Opposition Brief — Shriners Hospitals for Crippled Children v. First Security Bank of Utah, N. A.

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Text

No. 89-1444

Supreme Court of the United States

October Term, 1989

> ———————

NERS HOSPITALS FOR CRIPPLED CHILDREN

ID] l

IT LINIINIGE

FIRST SECURITY BANK OF UTAH, N.A

AS PERSONAL REPRESENTATIVE OF THE

[Tk OF VELMA RIFE JONES (DECEASED), El

On Petition For A Writ Of Certiorari

To The Supreme Court Of Wyoming

BRIEF OF RESPONDENTS ROCK SPRINGS GRAZING

ASSOCIATION, LAZY VD LAND AND LIVESTOCK,

ELZA EVERSOLE AND LOIS M. EVERSOLE IN

OPPOSITION TO PETITION

a 1} ’

VIN E. RAGsDA

} T>

Counsel of Record

MARTY & RA SDALI

20 E. Flaming Gorge Way

> = 7 , + y X 26

Green River, Wyoming 8293

BEST AVAILAE

QUESTION PRESENTED

Whether the decision of the Wyoming Supreme Court

that a beneficiary of a testamentary trust is not a “bene-

ficiary named in the Will” entitled to notice of the sale of

assets of a decedent’s estate under §2-7-205, Wyo. Stat.

(1977) is a violation of the Due Process Clause of the

Fourteenth Amendment to the United States Constitu-

tion.

RULE 29.1 STATEMENT

Respondent Rock Springs Grazing Association 1s a

Wyoming corporation. It has no parent or subsidiary

corporations.

RULE 29.4 STATEMENT

Since the proceeding draws into question the consti-

tutionality of Wyo. Stat. § 2-7-205(b), an act of Wyoming

affecting the public interest, and neither the attorney

general of Wyoming nor any agency, officer or employee

thereof is a party, it is noted that 28 U.S.C. § 2403(b) may

be applicable.

Page

Og 8 gS i

RULE 29.1 STATEMENT............ ii

ES os ii

ees iii

TABLE OF AUTHORITIES................ Vv

| 2

SIALEMENT OF THE CASE....................... 2

REASONS FOR DENYING THE PETITION......... 1]

ili

TABLE OF CONTENTS

WYOMING’S STATUTORY PROBATE PRO-

CEDURE CONFORMS TO THE REQUIRE-

MENTS OF DUE PROCESS UNDER THE

FOURTEENTH AMENDMENT TO THE UNITED

een ener MOMPOMPE BERIT MOI, 005... cece ccc ccn ence

A. Under Wyoming law, Petitioner has no

property interest in the specific property

-constituting the assets of the estate

B. Even if the Petitioner has a property interest

under Wyoming law, the testatrix limited the

extent and nature of the interest

C. To require the notice asserted by Petitioner

would adversely affect the comprehensive

Statutory provisions of Wyoming concerning

trusts and trustees and would disre gard the

special need recognized by this Court for

consistency and predictability where land ti-

tles are concerned

PETITIONER DOES NOT PRESENT A SUB-

STANTIAL FEDERAL QUESTION ..

A. Petitioner has raised its conflict of interest

argument for the first time in this Court...

TABLE OF CONTENTS - Continued

Page

B. Petitioner did not properly present the ques-

tion of the constitutionality of Wyoming's

statute to the Wyoming Supreme Court. ... 22

CE SIE sc oon vce re eee cere eee ety es teks 25

APPENDIX

TABLE OF AUTHORITIES

Page

Cases

Board of County Commissioners v. First National

Bank, 368 P.2d 132 (Wyo. 1962)................ ai, Ze

Board of Regents of State Colleges v. Roth, 408

Ae OEE 6 ne oa eb cas Vhs ovr ee eres 13, 14, 18

Cook v. Elmore, 25 Wyo. 393, 171 P. 261 (1918) ..... 14

Hammer v. Atchinson, 536 P.2d 151 (Wyo. 1975)..... 16

Illinois v. Gates, 462 U.S. 213 (1983).......... 21, 22, 24

In re Gilchrist’s Estate, 50 Wyo. 153, 58 P.2d 431,

rehearing denied, 60 P.2d 364 (1936)................ 16

In re Potter’s Estate, 396 P.2d 438 (Wyo. 1964)...... 14

Leo Sheep Co. v. United States, 440 U.S. 668 (1979) ..4, 19

Loyd v. Loyd, 731 F.2d 393 (7th Cir. 1984) .......... ‘7

McGoldrick v. Compaignie Generale Transatlanti-

que, Jur Uo. GA CFR) fo cs esc ce sanceeence 22, 24

Matter of Estate of Deutsch, 644 P.2d 768 (Wyo.

a) | I ae ee EMM FN te re Tad wie a 16

Matter of Estate of Jones, 770 P.2d 1100, rehearing

Gented, 762 F.20 229 USSD) «oie vis ve sw encwns passim

Mennonite Board of Missions v. Adams, 462 U.S.

FOR CER 6 6 doe re ee eee 13, 15, 18

Mountain States Legal Foundation v. Hodel, 799

F.2d 1423 (10th Cir. 1986), cert. denied, 480 U.S.

2 RE . y Ren, Capertee er MMM ar SR oe 5

Mullane v. Central Hanover Bank & Trust Co., 339

bJiaks ee COD fc oteels Oo Co eee 13, 15, 18, 21

Parratt v. Taylor, 451 U.S. 527 (1981)................ 12

TABLE OF AUTHORITIES - Continued

rape

Ririe v. Board of Trustees of School District No. 1,

674 P.2d 214 (Wyo. 1983) 23

Street v. New York, 394 U.S. 576 (1969) 24

lobin v. Pursel, 539 P.2d 361 (Wyo. 1972) 23

fulsa Professional Collection Services, Inc. v

Pope, 485 U.S. 478 (1988) 13, 15, 17, 19

. _

. rey TIC YALA te

C ‘ WO w ZN i

U.S. Const. Amend. XIV Cy Se

OTA

28 U.S.C. § 1257(a) (1982) 24

Wyo. Stat. § 2-1-102 (1977

Wyo. Stat. § 2-7-205 (1977 23

Wyo. Stat. § 2-7-402 (1977 +, 15

Wyo. Stat. § 2-7-615 (197, 23

Wyo. Stat. § 4-8-101 (1977) 5, 17

Wyo. Stat. § 4-8-102 (1977) - 19

Wyo. Stat. § 4-8-103 (1977) Q

Wyo. Stat. § 4-8-105 (1977 8 22

Wyo. Stat. § 4-8-107 (1977 2

TABLE OF AUTHORITIES — Continued

MIscELLANEOUS

G. Bogert, Trusts and Trustees (2nd ed. rev. 1982)

W. Calef, Public Lands and Private Grazing (Univ. of

Chicago 1960)......

C. Ragsdale, “Section 3 Rights Under the Taylor

Grazing Act,” IV Land & Water L. Rev. 399

(1969)...

Restatement (Second) of Trusts (1959)

Wyoming Rules of Appellate Procedure, Rule

Wyoming Rules of Civil Procedure, Rule 60(b)

Page

No. 89-1444

In The

Supreme Court of the United States

October Term, 1989

SHRINERS HOSPITALS FOR CRIPPLED CHILDREN,

Petitioner,

VS.

FIRST SECURITY BANK OF UTAH, N.A.,

AS PERSONAL REPRESENTATIVE OF THE

ESTATE OF VELMA RIFE JONES (DECEASED), ET AL.,

Respondents

— —_

BRIEF OF RESPONDENTS ROCK SPRINGS GRAZING

ASSOCIATION, LAZY VD LAND AND LIVESTOCK,

ELZA EVERSOLE AND LOIS M. EVERSOLE IN

OPPOSITION TO PETITION FOR A WRIT OF

CERTIORARI TO THE SUPREME

COURT OF WYOMING

Respondents Rock Springs Grazing Association, Lazy

YD Land and L‘vestock, Elza Eversole and Lois M. Ever-

sole respectfully request that the Petition for a Writ of

Certiorari sought by Petitioner to review the judgment of

the Supreme Court of Wyoming entered on November 15

1YS8Y, be denied

OPINIONS BELOW

The opinion of the District Court of the Third Judicial

District of the State of Wyoming, in and for the County of

Sweetwater, from which Petitioner appealed to the Su-

preme Court of Wyoming is not officially reported, but is

reproduced in Petitioner’s Appendix C. The original

opinion of the Supreme Court of Wyoming denying Peti-

tioner’s original appeal and affirming the decision of the

District Court is reported at 770 P.2d 1100 and is repro-

duced in Petitioner’s Appendix A. The Wyoming Su-

preme Court’s opinion on rehearing, again denying

Petitioner’s appeal, is reported at 782 P.2d 229 and is

reproduced in Petitioner’s Appendix B.

STATEMENT OF CASE

Velma Rife Jones (hereinafter Mrs. Jones) died on

October 19, 1986. (Petitioner’s Appendix A2, hereinafter

Pet. App. , R. 30'). Her will was admitted to informal

probate in Utah, her domicile at demise, and First Securi-

ty Bank of Utah, N.A. (hereinafter First Security-Utah),

named Executor in the will, was appointed Personal Rep-

resentative of her estate in Utah. (R. 6-9.) Subsequently,

the will was offered for ancillary probate in Wyoming by

“Tg

R. ” denotes references to the original record of the

probate proceedings in the District Court of the Third Judicial

District of the State of Wyoming, in and for the County of

Sweetwater, as filed in the Supreme Court of Wyoming on

appeal.

the joint petition of First Security-Utah and First Security

Bank of Rock Springs (hereinafter First Security-RS). The

will was admitted to probate and First Securitv-Utah and

First Security-RS were appointed Co-Personal Represen-

tatives by the District Court in Wyoming (R. 1-31)

Mrs. Jones’ will provided for specific pecuniary be-

quests to several cousins, if they survived her. (R. 13.) All

thor t

the rest of her property was disposed of under Paragraph

Fifth of the will, (R. 13) providing, in part

[he residue of the property owned by me at my

death, real and personal and wherever situate, |

give, devise and bequeath to First Security Bank

of Utah, N.A. as my Trustee to be held as a

- yr } ] 4 5 y 7

separate trust on the following terms

* * >

th} ] noi~acep $imN hop w}l] rp »} ral n y cyt

Lillis idngvuage In tne ww ili GALE SeCVEeTAal Dayes Vi

c c I (

y ; . _— . +} 1c | theo - . . vo

a\ A » \ NcermMing tne (TruSt anc tne DOWeTS and

tT) 1% e F

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| > Vi t c TUSTeE iN “ft

| 5 7 +1 12 2 1A \ h : | 4 5 7 ,

The will provided (ik. 13-14) that if Mrs. Jones’ sister

wry ; , } - to sal . — » be ho

irvived her, the trustee should pay income from the

+ + : , sch j “+7 1O li +) ' . >

rust to the surviving sister during her lifetime. The same

I) I vT yh yf } _ 1] (R 146 rOP T ry TY wide }, Bharata

Ppdarapray nm OF tne W1il IN i yOes On u\ pre vy iat tna up il

+ + + + . > , . y

e death of the sister, the trustee, after the complete

| sat C sh > “4

nding of the trust, shall distribute all of e principal

] n ]

Ind uncommitted incom e-half to petitioner and one

’ ? | rn) r r\ , | +>} + ry +, r + +r ,

i tO Ul \ hive Sit y \) 4 ] \ t L cS a t at

| ,

e QGudilllied as Organizations ger certain provis S

rf ‘ } tT) ' } ‘ .

r tne | ternal LeVe!l e ¢ at r eltner I Ot O] ne

tit 4 y y +

ned entities are not s jualified, appropriate co I

: :

{ t instruc ns iTé t f { Lee 5 ven IT

power to sell assets of the trust in its sole discretion. (R.

17-19.)

A large portion of the assets of the estate of Mrs.

Jones was a ranching operation in southwest Wyoming

known as the Rife Ranch.* That ranching operation con-

sisted of real property in Sweetwater County, Wyoming,

leases of state lands from the State of Wyoming, appurte-

nant federal grazing privileges on the public domain

adjacent to and interspersed with the real property, and

shares of stock in Rock Springs Grazing Association

(hereinafter RSGA).?

2 Some statements concerning the ranching operation in

Petitioner’s Petition are possibly misleading, probably as a

result of Petitioner’s limited experience concerning the nature

and extent of ranching property interests in the area of Wyo-

ming where the Rife Ranch is located. Specific instances of

potentially misleading statements will be treated in subsequent

footnotes.

3 Petitioner states in its Petition that Rife Ranch is an

approximately 40,000 acre parcel (emphasis added) of £%y and

leased property (Petition, page 3, hereinafter Pet. _ This

might imply that an owner of the ranch has the anor use

of some 40,000 contiguous acres of land. As pointed out by the

appraiser of the Rife Ranch (R. 233, 254, 380), this is not the

case. The fee lands of the Rife Ranch consist of approximately

25,000 acres of land. These lands are interspersed with other

privately owned lands, federally owned lands and state owned

lands. For the most part, they are unfenced and gencrally

undiscernable from neighboring lands in terms of readily as-

certainable boundaries. Most of the fee lands lie within an area

known as the “checkerboard.” See Leo Sheep Co. v. United States,

440 U.S. 668 (1979), for a description of the checkerboard about

100 miles east of the lands involved in this action and for a

description of some of the problems inherent in such

(Continued on following page)

After Mrs. Jones’ death, Ranchers Realty of Lander,

Wyoming approached A. W. Dickinson‘, a rancher en-

gaged in livestock raising on lands in the vicinity of the

Rife Ranch, to see if he might be interested in purchasing

(Continued from previous page)

ywnership. Cf. Mountain States Legal Foundation v. Hodel, 799

F.2d 1423 (10th Cir. 1986), cert. denied, 480 U.S. 951 (1987) for a

description of checkerboard lands in the immediate vicinity

and some of the other problems inherent in such ownership.

"he reference to leases is also somewhat misleading, inasmuch

is the only leases in the traditional sense are those from the

tate of Wyoming, which are subject to considerable manage-

nent constraints imposed by the State in the interest of rela-

tively free public access. The federal permits are Section 3

permits and are subject to the management restrictions on such

interests. See C. Ragsdale, “Section 3 Rights Under the Taylor

Grazing Act,” IV Land & Water L. Rev. 399 (1969). Finally, the

shares in RSGA simply represent the right to graze defined

numbers of livestock in common with other shareholders on

RSGA ranges, subject to the management restrictions of RSGA

and the Bureau of Land Management. All of the lands are used

by many other entities under the general concept of multiple

use, Without much concern for actual record owne rship. Thus,

he so-called “parcel” is unfenced, is subject to the manage

ment dictates of at least three different entities, and the use

thereof (including, as a practical matter, the fee lands) is non

exclusive and is shared with other livestock operators, hunters

recreationists, oil companies, wildlife, wild horses and myriad

other users. These factors may have played some role in the

appraiser's thoughts concerning the difficulties of manage

ment of the property and the pertinent considerations concert

ing value (R. 399-401). It mav also explain, to some degree, the

trustee's concerns regarding management, income producti

id the determination to sell. (R. 499-500)

+ Dickinson isa partner with his wife and children in La

the ranch or portions of it. (R. 530.) Dickinson indicated

interest, if he could find others to participate with him.

(R. 530.) Dickinson approached Elza Eversole, another

local rancher, and, later, Leonard W. Hay, Vice-President

of RSGA,> and ascertained that Eversole and RSGA

would be interested in joining him in making an offer on

the ranch. (R. 526-527, 530-531.) In early April, 1987,

Ranchers Realty indicated to Dickinson, Eversole and

RSGA that First Security-Utah might entertain an offer

and invited them to make one. (R. 527, 532.) Dickinson,

Eversole and RSGA created a joint venture styled South-

ern Wyoming Cattle Co. to make the offer, to take title to

the property if the offer were accepted and to distribute

the property among them according to their various re-

quirements. (R. 527, 532.) On April 28, 1987, Southern

Wyoming Cattle Co. made a written offer to First Securi-

ty-Utah to purchase the ranch for cash, subject to the

conditions stated in the offer. (R. 527, 532, 57, 62, 500,

488.)

5 RSGA owns lands within the checkerboard in Sweetwa-

ter County, Wyoming, leases lands within the checkerboard

from the State of Wyoming, leases lands within the checker-

board from other private land owners and has grazing permits

within the checkerboard from the Bureau of Land Manage-

ment. A share of RSGA stock presently entitles the shareholder

to graze 3500 sheep (or their livestock equivalent) within the

Association’s range during its stated grazing season of Decem-

ber 15 to May 1. The share is assessable by the corporation for

various expenses. RSGA’s lands are also unfenced and are

interspersed with the lands of other private owners, those of

the United States and those of the State of Wyoming. For a

somewhat dated, but still relatively accurate, description of

RSGA’s operation, see W. Calef, Public Lands and Private Graz-

ing, pp. 202-213 (Univ. of Chicago 1960).

Apparently, the trustee was concerned about the abil-

ity of the ranch to generate the income necessary for the

benefit of the income beneficiary and about the diffi-

culties of the trustee’s administering the property as a

reasonable investment.® (R. 499-500.) In any event, First

Security-Utah, after review of the offer and consultation

with the appraiser”? which ii had retained for purposes of

less, per annum being paid on the existing lease was market

and that the expected market return was something between

three and four per cent per annum, one might perhaps under-

stand these concerns. (R. 394-396).

? The appraiser had already brought to the attention of the

trustee that there was a declining market for agricultural lands

in southwest Wyoming. In the appraiser’s view, the value was

falling fairly rapidly. Justifiable comparables were hard to ob-

tain and were becorning rapidly dated even when obtained. (R.

399-401) The upshot was that when the appraiser was in-

formed of the cash offer in light of all the foregoing, the

appraiser himself, who provided every value figure quoted in

Petitioner’s petition, thought the price offered was reasonable.

(R. 492-493). Further, at various places in its Petition, petitioner

insinuates some sort of impropriety in the trustee’s having sold

the lands with minerals and quotes the appraiser’s report. (Pet.

5, n. 4; Pet. 10, n. 8.) An examination of R. 265-266 reveals that

of the 25,000 or so acres of deeded lands, fewer than four

thousand acres had mineral estate unsevered from the surface

estate, that none of the deeded lands with unsevered minerals

had any production and that

“Minerals in the general area have traditionally been

sold all or in part with the surface rights, with no

discernable value contribution except in those areas

where exploration has shown a reasonable certainty

of discovery. With the upsurge of oil and gas explo

ration tm the area the past few years, there is

]

(Continued on following page)

appraising the assets of the estate (R. 500-501), accepted

the offer, with minor modifications, on April 30, 1987,

and on May 1, 1987, the modifications were accepted by

Southern Wyoming Cattle Co. (R. 528, 532-533, 57-58,

63-93, 501, 490.)

The Personal Representatives obtained and filed

Waivers of Notice of Hearing on Petition for Authority to

Sell Real Property and for Confirmation of Sale from the

various specific legatees of Mrs. Jones’ will. First Securi-

ty-Utah, as trustee, issued its own Waiver of Notice as the

residuary beneficiary named in the will. (R. 47-53, 58, 94.)

First Security-Utah advised Southern Wyoming Cattle Co.

that a closing could be held on May 19, 1987. (R. 528,

533.)

On May 19, 1987, the Personal Representatives filed

with the District Court their “Petition for Authority to

Sell Real Property and for Confirmation of Sale” (R.

54-93), which recited (R. 57-58), inter alia, that the Rife

Ranch was not being operated and that the petitioners

believed that it was in the best interests of the estate and

of its beneficiaries that the ranch be sold, for the reasons

that the estate was in need of liquid assets to pay the

(Continued from previous page)

currently a trend for owner/sellers to reserve unto

themselves the mineral rights. However, there is no

concrete evidence in the market that the absence of

mineral rights has an effect on the selling price of a

property.”

In other words, the minerals value was de minimus. The pur-

chasers’ written offer included minerals. (R. 99)

debts, specific bequests, costs of administration and taxes

of the estate® and for the further reason that

the ultimate beneficiary of the estate (a trust for

the benefit of Darrell Rife Mork, the sister of

Velma Rife Jones during her lifetime and then

after her death two charities ) has no desire to

own or operate the Rife Ranch.

(Pet. App. A3, R. 57.)9 The petition also indicated that

there had been filed in the estate Waiver of Notice of

Hearing by the beneficiaries of the estate, and that there-

fore no additional notice of the hearing needed to be

given

On that same date, the District Court entered its

Order Approving Sale of Real Property and Confirma

tion of Sale,” (R. 94-130) which stated: ” Waivers of

notice of the said filing have been filed herein by those

Petitioner suggests in n. 7 of its Petition that $108,940 in

liquid assets would be available. Petitioner’s arithmetic fails to

considcr the necessities of the income beneficiary, the costs of

administration of the trust or the costs of simply maintaining

the Rife Ranch. Further, while the trustee was not required to

generate a 9% income return for the income beneficiary, it

appears to be the intent of the testatrix that the trustee was to

aim for such return. (R. 13-15.) An asset which would produce

3% —4% return and is the major asset of the trust would appear

to adversely affect the available income of the trust and the

mount available to the income beneficiary

Petitioner suggests in its Petition (Pet. 6) that this lan

guage somehow suggested to the Court that Petitioner had no

desire to own or operate the Rife Ranch. It seems quite clear, in

the context of the will, the language of the petition and the fact

that the trustee waived notice, that it was the trustee, the

beneficiary named in the will, which did not desire to own or

operate the Rife Ranch

persons interested in the said Estate and entitled to notice

by statute; ...” (R. 94) and which ordered and decreed

that notice of the matter need not be given, that the

Petition for Authority to Sell was approved and allowed

and that the sale to Southern Wyoming Cattle Co., pur-

suant to the terms and conditions of the offer, was con-

firmed. (R. 97.)

On the same day, a deed conveying the Rife Ranch

was executed and delivered by the Personal Representa-

tives to Southern Wyoming Cattle Co. (R. 528, 533.)

Southern Wyoming Cattle Co. then delivered its deeds

conveying the real property to its various joint venturers

(or their nominees) in accordance with their own agree-

ment. (R. 528, 533.) Later that day, all the deeds were

recorded. The various grantees went into possession and

took the necessary actions to cause the transfer of state

leases, federal grazing permits and RSGA shares and

caused notification of the change of ownership to be

given to various owners of interests in the real property

affected by the change. (R. 528-529, 533-534.)

About two months later, Petitioner filed its Motion

pursuant to Rule 60(b), Wyoming Rules of Civil Pro-

cedure, seeking to have the District Court vacate its Or-

der approving and confirming the sale and to nullify the

sale. (R. 131.) The District Court issued its opinion letter

denying the Motion (Pet. App. C, R. 596-601) and an

Order Denying the Appellant’s Motion for Relief under

Rule 60(b) was entered by the Court. (R. 915.) Petitioner

Appealed from that Order to the Supreme Court of Wyo-

ming. (R. 919.) The Supreme Court of Wyoming affirmed

the decision of the District Court in a 3-2 decision issued

on March 21, 1989, ruling that Petitioner was not “a

beneficiary named in the will” as contemplated by

§ 2-7-205, Wyo. Stat. (1977), that First Security-Utah, as

trustee, was the “beneficiary named in the will” as con-

templated by such statute, and that Petitioner was not

entitled to notice of the sale. (Pet. App. A.) Subsequently,

on November 15, 1989, the Wyoming Supreme Court

modified its earlier opinion, noting that it was not neces-

sary to categorize Petitioner as a “contingent” beneficiary

in order to reach its earlier decision. (Pet. App. B.) It

ruled that its earlier decision should be

confirmed insofar as it is expressed in the es-

sence of the ratio decidendi: “The resolution of

the problem of notice does not depend, how-

ever, upon whether Shriners was a vested bene-

ficiary or a contingent beneficiary. It still was

not a ‘beneficiary named in the will.’ ” Matter of

Estate of Jones, 770 P.2d at 1103.

(Pet. App. B2.) Chief Justice Cardine, author of a dissent-

ing Opinion in the first decision, signed the second opin-

ion for the Court.

, = —

—

REASONS FOR DENYING THE PETITION

Briefly stated, this is a case in which the trustee of a

testamentary trust, having been granted in the will creat

ing the trust full and exclusive discretionary power to sell

any or all of the assets of the trust, consented to a sale by

the personal representatives of the decedent's estate of

certain of the assets of the estate to a bona fide purchaser

Notwithstanding the intentions of the testatrix as ex-

pressed in the powers granted the trustee in the will

notwithstanding the powers of the trustee under the gen-

eral statutory law of Wyoming, notwithstanding the na-

ture of the interests of a beneficiary of a trust and

notwithstanding the equities of a bona fide purchaser,

Petitioner asserts that it has an absolute right under the

Due Process Clause of the Fourteenth Amendment of the

United States Constitution which overcomes them all.

Petitioner has confused the issue in this case from its

outset. Throughout the proceedings, Petitioner has failed

to adequately address important considerations necessary

to its due process argument. The elements of that argu-

ment are that (1) a state take action, (2) which deprives

someone of his property, (3) without due process. See

Parratt v. Taylor, 451 U.S. 527, 537 (1981). Petitioner's case

fails this test.

Petitioner has never shown, and no Court has ever

found, that it has a property interest in the specific prop-

erty which comprised the assets of the estate of Mrs.

Jones. Even if there were such an interest, Petitioner does

not show the requisite state action necessary to its due

process argument.

Further, to require a trustee to notify all beneficiaries

of each management decision which the trustee makes

with respect to the property of the trust would frustrate

the very nature of the comprehensive statutory provi-

sions of Wyoming concerning trusts and trustees and

would go far beyond the requirements which this Court

has heretofore established. It would adversely affect the

reasonable expectations of bona fide purchasers and

would disregard the special need recognized by this

Court for continuity and predictability where land titles

are concerned.

Finally, there really is no substantial federal question

presented in this case. The Wyoming Supreme Court

simply interpreted its own State statute to determine the

parties who have an interest in a probate proceeding and

thereby who has the right to notice of activities within

that process. If there is a constitutional deficiency in the

Wyoming statutory scheme, Petitioner has never properly

presented the question to the Wyoming Supreme Court

for its determination.

I. WYOMING’S STATUTORY PROBATE PRO-

CEDURE CONFORMS TO THE REQUIREMENTS

OF DUE PROCESS UNDER THE FOURTEENTH

AMENDMENT TO THE UNITED STATES CONSTI-

TUTION.

A. Under Wyoming law, Petitioner has no property

interest in the specific property constituting the

assets of the estate.

The United States Constitution does not create prop-

erty rights. Board of Regents of State Colleges v. Roth, 408

U.S. 564, 577 (1972). Such cases as Mullane v. Central

Hanover Bank & Trust Co., 339 U.S. 306 (1950), Mennonite

Board of Missions v. Adams, 462 U.S. 791 (1983), and Tulsa

Professional Collection Services, Inc. v. Pope, 485 U.S. 478

(1988) illustrate that the Constitution will protect rights

which are created from improper extinguishment by re-

quiring that due process be observed. However, the inter-

est protected must be created from some source other

than the United States Constitution. Such interests are

created and their dimensions defined by existing

rules or understandings that stem from an independent

source such as state law —- rules or understandings that

secure certain benefits and that support claims of entitle-

ment to those benefits. . . .” Roth, id. Further, for an

interest to be created, and thereby protected, the person

asserting the interest must show something more than an

abstract need or desire for it and more than a unilateral

expectation of it. He must show a legitimate claim of

entitlement to it. Id.

Throughout these proceedings, Petitioner has assert-

ed that it has a vested interest in the very assets of the

estate itself. However, a review of the law of Wyoming

makes it clear that it had no legitimate claim of entitle-

ment to the specific property present in the estate.

Under Wyoming law, where there is a will, title to a

decedent’s property “passes to the person to whom it is

devised by his last will...” § 2-7-4602, Wyo. Stat. (1977).

(Pet. App. A7) This has long been the law of Wyoming.

Cf. Cook v. Elmore, 25 Wyo. 393, 404, 171 P. 261, 264 (1918).

Further, the only parties interested in the estate in Wyo-

ming are the executor, administrator, spouse, next of kin,

heirs, legatees, devisees, and creditors of the deceased or

of the administration. In re Potter’s Estate, 396 P.2d 438,

447 (Wyo. 1964). (Pet. App. A6) In the instant case, a

review of Mrs. Jones’ will reveals that the general legatee

and only devisee under the will is First Security-Utah, as

trustee. The property in question passed to the trustee,

First Security-Utah, on October 19, 1986, the date of de-

mise Of Velma Rife Jones, subject to administration

of the estate as provided by § 2-7-402, supra. On that date,

in the absence of a prohibition in the instrument creating

the trust, the trustee had the discretionary power to sell

the property in question, subject only to the administra-

tion of the estate. §§ 4-8-102, 4-8-101(a)(iii), 2-7-402, Wyo.

Stat. (1977).

Petitioner argues that under the holdings of Mullane,

Mennonite Board of Missions and Tulsa Professional Collec-

tion Services, Inc., it was entitled to notice. In each of those

cases, the party entitled to notice had some entitlement, a

property interest, which was destroyed by the action

taken. In Mullane, it was the right to challenge the trust-

ee’s accounting. That existing right would be gone forev-

er after the court’s action. In Mennonite, the mortgagee in

question lost its right to redeem. That existing right

would be gone forever after the challenged action. In

Tulsa, the creditor lost its right to file a claim and enforce

its right against the decedent in the decedent’s estate.

That existing right was extinguished forever. In each

instance, there was an existing right — an expectation, a

property interest — created by the state, which would be

lost forever without action. Here, the expectation asserted

by Petitioner is the right to take the property in kind (Pet.

12, n.10). Under the law of Wyoming, Petitioner had no

legitimate claim of entitlement. Its expectation was uni-

lateral, at best. Petitioner lost nothing and Mullane, Men-

nonite and Tulsa simply do not apply.

B. Even if the Petitioner has a property interest

under Wyoming law, the testatrix limited the

extent and nature of the interest.

As in most states, Wyoming law requires its Courts

sitting in probate to give effect to the intentions of a

z 16

testator as expressed in the will. § 2-1-102(ii), Wyo. Stat.

(1977). See also, e.g., such cases as Matter of Estate of

Deutsch, 644 P.2d 768 (Wyo. 1982), Hammer v. Atchinson,

536 P.2d 151 (Wyo. 1975) and In re Gilchrist’s Estate, 50

Wyo. 153, 58 P.2d 431, rehearing denied, 60 P.2d 364 (1936).

Here, the intent is fairly easy to glean. Mrs. Jones intend-

ed that any interest which Petitioner might have was to

be subject to the absolute right of the trustee to sell the

assets of the trust.

Under the powers granted to the trustee under the

will, which defined the dimensions of the interest, the

trustee had absolute power on the date of Mrs. Jones’

death, as the trustee and owner of the property, subject

only to administration of the estate, to sell the property in

its absolute discretion. (R. 17-19.) The Petitioner had no

present vested interest in the property which was the

subject of the sale, i.e. the assets of the estate itself. The

trust provisions provided that Petitioner only took a

share of the principal and income of the trust upon the

death of the income beneficiary of the trust, subject to

conditions to be determined at such time. Even if Peti-

tioner met the conditions, its only right was to the trust

assets then existing after the complete funding of the

trust. (R. 16.) The interest which Petitioner has, of what-

ever nature, is not an interest in the property of the

estate, but is an interest in the trust created by the will. To

find otherwise would be contrary to the intent of the

testatrix, for Mrs. Jones gave the absolute discretionary

power to sell the trust assets to the trustee. If the trustee

is restricted as to sale discretion and has to consult the

beneficiaries of the trust on each decision, the intent of

the testatrix is being thwarted. And it is her intent which

creates - which defines - the dimensions of the right

created

Thus, it is not the action of the State of Wyoming

which restricts Petitioner’s right to notice. It is the very

act of the testatrix herself. Her action is not State action.

Cf. Loyd v. Loyd, 731 F.2d 393, at 398-99 (7th Cir. 1984)

Both from the point of view of the interest created and of

state action, Petitioner has failed to bring itself within the

parameters of the Fourteenth Amendment. As this Court

discussed in Tulsa, supra at 485-487, there has to be state

action. Further, as there indicated, to constitute state ac-

tion, the state must do more than be merely passive, must

do more than merely make available to a private party for

private use certain proceedings. /d. In this instance,

where a private party created the dimensions of the inter-

est, there simply is no State action

C. To require the notice asserted by Petitioner

would adversely affect the comprehensive stat-

utory provisions of Wyoming concerning trusts

and trustees and would disregard the special

need recognized by this Court for consistency

and predictability where land titles are con-

cerned.

[he Wyoming legislature has enacted comprehensive

statutory provisions concerning fiduciaries such as trust-

ees in the Uniform Trustees Powers Act, §§ 4-8-101, et

seq., Wyo. Stat. (1977) (set out in part in Appendix here-

to). In that act, Wyoming has provided that trustees in

Wyoming shall have certain duties and powers. Among

the powers granted by the legislature to trustees is the

power to sell the assets of the trust without having to

seek court or beneficiary approval, unless the instrument

creating the trust specifically prohibits such discretionary

sales.!° §§ 4-8-102(a), 4-8-103(a), 4-8-103(c)(vii), Wyo. Stat.

(1977). By creating such a power in the trustee, the Wyo-

ming legislature necessarily limited the nature of the

beneficiary’s interest.

Respondents have earlier discussed the requirements

concerning the source of protected interests set down by

this Court in the Roth decision at pp. 13-14, supra. Wyo-

ming, as part of its statutory treatment of trusts and

trustees, has defined the extent of the interest which a

beneficiary has in a trust, just as Wisconsin defined by

statutory terms the interest of school teachers such as

Roth. Obviously, the interest of a beneficiary in Wyoming

is not to any specific asset of the trust, in as much as that

specific piece of property can be sold at the discretion of

the trustee. This is not surprising in light of the general

law of trusts. See generally Restatement (Second) of Trusts

(1959), §§ 88(1), 187, 190, 202(2), 272, 277. However, what

is important is that the laws of Wyoming, which are the

source of Petitioner’s interest of whatever nature, have

limited the extent of Petitioner’s interest, in the absence

of a contrary instruction from the person creating the

trust. This is the State’s prerogative, recognized by this

Court. Roth, supra at 577.

This is not a situation like Mullane, where the legisla-

ture created a situation in which the existing right of the

beneficiary, that of challenging an accounting, was de-

stroyed forever without notice that the right was in jeop-

ardy. It is not a situation like Mennonite, where the action

10 § 4-8-105(b), Wyo. Stat. (1977) provides an exception in

the event of conflict of interest as there defined. Petitioner has

never invoked this provision. See text, infra at 21-22.

of the state destroyed a right by providing for a pro-

cedure which did not give the owner of the right notice to

allow it to exercise the only right it had, that of redemp-

tion. It is not a situation like Tulsa, where the only right of

the creditor, that of filing a claim in the decedent's estate

— a proceeding at least in part created for his benefit -

was destroyed without any reasonable notice. In all of

those cases, it was clear that the aggrieved party had a

legitimate claim of entitlement to the interest being extin-

guished. Here, there is no such legitimate claim. The very

source Of Petitioner’s interest defined the limitations of

that interest. To require anything further would be to

expand the right created and to improperly interfere with

the state’s right to define property interests.

Further, this Court has indicated that it has tradi-

tionally recognized the special need for certainty and

predictability where land titles are concerned. Leo Sheep

Co. v. United States, 440 U.S. 668, 687 (1979). It is clear

under the genera! law of trusts that where a trustee has

an absolute power of sale and sell§ to a bona fide pur-

chaser, all equitable interests are cut off and extinguished.

See G. Bogert, Trusts and Trustees, § 881; Restatement (Sec-

ond) of Trusts, §§ 283, 284. If the grantee is a bona fide

purchaser, he takes free of any interest of the benefici-

aries, and the beneficiaries are left to their remedy

against the trustee for breach of the trust.'! As part of its

'! Conversely, if the purchaser is not bona fide, it follows

that a frustrated beneficiary can pursue both the trustee and

the purchaser. See Restatement (Second) of Trusts, §§ 288, 289,

290, 291. Petitioner suggests “Perhaps the sale of the Rife

Ranch was part of a scheme to benefit the purchasers and to

(Continued on following page)

comprehensive statutory enactment, Wyoming has fol-

lowed this general rule. It has provided that a person

dealing with a trustee has the right to presume that the

trustee is acting within his powers and that he has the

power to act, unless the person has actual knowledge to

the contrary. § 4-8-107, Wyo. Stat. (1977). In the instant

case, the equities are even stronger. The instrument creat-

ing the trust was a public record. The instrument did not

withdraw the statutory power of the trustee to sell. In

fact, the instrument specifically granted such power to

the trustee in its sole discretion. The public record further

indicated that the very person with the power to sell had

consented to a sale from the estate. If this Court now

determines that a trustee with such power, whether

granted by statute or by the instrument itself, cannot sell

assets of the trust without giving notice to all the bene-

ficiaries of the trust, it seems clear that this Court will not

only have created a new right where none now exists, but

will make it necessary for every prospective purchaser in

every sale by a trustee to demand that every beneficiary

(Continued from previous page)

hoodwink the Petitioner.” (Pet. 23) If such is the case, then

perhaps Petitioner ought to prove its innuendo in a proper

Wyoming state court and show that the purchasers are not bona

fide under § 4-8-107, Wyo. Stat. (1977). Petitioner has made

much of its lack of remedy in this case. As was pointed out by

the District Court in its opinion, “ .. . perhaps Shriners’ best

remedy is to sue the bank for damages.” (Pet. App. C5). If the

purchaser respondents are not bona fide purchasers, they

should be included. And, indeed, Petitioner has filed such an

action. Shriners’ Hospital for Crippled Children v. First Security

Bank of Utah, N.A., et al., Civil Action No. C-89-247, District

Court of the Third Judicial District of Wyoming, in and for the

County of Sweetwater.

be notified of the sale. This assumes, of course, that such

a purchaser can be found after the creation of suchan

s | »

ait

In effect, this Court will be saying that there can never be

a bona fide purchaser in a trustee’s sale *

rt will be saying that every beneficiary of a t

ic property constituting (tr

Cou

an interest in the specif

ind that a purchaser buys any portion of such property a

urchaser will no

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PETITIONER DOES NOT PRESENT A SUBSTAN-

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its conflict of

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I rue. VVy I ~ itory law

provides a definition of conflict of interest in such cir-

cumstances. § 4-8-105(b), Wyo. Stat. (1977). Wyoming has

enacted legislation to establish uniform and definite rules

to govern dealings with and breaches by fiduciaries. Cf.

Board of County Commissioners v. First National Bank, 368

P.2d 132, 136-137 (Wyo. 1962). The conflict question was

never presented below, and no state court in Wyoming

has ever had an opportunity to rule on such a question.

This Court has indicated that it is not inclined to make

constitutional decisions where the lower courts have not

had the question properly placed before them. McGoldrick

v. Compaignie Generale Transatlantique, 309 U.S. 430 (1940)

Cf. Illinois v. Gates, Id. This Court should decline to issue

its Writ of Certiorari

B. Petitioner did not properly present the question

of the constitutionality of Wyoming’s statute to

the Wyoming Supreme Court.

In the Wyoming Supreme Court, Petitioner never

suggested that the applicable provisions of the Wyoming

statutes with which it was concerned were unconstitu-

tional as such. The Wyoming Supreme Court never ad-

dressed the issue of the constitutionality of its probate

statute concerning notice to be given to “beneficiaries

named in the will.” The only reference to the question of

due process was made in passing by Chief Justice

Cardine in his dissent from the first decision of that

Court. (Pet. App. A9). In that dissent, he makes clear that

he considered Petitioner a beneficiary named in the will.

As such, petitioner was entitled to notice, both as a

matter of state and federal law. (Pet. App. A9-A10). How-

ever, in the second opinion of the Wyoming Supreme

Court, Chief Justice Cardine, writing for the Court, makes

no reference to the Due Process question, but simply

States:

The crux of this case is that any beneficiary of a

trust created in a will is not a beneficiary under

the will for the purposes of the notice require-

ments of §§ 2-7-615 and 2-7-205, W.S. 1977. We

need make no further categorization of the sta-

tus of Shriners Hospitals for Crippled Children

than to conclude that it was not a “beneficiary

under the will.”

(Pet. App. B3).

For the Wyoming Supreme Court to have addressed

the question of the constitutionality of its statute under

the circumstances of this case would be extremely unusu-

al. Rule 5.07, Wyoming Rules of Appellate Procedure,

clearly provides:

In all cases both criminal and civil. ..in whicha

Statute, . . . is alleged to be unconstitutional,

. counsel shall also serve a copy of their brief

upon the attorney general.

In Ririe v. Board of Trustees of School District No. 1, 674 P.2d

214, 219 (Wyo. 1983), the Wyoming Supreme Court, quot-

ing Tobin v. Pursel, 539 P.2d 361 (Wyo. 1972), stated the

obvious reason for such a rule:

The attorney general, being the chief legal offi-

cer of the State, has a duty to protect the inter-

ests and the welfare of the people in declaratory

judgment actions where statutory constitutional

questions are in issue. 539 P.2d at 365.

Failure to comply with the rule can render an appeal of

whatever nature vulnerable to dismissal for lack of juris

diction. Ririe, supra at 220. In this instance, although

invited,'? Petitioner did not serve the attorney general as

required, and it must be assumed that such is a basis for

the Court’s silence on the constitutional issue.

Petitioner has invoked 28 U.S.C. § 1257(a) as the basis

for the Court’s jurisdiction in this matter. In exercising its

jurisdiction under that section, the Court has held that it

has no jurisdiction over such issues unless a federal ques-

tion has been properly presented or determined in the

court below. McGoldrick, Id. Cf. Illinois v. Gates, Id. Wheth-

er it is a question of jurisdiction as illustrated by

McGoldrick or merely one of prudential restriction as sug-

gested by Gates, this case is one in which this Court

should decline to issue its writ of certiorari. This Court

has stated that:

. when, as here, the highest state court has

failed to pass upon a federal question, it will be

assumed that the omission was due to want of

proper presentation in the state courts, unless

the aggrieved party in this Court can affir-

matively show the contrary... .

Street v. New York, 394 U.S. 576, 582 (1969). While in Street

it was determined that the appellant had affirmatively

established the contrary, such is not the case here. In the

instant case, petitioner failed to properly present the con-

stitutionality issue to the Wyoming Supreme Court and

has failed to affirmatively show that it was so considered

Accordingly, this Court should decline to grant a writ of

certiorari for lack of jurisdiction.

'2 Briefs for Respondents suggested this deficiency to Peti-

tioner. Petitioner chose not to serve the attorney general. Cf

Ririe, supra at 220.

CONCLUSION

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ALVIN E INAGSDAI

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Counsel of Record

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M ARTY & NAGSDALI

1) LC .] e >

20 East Flaming Gorge Way

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Green River, Wyoming 82935

307) 875-3235

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Springs Grazing Association

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APPENDIX

TITLE 2. Wills, Decedents’ Estates and Probate Code

CHAPTER 1. General Provisions

ARTICLE 1. Citation and Construction

S 2-1-102. Rules of construction and applicability.

a) This code shall be liberally construed and ap

ed, to promote the following purposes and policies t

(i) Simplify and clarify the law concerning

the affairs of decedents, missing persons, pro

tected persons, minors and incapacitated per

(ii) Discover and make effective the intent

ff a decedent in distribution of his property;

(111) Promote a speedy and efficient system

for liquidating the estate of the decedent and

i1king distribution to his successors;

iv) Facilitate use and enforcement of cer

tain trusts

(b Unless displaced by the particular provision of

is code, the principles of law and equity supplement

at: ode provisions

ryiry |

c) This code is a general act intended as a unified

verage of its subject matter and no part of it shall be

emed impliedly repealed by subsequent legislation if it

reasonably be avoided

d) The procedure herein prescribed shall govern all

proceedings in probate brought after the effective date of

this code. It shall also govern further procedure in

proceedings in probate then pending unless the court

determines its application in particular proceedings or

parts thereof is not feasible or will work an injustice, in

which event the former procedure shall apply.

(Laws 1979, ch. 142. § 1; 1980, ch. 54, § 1.)

Wills, Decedents’ Estates and Probate Code

HAPTER 7. Administration of Estates

ARTICLE 2. Notices

-205. Parties entitled to receive.

tJ)

(a) A true copy of the notice required in W.S.

2-7-201 shall be mailed by ordinary United States mail,

(i) The surviving spouse, if any, and to all

of the heirs at law of the decedent and to all of

the beneficiaries named in the will of the dece-

dent. The mailings sna e made not later th

ient. The mailings shall be made not later than

one (1) week atter the first publication of the

notice in the newspaper; and

(ii) Each creditor of the decedent whose

identity is reasonably ascertainable by the per

sonal representative within the time limited in

the notice to creditors. The mailing shall be

made not later than thirty (30) days prior to the

expiration of three (3) months after the first

publication of the notice in the newspaper.

(b) Unless waived in writing by the parties entitled

thereto, the notices reauired in W.S. 2-7-202, 2-7-203,

9-7-204, 2-7-615, 2-7-806, 2-7-807 and 2-7-811 sha'l be

mailed not less than ten (10) days prior to the day of

hearing, the date for filing objections, or sale, as the case

may be, to the surviving spouse, if any, and to all of the

heirs of a decedent dying intestate or to all of the bene-

ficiaries named in the will of a decedent dying testate.

requiring an order of the court shall be mailed or deliv-

ered not less than ten (10) days prior to the sale to the

surviving spouse, if any, and to the heirs of a decedent

dying intestate or to all of the beneficiaries named in the

will of a decedent dying testate.

(Laws 1979, ch. 142, § 1; 1980 ch. 54, § 1; 1989, ch.114, § 1.)

TITLE 2. Wills, Decedents’ Estates and Probate Code

CHAPTER 7. Administration of Estates

ARTICLE 4. Marshalling Assets

§ 2-7-402. Title to decedent's property; subject to admin-

istration and payment of debts; priorities.

Except as otherwise provided in this code, when a

person dies the title to his property, real and personal,

passes to the person to whom it is devised by his last will,

or in the absence of such disposition to the persons who

succeed to his estate as provided in this code. However

all of his property is subject to the possession of the

personal representative and to the control of the court for

the purposes of administration, sale or other disposition

under the provisions of law, and his property, except

homestead and other exempt property, is chargeable with

the payment of debts and charges against his estate.

There is no priority between real and personal property,

mam eV NORMAN A AE SAS A

except as provided in this code or by the will of the

decedent.

(Laws 1979, ch. 142, § 1; 1980, ch. 54, § 1)

TITLE 4. Fiduciaries

CHAPTER 8. Uniform Trustees’ Powers Act

§ 4-8-101. Definitions.

(a) As used in this act [§§ 4-8-101 to 4-8-110):

(i) “Trust” means an express trust created

by a trust instrument, including a will, whereby

a trustee has the duty to administer a trust asset

for the benefit of a named or otherwise de-

scribed income or principal beneficiary, or both;

“trust” does not include a resulting or construc-

tive trust, a business trust which provides for

certificates to be issued to the beneficiary, an

investment trust, a voting trust, a security in-

strument, a trust created by the judgment or

decree of a court, a liquidation trust, or a trust

for the primary purpose of paying dividends,

interest, interest coupons, salaries, wages, pen-

sions or profits, or employee benefits of any

kind, an instrument wherein a person is nomi-

nee or escrowee for another, a trust created in

deposits in any financial institution, or other

trust the nature of which does not admit of

general trust administration;

(ii) “Trustee” means an original, added or

successor trustee;

(iii) “Prudent man” means a trustee whose

exercise of trust powers is reasonable and equi-

table in view of the interests of income or princi-

pal beneficiaries, or both, and in view of the

manner in which men of ordinary prudence,

diligence, discretion, and judgment would act in

the management of their own affairs.

(Laws 1965, ch. 54, § 1.)

TITLE 4. Fiduciaries

CHAPTER 8. Uniform Trustees’ Powers Act

§ 4-8-102. Powers conferred on trustee by sections

4-8-101 to 4-8-110 and limitation thereon; in-

corporation of parts of sections 4-8-101 to

4-8-110 in instrument which is not a trust.

(a) The trustee has all powers conferred upon him

by the provisions of this act [§§ 4-8-101 to 4-8-110] unless

limited in the trust instrument.

(b) An instrument which is not a trust within the

meaning of section 1(1) [§ 4-8-101(a)(i)] may incorporate

any part of this act by reference.

(Laws 1965, ch. 54, § 2.)

TITLE 4. Fiduciaries

CHAPTER 8. Uniform Trustees’ Powers Act

§ 4-8-103. Powers and duties generally of trustee.

(a) From time of creation of the trust until final

distribution of the assets of the trust, a trustee has the

power to perform, without court authorization, every act

which a prudent man would perform for the purposes of

the trust including but not limited to the powers specified

in subsection (c).

(b) In the exercise of his powers including the pow-

ers granted by this act [§§ 4-8-101 to 4-8-110], a trustee

has a duty to act with due regard to his obligation as a

fiduciary including a duty not to exercise any power

under this act in such a way as to deprive the trust of an

otherwise available tax exemption, deduction or credit

for tax purposes or deprive a donor of a trust asset of a

tax exemption, deduction or credit or operate to impose a

tax upon a donor or other person as owner of any portion

of the trust. “Tax” includes, but is not limited to federal,

state or local income, gift, estate or inheritance tax.

(a) and (b):

(i) To collect, hold and retain trust assets

received from a trustor until, in the judgment of

the trustee, disposition of the assets should be

made; and the assets may be retained even

though they include an asset in which the trust-

ee is personally interested;

(ii) To receive additions to the assets of the

trust;

(iii) To continue or participate in the oper-

ation of any business or other enterprise, and to

effect incorporation, dissolution or other change

in the form of the organization of the business

or enterprise;

(iv) To acquire an undivided interest in a

trust asset in which the trustee, in any trust

capacity, holds an undivided interest;

(v) to invest and reinvest trust assets in

accordance with the provisions of the trust or as

provided by law;

(vi) To deposit trust funds in a bank, in-

cluding a bank operated by the trustee;

ama cattle eee |

(vii) To acquire or dispose of an asset, for

cash or on credit, at public or private sale; and

to manage, develop, improve, exchange, parti-

tion, change the character of, or abandon a trust

asset or any interest therein; and to encumber,

mortgage, or pledge a trust asset for a term

within or extending beyond the term of the

trust, in connection with the exercise of any

power vested in the trustee;

(viii) To make ordinary or extraordinary

repairs or alterations in buildings or other struc-

tures, to demolish any improvements, to raze

existing or erect new party walls or buildings;

(ix) To subdivide, develop or dedicate

land to public use; or to make or obtain the

vacation of plots and adjust boundaries; or to

adjust differences in valuation on exchange or

partition by giving or receiving consideration;

or to dedicate easements to public use without

consideration;

(x) To enter into a lease as lessor or lessee

with or without option to purchase or renew for

a term within or extending beyond the term of

the trust for any purpose;

(xi) To enter into a lease or arrangement

for exploration and removal of minerals or other

natural resources or enter into a pooling or uni-

tization agreement;

(xii) To grant an option involving disposi-

tion of a trust asset, or to take an option for the

acquisition of any asset;

(xiii) To vote a security, in person or by

general or limited proxy;

(xiv) To pay calls, assessments, and any

other sums chargeable or accruing against or on

account of securities;

(xv) To sell or exercise stock subscription

or conversion rights; to consent, directly or

through a committee or other agent, to the reor-

ganization, consolidation, merger, dissolution or

liquidation of a corporation or other business

enterprises;

(xvi) To hold a security in the name of a

nominee or in other form without disclosure of

the trust, so that title to the security may pass by

delivery; the trustee is liable for any act of the

nominee in connection with the stock so held;

(xvii) To insure the assets of the trust

against damage or loss, and the trustee against

liability with respect to third persons;

(xviii) To borrow money to be repaid from

trust assets or otherwise; to advance money for

the protection of the trust, and for all expenses,

losses and liabilities sustained in the administra-

tion of the trust or because of the holding or

ownership of any trust assets, for which ad-

vances with any interest the trustee has a lien on

the trust assets as against the beneficiary;

(xix) To pay or contest any claim; to settle

a claim by or against the trust by compromise,

arbitration, or otherwise; and to release, in

whole or in part, any claim belonging to the

trust to the extent that the claim is uncollectible;

(xx) To pay taxes, assessments, compensa-

tion of the trustee and other expenses incurred

in the collection, care, administration and pro-

tection of the trust;

(xxi) To allocate items of income or ex-

pense to either trust income or principal, as

provided by law, including creation of reserves

out of income for depreciation, obsolescence,

amortization or for depletion in mineral or tim-

ber properties;

(xxii) To pay any sum distributable to a

beneficiary under legal disability, without lia-

bility to the trustee, by paying the sum to the

beneficiary or by paying the sum for the use of

the beneficiary either to a legal representative

appointed by the court, or if none, to a relative;

(xxiii) To effect distribution of property

and money in dividend or undivided interests

and to adjust resulting differences in valuation;

(xxiv) To employ persons, including attor-

neys, auditors, investment advisors, or agents,

even if they are associated with the trustee, to

advise or assist the trustee in the performance of

his administrative duties; to act without inde-

pendent investigation upon their recommenda-

tions; and instead cf acting personally, to

employ one or more agents to perform any act

of administration, whether or not discretionary;

(xxv) To prosecute or defend actions,

claims or proceedings for the protection of trust

assets and of the trustee in the performance of

his duties;

(xxvi) To execute and deliver all instru-

ments which will accomplish or facilitate the

exercise of the powers vested in the trustee.

(Laws 1965, ch. 54, § 3.)

A10

TITLE 4. Fiduciaries

CHAPTER 8. Uniform Trustees’ Powers Act

§ 4-8-105. Effect of sections 4-8-101 to 4-8-110 on power

of court; when court authorization required

of trustee.

(a) This act [§§ 4-8-101 to 4-8-110] does not affect

the power of a court of competent jurisdiction for cause

shown and upon petition of the trustee or affected bene-

ficiary and upon appropriate notice to the affected parties

to relieve a trustee from any restrictions on his power

that would otherwise be placed upon him by the trust or

by this act.

(b) If the duty of the trustee and his individual

interest or his interest as trustee of another trust, conflict

in the exercise of a trust power, the power may be exer-

cised only by court authorization (except as provided in

subsections (1), (4), (6), (18) and (24) of section 3(c)

[§ 4-8-103(c)(i), (iv), (vi), (xviii) and (xxiv)]) upon petition

of the trustee. For purposes of this section, in the case of a

corporate trustee personal profit or advantage to an affili-

ated or subsidiary company or association is personal

profit to the trustee.

(Laws 1965, ch. 54, § 5.)

TITLE 4. Fiduciaries

CHAPTER 8. Uniform Trustees’ Powers Act

§ 4-8-107. Existence of trust powers and proper exer-

cise thereof assumable by third persons; ex-

ception.

With respect to a third person dealing with a trustee

or assisting a trustee in the conduct of a transaction, the

All

existence of trust powers and their exercise by the trustee

may be assumed without inquiry. The third person is not

bound to inquire whether the trustee has power to act or

is properly exercising the power, and a third person,

without actual knowledge that the trustee is exceeding

his powers or improperly exercising them, is fully pro-

tected in dealing with the trustee as if the trustee pos-

sessed and properly exercised the powers he purports to

exercise. A third person is not bound to assure the proper

application of trust assets paid or delivered to the trustee.

(Laws 1965, ch. 54 § 7.)

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.