3. RIGHTS, DUTIES & OBLIGATIONS OF
THE PARTIES
1. Petitioner is a recognized beneficiary of LFT as
defined under NRS §165.020(1)(b) and is entitled by LFT to a benefit and share
of LFT's corpus principal, capital and undistributed income upon the death and decease of
Petitioners' biological father, William P. Lear, Jr., or upon the termination of
the Trust. Exhibit 3, Article Fifth (b).
2. Petitioner is entitled to receive notice of filing of
an intermediate accounting and to receive a copy of the accounting under NRS
§165.045 for every calendar year in which LFT Trustees
have a duty to file an inventory under NRS §165.040. Since August 13, 1982 LFT Trustees have an
annual duty to file LFT accountings.
3. Petitioner, as an interested party in and to the LFT,
is entitled to receive legal notice regarding any litigation or Court filing pertaining to the LFT. Second
Judicial District Court Order dated August 23, 1983; NRS §155.010.
4. Petitioner has a guaranteed right to due process and
equal protection of the law under the Constitution of the
United States of America
and the Constitution of the State of Nevada
. U.S. Constitution Amendment XIV; Nevada Constitution Article 1, Section 8, Clause 5.
5. Petitioner, as LFT beneficiary, has not given the
Trustees of the LFT a written instrument excusing them from performing any of
their duties and has not exempted Trustees from liability for failure to
perform such duties. NRS §165.170; NRS §163.170; see
also 90 C.J.S Trusts §252 & 90A C.J.S.Trusts §596.
6. Trustees have a legal obligation to perform under and
enforce the Last Will and
Testament of William P. Lear, Sr (WPLSr). See
also Exhibit 25.
7. Trustees have a legal obligation to perform under and
enforce the terms and conditions of the LFT as amended by this Court.
8. Trustees have a legal obligation to abide by the
Constitution and laws of the State of Nevada.
9. Trustees have a legal obligation to abide by the
Constitution and laws of the United States of America.
10. Trustees have a legal obligation to cause a notice of
the time and place of a hearing of a petition regarding the LFT to be given to
or served upon Petitioner. NRS §155.010.
11. Furthermore, on August 23, 1983, this Court entered an Order,
which was sent to Petitioner in August 1983, imposing a duty and obligation on LFT
Trustees to advise Petitioner and other beneficiaries
similarly situated of litigation or threatened litigation upon the Trust. Said Order states in pertinent part:
"IT IS FURTHER ORDERED,
ADJUDGED AND DECREED that the Trustees of Trust A and the Trustees of Trust B shall have the
authority to retain legal and accounting services of their own selection ... ;
provided
....
(ii) The Trustees shall advise the Court and all parties of any litigation or threatened litigation which may have a significant impact upon the
Trust Estate."
August 23, 1983 Order, p.17, lines 24-28 and p.18 lines 1-4
Exhibit 11
[Emphasis added]
12. In their pleadings to the Court, Trustees have a legal
obligation to describe the interests to be affected and to give timely and
reasonable information to Petitioner and other beneficiaries similarly
situated. NRS §155.140.
13. As beneficiary of the Lear Family Trust, Petitioner has
a right to notices and the Trust inventory, to true, correct,
complete and accurate annual accountings, to an exhibition of trust property,
to require specific performance from Trustees as well as to information and the
privilege of inspecting trust records and papers. NRS §165.180; NRS §155.010; NRS §165.030; NRS §165.040; NRS §165.045; see also 90A C.J.S. Trusts §§ 321, 331, 587 & 594.
14. Trustees have an obligation to furnish a true, correct,
complete, and accurate accounting to all LFT beneficiaries, including
Petitioner, pursuant to common law principles governing Trusts. See Bogert on Trusts, Third Edition, West Publishing Company, chap. 16, Sec.
142, Duty to Render Court Accounting, pp. 537-539.
15. A trustee owes a beneficiary the highest degree of good
faith, care, loyalty and integrity and is required to provide a beneficiary,
upon request, complete and accurate information as to the nature and amount of
the trust property, the management of said property and any information
relative to the beneficiaries' interest in the trust. In Re Marriage of Petrie, 19 P.3d 443 (Wash.App. Div.1
2001); Baker Boyer National Bank v. Garver,
719 P.2d 583, 584 (Wash.App. 1986); Bogert on Trusts, supra, chap.16, sec. 141,
Duty to Furnish Information to the Beneficiary, p.534. 90A C.J.S. Trusts §§323, 330, 331.
17. Trustees have an obligation to timely serve notices,
produce inventories and furnish true, correct, complete and accurate annual accountings
in accordance with this Court's August 13, 1982 Order which directs LFT Trustees that:
"7. Both Trust A and Trust B shall be administered in
accordance with the provisions of NRS Chapter 163 and accountings shall be rendered pursuant to
NRS 165.030 through 165.120
."
August 13, 1982 Court Order, page 1, §2
Exhibit 8.
18. At all times relevant hereto, LFT Trustees had an
obligation to produce documents and information relevant to the LFT, to the LFT's beneficiaries who have interests therein.
19. At all times relevant hereto, LFT Trustees had an
obligation to conform to the "prudent man" rule as codified and amended under NRS
Chapter 164.
20. At all times relevant hereto, LFT Trustees had a duty
of impartiality toward the LFT beneficiaries and a duty to manage the LFT in
the best interest of all the beneficiaries. NRS §164.220.
21. At all times relevant hereto, LFT Trustees had a duty
of undivided loyalty to the beneficiaries and were prohibited from placing
themselves in a position where it would be for their own benefit to violate their duty to the beneficiaries. See Scott
on Trusts , William F. Fratcher, (Little, Brown & Company, 4th Edition, 1987), Volume IIA, page 311; 38 Am.Jur.
POF3d 279.
22. On March 9, 1978, WPLSr and MOL appointed
Sam Auld, Milton Weilenmann and Fran D. Jabara as co-trustees of the LFT.
23. On September 8, 1978, this Court entered an Order
confirming the appointment of LFT Trustees Sam Auld, Milton Weilenmann and Fran D. Jabara.
24. On August 13, 1982, this Court entered an Order
bifurcating WPLSr's March 9, 1978 Trust into two separate trusts and provided
for the appointment of three new Trustees of the LFT. The Court ordered, "all nominees shall be persons of mature judgment and a good reputation for honesty
and integrity." This Court further
ordered that:
"After the new three (3) individuals have been confirmed as
Trustees of Trust B, any vacancies in the office of the Trustee of that part of
the Trust shall be filled in the same manner as specified in the original Trust
Agreement."
August 13, 1982 Order, page 6, §23, lines 20-23
Exhibit 8
25. On January 17, 1983, this Court entered an Order Confirming
Trustees of Trust B of the Lear Family Trust. Said Order, at paragraph 2 of the "Conclusions of Law", confirmed and
appointed Respondents DAYTON, MURPHY and ROWLEY as trustees of Trust B of the LFT pursuant to this Court's
August 13, 1982 Order. See also the December 20, 1982 Petition for Confirmation of Trustees of Trust B of the
Lear Family Trust. Exhibits 10, 8, 9,
respectively. This Court's Order of
January 17, 1983 referred to above states in pertinent part:
"That said trustees shall administer Trust B in accordance with
all of the powers, duties and responsibilities more particularly set forth in
the Lear Family Trust instrument dated March 6, 1978 [sic], as if originally
named as trustees therein and in accordance with this Court's Order of
August 13, 1982 ."
Order Confirming Trustees, January 17, 1983, page 2, lines 26-31
[Emphasis Added]
Exhibit 10
26. Respondents knew
or should have known that under Nevada State
law, the power of the trustee is attached to the office of trustee and is not personal:
"NRS 163.100 Powers of trustee attached to office. Unless it is otherwise provided by the trust
instrument or by court order, all powers of a trustee are attached to the
office and are not personal."
27. Respondents knew
or should have known that until the resignation or death of one of the LFT
Trustees nominated by Order of this Court of January 17, 1983, the remaining LFT
Trustees did not have the power to appoint another Trustee. LFT, article TWELFTH states in pertinent part:
"The Trustees may resign at any time. Such resignation shall be effective after
delivery of thirty (30) days written notice to the income beneficiaries of all
the trust established by this trust agreement. The Trustee who has resigned shall have no duty, obligation or right to
appoint a successor Trustee. A successor
Trustee shall be appointed by the surviving Trustees. In the event of the death, incompetence or
disqualification of a Trustee, a successor Trustee will be appointed by the
surviving Trustees."
Exhibit 3, article TWELFTH
28. DAYTON was appointed LFT Trustee on
January 17, 1983 and continually served as LFT Trustee until
the date of his death on or about July 27, 2004.
29. ROWLEY was
appointed LFT Trustee from January 17, 1983 and continually served as LFT Trustee until
the date of his death on or about August 28, 2004.
30. MURPHY was
appointed LFT Trustee on January 17, 1983 and continually served as LFT Trustee to the
present date.
31. Respondents knew or should have known that until July
27, 2004, the date of decease of LFT
Trustee DAYTON, there was no Trustee
vacancy in the LFT and no LFT Trustee had the right or power to appoint a
successor Trustee or to delegate the office, duties and obligation of an LFT
Trustee to any another person or entity.
32. Respondents knew
or should have known that on August 23, 1983, this Court
entered an Order providing for the method of determining Trustees' fees. Said Order states in pertinent part:
"IT IS FURTHER ORDERED,
ADJUDGED AND DECREED that the Trustees of Trust A and the Trustees of Trust B shall have the
authority to retain legal and accounting services of their own selection ... ;
provided
(i) the method of determining Trustees' fees to be paid as a cost of administration of
the Trust shall first be presented to the Probate Court for approval.
August
23, 1983 Court Order, p.17, lines 24-32
Exhibit 11
33. Respondents knew
or should have known that on May 24, 1984, this Court
determined and ordered, in pertinent part:
"1. That compensation for Trustees of Trust B in the amount of
$15,000 each for the period January 17, 1983 to August 23, 1983 is approved.
2. That a salary for the Trustees of Trust B in the amount of
$2,000 per month each, commencing August 23, 1983 is approved."
May 24, 1984, Court Order §1 & §2
Exhibit 13
34. Respondents knew
or should have known that on June 25, 1996, this Court
determined and ordered, in pertinent part:
"3. That the Trustees' compensation be raised to $3,000.00 per
month each, ... effective July 1, 1996."
June 25, 1996 Court Order, §3.
Exhibit 36, p. #233
35. Trustees' attorneys CR&R and/or REESE, pursuant to this
Court's Orders of August 13, 1982 and January 17, 1983 were bound by the same requirements as LFT
Trustees to provide Trust accountings in accordance with NRS §165.030 through NRS §165.120, to all Trust beneficiaries including remaindermen beneficiaries. NRS §165.020(b) and NRS §165.045.
36. Trustees' attorneys CR&R and/or REESE pursuant to the retainer
agreement dated September 1, 1983 with LFT Trustees were collectively and
individually obligated to counsel, advise and assist Respondents LFT Trustees
to timely provide true, correct, complete and accurate annual accountings in
accordance with NRS §165.030 through NRS §165.120, and to provide competent,
effective and efficient legal services to LFT Trustees a ccording to the highest
legal and ethical standards.
37. In producing the accountings of the LFT, Respondents
accountants Grant Thornton and MURPHY have a legal obligation to take
into account the Last Will and
Testament of William P. Lear, Sr.
38. In producing the accountings of the LFT, Respondents
accountants Grant Thornton and MURPHY have a legal obligation to take
into account the terms and conditions of the LFT as lawfully amended by this Court.
39. In producing the accountings of the LFT, Respondents
accountants Grant Thornton and MURPHY have a legal obligation to abide
by the Constitution and laws of the State of Nevada as well as the lawful judicial determinations
of this Court with respect to the LFT.
40. In producing the accountings of the LFT, Respondents
accountants Grant Thornton and MURPHY have a legal obligation to abide
by Constitution and laws of the United States of America.
41. At all times relevant hereto, Respondents accountants Grant Thornton and MURPHY had an obligation to produce accounts which conformed with
the Fiduciary Accounting Standards, the Standards for performing compilation
engagements, the AICPA Code of Ethics, and any other standards as they relate to accounting where Respondents
would be held liable by others similarly situated.
