Julia BAZAZZADEGAN; Cannon Holdings, LLC; Ozark Mountain Publishing, Inc.; and Quantum Healing Hypnosis Academy, LLC, Appellants
Nancy VERNON, Individually and as Cotrustee of the Dolores E. Cannon Living Trust and on Behalf of Cannon Holdings, LLC, Appellees
FROM THE MADISON COUNTY CIRCUIT COURT [NO. 44CV-18-129],
HONORABLE DOUG MARTIN, JUDGE
House, Downing & Lueken, P.A., by: Matthew R. House, Little
Rock, for appellants.
& Winters, LLP, Fayetteville, by: G. Alan Wooten and Michael
D. Sutton, for appellees.
J. HARRISON, Judge
2018, Nancy Vernon, a successor cotrustee and beneficiary of
the Dolores E. Cannon Living Trust, sued her sister Julia
Bazazzadegan, who is also a successor cotrustee and a
beneficiary of the trust. Nancy alleged that Julia (1)
committed a breach of trust as cotrustee, (2) breached her
fiduciary duties as a corporate officer, and (3)
misappropriated funds and unjustly enriched herself so that
Nancy was entitled to a constructive trust. Julia moved
the circuit court to order the dispute to mediation or
arbitration, arguing that the settlor (the sisters mother)
intended that course. This interlocutory appeal, which we
review de novo and presents an issue of first impression,
asks whether the circuit court erred when it denied Julias
motion to compel mediation or arbitration. Ark. R. App.
P.-Civ. 2(a)(12) (2019); Gibbons v. Anderson, 2019
Ark.App. 193, 575 S.W.3d 144.
The Trusts Alternative-Dispute-Resolution
Dolores E. Cannon Living Trust was created on 4 April 2014,
and Dolores Cannon was the settlor and sole trustee before
she died. When Dolores died her daughters Nancy Vernon and
Julia Bazazzadegan became successor cotrustees pursuant to
section 3.03 of the trust. Each daughter accepted the role.
The trust contains three provisions that discuss
alternative-dispute resolution (ADR). They are the focus of
• Article Twelve outlines the trustees powers.
In particular, Section 12.24 states,
My Trustee may settle any claims and demands in favor of or
against the trust by compromise, adjustment, arbitration or
other means. My Trustee may release or abandon any claim in
favor of the trust.
• Article Eleven governs trust administration.
In particular, Section 11.04 states,
Section 11.04 No Court Proceeding
My Trustee shall administer this trust with efficiency, with
attention to the provisions of this trust, and with freedom
from judicial intervention. If my Trustee or another
interested party institutes a legal proceeding, the court
will acquire jurisdiction only to the extent necessary for
that proceeding. Any proceeding to seek instructions or a
court determination may only be initiated in the court with
original jurisdiction over matters relating to the
construction and administration of trusts. Seeking
instructions or a court determination is not to be construed
as subjecting this trust to the courts continuing
I request that any questions or disputes that arise during
the administration of this trust be resolved by mediation
and, if necessary, arbitration in accordance with the Uniform
Arbitration Act. Each interested party involved in the
dispute, including any Trustee involved, may select an
arbiter and, if necessary to establish a majority decision,
these arbiters may select an additional arbiter. The decision
of a majority of the arbiters selected will control with
respect to the matter.
third section of the trust that directly relates to the ADR
issue is Section 11.14. It provides that cotrustees must
agree unanimously on an action unless the trust provides
otherwise. Absent unanimous agreement between cotrustees, the
settlor expressly "request[ed] that the matter be
settled by mediation and then by arbitration, if
necessary[.]" Note that Sections 11.14 and 11.04 impose
an order of ...