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Virginia R. Beaudoin v. Davidson Trust Company

November 1, 2011

VIRGINIA R. BEAUDOIN, PLAINTIFF-APPELLANT,
v.
DAVIDSON TRUST COMPANY, DEFENDANT-RESPONDENT.



Appeal from the District Court of the Second Judicial District of the State of Idaho, Nez Perce County. The Honorable Carl B. Kerrick, District Judge.

The opinion of the court was delivered by: J. Jones, Justice

2011 Opinion No. 102

Stephen W. Kenyon, Clerk

The judgment of the district court is affirmed.

This is an appeal from a summary judgment dismissing Virginia Beaudoin's breach of fiduciary duty claim against Davidson Trust Company, which stemmed from Davidson Trust's mistaken distribution of trust funds to Beaudoin when Beaudoin's two children were, in fact, the designated beneficiaries. Because we find that Davidson Trust owed Beaudoin no fiduciary duty at the time of the alleged breach, we affirm.

I. FACTUAL AND PROCEDURAL HISTORY

Virginia Beaudoin's mother, Geraldine Schneider, was trustor and Davidson Trust Company was trustee of a May 9, 1996 trust instrument entitled "2nd Amended And Restated Geraldine M. Schneider Revocable Living Trust." Upon Ms. Schneider's death, the trust property was to be divided into two equal shares for the lifetime use of her two daughters, Beaudoin and Margaret Van Dyke. Beaudoin's share was to be held in trust for her lifetime benefit, remainder to her appointee or estate. Van Dyke's share was also to be held in trust for her lifetime benefit,*fn1 remainder to "the surviving issue by right of representation of [Beaudoin]." The trust further provided that "[i]n the event that [Beaudoin's] issue are not surviving then to [Beaudoin]."

Beaudoin was admittedly knowledgeable about the trust provisions and was present when her mother gave instructions to her lawyer to amend the trust to name Beaudoin's children the remainder beneficiaries of Van Dyke's share. Beaudoin was also appointed Advisor to the Trust pursuant to the 1996 trust instrument, and Davidson Trust was required to obtain her consent regarding investment strategy, discretionary payments, loans, and in determining whether and when Schneider was incapable of handling her own affairs. Ms. Schneider also gave Beaudoin a durable power of attorney and, beginning in 1999, when Ms. Schneider was determined incompetent, Beaudoin used that authority to make annual gifts from the trust to herself, her sister, and her immediate family.

Schneider died on March 10, 2004, and by October 2006, Beaudoin had withdrawn her entire $374,346.87 share of the trust principal. Van Dyke died on March 30, 2007. At that time, Beaudoin had two children--Brooks and Brianna--whose contingent interest in Van Dyke's share vested, according to the trust, upon their survival of Van Dyke. However, Beaudoin spoke to a trust assistant for Davidson Trust, Jan Shelby, on March 31, 2007, and was allegedly told that she was the beneficiary of the remainder of Van Dyke's share. Although the parties' affidavits conflict on what exactly was said during that conversation, Beaudoin admitted in her deposition that she knew at the time that the children were the proper beneficiaries but thought it was Davidson Trust's duty to find that fact out.*fn2

Beaudoin later consulted with Scott Baldwin, her financial advisor at D.A. Davidson & Co., about whether she could retire from her job as a cosmetologist based on the additional trust distribution, and he suggested a meeting with the trustee. Around the second week of April 2007, Beaudoin put in her notice of retirement at her workplace and worked her last day during the last week of April 2007. That same week, subsequent to her last day of work, Beaudoin and Baldwin met with J. Todd Edmonds--a vice president, trust officer, and branch manager of Davidson Trust--to discuss Beaudoin's retirement plans, and it was decided that she could retire.*fn3 Davidson Trust thereafter made a partial distribution of the trust funds into one of Beaudoin's accounts. Beaudoin asserted that based on Davidson Trust's conduct, she retired, sold all her business supplies and inventory, booked a non-refundable vacation, took distributions from her account, and made monetary gifts to her children.

When the mistake was discovered, Beaudoin sued Davidson Trust, claiming breach of fiduciary duty, negligent representation, and infliction of emotional distress. She claimed damages for the costs she allegedly incurred in reliance on the mistaken designation. The district court granted summary judgment to Davidson Trust on all of Beaudoin's claims, finding in regard to the fiduciary duty claim--the only finding appealed--that no fiduciary relationship existed between the parties at the time of the alleged breach. The court reasoned:

Prior to Margaret's death, Beaudoin had exhausted her share of the Schneider Trust in 2006, thus, her status as a beneficiary ended at that time. Further, any remote contingent interest she may have held in Margaret's share ceased upon Margaret's death, when Brooks and Brianna's status as beneficiaries became fixed.

The court further found that Beaudoin showed no legal support for her claim that Davidson Trust assumed a fiduciary duty by treating her as if she was the designated beneficiary. Beaudoin timely ...


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