GILL et al v. HARTSHORN et al
Filing
175
ORDER granting 104 Motion for Partial Summary Judgment to the extent set forth in the Order; denying 105 Motion for Partial Summary Judgment; granting in part and denying in part 106 Motion for Partial Summary Judgment. Ordered by U.S. District Judge Clay D. Land on 01/03/2014. (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
Truth is sometimes stranger than fiction.1
And this case
confirms it: a successful businessman accumulates a substantial
rental property portfolio, decides to take a vow of poverty,
donates
everything
to
a
trust
constructed
by
a
“charitable
society” that focuses upon the lymphatic system as the source of
good health, becomes a minister within that society, and retains
the right to manage the property he has conveyed to the trust
until
he
flees
the
country
as
a
fugitive
before he is supposed to report to prison.
from
justice
days
After his departure,
disputes arise between his brothers, former business associates,
and children as to how the trust should be managed and who the
trust beneficiaries are.
1
Mark Twain actually said, “Truth is stranger than fiction, but it is
because Fiction is obliged to stick to possibilities; Truth isn’t.”
Mark Twain, Following the Equator 156 (1897).
Put another way, “You
just can’t make this stuff up.”
I.
The Central, But Absent, Figure: John Gill
Although he is not a party to this action, John Gill is at
the
center
of
this
“strange
but
true”
story.
John
Gill
accumulated a considerable rental property portfolio, which he
actively managed.
Apparently motivated, at least in part, by
aggressive tax planning considerations, John Gill took a vow of
poverty and transferred all of his property to the Ten Talents
Ministry
of
Lymphology.
the
Order
The
of
the
International
legal
documents,
Academy
designed
presumably
of
to
separate him from his assets for tax purposes but leave him in
control of them for all practical purposes, are at best unduly
complicated and at worst incomprehensible.
Each rental property
was placed into a single asset property trust, and the sole
beneficiary of all the single asset property trusts is the Gill
Family Cornerstone Trust (“Cornerstone Trust”).
Although John
Gill transferred legal title to the property, he continued to
manage the rental properties and the trusts as a missionary and
minister
of
the
Healing
Academy of Lymphology.
Water
Ministry
of
the
International
He was assisted by representatives of
his ministry and other real estate managers, but
it appears
clear that John Gill had complete control over the trusts and
real estate until he ran into trouble with the law and fled the
country shortly before he was supposed to report to prison in
2009.
Although John Gill attempted to manage the trusts and
2
real estate as a fugitive, his continued absence created a void
and,
perhaps
for
some,
an
opportunity.
Now
his
children,
brothers, and former business associates fight for control of
the trusts.
II.
The Parties and Claims
The Plaintiffs are John Gill’s children, Lauren Gill and
K.G., a minor.
K.G.’s claims are asserted by her mother and
John Gill’s former wife, Karen Gill.
against
John
manage
Gill’s
the
entities
rental
with
former
business
properties
which
they
and
are
Plaintiffs asserted claims
associates
trusts
and
affiliated.
who
the
These
presently
business
Defendants
include Kevin Hartshorn, Daniel Van Gasken, Jay Nichols, Eastern
Property Development, LLC, South East Enterprises Group, LLC,
EPD 1 Holding Trust, EPD 2 Holding Trust, SEE Holding Trust, The
Church of Compassionate Service, and The Compassionate Order of
Service
of
The
Defendants”).
Church
of
initial
Hartshorn
Plaintiffs.
Service
(“Hartshorn
Plaintiffs maintain that they are beneficiaries
of the Cornerstone Trust
Their
Compassionate
complaint
Defendants
and that the trust is irrevocable.
also
included
violated
their
allegations
that
the
fiduciary
duty
to
Those breach of fiduciary duty claims against the
Hartshorn Defendants were subsequently settled.
Plaintiffs also named Loren Gill, who is John’s brother,
and Elm Leasing, LLC, a company controlled by Loren Gill, (“Gill
3
Defendants”) as Defendants because Loren Gill has asserted that
he has legal authority to control the trusts, and he disputes
that
the
Cornerstone
Trust
is
irrevocable.
Plaintiffs
also
assert claims against the Gill Defendants based on Plaintiffs’
contention
that
the
properties
owned
by
Elm
Leasing
were
purchased with money that was impermissibly diverted from the
Cornerstone Trust and the trusts that benefit it.
The Gill
Defendants have a cross-claim against the Hartshorn Defendants
regarding rental proceeds collected by the Hartshorn Defendants
that allegedly should have been paid to Elm Leasing.
Defendant
Daniel Van Gasken has a cross-claim against the Gill Defendants
on behalf of the single asset property trusts that allegedly
loaned money to Elm Leasing so that Elm Leasing could purchase
its rental properties.
Finally, Michael Gill, Steve Thomas, and Wallace Whitten
have intervened as Plaintiffs (“Intervenors”).
They claim that
they should control the various real estate trusts.
Gill is John Gill’s brother.
Michael
Thomas and Whitten are John Gill’s
former business associates.
III. The Summary Judgment Motions
Three
pending.
partial
These
summary
motions
Cornerstone Trust.
document
presents
judgment
require
the
motions
Court
to
are
presently
interpret
the
Generally, interpretation of such a legal
a
legal
question
4
for
the
Court.
Rose
v.
Waldrip, 316 Ga. App. 812, 815, 730 S.E.2d 529, 533 (2012).
And
if there are no ambiguities to be resolved by the jury, summary
judgment would be appropriate.
See id. (noting that “if the
language is plain and unambiguous and the intent is clear, the
court need look no further”).
trust
agreement
is
If a material provision of the
susceptible
one
reasonable
construction,
however,
appropriate.
Ovrevik v. Ovrevik, 254 Ga. App. 756, 758, 564
S.E.2d
(2002).
then
applies
than
after
11
Court
more
interpretation
8,
the
to
summary
Similarly,
for
traditional
judgment
other
rules
of
not
be
may
issues,
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
P. 56(a).
fact
to
judgment
as
a
matter
of
law.”
Fed.
R.
Civ.
In determining whether a genuine dispute of material
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.
Plaintiffs
move
for
partial
summary
Id.
judgment
seeking
a
construction of the Cornerstone Trust that would establish that
5
they
are
beneficiaries
irrevocable.
of
the
trust
and
that
the
is
As discussed below, that motion (ECF No. 104) is
granted to the extent set forth in this Order.
Defendants
trust
move
for
partial
summary
judgment
The Hartshorn
on
the
trust-
related cross-claims of Loren Gill and the trust-related claims
of Whitten.
As discussed below, that motion (ECF No. 106) is
granted in part and denied in part.
for
partial
summary
judgment
related to Elm Leasing.
on
The Gill Defendants move
the
claims
and
cross-claims
For the reasons set forth below, that
motion (ECF No. 105) is denied.
A.
Plaintiffs’ Summary Judgment Motion (ECF No. 104)
Plaintiffs seek a declaration by the Court that they are
beneficiaries of the Cornerstone Trust and that the Cornerstone
Trust is an irrevocable trust.
They contend that the language
of the Cornerstone Trust unambiguously supports their position,
and that these issues can therefore be decided as a matter of
law.
is
The Hartshorn Defendants agree that the Cornerstone Trust
irrevocable
and
Cornerstone Trust.2
that
Plaintiffs
are
beneficiaries
of
the
The Gill Defendants and Intervenors argue
that John Gill was the sole beneficiary of the Cornerstone Trust
and that as the settlor and sole beneficiary of the trust, he
could revoke the trust, which they claim he did.
2
They oppose
Plaintiffs initially pursued breach of trust claims against the
Hartshorn Defendants and sought summary judgment on those claims.
Plaintiffs settled all of their claims with the Hartshorn Defendants
and withdrew that portion of their summary judgment motion.
6
Plaintiff’s motion for summary judgment, claiming that genuine
fact disputes exist on this issue.
The
fundamental
issues
presented
by
Plaintiffs’
summary
judgment motion are whether the Cornerstone Trust is irrevocable
and whether Plaintiffs are beneficiaries under the Trust.
cardinal
rule
in
construing
a
trust
instrument
“The
involves
discerning the intent of the settlor and [effectuating] that
intent within the language used and within what the law will
permit.”
S.E.2d
SunTrust Bank v. Merritt, 272 Ga. App. 485, 488, 612
818,
821
(2005)
(alteration
quotation marks omitted).
in
original)
(internal
The starting point, and in this case
the ending point, for determining whether the Cornerstone Trust
is
irrevocable
and
who
the
beneficiaries
are
is
the
actual
language of the Cornerstone Trust.
John Gill settled the Cornerstone Trust.
Hartshorn Defs.’
1st Mot. for Summ. J. Ex. A, Decl. of Trust for Gill Family
Cornerstone Trust (“Cornerstone Trust Decl.”) at 2, ECF No. 603.3
The Cornerstone Trust Declaration is dated April 1, 1999,
but it was not signed until June 18, 1999.
Id. at 2, 22.
The
Cornerstone Trust Declaration names Kevin Hartshorn as trustee.
Id. at 3.
The Cornerstone Trust states in at least ten places
that it is “irrevocable.”
See, e.g., id. at 4 ¶ 2.1 (“The
3
The Cornerstone Trust Declaration does not contain page numbers. For
the sake of simplicity, the Court refers to the page numbers of the
electronic version of the Cornerstone Trust, which is in the present
record at ECF No. 60-3.
7
Declaration of Trust creates an irrevocable fiscal and estate
planning Foundation/Cornerstone Trust . . . .
purpose
or
irrevocable
reason
for
. . . .”);
existence,
id.
at
and,
4
¶
The trust has a
upon
2.3
execution,
(“The
Gill
is
Family
Cornerstone Trust is formed to irrevocably accept and distribute
assets in various forms . . . .”); id. at 4 ¶ 4.1 (“The Trustor
creates this Voluntary Pure Constitutional Trust and irrevocably
transfers
to
Trustees
the
property
described
on
Exhibit
‘A’
. . . .”); id. at 5 ¶ 6.1 (“The purport of the Gill Family
Cornerstone
Trust
property/assets
to
instrument
Trustee
is
to
irrevocably
management
which
convey
creates
or
constitutes a Trust estate for the benefit of the holders of
Units of Beneficial Interest (UBIs) . . . .”).
No
one
seriously
disputes
that
the
language
in
the
Cornerstone Trust Declaration clearly establishes that the Trust
is irrevocable.
irrevocable.
It states in at least ten places that it is
Under Georgia law, “[a]
settlor shall have no
power to modify or revoke a trust in the absence of an express
reservation of such power.”
side
pointed
to
any
O.C.G.A. § 53-12-40(a).
provision
in
the
Cornerstone
Neither
Trust
Declaration establishing that John Gill expressly reserved the
power to modify or revoke the trust.
Therefore, the unambiguous
language in the Cornerstone Trust Declaration establishes that
the Cornerstone Trust is irrevocable.
8
Intervenors and The Gill Defendants nonetheless argue that
John Gill was the sole beneficiary of the Cornerstone Trust and
that he therefore retained the power to modify or terminate the
trust.
A
settlor
who
is
a
trust’s
sole
beneficiary
may
terminate the trust despite language stating that the trust is
irrevocable.
Cooper v. Trust Co. Bank, 257 Ga. 272, 272, 357
S.E.2d 582, 582 (1987).
Obviously, if the settlor manifests an
intention to give a beneficial interest in the trust property to
someone else, then he is not the sole beneficiary.
The Gill Defendants and Intervenors ignore the following
language of the Cornerstone Trust Declaration:
“The Trustor
[John Gill] will have no retained interest in the Gill Family
Cornerstone Trust nor its assets, but does convey managerial and
fiduciary powers to the Trustees.”
Cornerstone Trust 4 ¶ 2.2.
This language directly contradicts their position that John Gill
was the sole beneficiary of the Trust.
ignore
specify
the
provisions
the
of
the
beneficiaries
Trust
of
the
Moreover, they also
Declaration
Cornerstone
that
clearly
Trust.
The
Cornerstone Trust Declaration specifies the following classes of
beneficiaries: (1) “Any/all natural and/or adopted children and
grandchildren of the Trustor as a class of beneficiaries,” (2)
“The Healing Water Ministries Integrated Auxiliary of the Order
of
the
IAL,”
and
(3)
“any
other
9
charitable
Trusts
or
other
organizations as established by the Trustees of this entity for
purposes of beneficial distribution.”
Id. at 9 ¶ 12.1.
The Intervenors and Gill Defendants argue that one can only
become an actual beneficiary of the Trust through the issuance
of “Units of Beneficial Interest” (“UBIs”).
The Cornerstone
Trust Declaration states that the trustee will hold the Trust
property
“for
the
benefit
of
the
Beneficiaries
who
hold
or
lawfully acquire shares (Units of Beneficial Interest or UBIs)
of beneficial interest in the Trust as noted by the Trustees.”
Id. at 4 ¶ 4.1; see also id. at 5 ¶ 6.1 (“The Trust estate [is]
for the benefit of the holders of Units of Beneficial Interest
(UBIs),
held
in
joint
tenancy
Trust,
with
distributions
Trustees to be under a sprinkling provision.”).
by
The Cornerstone
Trust Declaration also states, “Trustor distributes the UBIs to
the
Beneficiaries
as
witnessed
by
the
Trustees.
Upon
distribution of the UBIs, the Trustor retains no reversionary,
possessory or retained interest in the valuable assets/corpus
conveyed into the Trust for management by the Trustees.”
4
¶
4.1.
Therefore,
John
Gill
did
seek
to
Id. at
control
“distributions” to beneficiaries through the issuance of UBIs.
But the language of the Trust also clearly establishes that all
of the UBIs were conveyed to the three classes of beneficiaries
jointly when the Trust was established.
(“100%
of
UBIs
conveyed
to
the
10
See id. at 9 ¶ 12.1
Beneficiaries
as
classes
of
Beneficiaries.)
It then became the duty of the trustees, in
their discretion as guided by the purposes of the trust, to
determine how distributions should be made.
Id. at 11 ¶ 12.12.
The Court finds that the language of the Cornerstone Trust
Declaration clearly establishes three classes of beneficiaries,
that John Gill’s children are included as beneficiaries, that
the language in the Trust regarding UBIs and the distribution of
Trust
assets
does
not
eliminate
John
Gill’s
children
as
beneficiaries, and that the Cornerstone Trust is irrevocable.
The fact that John Gill may have operated the Trust in a manner
that was inconsistent with the requirements of the Trust does
not amend the provisions of the Trust.4
Moreover, as explained
in the following discussion, the Court is not persuaded by the
arguments of Intervenors and the Gill Defendants that a “Trust
Beneficiary Certificate” purportedly signed by John Gill and a
4
A superficial review of the Trust Declaration and the subsequent
conduct of John Gill and the Trustees could support the conclusion
that ambiguities exist as to John Gill’s intent in establishing the
Cornerstone Trust.
But if those facts are construed in the manner
that the Intervenors and the Gill Defendants suggest, they would also
support the conclusion that John Gill never intended to create a
legitimate trust where he truly conveyed his assets to a separate
trust entity. In its interpretation of the Trust and consideration of
the facts, the Court must interpret those provisions and facts in a
manner that will make the trust agreement enforceable and legitimate,
if possible. See Ovrevik v. Ovrevik, 242 Ga. App. 95, 97, 527 S.E.2d
586, 588 (2000) (“In construing an express trust, we look first and
foremost to the language therein and interpret that language to
effectuate the intent of the settlors. We turn to parol evidence only
if the trust instrument is ambiguous[.]”) (citation omitted).
11
“Letter of Direction” create a genuine factual dispute as to
whether John Gill was the sole beneficiary.
Intervenors
UBIs
were
and
issued
the
to
Gill
the
Defendants
Healing
contend
Water
that
Ministry
ninety
of
the
International Academy of Lymphology and that no other UBIs were
issued.
Given the Cornerstone Trust’s statement that the trust
is
the
“for
benefit
of
the
holders
of
Units
of
Beneficial
Interest (UBIs),” Cornerstone Trust Decl. 5 ¶ 6.1, Intervenors
and the Gill Defendants assert that the Healing Water Ministry
of the International Academy of Lymphology, whose minister is
John Gill, is the only beneficiary entitled to distributions
from the Cornerstone Trust.
In
support
of
their
assertion
that
the
Healing
Water
Ministry of the International Academy of Lymphology was issued
ninety
UBIs,
Intervenors
and
the
Gill
Defendants
rely
on
a
“Trust Beneficiary Certificate” purportedly signed by John Gill
and two witnesses.
Gill Defs.’ Resp. to Pls.’ 2d Mot. for
Partial Summ. J. Ex. C, Trust Beneficiary Certificate, ECF No.
122-3.
Plaintiffs object to the Trust Beneficiary Certificate
because Intervenors and the Gill Defendants did not point to any
evidence
to
authenticate
it.
“A
party
may
object
that
the
material cited to support or dispute a fact cannot be presented
in a form that would be admissible in evidence.”
P. 56(c)(2).
Fed. R. Civ.
“To satisfy the requirement of authenticating or
12
identifying
an
item
of
evidence,
the
proponent
must
produce
evidence sufficient to support a finding that the item is what
the proponent claims it is.”
Fed. R. Evid. 901(a).
Neither
Intervenors nor the Gill Defendants pointed to any evidence to
establish the authenticity of the Trust Beneficiary Certificate.
The Court thus cannot consider the certificate.
admissible
evidence
establishing
that
UBIs
There is no
were
issued
exclusively to the Healing Water Ministry of the International
Academy of Lymphology.
Moreover,
this
inadmissible
evidence
is
clearly
contradicted by the Cornerstone Trust Declaration, which states,
“Trustor distributes the UBIs to the Beneficiaries as witnessed
by
the
Trustees.”
Cornerstone
Trust
Decl.
4
¶
4.1.
The
Trustee’s minutes state that Hartshorn as Trustee recognizes the
conveyance of assets to the Cornerstone Trust “and that said
assets are hereby irrevocably accepted by said Trustee . . . in
the
best
interest(s)
of
the
Beneficiaries,
therein
defined.”
Gill Defs.’ Resp. to Pls.’ 2d Mot. for Partial Summ. J. Ex. A at
40, Trustee’s Minutes, ECF No. 122-1.
Certificate
submitted
beneficiaries
named
by
in
Plaintiff
the
The minutes and the Trust
both
Cornerstone
establish
Trust
that
the
Declaration—
including John Gill’s children—“are the joint holders of the
total One Hundred (100) Units of Beneficial Interest (UBIs)” in
the Cornerstone Trust.
Pls.’ Reply in Supp. of Pls.’ Mot. for
13
Summ. J. Ex. 1, Trust Certificate, ECF No. 144; accord Trustee’s
Minutes.5
The Trust also provides that after UBIs are issued to
beneficiaries, they cannot be transferred without approval by
the Trustees, Cornerstone Trust Decl. 10 ¶ 12.2b), and there is
no evidence that the attempted transfer of ninety UBIs to the
Healing
Water
Ministry
of
the
Lymphology was ever approved.
International
Academy
of
For all of these reasons, the
Trust Beneficiary Certificate cannot establish that John Gill
was the sole beneficiary of the Cornerstone Trust.6
The Gill Defendants and Intervenors also rely on a “Letter
of Direction” dated June 18, 1999.
Gill Defs.’ Resp. to Pls.’
2d Mot. for Partial Summ. J. Ex. B, Letter of Direction, ECF No.
122-2.
The Letter of Direction purports to be from John Gill to
Kevin Hartshorn, although John Gill did not sign the letter.
The Letter of Direction states that it is “direction(s) to the
Executive
Trustee
from
the
Trustor.”
Id.
The
Letter
of
Direction further states that the Cornerstone Trust “shall have
only
one
(1)
beneficiary
at
this
5
time
even
though
the
Gill
The Court rejects the authenticity challenge to the Trust Certificate
submitted by Plaintiffs. Kevin Hartshorn signed the certificate, and
it is consistent with his position that the Cornerstone Trust is
irrevocable and that Plaintiffs are beneficiaries of the Cornerstone
Trust.
6
Intervenors and the Gill Defendants’ argument also requires the Court
to find that the Healing Water Ministry of the International Academy
of Lymphology, which was listed in the Trust Declaration as a trust
beneficiary, and John Gill, who was not listed as a beneficiary, are
one and the same.
While this may be how John Gill and the trustees
operated the trust as a practical matter, it conflicts with the actual
language in the Trust Declaration.
14
Family
Cornerstone
beneficiaries.”
Trust
Id.
provides
for
three
(3)
classes
of
The letter instructs the trustees of all
the trusts that benefit the Cornerstone Trust that they should
“bypass Gill Family Cornerstone Trust and distribute monthly all
their cash directly to the Healing Water Ministry, Integrated
Auxiliary Chapter of the International Academy of Lymphology,”
whose
“assigned
Minister”
was
John
Gill.
Id.
The
letter
further states that it “shall stand as clarification for the
term other charities or charitable trusts” in paragraph 12.1 of
the
Cornerstone
assignments
and
Cornerstone
Trust:
Trust
must
and
all
funded
trusts
“any
buy
[sic]
be
Ministry IAC of the IAL.
a
future
subordinate
the
to
charitable
Gill
Family
Healing
Water
This is a private Ministry and No
charities’ [sic] outside the IAL shall ever be funded.”
Id.
Finally, the letter states that John Gill’s children “are not
beneficiaries
at
this
time
but
are
listed
as
a
class
of
beneficiaries and they will become eligible beneficiaries upon
their thirty second birthday.”
Id.
There is a fact dispute regarding the authenticity of the
Letter of Direction.
The Gill Defendants assert that Loren Gill
saw John Gill type the Letter of Direction and witnessed Kevin
Hartshorn initial it.
Loren Gill Dep. 21:15-24:4, ECF No. 64.
Plaintiffs and the Hartshorn Defendants contend that the letter
is
a
fake;
Hartshorn
testified
15
that
he
did
not
initial
the
document
and
did
not
see
it
until
this
litigation
began.
Hartshorn Dep. vol. IV 754:9-756:4, ECF No. 71.
Even assuming that the Letter of Direction is authentic for
purposes of the present motions, the Letter does not change the
Court’s
interpretation
of
the
Cornerstone
Trust.
The
Gill
Defendants contend that the Court may consider the Letter of
Direction as parol evidence that clarifies ambiguities in the
Cornerstone Trust.
is
at
issue,
“When the construction of an express trust
the
court
circumstances
surrounding
execution
the
may
of
ambiguities,
both
trust
the
and
latent
hear
parol
settlor
parol
and
at
evidence
the
evidence
patent.”
to
of
the
of
the
explain
all
time
O.C.G.A. §
53-12-27;
accord O.C.G.A. § 24-3-3 (stating that “(a) All contemporaneous
writings shall be admissible to explain each other” and that
“(b)
Parol
evidence
ambiguities,
both
contemporaneous
shall
latent
evidence
be
admissible
and
patent”).
shall
be
to
explain
But
generally
all
“[p]arol
inadmissible
to
contradict or vary the terms of a valid written instrument.”
O.C.G.A. § 24-3-1.
Intervenors and the Gill Defendants argue that the Letter
of
Direction
merely
“clarifies”
the
Cornerstone
Trust
Declaration and can therefore be considered as parol evidence of
the settlor’s intent.
“clarify”
the
But the Letter of Direction does not
Cornerstone
Trust
16
Declaration.
It
directly
conflicts
Cornerstone
with
the
Trust
Cornerstone
declaration
Trust
provides
Declaration.
for
three
The
classes
of
beneficiaries: (1) “Any/all natural and/or adopted children and
grandchildren of the Trustor,” (2) “The Healing Water Ministries
Integrated Auxiliary of the Order of the IAL,” and (3) “any
other charitable Trusts or other organizations as established by
the
Trustees
distribution.”
of
this
entity
for
purposes
Cornerstone Trust Decl. 9 ¶ 12.1.
of
beneficial
The Letter of
Direction, on the other hand, states that the Cornerstone Trust
“shall have only one (1) beneficiary at this time even though
[it] provides for three (3) classes of beneficiaries.”
Letter
of Direction.
Because the Letter of Direction seeks to modify a material
term of the Cornerstone Trust, the Court must determine whether
the unsigned Letter of Direction has any effect.
Even if the
Court assumed that John Gill expressly reserved the right to
modify the Cornerstone Trust Declaration (which he did not), the
Letter of Direction does not comply with O.C.G.A. § 53-12-40(c),
which
requires
that
“[a]ny
revocation
or
modification
of
an
express trust shall be in writing and signed by the settlor.”
John Gill did not sign the Letter of Direction, and there is no
evidence that Kevin Hartshorn was acting as John Gill’s agent
acting
under
a
power
of
attorney
17
containing
express
authorization when he allegedly initialed it.
The Letter of
Direction thus does not modify the Cornerstone Trust.
In
summary,
the
Cornerstone
Trust
Declaration
clearly
manifests John Gill’s intention to give a beneficial interest in
the trust property to his children.
The admissible evidence in
the present record does not create a genuine factual dispute as
to whether John Gill is the sole beneficiary of the Cornerstone
Trust, whether he retained the right to modify the Cornerstone
Trust, or whether he validly modified the Cornerstone Trust.
There is also no admissible evidence John Gill issued UBIs in
the Cornerstone Trust exclusively to the Healing Water Ministry
of
the
International
Academy
evidence
in
the
classes
of
beneficiaries
Cornerstone Trust.
Trust
is
present
of
record
Lymphology.
establishes
jointly
hold
the
Rather,
that
all
UBIs
in
the
three
the
For all of these reasons, the Cornerstone
irrevocable,
and
the
beneficiaries
are
the
three
classes of beneficiaries listed in ¶ 12.1 of the Cornerstone
Trust Declaration.7
7
Plaintiffs also seek a declaration regarding the phrase “any other
charitable Trusts or other organizations.” Cornerstone Trust Decl. 9
¶ 12.1. Based on the present record, there does not appear to be an
actual controversy between the parties on this issue.
Although the
parties disagree about the meaning of the phrase, the disagreement is
purely academic at this time because the only “other organization”
named by the Cornerstone Trust’s trustee as a separate class for
beneficial distribution is the Church of Compassionate Service, which
the Hartshorn Defendants assert is a charitable organization.
Given
the absence of an actual controversy regarding the phrase, the Court
finds no reason to construe it.
18
B.
Hartshorn Defendants’ Summary Judgment Motion (ECF No.
106)
Loren Gill filed several cross-claims against the Hartshorn
Defendants that are related to the Cornerstone Trust and trusts
that benefit the Cornerstone Trust.
Although Michael Gill and
Wallace Whitten had not been joined as parties when Loren Gill
filed his cross-claims, they joined the cross-claims and were
later permitted to file an intervenor complaint alleging similar
claims
against
Defendants
seek
the
Hartshorn
summary
Defendants.
judgment
on
(1)
The
Loren
Hartshorn
Gill’s
cross-
claims predicated on his claimed status as “trust protector” of
the Cornerstone Trust, (2) Loren Gill’s cross-claims predicated
on his claimed status as trustee of the real estate holding
trusts, and (3) Whitten’s cross-claims predicated on his status
as
a
trustee
holding
of
trusts.
the
Cornerstone
The
Hartshorn
Trust
and
Defendants
the
did
real
not
estate
move
for
summary judgment on Michael Gill’s claims.
1.
Loren Gill’s Cross-Claims
The Court previously ruled that Loren Gill is not the trust
protector of the Cornerstone Trust and is not a trustee on any
of the real estate holding trusts.
Gill v. Hartshorn, No. 4:12-
CV-77 (CDL), 2013 WL 2406554, at *3-*4 (M.D. Ga. May 31, 2013).
Loren Gill did not seek reconsideration of the Court’s previous
rulings and does not appear to do so now.
19
The Court therefore
grants the Hartshorn Defendants’ summary judgment motion as to
Loren
Gill’s
cross-claims
brought
as
trust
protector
of
the
Cornerstone Trust and trustee of the real estate holding trusts.
In response to the Hartshorn Defendants’ summary judgment
motion, Loren Gill asserted that he has standing to bring his
cross-claims as a trustee of certain business holding trusts.
The Hartshorn Defendants did not move for summary judgment as to
cross-claims
Loren
Gill
brought
as
trustee
of
the
business
holding trusts, and those cross-claims were clearly raised in
the Answer & Cross-Claim of Loren Gill and Elm Leasing, LLC (ECF
No. 31).
In their reply brief, the Hartshorn Defendants for the
first time questioned whether Loren Gill may pursue his crossclaims based on his undisputed status as a trustee on certain
business
holding
trusts.
The
Court
“do[es]
not
consider
arguments raised for the first time in a reply brief,” so this
issue is not properly before the Court.
Wetherbee v. S. Co.,
423 F. App’x 933, 934 (11th Cir. 2011) (per curiam).
Loren
Defendants’
bring
his
Cornerstone
Gill
also
summary
argues
judgment
cross-claims
Trust.
in
motion
because
This
is
response
he
the
that
is
first
a
to
he
the
has
Hartshorn
standing
beneficiary
time
Loren
to
of
the
Gill
has
asserted that he is a beneficiary of the Cornerstone Trust, and
he did not predicate any of his cross-claims on his alleged
beneficiary
status.
See
Answer
20
&
Cross-Cl.
of
Gill
Defs.,
Whitten & Michael Gill 20 ¶¶ 2-3, ECF No. 31.
The Court will
not permit Loren Gill to amend his cross-claims through argument
in a brief opposing summary judgment.
not
point
to
any
admissible
Moreover, Loren Gill did
evidence
beneficiary of the Cornerstone Trust.
that
he
actually
is
a
Rather, he pointed to an
unauthenticated “Assignment” certificate which states that Loren
Gill
is
an
Integrated
associate
Auxiliary
minister
Chapter
of
of
the
“Ten
Talents
International
Ministry
Academy
of
Life” and “Healing Water Ministry Integrated Auxiliary Chapter
of the International Academy of Life.”
Gill Defs.’ Resp. to
Hartshorn Defs.’ Mot. for Partial Summ. J. Ex. A, Assignment
Certificate 2-3, ECF No. 120-1.
The Hartshorn Defendants object
to the certificate because the Gill Defendants did not point to
any evidence to authenticate it.
And, even if the document had
been authenticated and could be considered, the Gill Defendants
pointed
to
no
evidence
that
Integrated
Auxiliary
Chapter
Life”
the
as
is
International
states
that
same
Academy
Loren
of
Gill
the
the
of
the
Healing
“Healing
International
Water
Lymphology.8
was
Water
appointed
for
Academy
Ministry
Also,
the
a
Ministry
of
of
the
certificate
one-year
term
beginning in October of 2011, but there is no evidence that
Loren Gill’s term was renewed or extended.
8
Id. at 2-3.
For all
Intervenors allege that the two entities are the same, Intervenor
Compl. 3 ¶ 14, ECF No. 82, but they did not point to any evidence to
prove it.
21
of these reasons, Loren Gill cannot pursue his cross-claims as a
beneficiary of the Cornerstone Trust.
2.
Whitten’s Cross-Claims
The Court previously ruled that Whitten is not a trustee of
any of the real estate holding trusts.
at *4.
Gill, 2013 WL 2406554,
Whitten did not seek reconsideration of the Court’s
previous ruling and does not appear to do so now.
therefore
grants
the
Hartshorn
Defendants’
The Court
summary
judgment
motion on Whitten’s cross-claims brought as trustee of the real
estate holding trusts.
Turning
trustee
of
to
the
Whitten’s
cross-claims
Cornerstone
Trust,
in
Whitten
his
capacity
initially
as
asserted
that he did “not serve as a trustee of the Cornerstone Trust.”
Answer & Cross-Cl. of Gill Defs., Whitten & Michael Gill 20 ¶ 4.
Whitten also stated in a 2011 declaration offered in a related
case
that
he
was
not
a
trustee
of
the
Cornerstone
Trust.
Whitten Decl. ¶ 5, ECF No. 9 in E. Prop. Dev., LLC v. Gill,
4:11-CV-62.
Whitten has, however, asserted that he is a trustee
of the Cornerstone Trust since late 2012, when he filed his
Motion
to
Intervene.
Mot.
to
Intervene
¶
1,
ECF
No.
50.
Specifically, Whitten contends that he was appointed as trustee
of the Cornerstone Trust in 2005 or 2006.
Decl. 1, ECF No. 50-2;
accord
Id. Ex. B, Whitten
Intervenor Resp. to Hartshorn
Defs.’ Mot. for Partial Summ. J. Ex. A, 2d Thomas Decl. 1, ECF
22
No. 115 at 8.
Whitten further asserts that in 2010, Daniel Van
Gasken deceived Whitten into believing that he had been removed
as a trustee of the Cornerstone Trust even though he was never
actually removed.
Whitten
Decl.
2.
Whitten
discovered the
deception in 2012 when Intervenor Steve Thomas contacted Whitten
to tell him that he had not been removed as a trustee of the
Cornerstone Trust.
Id.
The Hartshorn Defendants acknowledge that the Court may not
disregard self-serving testimony in determining whether genuine
fact disputes exist for trial.
See, e.g., Newsome v. Chatham
Cnty. Detention Ctr., 256 F. App’x 342, 346 (11th Cir. 2007)
(per
curiam).
They
contend,
however,
that
Whitten’s
2012
declaration should be disregarded as a sham.
The general rule
is
affidavit
that
“a
district
court
may
find
an
which
contradicts testimony on deposition a sham when the party merely
contradicts
explanation.”
its
prior
testimony
without
giving
any
valid
Van T. Junkins & Assocs., Inc. v. U.S. Indus.,
Inc., 736 F.2d 656, 656 (11th Cir. 1984).
Here, Whitten’s 2012
declaration contradicts his 2011 declaration, but Whitten does
offer an explanation: Van Gasken deceived Whitten into believing
that he had been removed as a trustee, and Whitten did not find
out about the deception until after the cross-claim had been
filed.
While a jury may well find that Whitten’s account of the
facts is not credible, that is not the Court’s call to make at
23
the summary judgment stage.
There is a fact dispute as to
whether Whitten is a trustee of the Cornerstone Trust, and the
Hartshorn Defendants’ summary judgment motion as to Whitten’s
claims in that capacity is denied.
In
summary,
the
Court
grants
the
Hartshorn
Defendants’
summary judgment motion as to Loren Gill’s cross-claims brought
as trust protector of the Cornerstone Trust, Loren Gill’s crossclaims brought as trustee of the real estate holding trusts, and
Whitten’s cross-claims brought as trustee of the real estate
holding trusts.
Loren Gill may not pursue any claims as a
beneficiary of the Cornerstone Trust.
The Court denies the Hartshorn Defendants’ summary judgment
motion
as
to
Whitten’s
claims
brought
in
his
capacity
as
a
trustee of the Cornerstone Trust because a genuine fact dispute
exists regarding Whitten’s trustee status.
Loren Gill’s cross-
claims predicated on his status as a trustee of several business
holding
trusts
remain
pending,
as
do
Michael
Gill’s
trust-
related claims against the Hartshorn Defendants.
C.
In
Gill Defendants’ Summary Judgment Motion (ECF No. 105)
addition
to
their
other
disputes regarding Elm Leasing, LLC.
claims,
the
parties
have
The Court previously found
that Loren Gill is the owner of Elm Leasing, which owns several
rental properties in Columbus, Georgia.
E. Prop. Dev. LLC v.
Gill, No. 4:11-CV-62 (CDL), 2012 WL 1424664, at *1 (M.D. Ga.
24
Apr. 24, 2012).
Loren Gill asserts that
Defendants Eastern
Property Development, LLC and South East Enterprise Group, LLC
converted and misappropriated rental proceeds belonging to Elm
Leasing.
Defendant Daniel Van Gasken, a trustee of the single
asset property trusts that benefit the Cornerstone Trust, argues
that funds from the single asset property trusts were used to
purchase and maintain properties owned by Elm Leasing, and he
brought a cross-claim against Elm Leasing asking that the funds
be returned to the single asset property trusts. 9
Plaintiffs
likewise assert several claims based on their contention that
Elm Leasing received funds from the single asset property trusts
that must be returned.
The Gill Defendants moved for partial
summary judgment, asserting that Eastern Property and South East
Enterprise owe Elm Properties $609,747.56 in rental proceeds.
The Gill Defendants also seek summary judgment as to Plaintiffs’
claims and Van Gasken’s cross-claim related to Elm Leasing.
In
opposition
to
the
Gill
Defendants’
summary
judgment
motion, Plaintiffs and Van Gasken relied on the affidavit of
9
Van Gasken brought his cross-claims as trustee of the single asset
trusts. Loren Gill argues that Van Gasken cannot bring any claims as
trustee of the single asset trusts because he was not sued in his
capacity as trustee for a specific trust.
In support of this
argument, Loren Gill cites a case regarding the distinction between a
lawsuit against a government official in his official capacity and a
lawsuit against a government official in his individual capacity. Bd.
of Comm’rs of Glynn Cnty. v. Johnson, 311 Ga. App. 867, 717 S.E.2d 272
(2011).
That case has no application here.
Loren Gill’s breach of
trust claims against Van Gasken are based on Van Gasken’s acts and
omissions as trustee of the single asset trusts. Van Gasken may bring
cross-claims in his capacity as trustee of the single asset trusts.
25
Robert Behar.
Pls.’ Resp. to Gill Defs.’ Mot. for Partial Summ.
J. Attach. 3, Behar Aff., ECF No. 128-3.
The Gill Defendants
contend that the Court must disregard Behar’s affidavit because
his conclusions lack credible support.
public accountant.
Behar Aff. ¶ 2.
Behar is a certified
He reviewed the records of
the Cornerstone Trust and related trusts.
Id. ¶¶ 3-4.
report and affidavit are based on that review.
Behar’s
Gill Defendants
may quarrel with Behar’s interpretation of the records, but that
does not mean that Behar’s conclusions lack credible support.
The Court declines to exclude Behar’s affidavit.
It is undisputed that Elm Leasing owns eight tracts of real
property in Columbus, Georgia.
It is also undisputed that Gill
Companies, LLC managed the properties owned by Elm Leasing until
John Gill fled the country.
After John Gill became a fugitive,
Eastern Property took over management of the rental properties,
including Elm Leasing’s properties.
by Hartshorn.
the
Eastern Property is managed
It is undisputed that Eastern Property managed
properties
owned
by
Elm
Leasing
and
collected
rents
generated by those properties from August 2010 until March 2012.
Based
on
the
present
record,
including
Behar’s
affidavit,
genuine fact disputes exist as to whether Eastern Property has
been
compensated
Therefore,
based
for
on
managing
the
the
present
26
Elm
Leasing
record,
the
properties.
Court
cannot
determine what, if any, rental proceeds must be remitted to
Loren Gill.
There are also significant factual disputes regarding whose
funds were used to purchase the Elm Leasing Properties.
There
is evidence that Loren Gill used funds from his pay-day loan
stores to pay mortgages on Elm Leasing properties.
But there is
also
Elm
evidence
that
the
funds
that
paid
for
the
Leasing
properties were taken from the Cornerstone Trust and the single
asset trusts that benefit the Cornerstone Trust.
5, 15-22.
Behar Aff. ¶¶
Based on the obvious fact disputes in the present
record, Loren Gill is not entitled to summary judgment on his
Elm Leasing claims, and he is not entitled to summary judgment
as to the Elm Leasing claims of Plaintiffs and Van Gasken.
CONCLUSION
For the reasons and to the extent explained in this Order,
Plaintiffs’ Second Motion for Partial Summary Judgment (ECF No.
104) is granted.
The Hartshorn Defendants’ Motion for Partial
Summary Judgment (ECF No. 106) is granted in part and denied in
part.
The Gill Defendants’ Motion for Partial Summary Judgment
(ECF No. 105) is denied.
IT IS SO ORDERED, this 3rd day of January, 2014.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE
27
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