Plaintiff and defendant—brother and sister, respectively—were named as co-trustees of a trust created by their mother. A few months after their mother's passing, plaintiff resigned as trustee. He later contested his resignation and his sister's actions as the remaining trustee, filing a verified complaint and subsequent amended verified complaint seeking: an order declaring him a trustee; a full accounting of the actions taken by defendant as trustee; a return of all trust and non-trust property taken by defendant or any agent of defendant; compensatory, consequential, incidental, nominal and expectation damages; and lawful interest, attorney's fees and other equitable relief.
The court determined the trial court's decision that plaintiff signed a Resignation of Trustee and did not, as he contended, delegate his authority to a co-trustee was supported by substantial, credible evidence. Neither prior notice of the resignation to the trust's beneficiaries and the co-trustee nor approval of the court was needed under N.J.S.A. 3B:31-50(a), because the trust provided if either trustee was "unable or unwilling to serve or to continue to serve, then the other shall serve as sole trustee[.]" It further provided "[n]o [t]rustee shall be required to obtain the order of any court to exercise any power or discretion" under the trust. Not only did the trust allow resignations, it provided for continuity of the trust's administration if a trustee did resign. Because plaintiff resigned, the court further rejected his argument that defendant violated N.J.S.A. 3B:31-48 by making unilateral decisions.
The court also upheld the trial court's determination that defendant did not violate the Prudent Investor Act (the Act), N.J.S.A. 3B:20-11.1 to -11.12, by holding trust assets in regular bank accounts. The prudent investor rule is a default rule—expressing "a standard of conduct, not outcome," N.J.S.A. 3B:2-11.9—and was expanded by the trust provisions granting defendant broad investment powers. The degree of caution exercised by defendant was befitting her fiduciary capacity
Although defendant breached her fiduciary duty by making a one-time distribution of trust funds to herself, she acted in accordance with the trust's broad grant of powers by delaying other interim distributions until inheritance taxes were paid. The court also determined, under N.J.S.A. 3B:31-72(a), the trial court properly found plaintiff was entitled only to five-percent interest on the amount of the co-trustee's self-serving distribution, dismissing plaintiff's request for "other appropriate relief" under N.J.S.A. 3B:31-71(b)(10), including lost investment opportunity and punitive damages, because the "opinion" of plaintiff's expert was "nothing more than speculation of what [p]laintiff might have earned if distributions were made to [him] from the [t]rust," and plaintiff did not pray for punitive damages in his complaint or prove defendant acted with actual malice or wanton and willful disregard for plaintiff.
In addition, the court determined, notwithstanding a fiduciary's duty to communicate with beneficiaries as required by N.J.S.A. 3B:31-67(a) and 3B:31-5(b)(7), there was no evidence that plaintiff suffered damages as a result of defendant's unresponsiveness to his inquiries for a brief period.
The court also summarily addressed plaintiff's counsel-fee arguments and his argument that the trial court abused its discretion by refusing to allow him to testify as a rebuttal witness.