John D. Glass v. Suntrust Bank

IN THE COURT OF APPEALS OF TENNESSEE
AT MEMPHIS
April 1, 2016 Session

JOHN D. GLASS v. SUNTRUST BANK, ET AL.

Direct Appeal from the Probate Court for Shelby County
No. D9423 Karen D. Webster, Judge

No. W2015-01603-COA-R3-CV – Filed May 4, 2016

This appeal involves a trust. A beneficiary of the trust filed this lawsuit against the bank
that served as trustee of the trust, alleging that the bank mismanaged the trust in various
respects and violated several duties owed to the beneficiary. After a five-day bench trial,
the trial court ruled in favor of the trustee-bank on all claims. The bank was awarded its
attorney‟s fees and expenses. The beneficiary appeals. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Probate Court Affirmed
and Remanded

BRANDON O. GIBSON, J., delivered the opinion of the court, in which J. STEVEN
STAFFORD, P.J., W.S., and ARNOLD B. GOLDIN, J., joined.

Donald William Pemberton, Memphis, Tennessee, for the appellant, John D. Glass.

Olen M. Bailey, Jr., Memphis, Tennessee, for the appellee, SunTrust Bank; SunTrust
Bank, Trustee of the Ann Haskins Whitson Glass Trust; and SunTrust Bank, Executor of
the Estate of Ann Haskins Whitson Glass.

OPINION

I. FACTS & PROCEDURAL HISTORY

On April 12, 1994, Ann Haskins Whitson Glass (“Mrs. Glass”) executed a trust
instrument creating a revocable trust and designating herself as trustee of the trust. On
that same date, Mrs. Glass also executed a limited durable power of attorney designating
National Bank of Commerce, in Memphis, Tennessee, or its corporate successor, as her
attorney-in-fact in the event of her disability or incapacity. On June 23, 2000, Mrs. Glass
executed an amended trust agreement and a last will and testament. The amended trust
agreement named National Bank of Commerce or its corporate successor as the successor
trustee of the trust in the event of Mrs. Glass‟s incapacity. The last will and testament
appointed National Bank of Commerce or its successor as the executor of Mrs. Glass‟s
will.

In 2004, doctors determined that Mrs. Glass was incompetent to handle her affairs.
As a result, pursuant to the limited durable power of attorney and the amended trust
agreement, the successor in interest to National Bank of Commerce, SunTrust Bank,
became the attorney-in-fact for Mrs. Glass and the successor trustee of the trust. Over the
next several years, representatives of SunTrust met with Mrs. Glass on numerous
occasions. SunTrust paid Mrs. Glass‟s bills and signed her tax returns during that time.

Mrs. Glass died on January 2, 2007. Days later, SunTrust submitted Mrs. Glass‟s
will for probate administration. The probate court admitted the will to probate and
appointed SunTrust as the executor of the estate.

The trust became irrevocable upon the death of Mrs. Glass. On the date of her
death, the trust owned four assets: stock in SunTrust Bank, stock in First Tennessee
Bank, stock in Security Bancorp of Tennessee, and a large farm in Dyer County. These
four assets had been owned by the trust for years. They were purchased by either Mrs.
Glass or her husband long before she became incapacitated. The cumulative value of the
four assets in the trust exceeded $2.5 million. Mrs. Glass also personally owned some
assets at the date of her death. These included a checking account, jewelry, clothing,
household furnishings, and similar items. The total value of these items was around
$27,000.

After all of the assets in the estate and the trust were distributed to the
beneficiaries designated in the will and trust instrument, one of the two sons of Mrs.
Glass, John D. Glass (“Plaintiff”), filed this lawsuit against SunTrust. His complaint
asserted claims for breach of trust, breach of fiduciary duties, mismanagement,
negligence, and breach of the duty to diversify. SunTrust asserted counter-claims for
refunding of the expenses incurred in defending the litigation and for its attorney‟s fees.
After several years of litigation,1 the trial court held a five-day bench trial in February
2015. Expert witnesses testified for both sides. On September 2, 2015, the trial court
entered a lengthy final order, exceeding fifty pages, in which it ruled in favor of SunTrust
on all of the claims asserted by Plaintiff. However, this order expressly reserved any
ruling on SunTrust‟s request for attorney‟s fees and expenses. Plaintiff filed a notice of

1
The case was originally filed in chancery court but was transferred to probate court. The probate court
dismissed the case twice on principles of res judicata and collateral estoppel due to a prior lawsuit
involving Plaintiff and SunTrust. We reversed the dismissals in Glass v. SunTrust Bank, No. W2010-
02527-COA-R3-CV, 2011 WL 3793495 (Tenn. Ct. App. Aug. 26, 2011) and Glass v. SunTrust Bank, No.
W2013-00404-COA-R3-CV, 2013 WL 4855400 (Tenn. Ct. App. Sept. 11, 2013).
2
appeal to this Court. On December 17, 2015, this Court entered a show cause order
directing the appellant to either obtain the entry of a final appealable judgment or show
cause why the appeal should not be dismissed. The trial court entered an amended final
order on December 29, 2015, awarding SunTrust $202,468.71 in attorney‟s fees and
expenses. This order resolved all issues and constitutes a final appealable judgment.

II. ISSUES PRESENTED

The issues raised by Plaintiff on appeal involve the items owned by Mrs. Glass
individually at the date of her death, the three stocks owned by the trust at the date of
Mrs. Glass‟s death, the farm owned by the trust at Mrs. Glass‟s death, and the award of
attorney‟s fees and expenses to SunTrust. Specifically, Plaintiff presents the following
issues, which we have slightly restated, for review:

1. Whether SunTrust Bank was negligent as trustee in failing to
exercise the power of attorney to transfer the remaining personally owned
assets of Mrs. Glass to the trust prior to her death in order to avoid probate
and the expenses in connection therewith;

2. Whether SunTrust Bank was negligent as trustee in failing to
develop and implement a plan for diversification of the assets of the trust;

3. Whether SunTrust Bank was negligent as trustee in continuing a
lease of the farm property in Dyer County; and

4. Whether SunTrust Bank asserted a valid counterclaim for refunding
of expenses and/or for attorney‟s fees.

For the following reasons, we affirm the decision of the probate court and remand for
further proceedings.2

III. STANDARD OF REVIEW

A trial court‟s findings of fact from a bench trial are presumed to be correct, and
we will not overturn those factual findings unless the evidence preponderates against
them. Tenn. R. App. P. 13(d); In re Estate of Ledford, 419 S.W.3d 269, 277 (Tenn. Ct.
App. 2013). “For the evidence to preponderate against a trial court‟s finding of fact, it
must support another finding of fact with greater convincing effect.” Watson v. Watson,

2
SunTrust, in its brief as appellee, listed 21 “sub-issues” for review within the context of the main issues
listed above. We do not find it necessary to restate all of those sub-issues here, as they will be addressed
where appropriate and necessary in the analysis below.
3
196 S.W.3d 695, 701 (Tenn. Ct. App. 2005). Appellate courts afford trial courts
considerable deference when reviewing issues that hinge on the credibility of witnesses
because trial courts are “uniquely positioned to observe the demeanor and conduct of the
witnesses.” Kelly v. Kelly, 445 S.W.3d 685, 692 (Tenn. 2014). However, we review the
trial court‟s resolution of legal questions de novo with no presumption of correctness.
1963 Jackson, Inc. v. De Vos, 436 S.W.3d 278, 286 (Tenn. Ct. App. 2013). The
interpretation of a trust agreement is a question of law for the court. Holder v. First
Tennessee Bank N.A. Memphis, No. W1998-00890-COA-R3-CV, 2000 WL 349727, at
*3 (Tenn. Ct. App. Mar. 31, 2000).

IV. DISCUSSION

A. Avoidance of Probate

The first issue we address is whether SunTrust breached a duty to Plaintiff by
failing to convey all of Mrs. Glass‟s personal assets to the trust during her lifetime in
order to avoid probate administration and the expenses incurred in connection therewith.
The limited durable power of attorney executed by Mrs. Glass in 1994 specifically
granted SunTrust the “power” to convey any property that she owned to the trust.
Because Mrs. Glass was deemed incapacitated in 2004, and SunTrust acted as her
attorney-in-fact thereafter, Plaintiff argues that SunTrust was negligent in failing to
convey her non-trust assets to the trust it was administering, which resulted in
unnecessary probate administration and related expenses. Plaintiff suggests that “one of
the principal purposes of a revocable trust is the avoidance of probate.” Plaintiff claims
that SunTrust‟s inaction constituted a breach of trust and that he is entitled to recover
$45,763.52 in unnecessary fees incurred during the probate proceeding.

A breach of trust is “[a] violation by a trustee of a duty the trustee owes to a
beneficiary[.]” Tenn. Code Ann. § 35-15-1001(a). The initial burden to establish a
breach of trust rests with the plaintiff. Kennard v. AmSouth Bank, No. M2007-00075-
COA-R3-CV, 2008 WL 427260, at *2 (Tenn. Ct. App. Feb. 12, 2008). We examine the
language of Mrs. Glass‟s will, the trust instrument, and the statute cited by Plaintiff on
appeal to determine whether SunTrust had a duty to convey Mrs. Glass‟s assets to the
trust and avoid probate administration.

Mrs. Glass‟s will required the trustee of the trust to pay all of the expenses “for the
administration of my estate” in addition to taxes that might be “imposed upon my probate
estate by reason of my death.” Mrs. Glass‟s will devised her clothing to the Dyer County
Union Mission and a gift of $2,000 to a companion. She left her personal effects and
furniture to her two sons (Plaintiff John and William) outright and free of trust. Finally,
Mrs. Glass devised the residue of her estate to the trust.
4
 We now turn to the language of the trust instrument. It directed the trustee to
honor and satisfy any pecuniary bequests made by Mrs. Glass in her will “if [her] probate
estate [was] inadequate to provide for such bequests.” After paying a charitable gift and
Mrs. Glass‟s expenses and taxes, the trustee was directed to distribute the remainder of
the trust assets, “including any distributions received from [her] probate estate under
[her] Last Will and Testament, duly probated, or otherwise,” one-half to John outright
and one-half to a separate trust for William. The trust instrument allowed Mrs. Glass to
impose additional terms and conditions on the administration of the trust “by any Last
Will and Testament duly probated.”

The language of these two instruments demonstrates that Mrs. Glass contemplated
the probate administration of her will. Although several witnesses at trial agreed that one
reason for establishing a revocable trust can be to avoid probate, the record does not
contain any evidence to suggest that this was Mrs. Glass‟s intention. Mrs. Glass‟s will
contained devises that were different than the distributions to be accomplished by the
trust instrument. Mrs. Glass obviously knew how to convey assets to the trust when she
desired to do so, yet she did not convey her individually owned assets to the trust during
her lifetime or instruct anyone else to do so. Plaintiff testified that Mrs. Glass did not
discuss her affairs with him prior to her death and said that she kept the trust and her will
a secret from him.

We recognize that Plaintiff‟s expert testified that, as a trust officer, he would have
transferred Mrs. Glass‟s personal assets to the trust prior to her death, and he believed
that SunTrust was negligent in failing to do so. However, Plaintiff‟s expert also
acknowledged that probate administration would have been necessary in any event,
regardless of any conveyance of the personal assets, because the estate received a
$40,000 tax refund from the Internal Revenue Service months after Mrs. Glass‟s death,
and “it would have been necessary to institute a normal estate administration” in order to
negotiate that refund check.3 He conceded that probate administration was “inevitable”
due to the refund check.

Plaintiff‟s expert also acknowledged Mrs. Glass‟s testamentary intent to bequeath
her clothing to the Dyer County Union Mission and her personal effects to her sons
outright and free of trust. He conceded that in order for these devises to be accomplished,
those assets had to be included in Mrs. Glass‟s probate estate at her death. The trust
instrument instructed the trustee to honor the pecuniary bequests set out in Mrs. Glass‟s
will but failed to mention bequests of personal property. Plaintiff‟s expert agreed that
SunTrust was carrying out the intent of Mrs. Glass as the testatrix by probating her will
and accomplishing the devises set forth in her will.
3
Plaintiff‟s expert testified that the maximum limitation for a small estate affidavit was $25,000 at the
time, so this check exceeded that sum and made small estate administration unavailable.
5
 In support of Plaintiff‟s argument on appeal, he cites Tennessee Code Annotated
section 35-15-802(a), which provides that “[a] trustee shall administer the trust solely in
the interest of the beneficiaries.” Plaintiff‟s argument, as we understand it, is that
SunTrust had a duty to avoid probate because doing so would be in Plaintiff‟s interest.
However, under the Tennessee Uniform Trust Code, the phrase “[i]nterests of the
beneficiaries” means “the beneficial interests provided in the terms of the trust.” Tenn.
Code Ann. § 35-15-103(17). Accordingly, “throughout the Tennessee Uniform Trust
Code, whenever one encounters the phrase „that a trust and its terms be for the benefit of
its beneficiaries‟ (or a similar phrase), one should automatically add to such phrase . . .
„as the interests of such beneficiaries are defined under the terms of the trust.‟” Tenn.
Code Ann. § 35-15-105 cmt. As a result, the statute cited by Plaintiff requires a trustee to
administer a trust solely in the interest of the beneficiaries as those interests are defined
under the terms of the trust. In other words, the “interests of the beneficiaries” to which
the trustee must be loyal are the beneficial interests as provided in the terms of the trust.
Tenn. Code Ann. § 35-15-802 cmt. In the case before us, Plaintiff has not demonstrated
that SunTrust administered the trust in a manner that was inconsistent with his beneficial
interest as defined under the terms of the trust.

Even though SunTrust Bank had the power to convey Mrs. Glass‟s property to the
trust, pursuant to the durable power of attorney, Plaintiff has not established that
SunTrust had any duty to do so as trustee in an effort to avoid probate. As the comment
to Tennessee Code Annotated section 35-15-815 explains,

A power differs from a duty. A duty imposes an obligation or a mandatory
prohibition. A power, on the other hand, is a discretion, the exercise of
which is not obligatory. The existence of a power, however created or
granted, does not speak to the question of whether it is prudent under the
circumstances to exercise the power.

Tenn. Code Ann. § 35-15-815 cmt. Neither Plaintiff nor his expert pointed to any
provision of the will, the trust instrument, or a statute that gave rise to a duty on the part
of SunTrust as trustee to convey all of Mrs. Glass‟s personal assets to the trust prior to
her death. It is one thing to suggest that avoiding probate would have been a wise move
but quite another to say that SunTrust should be held liable for damages for failing to
avoid probate in the absence of any instruction from decedent and when doing so would
have defeated Mrs. Glass‟s testamentary intent.

The trial court found that SunTrust was not negligent in opening a probate
proceeding but, rather, acted in good faith and as a prudent person would act, considering
the purposes, terms, and other circumstances regarding the instruments executed by Mrs.
Glass. We affirm the trial court‟s decision as to this issue.
6
 B. Diversification

The next issue presented by Plaintiff involves the four assets that were owned by
the trust when Mrs. Glass died. As noted above, those assets were: stock in SunTrust
Bank, stock in First Tennessee Bank, stock in Security Bancorp of Tennessee, and a large
farm in Dyer County. At the date of Mrs. Glass‟s death, the assets were valued as
follows:

12,800 shares of SunTrust Bank, Inc. $1,084,096

17,075 shares of First Horizon Nat‟l Corp. (First Tennessee Bank) $712,412

1,047 shares of Security Bancorp of Tennessee, Inc. $275,152

Farm in Dyer County $510,292

Total value at date of death $2,581,952

Plaintiff argues that SunTrust should have sold at least some of the bank stock in either
SunTrust Bank or First Tennessee Bank in order to diversify the trust‟s investments.4

A brief recap of the timeline is helpful at this point. Mrs. Glass died on January 2,
2007. The trust instrument required SunTrust to pay the expenses and taxes associated
with the death of Mrs. Glass and the administration of her estate, then to pay a charitable
gift to a certain recipient, then to distribute the residue of the trust assets one-half to
Plaintiff outright and one-half to a trust for Plaintiff‟s brother.

On February 1, 2007, SunTrust sent a letter to Plaintiff that stated:

Re: Ann Glass Estate

Dear Mr. Glass

4
Plaintiff does not argue that SunTrust should have sold the farm or the stock in Security Bancorp of
Tennessee, as Security Bancorp of Tennessee was a closely held corporation associated with a small bank
(originally Newbern State Bank). Plaintiff concedes in his brief on appeal that “there was no market for
this stock” and SunTrust “would have no way to market this stock even if they had developed a plan of
diversification.” He also states that the farm “would have never been part of any asset pool which should
have been diversified.” The Security Bancorp stock and the farm also increased in value after Mrs.
Glass‟s death.
7
 Please accept our sincere wishes of sympathy on the passing of your mom,
Mrs. Ann Glass.

We would like to notify you that SunTrust Bank will serve in the capacity
of Personal Representative for the above referenced Estate. You have been
named as a beneficiary, and as such, are entitle[d] to a 50% share of the
value of the assets of the Estate.

As a beneficiary of the above mentioned Estate you have the option of
receiving your share of the assets in the form of a cash payment or in the
form of in-kind securities. Should you choose a cash payment, you would
not be assuming market risk related to the fluctuation in security values
during the estate or trust settlement period. And as a result, once we
receive all pertinent information, we intend to liquidate all securities and
invest the proceeds in appropriate interest bearing investment grade fixed
income securities (including money market) until such time as we are able
to make a distribution.

However, if you choose to receive your distribution in the form of in-kind
securities you will be assuming market risk related to the fluctuation in
security value during the estate or trust settlement period and your final
distribution amount will be subject to the prevailing market value of the
subject securities. In addition, if an in-kind distribution is elected we
require that you execute Letters of Direction allowing us to continue to hold
these securities for your benefit. Please acknowledge your receipt of this
letter by indicating your distribution preference and signing below.

We are still in the early stages of administration, however, we will keep
you apprised as we progress and get closer to making appropriate
distribution. In the interim, feel free to call me with any questions or
concerns regarding this letter or otherwise[.]

The letter was signed by Matthew Buyer, the First Vice President and trust officer at
SunTrust who served as Plaintiff‟s primary contact regarding the administration of Mrs.
Glass‟s estate and the administration of the trust. Plaintiff also signed the letter and
placed a checkmark in the space for “In-Kind,” as opposed to the space for “Cash.”

The parties have differing opinions as to the meaning of the February 1, 2007 “in-
kind” letter. Mr. Buyer, the trust officer for SunTrust, who is also an attorney, interpreted
the letter as an offer by SunTrust to allow Plaintiff the option of receiving the three
particular bank stocks owned by the trust in-kind. In other words, Mr. Buyer believed
8
that when Plaintiff elected to receive “in-kind securities,” he wanted to receive from the
estate the three specific stocks owned by Mrs. Glass on the date of her death. Mr. Buyer
testified that he also had a telephone conversation with Plaintiff during which Plaintiff
“said that he wanted those stocks in kind.” At trial, Mr. Buyer produced an “Activity &
Time Log” containing records of his communications with Plaintiff, and it listed a
January 22, 2007 telephone call from Plaintiff with the notation that Plaintiff “wants
stocks in-kind.” Mr. Buyer said he interpreted this oral direction to implicitly mean “do
not sell those stocks.”

Mr. Buyer acknowledged that he did not ask Plaintiff to sign additional “Letters of
Direction” as mentioned in the letter. He explained that SunTrust sometimes obtains a
release from a beneficiary in the form of a letter of direction or letter of retention if the
beneficiary does not want SunTrust to diversify a portfolio. However, he explained that
such letters are typically only required by SunTrust if specific assets are retained for more
than one year, and the stocks at issue in this case were distributed in less than a year.5
Rather than an additional letter of direction or retention, SunTrust relied on Plaintiff‟s
election in the February 1, 2007 “in-kind” letter for an in-kind distribution of assets from
the estate. Mr. Buyer testified that SunTrust never developed a plan for diversification of
the assets in the trust because Plaintiff, through the in-kind letter, instructed SunTrust to
hold the shares for final distribution to him “in-kind.”

Plaintiff testified about his understanding of the letter as well. Plaintiff was an
experienced trust officer himself. He had worked at First Tennessee Bank as a trust
officer for 26 years and at two other banks as a trust officer for 23 years. Plaintiff had a
master‟s degree in business administration and a law degree. He was the former head of
a trust administration department and at one time administered around 180 trusts. By the
time of trial, Plaintiff was a partner in a wealth management company and managing over
$700 million in assets as an investment manager.

Plaintiff learned that he was a beneficiary of his mother‟s trust when he obtained a
copy of her will after she died. Plaintiff testified that because the trust owned only three
stocks, he assumed that SunTrust would make investment changes to preserve the
principal and diversify the portfolio. Plaintiff admitted to signing the in-kind election
letter but claimed that Mr. Buyer did not otherwise discuss the investments with him.
With regard to the letter, Plaintiff testified, “They asked m[e] how I wanted my assets. I
said in kind.” However, Plaintiff interpreted the letter to mean that whatever stocks were
owned by the trust when the trust assets were ultimately distributed would be distributed
to him in-kind. He anticipated that the stocks distributed in-kind would be different than
those currently owned by the trust because of his assumption that SunTrust would sell
5
Mr. Buyer referred to this type of trust as “an interim Trust” due to its limited existence during the
administration period after death.
9
and diversify the stocks. Plaintiff testified that when he worked as a trust officer, he
asked any beneficiary who wanted to retain specific assets in a trust to sign a letter
releasing the trustee from liability.

Plaintiff testified that he simply assumed that SunTrust would diversify the assets.
He conceded that he never communicated to SunTrust his opinion that holding the three
bank stocks was inappropriate or his disagreement with the current allocation of the trust
assets. Each month during the trust administration period, Plaintiff received a monthly
account statement from SunTrust containing detailed information about the trust and its
investments. Among other things, the statements listed the particular stocks owned by
the trust and all of the transactions during the statement period. The statements listed the
number of shares owned, the price per share, the market value of all the shares held by
the trust, the percentage of the total trust portfolio that each stock comprised, and other
information. Plaintiff admitted that he received all of the monthly statements, he
understood “every bit” of the information in the statements, and he knew what assets
were in the trust because of the monthly statements. Still, throughout 2007, he did not
contact SunTrust to complain about the fact that it had not sold the bank stock or
diversified the portfolio. Plaintiff testified that, in his opinion, three bank stocks were not
a proper investment, but, he said, “I was waiting for them to do an examination to tell me
how to preserve the principal and diversify. That was their job. It wasn‟t mine.”
Plaintiff said, “If that had been my account, I would have jumped all over it.”

Four months after the date of the “in-kind” letter, on June 6, 2007, Mr. Buyer
wrote another letter to Plaintiff “to bring [him] up to date on the estate.” Mr. Buyer
informed Plaintiff that the estate tax returns were due in the near future and that SunTrust
would have to sell some assets in order to raise money to pay estate taxes. Mr. Buyer
informed Plaintiff that SunTrust was considering making a partial distribution of the trust
assets, including a portion of the First Tennessee stock and SunTrust stock, while
retaining a reserve for taxes and expenses. He estimated that SunTrust might be able to
distribute 8,350 shares of the First Tennessee stock and about 1,000 shares of SunTrust
stock. Mr. Buyer asked for instructions regarding “where and when [Plaintiff] would like
me to send these shares.” In response, Plaintiff sent a handwritten letter to Mr. Buyer
indicating that he would like to receive 3,533 shares of First Tennessee stock, 1,577
shares of SunTrust stock, and 523 shares of Security Bancorp stock. Plaintiff‟s
handwritten letter explained that Security Bancorp was Plaintiff‟s father‟s favorite bank
stock, as he was an original investor in the bank. Plaintiff wrote that Security Bancorp
was his favorite bank stock as well, as he “grew up in the bank,” and, like his father, he
wished to keep Security Bancorp stock in his family. SunTrust subsequently distributed
the stock shares to Plaintiff in-kind and in the amounts he requested.

Three months later, Mr. Buyer sent another letter to Plaintiff updating him on the
10
status of the estate. He informed Plaintiff that SunTrust would be filing the necessary tax
returns in the following week and expected to make another distribution in the near
future. Mr. Buyer asked if Plaintiff wanted stock certificates as he had in the past.
Plaintiff responded with a letter requesting a specific number of shares of First Tennessee
stock and all of the SunTrust shares that could be distributed. SunTrust again distributed
the shares requested by Plaintiff.6

SunTrust sold some of the remaining shares of bank stock in order to pay the
estate‟s tax liability. All of the remaining stock was distributed in-kind to Plaintiff by
December 2007. However, since the date of Mrs. Glass‟s death in January 2007, the
value of the shares of SunTrust stock and First Tennessee Bank stock had plummeted.
The combined value of these two stockholdings at the date of Mrs. Glass‟s death was
$1,796,508. According to Plaintiff‟s expert, the value of these two stockholdings
declined by $243,464 during the period of less than a year between the date of Mrs.
Glass‟s death and the dates of distribution. As a result, Plaintiff claims that his one-half
beneficial interest in the trust was damaged by $121,732 due to SunTrust‟s failure to sell
the stocks after Mrs. Glass‟s death and diversify the portfolio.

In order to determine whether SunTrust had a mandatory duty to sell the bank
stock and diversify the trust assets, we again start with the terms of the trust instrument.
In the section of the trust instrument entitled “Powers, Duties, Privileges and Immunities
of Trustee,” the trust instrument provided:

Plenary authority is hereby granted by Grantor to the Trustee (and wherever
it appears this term includes every Successor Trustee) to exercise
everything it deems advisable with respect to the administration of the
Trust, even though such powers would not be authorized or appropriate for
the Trustee under statutory or other rules of law.

The trust instrument also granted the trustee the power:

To retain investments that initially come into the hands of the fiduciary
among the assets of the estate, without liability for loss or depreciation or
diminution in value resulting from the retention, so long as in the judgment
of the fiduciary it is not clearly for the best interests of the estate, and the
distributees of the estate, that those investments be liquidated, although the

6
At trial, Plaintiff explained that he did not want to receive all of the shares of First Tennessee stock at
that time because he “owned a ton outside the Trust [him]self personally,” around 40,000 shares, and he
did not want to be overloaded. Plaintiff also personally owned numerous other bank stocks, including
Citigroup, Wachovia, Bank of America, SunTrust, and Wells Fargo. Plaintiff acknowledged that he may
have made this decision based on his ability to take losses on his personal income tax return.
11
 investments may not be productive of income or otherwise may not be such
as the fiduciary would be authorized to make[.]

Finally, the trust instrument provided:

In managing, investing and controlling the Trust, the Trustee shall
exercise the judgment and care under the circumstances then prevailing,
which persons of prudence, discretion and intelligence exercise in the
management of their own affairs, not in regard to speculation but in regard
to the permanent disposition of their funds, considering the probable
income as well as the probable safety of their capital, and, in addition, the
purchasing power of income distribution to beneficiaries. . . .

So long as the Trustee shall act in good faith and reasonable business
prudence, it shall not be liable for any loss or damage to the Trust estate or
the beneficiaries thereof by reason of any error of judgment or discretion.

The trust instrument directed the trustee to distribute Plaintiff‟s one-half of the net
residuary trust estate to him “in cash or other assets.”

In addition to these provisions in the trust instrument, several statutes are also
particularly relevant to our decision. The Tennessee Uniform Trust Code provides that in
the absence of a breach of trust, a trustee is not liable to a beneficiary for a loss or
depreciation in the value of trust property or for not having made a profit. Tenn. Code
Ann. § 35-15-1003. It recognizes that “[a] trustee is not an insurer.” Id. at cmt.

The Tennessee Uniform Trust Code also incorporates by reference the Tennessee
Uniform Prudent Investor Act.7 Tenn. Code Ann. § 35-15-901. The Tennessee Uniform
Prudent Investor Act prescribes a trustee‟s responsibilities with respect to the
management and investment of trust property. Tenn. Code Ann. § 35-15-101 cmt. Using
language in the trust instrument comparable to the “prudent person rule” (as Mrs. Glass
did) will authorize any investment or strategy permitted under the Uniform Prudent
Investor Act. Tenn. Code Ann. § 35-14-112. The Prudent Investor Act addresses
diversification, in pertinent part, as follows:

(a) A trustee shall diversify the investments of the trust:
(1) Unless the trustee reasonably determines that, because of special
circumstances, the purposes of the trust are better served without
diversifying, or
7
We note that most of the Uniform Trust Code consists of default rules that apply only if the terms of the
trust fail to address or insufficiently cover a particular issue. Tenn. Code Ann. § 35-15-101 cmt.
12
 (2) Except as otherwise provided in subsection (b).
(b)(1) In the absence of express provisions to the contrary in the governing
instrument, a fiduciary may without liability continue to hold property
received into a trust at its inception or subsequently added to it or acquired
pursuant to proper authority if and as long as the fiduciary, in the exercise
of good faith and reasonable prudence, discretion and intelligence, may
consider that retention is in the best interest of the trust and its beneficiaries
or in furtherance of the goals of the trustor as determined from that
instrument. Such property may include capital stock in the corporate
fiduciary[.]

Tenn. Code Ann. § 35-14-105. This section demonstrates that prudent investing
ordinarily requires diversification; however, circumstances can overcome the duty to
diversify. Id. at cmt.

The Prudent Investor Act also provides that “[a] trustee‟s investment and
management decisions respecting individual assets must be evaluated not in isolation but
in the context of the trust portfolio as a whole and as a part of an overall investment
strategy having risk and return objectives reasonably suited to the trust.” Tenn. Code
Ann. § 35-14-104(b). Even though Plaintiff focuses only on the SunTrust and First
Tennessee stockholdings, we must bear in mind that the trust owned more than just these
two stocks.

Before we can decide whether the circumstances present in this case justified
SunTrust‟s decision regarding diversification, applying the aforementioned principles, it
is necessary to decide how to interpret the February 1, 2007 “in-kind” election letter. In
short, SunTrust interprets the letter as an explicit direction from Plaintiff not to diversify
the assets, while Plaintiff claims it was not. Not surprisingly, SunTrust‟s expert agreed
with SunTrust‟s interpretation of the letter, while Plaintiff‟s expert agreed with Plaintiff‟s
interpretation. The trial court concluded that Plaintiff “elected not to liquidate the
investment [and] requested the investments in-kind[.]” The trial court concluded that
Plaintiff‟s in-kind election essentially froze the stocks in the trust. After carefully
reviewing the language of the letter and the parties‟ circumstances, we agree with
SunTrust and the trial court. The two pivotal paragraphs of the in-kind election letter
state:

As a beneficiary of the above mentioned Estate you have the option of
receiving your share of the assets in the form of a cash payment or in the
form of in-kind securities. Should you choose a cash payment, you would
not be assuming market risk related to the fluctuation in security values
during the estate or trust settlement period. And as a result, once we
13
 receive all pertinent information, we intend to liquidate all securities and
invest the proceeds in appropriate interest bearing investment grade fixed
income securities (including money market) until such time as we are able
to make a distribution.

However, if you choose to receive your distribution in the form of in-kind
securities you will be assuming market risk related to the fluctuation in
security value during the estate or trust settlement period and your final
distribution amount will be subject to the prevailing market value of the
subject securities. In addition, if an in-kind distribution is elected we
require that you execute Letters of Direction allowing us to continue to hold
these securities for your benefit.

In our view, the last sentence clearly demonstrates SunTrust‟s intention with regard to the
in-kind election. If Plaintiff elected an in-kind distribution, SunTrust would require
additional documentation because it intended “to continue to hold these securities for
your benefit.” The fact that SunTrust did not ultimately obtain additional letters of
direction is not determinative. Additional letters of direction may have been useful or
even advisable, but Plaintiff has not cited any authority to suggest that they were
mandatory. SunTrust‟s expert testified with regard to such letters that “[s]ome trustees
do that and some do not.” Even without additional letters of direction, SunTrust had a
written instruction from Plaintiff in the in-kind letter regarding his preference for in-kind
distribution of his share of the assets of the estate.8

The remaining question is whether SunTrust had a mandatory duty to sell the bank
stocks and diversify the portfolio under the circumstances presented. The trust
instrument specifically gave SunTrust the power to retain investments that initially came
into its hands without liability for loss or depreciation or diminution in value resulting
from the retention so long as in SunTrust‟s judgment it was “not clearly for the best
interests of the estate, and the distributees of the estate, that those investments be
liquidated.” The trust instrument also utilized a prudent person standard, implicating the
Tennessee Uniform Prudent Investor Act, which provides that a trustee may refrain from
diversifying the trust assets if the trustee “reasonably determines that, because of special
circumstances, the purposes of the trust are better served without diversifying.” Tenn.
Code Ann. § 35-14-105. SunTrust correctly notes in its brief that “Tennessee caselaw
regarding what constitutes a special circumstance under UPIA Section 105 is sparse to
non-existent.” In fact, no Tennessee appellate decisions have discussed or cited section
35-14-105. The trial court found that special circumstances existed because of Plaintiff‟s
in-kind election freezing the assets in the trust, as SunTrust could not have sold the assets
8
In fact, at trial, Plaintiff‟s counsel and SunTrust‟s expert both referred to the February 1, 2007 in-kind
election letter as “the letter of instruction.”
14
of the trust without violating the express instruction of the beneficiary.

We likewise deem it appropriate for a trustee to consider an express direction from
a beneficiary when deciding whether to sell and diversify the trust‟s assets. The Prudent
Investor Act lists certain circumstances that a trustee may consider in managing and
investing trust assets, and one of those circumstances is “[a]n asset‟s special relationship
or special value, if any, to the purposes of the trust or to one (1) or more of the
beneficiaries.” Tenn. Code Ann. § 35-14-104(c)(8). The official comment to this statute
explains that this subsection would allow the trustee “to take into account any preferences
of the beneficiaries respecting heirlooms or other prized assets.” Id. at cmt. Therefore, it
was not improper for SunTrust to consider Plaintiff‟s directions when considering
whether to sell and diversify the assets in the trust. See, e.g., Adams v. Regions Bank, No.
3:14CV615-DPJ-FKB, 2016 WL 71429, at *10 (S.D. Miss. Jan. 6, 2016) (concluding that
“special circumstances” existed within the meaning of Mississippi‟s version of the
Uniform Prudent Investor Act where the beneficiary approved of the retention of stock by
signing a retention agreement; the trustee did not breach its duties by failing to diversify);
In re Trust Created By Inman, 693 N.W.2d 514, 521 (Neb. 2005) (noting that a
beneficiary‟s professed sentimental attachment to farmland could be a special
circumstance justifying non-diversification); Wood v. U.S. Bank, N.A., 828 N.E.2d 1072,
1079 (Ohio Ct. App. 2005) (stating that the “special circumstances” language in the
UPIA includes situations involving “holdings that are important to a family or a trust”).9

In the case before us, Mr. Buyer testified that SunTrust actually considered several
factors when deciding not to sell the bank stock or diversify the trust‟s assets during the
estate or trust settlement period. SunTrust considered the specific stock distribution
instructions given by Plaintiff in the February 1, 2007 in-kind letter. As noted above, Mr.
Buyer‟s understanding of the in-kind election letter was that it essentially froze the assets
that were held by the trust because the beneficiary wanted to receive those particular
assets in-kind (with the exception of those shares sold to pay taxes). Mr. Buyer testified
that if SunTrust had sold the bank stocks, it would have violated the express instruction
he had received from Plaintiff.

According to Mr. Buyer, SunTrust also considered the dividend yield of the
stocks, as these two bank stocks paid large dividends to the trust, totaling nearly $50,000,
during the administration period. SunTrust also considered the Glass family‟s history of
ownership of bank stock. Mr. Buyer testified that when SunTrust became the successor
trustee in 2004, when Mrs. Glass became mentally incapacitated, the trust already owned
the SunTrust stock, the First Tennessee Bank stock, and the Security Bancorp stock. He
testified that the stocks had an extremely low cost basis, which indicated that they had
9
SunTrust‟s expert and Plaintiff‟s expert both agreed that a beneficiary‟s direction not to diversify could
be considered a “special circumstance” within the meaning of the statute.
15
been held for a long time and appreciated for “many, many years.”10 Considering all
these factors, SunTrust decided not to liquidate the bank stock in order to diversify the
trust portfolio during the administration period.

Mr. Buyer also testified that Plaintiff never complained about the fact that
SunTrust did not sell the bank stocks and diversify the portfolio. In fact, he pointed out,
Plaintiff specifically requested distributions of the three particular bank stocks and
indicated that Security Bancorp was his favorite stock. According to Mr. Buyer, Plaintiff
never had any communication with SunTrust that was inconsistent with SunTrust‟s
understanding of the in-kind election letter.

Having carefully reviewed the record, we agree with the trial court‟s conclusion
that SunTrust did not breach a duty to Plaintiff by failing to liquidate the bank stock and
diversify the portfolio. Plaintiff had executed written documentation electing an in-kind
distribution of the stocks in the estate, acknowledging that SunTrust would continue to
hold “these securities” for his benefit. Plaintiff‟s actions over the course of the next year
were consistent with SunTrust‟s understanding of the in-kind election letter. The Glass
family had owned these stocks for years, and they continued to pay large dividends to the
trust during the administration period. SunTrust did not have a mandatory duty to
diversify because it “reasonably determine[d] that, because of special circumstances, the
purposes of the trust [were] better served without diversifying.” Tenn. Code Ann. § 35-
14-105(a)(1). Given the circumstances existing at the time,11 and the limited duration of
the trust, SunTrust acted as a reasonably prudent person and was not negligent in its
decision regarding diversification.

C. Farm Lease

The third issue raised by Plaintiff on appeal involves the large farm owned by the
trust. The farm consisted of 295 acres. Mrs. Glass leased the farm during her lifetime
pursuant to a lease agreement dated November 18, 2002. The term of the lease extended
from January 1, 2003, until December 31, 2007. Mrs. Glass died on January 2, 2007,
during the original term of the lease. The lease provided that its obligations were binding
upon the parties‟ heirs, legal representatives and successors in title. However, the lease
also contained the following provision regarding its termination:

10
Mr. Buyer testified that the number of shares of bank stock owned by the trust was originally much
higher, but when SunTrust became successor trustee, it sold some of the SunTrust stock and the First
Tennessee stock each year to pay for Mrs. Glass‟s living expenses.
11
“Compliance with the prudent investor rule is determined in light of the facts and circumstances
existing at the time of a trustee‟s decision or action and not by hindsight.” Tenn. Code Ann. § 35-14-110.
Not every investment or management decision turns out in the light of hindsight to have been successful,
but hindsight is not the relevant standard. Id. at cmt.
16
 In the event of the death of Ann H. Glass, this lease will terminate on
December 31, 2007. Should her death occur after December 31, 2002 and
prior to December 31, 2007 this lease will terminate after the harvest of any
then planted crop, however, if a crop has not been planted this lease will
terminate on the date of death of Ann H. Glass.

After Mrs. Glass died, Mr. Buyer discussed the lease with the farmer who leased the
property and informed him that the existing lease would be honored through December
31, 2007.

Plaintiff asserts that the farm lease expired on the date of death of Mrs. Glass, and
therefore, SunTrust was negligent in failing to either terminate the lease or renegotiate the
terms of the lease for a higher rental payment for 2007. The lease provided for a rent
obligation of $65 per acre per year, and Plaintiff testified at trial that he contacted the
local Farm Bureau agency in Dyer County and was told that the fair rental value of the
land was between $80 and $85 an acre.

Mr. Buyer testified that he and the existing tenant discussed the ambiguity
regarding the lease termination date after Mrs. Glass died. Mr. Buyer considered the
lease provisions to be contradictory. Mr. Buyer testified that he decided to essentially
honor the existing farm lease for the remainder of 2007 because the farmer who leased
the property had always been a good tenant, he had farmed the land for years, and it was
late in the season for him to try to find someone else to farm the land for the upcoming
year. Mr. Buyer noted the uncertainty and various risks he would face if he attempted to
find a new tenant, including the risk of nonpayment. Mr. Buyer explained that the land
was located in Dyer County and that he was not personally familiar with the farmers
there. Mr. Buyer testified that he drove to the property, met with the current tenant, and
examined the land, and Mr. Buyer determined that the current tenant was taking good
care of it. Mr. Buyer testified that he never had any issues with the current tenant causing
erosion or waste or improper application of chemicals. The current tenant also prepaid
his rent in cash each year, which, according to Mr. Buyer, was very unusual for farmers
and very beneficial for a lessor. Overall, Mr. Buyer characterized the decision to
continue the lease as “low risk.”

On appeal, Plaintiff argues that SunTrust‟s decision regarding the farm lease
violated three statutory duties within the Uniform Trust Code: the duty to administer the
trust as a prudent person, Tenn. Code Ann. § 35-15-804, the duty to keep beneficiaries
reasonably informed about the administration of the trust, Tenn. Code Ann. § 35-15-
813(a)(1), and the duty to administer the trust solely in the interest of the beneficiaries as
those interests are defined in the trust instrument, Tenn. Code Ann. § 35-15-802.
17
 Regarding the alleged lack of communication, the trial court found that SunTrust
voluntarily offered information to Plaintiff regarding the estate and trust and did not
breach its duty to reasonably inform Plaintiff about the administration. With specific
regard to the farm lease, the trial court found that the lease was inconsistent regarding its
termination date, the factors SunTrust considered when deciding whether to continue the
lease were reasonable, and SunTrust acted prudently by taking those circumstances into
consideration. The trial court concluded that SunTrust exercised the requisite care, skill,
and caution under the circumstances of this case and was not negligent. We agree with
these conclusions. SunTrust considered numerous relevant factors and circumstances,
detailed above, and it exercised reasonable care, skill, and caution in its decision
regarding the farm lease.12 SunTrust also kept Plaintiff reasonably informed about the
administration of the trust and the farm lease. Plaintiff failed to demonstrate that
SunTrust administered the trust in a manner that was adverse to his beneficial interest as
that interest was defined under the terms of the trust. This issue is without merit.

D. Attorney’s Fees

The final issue we review on appeal involves the trial court‟s award of attorney‟s
fees. As previously noted, the trial court‟s original order ruled in favor of SunTrust on
the claims asserted by Plaintiff, but the order specifically reserved a ruling on SunTrust‟s
request for attorney‟s fees and/or refunding of the expenses it had incurred in this
litigation, pending a subsequent hearing. Before a hearing was held, Plaintiff filed a
notice of appeal to this Court. Recognizing that the order appealed was not a final,
appealable judgment, this Court entered a show cause order directing the appellant to
either obtain the entry of a final order or show cause why the appeal should not be
dismissed. The trial court subsequently entered an amended order granting SunTrust‟s
request for attorney‟s fees and/or refunded expenses in the amount of $202,468.71.

On appeal, Plaintiff presents several arguments regarding the trial court‟s award.
Plaintiff claims that SunTrust did not assert a valid matured counterclaim and that an
award of attorney‟s fees was inappropriate in the absence of a statute, contract, or
recognized equitable basis for such an award. In response, however, SunTrust claims that
Plaintiff “does not have the right to include this issue in his appeal” because he
“consented to the final relief” on this issue. According to SunTrust, after the show cause
order was entered by this Court, Plaintiff declined to have a hearing, and the parties
agreed on a resolution of SunTrust‟s counterclaim for attorney‟s fees and/or refunding
expenses. According to SunTrust, it agreed to reduce the amount of its fee request, and
Plaintiff agreed to the entry of an amended order granting the counterclaim. Thus,
12
Even Plaintiff‟s expert agreed that the lease was “[a]bsolutely” contradictory regarding its date of
termination.
18
SunTrust claims that Plaintiff cannot now complain about the trial court‟s decision to
which both parties consented.

According to Plaintiff‟s reply brief, “[h]ere is what happened.”

On December 15, 2015 this Court entered an Order to Show Cause,
as the Final Order of September 2, 2015 contained a reservation of ruling
on Defendants‟ Counterclaim.
At that point Plaintiff‟s counsel had two (2) choices. One, to have
this Court dismiss the appeal resulting in waiting on the Trial Court to hold
a hearing and rule on the counterclaim issue with loss of time and
considerable additional attorney fees; or keep the appeal in place and have
the Trial Court render an Amended Final Order.
The Trial Court had already ruled in favor of Defendants on the
negligence issues, which was being appealed, and in the opinion of
Plaintiff‟s counsel would likely grant Defendants‟ Counterclaim.
In an effort to save money and time, and realizing no matter what the
Trial Court would rule and which would ultimately be decided by this
Court, sought the approval of Defendants‟ Counsel to have the Trial Court
enter an Amended Order granting the Counterclaim in consideration of
Plaintiff‟s counsel‟s agreement to the amount of attorney fees and expenses
incurred by Defendants which would likely be the major part of any hearing
on the Counterclaim. Plaintiff‟s counsel told Defendants‟ counsel that he
would agree to a dollar figure if he would eliminate any fees and expenses
related to the two (2) previous appeals, which Defendants lost, and that
Plaintiff‟s counsel would trust him to do so. He provided counsel the figure
of $202,468.71 and this amount was and is accepted by Plaintiff as the
amount due Defendants but only if their Counterclaim and Application for
Fees is sustained by this Court on appeal.
The Final Amended Order contains the signature of Plaintiff‟s
counsel only as approving the Order in form, not in content. Record, Vol.
19 at 4.
Plaintiff‟s counsel as an Officer of this Court states that he told
Defendants‟ counsel he did not concede the Counterclaim but was only
agreeing to the dollar amount if the Counterclaim issue was decided in
Defendants favor.
None of this is in the record but it clearly was done to preserve the
appeal; save attorney fees; and put the issue before this Court where it
would ultimately be in any event.

Basically, then, Plaintiff acknowledges that he declined the opportunity to have a
19
hearing before the trial court on the issue of attorney‟s fees and/or expenses. He
concedes that one of his two choices, when faced with the show cause order, was
“waiting on the Trial Court to hold a hearing and rule on the counterclaim.”
Unfortunately for Plaintiff, he did not elect that option. Instead, he “sought the approval
of Defendants‟ Counsel to have the Trial Court enter an Amended Order granting the
Counterclaim.” Plaintiff claims that this maneuver “put the issue before this Court where
it would ultimately be in any event,” while saving the parties the time and expense of a
hearing before the trial court.

Although this strategy may have seemed wise to Plaintiff at the time, we cannot
condone such a practice. The issues regarding SunTrust‟s counterclaim for attorney‟s
fees and expenses were for the trial court to decide in the first instance, not this Court.
Plaintiff cannot simply “have the Trial Court render an Amended Final Order” granting a
judgment against him, for his convenience, and then complain on appeal that the trial
court erred in doing so. This Court is not required to grant relief “to a party responsible
for an error or who failed to take whatever action was reasonably available to prevent or
nullify the harmful effect of an error.” Tenn. R. App. 36(a). In other words, “we are not
required to grant leave to a party who invited error[.]” McLemore ex rel. McLemore v.
Elizabethton Med. Inv’rs, Ltd. P’ship, 389 S.W.3d 764, 793 (Tenn. Ct. App. 2012).
Appellate courts are “loath to place a trial court in error when the party complaining on
appeal failed to take corrective action with respect to any error which allegedly occurred
below, and we are particularly loath to do so where the complaining party affirmatively
acquiesced in the trial court‟s action.” State v. Schiefelbein, 230 S.W.3d 88, 117 (Tenn.
Crim. App. 2007). See, e.g., Byrnes v. Byrnes, 390 S.W.3d 269, 273 (Tenn. Ct. App.
2012) (holding that a party could not challenge a child support award on appeal when she
expressly agreed in the trial court to the award she sought to challenge).

We express no opinion on appeal regarding the correctness of the trial court‟s
order regarding attorney‟s fees. We simply hold that if any error exists in the trial court‟s
order, it was certainly invited by Plaintiff, and he must bear the consequences of invited
error. Plaintiff created his own predicament and cannot complain about it on appeal.

V. CONCLUSION

For the aforementioned reasons, the decision of the probate court is hereby
affirmed and remanded for further proceedings. Costs of this appeal are taxed to the
appellant, John D. Glass, and his surety, for which execution may issue if necessary.

_________________________________
BRANDON O. GIBSON, JUDGE
20