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Harvey, ex rel. Gladden v. Cumberland Trust and Investment Co.

Court of Appeals of Tennessee, Knoxville

October 20, 2017

WADE HARVEY, EX REL. ALEXIS BREANNA GLADDEN
v.
CUMBERLAND TRUST AND INVESTMENT COMPANY, ET AL.

          Session January 10, 2017

         Appeal by Permission from the Court of Appeals Circuit Court for Hamblen County No. 12CV119 Thomas J. Wright, Judge

         In this interlocutory appeal, the trustee of a trust executed an investment/brokerage account agreement that included a provision requiring the arbitration of disputes. The trust beneficiary filed a lawsuit asserting claims against the investment broker, and the defendant broker sought to compel arbitration under the arbitration provision in the account agreement. The trial court granted the motion to compel arbitration and granted permission for this interlocutory appeal. The Court of Appeals reversed. On appeal, we are asked to determine whether the signature of the trustee on the account agreement binds the beneficiary of the trust to the predispute arbitration provision. We hold that the Tennessee Uniform Trust Code is intended to give trustees broad authority to fulfill their duties as trustee. We also hold that the Tennessee Uniform Trust Code gives trustees the power to enter into predispute arbitration agreements, so long as doing so is not prohibited under the operative trust instrument. We hold that the trust instrument in this case gives the named trustee broad authority and does not prohibit the trustee from entering into a predispute arbitration agreement. As a result, we interpret the trust instrument as authorizing the trustee to execute the account agreement with the defendant broker, including the predispute arbitration provision therein. Thus, under both the Tennessee Uniform Trust Code and the operative trust instrument, the trustee had authority to enter into the arbitration agreement contained within the account agreement. The question of whether the trust beneficiary in this case is bound by the arbitration provision is governed by the principle that a third party who seeks the benefit of a contract must also bear its burdens. Applying this principle, the trust beneficiary in this case may be bound to arbitrate claims against the investment broker that seek to enforce the account agreement. We reverse the decision of the Court of Appeals and vacate the trial court order compelling arbitration of all claims. We remand the case to the trial court for further proceedings, including a determination as to which if any of the claims asserted by the trust beneficiary seek to enforce the account agreement.

         Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals Reversed; Case Remanded to the Trial Court

          Mark D. Griffin and Will E. Routt, Memphis, Tennessee, for the appellants, Albert Alexander, Jr., and Wunderlich Securities, Inc.

          William Lewis Jenkins, Jr., Dyersburg, Tennessee, and F. Braxton Terry, Morristown, Tennessee, for the appellee, Wade Harvey, Jr., ex rel. Alexis Breanna Gladden.

          Holly Kirby, J., delivered the opinion of the court, in which Jeffrey S. Bivins, C.J., and Cornelia A. Clark, Sharon G. Lee, and Roger A. Page, JJ., joined.

          OPINION

          HOLLY KIRBY, JUSTICE.

         Factual and Procedural Background

         Trust Formation

         The minor trust beneficiary in this case, Alexis Breanne Gladden, was born in 1997 to Shauna Gladden (a/k/a Shauna Lynn Harvey) ("Mother") and Billy P. Gladden ("Father"). When Alexis was eight months old, she was hospitalized with fever and possible sepsis. In the hospital, there was apparently a delay in administering antibiotics to Alexis. Complications ensued. Alexis endured a lengthy hospitalization and multiple surgeries, including several amputations, and ended up significantly disabled.[1]

         As a result, Mother filed a lawsuit in the Circuit Court for Hamblen County, Tennessee, against the pediatric practice, the physicians, the hospital, and the nurses. The lawsuit asserted that they were responsible for the catastrophic illness and injuries to infant Alexis. All of the defendants initially denied liability.

         In May 2001, Mother settled with the physicians and the pediatric practice for a total of $1, 000, 000. In connection with its approval of the settlement, the circuit court required the establishment of a trust for the benefit of Alexis to receive the settlement proceeds. Pursuant to this directive, a trust instrument ("Trust Instrument") was executed and approved by the circuit court, establishing the Alexis Breanne Gladden Irrevocable Trust ("Trust"). The Trust Instrument states that the Trust was created "as a means by which trust assets may be held for the benefit" of Alexis, and recites an intent "to provide a system for fiscal management, administration and disbursement, advocacy, care and emotional guidance" for Alexis.[2] As outlined below, the Trust Instrument gave the Trustee broad authority to invest the trust assets and settle and arbitrate disputes.[3]

         A.G. Edwards Trust Company, FSB ("A.G. Edwards"), was designated as the Trustee. Slightly less than half of the proceeds from the settlement with the physicians and the pediatric practice were paid to A.G. Edwards as the Trustee and ultimately became the initial Trust assets. Of the remainder, $150, 000 went to Mother individually, and the balance was paid toward attorney fees and expenses.

         Two months later, Mother settled with the hospital and the nurses for a total of $3, 350, 000. Of this total, almost $2, 100, 000 was paid to the Trustee to pay into the Trust, $130, 000 was paid to Mother individually, and the rest went toward attorney fees and expenses. Thus, the Trust received a total of almost $2, 600, 000 in settlement monies for the benefit of Alexis.[4]

         In October 2002, Mother successfully petitioned the circuit court to remove A.G. Edwards as Trustee and appoint the Wilmington Trust Company ("Wilmington") as the successor Trustee, with Defendant/Appellant Albert M. Alexander, Jr., to serve as financial advisor to the Trust. During Wilmington's tenure as Trustee, the Trust retained Defendant/Appellant Wunderlich Securities, Inc. ("Wunderlich"), to supervise and direct some of the Trust assets.[5]

         In 2004, again at Mother's request, the circuit court removed Wilmington as Trustee and appointed Cumberland Trust and Investment Company ("Cumberland") in its stead.[6] Pursuant to Mother's petition, the circuit court specified that Mr. Alexander would remain as the financial advisor to the Trust. After Cumberland became the Trustee, the Trust continued to invest Trust assets with Wunderlich.

         Investment Account Agreement

         In 2009, Cumberland entered into the agreement that contains the arbitration clause that is the subject of this appeal. In July 2009, Cumberland and Wunderlich executed a contract entitled "Pathways Client Agreement" ("Client Agreement"), under which Cumberland engaged Wunderlich's investment services for the Trust.[7] The Client Agreement identifies the Trust as the subject of the parties' agreement and Alexis as the beneficiary of the Trust. In addition, page one of the Client Agreement contains a notice in bold letters that it includes a predispute arbitration agreement, and provides for the parties to sign an acknowledgement that they received a copy of the arbitration agreement.[8] Following this notice are the signatures of the representatives of both Cumberland and Wunderlich, as well as the signature of Mr. Alexander as financial advisor to the Trust.

         Lawsuit Underlying This Appeal

         For reasons that are not stated expressly in the record, in June 2011, the circuit court appointed Alexis's maternal grandfather, Plaintiff/Appellee Wade Harvey, Sr., as the guardian of Alexis.[9]

         Almost a year later, on May 10, 2012, Mr. Harvey, as next friend of Alexis ("Plaintiff"), filed the lawsuit underlying this appeal in the Circuit Court of Hamblen County, Tennessee. Among others, the amended complaint named as defendants Cumberland, Mr. Alexander, and Wunderlich.[10]

         The complaint alleged that, after Mr. Harvey was appointed as Alexis's guardian in June 2011, he discovered that the Trust funds had been drastically depleted. The complaint noted that, until approximately 2008, the Trust had retained a corpus totaling at least $2, 300, 000. Soon, however, the Trust assets began to be "recklessly depleted." According to Plaintiff, during 2009, there were $578, 000 in disbursements from the Trust. The rate of depletion accelerated during 2010. That year, there were $886, 000 in disbursements, some of which went to build a large five-bedroom house on seven acres of land, an expenditure that the complaint characterized as being of "no use" to Alexis. The end result, the complaint alleged, was reduction of the Trust corpus to less than $200, 000.

         The complaint asserted that Wunderlich and Mr. Alexander (together "Defendants") had breached a number of duties to Alexis. These included their fiduciary duty in investing Trust monies; their duty to either disclose conflicts of interest or withdraw in the event of such conflicts; and their duty to act in Alexis's best interest and safeguard the Trust monies. Among other things, the complaint asserted that the Defendants failed to disclose facts material to their decision-making; failed to properly oversee the Trust assets and disbursements; negligently mismanaged Trust funds; gave negligent investment advice to the Trust; misappropriated Trust funds; engaged in deceptive and unfair trade practices under the Tennessee Consumer Protection Act; and fraudulently allowed Trust monies to be used on purchases that had no value to Alexis, resulting in the near complete depletion of the Trust monies.

         As to Mr. Alexander, the complaint alleged that he entered into an inappropriate relationship with Mother, "which led to the unscrupulous spending" of Trust monies intended to benefit Alexis. In turn, the complaint asserted, the other defendants negligently failed to monitor Mr. Alexander, who held himself out as an investment advisor. The complaint alleged that Mr. Alexander advised Mother to change from trustee to trustee, which facilitated their manipulation of the Trust to accomplish their personal desires. As relief, the complaint sought a complete accounting of the Trust funds and an award of compensatory damages "in an amount no less than $3, 925, 000."

         Cumberland filed an answer to Plaintiff's amended complaint.[11] Wunderlich and Mr. Alexander jointly filed a notice of appearance followed by a motion to compel arbitration and stay all court proceedings.

         In February 2013, the trial court granted the motion to compel arbitration and stay all proceedings.[12] The Plaintiff filed a motion for permission to seek an interlocutory appeal from the order compelling arbitration, pursuant to Rule 9 of the Tennessee Rules of Appellate Procedure. See Tenn. R. App. P. 9. In the motion, the Plaintiff argued that the Trustee had no authority to execute a predispute arbitration agreement or waive the right to a jury trial, and that the arbitration agreement was not enforceable against the beneficiary of the Trust. The Defendants opposed the Plaintiff's request for permission for interlocutory appeal.

         On July 11, 2013, Alexis died. In September 2013, all parties consented to substitute Mr. Harvey as Plaintiff in the lawsuit. Mr. Alexander and Wunderlich added a proviso that their consent to substitute parties should not be construed as a waiver of their right to have the disputes arbitrated.

         In December 2014, the trial court held a hearing on the Plaintiff's request for permission to seek an interlocutory appeal and on May 8, 2015, the trial court granted permission for the appeal. In its order, the trial court stated the reason it granted permission for the appeal as well as the question certified:

[A]lthough this Court granted Defendants' motion to compel arbitration based on the facts and arguments presented by the parties and controlling precedent under Tennessee law, the Court is not aware of a Tennessee case directly on point addressing the precise issue of whether the signature of a trustee on an investment/brokerage account agreement may bind a beneficiary of a trust to conduct arbitration. The parties presented conflicting authority from out of state on this precise issue in connection with the motion to compel arbitration. If resolution of that particular issue would be dispositive of whether or not an arbitrator had authority to hear this case, then an interlocutory appeal at this point will assist in potentially reducing needless litigation.

         As required under Rule 9, the Court of Appeals granted permission for the appeal as well. See Tenn. R. App. P. 9. The Court of Appeals stated that it granted permission for appeal on "the sole issue of whether the signature of the trustee on an investment/brokerage account agreement agreeing to arbitration binds the Minor beneficiary of the Trust to conduct arbitration of unknown future disputes and claims." Gladden v. Cumberland Trust & Inv. Co., No. E2015-00941-COA-R9-CV, 2016 WL 1166341, at *4 (Tenn. Ct. App. Mar. 24, 2016).

         The Court of Appeals decided the issue based on its construction of the language in the Trust Instrument. It acknowledged that the Trust Instrument gives the Trustee the right to "settle, by compromise, arbitration or otherwise any and all claims and demands." Id. at *5. The intermediate appellate court observed: "[W]ithout question the trustee has the right under the Trust [Instrument] to agree to arbitration binding the Minor beneficiary as to claims or demands once they have arisen." Id. However, it construed the word "claim" as used in these provisions as referring only to existing claims, not "disputes that have not yet arisen." Id. On this basis, the Court of Appeals reasoned that the phrase "any and all" in the Trust Instrument did not modify "claims and demands" to refer to disputes "not yet in existence." Id. It concluded that the Trust Instrument "does not provide that the trustee has the right to agree to arbitration prior to a claim or demand arising, " so the Trustee's signature on the Client Agreement did not bind Plaintiff to arbitrate the disputes with Wunderlich. Id. at *6. Accordingly, the Court of Appeals reversed the trial court's order compelling arbitration. Id.

         The Defendants applied to this Court for permission to appeal, which was granted.

         Issues on Appeal and Standard of Review

         In this case, the trial court granted permission to appeal pursuant to Rule 9 of the Tennessee Rules of Appellate Procedure. See Tenn. R. App. P. 9. As required under Rule 9, the Court of Appeals granted permission for the appeal as well. Id. The scope of the issues that may be considered in a Rule 9 appeal differs from the scope of the issues that may be raised in an appeal as of right under Rule 3 of the Tennessee Rules of Appellate Procedure:

Unlike an appeal as of right under Tennessee Rule of Appellate Procedure 3, in which both the appellant and the appellee have broad latitude with regard to the issues that may be raised, "[w]hen dealing with an interlocutory appeal, the Court can and will deal only with those matters clearly embraced within the question certified to it."

Young v. City of LaFollette, 479 S.W.3d 785, 789 (Tenn. 2015) (quoting Tenn. Dep't of Mental Health & Mental Retardation v. Hughes, 531 S.W.2d 299, 300 (Tenn. 1975)).

         In their request to this Court for permission to appeal, the Defendants ask the Court to consider several issues.[13] As required under our Rules, we focus on the question certified by the trial court in its order granting permission to seek an interlocutory appeal, in the Court of Appeals order granting the appeal, and "'matters clearly embraced within the question certified'" to us. Young, 479 S.W.3d at 789 (quoting Hughes, 531 S.W.2d at 300). The trial court certified the question of "[W]hether the signature of a trustee on an investment/brokerage account agreement may bind a beneficiary of a trust to conduct arbitration." The Court of Appeals stated the question similarly: "whether the signature of the trustee on an investment/brokerage account agreement agreeing to arbitration binds the Minor beneficiary of the Trust to conduct arbitration of unknown future disputes and claims." Gladden, 2016 WL 1166341, at *4. We consider the issues the Defendants seek to raise only to the extent that they are embraced within the question certified below.

         This appeal arises from the trial court's order granting the motion to compel arbitration. We review the enforcement of an arbitration agreement de novo, with no presumption of the correctness of the lower courts' rulings. Rosenberg v. BlueCross BlueShield of Tenn., Inc., 219 S.W.3d 892, 903 (Tenn. Ct. App. 2006) (citing Cooper v. MRM Inv. Co., 367 F.3d 493, 497 (6th Cir. 2004)). "A trial court's order on a motion to compel arbitration addresses itself primarily to the application of contract law. We review such an order with no presumption of correctness on appeal." Id.; see also Great Earth Cos. v. Simons, 288 F.3d 878, 888 (6th Cir. 2002) (review of a lower court's ruling compelling arbitration is de novo).

         In order to resolve the arbitration issue in this case, we must construe the Trust Instrument and applicable statutory provisions. These issues also present questions of law, reviewed de novo with no presumption that the lower courts' rulings are correct. See BSG v. Check Velocity, Inc., 395 S.W.3d 90, 92 (Tenn. 2012) ("The interpretation of a written contract is a question of law, which we review de novo."); Marks v. S. Trust Co., 310 S.W.2d 435, 437-38 (Tenn. 1958) (trust instruments should be construed and interpreted similarly to contracts and wills); Presley v. Hanks, 782 S.W.2d 482, 487 (Tenn. Ct. App. 1989) ("[C]onstruction of a will is a question of law for the court . . . ."). We must also construe applicable statutory provisions. Am. Heritage Apartments, Inc. v. Hamilton Cnty. Water & Wastewater Treatment Auth., 494 S.W.3d 31, 40 (Tenn. 2016) ("We review the interpretation of the statutes by the lower courts de novo, with no presumption of correctness.").

         Analysis

         The parties to this appeal approach the issues from very different vantage points. Appellant/Defendants Wunderlich and Mr. Alexander contend that the governing Act, the Tennessee Uniform Trust Code, Tennessee Code Annotated sections 35-15-101 through 35-15-1206 (2015), grants trustees broad authority and allows a trustee to enter into predispute arbitration agreements unless the governing trust instrument expressly provides that the trustee does not have such power. Wunderlich and Mr. Alexander maintain that the Trust Instrument does not prohibit the Trustee from entering into predispute arbitration agreements, so the Trustee had authority to do so. They contend that Appellee-Plaintiff Mr. Harvey, on behalf of Alexis, is bound by the arbitration agreement executed by Wunderlich and the Trustee, so all of the claims asserted in this lawsuit must be arbitrated.

         In response, Plaintiff contends that Tennessee trust law gives trustees only the powers expressly granted in the governing trust instrument. Plaintiff agrees with the Court of Appeals' approach and maintains that the Trust Instrument in this case only grants the Trustee authority to enter into arbitration after the subject claim has arisen. Plaintiff also argues that neither the Tennessee Uniform Trust Code nor the Trust Instrument permits the Trustee to waive the right to a jury trial and enter into predispute arbitration agreements. Entering into a predispute arbitration agreement and thereby waiving future rights, Plaintiff insists, amounts to a breach of the Trustee's fiduciary duty to act in utmost good faith. Finally, Plaintiff argues that the arbitration agreement between the Trust and Wunderlich is not binding on the Trust beneficiary because: (1) the Trustee was not the agent of the Trust beneficiary; (2) the Plaintiff did not sue to enforce the contract containing the arbitration agreement; and (3) Alexis was a minor.

         Resolution of the issues presented in this appeal requires us to interpret the Tennessee Uniform Trust Code and the Trust Instrument. To provide necessary background and context for discerning the legislature's intent and purpose in adopting the Tennessee Uniform Trust Code, we will briefly review the history of trust law, focusing on the evolution of the trustee's authority as well as the promulgation of the Uniform Trust Code, on which the Tennessee Uniform Trust Code is based. Next, we examine the pertinent provisions of the Tennessee Uniform Trust Code and the Trust Instrument to determine whether the Trustee had authority to enter into a predispute arbitration agreement and whether doing so constituted a breach of the Trustee's fiduciary duty. We then consider the circumstances under which a trust beneficiary who did not sign a predispute arbitration agreement may nevertheless be bound by it. We also consider whether the fact that the Trust beneficiary in this case was a minor renders the arbitration provision unenforceable. Finally, we remand to the trial court for a determination regarding which of the Plaintiff's claims are subject to the arbitration agreement in this case, under the parameters set forth in this Opinion.

         An Abbreviated History of Trusts

         In outlining the reasons for proposing uniform trust statutes, a member of the drafting committee for the Uniform Trust Code commented that "trust law is an ancient field." John H. Langbein, Why Did Trust Law Become Statute Law in the United States?, 58 Ala.L.Rev. 1069, 1071 (2007).[14] Modern English and American trusts resulted from the struggle of landowners in medieval England to control the disposition of their real property. See id. at 1071-72; Richard T. Bowser & James B. McLaughlin, Jr., Wiggins Wills & Administration of Estates in North Carolina, § 1:3 Norman Conquest (4th ed. Nov. 2016 Update).

         In medieval England, real property constituted the main form of wealth. Under the common law at that time, land was not devisable. Upon the death of the landowner, it could not pass by will, but had to descend according to the often unfair rules of intestacy.[15] See Langbein, supra, at 1071; see also Bowser & McLaughlin, supra, § 1:3; Avisheh Avini, The Origins of the Modern English Trust Revisited, 70 Tul. L. Rev. 1139, 1143-44 (1996); R. H. Helmholz, The Early Enforcement of Uses, 79 Colum. L. Rev. 1503, 1503 (1979).

         To complicate matters further, under the English feudal system, the church continued as a rich and powerful influence in society and the monasteries continued to increase their ownership of real property. Bowser & McLaughlin, supra, § 1:3 (citing 2 Blackstone 375). The ever-increasing wealth and power of the church led to tension between the church and Parliament, culminating in the enactment of statutes that prohibited gifts of land to the church. Id.; Avini, supra, at 1143-44.

         To circumvent these statutes and the common-law rules restricting the disposition of property upon death, the doctrine of uses-that is, trusts-arose. Under the doctrine, the use of land could be separated from its legal title, and legal title could be transferred to a person who was entrusted to hold the property for the benefit of another.[16] Bowser & McLaughlin, supra, § 1:3 (citing 2 Blackstone 330); Avini, supra, at 1143. While the transfer or devise of legal title to land remained constrained, the use of land was freely transferrable and devisable. Bowser & McLaughlin, supra, § 1:3 (citing 2 Blackstone 330); Avini, supra, at 1145. The "use" made it possible to convey land for the use of the religious order; this device allowed laymen to avoid the high cost of legal title and gave them some control over the land upon the owner's death.[17] Avini, supra, at 1144-45 (citing George G. Bogert & George T. Bogert, Handbook of the Law of Trusts 8-9 (5th ed. 1973)). This heritage established the "fragmentation of title at the core of the trust's conceptual structure, " namely, "[l]egal title to the trust assets is transferred from the settlor to the trustee; equitable title is transferred from the settlor to the trust's beneficiaries." Gallanis, supra, at 217 (citing 1 Austin Wakeman Scott et al., Scott and Ascher on Trusts §1.1, at 5 (5th ed. 2008)).[18]

         Trust law remained a branch of real property law "[l]ong into the nineteenth century." Langbein, supra, at 1073. When trusts consisted only of real property, trustees had few duties beyond holding title to the property and then conveying it to beneficiaries. Id. at 1073. Trustees were not "managers" of the property and "needed little in the way of powers" to fulfill their role. Id. In fact, the common law disempowered trustees as a protection for trust beneficiaries-trustees' restricted transactional powers limited the harm they could do to the beneficiaries. Id.; see I. Mark Cohen, The Top Fourteen Things You Need to Know About the Uniform Trust Code, 2 NAELA J. 259, 280 (2006).[19]

         During the twentieth century, financial assets gradually displaced land as the main form of wealth held in trust. Over time, "[m]ost modern wealth [took] the form of financial assets-corporate shares, government and corporate bonds, insurance contracts, pension and annuity interests, bank accounts, interests in pooled investment vehicles such as mutual funds, and so forth." Langbein, supra, at 1072. "The management trust [was] developed in response to the movement away from family real estate as the predominant form of personal wealth." Id. Now, "[m]odern trust property typically consists of a portfolio of these complex financial assets" and the trust is "primarily a management device for assembling and administering a portfolio of financial assets." Id. "Such a portfolio requires skilled and active management." Id. at 1072-73.

         In this changed environment, traditional trust law hampered trustees "not only by withholding transactional powers but also by deterring market actors from dealing with trustees." Id. at 1073. Because trustees had no intrinsic powers, a party who sought to enter into a transaction related to the trust "had to demand and study the trust instrument in order to determine whether the trust authorized the trustee to transact with the trust asset in the way that the pending deal envisaged." Id. at 1074. Thus, "every transaction with a trustee became a research project, " and the result was to "'effectively deter third parties from dealing with trustees.'"[20] Id. at 1074 (quoting Peter T. Wendel, Examining the Mystery Behind the Unusually and Inexplicably Broad Provisions of Section Seven of the Uniform Trustees' Powers Act: A Call for Clarification, 56 Mo. L. Rev. 25, 31 (1991)).

         Uniform Trust Code

         To accommodate the new demands on trusts, a change in trust law became imperative. Most states "had a paucity of statutory law governing trust formation and administration, " and the common law supplied much of the law governing trusts. Marshall H. Peterson, Tennessee Uniform Trust Code: New Formulation for a Trusty Tool, 41 Tenn. B. J. 24, 25 (2005).[21] Not surprisingly, the common law was slow to address new issues as they emerged. See Langbein, supra, at 1071 ("common law processes of incrementalism" were not suitable for today's trust law). Legislation was required to clear away older inconsistent law, "facilitate the workings of the management trust, " id. at 1073, and "open the securities and other markets to trustees, " id. at 1074. Throughout the twentieth century, legislation in the states trended toward maximizing trustees' transactional power and facilitating management trusts, id. at 1073-77, 1082; in large part, "[e]mpowerment replaced disempowerment, " id. at 1073; see also Cohen, supra, at 280.

         Many years before uniform trust statutes were proposed, the National Conference of Commissioners on Uniform State Laws ("NCCUSL")[22] began participating in states' attempts to codify American trust law. Langbein, supra, at 1080-82; Amy Morris Hess, George Gleason Bogert, & George Taylor Bogert, Bogert Hess Trusts and Trustees § 7 (3d ed. 2007). In 2000, after seven years of effort, the NCCUSL promulgated the first national codification of American trust law, the Uniform Trust Code. Hess, Bogert & Bogert, supra, § 7; Peterson, supra, at 25. The Uniform Trust Code was an effort to promote consistency in trust law among state jurisdictions. Peterson, supra, at 25. It took the trend of maximizing trustees' power "to the limit and grant[ed] trustees virtually unlimited power, " kept in check primarily by the fiduciary duties incumbent upon trustees:

Specifically, [the Uniform Trust Code] grants the trustee: (1) all powers over trust property which an unmarried competent owner has over individually owned property-unrestrained by considerations of marriage, disability, or cotenancy; (2) any other powers appropriate to achieve the proper investment, management, and distribution of the trust property; and ([3]) any other powers conferred by the [Uniform Trust Code].

Cohen, supra, at 280.

         The Uniform Trust Code "reflects a comprehensive attempt to collect, codify, and make uniform the law of trusts." Id. at 263. However, because some aspects of trust law are not amenable to codification, the drafters of the Uniform Trust Code intended for "the common law of trusts and principles of equity . . . to supplement the [Uniform Trust Code], and aid in its construction." Id.; see also David M. English, The Uniform Trust Code (2000): Significant Provisions and Policy Issues, 67 Mo. L. Rev. 143, 148 (2002)[23]("The [Uniform Trust Code] is supplemented by the common law of trusts, including principles of equity.").

         As with much of the common law of trusts, the Uniform Trust Code "consists of rules subject to override by the terms of the trust." English, supra, at 155; see also Cohen, supra, at 264 ("Most of the [Uniform Trust Code] consists of default rules that apply only where the trust instrument is silent.").

         Thirty-two states, including Tennessee, have adopted the Uniform Trust Code.[24]"In Tennessee, a study committee representing the Tennessee Bar Association and Tennessee Banker's Association studied the [Uniform Trust Code], made recommendations for the Tennessee version, and submitted the proposal to the sponsors of the [Uniform Trust Code] legislation in the General Assembly." Peterson, supra, at 25. In 2004, the General Assembly enacted the Tennessee Uniform Trust Code.[25] Id. The Tennessee Uniform Trust Code largely follows the Uniform Trust Code but is in some respects tailored to Tennessee practice.[26] Id.

         Tennessee ...


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