In the MATTER OF the GNB III TRUST Jerita Wylie and Doug Bobo, Appellants
v.
Cheryl Shaw, Appellee
Page 160
APPEAL
FROM THE HEMPSTEAD COUNTY CIRCUIT COURT [NO. 29PR-16-79],
HONORABLE DUNCAN CULPEPPER, JUDGE
Montgomery
& Burke, by: Wm. Blake Montgomery and Jim A. Burke, Hope, for
appellants.
Wilson,
Walker & Short, Hope, by: Charles M. Walker, for appellee.
OPINION
PHILLIP
T. WHITEAKER, Judge
Page 161
The
appellants, Jerita Wylie and Doug Bobo, and the appellee,
Cheryl Shaw, are siblings. They serve as cotrustees of the
GNB III Trust (the Trust), which was created by their
parents, Guy M. and Nellie Bobo. When a disagreement between
the cotrustees arose concerning trust administration, Wylie
and Bobo requested that the probate division of the Hempstead
County Circuit Court make a declaration that a majority of
cotrustees could act on behalf of the Trust and approve the
sale of certain trust property to Bobo. The circuit court
denied their request, and Wylie and Bobo appeal. We reverse
in part and affirm in part.
I.
Facts and Procedural History
Guy
and Nellie created the GNB III Trust on August 13, 2004. Guy
and Nellie partially funded the Trust with real estate,
including their marital home and acreage. Guy and Nellie were
the grantors of the Trust, the primary beneficiaries, and the
initial trustees of the Trust. The Trust provided that if
either Guy or Nellie was unable to serve as a trustee due to
death, resignation, or incompetency, the other would assume
the full duties of the office of trustee. Wylie, Bobo, and
Shaw were designated as contingent beneficiaries, and in the
event that both Guy and Nellie were unable to serve as
trustees, then Wylie, Bobo, and Shaw were to serve as
successor cotrustees. Unfortunately, Guy and Nellie failed to
specify in the Trust whether the successor cotrustees must
act by majority vote or by unanimity.
In
2011, Guy was declared incapacitated, and a guardianship was
created. Nellie was appointed as guardian of his person and
of his estate. Based on Guys incapacity, Nellie became the
sole trustee of the Trust. Nellie passed away in 2015.
Because of Nellies death and Guys incapacity, Wylie, Bobo,
and Shaw assumed their roles as successor cotrustees of the
Trust and became the beneficiaries of Nellies one-half
interest in the Trust.[1]
Discord among Wylie, Bobo, and Shaw developed in 2016. Bobo
desired, individually and not as cotrustee or beneficiary, to
purchase real estate owned by the Trust. Wylie agreed with
Bobos purchase. Bobo and his wife entered into a contract to
purchase with the Trust. Because Bobo was a trustee and was
attempting to purchase a trust asset, his offer to purchase
was made contingent on court approval.
Wylie
and Bobo, pursuant to Arkansas Code Annotated section
28-73-802 (Repl. 2012), petitioned the Hempstead County
Circuit Court to approve Bobos offer to purchase trust
property. Shaw responded and filed a counterpetition claiming
that Wylie and Bobo had committed serious breaches of trust
and fiduciary duty and seeking their removal as cotrustees
and coguardians. She requested that the court appoint an
independent third party as trustee. Shaw also claimed that
Bobo had entered into a pasture-lease agreement with the
Trust; that the rental rate was far below the fair rental
value for comparable property in the area; that Bobo had
already taken possession of the premises and had cut and
baled hay thereon; and that she was willing to pay more for
the subject property and more for pasture rental but had not
been given an opportunity to do so. Wylie and Bobo denied the
counterpetition allegations.
Before
any court action was taken on the petition or
...