IN
THEDISTRICTCOURT
INAND
FOR
TULSACOUNT~,l~~f.ri.'''''STATEOFOKLAHOMA,_
I
,iii~
INTHEMATTEROFTHETRUSTOF:)
OCr~
9.
CAROLYNS.BURFORD;(PETITIONOF)
~YHO~
2012
JPMORGANCHASEBANK,N.A.,)
'"A1'I!OF'tfSMI'fH.
successorininterestto)~
rt4~f.IJ(
BANKONETRUSTCOMPANY,N.A.FOR)CaseNo.PT-2006-013INSTRUCTIONSANDCONSTRUCTIONOF)TRUST))JudgeLindaG.Morrissey
",I
FINDINGSOFFACTANDCONCLUSIONS
OF
LAW
i
I
THISCAUSEcomesbeforetheCourtfordecisionfollowinganon-jurytrial.
The',.
(,,)
Petitioner,J.P.MorganChaseBank,N.A.wasrepresentedbyJamesWeger,AdamStrangeandRobertPeters.Respondent,AnnFletcher,wasrepresentedbyErinDonovan.Respondent,OklahomaAnnualConferenceoftheUnitedMethodistChurch,wasrepresentedbyJohnImel.InterestedParty,RufusGriscom,wasrepresentedbyR.CaseyCooper.InterestedParty,MarianneBorgono,wasrepresentedbyJosephFarrisandJeremyWard.Trustee,theTrustCompanyofOklahoma,wasrepresentedbyJamesMilton.Afterconsideringalloftheevidence,briefsandauthoritypresented,theCourt,beingfullyadvisedinthepremises,herebyFINDSandORDERSasfollows:
I.
FACTUALANDPROCEDURALHISTORY
A.HistoryandTermsoftheCarolynS.BurfordTrust
TheCarolynS.BurfordTrust(theTrust)wascreatedbyGrantors,W.G.SkellyandGertrudeSkelly(Grantors),onOctober11,1955.TheTrustwascreatedtobenefittheGrantors'daughter,CarolynSkellyBurfordandtheGrantors'granddaughter,AnnBurford(nowAnnFletcher).TheTrustprovidesfortwoco-trustees,onecorporateandoneindividual.TheTrustis
1
anirrevocabletrust,andwasoriginallyfundedwithsharesofCommonCapitalStockoftheSkellyOilCompanyandCapitalStockofSoconyMobilOilCompany,Inc.WilliamSkellywasthefounderofSkellyOilCompanyandGertrudeSkellyhadtieswithSoconyMobilOilCompany,Inc.BecauseoftheGrantors'affiliationwiththeoriginalcommonstocks,theTrustinstrumentincludedaRetentionProvision.TheRetentionProvisionspecificallyprovided:BecauseofthehighregardwhichtheGrantorsholdforthecommonstocksplacedinthistrustasaninvestment,theyspecificallyrecommendthat,exceptforunusualcircumstances,theTrusteeretainallsuchstocksthroughoutthetermofthetrustandregardlessofwhetherornotsuchretentionmayappeartooffendagainstwhatmightordinarilybeconsideredasoundtrustinvestmentpracticeandtheusualprinciplesofinvestmentdiversification.TheGrantorsunequivocallyrecommendedthattheTrusteesretaintheoriginalstocks,irrespectiveofthetraditionalinvestmentpracticeofassetdiversification.TheTrustprovidedforthepaymentofthenetincomeofthetrusttoCarolynSkellyBurfordforherlifetime.CarolynBurforddiedonDecember10,1996.TheincomebeneficiarythenbecameAnnFletcher.AtFletcher'sdeath,fiftypercentoftheTrustcorpusistobedistributedtotheOklahomaAnnualConferenceoftheUnitedMethodistChurch(theChurch),andtheotherfiftypercentistobedividedequallyamongFletcher'ssurvivingchildren.
l
FletcherholdsavestedinterestintheincomeoftheTrust.TheChurchandthesurvivingchildrenofAnnFletcheraretheremaindermenoftheTrust.JPMorganChaseBank,N.A.(theBank)becamethecorporateco-trusteethroughaseriesofbankacquisitionsandmergers.TheBankresignedasco-trusteeonMarch3,2006.TheTrustCompanyofOklahomawasappointedsuccessorcorporateco-trusteeandcontinuestoserveinthatcapacity.AtFletcher'srequest,RufusGriscom(Griscom)servedastheindividualco-trusteefromFebruary1998untilJuly1999.Griscomwaslaterre-appointedinMarch2005,and
1
Now,CarolynBriggsandMarianneBorgono.
2
resignedinSeptember2005.Fletcherservedastheindividualco-trusteefromJuly1999untilMarch2005.Griscomwasappointedasindividualco-trusteeforathirdtime,beginningin2008.
B.RelevantBankPersonnel
Beginningin1988,JeffMorrowhadprimaryresponsibilityforadministrationoftheTrustinhisroleastrustofficerofthecorporatetrustee.Morrowisalsoalicensedattorney.MorrowactedasthetrustofficeruntilMarch2005,whenhewasreplacedbyPaulaEtter.TimothyGoldwasemployedintheBank'ssecuritiesdepartment,andassistedMorrowwithinvestmentofTrustassets.Goldisalicensedsecuritiesbroker.KatherineGrahamwasemployedbytheBankasamarketingspecialistinthecapitalmarketsdivisioninChicago.
C.EvolutionofOriginalStocks
SkellyOilCompanymergedintoGettyOilCompanyonJanuary31,1977.Asaresult,theTrust'ssharesofSkellyOilCompanywereconvertedorexchangedforsharesofGettyOilCompany.In1984,TexacowasattemptingtotakeoverGettyOilCompany,andofferedatwentypercentpremiumfortheGettystock.Theco-trusteesacceptedtheoffer,determiningthatsuchsalewasjustifiedasan"unusualcircumstance"undertheTrust'sRetentionProvision.SoconyMobilOilCompanybecameMobilOilCompany.InDecember1998,MobilannouncedamergerwithExxon,formingExxonMobilCorporation(XOM).TheTrust'sMobilshareswereconvertedorexchangedforXOMshares,subjecttotheRetentionProvision.TheTrust'soriginalportfolioofstocksremainedunsoldfrom1955untilthe1984saleoftheGettystocktoTexaco.TheBankrepeatedlyrecommendeddiversificationoftheTrustassets,includingsaleofMobil
IX
OMstock,butwasmetwithresistancefromFletcherandGriscom.Asthetrustadvisor,theBankhadtheoptiontoresignorseekacourtorderrequiringdiversification,whichitdidnotdo.
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