Choice of Law Regarding Trust Administration - Award of Attorney's Fees for Trustee Malfeasance

Foster v. Foster, [Ms. 1180648, Mar. 6, 2020] __ So. 3d __ (Ala. 2020). The Court (Sellers, J.; Bolin, Wise, and Stewart, JJ., concur; Parker, C.J., concurs in part and concurs in the result in part) affirms the Shelby Circuit Court’s judgment in a dispute concerning a family trust. The trial court removed the trustee, awarded damages, and required the trustee to pay the prevailing party’s attorney’s fees.

The Court rejects the trustee’s argument that subject matter jurisdiction was lacking based on California law. Ms. *7. Although the trust states it “is to be construed according to California law,” Ms. *8 (emphasis in the original), the Court held that administration of the trust, including alleged mismanagement of the trust, is governed by Alabama law where the trust is being administered. Ms. *10.

The Court affirmed the award of attorney’s fees against the trustee citing Reynolds v. First Alabama Bank of Montgomery, N.A., 471 So. 2d 1238 (Ala. 1985) and held that a trial court has discretion to award attorney’s fees to a successful party “when a defendant has committed fraud, willful negligence, or malice, or otherwise acted in bad faith ....” Ms. *21.

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