Phillip D. Faircloth v. Elizabeth K. Glass, as Representative of Ashley Glass

Citation: Not availableDocket: A19A2393

Court: Court of Appeals of Georgia; March 13, 2020; Georgia; State Appellate Court

Original Court Document: View Document

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Motions for reconsideration must be physically received in the clerk’s office within ten days of the decision date to be considered timely. In the Court of Appeals of Georgia, the cases Glass et al. v. Faircloth et al. (A19A2190) and Faircloth et al. v. Glass et al. (A19A2393) involve disputes between trust beneficiaries and trustees regarding fees paid to the trustees of The Glass Dynasty Trust. In A19A2190, the Beneficiaries—Elizabeth Glass, Gregory Glass, and Joel Glass—appeal the denial of their motion for an interlocutory injunction aimed at halting fee payments while their 2017 litigation against the trustees is ongoing. In A19A2393, trustees Phillip Faircloth and Ted Sexton appeal the denial of their motion to vacate an order that allowed the Beneficiaries to amend the trust to replace the trustees with corporate trustees.

The Trust was established in 2005 by Shirley Glass shortly before her husband Sherwin's death. Beneficiaries include Sherwin's sons, his grandchildren, and certain charities. Faircloth and Sexton, who also held positions in Sherwin's businesses, were appointed trustees, with Greg Glass replacing Shirley in 2013. A 2008 resolution compensated the trustees for the first time, and subsequent disputes led to Faircloth and Sexton filing for court accountings in 2012, resulting in a consent judgment that allowed for "reasonable compensation" for trustees.

In December 2017, the Beneficiaries, asserting disputes over trustee fees totaling nearly $3 million from 2008 to 2017, filed a lawsuit against Faircloth and Sexton for removal as trustees and various forms of relief. In January 2018, they sought an interlocutory injunction to prevent further payments to the trustees. The defendants moved to dismiss the complaint, but the trial court denied this motion in October 2018. The appellate court affirmed the judgments in both cases.

In January 2019, the trial court denied a motion for an injunction, leading to Case No. A19A2190. In April 2019, the Beneficiaries filed a petition in Fulton County to modify the Trust under OCGA § 53-12-61(c), resulting in Case No. A19A2393. The superior court found the conditions for modification met and allowed trustees' removal by the majority of Sherwin’s senior descendants. Sexton and Faircloth's motion to vacate this order was denied, prompting their appeal in Case No. A19A2393.

Regarding Case No. A19A2190, the Beneficiaries' appeal against the denial of their interlocutory injunction was reviewed. The court affirmed that the trial court has discretion in granting such injunctions, considering factors such as the threat of irreparable harm, the balance of injuries, the likelihood of success on the merits, and the public interest. The Beneficiaries failed to demonstrate irreparable harm or insolvency of the trustees, and the funds in question were not unique. They have a viable legal remedy, indicating that an injunction was not necessary. Consequently, the trial court did not abuse its discretion in denying the injunction.

In Case No. A19A2393, Sexton and Faircloth appealed the orders allowing the trust modification and denying their motion to vacate. The court conducted a de novo review and found no basis for reversal of the superior court's orders.

Beneficiaries petitioned to amend the Trust following the 2018 amendment to OCGA § 53-12-61, which now allows modification of a noncharitable irrevocable trust after the settlor's death if all beneficiaries consent and the court finds the modification consistent with the trust's material purposes. The beneficiaries sought to remove trustees Faircloth and Sexton and appoint a corporate trustee. After notifying the trustees and obtaining unanimous consent from the beneficiaries, the superior court approved the amendment. Faircloth and Sexton subsequently moved to vacate this order, but the court denied their motion, emphasizing that the statutory language mandates approval if specified conditions are met.

The Trust's primary purpose is to provide for the living descendants of Sherwin and includes a charitable component, classifying it as a mixed trust. The proposed modification did not alter the distribution process outlined in the original Trust, which aims to support Sherwin’s descendants and Jewish charities. Faircloth and Sexton contended that modifying the Trust conflicts with OCGA § 53-12-221, the Removal Statute. They argued that the Removal Statute, which requires good cause for removal and allows any interested person to initiate the process, should govern trustee removal instead. However, the court clarified that the Modification and Removal Statutes serve different functions: the former applies post-settlor death and necessitates beneficiary consent, while the latter can be initiated by any interested party at any time without beneficiary consent. The court found no inherent conflict between the two statutes, asserting that both can coexist without undermining each other’s purposes. The court emphasized the importance of interpreting statutory language in accordance with the legislature's intent, adhering to the ordinary meanings of the terms used unless they produce contradictions or absurd outcomes.

Statutes are presumed to be enacted with awareness of existing laws. Amendments to statutes suggest legislative intent to change the law. The 2018 amendment to the Modification Statute permits the modification of trusts after the settlor's death, under specific conditions, without imposing restrictions on the removal of trustees. The statute provides broad authority for trust modifications, requiring only beneficiary consent and adherence to notice provisions, while maintaining the trust's purpose. The Modification Statute does not require proof of good cause for modifications, unlike the Removal Statute. The court emphasizes that the statutory language does not imply any limitations not explicitly stated. All pending motions are denied, and previous judgments are affirmed.