Ga. High Court: Trustee Must Restore $1.1M to Candler Fund
The Georgia Supreme Court on Monday upheld a jury verdict requiring the trustee of a fund for the descendants of Coca-Cola Co. founder Asa Candler to restore more than $1.1 million to the trust.
The justices said the corporate trustee, Reliance Trust Co., had waived its challenges to the verdict by agreeing to jury instructions and a verdict form that were at odds with its argument on appeal. However, the justices agreed with Reliance that a Fulton County judge had added about $206,000 too much to the jury's verdict.
The ruling upholding the verdict is a win for eight grandchildren of Charles "Buddy" Candler III, the grandson of Asa Candler. The eight grandchildren complained that, before Buddy Candler's death in 2005, Reliance made improper disbursements to Buddy Candler from the trust set up by his wife.
By finding Reliance had waived its arguments against the verdict, the Supreme Court left for another day questions the bank had raised about the interpretation of a new trust statute adopted by the state Legislature in 2010.
The lawyer for Buddy Candler's grandchildren, Craig Frankel, said the case will go back to Fulton Superior Court Judge Constance Russell to issue an award reduced by the $206,000 interest overcharge from an earlier stage in the six-year-old litigation. But since interest has continued to run on the verdict, he said the total award minus the overcharge stood at about $2.19 million through Oct. 31, including $372,411 Reliance had spent out of the trust in defending itself.
The legal fight was over a marital trust that was established by Buddy Candler's wife, Claire Clement Candler, in 1996. Under the trust's terms, Buddy Candler was to be provided any income the trust generated, but the principal was not to be expended unless the trustee deemed that the income Buddy Candler received from the trust and other sources was insufficient to support his living needs.
Claire Candler died the following year, and Buddy Candler remarried in 1999. His four children had their father declared incompetent and took over the trust, according to a pretrial order in the case, but Buddy Candler successfully sued to regain control.
In 2001, Buddy Candler placed control of the trust with Reliance, with himself as co-trustee. At the time, the trust principal was worth $2.1 million. Buddy Candler had his children removed as beneficiaries, naming his eight grandchildren as beneficiaries instead.
By the time Buddy Candler died in 2005 at the age of 75, the trust was down to $838,762 due to distributions Reliance allowed him to take to cover his living expenses as well as legal bills for the competency fight with his children.
The eight grandchildren sued Reliance, alleging the distributions were improper. Frankel has said that, at the time of Claire Candler's death, there still was about $7.5 million in Buddy and Claire Candler's joint account, and the family anticipated Buddy Candler would be able to live on his own money and the trust income so the trust principal would go to the children and grandchildren when Buddy Candler died.