## Facts

- Marie M. McGinley created a revocable inter vivos trust naming Bank of America, N.A. as trustee and transferred Enron stock into the trust.
- About seven months later, McGinley signed a bank-drafted letter directing the bank to retain the Enron stock.
- The letter stated McGinley would “exonerate” the bank from any loss from retaining the stock and relieved the bank of responsibility for “analyzing and monitoring” it.
- Enron’s stock later collapsed in value, materially reducing the trust’s holdings.
- McGinley did not revoke the trust, revoke the letter, or otherwise countermand the written retention direction before the loss.
- McGinley sued the bank asserting multiple theories, including breach of fiduciary duty, breach of loyalty, negligent supervision, fraud/misrepresentation by silence, and Kansas Consumer Protection Act violations.
- The district court granted summary judgment to the bank, and the Kansas Supreme Court took the appeal on transfer.

## Issues

1. Whether a trustee of a revocable trust complies with the prudent investor rule by following the grantor’s clear written direction to retain a specific asset and to relieve the trustee from monitoring and loss responsibility for that asset.
2. Whether the retention letter and its exculpatory language were invalid or ineffective (including as an alleged trust amendment) due to inadequate explanation or disclosure, and whether extrinsic evidence could alter their plain meaning.
3. Whether the trustee’s alleged failure to recommend diversification or disclose concerns about overconcentration fell outside the exculpatory protection as bad faith or indifference to the grantor-beneficiary’s interests.
4. Whether arguments not briefed on appeal were waived or abandoned.

## Decision

- The Kansas Supreme Court affirmed summary judgment for Bank of America.
- The court held that, on these facts, a trustee that followed the grantor’s written directions regarding trust property complied with the prudent investor rule and was authorized to follow those directions.
- The court refused to consider parol evidence to interpret the trust instrument and the subsequent letter because both were clear and unambiguous.
- The court held that expert opinions on the legal validity of the instrument were not determinative.
- The court treated issues not briefed by the appellant as waived or abandoned.

## Legal Principles

- When a trustee of a revocable trust follows the grantor’s written directions regarding specific trust property, the trustee is deemed to comply with the prudent investor rule and may act pursuant to those directions.
- Courts will not admit parol evidence to interpret or vary a trust instrument and related letter that are unambiguous on their face.
- Expert testimony cannot decide legal questions concerning the validity or legal effect of an instrument.
- Appellate claims not briefed are waived or abandoned.

## Conclusion

Because McGinley gave a clear written instruction to retain Enron stock and expressly relieved the trustee from monitoring duties and liability for losses from retention, the bank’s compliance with that direction satisfied its investment-duty obligations; the unambiguous documents controlled without resort to extrinsic evidence, and summary judgment for the bank was properly affirmed.


McGinley v. Bank of Am., N.A., 279 Kan. 426, 109 P.3d 1146 (Kan. 2005)