## Facts

- A wrongful-death settlement for Stephen Michael Estrada (as a minor) funded a trust created by superior court order in 1968; The Arizona Bank served as trustee, and Estrada was the sole beneficiary.
- After the age of majority was lowered to 18, the trustee petitioned for interpretation; in May 1976 the court ordered the trust to terminate at age 18 and directed annual accountings under Arizona conservatorship statutes.
- From 1976 to 1982, the trustee filed annual interim accountings that disclosed investments, income, expenses, gains, and losses; notice was provided to Estrada and his guardians; no objections were filed; the court approved each accounting.
- In September 1982, the trustee filed a final accounting through Estrada’s 18th birthday and sought final settlement and distribution; notice was given; after an October 1982 hearing, the court approved the final accounting and distribution without objection.
- The trust assets were distributed to Estrada and the trustee was discharged.
- In July 1984, Estrada sued the trustee for alleged mismanagement that depleted the trust’s value.

## Issues

1. Whether superior-court orders approving a trustee’s interim and final accountings, entered after notice and opportunity to object, preclude a later damages action by the beneficiary for alleged mismanagement during the accounting periods.
2. Whether any exception permits such a later suit despite approved accountings, including claims based on fraud or other grounds that would permit a direct attack on the prior orders.

## Decision

- The Court of Appeals affirmed summary judgment for the trustee.
- The court held that the orders approving the accountings were final judgments on matters disclosed in the accountings and barred Estrada’s later mismanagement claims for those periods.
- The court found no basis in the record for an exception that would allow a collateral attack on the accounting approvals.

## Legal Principles

- A court order approving a fiduciary accounting, entered after notice and an opportunity to contest, is a final judgment as to matters presented in the accounting.
- Claim preclusion bars later litigation between the beneficiary and fiduciary over issues that were, or could have been, raised in the accounting proceeding regarding disclosed transactions and administration for the covered period.
- A later damages action challenging administration covered by approved accountings is an impermissible collateral attack absent a timely, proper direct challenge (including a sufficient showing of fraud that would justify setting aside the approval).

## Conclusion

Because the trustee’s accountings fully disclosed the trust’s transactions and were repeatedly approved after notice without objection, the beneficiary’s later suit for alleged mismanagement during those accounting periods was barred by preclusion, and summary judgment for the trustee was affirmed.


Estrada v. Arizona Bank, 732 P.2d 1124 (Ariz. Ct. App. 1987)