Opinion
Case No. 03-4130-SAC
February 3, 2004
MEMORANDUM AND ORDER
This case comes before the court on three motions: plaintiff's motion to transfer assets and for designation of successor trustee; plaintiff's motion for a hearing; and defendant's motion to strike the supplement to plaintiff's reply.
FACTUAL BACKGROUND
Plaintiff's father, Mr. E.J. Erp, created two trusts: the E.J. Erp Charitable Remainder Trust ("CRT"), and the E.J. Erp Trust A. Plaintiff Anna M. Austin is one of the beneficiaries of Trust A. Defendant U.S. Bank N.A. is the successor trustee for both trusts.
Plaintiff has brought claims against defendant in its capacity as trustee, alleging multiple breaches of fiduciary duty owed to her as the income beneficiary. Plaintiff contends that the trust assets have been dissipated and diminished due to the gross mismanagement of the trusts by defendant. Dk. 1, p. 4. Plaintiff's claims include that defendant breached its duties to communicate information regarding the trust to her, to insure the assets of the trust, to preserve trust assets and protect them against waste, to keep separate the property of the trust, and to fulfill the terms of the trust. Dk. 1, pp. 8-9. Plaintiff's complaint seeks a preliminary injunction prohibiting defendant from continuing as trustee, declaratory relief that defendant has breached its fiduciary duties to plaintiff, and monetary relief including compensatory and punitive damages. Id., at 36-38.
MOTION FOR HEARING
Plaintiff's motion for a hearing states no reason why a hearing is requested. The motion does reveal that plaintiff seeks oral argument of the substantive motion, rather than an evidentiary hearing. The court, having reviewed both motions, finds that oral argument regarding the motion to transfer assets and for designation of successor trustee would not materially assist the court in its decision, so denies the motion for a hearing. See D. Kan. R. 7.2.
MOTION TO TRANSFER ASSETS AND DESIGNATE SUCCESSOR TRUSTEE
By this motion, plaintiff seeks "permanent change of Trustee by transfer of all remaining monies held in trust for the remainder of the Trusts." Plaintiff's motion then lists eight numbered paragraphs in support of her motion, and six paragraphs itemizing the relief plaintiff seeks. No allegation in plaintiff's motion is supported by citation to the record or to any legal authority.
Two distinctive factors immediately seize the court's attention. The first is that plaintiff's motion is unaccompanied by any memorandum of law in support, in violation of the rules of this court, which require that all motions in civil cases be accompanied by a brief or memorandum. D. Kan. Rule 7.1(a). Although plaintiff's subsequent briefs attempt to add flesh to its bare-boned arguments, it is an improper briefing practice for plaintiff to file a cursory motion, await the defendant's response, then file a memorandum of law which could and should have accompanied its initial motion.
The second factor that makes plaintiff's motion somewhat unusual is that it is made at a time when discovery is ongoing, when depositions are still being taken and disputed, and when expert reports have not yet been produced. The dispositive motion deadline is several months away. See Dk. 9. Defendant has raised both factual and legal defenses to plaintiff's claims. The court's resolution of the issues in plaintiff's motion would necessarily be based solely upon the documents the parties have attached to their briefs, and would thus be tantamount to granting summary judgment. Yet plaintiff has not attempted to set out any undisputed material facts which would warrant summary judgment, see D.Kan. R. 56.1, and summary judgment is inappropriate where, as here, the nonmoving party has not had the opportunity to discover information essential to its opposition. Committee for the FirstAmendment v. Campbell, 962 F.2d 1517, 1521 (10th Cir. 1992).
Plaintiff contends that because Trust A requires the trustee to distribute to her a sum certain each year from the trust, and she has not received that amount, the court should grant her motion. Dk. 28 at 5. Plaintiff alleges "[t]he relief requested in plaintiff's motion does not require proof of plaintiff's allegations of breach of fiduciary duty, nor does it require findings of facts by the Court after a proceeding on the merits of the issue that grounds exist for removal." Id. at 5. Yet plaintiff cites no legal authority in support of that position, and the court's review of case law fails to show any case in which a trustee has been removed prior to an evidentiary hearing and factual findings. See Simpson v. State, Dept. of Social and Rehabilitation Services, 21 Kan. App. 2d 680, 688 (1995) (noting findings made by administrative hearing officer); Accord Matter of Estate of Stoskopf, 24 Kan. App. 2d 851 (1998) (affirming removal of executor after partial pretrial evidentiary hearing, without finding misappropriation of funds).
Removal of a trustee is not a matter which is taken lightly. "The powers of the courts to remove a trustee are limited and can be utilized only in extreme circumstances." Simpson, 21 Kan. App. 2d at 688.
As was said in Ingalls v. Ingalls, supra, `(t)he removal of a trustee is a drastic action which should only be taken when the estate is actually endangered and intervention is necessary to save trust property.' Further, `(t)his is especially true where the trustee is named by the settlor.'
Jennings v. Murdock, 220 Kan. 182, 211 (1976) (reaffirming the above standard as the correct standard).
Further, not every breach of fiduciary duty compels the removal of a trustee. Instead, "[w]hether a trustee should be removed is a question addressed to the sound discretion of the trial court." Murdock, 220 Kan. at 211. Accordingly, even where a breach of fiduciary duty is found, a trustee may continue to serve as such. See id. 220 Kan. at 212 (finding no abuse of discretion in trial court's refusal to remove trustee, despite trial court's finding of breach of duty by trustee).
Nor has plaintiff shown that the intervention it seeks would achieve the results it desires. Disputed issues of fact have been presented regarding why Trust A is currently unable to make the distributions required by the Trust, and whether designation of a new trustee would have any effect whatsoever upon the trust's ability to do so. For the court to rule upon plaintiff's motion now, as a matter of law, would be premature at best. Thus plaintiff's invitation for the court to resolve the merits of the issues at this early stage of the litigation shall be denied.
DEFENDANT'S MOTION TO STRIKE
Defendant moves to strike Dk. 31, which is plaintiff's supplement to plaintiff's reply in support of plaintiff's motion to transfer trust assets and designate a successor trustee. Defendant properly states that plaintiff's supplement was filed without leave of court, and that it interjects multiple evidentiary matters and exhibits which could and should have been included in plaintiff's original memorandum or motion.
A supplement is not a pleading or other document that can be filed as a matter of right. See D.Kan. R. 7.1; 7.4; 15.1(b). Plaintiff has neither sought nor received leave of court to file its supplement. Even had it done so, the court would have denied that request. As this court has previously stated:
. . . the Court disfavors supplements and applies the rules governing sur-replies in determining whether to consider them. See Cotracom Commodity Trading Co. v. Seaboard Corp., 189 F.R.D. 655, 659 (D. Kan. 1999). Local court rules do not provide for sur-replies. See D.Kan. Rule 7.1 (2001). Leave to file a sur-reply is generally only granted in "rare circumstances," as where the movant "improperly raises new arguments in a reply." Humphries v. Williams Natural Gas Co., No. 96-4196-SAC, 1998 WL 982903, at *1 (D. Kan. Sept. 23, 1998).
Zhu v. Countrywide Realty Co., Inc., 160 F. Supp.2d 1210, 1220 (D. Kan. 2001). The matters contained in plaintiff's supplement could have been included in plaintiff's original motion and a supporting memorandum, and thus are not properly raised in a supplement to a reply brief. The court shall thus grant the motion to strike this pleading.
The court finds it unnecessary to address defendant's additional contention that plaintiff's affidavit, included in the supplement, contains legal conclusions, inadmissible hearsay, and inadmissible pleadings from another action.
IT IS THEREFORE ORDERED that plaintiff's motion to transfer assets and for designation of successor trustee (Dk. 12) and plaintiff's motion for hearing (Dk. 32) are denied.
IT IS FURTHER ORDERED that defendant's motion to strike (Dk. 37) is granted, thus Dk. 31 shall be stricken from the record.