives Gary and Randall discretion to make periodic

cash distributions to partners at such times and in such amounts as they determine.

However, even assuming (which we do not, as outlined in Division (1)) that Gary and

      10
        In deposition testimony, Randall was asked, “[E]ven though you were taking
money from the assets held in trust for my clients, you and Gary were imposing
requirements on these distributions that did not have any basis in the trust
instruments, correct?” To which Randall replied, “That’s correct.”

                                          21
Randall were authorized to amend the RIF agreement such that a code of conduct

could be utilized to facilitate non pro rata distributions, they still would be required

under the partnership standard of duty to implement such a code in good faith. They

also would be required to make any distribution decisions, even discretionary ones,

in good faith. As OCGA § 23-2-58 provides, in the relationship between partners,

“the law requires the utmost good faith[.]” See AAF-McQuay, supra at 211 (1) (c)

(partners owe one another duties of the “utmost good faith” and “finest loyalty”)

(citation and punctuation omitted).

      The Plaintiffs argue that the code of conduct evidences bad faith because it

applies only to the grandchildren-beneficiaries and not to Gary and Randall. The

Plaintiffs also argue that Gary and Randall showed bad faith in using the code to

control the Plaintiffs and prevent them from accessing their own trust assets. As an

example of how Gary and Randall attempted to control their behavior, the Plaintiffs

cite to Gary’s deposition testimony, where he acknowledged telling them, in relation

to the instant lawsuit, “[a]ny litigation and there will be no distribution.” They also

point to a conflict of interest, given that the code of conduct has no basis in any trust

instrument and thus had to be implemented at the partnership level in order to skirt

trust requirements.

                                           22
       Gary and Randall present no argument as to how the code of conduct served

the partnership. See Solomon v. Solomon, 2 Ga. 18, 25 (1) (1847) (partners are bound

to use partnership property for the benefit of the partnership interest). They instead

focus their contentions on the fact that the code of conduct, which required

attendance at family meetings and engagement in meaningful pursuits such as full-

time work or full-time parenting, applied equally to all beneficiaries, not just the

Plaintiffs. They also argue that they were not required to make any distributions from

RIF.

       The Plaintiffs clearly have provided evidence that they do not have the same

access to partnership assets as do Gary and Randall. See Bennett v. Smith, 108 Ga.

466, 468 (34 SE 156) (1899) (“As a general rule, one partner is as much entitled to

possession of the assets of the firm as the other”). Again, partners have a duty to act

toward other partners with loyalty and good faith. See AAF-McQuay, Inc., supra. In

the civil context, our appellate courts have determined that “[b]ad faith is not simply

bad judgment or negligence, but it imports a dishonest purpose or some moral

obliquity, and implies a conscious doing of wrong, and means a breach of a known

duty through some motive of interest or ill will.” (Footnote and punctuation omitted.)

Namik, supra at 234 (3) (b). See generally Vickers v. Motte, 109 Ga. App. 615, 620

                                          23
(137 SE2d 77) (1964) (bad faith “contemplates a state of mind affirmatively operating

with a furtive design” and while it “may not always denote malicious intent to injure,

the term should be construed within the context of the subject matter involved”).

       As the Supreme Court determined, in contexts such as this, Gary and Randall

owe or owed no partnership duty to the Plaintiffs where only the Plaintiffs’ trust

accounts rather than the Plaintiffs themselves held partnership status, and that Gary,

as trustee of his children’s trusts, owed partnership duties only to himself. See Rollins

IV, supra at 172 (1) (c) (ii). However, as we determined in Division (1) (b), given that

Gary allegedly has not taken action on behalf of the Plaintiffs’ S-Trust partners and

that the Plaintiffs may have no other recourse to protect their interests, they might be

able to pursue their claims as beneficiaries. See Restatement (Second) of Trusts § 282,

supra; Stout, supra; Field, supra. Again, for those Plaintiffs who have not reached age

45, the trial court must determine whether the trustee refused or failed to act on their

behalf or whether the individual beneficiaries must show or have been relieved of

showing a failure to act in the face of any demand for action made upon the trustee.

For those Plaintiffs who are 45, they are entitled to pursue said claims directly as

partners.

                                           24
      Even evaluating Gary and Randall’s actions under the more lenient partnership

standard (as opposed to the more stringent trustee standard),11 a jury could find

evidence of bad faith. A jury could find evidence of bad faith because Gary and

Randall created a code of conduct that applied only to the grandchildren-

beneficiaries, did not apply to Gary and Randall, and facilitated the Plaintiffs’ loss of

access to their own assets,12 and because said code of conduct arguably did not

promote any partnership interest. A jury also could find evidence that Gary and

Randall knew they owed the Plaintiffs a duty of good faith, but exercised a “motive

of interest” in choosing to control Plaintiff’s assets and make disparate distributions

      11
         We note that the original partnership agreement did not permit non pro rata
distributions, although the amended agreement under which the code of conduct was
implemented does. We also note, as discussed elsewhere in this opinion, that the
amended RIF agreement somewhat diminishes Gary and Randall’s liability for their
partnership decisions.
      12
          The Plaintiffs contend broadly that the trial court erred in ruling that they
failed to show actual harm to support a claim for breach of fiduciary duty. The trial
court specifically ruled on this point only in the context of the imposition of the code
of conduct on S-Trust distributions. Although Defendants argue otherwise, because
a jury question exists as to whether Gary and Randall acted in good faith, we cannot
say that the Plaintiffs would suffer no harm when they are denied access to assets for
extended periods of time, or in perpetuity, and where they must resort to protracted
litigation to attempt to obtain access to those assets. See Glisson v. Freeman, 243 Ga.
App. 92, 104 (1) (532 SE2d 442) (2000). See also Ringer v. Lockhart, 240 Ga. 82, 84-
85 (239 SE2d 349) (1977).

                                           25
through a behavioral code they did not apply to themselves. See Namik, supra. On the

other hand, if a jury finds that Gary and Randall acted in good faith to implement the

amended RIF agreement permitting non pro rata distributions, they also could find

that the code of conduct was implemented in good faith because it, at least facially,

applies equally to all the grandchildren-beneficiaries. Either way, a question of fact

remains for the jury.

      3. The Plaintiffs allege that they have been harmed by various decisions Gary

and Randall made in their management of and distributions from the family entities

RHC and LOR. They argue, inter alia, that Gary and Randall “locked up” control over

assets, inappropriately diverted assets between family entities, saddled the Plaintiffs’

interests with debt, and inappropriately retained and distributed assets. .13 See Rollins

IV, supra at 167 (1) (a).

      As the Supreme Court has noted, the Plaintiffs’ S-Trusts hold minority interests

in these family entities. In the specific context at issue here, Gary and Randall are

held to a “corporate level fiduciary standard when acting as directors,” Rollins II,

      13
          We find no enumeration, argument, or record citations in the Plaintiffs’
original appellate brief raising the issue of retained earnings in LOR. Thus, we do not
address this issue. Blockum, supra at 592 (1).

                                           26
supra at 715 (2), and in regards to their management of the corporate family entities

held in the trusts. Rollins IV, supra at 167-168 (1) (a).

      A corporate officer or director owes to the corporation and its
      stockholders a fiduciary or quasi-fiduciary duty, which requires that they
      act in utmost good faith. Directors and officers in the management and
      use of corporate property in which they act as fiduciaries and are
      trustees are charged with serving the interests of the corporation as well
      as the stockholders.

(Citation and punctuation omitted.) Enchanted Valley RV Resort, Ltd. v. Weese, 241

Ga. App. 415, 423 (5) (526 SE2d 124) (1999). See also OCGA §§ 14-2-830 (a) (1);

14-2-842 (a) (1). Further, directors owe the corporation and stockholders three

primary duties: to exercise only such “corporate powers” granted by the corporation’s

own rules, to exercise reasonable care, and to provide a duty of “undivided good faith

since they are fiduciaries and trustees of their corporation and stockholders.”

(Citations and punctuation omitted.) Milton Frank Allen Publications, Inc. v. Ga.

Assn. of Petroleum Retailers, Inc., 224 Ga. 518, 527-528 (4) (162 SE2d 724) (1968).

      In arguments that overlap in both presentation and discussion and are thus

somewhat unclear and contradictory, the Plaintiffs contend that distributions

stemming from these family entities were subjected to the code of conduct, resulting

                                          27
in “wildly varying distributions for each beneficiary.” However, they also

acknowledge that Gary and Randall “could not make disparate dividends from LOR

and RHC” and so “simply slashed dividends from these corporate entities and

engaged in transactions to divert income from these entities to other entities they

control[.]” They contend that Gary and Randall used the code of conduct and the

amendment allowing non pro rata distributions through RIF as a vehicle for reducing

the LOR and RHC pro rata dividends by more than 90 percent, while pumping up

their own distributions by diverting assets through the non pro rata system allowed

by the RIF amendment. The Plaintiffs also argue that they were misled by Gary and

Randall’s claims of being “trustees” who could alter the distribution systems of

family entities, including LOR, that were not trusts based on a code of conduct.

      The “corporate powers” as laid out in the RHC Articles of Incorporation give

the Board of Directors the power to make distributions from “capital surplus,” entitle

the holders of various classes of stock to receive dividends in cash or other property

“when and as declared by the Board,” which included Gary and Randall, “on such

dates as may from time to time be determined by the Board[.]” LOR’s articles of

incorporation and various amendments contain similar provisions.

                                         28
       Thus, to the extent that the Plaintiffs are claiming that Gary and Randall have

reduced the pro rata dividends paid through LOR and RHC compared with prior

years, or have retained earnings, we find no breach of fiduciary duty and no fact

questions because Gary and Randall had authority through the corporate bylaws to

make those decisions. However, to the extent that the Plaintiffs argue that Gary and

Randall subjected the Plaintiffs’ pro rata distributions to the code of conduct (for

which there is no provision in LOR or RHC), a fact question remains for trial.14

       4. The Plaintiffs argue that the trial court erred in failing to grant their motion

for summary judgment on the issue of whether Gary and Randall breached their

fiduciary duties when they executed RHC and LOR shareholder agreements that

prohibit shareholders from selling or disposing of their shares to those outside the

family without company consent. In 1999, Gary executed the RHC and LOR

       14
          On this point, a jury could consider Gary and Randall’s representation of
themselves as trustees of trusts that did not exist in order to impose conduct-based
criteria on the Plaintiffs’ money as evidence of bad faith. “Good faith . . . requires that
the stockholders be treated fairly[.]” Comolli v. Comolli, 241 Ga. 471, 474 (1) (246
SE2d 278) (1978) (in case involving directors’ use of corporate funds to purchase
corporation’s own stock as means of depreciating minority shareholder’s interests and
freezing his investment). See generally Nalley v. Langdale, 319 Ga. App. 354, 365
(2) (734 SE2d 908) (2012) (where a fiduciary has falsely represented information
related to a transaction, “whether that representation was made negligently,
fraudulently, or in good faith remains for the jury to resolve”).

                                            29
shareholder agreements at issue on behalf of the Plaintiffs’ S-Trusts in his capacity

as trustee, and we evaluate his actions under a trustee-level standard of fiduciary duty.

See Rollins IV, supra at 170 (1) (b) (ii) and n. 11.

      The Plaintiffs allege that Gary and Randall breached their fiduciary duty as

directors in “locking up” or inhibiting the alienability of the stock, which passed or

will pass to the beneficiaries “free of trust” when they reach age 45.

      The S-Trust agreement authorizes trustees to “do all things and to execute such

instruments as may be deemed necessary and proper[,]” to “agree to or take any other

action in regard to any . . . proceeding affecting any stock,” and to “retain and carry

on any business in which the trust acquires an interest . . . [and] to join with other

owners in adopting any form of management for any business or property in which

the trust may have an interest[.]”

      It seems clear that under the broad discretion granted to him by the S-Trust,

Gary had the authority to execute such shareholder agreements. However, a jury

could find that Gary did so in bad faith to prevent the Plaintiffs from selling their

stock if they wished to do so. On the other hand, the Defendants presented evidence

that the purpose of these amendments was to protect the S-Corporation status of RHC

and LOR, and to keep assets, including Rollins Inc. stock, in the family, which the

                                           30
jury could find to be legitimate goals exercised in the utmost good faith. Thus, a fact

question remains and summary judgment was improperly granted as Gary’s actions

on this point.15

      5. In the context of their enumerations and arguments related to the

management of the family entities, the Plaintiffs also contend that the trial court erred

in failing to find that the trustees breached their fiduciary duties when they replaced

marketable securities in RCT with illiquid investments in debt-ridden entities created

and controlled by Gary and Randall. The RCT Trust Indenture lists Gary, Randall,

and Tippie as trustees. See Rollins IV, supra 168 (1) (b) (i).

      Specifically, the Plaintiffs argue that in 2002, $150 million in liquid assets

were transferred from RCT to RCT, LLC, a new entity controlled by Gary and

Randall for the purpose of ensuring that Gary and Randall maintained control of all

liquid marketable securities even after they were distributed to the beneficiaries. They

argue that marketable stock was replaced with partnership interests that hold only the

right to receive debt payments from the Plaintiffs themselves through their S-Trusts.

      15
         The Defendants point out that three of the four Plaintiffs, Glen, Ellen, and
Nancy Rollins, signed the LOR amendment in their capacities as trustees for a
separate trust. However, as they did not sign in their capacities as beneficiaries, we
do not address this issue further.

                                           31
They argue that Gary and Randall “locked up” Rollins, Inc. stock originally held in

RCT by transferring it to entities they control.

      The Plaintiffs argue that the trustees knew these restructurings would cause

them each to lose more than $14.5 million in present-day value from their RCT

interests. The Defendants point to record evidence that the Plaintiffs participated in

the restructurings of which they now complain, and that the purpose of those

transactions was to minimize tax liability to future generations. They have provided

evidence that the estate tax burden on the fourth and fifth generations has been

reduced from 50.23 percent to 1.88 percent, generating an estimated value of $58

million to the fourth generation (which includes the Plaintiffs’ children) and $131

million to the fifth generation.

      The RCT indenture provides in pertinent part16 that

      The Trustees shall pay over to any one or more of my said grandchildren
      [including the Plaintiffs in the instant case] a part, all or none of the net

      16
         The trust indenture provides for specific distributions of principal upon the
beneficiaries reaching their 25th and 30th birthdays. The record shows that the
Plaintiffs already had received those distributions by 2002, the time of the transaction
of which they complain, though they argue that they received illiquid assets. The trust
provides that a final distribution is to occur when the trust terminates on the date of
death of the last grandchild who was living when the trust was created on February
1, 1968. This final contingency has yet to occur.

                                           32
      income from said trust as will be appropriate, in the sole discretion of
      my said Trustees for the comfortable support and maintenance or
      education of said grandchildren. The Trustees need not apportion said
      income in equal amounts to said grandchildren and may refrain from
      paying any amounts whatsoever to any of such grandchildren.

(Emphasis supplied.) The trustees also are authorized to sell, convey, or dispose of

any trust property, and the power to sell or retain stocks or other properties. The

indenture gives the trustees the “power to do all things which may be necessary or

proper to protect and preserve the trust estate” and to do “any and all things in

connection with such transactions as could be done by the Trustees if they owned the

trust property in their own right and for their own benefit.” Further, the trust provides

that in distributing income, “[t]ax factors may also be taken into consideration by the

Trustees to the end that Donor’s family as a whole shall be subjected to the least

practicable income and estate taxation.” (Emphasis supplied.)

      This last provision, authorizing the trustees to make management decisions

based on tax considerations for the entire Rollins family – not just the Plaintiffs –

when coupled with the trustees’ broad authority as granted in the indenture, negates

any possible fact question that could have arisen between the Plaintiffs’ contention

that they lost present-day value in their RCT assets, and the Defendants’ showing of

                                           33
significant tax savings to present and future generations. See generally Meyer v.

Citizens and Southern Nat. Bank, 677 F.Supp. 1196, 1202 (II) (B) (1) (M.D. Ga.

1988) (“The fact that losses were suffered does not prohibit a court from approving

the actions of a trustee”) (citation omitted.)17

      Trustees, of course, must administer a trust “in good faith, in accordance with

its provisions and purposes.” OCGA § 53-12-240 (b). They also must “exercise the

judgment and care of a prudent person acting in a like capacity and familiar with such

matters, considering the purposes, provisions, distribution requirements, and other

circumstances of the trust.” OCGA § 53-12-241. Given the broad powers granted to

the trustees as shown by the trust instrument, as cited above, and the clear intent of

the Settlor as shown by that trust instrument, see Griffith v. First Nat. Bank & Trust

Co., 249 Ga. 143, 146 (1) (287 SE2d 526) (1982), no fact question arises as to

whether the trustees’ actions were consistent with the authority granted to them in the

RCT indenture. Nor is there any fact question as to their good faith, again in the

      17
         As the Defendants point out, there is evidence that the Plaintiffs actually
participated in transactions about which they now complain, whereby certain
partnership interests held in the RCT were transferred to family entities, specifically,
RCT, LLC, and RCTLOR, LLC. We note that beneficiaries may be estopped from
complaining about alterations to which they agreed. See Clayton v. First Nat. Bank
of Atlanta, 237 Ga. 604, 604 (229 SE2d 346) (1976).

                                           34
context of the latitude of their authority under the indenture.18 The trial court did not

err.

       6. The Plaintiffs now argue that Gary and Randall also committed constructive

fraud and are liable for amending the RIF partnership agreement without their

knowledge or participation, and for suppressing material facts. See Rollins IV, supra

at 172-173 (1) (c) (ii). The Plaintiffs did not argue this point in their initial appellate

brief, so we do not address it here. See Blockum, supra at 592 (1).

       7. The Plaintiffs argue that, other than giving them an accounting of trust

assets, the trial court erred in granting summary judgment to the Defendants on the

other aspects of the Plaintiffs’ breach of trust claims. The Plaintiffs initially had

sought, inter alia, rescission, removal of the trustees, and appointment of a receiver.

Given our determinations in the instant opinion that certain fact questions remain for

jury resolution, the trial court would need to reassess these issues in light of a jury’s

determination as to whether or not Gary and Randall acted in good faith or breached

       18
         The Plaintiffs’ argument that Gary and Randall’s actions were inappropriate
because the third trustee, Tippie, was not involved in management decisions made at
the entity level does not succeed. The record shows that Tippie participated in the
vote to put RCT assets into RCT, LLC, and we find no requirement in the trust
indenture that all three trustees be involved in or make unanimous decisions related
to assets held within corporate entities held within the trust.

                                            35
their fiduciary duties or duties of trust. As a result, we remand these matters to the

trial court.19

       8. The Plaintiffs also argue that Gary and Randall breached their fiduciary

duties as trustees in seeking to implement the Rollins Perpetual Management Trust,

which was intended “to serve as the vehicle through which the governance of the

family and its assets is established in perpetuity.” However, as the Plaintiffs

acknowledge that they refused to sign the documents to implement this trust, we find

no breach of fiduciary duty. The trial court did not err.

       9. On remand, the Plaintiffs argue that Gary violated his trustee-level fiduciary

duties by failing to “generate income” for the S-Trusts.

       Although the parties argued this point on summary judgment, the trial court

ruled on the issue only in the context of how trust income was classified. The trial

court found that because the S-Trust indenture gave the trustees the authority to

classify money as either income or principal, the trustees had no duty to “maximize”

the income distributions and had breached no duty. Because the trust indenture gives

       19
          We recognize that our decision herein is different from the decision on this
point in Rollins I. However, in footnote 8 of Rollins IV, supra at 166, the Supreme
Court concluded we had chosen in Rollins III to reconsider our previous opinion in
its entirety upon remand, and further, the Supreme Court in Rollins IV vacated our
opinion in its entirety.

                                          36
the trustees the discretion to determine whether items should be charged or credited

to income or principal, the trial court’s decision on this point was correct.

      In the context of pure income generation, however, the trial court made no

ruling on whether the Defendants had a duty to maximize earnings or to generate

funds for the S-Trusts (regardless of whether those monies were later classified as

income or principal), or on whether the Defendants had breached any duty in this

regard. As a result, we remand this issue to the trial court for further consideration.

      10. Finally, the Plaintiffs argue that the trial court erred in failing to order a

judicial or third-party accounting and an accounting of the business entities held

within the trusts and controlled by the trustees.

      Trusts are peculiarly subjects of equity jurisdiction. OCGA § 53-12-6
      (a). Thus, in determining whether a trustee’s accounting is sufficient
      under a given set of circumstances, an appellate court must consider
      whether a trial court properly exercised its equitable discretion; and the
      decision of the trial court should be sustained where such discretion has
      not been abused. See Prime Bank v. Galler, 263 Ga. 286, 288 (4) (430
      SE2d 735) (1993); Estate of Hershel, 336 P.2d 571 (168 Cal.App.2d
      658) (1959) (whether trustee’s account is sufficiently detailed is matter
      committed to sound discretion of trial court). See also OCGA § 53-12-
      243 (e) (Ga.L.2010, pp. 579, 611) (“Nothing in this Code section shall
      affect the power of a court to require or excuse an accounting”).

                                          37
(Punctuation omitted.) Rollins II, supra at 713 (1). The trial court denied the

accounting request in the context of its decision denying the Plaintiffs’ other claims

on summary judgment. Given that our instant opinion has determined that some of

those issues are appropriate for jury resolution, the trial court would need to exercise

its discretion anew in light of the different circumstances now presented, and in light

of a jury’s decision on issues placed before them for resolution. We, thus, vacate the

trial court’s decision on the accounting issue and remand for further consideration in

light of any subsequent jury determination.

      Judgment affirmed in part, reversed in part, vacated in part, and case

remanded. Branch, J., concurs. Miller, P. J., concurs in the judgment only.

                                          38