## Facts

- Freeman Allard and Evelyn Orkney were life income beneficiaries of testamentary trusts created by their parents.
- Pacific National Bank served as trustee and held broad powers to manage and dispose of trust assets.
- By 1978, the trusts’ sole asset was a fee interest in downtown Seattle real property subject to a 99-year lease that included a right of first refusal held by the lessee (later assigned to a credit union).
- In 1978, the credit union offered $200,000 to purchase the fee interest; the trustee accepted and delivered a deed on August 17, 1978.
- The trustee did not inform the beneficiaries of the proposed sale before conveying the property and notified them only after the conveyance (on September 26, 1978).
- The beneficiaries sued for breach of fiduciary duty, alleging inadequate efforts to determine value and obtain a fair or highest reasonably attainable price, and lack of disclosure.
- The trial court dismissed the claims, denied a jury trial, excluded proposed expert testimony on trust administration standards, and awarded attorney’s fees and costs to the trustee.

## Issues

1. Whether the trustee breached fiduciary duties by selling the trust’s sole asset without prior notice to beneficiaries and without reasonable steps to obtain the highest price reasonably attainable.
2. Whether beneficiaries were entitled to a jury trial on claims for breach of trust.
3. Whether the trial court erred in awarding attorney’s fees and costs to the trustee.

## Decision

- The dismissal was reversed because the trustee breached fiduciary duties in the sale of trust property.
- The denial of a jury trial was affirmed because the claims were primarily equitable in nature.
- The award of attorney’s fees and costs to the trustee was reversed.
- The case was remanded for determination of damages and proper allocation of attorney’s fees and costs; the appellate court did not reach the expert-testimony issue.

## Legal Principles

- Broad discretionary powers in a trust instrument do not relieve a trustee of core fiduciary duties of loyalty, prudence, and acting in beneficiaries’ interests.
- A trustee selling trust property, particularly the trust’s sole significant asset, must take reasonable steps to obtain the highest price reasonably attainable under the circumstances (including investigating value and exposing the property to the market when appropriate).
- A trustee has a duty to keep beneficiaries reasonably informed about material transactions affecting trust corpus; failing to provide timely notice of a major proposed sale may constitute a breach.
- Claims by beneficiaries seeking traditional breach-of-trust remedies are equitable; absent a legal claim, there is no constitutional right to a jury trial.
- A trustee found to have breached fiduciary duties generally may not shift its litigation defense costs to the trust or beneficiaries when the litigation results from the trustee’s misconduct.

## Conclusion

The court held that the trustee’s broad authority to sell trust assets did not excuse selling the trust’s only asset without timely disclosure and without reasonable efforts to secure the highest attainable price, and it remanded for damages while affirming that the beneficiaries had no right to a jury trial and reversing the trustee’s attorney-fee award.


Allard v. Pac. Nat'l Bank, 99 Wn.2d 394, 663 P.2d 104 (Wash. 1983)