In Bowman v. Washington Trust Bank, Lukins & Annis successfully defended its trustee client against multiple challenges asserted by three trust beneficiaries.
In the case, trust beneficiaries sued Lukins & Annis' client in its role as trustee, claiming that the bank negligently operated the trust and breached its fiduciary duty. The Idaho district court granted Lukins & Annis attorney Mischelle Fulgham's motions to dismiss all claims against the bank in part because the trustee's actions were authorized by the trust instrument and Idaho law.
When the beneficiaries appealed, Fulgham convinced the Idaho Supreme Court to affirm the trial court's dismissal. She argued these trust beneficiaries did not have standing to challenge the trustee's conduct and that their claims were not ripe for judicial review. The Idaho Supreme Court agreed, affirming the lower court's dismissal. In its opinion, the Court particularly noted that Fulgham had done "a good job of arguing its case before the Court and responding to questions."
The Idaho Supreme Court's decision reinforces that trust beneficiaries must have a personal stake in the outcome of a controversy in order to sue a trustee. The Court held that, in this case, the beneficiaries' trusts were separate, and the suing beneficiaries had not been affected by the administration of the other beneficiary's trust. Likewise, trust beneficiaries must have suffered actual damages and must establish a real controversy over which to sue. Here, the beneficiaries challenged an action to partition trust property, but no such partition action was pending. Thus, their claim was not ripe and was properly dismissed.
Read a copy of the Idaho Supreme Court's opinion here.