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Keywords

appealfiduciarytrustfiduciary dutyduty of careduty of loyaltywater rights

equityfiduciarytrustwillcorporationduty of loyalty

Related Cases

Forbes v. Forbes, 341 P.3d 1041, 2015 WY 13

Facts

The Beckton Ranch Trust was established in 1920 by the Forbes family to manage land and water rights for their descendants. Disputes arose in 2007 when trustee Waldo E. Forbes resigned, leading to a series of controversial land and water transactions by the remaining trustees, which prompted beneficiary Spike Forbes to file a complaint alleging breaches of fiduciary duty. The district court initially found two trustees had breached their duty of loyalty and ordered their removal, but both sides appealed the decision.

The Beckton Ranch Trust (BRT) was formed in 1920 by six members of the Forbes family to hold certain parcels of land and their appurtenant water and ditch rights in Sheridan County, Wyoming, for the benefit of their descendants.

Issue

Did the district court err in finding that the trustees breached their duty of loyalty and in ordering their removal?

Rule

Trustees owe a fiduciary duty of care and loyalty to the beneficiaries, and removal of a trustee is a drastic action that should only occur for gross misconduct.

A trustee of a business trust, like a director and officer of a corporation, owes the trust and its investors fiduciary duties of care and loyalty.

Analysis

The Supreme Court analyzed whether the district court's findings were clearly erroneous and whether the trustees had been given fair notice of the claims against them. The court found that the district court had abused its discretion in admitting evidence regarding water rights transactions and that the removal of the trustees was not justified under the applicable legal standards.

The district court's power to remove a trustee is rooted in equity, and the court has sound discretion to make the determination whether to remove a trustee, which we will not disturb absent an abuse of discretion.

Conclusion

The Supreme Court affirmed the district court's decision not to remove two of the trustees but reversed the removal of Cam and Julia Forbes, concluding that the evidence did not support such drastic action.

We reverse the district court's order removing Cam and Julia, and affirm the decision not to remove Sarah and Edith.

Who won?

The prevailing party was the trustees, Cam and Julia Forbes, as the Supreme Court reversed the district court's order for their removal, finding insufficient grounds for such a drastic measure.

The Supreme Court affirmed the decision not to remove Sarah and Edith.

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