Citation. Allard v. Pac. Nat’l Bank, 99 Wn.2d 394, 663 P.2d 104, 1983)
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Brief Fact Summary.
Trust beneficiaries claimed that the trustee breached his fiduciary duty when he sold the sole trust asset for less than its fair market value.
Synopsis of Rule of Law.
Except where impossible, illegal, or where a change of circumstances would impair the purposes of a trust, the nature and extent of the duties and powers of a trustee are determined by the trust agreement.
J.T. and Georgia Stone, both deceased, created trusts in their wills conveying their property upon their deaths to Defendant, Pacific National Bank, to be held for their children, Plaintiffs, Freeman Allard and Evelyn Orkney. Plaintiffs are life income beneficiaries of the trusts and upon the death of either, the trustee is to pay the income from the trust to the issue of the deceased beneficiary. In 1978 the sole asset of the trust was a fee interest in a quarter block in downtown Seattle. The property was subject to a 99-year lease, entered into by the Stones in 1953 with Seattle-First National Bank (Seafirst Bank). In June 1977 Seafirst Bank assigned its leasehold interest in the property to the City Credit Union of Seattle (Credit Union). In June 1978, Credit Union offered Defendant $200,000 for the property, which Defendant accepted and deeded the property to Credit Union on August 17, 1978. On September 26, 1978, Defendant informed Plaintiffs of the sale to the Cre
dit Union. In May 1979 Plaintiffs commenced the present action against Defendant for breach of its fiduciary duties in regards to management of the trust, as well as against Credit Union and Seafirst Bank for participation in the alleged breach, and against Credit union for conversion. Plaintiff’s complaint requested money damages as well as the imposition of a constructive trust on the property and removal of the Defendant as trustee. Upon determining that Plaintiff’s cause of action was primarily equitable in nature the trial court struck Plaintiff’s request for a jury trial. Motions by Credit Union and Seafirst Bank for a partial summary judgment were granted, thus dismissing them from the case. At trial the primary dispute was over the degree of care owed by Defendant to the trust and the Plaintiffs. Plaintiffs attempted to show the degree of care owed through expert testimony but the Plaintiff’s proffered expert witnesses were excluded, leaving them with no direct testimony
regarding ordinary standards of trust administration. The court entered judgment for Defendant and Plaintiffs appeal.
Whether Defendant breached his fiduciary duty in managing the trust?
Whether Plaintiff’s were entitled to a jury trial in determination of whether Defendant breached its fiduciary duties in regards to management of the trust?
Whether the court improperly awarded attorney’s fees to Defendant?
Yes. Judgment reversed and remanded for a determination of the damages caused by the trustee’s breach of its fiduciary duties and a determination of attorney fees to be awarded to Plaintiffs.
The trust agreement specifically adopted the prudent investor standard of care. Furthermore, the terms of the trust instrument control as to investments made by the trustee. The trust gave Defendant “full power to.