REPLY BRIEF OF APPELLANT NAPOLEON L. CASSIBRY, III

Transcription

1 E-Filed Document May :57: CA COA Pages: 11 IN THE MISSISSIPPI COURT OF APPEALS NO CA NAPOLEON L. CASSIBRY, III, as Trustee of the N.L. Cassibry, Jr. Family Trust, Trustee of the Cassibry Children Irrevocable Trust, Trustee of the June C. Cassibry Irrevocable Trust, Power of Attorney for June C. Cassibry, and Managing Partner of the Cassibry Brothers Partnership; NAPOLEON L. CASSIBRY, III, Individually; and JOHN C. CASSIBRY, Individually RESPONDENTS/APPELLANTS V. GRAHAM W. CASSIBRY PETITIONER/APPELLEE On Appeal from the Bolivar County Chancery Court, Second Judicial District, Mississippi, No REPLY BRIEF OF APPELLANT NAPOLEON L. CASSIBRY, III ORAL ARGUMENT REQUESTED Kaytie M. Pickett, MB # JONES WALKER LLP 190 E. Capitol Street, Suite 800 (39201) P.O. Box 427 Jackson, MS Jeffrey A. Levingston, MB #1219 LEVINGSTON & LEVINGSTON, P.A. 201 S. Pearman Ave. P.O. Box 1327 Cleveland, MS {JX }

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii SUMMARY OF THE ARGUMENT...1 ARGUMENT...2 I. Miss. Code Ann applies to this action....2 II. The Court cannot ignore Napoleon s uncontroverted testimony based on Graham s character attacks....5 CONCLUSION...7 CERTIFICATE OF SERVICE...8 {JX } i

3 TABLE OF AUTHORITIES Cases City of Starkville v. 4-County Electric Power Association, 909 So. 2d 1094 (Miss. 2005)... 2, 4 Hearin-Miller Transporters, Inc. v. Currie, 248 So. 2d 451 (Miss. 1971)... 6 Musgrove v. Vicksburg and Nashville Railroad Co., 50 Miss. 677 (1874)... 3, 4 Protective Service Life Ins. Co. v. Carter, 445 So. 2d 215 (Miss. 1983)... 3, 4 The Schooner Rachel v. United States, 6 Cranch 329, 10 U.S. 329 (1810)... 3, 4 Statutes Miss. Code Ann , 5 Miss. Code Ann , 3, 4, 5 {JX } ii

4 SUMMARY OF THE ARGUMENT The parents of the Appellee, Graham Cassibry, and the Appellant, Napoleon Cassibry, named Napoleon, their oldest son, as both trustee and a beneficiary of three family trusts, only two of which are at issue in this appeal the Family Trust and the Children s Trust. Napoleon made an investment with trust funds that cost the Family Trust, which provided for his mother, to lose a great deal. After their mother had to sell her home, resentment and distrust bubbled between the brothers. Despite this distrust, Napoleon made sure that Graham received his share of the Children s Trust free and clear. Nonetheless, Graham continues to believe that Napoleon breached his duties as trustee. The problem with Graham s argument is that the Children s Trust authorized Napoleon to make loans to himself as beneficiary, without interest, and without liability for loss. And Napoleon had his mother s blessing to withdraw funds from the Family Trust. Under the Mississippi Uniform Trusts Act, these transactions cannot form the basis of Graham s claim for damages against Napoleon. Graham contends that law, passed in 2014, does not govern this appeal, but the Legislature specifically provided for retroactive application. Accordingly, the Court should apply the correct legal standard, hold that Napoleon s transactions with regard to the Children s Trust were authorized by the terms of the trust and with regard to the Family Trust were consented to by the beneficiary, and reverse the Chancellor s award of damages arising from these transactions. Finally, Graham concedes that the record lacks evidence supporting the award of attorneys fees and seeks remand on this issue. Napoleon continues to maintain this is not an appropriate case for attorneys fees, but in the alternative, agrees that remand on the amount of fees is appropriate. {JX } 1

5 ARGUMENT I. Miss. Code Ann applies to this action. Miss. Code Ann , Subsections (b)(1) and (4) provide that if a trustee s transaction is authorized by the terms of the trust or consented to by the beneficiary, then it is not voidable. In other words, because the record demonstrates that Napoleon s transactions were authorized by the terms of the Children s Trust and/or approved by the beneficiary of the Family Trust, Graham s claims for damages arising from those transactions cannot stand. Graham argues that this Code section is not applicable because it was enacted in 2014, when the Uniform Trustee Powers Act was repealed and substituted with the Mississippi Uniform Trust Code. Miss. Code Ann states that this chapter of the Code, which includes Miss. Code Ann , applies to all trusts created before, on, or after July 1, 2014 and further specifies that it applies to judicial proceedings concerning trusts commenced before July 1, 2014, unless the court finds that the application of a particular provision of this chapter would substantially interfere with the effective conduct of the judicial proceeding or prejudice the rights of the parties, in which case the particular provision of this chapter does not apply and the superseded law applies. Miss. Code Ann (a)(3). Graham presents no argument why application of Miss. Code Ann would prejudice his rights or interfere with the effective conduct of the judicial proceedings. There is no basis in the record for the Court to conclude Miss. Code Ann should not apply. Graham argues that City of Starkville v. 4-County Electric Power Association, 909 So. 2d 1094, (Miss. 2005), and the many other cases cited in Napoleon s initial brief on retroactive application are distinguishable because in each, there was a clear indication from the Legislature of retroactive applicability. (Appellee s Brief, p. 11 n.2). But Miss. Code Ann. 9- {JX } 2

6 presents precisely the type of legislative intent of retroactivity that Graham argues is lacking in this case. Even if that intent were lacking (and it is not), Graham s characterization of the law is inaccurate. He relies upon a single thirty-year-old case, Protective Serv. Life Ins. Co. v. Carter, 445 So. 2d 215, 216 (Miss. 1983), to argue against the application of Miss. Code Ann In Protective Services, the Court considered an appeal of a tortious interference case from chancery court. Id. at The case was appealed under a statute that allowed a direct appeal if the trial court had not ruled within six months after taking a case under advisement. Id. at 216. After the case was appealed, the Supreme Court promulgated Supreme Court Rule 47, which provided for a writ of mandamus. Id. The Supreme Court chose to rule on the case, rather than issue a writ compelling the trial judge to rule, and held that the prior procedure controlled. Id. In holding that the prior law controlled, the Protective Services Court quoted Musgrove v. Vicksburg and Nashville Railroad Co., 50 Miss. 677, 682 (1874): If, therefore, the judgment of the court of original jurisdiction was wrong, on the law as it then stood, although there may have been error, if the law has been repealed, the court will not reverse. Id. The Court omitted the next sentence: Will not reverse and remand because the inferior court must recognize the repeal, and conform, on the second trial, to the law as it then was, and not to the law as it may have been at the time of the first trial. Id. Musgrove cites The Schooner Rachel v. United States, 6 Cranch 329, 10 U.S. 329 (1810), for this proposition. But The Schooner Rachel held that the Court could not affirm a trial court s judgment because the law under which the trial court ruled had expired. 10 U.S. at 329. Furthermore, Musgrove s actual holding is in line with The Schooner Rachel. The Musgrove Court considered whether a railroad could sue an auditor for failing to collect {JX } 3

7 assessments. 50 Miss. 677, 680. During the pendency of the appeal, the law under which the railroad was suing was repealed in part, making the railroad s cause of action against the board of supervisors, rather than the auditor. Id. at 679. The Supreme Court held that We are of the opinion that the repeal of the statute of 1872 put an end to these proceedings against the auditor, and that the repeal did not impair or destroy any vested right or the obligation of any contract to which the relator may have been substituted. Id. at 687. Accordingly, the Court reversed and dismissed the suit against the auditor. Id. at 688. In sum, Protective Services took a quote from Musgrove out of context and ignored the holding of the case. The long line of cases Napoleon cited in his initial brief are in line with Musgrove. Moreover, Graham s statement that Napoleon took a quote from one of those cases, City of Starkville v. 4-County Electric Power Association, 909 So. 2d 1094, (Miss. 2005), totally out of context is baseless. (Appellee s Brief, p. 11 n.2). Napoleon quoted City of Starkville for the proposition that if the legislature amends a statute while a case is pending, the Court takes that amendment into consideration, regardless of intent of retroactivity. The City of Starkville Court held: While the clear intent of the Legislature was to have H.B. 997 apply directly to this case, inasmuch as we invited the Legislature to do so, this Court has also affirmed cases involving the retroactive application of statutory amendments to pending litigation. Id. (citing City of Belmont v. Mississippi State Tax Comm n, 860 So. 2d 289, 304 (Miss. 2003); USPCI of Miss., Inc. v. State ex rel. McGowan, 688 So. 2d 783, (Miss. 1997); City of Clarksdale v. Miss. Power & Light Co., 556 So. 2d 1056 (Miss. 1990)). Thus, the Court s holding had two alternative rationales, and Napoleon s reliance on one of those rationales was not misplaced. Regardless, Graham s claim that there is no legislative intent of retroactivity cannot succeed in the face of Miss. Code Ann There is no evidence and no argument in {JX } 4

8 the record that Miss. Code Ann should not apply to the Court s determination of this appeal. Under Miss. Code Ann , Napoleon s transactions are not breaches of trust if authorized by the trust document or by the beneficiary. As discussed in Napoleon s initial brief, the Children s Trust allowed Napoleon to make loans, secured or unsecured, with interest or without, to the executor of the estate of Grantor, or to a beneficiary, and shall be without liability for a loss resulting therefrom. (Appellant s Brief, pp ; Ex. 3, p. 14, Article 6.5(l); R.E. 372). And Napoleon s testimony that June Cassibry authorized his withdrawals from the Family Trust is uncontroverted. Under the law as it stands, the Chancellor s award of damages to Graham for these transactions must be reversed. II. The Court cannot ignore Napoleon s uncontroverted testimony based on Graham s character attacks. The acrimony in this case is obvious from Appellee Graham Cassibry s brief. He accuses his own brother, Napoleon, of giving abject false testimony and of admitting he rendered his mother virtually penniless during the twilight of her life. Neither accusation is well-founded, and both are intended to distract from the fact that Napoleon s testimony on June Cassibry s authorization of withdrawals from the Family Trust was uncontroverted. First, the abject false testimony to which Graham refers involves a tangential issue regarding the contents of the record on appeal. The original court reporter in this case resigned, and Napoleon was told for years that her original tape recordings of the trial were lost. Napoleon s memory of the trial did not match the transcript that was prepared (without the tapes), and he was adamant that his memory was correct. When the tapes were finally discovered and the Chancellor notified the Court that the transcript was accurate, Napoleon withdrew his objections to the record. He is still adamant, in fact, that his memory is correct and would have liked the opportunity to review the tapes himself. But Napoleon did not wish to {JX } 5

9 implicitly accuse the Chancellor of falsehood, and he did not wish to prolong the dispute over the record in the face of the Chancellor s representation. Ultimately, a faulty memory does not equal an abject falsehood. Given the bizarre length of time it took to prepare the record and find the tapes, it is understandable that Napoleon would harbor doubts over the record s accuracy. There is no evidence that Napoleon did not truly believe he remembered the testimony as contrary to the record, and there is no evidence that Napoleon manufactured testimony for any purpose. Graham makes frequent reference to this abject falsehood to convince the Court to make its own credibility determination regarding Napoleon s testimony that his mother authorized his withdrawals from the Family Trust. Although Graham repeatedly says it is clear that the Chancellor found this testimony to lack credibility, the Chancellor made no findings of fact on this point. (R. 3:328-29, R.E ). And there is no evidence in the record contradicting Napoleon s testimony. For the same reason, Graham claims his mother was virtually penniless when she died, and this somehow proves to the Court that Napoleon s testimony is not credible. Contrary to Graham s assertion otherwise, Napoleon certainly does not acknowledge that his own withdrawals or loans from the Family Trust rendered his mother virtually penniless during the twilight of her life. (Appellee s Brief, p. 13). Nor did the Chancellor rule as much. The Court found that June Cassibry s fortunes took a turn for the worse because of the Paragon investment which the Court found was not, in and of itself, a breach of fiduciary duty. (R. 3:330-31, R.E ). In sum, When the testimony of a witness is not contradicted, either by direct evidence or by circumstances, it must be taken as true. Hearin-Miller Transporters, Inc. v. Currie, 248 So. 2d 451, 454 (Miss. 1971) (quoting Ryals v. Douglas, 205 Miss. 695, 39 So. 2d 311 (1949)). {JX } 6

10 There is simply no evidence, whether direct or circumstantial, that calls into question Napoleon s testimony that his mother approved his withdrawals from the Family Trust. CONCLUSION The Chancellor s ruling was based on the premise that Napoleon, as a trustee and a beneficiary, could not make loans to himself or withdrawals from the trust without breaching the trust. This is contrary to the settlors intent in the trust documents. The Mississippi Uniform Trust Act honors the settlors ultimate intent and authorizes Napoleon s actions. For the reasons stated above, Napoleon asks that the Court reverse the Chancellor s award of damages and attorney s fees and render judgment reducing the damage award to Graham by $135,045 (which is the amount the Chancellor found Napoleon withdrew from the Children s Trust and the Family Trust), making the final judgment $9, in damages and $17,902 in costs; in the alternative, Napoleon asks for remand on the issue of attorneys fees. Respectfully submitted this 11th day of May Kaytie M. Pickett, MB # JONES WALKER LLP 190 East Capitol Street, Suite 800 (39201) P.O. Box 427 Jackson, MS Tel: (601) ; Fax: (601) kpickett@joneswalker.com Jeffrey A. Levingston (MSB #1219) LEVINGSTON & LEVINGSTON, P.A. 201 S. Pearman Ave. P.O. Box 1327 Cleveland, MS Tel: (662) ; Fax: (662) jleving@bellsouth.net NAPOLEON L. CASSIBRY, III By His Attorneys, JONES WALKER LLP /s/ Kaytie M. Pickett Kaytie M. Pickett {JX } 7

11 CERTIFICATE OF SERVICE I hereby certify that I electronically filed the foregoing with the Clerk of Appellate Courts using the MEC system which sent notification of such filing to the following counsel of record: S. Todd Jeffreys Povall & Jeffreys, P.A. 215 N. Pearman Ave. P.O. Drawer 1199 Cleveland, MS I further certify that I have this day served, via United States mail, postage prepaid, a true and correct copy of the foregoing document to: Honorable Catherine Farris-Carter Bolivar County Chancery Court P.O. Box 1787 Cleveland, MS Mr. John C. Cassibry P.O. Box 1000 Cleveland, MS This the 11th day of May /s/ Kaytie M. Pickett Kaytie M. Pickett {JX } 8