FROM THE ST. FRANCIS COUNTY CIRCUIT COURT [NO. 62CV-14-179]
HONORABLE CHALK S. MITCHELL, JUDGE
AND REMANDED FOR PROCEEDINGS CONSISTENT WITH THIS OPINION
Branch, Thompson, Warmath & Dale, P.A., by: Robert F.
Thompson III, for appellant.
Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.,
by: M. Samuel Jones III, for appellee.
BRANDON J. HARRISON, Judge
appeal concerns cross-motions for summary judgment in the St.
Francis County Circuit Court. The circuit court dismissed
William Ash's complaint with prejudice and entered
judgment for First National Bank of Eastern Arkansas. Because
the circuit court committed an error of law, we reverse and
remand for further proceedings consistent with this opinion.
majority of this case's facts are undisputed. In 2012,
William Ash, individually, owned 3, 881 shares of Bancshares
of Eastern Arkansas, Inc. He also held an equitable interest
in 4, 164 shares of Bancshares of Eastern Arkansas, Inc., as
the sole beneficiary of the William Campbell Ash Trust. The
William Campbell Ash Trust is an irrevocable spendthrift
trust that was funded by Ash's mother upon her death in
2011. First National Bank of Eastern Arkansas is the trustee
of the William Campbell Ash Trust. We refer to First National
Bank of Eastern Arkansas as "the bank" or "the
trustee" throughout this opinion. Bancshares of Eastern
Arkansas, Inc., is not a party to this case. The important
point is that Ash owned some shares outright, but other
shares were in an irrevocable spendthrift trust. No one
disputes that, on 13 July 2012, Ash signed two documents at
the bank: a stock certificate and a stock power. The parties
do dispute what Ash intended to do by signing the documents
and what legal effect his signatures have.
to Ash, he was transferring the Bancshares stock he owned
individually to a new trust-meaning a trust that was not the
spendthrift trust his mother had funded. He explained that he
met with attorney Phil Hickey at the bank "to set up a
trust, " that he was handed a document, thought it was
the new trust, and signed it. Two years passed, and Ash learned that,
when he tried to liquidate some stock to secure money for a
business investment, the bank believed the stocks to be in
the spendthrift trust.
Fletcher, chairman of Bancshares of Eastern Arkansas, Inc.,
and CEO of First National Bank of Eastern Arkansas, testified
in his deposition that senior officers, including himself,
"execute all stock certificates on behalf of the
bank." He said that he had not talked with Ash about
transferring stock individually to the bank as trustee of the
irrevocable trust. He did not discuss the stock power with
Ash and said that the transfer "was done because
Will's financial responsibility has not shown where he
could manage assets, and it was in his best interest to have
perpetual income to help him have a pretty good life."
Fletcher also said that Ash's family had "a long
history" with the bank and agreed that the bank as
trustee "can manage the money better than Will could
himself." In the bank's view, the Bancshares stock
is part of the corpus of the William Campbell Ash Trust, and
the bank refuses to allow Ash to liquidate or otherwise
access the Bancshares stock because it would "constitute
a violation of [the bank's] duties as trustee."
September 2014, Ash filed a complaint against the bank for
breach of fiduciary duty, conversion, and replevin. He also
asked the court to declare that the bank has no ownership
interest in the 3, 881 shares he owned individually nor did
it have the right to "possess or control these shares,
as trustee or otherwise, " citing Arkansas's
declaratory-judgment statute. Ash moved for summary judgment
in January 2015; the bank moved for cross-summary judgment in
"Memorandum and Order" entered in February 2016
explained the circuit court's reasoning in granting
summary judgment to the bank. The circuit court framed the
issue as whether Ash had legally transferred his individually
owned Bancshares stock to the bank as the trustee of the
irrevocable trust. The court found that the stock power that
Ash had signed on 13 July 2012 effectively transferred the
stock. It wrote, in part,
[T]he Court finds that pursuant to the plain language of the
Stock Power Mr. Ash did in fact transfer his stock to First
National Bank of Eastern Arkansas as Trustee for the William
Campbell Ash Trust on July 13, 2012.
The Court thus agrees with the Bank's position that the
unambiguous terms of the Stock Power admittedly signed by Mr.
Ash controls the disposition of this ...