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Wilson v. Adcock

United States District Court, E.D. Kentucky, Central Division, Lexington

July 31, 2019

KEVIN WILSON, Plaintiff,
ERIN ADCOCK and AMY SHELTON, individually, as Attorneys-in-Fact in connection with the Edward C. Wilson and Jane L., Wilson Revocable Trust, and as Co-Trustees of the Jane L. Wilson Revocable Trust and the Wilson Family Dynasty Trust, Defendants.

          OPINION & ORDER


         The Court confronts a dispute over family and money. Plaintiff Wilson, one of seven children of the late Edward and Jane Wilson, sues two siblings (Erin Adcock and Amy Shelton) over alleged impropriety in their handling of entrusted family funds.

         Per the Complaint and its attachments, three trusts pertain: a 1995 Trust (as amended and restated), a 2014 Revocable Trust, and a 2014 Family Dynasty Trust.[1] Adcock and Shelton, the Complaint alleges, improperly used a durable power of attorney (granted by Jane Wilson) to siphon assets from the 1995 Trust, in the period between 2010 and 2014. Then, as Co-Trustees under the two 2014 Trusts, Adcock and Shelton allegedly continued to make improper transfers and then defrauded Plaintiff, or tried to do so, with respect to his rights. Plaintiff Wilson sues alone, but he purports to represent, functionally at least, the interests of all Trust beneficiaries. The Complaint is the only pleading, at this stage, and the Court accepts its well-pleaded allegations as true.[2]

         The Complaint has some omissions of interest to the Court. Although Plaintiff seeks to redress wrongs and claw back monies misspent under the 1995 Trust, DE 1 ¶ 30-33, Plaintiff did not name that Trust itself as a party. Plaintiff also did not name the 2014 Trusts, even though the Complaint targets Trust management and seeks to depose the Trustees and augment the Trust's (or Trusts') corpus/corpora. Id. at Prayer (g), (i). No. one has complained about that structural omission, and presumably naming the Trustees is enough to deal with trust mechanics and powers. Further, the Complaint generally identifies Trust beneficiaries but does not name the current roster. Thus, although Plaintiff purports to act for the benefit of the full non-party beneficiary roster (to include replenishing the Trusts and changing trustees), the pleading does not provide current information about the roster, which is a concern.

         The pending motion addresses failure to join.[3] Defendants (who are co-Trustees and also beneficiaries) argue that all beneficiaries should be part of the suit. They seek relief under Rule 19, ultimately arguing for dismissal under the Rule 19(a)/(b) sequential rubric.[4] The matter is fully briefed. See DE 8, 9, 10, 14. The Court has read the full record, carefully and pragmatically assessing the facts and posture in the case.

         The Court notes the breadth of Plaintiff s undertaking, here on diversity jurisdiction. By the Complaint, Wilson seeks accountings under all Trusts. He seeks to recover all misspent (by Defendants) money during the period of the 1995 Trust and similar relief under the 2014 Trusts. Further, Wilson endeavors to hold Adcock and Shelton liable for related fraud and fiduciary duty breaches. Alternative or supplementary theories include conversion and unjust enrichment. The Complaint seeks imposition of a constructive trust (and/or deposit of recovered funds into the 2014 Trusts).

         Critically, the Complaint includes the demand for removal of Adcock and Shelton as Trustees, along with the naming of a successor trustee(s). DE 1 ¶ Prayer (g).[5] Finally, it seems Wilson endeavors a personal recovery for punitive damages, aimed at direct behavior toward him (id. ¶ 120) but also the general wrongs claimed.

         The Court, in this nascent matter, turns to the Rule 19 analysis. The Rule calls for a sequential process. Is the nonparty a “required party”? If so, and joinder is not feasible, should the Court forge ahead or dismiss? Glancy v. Taubman Centers, Inc., 373 F.3d 656, 666 (6th Cir. 2004) (describing three-step sequence under Rule).

         1. The beneficiaries are parties required to be joined if feasible.

         Rule 19(a)(1)(B) provides:

(a) Persons Required to Be Joined if Feasible.
(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person's absence, the court cannot accord complete relief among existing parties; or
(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in ...

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