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The Robert N. Brewer Family Foundation v. Huggins

United States District Court, M.D. Alabama, Northern Division

December 16, 2019

THE ROBERT N. BREWER FAMILY FOUNDATION Plaintiff,
v.
REX LARRY HUGGINS, as TRUSTEE OF THE CHRISTINE C. BREWER REVOCABLE TRUST, and individually Defendant.

          MEMORANDUM OPINION AND ORDER

          ANDREW L. BRASHER, UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Rex Huggins' (“Defendant”) motion to dismiss the claims against him. See Doc. 52. The Robert F. Brewer Family Foundation (“Plaintiff”), a beneficiary of the trust to which Defendant was appointed trustee, sued Defendant for violations of fiduciary duty in connection with the management of trust assets. Now, Defendant moves to dismiss Plaintiff's claims against him, alleging that they fail to state a claim upon which relief can be granted. Upon consideration, the motion is DENIED.

         BACKGROUND

         These facts are from the operative complaint, which the Court assumes is true, and are taken in the light most favorable to the nonmovant, the Plaintiff.

         Business magnate Robert M. Brewer died in 2012. During the preceding decades, he had built and operated a series of successful business ventures, including a motel chain called Best Inns. His will included the creation of his eponymous foundation, Plaintiff in this case, as well as gifts for his wife and sons. Christine, Brewer's wife, created a revocable trust in 2014. The Trust is governed by Florida law. Christine requested that Ronald Osman, her personal attorney, retain the original Trust documents and her original will. Also in 2014, Christine gave Rex Huggins the power of attorney over her affairs and Elaine Huggins the power of her healthcare surrogate.

         Christine provided generously for the Huggins family in the Trust, leaving them a 2012 Lexus, sterling silver, fur apparel, gold flatware, crystals, fine china, Christmas decorations, and paintings. In addition to all of that, Rex Huggins was left $1.4 million and Elaine Huggins an additional $50, 000. Christine's Trust included charitable gifts for Habitat for Humanity, the Salvation Army, Cypress Lake United Methodist Church, the American Heart Association, the American Lung Association, and the American Cancer Society. These gifts totaled $400, 000. The residue of the estate, including jewelry valued at $200, 000, was to be transferred to the Robert N. Brewer Family Foundation. Christine herself was made Trustee, with Rex Huggins as successor Trustee.

         When the Hugginses found out in 2016 that Christine had been diagnosed with dementia, suffered a stroke, and fallen down, they transported her from her home in Florida to a rehabilitation center in Tallassee, Alabama. After her discharge, Christine moved to the Huggins home in Notasulga, Alabama, where she remained until her death in 2018. During Christine's stay with the Hugginses, her physical and mental health continued to deteriorate. Among other things, Christine would hallucinate, speak to the dead, complain of confusion, call the Hugginses incorrect names, and accuse nurses of stealing her jewelry. All these occurrences were confirmed by the Huggins family to Osman via text messages beginning in July of 2016. In that same month, Osman asked Rex to have Christine's deteriorating condition evaluated by a physician. Rex said he would but did not. Further, in April of 2017, Rex admitted openly to Osman that he did not believe Christine was mentally competent.

         On October 14, 2016, Rex set up a new Trust Account at the Bank of Vernon. Records show that the Trust Account had a balance of $323, 279.43 on November 30, 2016. By July 6, 2018, a month after Christine's death on June 1, 2018, the Trust Account had a balance of $158, 691.48. On December 21, 2015, Osman sent Christine a distribution check of $270, 000.00, representing proceeds from the sale of her interest in the Best Suites motel located in Lake Charles, Louisiana. He believed these funds would be deposited into a Trust account in accordance with Christine's estate plan, but they never were.

         During her rehabilitation in 2016, Christine allegedly signed an amendment to the Trust, removing all gifts to charitable institutions except for the Family Foundation and giving $300, 000 to Elaine Huggins and her daughter. This document was witnessed by only one person.

         On the same day she signed the alleged amendment, Osman paid an unrelated visit to Christine at the rehabilitation clinic. Christine was confused as to who Osman was, even though he had represented Christine and her husband for decades. Osman specifically questioned Christine as to her relatives, the date, and where she was located. Christine thought her dead siblings were alive and she knew neither where she was located, nor where her home was. She was also unaware of the year. Christine did not mention any Trust Amendment to Osman, even though he was the attorney for both Christine and the Trust. Rex did not provide Osman a copy of the amendment until two years later, on January 9, 2018, when Osman traveled to Alabama to visit Christine at the Huggins home. At the end of the visit, Rex showed Osman a copy of the Amendment. When Osman asked why he had not previously been given copies, Rex did not respond. He told Osman that he would not be cheated out of his inheritance.

         After Christine's death, Osman noticed what he considered to be unusual distributions from the Trust. For example, shortly before Christine's death, she allegedly wrote out several large checks to the Huggins family. Defendant also withdrew $15, 000 from the Trust Account by telephone on June 1, 2018, the day Christine fell into a coma and died. Osman also discovered that the Hugginses used Christine's Citi-Bank credit card in the year preceding her death to the tune of $274, 276.51 in groceries, gas, prescription drugs, and discretionary items. Some of the discretionary items were not customary purchases for an ailing octogenarian. For instance, in the month leading up to Christine's death, her credit card statement showed approximately $1, 846.00 in charges over six separate trips to Neiman Marcus, a high-end clothing retailer.

         Because of the withdrawals, the checks made out to the Huggins family, and the credit card expenditures, Osman contacted Rex on August 8, 2018, seeking an explanation. Rex responded on August 20, 2018 that Christine had insisted his family receive these amounts as gifts and that she gave them permission to use her credit card as needed. Rex failed to provide a full accounting. Around this time, Osman commissioned a forensic audit of the Trust's financial records he had in his possession and the items provided by Rex. The audit revealed $1, 140, 192.65 in unidentifiable disbursements from accounts belonging to Christine and the Trust.

         About a month later, Osman again requested that Rex provide details on these disbursements. This included a request for 22 months of itemized bank statements from Christine's SunTrust Bank account, evidence that Christine was mentally competent to make payments from December 26, 2015 to June 1, 2018 on hundreds of thousands of dollars in checks to the Huggins family, further explanation of checks signed by Rex as Christine's power of attorney, further explanation of a gift of over $180, 000 in April of 2017 that Christine supposedly gave to the Hugginses, an accounting of the $270, 000 distribution from Best Suites Lake Charles, and further explanation of the charges to Christine's credit card. Rex did not reply to this request.

         On August 1, 2019, pursuant to a Court order, Defendant provided the first accounting of Trust assets. The accounting failed to identify Trust assets totaling more than $1.1 million, including approximately $500, 000 that was withdrawn between 2015 and 2018 from the Merrill Lynch account, approximately $500, 000 that was withdrawn from Christine's personal SunTrust Bank account, and the $270, 000 distribution from the Best Suites Lake Charles transaction. The accounting further failed to identify funds existing in the Trust Account and Christine's personal SunTrust Bank account at the time of her death. Just over a month after Christine died and Rex became Trustee, the Trust Account had a balance of $158, 691.48 and the SunTrust account had a balance of $4, 266.62. The accounting offers no explanation as to what Rex has done with this money.

         At the time of Christine's death, the Trust assets should have totaled more than $3 million, including a $2.19 million Merrill Lynch brokerage account, about $500, 000 from Christine's personal bank account, $270, 000 from the Best Suites Lake Charles transaction, and over $200, 000 in jewelry. Instead, only $1.8 million is available. Defendant has taken no action to identify missing assets or to turn them over to the Trust. Due to the loss of these assets, the Trust will not have money for the Foundation after it satisfies higher priority gifts. If these funds are returned, the Trust will have sufficient funds to pay the specific cash bequests to individuals and charitable organizations with more than $900, 000 remaining to distribute to the Foundation.

         STANDARD

         When considering a motion to dismiss, the court accepts all facts alleged in the complaint as true and draws all reasonable inferences in the plaintiff's favor. Keating v. City of Miami, 598 F.3d 753, 762 (11th Cir. 2010). There are two questions a court must answer before dismissing a complaint. First, the court must ask whether there are allegations that are no more than conclusions. If there are, they are discarded. Second, the court must ask whether there are any remaining factual allegations which, if true, could ...


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