Gray v. Gray

Filing 241

///ORDER AFTER BENCH TRIAL: FINDINGS OF FACT AND RULINGS OF LAW. The court directs Skip Gray to reimburse CLG Trust $170 as outlined. Judgment is otherwise in Skip Gray's favor as to Counts 3 and 4. The clerk shall enter judgment accordingly. The court adopts parties' findings of fact and conclusions of law as outlined, and otherwise denies. The court also denies 234 MOTION to Strike Affirmative Defenses Waived by CLG Trustee. Prevailing party entitle d to costs as outlined. The matter of attorney fees and/or reimbursements remains for adjudication as outlined and the 14-day period to file a motion for attorney fees is stayed pending resolution of the pending appeal. So Ordered by Judge Joseph N. Laplante.(jb)

Case 1:18-cv-00522-JL Document 241 Filed 01/04/23 Page 1 of 43

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Evan W. Gray
v.

Civil No. 18-cv-522-JL
Opinion No. 2023 DNH 001

Chester L. Gray III

ORDER AFTER BENCH TRIAL:
FINDINGS OF FACT AND RULINGS OF LAW
During their lives, Barbara and Chester Gray accrued a significant amount of wealth,
which they intended to leave to their three sons, Chester L. Gray III (“Skip”), Scott Gray, and
Evan Gray, via two relatively ordinary trusts.1 Spurred, however, by the one extraordinary
provision--which carves out a chunk of the brothers’ inheritance to maintain Barbara and
Chester’s old home and prope35y in Grafton, New Hampshire--the brothers have engaged in a
series of legal fights since Barbara’s and Chester’s respective deaths in 2013 and 2017.2
The present case is just one of these contentious disputes. In 2018, Evan, who proceeds
pro se,3 began this case against Skip, his oldest brother and then-executor of their father’s estate.
Evan’s claims against Skip relate to two trusts created by their parents as vehicles to manage

1

Because the principals in this case all have the same last name, the court uses their first
names for clarity, as it did throughout trial. The court intends no disrespect toward any party.
See, e.g., Johnson v. Johnson, 23 F.4th 136, 138 n.1 (1st Cir. 2022) (using first names of
members of family with the same last name for clarity); Sacks v. Dissinger, 488 Mass. 780, 782
n.3 (2021) (“Because many parties share a surname, we refer to them all by their first names.”).
2
Many characteristics of the Grays’ feud--bombastic, long running, and sometimes petty-are not unique within the brother-versus-brother canon. See Beane v. Beane, 856 F. Supp. 2d 280,
284 & n.1 (D.N.H. 2012) (collecting fraternal disputes).
3
Although Evan proceeds pro se, he is a lawyer and member of the bar in the State of
New York. Prior to trial, Evan recounted his experience practicing law. Attorney David Eby
entered a limited appearance on Evan’s behalf for the purpose of presenting Evan’s direct
examination during trial.

Case 1:18-cv-00522-JL Document 241 Filed 01/04/23 Page 2 of 43

their estates and the brothers’ inheritance: the Barbara J. Gray Revocable Trust of 1996 (“BJG
Trust”) and the Chester L. Gray, Jr. Revocable Trust of 1996 (“CLG Trust”). Currently, all three
brothers are co-trustees of the BJG Trust, but only Skip is trustee of the CLG Trust.
In his two claims that remain in this case,4 Evan alleges that Skip violated his fiduciary
duties as the sole trustee of the CLG Trust and as a co-trustee of the BJG Trust in the year or so
following Chester’s 2017 death. Skip, for his part, brought several counterclaims against Evan
and their other brother, Scott, including a declaratory judgment counterclaim asking for an
interpretation of the terms of the BJG Trust. In 2020, the court granted summary judgment in
Skip’s favor on his declaratory judgment counterclaim. Gray v. Gray, No. 18-522-JL, 2020 WL
4194964 (D.N.H. July 20, 2020).
In June 2022, the court held a four-day bench trial on Evan’s remaining claims. Evan and
Skip5 submitted sets of proposed findings and rulings, and they jointly submitted a statement of
agreed-upon facts and a timeline of events. Having considered the evidence presented at trial
and with the assistance of the materials submitted by the parties, the court makes the following
findings of fact and rulings of law. See Federal Rule of Civil Procedure 52(a).
As to Count 3, the court finds that Evan has not proved his claims except as to a $170
payment made from the CLG Trust property for Skip’s personal legal expenses. As to Count 4,
the court finds that removal of Skip as co-trustee of the BJG Trust is not warranted.6

In 2021, the court dismissed Evan’s two claims against Chester as moot after a state
probate court removed Skip as executor and appointed Evan as his replacement.
5
Scott Gray is a defendant as to Skip’s counterclaims, but he is not as to Counts 3 and 4
of Evan’s Amended Complaint. Accordingly, Scott participated in the trial only as a witness.
6
The court also denies Evan Gray’s motion to strike (doc. no. 234) two purported
“statutory affirmative defenses” under RSA 564-B:9-901 and 564-B:9-902 that Evan claims Skip
raised at the eleventh hour before trial. The court denies Evan’s motion because Skip’s general
good faith defense stated in his answer as his Third Defense (doc. no. 15 at 32) encompasses
4

2

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I.

Findings of Fact

1.

During trial, Evan, Scott, Skip, and Attorney Nicholas Harvey testified.

2.

In addition, Evan presented the expert testimony of John Lisle, and Skip presented the

expert testimony of Attorney Joseph McDonald. Lisle is a retired trust portfolio manager in
Pennsylvania. Attorney McDonald is an attorney in New Hampshire who specializes in trust and
probate law. Both Lisle and Attorney McDonald have extensive experience as trustees and in
managing trust property.
3.

Both Lisle and Attorney McDonald recounted impressive experience in their respective

professions, which rendered them qualified to give their opinions about customs and standards in
trust property management, but Attorney McDonald’s testimony was more persuasive because it
was more applicable to the facts of this case.
A.

Establishment of amended and restated CLG Trust and BJG Trust

4.

Chester L. Gray Jr. and Barbara J. Gray were Skip, Scott, and Evan’s parents.7

5.

In 1996, Chester and Barbara created the CLG Trust and the BJG Trust.8 Chester was the

settlor of the CLG Trust. Barbara was the settlor of the BJG Trust.9

good faith defenses under RSA 564-B:9-901 and 564-B:9-902. See Williams v. Ashland Eng’g
Co., 45 F.3d 588, 593 (1st Cir. 1995), overruled on other grounds by, Carpenters Local Union
No. 26 v. U.S. Fidelity & Guar. Co., 215 F.3d 136 (1st Cir. 2000). The Third Defense as pleaded
put Evan on notice that Skip would be arguing that he is not liable because he acted in good
faith. Furthermore, Evan has not shown that he was prejudiced because Skip did not particularly
identify RSA 564-B:9-901 or 564-B:9-902 in his answer. See Williams, 45 F.3d at 593 (“Where,
as here, a plaintiff clearly anticipates that an issue will be litigated, and is not unfairly prejudiced
when the defendant actually raises it, a mere failure to plead the defense more particularly will
not constitute a waiver.”).
7
Undisputed Facts (doc. no. 214) ¶ 3.
8
Id. ¶¶ 13-14.
9
The settlor, in the context of this case, is the person or persons who created the trust.
See RSA 564-B:1-103(15).
3

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6.

In 2009, Chester hired Attorney Nicholas Harvey, who was then employed by the law

firm Stebbins Bradley, to help him reevaluate their estate planning.
7.

In 2011, aided by Attorney Harvey, Chester and Barbara amended and restated the terms

of the CLG Trust and BJG Trust.10 The trusts’ amended terms are set out in two documents,
which in a series of articles enumerate the trusts’ purposes, the proper handling of the trusts’
property upon Chester’s and Barbara’s deaths, and the powers and duties of the trustees.
8.

Under the 2011 terms, Chester and Barbara served as the co-trustees of both the CLG

Trust and the BJG Trust, which were revocable until their respective settlor’s death. The trusts
became irrevocable, and the provisions for trustee succession were triggered, upon their
respective settlor’s death.11
9.

Chester and Barbara created the CLG Trust and BJG Trust, respectively, to aid the

management of their property before and after their deaths.12
10.

At the time Attorney Harvey drafted the trusts, Chester or Barbara faced a significant

estate tax after the first spouse’s death. Accordingly, rather than create one trust into which
Chester and Barbara poured all their joint property, Chester and Barbara formed separate trusts
and split their otherwise joint property between the trusts to avoid the estate tax.
11.

After Chester and Barbara’s deaths and after payment of any obligations, the property of

both trusts--with one notable exception--were meant to be distributed in equal parts to Skip,
Scott, and Evan.13

10

Undisputed Facts ¶¶ 17-26.
Preamble, Arts. 1.4 & 1.5, BJG Trust; Preamble, Arts. 1.4 & 1.5, CLG Trust.
12
Art. 1.1B, BJG Trust; Art. 1.1.B, CLG Trust.
13
Art. 2.4, BJG Trust; Art. 2.2, CLG Trust.
11

4

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12.

The property Chester and Barbara held in the trusts included assorted securities, bonds,

and cash. However, Chester also placed into the CLG Trust their home and some surrounding
property, located in Grafton and Springfield, New Hampshire (the “Grafton Property”).14
13.

The Grafton Property consists of a large house and more than 200 acres of land.

14.

From Chester’s retirement around 1991 until their respective deaths, Chester and Barbara

lived at the Grafton Property.
15.

The Grafton Property, which had been in Barbara’s family, was exceptionally important

to Chester, and he wanted to maximize the chance that the property would be held by his
descendants.
16.

Thus, one purpose of the CLG Trust is to hold and maintain the Grafton Property for

Barbara and Chester’s descendants “for as long as is reasonably and prudently possible.” To that
end, the CLG Trust provides that, after Chester’s death, the Grafton Property will be placed in a
“Continuing Trust,” which shall exist until certain conditions outlined in Article 2.2.A(2)-(4) of
the CLG Trust are met.15
17.

The CLG Trust provides for a “maintenance fund” as part of the Continuing Trust. The

purpose of the maintenance fund is to aid Skip, who is provided preferential treatment with
respect to using the Grafton Property, in managing the Grafton Property after Chester’s death.
The CLG Trust directs its trustee to endow the maintenance fund with assets valued at $820,000,
with an adjustment for inflation, to generate income for the property’s maintenance. The CLG

14

The property is contiguous but crosses portions of both Grafton and Springfield. For
simplicity, the court refers to it as just the “Grafton Property.”
15
Art. 2.2.A(1)-(4), CLG Trust; Gray, 2020 WL 4194964, at *15. If the Continuing
Trust terminates and the Grafton Property is sold, the money from the sale and any remaining
assets in the maintenance fund are to be distributed equally among the three brothers. See Art.
2.2.A(2), (4).
5

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Trust also permits Skip “at his election” to personally pay any of the Grafton Property’s costs.16
18.

In deciding one of Skip’s counterclaims, this court interpreted the CLG Trust to mean

that the Continuing Trust and maintenance fund cannot be created “until all death taxes,
administrative expenses and other obligations” are paid or provided for.17 Only after the
Continuing Trust and maintenance fund are created can the trustee distribute the remainder of the
CLG Trust’s property equally between Skip, Scott, and Evan.18
19.

The CLG Trust gives Skip preferential treatment in the use of the Grafton Property and

the option to reside at the Grafton Property.19 In the CLG Trust instrument, Chester and Barbara
explained why Skip was given preferential treatment:
We understand that holding this land, together with the aforementioned liquid
assets held in the maintenance fund, in this trust for an extended period of time may
appear to be an inequitable benefit for our son, Skip. However, he has expressed
the greatest interest in continuing to use and enjoy this land and will do so as a
steward of the real estate and also for the use of our other sons and their
descendants.20
20.

The BJG Trust also contains a provision, referred to during this case as a “pour-over

provision,” related to the Grafton Property and the maintenance fund. Specifically, BJG Trust
Article 2.4.A provides:
If at the time of the death of my husband and myself, the amount of liquid assets
held in the continuing trust for real estate located in Grafton and Springfield, New
Hampshire as set forth in my husband’s trust is less than [$820,000 adjusted for
inflation], I direct that my trustee distribute from my trust an amount of property

16

Art. 2.2.A(1), CLG Trust.
Gray, 2020 WL 4194964, at *15.
18
Art. 2.2.B, CLG Trust.
19
Art. 2.2.A(1), CLG Trust. The trust terms require Skip to “make the property available”
to Scott and Evan “for short term periods each year if they want to visit and enjoy the property as
well . . . .” Id.
20
Art. 2.2.A(3), CLG Trust.
17

6

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that will increase the sums held in said continuing trust of my husband’s to
[$820,000 adjusted for inflation].21
21.

Whether the “amount of liquid assets” in the Continuing Trust is less than $820,000,

adjusted for inflation, is determined when the Continuing Trust and maintenance fund are
created.22
22.

The BJG Trust directs that, after Article 2.4.A is satisfied, its trustees make an equal

distribution of its remaining property to Skip, Scott, and Evan. Once the BJG Trust property is,
as necessary, distributed to the maintenance fund and the remainder to Skip, Scott, and Evan, the
BJG Trust would effectively cease to exist.23
23.

Both trust instruments contain provisions setting out certain powers of trustees—and

limiting their liability for violations of fiduciary duties. Specifically, Articles 4.3 of both the
BJG Trust and the CLG Trust state:
The trustee shall be entitled to use the trustee’s best judgment in exercising the
powers and rights conferred by this trust and in fulfilling the trustee’s obligations
under the trust and those imposed by law; the trustee shall not be liable for any
action taken or omitted in good faith pursuant to such provisions.
B.

Barbara Gray’s mental state when executing the BJG Trust documents

24.

During trial Evan testified to his belief that, when the trusts were amended or restated by

Barbara and Chester in 2011, Barbara lacked the mental capacity to engage with a complex
matter such as a trust document. Evan’s belief about Barbara’s mental capacity was based on his
observation in November and December 2010 that Barbara, who had been an avid reader and
never watched television before, had stopped reading and only watched television.

21

Art. 2.4.A, BJG Trust. The BJG Trust directs the inflation adjustment to be calculated
“in accordance with the percentage changes in the Consumer Price Index – All Urban Consumers
(Northeast Region) from January 1, 2011 until January of the year of my death . . . .” Id.
22
Gray, 2020 WL 4194964, at *15.
23
See Arts. 2.4.B & 3.7 (“Termination of Small Trusts”), BJG Trust.
7

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25.

Attorney Harvey met with Barbara in February 2011 when she and Chester executed the

trust restatements. Attorney Harvey explained the trusts’ terms, including the pour-over
provision, to Barbara. Attorney Harvey “talked at some length” with both Chester and Barbara
about the Continuing Trust “to confirm that’s what both of them wanted.” Attorney Harvey
wanted to confirm at the meeting that the Continuing Trust also reflected Barbara’s wishes
because he had not yet met Barbara in person. Attorney Harvey testified that Barbara “seemed
very happy with it” and that he was satisfied with Barbara’s apparent understanding of the trusts’
terms.
26.

Barbara Gray was competent to restate her trust in 2011, which resulted in the BJG Trust.

C.

Chester’s and Barbara’s Deaths

27.

During their lifetimes, Chester and Barbara were co-trustees of both trusts. The trusts set

out trustee succession plans upon the deaths of one or both of Chester and Barbara.24
28.

Barbara died on April 9, 2013.25

29.

Per the trusts’ succession plans, Chester became sole trustee of both trusts after Barbara’s

death.26
30.

Chester died on April 26, 2017.27

31.

Consistent with the BJG Trust’s succession plan, Skip, Scott, and Evan became

co-trustees of the BJG Trust.28 Likewise, Skip accepted the role of sole trustee of the CLG

24

Art. 1.4, BJG Trust; Art. 1.4, CLG Trust.
Undisputed Facts ¶ 27.
26
Id. ¶ 28.
27
Id. ¶ 36.
28
Art. 1.4, BJG Trust; see Evan Gray Proposed Rulings of Law (doc. no. 229) ¶ 96.
25

8

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Trust.29 Skip was also appointed executor of Chester’s estate.30
32.

Evan contends that Skip did not tell him that he had accepted the role of trustee of the

CLG Trust.
33.

When Chester died, the BJG Trust held property valued just under $1.5 million.31 The

CLG Trust’s investment assets were valued at more than $1.5 million, and the CLG Trust also
held the Grafton Property.32 At the time Chester died, the CLG Trust investments were projected
to produce $63,792 in income per year.33
D.

Family Relationships

34.

Evan is a lawyer who practices law in New York City. Skip is a pastor and book seller in

Massachusetts. Scott lives in Florida, and he is a consultant who provides financial analysis
related to litigation.
35.

For a time as a young adult, Skip had a difficult relationship with his parents. As Skip

grew older, however, his relationship with his parents improved, and Skip then maintained a
good relationship with both of his parents through their deaths.
36.

Growing up, Skip did not have a close relationship with Scott and Evan because of the

difference in age among them. As adults, the three brothers never lived near each other, but they
gathered for holidays--usually at the Grafton Property with their parents.

29

Undisputed Facts ¶ 40. It is common for parents to name one child as a trustee of a
trust when that child and others are beneficiaries.
30
See id. ¶ 45. In May 2021, a probate court removed Chester as executor and appointed
Evan Gray in his place.
31
Id. ¶ 37.
32
Id. ¶ 38.
33
Id. ¶ 39.
9

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37.

Evan testified that he had been “subjected to malicious and sadistic mistreatment by”

Skip since Evan was a young child. Evan did not elaborate in his testimony on what specific
treatment by Skip during their childhood was “malicious and sadistic.”
38.

Evan had assumed that he would be executor of Chester’s estate.34 Evan also believes

that Barbara would have named him sole trustee of the BJG Trust, but Skip and Chester
conspired to influence Barbara to name Skip and Scott as co-trustees.
39.

Evan disagrees with Chester’s attempt to keep the Grafton Property in the family and

with his decision to create the maintenance fund. Evan also disagrees with Skip’s intent to
exercise his right under the CLG Trust to use the maintenance fund to maintain the property and
believes Skip should use his own money for that purpose.
40.

This case is just one of Evan’s suits over the brothers’ inheritance. Other suits continue

in state court.
E.

Initial Difficulties Administering the Trusts and Estate

41.

The jobs of executor and trustee proved difficult for Skip. At the time Chester died, Skip

“barely had any idea what a trust was” and “had very little understanding of the estate.” Skip
was also confused about the nature of the two trusts, believing at first that that the BJG Trust and
CLG Trust “were one account in essence.”
42.

Skip understood that he lacked experience or knowledge in trust management. He hired

Stebbins Bradley, the law firm that had prepared the trusts, to assist him with legal issues, and he
spoke with an account manager at Merrill Lynch to help him with financial issues. Skip also
hired an accountant to help with taxes for the estate and the trust. These advisors helped Skip,

34

Evan is disappointed that Skip did not ask for his help in managing the trust.
10

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and over time he learned, at least in general terms, what the jobs of trustee and executor required
of him.
43.

In the years prior to his death, Chester neglected the Grafton Property and his affairs.

After Chester died, it was difficult for Skip to manage the Grafton Property. The size of the
property--exceeding 200 acres--meant it required frequent outdoor maintenance, while the
interior of the home was in disarray and important paperwork and personal property were
scattered throughout the house. The neglect and disarray made putting together an inventory of
assets and tracking down necessary paperwork difficult for Skip.
44.

Skip spent a significant amount of time in the months following Chester’s death finding

the paperwork and determining the needs for the Grafton Property. Skip did not always act as
quickly as Evan wanted, and he had trouble keeping up with his responsibilities. Skip’s record
keeping was inconsistent, though it improved as he gained more experience.
45.

In the months following Chester’s death, Skip focused on his role as executor of

Chester’s estate and on the Grafton Property. Skip did not focus--contrary to Evan’s wishes--on
the other property held in the CLG Trust.
46.

Early on in the process, Skip and Evan were able to work together on some issues and

agreed to distribute property--separate from that involved in the trusts in this case--from
Chester’s retirement account. The brothers received a substantial amount of money from that
distribution.
47.

Despite this brief cooperation, Skip and Evan’s relationship was usually hostile.

48.

After Skip became trustee of the CLG Trust and executor of Chester’s estate, Evan

frequently demanded information from Skip that Skip either did not have or did not fully
understand how to obtain. Evan displayed impatience with his brother in his quests for

11

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information, and Skip’s different priorities frustrated Evan. Evan’s priorities likewise puzzled
Skip.
49.

Evan does not trust Skip. For example, Evan testified that he received a letter from

Skip’s law firm on his birthday. Evan believes that Skip told his lawyers to deliver the letter on
Evan’s birthday just to annoy him. And when asked at trial to acknowledge that Skip is a pastor,
Evan sardonically responded, “He professes to be.” It is unclear whether Evan believes Skip has
done anything correctly as a trustee.
50.

In turn, Skip has an uncomplimentary view of Evan. Skip implied during his testimony

that Evan drinks too much and has an anger problem.
51.

Evan’s correspondence with Skip and those working with Skip was unpleasant and

unnecessarily sharp and accusatory.35
52.

An early flashpoint for Evan involved Skip’s then-counsel’s initial miscalculation of the

inflation adjustment for the maintenance fund. Though seemingly trivial to resolve, the inflation
adjustment issue escalated as Evan and Skip’s counsel traded snide letters. 36
53.

On December 12, 2017--before the maintenance fund was created and the remainder of

either trust distributed--Evan notified Skip by letter that he was asserting claims that Chester
35

See, e.g., Pl. Exh. 31 (May 23, 2017 email responding to Stebbins Bradley paralegal
that raises numerous issues and previews future complaints about legal expenses); Pl. Exh. 40
(July 28, 2017 letter accusing Skip of failing to act with impartiality and stating that Skip had
conflicts of interest and raising numerous issues to Skip’s legal counsel); Pl. Exh. 55 (December
5 and 7, 2017 emails from Evan to Skip accusing Skip of misconduct).
36

Skip initially retained the law firm Stebbins Bradley to aid him with the trust
administration, and it was a lawyer from Stebbins Bradley who made the initial miscalculation of
the inflation adjustment. At some point after the initial miscalculation, Skip switched to the law
firm McLane Middleton because of “the sort of legal tone of Evan’s communications” about the
inflation adjustment and Skip wanted to have counsel “that was ready and willing and able to
deal with litigation.” McLane Middleton represented Skip in this lawsuit until December 2021.
The law firm Shaheen & Gordon represented Skip through trial.
12

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violated his fiduciary duties when he was trustee of the BJG Trust and CLG Trust. Evan
demanded payment of at least $850,000 from Chester’s estate and the CLG Trust37 in favor of
the BJG Trust. 38
54.

Scott delegated his authority as co-trustee to Evan with respect to Evan’s claims. Scott

did not “know the merits or the non-merits” of the claims. Since that time, Scott has “shut [the
case] out” and has not “paid much attention to it.” Scott wants to avoid taking sides between
Skip and Evan, but continues to authorize this suit to move forward in his capacity as trustee of
the BJG Trust.
55.

Evan believes that the maintenance fund should bear the entire cost of attorney fees

resulting from his December 12 letter because protecting the maintenance fund was the only
reason to defend against the claims. Evan testified that he did not expect Skip to be “foolish
enough to waste money” defending against the claims and that it did not make sense for Skip to
spend money defending the claims when Skip could instead pay “some amount of money” to the
BJG Trust. Evan testified that he expected the December 12 letter to bring Skip “to his senses”
and settle the claims.
56.

Evan, however, denies that he engineered this lawsuit to undermine the maintenance fund

or cause it not to be implemented; rather, Evan testified, he brought the lawsuit because Skip
refused to negotiate a settlement. Evan testified that he would have negotiated a settlement for
an amount that did not impact the maintenance fund. Evan believes that such a settlement never

37

Under RSA 564-B:5-505(b)(1), the property of a trust that was revocable at the time of
its settlor’s death is liable for debts of the settlor’s probate estate that the estate cannot afford to
pay.
38
Pl. Exh. 56.
13

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came to fruition because Skip’s prior counsel, Attorney Ralph Holmes of McLane Middleton,
“wanted to earn as many fees as possible.”
57.

Skip would have preferred to settle the suit, “as long as the trust could remain as

described in” the CLG Trust instrument.
58.

Evan filed this suit on June 13, 2018. Counts 1 and 2 related to Chester’s conduct as

trustee prior to his death. Evan later amended his complaint to add Counts 3 and 4 against Skip
based on his conduct as trustee after Chester’s death. Of Evan’s claims, only Counts 3 and 4
remain for adjudication.
F.

Count 3: Skip’s conduct as trustee of the CLG Trust.

59.

In Count 3, Evan alleges that Skip breached his fiduciary duties as trustee of the CLG

Trust. This claim focuses on (1) Skip’s management of the CLG Trust property; (2) Skip’s
supply of reports and accountings about the CLG Trust’s property; and (3) Skip’s payment of
legal expenses from the CLG Trust property.
1.
60.

Skip’s sale of CLG Trust investments in November 2017 and
reinvestment in April 2018.

When Chester died in April 2017, the CLG Trust’s property was mostly invested in New

Hampshire municipal bonds and a handful of equities, including utilities, AT&T, Verizon, and
Exxon.
61.

After he became trustee, Skip did not develop or formulate a written investment plan for

the CLG Trust property. No one advised Skip that he was required to write a written investment
plan for the CLG Trust property.

14

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62.

In early November 2017, Skip sold the CLG Trust’s equity and bond investments. The

sale incurred expenses of $7,898.60, which Skip paid from the CLG Trust property.
63.

Skip did not tell Evan or Scott about his plan or decision to sell the CLG Trust

investments. The First Annual Account provided by Skip to Evan in September 2018 documents
the transactions themselves,39 but Skip did not document the reasons for them.
64.

Prior to the sale, Skip consulted with an account manager with Merrill Lynch who had

also advised Chester on managing his assets. Skip relied on the account manager’s guidance in
liquidating the CLG Trust investments.
65.

The proceeds from the sale were held in cash in a bank account generating a small

amount of interest income. The CLG Trust lost income in the form of dividends and bond
coupon payments, as well as possible capital gains from growth in the investments’ values. At
the same time, the sale minimized the CLG Trust’s exposure to market and other risks.
66.

When he sold the CLG Trust’s investments, Skip believed that he and Evan were close to

resolving their dispute about the maintenance fund’s inflation adjustment.
67.

Skip sold the investments because he intended to create the maintenance fund and

distribute the remainder of the assets to the three other beneficiaries (himself, Scott, and Evan) as
dictated by the CLG Trust terms.
68.

Skip’s sale of the equities frustrated Evan. Evan wanted Skip to negotiate with him about

distributing the Verizon stock to him because Evan wanted to take advantage of the cost-basis
step up that occurred when Chester died. Evan was also concerned that Skip would distribute
municipal bonds to him. Evan believes that Skip sold the investments not because he intended to

39

Pl. Exh. 90 (First Annual Accounting).
15

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distribute the funds per the CLG Trust’s terms but because he thought it would make Evan upset.
69.

The trust--and therefore Evan as beneficiary--received the advantage of the cost-basis

step up (effectively, a smaller capital gains tax) when Skip sold the Verizon stock.
70.

After the sale of the CLG Trust’s investments, the CLG Trust no longer held any

municipal bonds. After the bonds were sold, Skip could not distribute them to Evan against his
wishes.
71.

As noted, on December 12, 2017, Evan sent Skip a letter demanding payment of at least

$850,000 from Chester’s estate or the CLG Trust. Evan’s December 12 letter also demanded
that Skip not create the Continuing Trust or maintenance fund. Considering Evan’s letter, Skip
concluded that he could not distribute the CLG Trust remainder until Evan’s claims were
resolved.
72.

Several months later, in April 2018, Skip reinvested some of the CLG Trust’s cash,

leaving uninvested an amount sufficient to cover “ongoing expenses” for the trust and Evan’s
demand if he were to prevail in his claims or to cover a settlement.
73.

Specifically, after meeting with a Merrill Lynch account manager, Skip purchased four

mutual funds for the CLG Trust account. Skip selected investments that were portrayed to him
by the account manager as “medium risk and reward.” The purchase incurred commissions and
trading fees of $22,558.28.
74.

Although Skip could have selected funds without upfront fees, those funds had higher

annual expenses. Skip chose to buy the funds with upfront fees because he planned to hold the
funds for a long period of time as part of the maintenance fund for the Grafton Property. Skip

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concluded that, if the funds were held for longer than six or seven years, the trust would
ultimately save money on fees.
75.

John Lisle testified that he believed it was unreasonable for Skip to incur the transaction

costs associated with the November 2017 sale and subsequent April 2018 reinvestment. He
attested that the sale and later repurchase of assets made no sense to him, assuming that those
assets were intended to be used to support the maintenance fund over a long period of time. He
also testified that he disagreed with Skip’s investment choices and testified that he would have
invested in lower-cost index funds instead of mutual funds with upfront fees.
76.

Lisle, however, did not know that, in November 2017, Skip was preparing to set up the

maintenance fund and distribute the remainder to Skip, Scott, and Evan. Lisle agreed that it did
not make sense to invest in equities when a trust has short-term obligations.
77.

Lisle also did not consider the December 2017 notice of claims when he was preparing

his opinion, and he did not consider the potential that the CLG Trust would have to pay a large
portion of money to the BJG Trust.
78.

Lisle did not know that a Merrill Lynch account manager presented Skip with several

different options with different anticipated risks and returns for the April 2018 reinvestment.
79.

It is typical for a trustee in New Hampshire to distribute trust property to remainder

beneficiaries in cash. A trustee can distribute invested property to a beneficiary if the beneficiary
prefers it and there is no potential for dissension or potential liability to the trustee.
80.

During a formerly revocable trust’s wind-up period--i.e., the several months after the

trust becomes irrevocable upon the settlor’s death but before the trust is dissolved or its assets are

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distributed--investment in potentially volatile equities is disfavored.
81.

A written investment plan is a best practice for trustees.

82.

The distribution of the CLG Trust funds to the Continuing Trust/maintenance fund and

then of the remainder to Skip, Scott, and Evan has not occurred. The payment of attorney fees
defending Evan’s lawsuits has substantially reduced the CLG Trust’s property.
2.
83.

Evan’s request for a vacancy report and annual accounting of the
CLG Trust.

Soon after Skip became trustee of the CLG Trust, Evan demanded that Skip provide two

reports under the CLG Trust terms and RSA 564-B:8-813(d), namely, an “annual accounting” of
the CLG Trust property and a “vacancy report” with largely the same information.
84.

A trustee in New Hampshire typically keeps beneficiaries reasonably informed through

accountings of trust property, identifying the trustee and the trustee’s address.
85.

Skip sent “preliminary information” about the trust property to Evan on May 23, 2017,

about a month after Skip became trustee of the CLG Trust. The information included the
combined values of the CLG Trust and BJG Trust.40
86.

On June 7, 2018, Skip sent a vacancy report to Evan.41 The vacancy report covered the

period between April 27, 2017, until May 17, 2017.

40

In providing the information about the CLG Trust property, Skip incorrectly combined
the values of both the CLG Trust and BJG Trust. Evan knew immediately that Skip had
mistakenly combined the property values.
41
Pl. Exh. 79 (Evan June 26, 2018 letter to McLane Middleton responding to Vacancy
Report).
18

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87.

Skip provided an “annual account” to Evan on September 11, 2018. The annual account

detailed the trust property between May 18, 2017, and May 17, 2018.42
88.

Also on September 11, 2018, Skip provided Evan an amended vacancy report, which

covered the time between April 27, 2017, and May 17, 2017.43
89.

The vacancy report and annual account contain a report of the trust property and assets,

its receipts, and its disbursements.
90.

A law firm, McLane Middleton, prepared the annual accounting and vacancy reports

based on data provided by Skip.

91.

After Skip provided Evan with the accounting and report, Evan communicated various

objections to Skip.
92.

The First Annual Accounting, Schedule B, contains a misstatement of the cost basis for

certain municipal bonds that had been owned by the trust and liquidated in November 2017.
93.

Evan does not claim or submit any evidence that he suffered any damages because of the

alleged inaccuracies in the accounting and vacancy report or as a result of any delay in receiving
them.
3.
94.

Skip’s payment of certain legal expenses from CLG Trust property.

Evan contends that Skip paid some expenses for legal advice for himself in his personal

capacity and for Chester’s estate out of the CLG Trust property. In developing this allegation,
Evan relied on the descriptions contained in the invoices provided by Skip’s law firm. Evan
marked those expenses which he believed should not have been charged to the CLG Trust. Evan

42
43

Pl. Exh. 90 (First Annual Accounting); Def. Exh. X (First Annual Accounting).
Def. Exh. Z (Amended Vacancy Report).
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agreed that he did not know for sure whether the advice did not pertain to the CLG Trust.
95.

Skip paid a $170 legal expense for personal services from the CLG Trust account.44 This

expense was incurred on October 3, 2017, and McLane Middleton’s invoice describes it as
follows:
Telephone conference with Attorney Salek regarding representing Mr. Gray
individually in the Chester Gray Estate and Trust administration matter; Scan Trust
and beneficiaries’ names and addresses to Attorney Salek for conflict check;
Review results of conflict check.45
G.

Count 4: Skip’s conduct as co-trustee of the BJG Trust.

96.

In Count 4 of his Amended Complaint, Evan seeks removal of Skip as co-trustee of the

BJG Trust. Evan asserts that Skip is disqualified from being a trustee due to inherent conflicts of
interest; that Skip has committed serious breaches of trust; and that Skip’s failure to cooperate
with Evan and Scott substantially impairs the administration of the trust.
97.

Evan thought that Skip was attempting to take control of the BJG Trust in addition to the

CLG Trust and Chester’s estate. Evan premised this theory on a letter he received from a
paralegal at Stebbins Bradley informing Evan that “a substantial interim distribution”46 of the
BJG Trust funds could be made to the three brothers if Evan executed a “trustee certification
form” from Merrill Lynch. Evan believed that the trustee certification form would give Skip
unilateral control over the BJG Trust property because of a provision allowing Merrill Lynch to
rely on the instructions of a single trustee.

44

See Pl. Exh. 110 (indicating payment for McLane Middleton October invoice with a
trust check).
45
Pl. Exh. 101 at 5 (Evan summary of Skip’s legal expenses).
46
Evan also believed that a complete distribution of the BJG Trust property should have
occurred rather than a “substantial interim distribution.”
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98.

Evan declined to sign the trustee certification form, and he also refused to assent to

Merrill Lynch’s “relationship agreement.” Evan, whose legal practice is arbitration, testified that
he refused because he disagreed with certain terms in the agreement about arbitration. Evan also
took issue with language about the scope of the agreement.
99.

In 2018, Evan attempted to negotiate the agreements with Merrill Lynch, but Merrill

Lynch declined to do so.47
100.

Evan testified to his belief that Skip and Skip’s then-lawyers at McLane Middleton

influenced Merrill Lynch not to negotiate its terms or accept a substitute trustee certification
provided by Evan. Evan premised this belief on the fact that McLane Middleton and Merrill
Lynch had offices in the same building.
101.

In November 2017, Evan and Scott Gray agreed to distribute the BJG Trust property

before the end of 2017. Evan asserted that their goal was to wind up the BJG Trust so that it did
not have to file a tax return for the next year.
102.

To accomplish a distribution while not assenting to Merrill Lynch’s relationship

agreement or using Merrill Lynch’s trustee certification form, Evan drafted a letter that he
proposed to send to Merrill Lynch. The letter--a copy of which Evan intended each brother to
sign and send to Merrill Lynch--instructed Merrill Lynch to distribute the BJG Trust property.
Evan believed that Merrill Lynch would follow the brothers’ unanimous instructions
notwithstanding his refusal to agree to Merrill Lynch’s terms for using their service.
103.

Evan sent Skip the draft letter and asked him to send it to Merrill Lynch. Two days later,

Skip responded and told Evan that he agreed to send the letter. Evan and Scott signed their
47

See Pl. Exh. 81 (August 7, 2018 letter from Merrill Lynch to Evan). Merrill Lynch
asked Evan and Scott to take their business elsewhere, and “[a]s a gesture of goodwill” agreed to
waive a $95 transfer fee if Merrill Lynch received instructions to transfer by August 31, 2018.
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letters and sent them to Merrill Lynch. 48
104.

Skip, however, did not immediately sign and send his letter.

105.

On December 4, 2017, Evan asked Skip whether he had sent the letter, and Skip

responded that he had not. Skip stated in his email he was “checking with [his] tax accountant”
and asked Evan whether Merrill Lynch had agreed to process the transaction. Evan expressed
significant frustration and asked Skip to elaborate about why he was checking with a tax
accountant. Skip explained that he was concerned that the BJG Trust would need to pay its 2017
taxes before distributing all of its property.49 Evan responded with a long letter accusing Skip
and Skip’s counsel of misconduct.50
106.

On December 13, Skip mailed the letter to Merrill Lynch containing the joint instructions

for distributing the BJG Trust.
107.

After Skip mailed the letter, Skip received Evan’s notice of claims against the CLG

Trust.51
108.

On December 15, Evan received an email from the BJG Trust’s account manager stating

that Merrill Lynch would not accept the trust certification form sent by Evan. The account

48

Undisputed Facts ¶¶ 49-52; Pl. Exh. 53.

49

Pl. Exhs. 53 (December 4 email asking Skip whether he sent the letter), 54 (Skip
December 5 response stating that he had not sent the letter, was “checking with” his “tax
accountant,” and asking whether Merrill Lynch had agreed to process the transaction).
50
See Pl. Exh. 55 (“It is now completely evident that your prior message . . . was a
complete pretext prepared for you by one of your team of expensive lawyers, just as is the case
with this current message. . . . Send the letter to Merrill Lynch, or state that your [sic] are
breaching your commitment to do so . . . . Also, identify to us which lawyer(s) is (are) providing
you with advice as to your position as trustee of Mom’s trust, as well as who is ghostwriting your
e-mails for you, in order that the co-trustees can evaluate the conflicts of interest this creates . . .
.”).
51
See Pl. Exh. 56 (December 12 notice of claims).

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manager told Evan that Merrill Lynch would only accept its own trust certification forms. The
account manager told Evan that there were, therefore, three options: (1) completing Merrill
Lynch’s form “so we can proceed with the distribution”; (2) “If the form is not completed the
account becomes in effect frozen”; or (3) transfer the account to another firm. Evan replied,
stating that “it seems to me” that the account was frozen because Skip had failed to send the joint
instructions to distribute the BJG Trust’s property.52
109.

On December 19, the BJG Trust’s Merrill Lynch account manager replied to Evan,

stating that Merrill Lynch “in effect” froze the BJG Trust account because Merrill Lynch had not
received its trust certification forms.53 Evan did not tell Skip about this correspondence with
Merrill Lynch.
110.

On January 4, 2018, Skip wrote another letter to Merrill Lynch rescinding the instructions

to distribute the BJG Trust property.54
111.

Skip rescinded the letter because he was concerned that Evan’s claims against the CLG

Trust might cause the maintenance fund to become underfunded, necessitating a pour over of
funds from the BJG Trust. In Skip’s view, if the BJG Trust property were distributed and if
Evan prevailed in his claims against the CLG Trust, the BJG Trust would not have funds to pour
over to the maintenance fund.
112.

Skip did not personally tell Evan or Scott that he had sent a letter to Merrill Lynch

informing Merrill Lynch that he did not acquiesce to distributing the BJG Trust property.

52

Pl. Exh. 142 (December 15 through 19 email correspondence between Evan and
Merrill Lynch).
53
Id.
54
Pl. Exh. 60 (January 14, 2018 letter from Skip to MacGill).
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113.

On January 5, 2018--the day after Skip rescinded his instructions to distribute the BJG

Trust property--Skip’s counsel sent a letter to Evan and Scott asserting that, if Evan were to
pursue his claims outlined in the December 12 letter in court, Chester’s estate would seek
indemnification from the BJG Trust for all defense costs. This letter further told Evan and Scott
that the CLG Trust may have to be reimbursed under Article 2.4.A, the BJG Trust’s pour-over
provision. Given those potential claims against the BJG Trust’s property, Skip asked the BJG
Trust trustees to “refrain from making any beneficial distributions until the issues raised” by
Evan’s claims were “resolved.”55
114.

Neither Evan nor Scott rescinded their letters to Merrill Lynch requesting that a

beneficial distribution be made to them after receiving Skip’s January 5 letter.
115.

On April 9, 2018, Skip filed a tax return for the BJG Trust for the 2017 tax year. Skip

hired an accountant to help with the tax return. Skip did not tell Evan or Scott that he was
planning to file the tax return or hire the accountant, and Skip did not obtain unanimous or
majority assent to hire the accountant or file the tax return. Skip paid the accountant and the tax
bill ($1,519) from Chester’s estate. Skip later reimbursed the estate for the tax bill from his
personal account and has paid other tax amounts for the BJG Trust from his personal account.
116.

Skip believed that Scott and Evan had access to all information about the BJG Trust from

Merrill Lynch.
117.

Currently, the BJG Trust property is primarily cash and earns a small amount from bank

interest. It is undisputed that the BJG Trust property would likely earn more if it were invested.

55

Pl. Exh. 61 (January 5, 2018 letter from McLane Middleton to Evan and Scott).
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II.

Rulings of law

118.

As noted, only Counts 3 and 4 of Evan’s Amended Complaint are before the court. In

Count 3, Evan alleges that Skip violated his fiduciary duties to appropriately manage and invest
the CLG Trust property and his duty to report to beneficiaries. Evan also contends that Skip
misappropriated CLG Trust property to pay a personal legal expense and legal expenses for
Chester’s estate. Evan seeks damages of about $115,000, to be paid by Skip into the CLG Trust
account, for losses incurred during Skip’s November 2017 and April 2018 transactions with the
CLG Trust property. Evan also seeks an order requiring Skip to reimburse the CLG Trust
account for legal expenses paid from the CLG Trust property that were not related to the CLG
Trust. Evan does not identify any damages resulting from the failure to report to beneficiaries.
119.

In Count 4, Evan seeks Skip’s removal as co-trustee of the BJG Trust. Evan asserts that

Skip has a fundamental conflict of interest as co-trustee of the BJG Trust and has failed to
communicate with his co-trustees.
120.

In defense, Skip argues that his conduct should be measured against a standard of good

faith. Skip asserts that he complied with his fiduciary duties under the law and as set out in the
trust instruments and that he acted in good faith at all times. Skip acknowledges that his trust
administration has been imperfect, but he asserts that the mistakes he has made were minor and
ultimately inconsequential.
A.

General Law on Trust Fiduciary Duties and Good Faith

121.

A person who accepts the position of trustee has assorted responsibilities—known as

fiduciary duties—to the trust property and trust beneficiaries. See RSA 564-B:1-105;

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Restatement (Third) of Trusts § 3 (2003).56 The New Hampshire Trust Code sets the default
scope of these duties, which include the duty to prudently administer, invest, and mange trust
property, the duty of loyalty, and the duty of impartiality, among others. See RSA 564-B:1105(a).
122.

The trust settlor’s intent, as evidenced by the trust instrument, can modify, expand,

restrict, or waive many of those duties. Id. (“Except as otherwise provided in the terms of the
trust, this chapter governs the duties and powers of a trustee . . . .”); see RSA 564-B:1-112(b)-(c)
(“For the purposes of determining the benefit of the beneficiaries, the settlor's intent as expressed
in the terms of the trust shall be paramount.”); Bartlett v. Dumaine, 128 N.H. 497, 504 (1986)
(“In determining the settlor’s intent, courts should look to the terms of the trust.”). Accordingly,
the court looks to both the law and the trust terms to determine the duties of a trustee.
123.

Regardless of the trust terms, the trustee must always “act in good faith and in accordance

with the terms of the trust, the purposes of the trust, and the interests of the beneficiaries.” RSA
564-B:1-105(b)(2).
124.

With respect to a trustee, “good faith” means:
[T]he observance of common standards of honesty, decency, fairness, and
reasonableness in accordance with the terms of the trust, the trust’s purposes, and
the interests of the beneficiaries as their interests are defined under the terms of the
trust[.]

RSA 564-B:1-103(30)(A).
125.

The “interests of the beneficiaries” means “the beneficial interests provided in the terms

of the trust.” RSA 564-B:1-103(7). Thus, the beneficiaries’ interests “are defined under the
56

The New Hampshire Supreme Court frequently looks to the Restatement (Third) and
Restatement (Second) of Trusts to aid its interpretation of the New Hampshire Trust Code. See,
e.g., In re Omega Trust, 175 N.H. 179, 184-85 (2022) (looking to Restatement for “guidance”);
Shelton v. Tamposi, 164 N.H. 490, 500 (2013).
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terms of the trust.” See RSA 564-B:1-105(b)(3); cf. RSA 564-B:1-112(c) (“For the purposes of
determining the benefit of the beneficiaries, the settlor’s intent as expressed in the terms of the
trust shall be paramount.”).
B.

Count 3: Skip’s conduct as trustee of the CLG Trust

126.

In Count 3, Evan asserts that Skip: (1) failed to appropriately manage the assets of the

CLG Trust, resulting in unnecessary losses and missed profit opportunities (2) failed to provide
an appropriate and timely accounting to the trust’s beneficiaries and failed to properly
communicate with the trust’s beneficiaries; and (3) improperly paid legal bills from the CLG
Trust account.57
127.

Skip responds that, considering the circumstances of the transactions, he acted

appropriately in selling and then partially reinvesting the trust property. Skip contends that he
provided an accurate accounting and that he has no duty to account to the trust beneficiaries each
transaction he makes as trustee. Skip further contends that because he acted in good faith at all
times, Article 4.3 of the CLG Trust exculpates him from any liability.
128.

With one limited exception discussed below, Evan did not prove by a preponderance of

the evidence that Skip violated any fiduciary duties while acting as trustee of the CLG Trust
during the time period at issue. Further, as to most of Evan’s allegations, Skip proved by a
preponderance of the evidence that he acted in “good faith.” Therefore, under CLG Trust and
BJG Trust Article 4.3, Skip “shall not be liable” for those actions he took or omitted pursuant to
the law or the trust terms.

57

Evan Gray Proposed Rulings of Law ¶¶ 14, 17-18, 22, 32, 36, 40-41, 46-48, 50, 52, and

66.
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1.
129.

Sale of CLG Trust investments in November 2017, April 2018
reinvestment, written investment plan, and choice of investments.

The New Hampshire Trust Code’s prudent investor rule requires a trustee to “invest and

manage trust assets as a prudent investor would, by considering the purposes, terms, distribution
requirements, and other circumstances of the trust.” RSA 564-B:9-902(a).
130.

The “circumstances” that a trustee must consider when investing and managing trust

property include, among others, “general economic conditions,” potential tax consequences of
investment decisions, expected returns, “needs for liquidity, regularity of income, and
preservation or appreciation of capital,” and “an asset’s special relationship or special value, if
any, to the purposes of the trust or to one or more of the beneficiaries.” RSA 564-B:9-902(c);
see Restatement (Third) of Trusts § 90(b) (2003) (“In making and implementing investment
decisions, the trustee has a duty to diversify the investments of the trust unless, under the
circumstances, it is prudent not to do so.”).
131.

The test of prudent management “is one of conduct not of performance. The trustee’s

conduct, and compliance with other fiduciary standards, is to be judged as of the time of the
decision or action in question.” Restatement (Third) of Trusts § 77 cmt. a (2003); accord RSA
564-B:9-905(a)(1) (amended 2014).
132.

The CLG Trust grants the trustee “all powers granted by law” and, in addition, provides

enumerated “discretionary powers with respect to both real and personal property held in trust.”58
These discretionary powers include the power to “invest and reinvest in any bonds, stocks,
mutual funds, . . . and securities of any type or form and other property of any kind, real or

58

Art. 4.11, CLG Trust.

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personal, irrespective of any statute or rule of any state or other jurisdiction limiting the
investment of fiduciary funds.”59
133.

The CLG Trust modifies the prudent investor rule by stating that the trustee is entitled to

use his “best judgment” in fulfilling his obligations. And, as noted, Article 4.3 states that the
“trustee shall not be liable for any action taken or omitted in good faith” pursuant to the law or
trust terms.60
134.

Skip’s November 2017 sale of the CLG Trust property was prudent under the

circumstances at the time. At the time, Skip reasonably believed that soon he would be
distributing the CLG Trust’s property to its four beneficiaries--approximately $820,000 to the
Continuing Trust/maintenance fund, with any remaining property split equally between himself,
Scott, and Evan.
135.

Skip’s sale of the CLG Trust’s investments complied with RSA 564-B:9-902(c), which

directs trustees to consider, among several items, the need for liquidity and the “preservation or
appreciation” of capital. Skip’s actions accounted for the need for liquidity and to preserve
capital given the expected near-term distribution of trust property. Because Skip’s intention,
consistent with the CLG Trust’s terms, was to distribute the CLG Trust property in the near term,
it was reasonable for him to conclude that the interests of capital preservation and liquidity
outweighed the competing interests of capital appreciation and income generation.
136.

It is reasonable for trustees faced with a near-term distribution requirement to sell assets

and deliver distributions in cash, and a trustee should not expose trust property expected to be

59
60

Art. 4.11.A, CLG Trust.
Art. 4.3, CLG Trust.
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paid from the trust in the near term to the risks of volatile equity markets.
137.

Because Skip expected to distribute the CLG Trust’s property in the near term, he acted

prudently by liquidating the CLG Trust property.
138.

Skip’s reinvestment of the trust property in April 2018 also did not violate his fiduciary

duties to manage and invest the trust property. Although Skip had reasonably believed in
November 2017 that a distribution of the trust property was likely in the near term, on December
12, 2017, Evan sent his notice of claims against the CLG Trust property. At that point, a
distribution of the CLG Trust property was untenable given Evan’s demand that the CLG Trust
make no distributions pending the resolution of his claims.
139.

By April 2018, Skip reasonably (and correctly) determined that Evan’s claims would not

be resolved in the near term. Accordingly, Skip’s reinvestment of the trust property to take
advantage of capital appreciation and income generation was prudent. Skip’s decision to reserve
a portion of the property in cash to pay Evan’s claims or the CLG Trust’s attorney fees was also
prudent.
140.

Evan quibbles with Skip’s specific investment choices and lack of written investment

plan.61 As to the selection of the mutual funds over index funds, Article 4.3 and the prudent
investor rule, RSA 564-B:9-902, effectively leave the trustee of the CLG Trust large discretion in
the selection of specific assets to invest. Skip consulted with an account manager when selecting
the investments. Skip evaluated each investment option and the option of prepaying the
investments’ fees. Skip determined that, if the trust or maintenance fund held these assets for a
long period of time, which was the plan, it was less expensive to prepay the fees than to pay
them over time. Skip’s decision-making in this regard was prudent as required under RSA 56461

Evan Gray Proposed Rulings of Law ¶¶ 32, 36, 48.
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B:9-902 and demonstrates the use of his “best judgment” per Article 4.3. Furthermore, Skip
acted in good faith in exercising his authority as trustee to manage the trust assets.
141.

As to Skip’s failure to document his investment plan and his reasons for liquidating the

assets and reinvesting them in April 2018, the law and trust terms required Skip to manage the
CLG Trust property prudently, to use his “best judgment,” and to act in good faith. Neither the
trust terms nor New Hampshire’s prudent investor rule require a trustee under these
circumstances to create a written investment plan. Likewise, under state law and the trust terms,
Skip did not have a duty to consult with Scott or Evan before making decisions about how to
manage the trust property.62
142.

In sum, Skip did not violate his responsibilities to manage and invest the trust property

prudently, to use his “best judgment,” or to act in good faith because of his investment decisions
in November 2017 and April 2018.
2.
143.

Provision of annual accounting and vacancy report.

In Count 3, Evan also contends that Skip breached his fiduciary duties by failing to

properly communicate with the trust beneficiaries (Evan and Scott) and by failing to timely
provide a complete and accurate accounting of the trust property.63
144.

As to the provision of the vacancy report and annual accounting, Skip acted in good faith

and Evan failed to show that he or the trust suffered any harm because of any delay in receiving

62

While the court agrees with Lisle that it would have been better practice for Skip to
have disclosed his intentions to the beneficiaries beforehand and documented his reasons for
undertaking it, he is not held to the standard of best practices. See Restatement (Third) of Trusts
§ 82 cmt. d. (2003) (noting that, in some circumstances, a trustee should disclose “important
adjustments being considered in investment or other management strategies” as well as “plans
being made for distribution on termination or partial termination . . . of the trust”).
63
Evan Gray Proposed Rulings of Law ¶¶ 14, 17-18.
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the reports. Evan proved only one inaccuracy with the reports, but did not show he or the trust
suffered any harm as a result of the misstatement.
145.

Under the New Hampshire Trust Code, a trustee of an irrevocable trust must provide a

report “at least annually” to the trust distributees, “unless the terms of the trust provide
otherwise.” RSA 564-B:8-813(d) (“Duty to Inform and Report”). CLG Trust Article 4.8
modifies this rule slightly, stating that “the trustee shall render annually an account of the
trustee’s administration to each of the income and residuary beneficiaries who requests it for the
trust of which he or she is a beneficiary.”
146.

Under the CLG Trust’s terms, Skip’s responsibility was to provide an annual account to a

beneficiary who requested one. Evan requested that Skip provide an annual account. Skip
provided an account to Evan.
147.

RSA 564-B:8-813(d) further states that, “[u]pon a vacancy in a trusteeship, unless a

cotrustee remains in office, a report must be sent to the qualified beneficiaries who have attained
21 years of age and those who have the rights of a qualified beneficiary by the former trustee. A
personal representative, conservator, guardian of the estate, or guardian of the person may send a
report on behalf of a deceased or incapacitated trustee.” Id. This report “shall include a report of
the trust property, liabilities, receipts, and disbursements, including the source and amount of the
trustee's compensation, a listing of the trust assets, and, if feasible, their respective market
values.” Id.

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148.

Evan requested that Skip provide a vacancy report. Skip provided a vacancy report to

Evan. 64
149.

One item on the annual accounting was inaccurate, which was the reported cost basis for

a municipal bond that had been owned by the CLG Trust. Skip relied on McLane Middleton to
prepare this aspect of the accounting. Skip demonstrated by a preponderance of the evidence
that he acted in good faith in relying on McLane Middleton or in preparing that aspect of the
report. Accordingly, per Article 4.3 of the CLG Trust, Skip “shall not be liable” for that
misstatement, to the extent any breach of fiduciary duty occurred.
150.

In any event, Evan knew that this item was inaccurately listed, and he did not prove that

the inaccuracy was anything more than an inconsequential misstatement. Although Evan
speculated that the CLG Trust might have overpaid its tax burden as to the sale of those
municipal bonds, Evan did not provide any documentation or testimony of any person with
personal knowledge of the CLG Trust’s tax payments to support his speculation.
151.

Evan did not show that any other aspect of the first accounting or vacancy report was

materially incorrect or deficient. Other than the one payment for legal expenses, discussed next,
Evan did not prove by a preponderance of the evidence that Skip breached any fiduciary duty by
improperly paying any personal expenses out of CLG Trust property. 65
64

The parties debate the meaning of RSA 564-B:8-813(d), which defines whether a
trustee must provide a vacancy report to beneficiaries. Evan contends that the statute requires a
trustee to provide a report whenever there is a vacancy in the trustee position. Skip argues that
when the vacancy occurs because of a death, the successor trustee “may”—but is not required
to—send a report to the beneficiaries. Regardless of whether the report was required, Skip did,
in fact, send a vacancy report.
65
Evan proposes that the court should reduce the amount in the Continuing Trust “by the
costs of holding” the Continuing Trust’s property “during the period of the First Annual
Account.” Evan Gray Proposed Rulings of Law ¶¶ 66, 67; see also id. ¶¶ 49-50. Evan did not
indicate by what amount he claims the amount in the Continuing Trust (which has not been
created yet, in any event) should be reduced. Evan did not prove by a preponderance of the
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Case 1:18-cv-00522-JL Document 241 Filed 01/04/23 Page 34 of 43

152.

Evan did not establish any damages or entitlement to other relief because of the delay in

providing the vacancy report or annual accounting.
153.

Evan did not establish any damages or entitlement to other relief because of any

inaccuracy in the vacancy report or annual accounting.
3.
154.

Payment of legal expenses from CLG Trust account.

Skip paid a $170 personal legal expense from the CLG Trust property, which reduced the

amount available to the CLG Trust’s beneficiaries by $170. To the extent the amount has not
already been restored, Skip shall pay $170 into the CLG Trust account. See RSA 564-B:101002(a)(1) (requiring trustee who commits breach of trust to “restore the value of the trust
property and trust distributions to what they would have been had the breach not occurred”); In
re Guardianship of Dorson, 156 N.H. 382, 386-87 (2007) (“Equity is primarily responsible for
the protection of rights arising under trusts, and will provide the beneficiary with whatever
remedy is necessary to protect him and recompense him for loss, in so far as this can be done
without injustice to the trustee or third parties.”); Restatement (Third) of Trusts § 88 cmt. a
(2003) (“[I]f expenses that are improper have been paid from the trust estate, the trustee
ordinarily has a duty to restore the amount of the improper payment(s) to the trust . . . .”), id. §
100(a) (stating that trustee is liable to restore value of trust property to what it would have been if
the trust had been properly administered).

evidence that he is entitled to relief as to paragraphs 66 and 67 of his proposed rulings of law.
Likewise, Evan asserted in his proposed rulings of law that Skip breached his fiduciary duties by
failing to identify the personal property at the Grafton Property that he intends to retain under the
CLG Trust terms and by failing to distribute what he does not intend to retain in reasonably
equal parts between the three brothers. Id. ¶ 22. Evan did not prove any of the factual
allegations underlying that claim by a preponderance of the evidence.
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155.

As to any other amount, Evan did not prove by a preponderance of the evidence that Skip

used CLG Trust property to pay for legal expenses not pertaining to the CLG Trust.
156.

Evan did not show by a preponderance of the evidence that Skip paid legal expenses for

Chester’s estate from the CLG Trust. The CLG Trust must pay claims against Chester’s probate
estate to the extent Chester’s estate cannot pay them. See RSA 564-B:5-505(b). Unpaid legal
expenses are likely to become claims against Chester’s estate, so the CLG Trust may have ended
up paying the estate’s legal bills in any event. Further, if the payment of the estate’s legal bills
by the CLG Trust were to lead to a surplus in the estate, any assets that remain in Chester’s estate
after its debts are paid pass to the CLG Trust. In other words, for the purposes of this issue,
Chester’s estate and the CLG Trust were, in essence, a single pot of money, so there was no loss
to Evan or the other CLG Trust beneficiaries for any amounts paid by the CLG Trust for legal
services provided to Chester’s estate.
157.

Evan did not prove by a preponderance of the evidence that Skip breached any other

fiduciary duty while acting as trustee of the CLG Trust.
C.

Count 4: Skip’s conduct as co-trustee of the BJG Trust

158.

In Count 4, Evan contends that Skip should be removed from his position as co-trustee of

the BJG Trust due to inherent conflicts of interest; serious breaches of trust; and his failure to
cooperate with Evan and Scott, which substantially impairs the administration of the trust.
159.

A trustee has a duty of loyalty, meaning that he “shall administer, invest and manage the

trust and distribute the trust property solely in the interests of the beneficiaries.” RSA 564-B:8802(a).66 Similarly, when a trust has two or more beneficiaries, “the trustee shall act impartially

66

Evan Gray Proposed Rulings of Law ¶ 107.
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Case 1:18-cv-00522-JL Document 241 Filed 01/04/23 Page 36 of 43

in administering, investing, managing, and distributing the trust property, giving due regard to
the beneficiaries’ respective interests.” RSA 564-B:8-803.
160.

A trustee must keep co-trustees “reasonably informed about the administration of the

trust.” RSA 564-B:7-703. Specifically:
A trustee shall keep each cotrustee . . . reasonably informed about the
administration of the trust, to the extent the trustee has knowledge that the other
cotrustee . . . does not have of the trustee's actions, or regarding other material
information (or the availability of such information) related to the administration
of the trust that would be reasonably necessary for the cotrustee . . . to perform his
or her duties as a trustee . . . of the trust.67
161.

The court may remove a trustee if the trustee “has committed a serious breach of trust,” if

there is a lack of cooperation among the co-trustees that “substantially impairs the administration
of the trust,” or because the trustee is unfit, unwilling, or persistently fails to administer the trust
effectively. See RSA 564-B:7-706(a), (b)(1)-(3); Hodges v. Johnson, 170 N.H. 470, 487-88
(2017); Shelton, 164 N.H. at 503-504. The court, however, should defer to the settlor’s choice of
trustee. See Restatement (Third) of Trusts § 37 cmt. f (2003) (“The court will less readily
remove a trustee named by the settlor than one appointed by a court.”); see also Unif. Trust Code
§ 706 cmt. (“Because of the discretion normally granted to a trustee, the settlor’s confidence in
the judgment of a particular person whom the settlor selected to act as trustee is entitled to
considerable weight.”).
1.
162.

Barbara and Chester waived any potential inherent conflict of interest
by appointing Skip as trustee of both trusts.

Evan contends that Skip cannot be a co-trustee because he is disqualified by conflicts of

67

Evan Gray Proposed Rulings of Law ¶ 107.

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interest based on Skip’s responsibilities as trustee of the CLG Trust.68
163.

“Ordinarily, a court will not remove a trustee named by the settlor upon a ground that

was known to the settlor at the time the trustee was designated, even though a court would not
itself have appointed that person as trustee.” See Restatement (Third) of Trusts § 37 cmt. f, f(1)
(2003). “[T]he fact that the trustee named by the settlor is one of the beneficiaries of the trust, or
would otherwise have conflicting interests, is not a sufficient ground for removing the trustee . . .
.” Id.
164.

Chester and Barbara appointed Skip to his positions as trustee of the CLG Trust and co-

trustee of the BJG Trust. Chester and Barbara were aware that Skip, as trustee of two separate
trusts, may have competing fiduciary duties. By appointing Skip as trustee of both trusts and
naming him as a beneficiary of both trusts, Chester and Barbara therefore waived any potential
inherent conflict of interest or duty of loyalty issue regarding such competing fiduciary duties
involving the two trusts.
165.

Further, Evan did not prove by a preponderance of the evidence that Skip acted with

partiality as to one or more of the BJG Trust beneficiaries nor that Skip acted disloyally to the
trust property or the trust’s beneficiaries. See RSA 564-B:8-803; Restatement (Third) of Trusts
§ 79 & cmt. b(1) (2003) (discussing duty of impartiality); id. § 78 cmt. c(2) (addressing duty of
loyalty, and stating that “the common situation in which one or more of a trust’s beneficiaries are
selected or authorized by the settlor to serve as trustee or co-trustee inevitably presents an array
of conflicts between the trustee’s interests as a beneficiary and the interests of other
beneficiaries; the problems presented by these (usually) implicitly authorized conflicts are most

68

See Evan Gray Proposed Rulings of Law ¶ 117.
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appropriately dealt with as questions of impartiality under § 79.”).
166.

Accordingly, Skip is not disqualified as trustee of the BJG Trust by virtue of an inherent

conflict of interest between his positions as co-trustee of CLG Trust and trustee of the BJG Trust.
Nor has Skip breached any aspect of his duty of loyalty or impartiality by favoring one or more
beneficiaries over the others.
2.
167.

Skip did not commit any serious breach of trust.

Second, Evan contends that Skip committed three serious breaches of trust that justify

removing him as a trustee of the BJG Trust: (1) he failed to notify Evan and Scott about
accepting his position as co-trustee of the BJG Trust;69 (2) he failed to properly communicate
with his co-trustees and attempted to take unilateral control of the BJG Trust property;70 and (3)
he failed to investigate the claims that Evan alleged against Chester on the BJG Trust’s behalf.71
168.

The commentary to Uniform Trust Code § 706 explains the meaning of “serious” breach

of trust:
[N]ot every breach of trust justifies removal of the trustee. The breach must be
“serious.” A serious breach of trust may consist of a single act that causes
significant harm or involves flagrant misconduct. A serious breach of trust may also
consist of a series of smaller breaches, none of which individually justify removal
when considered alone, but which do so when considered together.
Unif. Trust Code § 706 cmt.; see also Restatement (Third) of Trusts § 37 cmt. e & g (2003)
(“Not every breach of trust warrants removal of the trustee . . . but serious or repeated
misconduct, even unconnected with the trust itself, may justify removal.”).

69

Evan Gray Proposed Rulings of Law ¶ 99.
Evan Gray Proposed Rulings of Law ¶ 108
71
Evan Gray Proposed Rulings of Law ¶ 115.
70

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169.

Skip did not commit any serious breach of trust as co-trustee of the BJG Trust.

170.

Evan and Scott understood that Skip was acting as a co-trustee of the BJG Trust. Skip

did not commit a serious breach of trust by failing to explicitly inform Evan or Scott that he had
accepted the office of trustee when this information was known to Evan and Scott.
171.

Evan did not prove by a preponderance of the evidence that Skip attempted or desired to

take “unilateral control” of the BJG Trust property. Rather, Skip intended to distribute the BJG
Trust property consistent with the BJG Trust’s terms, including ensuring that the pour-over
provision, Article 2.4.A, was followed if necessary.
172.

Skip did not commit a serious breach of trust by sending and then rescinding the letter

instructing Merrill Lynch to distribute the BJG Trust property. The delay in sending the letter
was also not a serious breach of trust.
173.

Skip reasonably understood his rescission letter to be in service of a trust beneficiary,

namely, the Continuing Trust or maintenance fund. After Evan sent his notice of claims in
December 2017, it was reasonable and prudent for Skip to become concerned that the BJG Trust
might need to give property to the maintenance fund if Evan prevailed on his claims against the
CLG Trust. Consistent with that concern, Skip (through counsel) sent a letter to Scott and Evan
requesting that they refrain from distributing the BJG Trust property. By rescinding the
instruction to distribute the BJG Trust property, Skip acted prudently in attempting to protect the
maintenance fund’s interests.
174.

Skip’s payment of the BJG Trust tax bill and retention of an accountant to aid payment of

the BJG Trust tax bill were not serious breaches of trust. Skip should have discussed the matter
with his co-trustees before paying the bill. See RSA 564-B:7-703(i). Nonetheless, the payment
of the BJG Trust’s tax liabilities by Skip was in service of maintaining and preserving the trust

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property. Further, Skip did not use BJG Trust property without Evan or Scott’s consent to pay
the accountant or pay the tax bill.
175.

Evan failed to prove by a preponderance of the evidence that Skip insufficiently

investigated the claims that Evan made against the CLG Trust on behalf of the BJG Trust.
Evan’s claim in this regard was founded on his speculation and conjecture.
3.

176.

There is a lack of cooperation among the trustees, but it does not
substantially impair the administration of the trust and removing
Skip would not improve the trust’s administration.

Third, Evan contends removing Skip is warranted because he has failed to cooperate with

Evan and Scott, which substantially impairs the administration of the trust. Evan asserts that
removing Skip is the only way to facilitate the proper management of the trust property.72
177.

Skip, Scott, and Evan had--and continue to have--difficulty communicating and

cooperating even on basic matters. Despite the legal battles over the trust’s management, most
of the acts that remain to be performed by the BJG Trust trustees are ministerial. Specifically,
once Evan’s lawsuits are resolved, the only thing the trustees must do is distribute the BJG Trust
property to any creditors, the Continuing Trust/maintenance fund (as necessary), and the three
remainder beneficiaries (themselves). See Art. 2.4.A, B, BJG Trust. After those acts are
performed, the BJG Trust will cease to exist. See id., Art. 3.7. Since these acts leading to the
termination of the BJG Trust require no exercise of judgment, there is no reason to remove Skip
as trustee on the basis that doing so will remove an impediment to the trust’s administration. See
Bogert’s The Law of Trusts & Trustees § 527 (June 2022 update) (noting that if trustee duties are
“merely ministerial or formal” removal of trustee because of hostility will be denied); cf.

72

Evan Gray Proposed Rulings of Law ¶ 117.
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Restatement (Third) of Trusts § 37 cmt. e(1) (2003) (“Friction between the trustee and some of
the beneficiaries is not a sufficient ground for removing the trustee unless it interferes with the
proper administration of the trust.”).
178.

Further, removing Skip would not remove any impediment to properly managing the BJG

Trust property because the administration is affected by Evan’s actions, not Skip’s management.
The BJG Trust property remains uninvested because of Evan and Scott’s refusal to acquiesce to
Merrill Lynch’s terms for managing the account, not because of any action or inaction by Skip.
Accordingly, the court declines to remove Skip on the ground that he prevents the BJG Trust
property from being invested.
179.

Further, it concerns the court that Evan’s actions have elevated his personal beliefs about

the need and purpose of the maintenance fund above the settlors’ intent to create a maintenance
fund, as stated in the trust instruments. Evan demonstrated during trial that he is a skilled and
professional lawyer. But his better judgment has been overwhelmed by his disdain for Chester’s
plan, and his deep-seated mistrust and personal animosity--warranted or not--toward Skip.
Simple issues have grown to unwarranted proportions because of Evan’s tendency to assume that
Skip is operating with malicious intent. Furthermore, even if Evan were correct about Skip’s
behavior, an experienced lawyer like Evan should understand that the emotional undercurrent of
this case undermines his judgment both as legal counsel and a trustee, as it would any other
person in the same circumstance.
180.

It would not be in the interest of justice to remove Skip as co-trustee.

181.

In sum, Evan has not shown by a preponderance of the evidence that he is entitled to the

relief he seeks as to Count 4. Accordingly, judgment will be entered in Skip’s favor as to Count
4.

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III.

Conclusion
The court directs Skip Gray to reimburse the CLG Trust $170 for the payment of

personal legal expenses with trust property. Judgment is otherwise in Skip Gray’s favor as to
Counts 3 and 4. The clerk shall enter judgment accordingly.
The court adopts the parties’ findings of fact and conclusions of law to the extent they are
consistent with the court’s own findings of fact and conclusions of law. The parties’ proposed
findings of fact and conclusions of law are otherwise denied. The court also denies Evan’s
motion to strike (doc. no. 234) Skip Gray’s good faith affirmative defense.
As the prevailing party, Skip Gray is entitled to costs should he choose to seek them. See
28 U.S.C. § 1920, Fed. R. Civ. P. 54(d)(1); LR 54.1(a). The court finds that Skip Gray is the
prevailing party because he has prevailed as to the substantial part of this litigation. That is, Skip
prevailed on the merits as to his declaratory judgment counterclaim and as to the substantial
portions of Counts 3 and 4, finding himself liable for only a nominal sum for a non-serious and
de minimis breach of trust. Accordingly, if Skip wishes to seek costs, he shall file a bill of costs
as directed under Local Rule 54.1.
The matter of attorney fees and/or reimbursement remains for adjudication, as set out in
Skip Gray’s counterclaims and in his pretrial statement. See doc. nos. 204 (Skip CLG Trust
pretrial statement); 206 (Skip BJG Trust pretrial statement). The court previously denied a
motion by Evan to dismiss Skip’s counterclaims, which effectively claim attorney fees, for lack
of jurisdiction. See Order of April 1, 2022. Evan appealed that ruling to the Court of Appeals on
April 29. That appeal remains pending as of the date of this Order, and the appeal divests the
court of jurisdiction to further address Skip’s counterclaims. E.g., Griggs v. Provident Consumer
Discount Co., 459 U.S. 56, 58 (1982) (“The filing of a notice of appeal is an event of

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jurisdictional significance--it confers jurisdiction on the court of appeals and divests the district
court of its control over those aspects of the case involved in the appeal.”). Accordingly, the 14day time period to file a motion for attorney fees is stayed pending resolution of that appeal. See
Fed. R. Civ. P. 54(d)(2) (stating that party seeking attorney fees must file a motion “no later than
4 days after the entry of judgment” unless “a statute or court order provides otherwise”).

SO ORDERED.

___________________________
Joseph N. Laplante
United States District Judge
Dated: January 4, 2023
cc:

Evan W. Gray, pro se
Benjamin T. Siracusa Hillman, Esq.
Roy S. McCandless, Esq.
Timothy John McLaughlin, Esq.

43