GILL et al v. HARTSHORN et al
Filing
103
ORDER granting 60 Motion for Summary Judgment. Ordered by Judge Clay D. Land on 05/31/2013. (CGC)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
KAREN GILL, et al.,
*
Plaintiffs,
*
vs.
*
KEVIN HARTSHORN, et al.,
*
Defendants.
CASE NO. 4:12-CV-77 (CDL)
*
O R D E R
This action involves approximately 300 real estate holding
trusts whose beneficiary is the Gill Family Cornerstone Trust.
Defendants Kevin Hartshorn, Daniel Van Gasken, Eastern Property
Development,
LLC,
and
South
East
Enterprise
Group,
LLC
(collectively, “Hartshorn Defendants”) seek a declaration that
Defendant Loren Gill and Intervenor Plaintiff Wallace Whitten
(“Whitten”) are not trustees of the real estate holding trusts.
Presently pending before the Court is the Hartshorn Defendants’
Motion for Summary Judgment (ECF No. 60), which Plaintiffs Karen
Gill and Lauren Gill do not oppose.
For the reasons set forth
below, the motion is granted.
SUMMARY JUDGMENT STANDARD
Summary judgment may be granted only “if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed. R.
Civ. P. 56(a).
In determining whether a
genuine
dispute of
material fact exists to defeat a motion for summary judgment,
the evidence is viewed in the light most favorable to the party
opposing summary judgment, drawing all justifiable inferences in
the opposing party’s favor.
477 U.S. 242, 255 (1986).
Anderson v. Liberty Lobby, Inc.,
A fact is material if it is relevant
or necessary to the outcome of the suit.
Id. at 248.
A factual
dispute is genuine if the evidence would allow a reasonable jury
to return a verdict for the nonmoving party.
Id.
DISCUSSION
The
key
question
for
purposes
of
the
pending
summary
judgment motion is whether there is any evidence to create a
genuine fact dispute that Loren Gill and Whitten are current
trustees of the real estate holding trusts.
As discussed in
more
the
detail
below,
the
evidence
viewed
in
light
most
favorable to Loren Gill and Whitten reveals that they are not.
The Gill Family Cornerstone Trust (“Cornerstone Trust”) is
an irrevocable trust settled by John A. Gill, Jr. on June 18,
1999.
Gill
See generally Hartshorn Defs.’ Mot. for Summ. J. Ex. A,
Family
Trust”).
Cornerstone
The
Trust,
Cornerstone
(“Hartshorn”) as trustee.
ECF
Trust
No.
named
60-3
(“Cornerstone
Kevin
Hartshorn
Id. at 3.1
1
The Cornerstone Trust does not contain page numbers. For the sake of
simplicity, the Court refers to the page number of the electronic
version attached to the Hartshorn Defendants’ summary judgment motion,
ECF No. 60-3.
2
It
is
separate
undisputed
trust
that
declarations
John
under
Gill
executed
which
he
a
number
conveyed
of
certain
property to various holding trusts, including a number of real
estate holding trusts.
real
estate
holding
Cornerstone Trust.
It is also undisputed that all of the
trusts
had
the
same
beneficiary:
the
Finally, it is undisputed that, except for a
description of the property
held by the real estate holding
trusts, the real estate holding trusts all contain substantially
similar wording.
I.
The Trust Documents
Each
trustees.
real
estate
holding
trust
names
three
initial
See, e.g., Hartshorn Defs.’ Mot. for Summ. J. Ex. C,
202 Oakridge Commercial Real Estate Holding Trust at 3 (“202
Oakridge Trust”), ECF No. 60-6.2
It is undisputed that the
initial trustees of all of the real estate holding trusts were
Daniel Van Gasken, Wallace Whitten, and Robert Hurst.
Id.
Each
real estate holding trust refers to a “trust protector,” who has
the
power
trustees.
to
terminate
trustees
and
to
appoint
successor
Id. ¶ 10 (“If the Trustees appointed initially herein
are unable or unwilling to serve as Trustee, a substitute or
successor Trustee needs be appointed for him or her, choosing
first from the below individuals, and the remaining Trustees, by
2
The 202 Oakridge Trust does not contain page numbers. For the sake
of simplicity, the Court refers to the page number of the electronic
version attached to the Hartshorn Defendants’ summary judgment motion,
ECF No. 60-6.
3
unanimous vote, after approval from the Trust Protector, may
elect a Trustee approved of by said Trust Protector.”); id. ¶ 18
(“The Trustees will serve for a term of two years, and which
term will automatically renew unless terminated by the Trust
Protector.”)
Each
real
estate
holding
trust
has
a
provision
that
incorporates by reference any provision of the Cornerstone Trust
that
is
missing
necessary
trust.
for
from
the
Id. ¶ 20.
the
real
administration
provide
¶ 15.1.
of
holding
the
real
trusts
but
is
estate
holding
The real estate holding trusts do not define
the term “trust protector.”
does
estate
for
a
trust
The Cornerstone Trust, however,
protector.
See
Cornerstone
Trust
Based on the Cornerstone Trust, the trust protector has
the power to remove trustees and to approve successor trustees.
Id.
¶
15.1a.
protector
“may
The
be
Cornerstone
replaced
by
Trust
a
states
unanimous
that
vote
a
trust
of
then-
subsisting Trustees at the recommendation of the General manager
of the contracted managerial organization, at any time.”
¶ 15.2a.
Id.
In addition, the Cornerstone Trust provides: “Should
the Trust organization, at any time, find itself without the
services
of
a
competent
Trust
Protector,
then
it
will
be
contingent upon the Executive Trustee to assume the powers and
responsibilities of Protector until such a time as an acceptable
replacement
is
identified
and
4
installed
by
the
Board
of
Trustees.”
Id. ¶ 15.2b.
The Cornerstone trust further states
that if the trust protector is terminated, then the investment
consulting trustee (“ICT”) “will be the normal Trustee’s first
alternative to fill the vacated Protector’s position as approved
by the Trustees.
In which case, the ICT will then fill both
positions until a suitable replacement is established for one or
the other of those positions, by the Executive Trustee.”
Id.
¶ 17.a3.
If the investment consulting trustee and the trust
protector
are
the
same
individual
or
entity
and
if
the
individual or entity vacates the positions, then “the Trustees
are therefore empowered to recruit and install (an) appropriate
successor(s)
by
a
unanimous
Trustees.”
Id.
¶
17.a4.
Trustees
will
look
to
vote
of
Under
the
the
these
manager(s)
then
subsisting
circumstances,
of
their
“the
contracted
managerial organization to fill the vacated ICT and/or Trust
Protector’s
position(s).”
Id.
¶
17.a4)1.
Though
the
Cornerstone Trust does not define the term “executive trustee,”
the signature page indicates that Hartshorn was the original
executive trustee.
II.
Id. at 22.
The Trust Protector
The
following
facts
protector are undisputed.
Smith
as
trust
regarding
the
chronology
of
trust
The Cornerstone Trust named Kerry R.
protector.
Kerry
Smith
resigned
as
trust
protector of the Cornerstone Trust in late 2003 or early 2004,
5
and
Jay
Nicol
was
appointed
as
his
replacement.
Jay
Nicol
resigned as trust protector in February 2011.
The Hartshorn Defendants assert that, pursuant to ¶ 15.2b
of the Cornerstone Trust, Hartshorn assumed the powers of trust
protector of the Cornerstone Trust and the real estate holding
trusts when Nicol resigned.
No. 66;
accord
Van Gasken Dep. 268:23-269:5, ECF
Cornerstone Trust ¶ 15.2b (“Should the Trust
organization, at any time, find itself without the services of a
competent Trust Protector, then it will be contingent upon the
Executive Trustee to assume the powers and responsibilities of
Protector until
such a time as an acceptable replacement is
identified and installed by the Board of Trustees.”).
Loren Gill and Whitten contend, however, that Loren Gill
became
trust
protector
of
the
Cornerstone
Trust
after
Nicol
resigned.
In support of this contention, Loren Gill and Whitten
point
the
to
declarations
of
Loren
Gill
and
Steve
Thomas
(“Thomas”), who have differing accounts of the trust protector
story.
According to Thomas, Loren Gill was appointed trust
protector because, under ¶ 17.a3 of the Cornerstone Trust, the
“next choice” after Nicol resigned as trust protector “would be”
the investment consulting trustee, Raymond Thorn.
¶ 9, ECF No. 83-3.
Thomas Decl.
Thorn, however, resigned from his position
as investment consulting trustee in early February 2011.
Id.
Therefore, according to Thomas, because the Cornerstone Trust
6
was without both a trust protector and an investment consulting
trustee,
the
“contracted
managerial
organization”—which
was
managed by Loren Gill—was “empowered to fill the vacated” trust
protector position under ¶ 17.a4 of the Cornerstone Trust.
¶
10.
Thomas
organization”
asserts
appointed
that
Loren
the
Gill
“contracted
as
trust
evidence
that
Id.
managerial
protector.
Id.
¶ 11.
There
is,
however,
no
the
“contracted
managerial organization” actually had any power to take such an
action
under
the
clear
terms
of
the
Cornerstone
Trust.
Significantly, Thomas misquotes ¶ 17.a4, which states that “the
Trustees”—and
not
the
contracted
managerial
organization—are
“empowered to recruit and install (an) appropriate successor(s)
by
a
unanimous
vote
of
the
Cornerstone Trust ¶ 17.a4.
that
the
trustees
then
subsisting
Trustees.”
Though the Cornerstone Trust states
“will
look
to
the
manager(s)
of
their
contracted managerial organization to fill” the trust protector
position, id. ¶ 17.a4)1, there is nothing in the Cornerstone
Trust
document
protector
evidence
away
that
that
from
the
takes
the
the
power
trustees.
trustees
of
the
of
And,
appointing
there
Cornerstone
is
a
trust
simply
Trust,
no
which
undisputedly included Hartshorn, actually approved Loren Gill as
trust protector.
Accordingly, Steve Thomas’s declaration does
not establish that Loren Gill was appointed trust protector.
7
Likewise, Loren Gill’s own declaration does not establish
that Loren Gill was appointed trust protector.
According to
Loren
appoint
Gill,
John
Gill
retained
terminate trust protectors.
the
power
to
and
Loren Gill Decl. ¶ 8, ECF 83-2.
After John Gill became a fugitive, his wife Barbara Gill signed
a document purporting to appoint Loren Gill as trust protector
pursuant to a power of attorney signed in her favor by John
Gill.
Id. ¶ 10.
Loren Gill did not, however, point to any
provision of the “irrevocable” trust documents that permits John
Gill to appoint trust protectors.
Rather, the Cornerstone Trust
document states that a trust protector “may be replaced by a
unanimous
vote
of
then-subsisting
Trustees”
and
that
the
executive trustee will assume the powers and responsibilities of
the trust protector in the event of a vacancy.
Cornerstone
Trust ¶¶ 15.2a, 15.2b.
In a remarkable display of circular reasoning, Loren Gill
maintains that he had authority, as trust protector, to convene
a meeting and have Van Gasken, Hartshorn, Troy Sinclair, and
Janet Smith removed as trustees and then to appoint Mike Gill
and Joe Gill as new trustees.
Loren Gill Decl. ¶¶ 10-13.
After
the replacement of the former trustees with the new trustees,
those new trustees confirmed Loren Gill as the trust protector.
Id. ¶ 13.
The problem with this argument is that Loren Gill was
not the duly appointed trust protector
8
when
he attempted to
replace
the
former
trustees.
Therefore,
the
attempted
appointment of new trustees is void and has no legal effect.
And, Loren Gill’s subsequent confirmation as trust protector by
his “new trustees” is likewise void because those “new trustees”
were not in fact duly appointed trustees and thus had no legal
authority
to
make
that
appointment
or
confirmation.
Accordingly, Loren Gill’s declaration does not establish that
Loren
Gill
was
appointed
trust
protector
of
the
Cornerstone
Trust or any other trust.
III. The Trustees
The
trustees
following
are
facts
undisputed.
regarding
As
the
discussed
chronology
of
above,
initial
the
the
trustee of the Cornerstone Trust was Kevin Hartshorn, and the
initial trustees of the real estate holding trusts were Daniel
Van Gasken, Wallace Whitten, and Robert Hurst.
Robert Hurst
resigned from his position as trustee of the real estate holding
trusts and that Steve Thomas replaced him in 2004.
Thomas held
a trustee position until he resigned in 2006.
According to the Hartshorn Defendants, Janet Smith replaced
Thomas as trustee in 2006.
No. 60-15.
See, e.g., Smith Dep. 29:9-17, ECF
Loren Gill disputes this assertion, contending that
he was “voted in by the trustees” to be a trustee on all of the
real
estate
Loren Gill
holding
trusts
in
2006.
also asserts, however,
9
that
Loren
Gill
Decl.
he resigned
¶ 4.
from his
position as trustee on all of those trusts on July 30, 2011.
Id. ¶ 6.
The question then arises whether he was reappointed
trustee after he resigned effective July 30, 2011.
Although
Loren Gill avers that he, as trust protector, appointed other
individuals to serve as trustees of the real estate holding
trusts in 2011, id. ¶ 13, which appointments this Court has
previously found were void, there is no assertion that Loren
Gill was reappointed as a trustee following his resignation.
Based on Loren Gill’s own declaration, therefore, Loren Gill is
not a trustee of the real estate holding trusts, and there is no
genuine fact dispute on this issue.
The remaining question is whether there is a fact dispute
regarding Whitten’s status as trustee.
Again, it is undisputed
that Whitten was an initial trustee of the real estate holding
trusts and that he served in that role until 2011.
the Hartshorn Defendants, Whitten was found
According to
to be unable to
continue serving as trustee, and he was terminated and replaced.
Van Gasken Decl. ¶ 8, ECF No. 60-7.
Loren
Gill,
holding
however,
Whitten
trusts.
is
based
remained
Loren
on
Gill
Loren
a
In contrast, according to
trustee
Decl.
Gill’s
¶
of
13.
claim
the
real
This
that
he
estate
assertion,
was
protector with authority to appoint and remove trustees.
trust
As
discussed above, there is no evidence to create a fact dispute
that
Loren
Gill
was
the
trust
10
protector.
Rather,
the
Cornerstone
Trust’s
clear
terms
give
the
Cornerstone
Trust’s
executive trustee, Hartshorn, the authority to assume the powers
of
trust
protector.
And
only
the
trustees
who
have
been
appointed consistent with the provisions of the trust can remove
Hartshorn
as
trust
protector,
which
they
have
not
done.
Therefore, Loren Gill’s declaration is not sufficient to create
a
fact
question
on
this
point,
and
the
undisputed
facts
establish that Whitten’s trustee status was terminated.
CONCLUSION
As
discussed
above,
Loren
Gill’s
own
declaration
establishes that Loren Gill is not a trustee of the real estate
holding trusts.
The contention that Whitten remained a trustee
following 2011 depends on Loren Gill’s assertion that he became
trust protector.
There is, however, no evidence to create a
genuine fact dispute on this point.
For all of these reasons,
the Court concludes that Loren Gill and Whitten are not trustees
of the real estate holding trusts, so the Hartshorn Defendants’
summary judgment motion (ECF No. 60) is granted.
IT IS SO ORDERED, this 31st day of May, 2013.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE
11
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