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Wrede v. Carter

United States District Court, E.D. Tennessee, Knoxville

January 9, 2017

ELIZABETH M. WREDE, Plaintiff,
v.
WILLIAM E. CARTER, JR., and ALLISON LEE PILCHARD, Defendants.

          MEMORANDUM AND ORDER

          C. CLIFFORD SHIRLEY, JR. UNITED STATES MAGISTRATE JUDGE.

         This case is before the undersigned pursuant to 28 U.S.C. § 636(c), Rule 73(b) of the Federal Rules of Civil Procedure, and the consent of the parties, for all further proceedings, including entry of judgment [Doc. 12].

         Now before the Court is Defendant William Carter, Jr.'s Motion for Summary Judgment [Doc. 36] and Defendant Allison Lee Pilchard's Motion for Summary Judgment [Doc. 39]. The parties appeared before the Court on December 1, 2016, for a motion hearing. For the reasons explained below, the Court finds Defendant Carter's Motion for Summary Judgement [Doc. 36] to be GRANTED IN PART AND DENIED IN PART and Defendant Pilchard's Motion for Summary Judgement [Doc. 39] to be DENIED.

         I. BACKGROUND

         Unfortunately, this case involves a sibling dispute over the assets of their deceased mother. The relevant and undisputed facts are as follows:[1]

         Defendant Carter is the son of Mrya L. Kravetaz (“Grantor”) and Allison Pilchard and Elizabeth Wrede are the Grantor's daughters. [Doc. 38 at 1]. The Grantor settled the Mrya K. Kravetz Family Trust on February 16, 2004 (“Trust”). Id. Pursuant to the terms of the Trust, the Grantor had the right to amend, modify, or revoke the Trust Declaration during her lifetime in whole or in part “without the consent of any beneficiary and without giving notice to any beneficiary hereunder, by a writing signed and acknowledged by the Grantor, to be effective upon delivery to the Trustee.” [Doc. 38-1 at 14]. Upon the Grantor's death, the Trust Declaration “shall become irrevocable and not subject to amendment.” [Doc. 38-1 at 11]. The Grantor nominated Defendant Carter to serve as the First Alternate Successor Trustee of the Trust after her death. [Doc. 38-1 at 14]. Pursuant to Article IV of the Trust, after the Grantor's death and the payment of expenses of any last illness and funeral costs, “all of the personal property in the trust estate then in the possession of the successor trustee or contingent successor trustee shall be sold and all of the net funds of the sale shall be distributed by the trustee free of the trust to all of the contingent beneficiaries as named below share and share alike.” [Doc. 38-1 at 11]. Further, Article V provides as follows:

If any of the named beneficiaries desires to keep any personal property item of the trust estate, that beneficiary may do so by having the value of that personal property item deducted from that persons' share of the net funds of the estate. In the event that two or more beneficiaries desire the same item and they cannot agree on the price and/or who shall have said item, then that item shall be sold and the funds distributed in the estate.

[Doc. 38-1 at 12]. The parties are the contingent beneficiaries of the Trust. [Doc. 38-1 at 11]. Finally, the Trust Declaration states, “This Declaration of Trust shall be administered and interpreted in accordance with the laws of the State of California.” [Doc. 38-1 at 16].

         At the time she settled the Trust, the Grantor also executed the Last Will and Testament of Myra L. Kravetz (“Will”). [Doc. 38-1 at 96-97]. The Grantor nominated Defendant Carter as the Executor of the Will, and she devised and bequeathed her entire estate, whether real property or personal property, “to be held, managed, and disposed of in accordance with the provisions of” the Trust. [Doc. 38-1 at 96].

         Three days after she settled the Trust and executed the Will, the Grantor also signed a one-page document identifying certain items of tangible personal property (“Memorandum”). [Doc. 38-1 at 99]. Specifically, with respect to “Liz, ” the Memorandum states, “Remainder of contents in the home.” [Doc. 38-1 at 99]. The parties dispute as to whether the Memorandum is a valid document. The parties do not dispute, however, that the Trust Declaration does not reference any tangible personal property memorandum or direct the successor Trustee to follow any such memorandum. [Doc. 38 at 4].

         On December 17, 2014, the Grantor died from carbon monoxide toxicity which she suffered in a fire at her home in Knoxville. [Doc. 38 at 4]. The fire caused significant damage to the house and the tangible personal property found inside. Id. Between December 20 and 22, 2014, the Defendants and the Plaintiff's husband met at the house to view the damage and to begin to sort through the contents. Id. at 6. In addition, ServPro took various items of tangible personal property from the house into its possession in an effort to clean and salvage them. Id. at 7. An Allstate claims adjuster prepared an inventory of the items of tangible personal property from the house that could not be cleaned or salvaged and which would be paid as a casualty loss. Id.

         Later, Defendant Carter arranged to meet with ServPro at its facility in Knoxville on January 24, 2015, to receive the cleaned items of tangible personal property and distribute them among the contingent beneficiaries. Id. Defendant Carter contacted the Plaintiff via text message on January 14, 2015, and asked if she was available to meet and review the items of tangible personal property. Id. at 7-8. The Plaintiff agreed to the meeting. Id. at 8.

         Subsequently, however, on January 15, 2015, the Plaintiff became ill and entered the hospital. Id. The Plaintiff contacted a representative with ServPro on or about January 23, 2015, and informed the representative that she could not attend the meeting the following day. Id. The ServPro representative contacted Defendant Carter while he was traveling from Indiana to Tennessee and could only inform him that one of his sisters was ill and could not attend the meeting and asked for instructions. Id. There is a dispute as to whether Defendant Carter attempted to contact the Plaintiff. Id. see also [Doc. 47 at 6]. In any event, Defendant Carter proceeded with the scheduled meeting at the ServPro facility. Id. at 9. Following the January 24 meeting, various disputes arose between the Plaintiff and Defendant Carter concerning Defendant Carter's administration of the Trust. Id.

         The Complaint was originally filed in Knox County Chancery Court but removed [Doc. 1] on March 28, 2016, and later amended [Doc. 23] on August 29, 2016. The Amended Complaint alleges that Defendant Carter failed to perform duties incumbent upon him as the Trustee of the Myra L. Kravetz Family Trust. Specifically, the Plaintiff alleges that Defendant Carter failed and refused to provide a full and complete record and accounting of his actions as the Trustee, failed and refused to include all the assets that must be included in the Myra L. Kravetz Family Trust, failed to serve as Trustee in a neutral manner, and depleted and wrongfully spent Trust assets in favor of those who were not entitled to those assets. In addition, the Plaintiff alleges that Defendant Pilchard served as an agent of the Trust when Defendant Carter had to leave town and that during the time she served as an agent, she removed property that belonged to the Plaintiff and made distribution of items ...


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