Fiduciary Litigation in Louisiana: Mandataries, Succession Representatives, and Trustees
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Louisiana Law Review Volume 80 Number 3 Spring 2020 Article 6 9-15-2020 Fiduciary Litigation in Louisiana: Mandataries, Succession Representatives, and Trustees Elizabeth R. Carter Louisiana State University Law Center, [email protected] Follow this and additional works at: https://digitalcommons.law.lsu.edu/lalrev Part of the Estates and Trusts Commons Repository Citation Elizabeth R. Carter, Fiduciary Litigation in Louisiana: Mandataries, Succession Representatives, and Trustees, 80 La. L. Rev. (2020) Available at: https://digitalcommons.law.lsu.edu/lalrev/vol80/iss3/6 This Article is brought to you for free and open access by the Law Reviews and Journals at LSU Law Digital Commons. It has been accepted for inclusion in Louisiana Law Review by an authorized editor of LSU Law Digital Commons. For more information, please contact [email protected]. Fiduciary Litigation in Louisiana: Mandataries, Succession Representatives, and Trustees * Elizabeth R. Carter TABLE OF CONTENTS Introduction .................................................................................. 664 I. Fiduciary Responsibility in General ............................................. 664 A. Fiduciaries in the Common Law Tradition ............................ 665 1. Development of the Body of Law ................................... 666 2. Contemporary Fiduciary Relationships ........................... 667 B. Fiduciaries in the Civil Law Tradition and in Louisiana ........................................................................... 669 1. Fiduciaries in Roman Law .............................................. 669 2. Fiduciaries in Louisiana: Requirement of Good Faith ............................................. 672 a. Mandataries .............................................................. 672 b. Tutors and Curators .................................................. 672 c. Succession Representatives ...................................... 673 d. Trustees ..................................................................... 674 3. Confusion in Louisiana Courts ........................................ 675 II. Mandataries .................................................................................. 677 A. Parties to Litigation Against a Mandatary ............................. 677 1. Direct Action ................................................................... 678 a. Plaintiff ..................................................................... 678 b. Defendant .................................................................. 679 c. Dual Appointments and Conflicts of Interest ........... 679 2. Action to Review ............................................................. 680 a. Plaintiff ..................................................................... 681 b. Defendant .................................................................. 682 c. Timing Issues: Distinguishing Between the Direct Action and the Action to Review ................... 683 B. Venue… ................................................................................. 683 1. Direct Action ................................................................... 683 2. Action to Review ............................................................. 684 Copyright 2020, by ELIZABETH R. CARTER. * A.N. Yiannopoulos Professor of Law; Judge Anthony J. Graphia & Jo Ann Graphia Professor of Law; Louisiana State University. B.A., B.S. University of Memphis; J.D., Tulane University; LL.M., University of Alabama. 344404-LSU_80-3_Text.indd 5 8/17/20 7:18 AM 662 LOUISIANA LAW REVIEW [Vol. 80 C. Types of Proceedings and Related Issues .............................. 684 D. Remedies Available: Direct Action ....................................... 685 1. Burden of Proof ............................................................... 685 2. Injunctive Relief .............................................................. 685 3. Demanding an Accounting .............................................. 686 4. Demanding the Return of Property ................................. 687 5. Money Damages .............................................................. 688 6. Interest ............................................................................. 689 7. Defenses of Mandatary.................................................... 690 E. Remedies Available: Action to Review ................................. 690 1. Burden of Proof ............................................................... 690 2. Injunctive Relief .............................................................. 691 3. Remedies During Pendency of the Proceeding ............... 691 4. Defenses and Related Matters ......................................... 693 F. Prescription ............................................................................ 694 1. Prescription: Demand for Accounting ............................. 695 2. Louisiana Revised Statutes § 9:5647: Five-Year Prescription in Action to Set Aside Document ............... 696 3. Action to Review ............................................................. 696 III. Succession Representatives .......................................................... 696 A. Parties to Litigation Against a Succession Representative ..................................................... 697 1. Plaintiff ............................................................................ 697 2. Defendant ........................................................................ 697 B. Venue… ................................................................................. 697 1. Succession Under Administration ................................... 697 2. Closed Succession ........................................................... 697 C. Types of Proceedings and Related Issues .............................. 698 D. Remedies Available ............................................................... 699 1. Injunctive Relief .............................................................. 700 2. Demanding an Accounting .............................................. 702 3. Removal of Succession Representative ........................... 703 a. Succession Representative Has Become Disqualified .............................................................. 705 b. Succession Representative Has Become Incapable of Discharging the Duties of His Office ............................................ 708 c. Succession Representative Has Mismanaged the Estate ............................................. 710 344404-LSU_80-3_Text.indd 6 8/17/20 7:18 AM 2020] FIDUCIARY LITIGATION IN LOUISIANA 663 d. Succession Representative Has Failed to Perform Any Duty Imposed by Law or by Order of Court ................................................. 711 4. Conversion of Independent Administration to Ordinary Administration ............................................. 712 5. Money Damages .............................................................. 713 6. Voiding Self-Dealing Transactions ................................. 714 7. Forfeiture of Compensation ............................................ 714 8. Penalties Relating to Succession Bank Accounts ............ 714 E. Prescription ............................................................................ 715 1. Louisiana Revised Statutes § 9:5621: Two-Year Prescription for Certain Actions Against Succession Representative ................................. 716 2. Louisiana Revised Statutes § 9:5632: Two-Year Prescription for Defects in Alienation, Encumbrance, or Leases .................................................. 717 IV. Trustees ........................................................................................ 718 A. Parties to Trustee Litigation ................................................... 718 1. Parties to Litigation Against a Trustee ............................ 718 2. Suits by Beneficiaries Against Third Parties ................... 718 B. Venue… ................................................................................. 719 C. Types of Proceedings and Related Issues .............................. 720 1. General Rule: Summary Proceeding ............................... 721 2. Other Types of Proceedings ............................................ 721 D. Remedies Available: Instructions and Injunctions ................ 722 1. Instructions ...................................................................... 722 2. Injunctive Relief .............................................................. 724 E. Remedies Available: Beneficiary Actions Against the Trustee ................................................................ 726 1. Compelling the Trustee to Perform His Duties as Trustee ............................................................. 726 a. Furnishing Information ............................................. 727 b. Accounting ................................................................ 729 2. Enjoining a Breach of Trust ............................................ 730 3. Removal of Trustee ......................................................... 730 a. General Standard and Comparison to Other Laws ........................................................... 731 b. Trustee Has Become Disqualified ............................ 732 c. Trustee Is Incapable of Discharging the Duties of His Office ............................................ 733 d. Trustee Has Mismanaged the Trust .......................... 734 344404-LSU_80-3_Text.indd 7 8/17/20 7:18 AM 664 LOUISIANA LAW REVIEW [Vol. 80 e. Trustee Has Failed to Perform Any Duty Imposed