Little v. Mannas

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF OKLAHOMA

WILLIAMSON PENN LITTLE,

Plaintiff,

v. Case No. 19-cv-306-JFH-GLJ

DAVID MANNAS, CHAD CRADDOCK,

and CATHY ETCHEN, Individually and

as Trustees,

Defendants.

OPINION AND ORDER

Before the Court is a Motion for Summary Judgement (“Motion”) filed jointly by

Defendants David Mannis, Chad Craddock and Cathy Etchen (“Defendants”). Dkt. No. 181. The

Court referred the Motion to Magistrate Judge Gerald Jackson for issuance of a report and

recommendation (“R&R”). Dkt. No. 212. Judge Jackson issued an R&R on November 16, 2022,

recommending that Defendants’ Motion be granted. Dkt. No. 214. Plaintiff Williamson Penn

Little (“Plaintiff”) has filed an objection to the R&R (“Objection”). Dkt. No. 217. Defendants did

not file a brief in opposition of Plaintiff’s Objection, but the matter is nonetheless ripe for decision.

For the reasons stated, the Court ADOPTS the R&R in this case and GRANTS Defendants’ Motion

for Summary Judgement.

BACKGROUND

Plaintiff, the sole beneficiary of the Williamson Penn Little Trust dated December 1, 1984

(the “Trust”), commenced this action against the above-named Defendants and others on

September 10, 2019. Dkt. No. 2 at ¶¶ 2, 3; see also Dkt. No. 46. On April 14, 2020, Plaintiff

filed an Amended Complaint (“Complaint”) asserting that the Defendants, as trustees of the Trust,

“breached their fiduciary duties of loyalty, due care, a full disclosure owed to” Plaintiff. Dkt. No.

56 at ¶ 16. Plaintiff’s sole cause of action against the Defendants is for breach of their fiduciary

duties as trustees, in violation of Okla. Stat. tit. 60, § 175.1, et seq. Id. at ¶ 28.

The subject Trust, which was created for Plaintiff’s sole benefit by his now-deceased

father, granted the Defendant-trustees discretionary authority regarding the acquisition and sale of

property and assets managed by the Trust. Id. at 3; see also Dkt. No. 181, Ex. 4 at ¶ 4. The Trust

provided for a discretionary distribution of funds to Plaintiff upon Plaintiff’s attainment of the age

of thirty (30), and a subsequent mandatory distribution of the remainder of said funds, if any, upon

Plaintiff’s attainment of the age of thirty-five (35). Dkt. No. 181, Ex. 4 at ¶ 3.04.2(B). It is the

Defendants’ alleged failure to distribute the Trust assets in full to Plaintiff which forms the primary

basis of Plaintiff’s cause of action against Defendants. Dkt. No. 56 at 17. Plaintiff also alleges

that the Defendants made imprudent investments with Trust assets, which, had they been placed

in a conservative market ETF, Plaintiff asserts would have generated substantial profit. Id. at 25.

In particular, although not identified in the Complaint, Plaintiff complains in his discovery

responses of an investment in a now-defunct entity—NextGenCity Investments (“NextGen”).

On December 13, 2021, Defendants filed the subject Motion for Summary Judgement.

Dkt. No. 181. Attached to the Motion, in support of the “Undisputed Material Facts” section, are

signed, sworn declarations in which the Defendants state that they did not receive any

compensation for their work as trustees, and that their actions were always intended to be in the

best interest of Plaintiff as beneficiary of the Trust. Id. at Exs. 5-7. Defendants also declare that

they sought counsel whenever any issue arose that was outside of their knowledge or

understanding, including with respect to the NextGen investment. Id. at Exs. 5, 6. Critically,

Defendants declare that all Trust assets were distributed to Plaintiff by September 12, 2019. Id. at

Ex. 5.

On January 4, 2022, Plaintiff filed a brief in opposition to Defendants’ Motion (out of time

but with permission). Dkt. No. 185. Plaintiff’s brief contained a section titled “Statement of Facts

in Support,” but did not contain “a section responding, by corresponding numbered paragraph, to

the facts that the movant contends are not in dispute,” as required by LCvR 56.1(c) (emphasis in

original)—a point Defendants emphasize in their reply brief filed January 18, 2022. Dkt. No. 188.

For this reason, and in light of the undisputed material facts, Magistrate Judge Jackson

recommended that Defendants’ Motion be granted. Dkt. No. 214. On December 7, 2022, Plaintiff

filed an Objection to the R&R after receiving an extension of his deadline to do so. Dkt. No. 217;

see also Dkt. No. 216.

STANDARD OF REVIEW

When a party objects to an R&R, the Court is statutorily required to “make a de novo

determination of those portions of the report or specified proposed findings or recommendations

to which objection is made.” 28 U.S.C. § 636(b)(1). The Court “may accept, reject, or modify, in

whole or in part, the findings or recommendations made by the magistrate judge.” Id. The Court

“may also receive further evidence or recommit the matter to the magistrate judge with

instructions.” Id.

ANALYSIS

Plaintiff agrees with the R&R to the extent that: “[i]n order to prove a claim for breach of

fiduciary duty, plaintiff must establish (1) the existence of a fiduciary relationship; (2) a duty

arising out of the fiduciary relationship; (3) breach of the fiduciary duty; and (4) damages

proximately caused by the breach of duty.” Dkt. No. 185 at 15 (quoting Miller v. Farmers Ins.

Grp., No. CIV-10-466-F, 2012 WL 8017244, *15 (W.D. Okla. Mar. 22, 2012)); see also Dkt. No.

214 at 11-12. In the Motion, Defendants do not contend that the first two elements required for

Plaintiff’s claim are lacking, but instead that there is no evidence for the third or fourth elements.

Dkt. No. 181 at 9 (“For the purposes of this Motion, even assuming the first two elements are met,

Plaintiff has not and cannot provide sufficient evidence of any breach of a duty owed by

Defendants or any damages proximately caused by such an alleged breach.”).

In the Objection, Plaintiff argues, without basis, that the magistrate judge applied a “lesser

standard” in evaluating whether Defendants breached their fiduciary duty to Plaintiff. Dkt. No.

217 at 2. Plaintiff cites to a 2008 decision by the Oklahoma Supreme Court:

A trustee is a fiduciary of the highest order in whom the hope and confidence of

the settlor are placed with the expectation that the trustee will exercise the

obligations of the office for the exclusive benefit of those holding beneficial

interests. Without exception, a trustee owes its beneficiaries the most abundant

good faith, absolute and perfect candor, openness and honesty.

Id. (quoting Corr v. Smith, 2008 OK 12, ¶ 18, 178 P.3d 859, 863) (emphasis supplied by Plaintiff).

Plaintiff asserts that “[i]t is this standard that Defendants must have met in all of their

actions taken on behalf of [the Trust] . . . . Conduct which does not satisfy this high standard, or

which violates the terms of the Trust is a breach of the trust under Oklahoma law.” Id. Yet, in

the R&R, the magistrate judge similarly acknowledged that a fiduciary relationship entails a

“heightened duty of care . . . .” Dkt. No. 214 at 12 (quoting Horton v. Hamilton, 2015 OK 6, ¶¶

20, 22, 345 P.3d 357, 364-65). The Court is not convinced that the magistrate judge imposed a

“lesser standard” in evaluating Defendants’ alleged conduct.

Plaintiff simply disagrees with the outcome reached by the magistrate judge in the R&R:

that is, Plaintiff did not sufficiently establish any dispute of material fact with respect to the third

and fourth elements of Plaintiff’s cause of action. Therefore, the Court proceeds as it must to

conduct a de novo review of that outcome. See 28 U.S.C. § 636(b)(1).

Summary judgment is properly granted if the Defendants establish “that there is no genuine

dispute as to any material fact” and that they are “entitled to judgment as a matter of law.” Fed.

R. Civ. P. 56(a). To successfully oppose Defendants’ Motion, Plaintiff must show that a material

fact is disputed by “citing to particular parts of materials in the record,” or by showing that the

materials on which Defendants rely “do not establish the absence . . . of a genuine dispute.” Fed.

R. Civ. P. 56(c)(1). “If the movant carries the initial burden, the non-movant may not rest upon

its pleadings, but must set forth specific facts showing a genuine issue for trial as to those

dispositive matters for which it carries the burden of proof.” Kaul v. Stephen, 83 F.3d 1208, 1212

(10th Cir. 1996) (citing Wolf v. Prudential Ins. Co. of America, 50 F.3d 793, 796 (10th Cir. 1995)).

Defendants argue that summary judgment is proper because Plaintiff cannot identify any

evidence of a breach of any duty owed by the trustees or any damages arising therefrom. Dkt. No.

181 at 9. Defendants note that in response to interrogatories requesting all facts upon which

Plaintiff relief for these positions, Plaintiff merely directs Defendants back to his pleadings. Dkt.

No. 181, Ex 8 at pp. 6-7 (“Plaintiff objects to this interrogatory as he alleges his true and valid

complaints are in the amended complaint . . . . The damages sought are listed in paragraphs 26-29

of the amended complaint.”). Plaintiff may not rely on his pleadings in opposing summary

judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (Rule 56 “permits a proper summary

judgment motion to be opposed by any of the kinds of evidentiary materials listed in Rule 56(c),

except the mere pleadings themselves, and it is from this list that one would normally expect the

nonmoving party to make the [requisite] showing . . . .”).

Yet more importantly, whereas Defendants’ argument (that Plaintiff cannot establish a

breach nor damages) is supported as required by “declarations” and “interrogatory answers”

(which materials are expressly permitted by Rule 56(c)(1)(A)),1 Plaintiff fails to rebut these

arguments by presenting evidence suggesting the presence of any genuine issue of material fact.

More specifically, Defendants’ Motion “begin[s] with a section stating the material facts to which

the movant contends no genuine dispute exists,” and the facts in this section are “set forth in

concise, numbered paragraphs”—as required by LCvR 56.1(b). Dkt. No. 181 at ¶¶ 1-16.

Plaintiff’s response in opposition to Defendants’ Motion, by contrast, fails to include “a section

responding, by correspondingly numbered paragraph, to the facts that the movant contends are

not in dispute . . . .” LCvR 56.1(c) (emphasis in original).

Plaintiff’s failure to comply with the Federal Rules of Civil Procedure and local rules of

this Court is not trivial. Federal appellate courts have “repeatedly emphasized the importance of

local rules similar to Local Rule 56.” Caban Hernandez v. Phillip Morris USA, Inc., 486 F.3d 1,

7 (1st Cir. 2007).2 “Such rules are designed to function as a means of ‘focusing a district court’s

attention on what is—and what is not—genuinely controverted.’” Id. (quoting Calvi v. Knox

County, 470 F.3d 422, 427 (1st Cir. 2006)). “When complied with, they serve ‘to dispel the

1 “A party asserting that a fact cannot be . . . disputed must support the assertion by . . . citing to

particular parts of materials in the record, including depositions, documents, electronically stored

information, affidavits or declarations, stipulations (including those made for purposes of the

motion only), admissions, interrogatory answers, or other materials.” (emphasis added). This

requirement is reinforced by this Court’s local rules. See LCvR 56.1(d) (“Each individual

statement by the movant or nonmovant pursuant to subparagraph (b) or (c) of this rule shall be

followed by citation, with particularity, to any evidentiary material that the party presents in

support of its position pursuant to Fed. R. Civ. P. 56(c).”) (emphasis added).

2 The local rule at issue in Caban Hernandez (from the United States District Court for the District

of Puerto Rico), and its present iteration provides: “A party opposing a motion for summary

judgment shall submit with its opposition a separate, short, and concise statement of material facts.

The opposing statement shall admit, deny or qualify the facts supporting the motion for summary

judgment by reference to each numbered paragraph of the moving party’s statement of material

facts.” Like the Court’s local rule here, this rule does not place form over substance; these rules,

consistent with Fed. R. Civ. P. 56(c), require a party opposing a motion for summary judgment to

identify material facts in dispute.

smokescreen behind which litigants with marginal or unwinnable cases often seek to hide [and]

greatly reduce the possibility that the district court will fall victim to an ambush.’” Id.

Here, Plaintiff’s brief in opposition to Defendant’s Motion attempts to create disputes of

material fact, but these efforts are inadequate because they are unsupported by evidentiary

materials. See Bones v. Honeywell International, Inc., 366 F.3d 869, 875 (10th Cir. 2004)

(“Unsubstantiated allegations carry no probative weight in summary judgment proceedings . . . .

To defeat a motion for summary judgment, evidence . . . must be based on more than speculation,

conjecture, or surmise.”) (citations omitted). In this respect, Plaintiff’s arguments, as in Calvi,

amount to a “smokescreen” disguising a “marginal or unwinnable” case. Indeed, a substantial

amount of Plaintiff’s arguments against summary judgment are irrelevant to the instant dispute.

See, e.g., Dkt. No. 185 at pp. 7-9, ¶¶ 1-9 (describing Plaintiff’s family history).

As the magistrate judge observed in the R&R: “[w]hile his assertions are clear, Plaintiff

offers no substantive evidence in support of these allegations and instead relies on innuendo and

conjecture that some evidence produced in the future may confirm his allegations.” Dkt. No. 214

at 13; see also Burbridge Mitchell & Gross v. Peters, 622 Fed. App’x, 749, 733 n. 3 (noting that

even though “[t]he logic of [the plaintiff’s] argument is clear . . . [s]peculation is insufficient to

defeat summary judgment.”). The magistrate judge nevertheless addressed Plaintiff’s various

unsupported arguments and assertions and found them to be substantively lacking. See, e.g., Dkt.

No. 214 at 13, ff. The undersigned independently agrees with the analysis after considering

Plaintiff’s argument and lack of factual support.

Revealingly, Plaintiff’s argument contains a section titled “Plaintiff has clearly articulated

a cause of action.” Dkt. No. 185 at 14. Plaintiff subsequently acknowledges that this is the

standard at the motion to dismiss stage [Id. at 15], whereas Defendants’ Motion is for summary

judgment. Applying the proper standard, the Court finds that Defendants’ Motion establishes that

there is no dispute as to any material fact and that they are therefore entitled to judgment as a

matter of law. See Fed. R. Civ. P. 56(a). As Defendants carried their initial burden, Plaintiff was

required to “set forth specific facts showing a genuine issue for trial as to those dispositive matters

to which it carries the burden of proof.” Kaul v. Stephen, 83 F.3d 1208, 1212 (10th Cir. 1996).

Plaintiff failed. The Federal Rules provide:

If a party fails to properly support an assertion of fact or fails to properly address

another party’s assertion of fact as required by Rule 56(c), the court may:

(1) give an opportunity to properly support or address the fact;

(2) consider the fact undisputed for purposes of the motion;

(3) grant summary judgment if the motion and supporting materials--including the

facts considered undisputed--show that the movant is entitled to it; or

(4) issue any other appropriate order.

Fed. R. Civ. P. 56(e)

The discovery cutoff in this case was in December 2021, and subsequent scheduling

extensions did not extend the discovery period. Dkt. No. 166. The Court finds that Plaintiff has

had ample opportunity to conduct discovery and properly support or address the material facts.

Moreover, and similarly, the Count finds that the accounting Plaintiff requests is unwarranted for

the same reasons laid out in the R&R; namely, applicable law3 provides an accounting as just one

of several remedies in the event the Court finds a violation by a trustee of a duty owed the

beneficiary (which the Court has not). Id. at pp. 9-10.

The Court therefore grants summary judgment because the supporting materials in

Defendants’ Motion show that the movants are entitled to it. Fed. R. Civ. P. 56(e)(3). To be clear,

3 Okla. Stat. tit. 60, § 175.57.

the Court does not grant summary judgment because of Plaintiff’s failure to comply with local

rules and procedure, but because Plaintiff’s failure reveals that Defendants are in fact entitled to

summary judgment.

THEREFORE, the Court ADOPTS the Report and Recommendation [Dkt. No. 214], and

GRANTS Defendants’ Motion for Summary Judgment.

Dated this 17th day of July 2023.

JOHN F. HEIL, III

UNITED STATES DISTRICT JUDGE