{ "id": 8526032, "name": "CRYSTAL DIANE PITTMAN, Plaintiff v. DAN TAYLOR BARKER, SR., Trustee of the Trust under the Will of R. L. Pittman, Sr., RAYMOND LUPTON PITTMAN, III, JEANETTE GRACE PITTMAN (FORD), SARAH DELLA PITTMAN, and SARAH GUY PITTMAN, executrix of the estate of Raymond L. Pittman, Jr. Defendants and R. LUPTON PITTMAN, III, Third Party Plaintiff v. SARAH GUY PITTMAN, Third Party Defendant; R. LUPTON PITTMAN, III, Plaintiff v. SARAH GUY PITTMAN, individually and as executrix of the estate of Raymond L. Pittman, Jr., Defendant", "name_abbreviation": "Pittman v. Barker", "decision_date": "1995-01-17", "docket_number": "No. 9312SC1278", "first_page": "580", "last_page": "592", "citations": [ { "type": "official", "cite": "117 N.C. App. 580" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "24 ALR3d 730", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "opinion_index": -1 }, { "cite": "58 ALR4th 653", "category": "reporters:specialty", "reporter": "A.L.R. 4th", "opinion_index": -1 }, { "cite": "9 ALR2d 10", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "opinion_index": -1 }, { "cite": "420 S.E.2d 678", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1992, "pin_cites": [ { "page": "681" } ], "opinion_index": 0 }, { "cite": "107 N.C. App. 474", "category": "reporters:state", "reporter": "N.C. 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App. 448", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550339 ], "year": 1971, "opinion_index": 0, "case_paths": [ "/nc-app/12/0448-01" ] } ], "analysis": { "cardinality": 1128, "char_count": 31709, "ocr_confidence": 0.738, "pagerank": { "raw": 3.632839378281889e-07, "percentile": 0.8892199892735059 }, "sha256": "c5ed3e53f883ada828e37c770dae97b36c95674760a90d644ee014b92273b186", "simhash": "1:cfea61e2340e1d5e", "word_count": 5185 }, "last_updated": "2023-07-14T20:31:41.091249+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Chief Judge ARNOLD and Judge THOMPSON concur." ], "parties": [ "CRYSTAL DIANE PITTMAN, Plaintiff v. DAN TAYLOR BARKER, SR., Trustee of the Trust under the Will of R. L. Pittman, Sr., RAYMOND LUPTON PITTMAN, III, JEANETTE GRACE PITTMAN (FORD), SARAH DELLA PITTMAN, and SARAH GUY PITTMAN, executrix of the estate of Raymond L. Pittman, Jr. Defendants and R. LUPTON PITTMAN, III, Third Party Plaintiff v. SARAH GUY PITTMAN, Third Party Defendant R. LUPTON PITTMAN, III, Plaintiff v. SARAH GUY PITTMAN, individually and as executrix of the estate of Raymond L. Pittman, Jr., Defendant" ], "opinions": [ { "text": "MARTIN (JOHN C.), Judge.\nSarah Pittman makes twenty-three separate assignments of error in the record on appeal and brings them forward in five arguments in her brief. Because the trial court did not fully resolve the issues raised by the pleadings and the evidence, we must vacate the judgment and remand the case for further findings.\nI.\nSarah Pittman initially contends the trial court erred by failing to join Jeannette Ford and Della Pittman as necessary parties as required by G.S. \u00a7 1A-1, Rule 19. Sarah Pittman argues the sisters are united in interest with their brother in the trust estate, and therefore must be joined in his claim against Raymond Pittman\u2019s estate for his alleged breach of his fiduciary duty as trustee. We conclude their join-der was not required.\nRule 19 provides:\n(a) Necessary joinder. \u2014 ... those who are united in interest must be joined as plaintiffs or defendants; . . .\n(b) Joinder of parties not united in interest. \u2014 The court may determine any claim before it when it can do so without prejudice to the rights of any party or to the rights of others not before the court; but when a complete determination of such claim cannot be made without the presence of other parties, the court shall order such other parties summoned to appear in the action.\n\u201cNecessary parties\u201d must be joined in an action, while \u201cproper parties\u201d may be joined. Carding Developments v. Gunter & Cooke, 12 N.C. App. 448, 183 S.E.2d 834 (1971).\nA necessary party is one who is so vitally interested in the controversy that a valid judgment cannot be rendered in the action. completely and finally determining the controversy without his presence. A proper party is one whose interest may be affected by a decree, but whose presence is not essential in order for the court to adjudicate the rights of others. (Citation omitted.)\nId. at 451-52, 183 S.E.2d at 837. A proper party to an action means \u201ca party who has an interest in the controversy or subject matter which is separable from the interest of the other parties before the court, so that it may, but will not necessarily, be affected by a decree or judgment which does complete justice between the other parties.\u201d Strickland v. Hughes, 273 N.C. 481, 485, 160 S.E.2d 313, 316 (1968), quoting 67 C.J.S., Parties \u00a7 1. \u201cA proper party is one whose interest may be affected by a judgment but whose presence is not essential for adjudication of the action.\u201d River Birch Associates v. City of Raleigh, 326 N.C. 100, 129, 388 S.E.2d 538, 555 (1990).\nJeannette Ford and Della Pittman are proper parties to the action rather than necessary parties. The claim upon which Lupton Pittman prevailed was against his father\u2019s estate for his breach of fiduciary duty, as trustee, by depleting the trust corpus in order to maximize the income from the trust for himself, as the primary life beneficiary. Jeannette Ford and Della Pittman are not necessary parties for the court to determine the total amount of specific damage caused by Raymond\u2019s breach of fiduciary duty to the remaindermen, as their interests are no different than Lupton Pittman\u2019s. Nor are the sisters necessary parties in order to determine Lupton Pittman\u2019s percentage share of the total damages caused by Raymond Pittman\u2019s breach, because his share had already been predetermined by the trust document itself. Though they have undeniable interests which might have been affected by the outcome of this action, they were not essential parties in order for the court to adjudicate the rights of Lupton Pittman as against their father\u2019s estate.\nDefendant relies on our decision in Wall v. Sneed, 13 N.C. App. 719, 187 S.E.2d 454 (1972), for the proposition that in the context of trust beneficiaries, all persons legally or beneficially interested in the subject matter of the suit, or who will be affected by a decree therein, are necessary parties. However, the holding in Wall is not so broad and that case is readily distinguishable from the case before us.\nIn Wall, a mother transferred, inter vivos, her interest in certain real estate to one of her sons, allegedly with instructions for him to hold the property in trust and divide it among her children who had not already been conveyed a portion of the property earlier. Upon the mother\u2019s death, the son instead attempted to purchase all his siblings\u2019 claims to the property in question.\nThe eleven plaintiffs sued to determine their rights to the property. On appeal, however, this Court identified several other siblings and relations with important interests. Four of the non-plaintiff siblings had allegedly been paid by the son for their interests in the property. Nevertheless, there was a deed in the record indicating that the four had transferred their interests to a daughter of one of the plaintiffs. Thus not only was there a dispute as to the existence of the trust, there was a controversy as to who held the interests of the unjoined siblings. As noted in the opinion, \u201cit appears [the unjoined parties] have rights in the subject matter of this controversy which must be ascertained and settled before the rights of the present plaintiffs and defendants can be completely and finally adjudicated and determined.\u201d Id. at 724-25, 187 S.E.2d at 457. Joinder of the other siblings was found to be necessary, and the case was remanded.\nNo such confusion exists here. The trust is explicit in determining the proportionate share to which each of the remainder beneficiaries is entitled. There is no unascertained interest in the trust. Whether or not the other remainder beneficiaries were parties to the action would have no impact on the amount of total damages determined by the court to have been caused by Raymond Pittman\u2019s breach nor the proportionate share of those damages to be awarded to Lupton Pittman. Though they are proper parties by their common interest in the trust corpus, Jeannette Ford and Della Pittman are not necessary parties, and the trial court was not obligated to join them under G.S. \u00a7 1A-1, Rule 19.\nWhether proper parties will be ordered joined rests within the sound discretion of the trial court. Carding Developments v. Gunter & Cooke, supra. We note that both Jeannette Ford and Della Pittman were parties to the original suit brought by Crystal Pittman, in which Lupton Pittman advanced the crossclaim upon which he ultimately recovered. Each had an opportunity to join in the crossclaim; neither chose to do so. The record discloses no abuse of the trial court\u2019s discretion by denying the motion to join the sisters.\nII.\nSarah Pittman also argues that the trial court erred by allowing into evidence two deeds which had not been listed by Lupton Pittman as exhibits in the pretrial order. The deeds were both dated 21 April 1967 and conveyed an undivided interest in property, known as the Sykes Pond Property, from Raymond Pittman, as trustee, to himself individually, and, subsequently, from himself individually, to himself and Sarah Pittman as tenants by the entireties. The deeds were admitted during the examination of Sarah Pittman as an adverse witness by Lupton Pittman\u2019s counsel, over her objection on the grounds of unfair surprise. Lupton Pittman\u2019s counsel explained that the deeds had only been discovered the previous day during a title search with respect to the property and that Lupton Pittman had no knowledge of the existence or content of the deeds prior thereto. Sarah Pittman contends on appeal that she had no opportunity to prepare a defense to the presumption of fraud created by the exhibits.\nThe admissibility of such evidence is a matter committed to the sound discretion of the trial court, and its decision will not be reviewed unless an abuse of discretion is shown. Matter of Will of Maynard, 64 N.C. App. 211, 307 S.E.2d 416 (1983), disc. review denied, 310 N.C. 477, 312 S.E.2d 884 (1984). No abuse of discretion has been shown here. The deeds were not discovered until the trial was underway, thus, they could not have been listed in the pretrial order. Sarah Pittman was a grantor in one of the deeds; both deeds were in her chain of title. Her counsel was sufficiently familiar with the transaction to be able to cross-examine another of Lupton Pittman\u2019s witnesses about the division of the property. Moreover, the record reflects that after the exhibits were introduced on Friday, the trial was recessed until the following Monday afternoon, allowing Sarah Pittman additional time to examine the documents, explore the transactions evidenced by them, and meet the exhibits. Her assignments of error with respect to the admission into evidence of the deeds are overruled.\nIII.\nNext Sarah Pittman contends that the trial court erred by finding that Raymond Pittman had breached his fiduciary duty as trustee. She argues (1) that the claim was barred by the statute of limitations and by the equitable defenses of estoppel, laches, ratification, and waiver; (2) that the trial court applied an erroneous standard to Raymond Pittman\u2019s actions as trustee; and (3) that the trial court unfairly excluded the testimony of one of her expert witnesses with respect to Raymond Pittman\u2019s management of the trust. We reject the latter two contentions. However, we are unable to review her first contention with respect to the affirmative defenses because the court\u2019s findings do not address or resolve those issues.\nA.\nWe consider first Sarah Pittman\u2019s argument that it was error for the trial court to exclude the testimony of one of her expert witnesses on trust management. We disagree.\nThe record reflects the following: The trial of these cases was set for December 1992, but was continued until 12 April 1993 upon motion of Sarah Pittman. Pursuant to discovery extensions agreed upon by the parties, expert witnesses were to be designated by 1 March 1993. The parties exchanged designations of expert witnesses on that date, with Lupton Pittman designating five experts and Sarah Pittman designating four experts. Each completed the depositions of the other\u2019s designated expert witnesses by 25 March 1993. On that date, Sarah Pittman\u2019s counsel notified opposing counsel that a fifth expert, William Weiner, would testify. On 26 March 1993, Lupton Pittman moved in limine to exclude Mr. Weiner\u2019s testimony, contending unfair prejudice pursuant to G.S. \u00a7 8C-1, Rule 403. Prior to trial on 12 April 1993, the trial court granted the motion and excluded Mr. Weiner\u2019s testimony on the grounds of \u201cundue delay\u201d by Sarah Pittman and \u201cunfair prejudice\u201d to Lupton Pittman.\nSarah Pittman contends that because the trial court relied upon G.S. \u00a7 8C-1, Rule 403, in excluding the testimony of Mr. Weiner, it applied the wrong standard and its ruling should be overturned. She argues that Rule 403 is strictly an evidentiary rule and is not applicable to claims of delay and surprise in pre-trial disclosure procedures. Even assuming, arguendo, that Rule 403 has no application, we decline to disturb the trial court\u2019s exclusion of Mr. Weiner. Whether to exclude evidence under Rule 403 is within the sound discretion of the trial court, Smith v. Pass, 95 N.C. App. 243, 382 S.E.2d 781 (1989), as is a ruling with respect to whether a witness should be allowed to testify where the proffering party had not properly disclosed the witness\u2019 identity through discovery. Denton v. Peacock, 97 N.C. App. 97, 387 S.E.2d 75, disc. review denied, 326 N.C. 595, 393 S.E.2d 876 (1990); see also Peed v. Peed, 72 N.C. App. 549, 325 S.E.2d 275, cert. denied, 313 N.C. 604, 330 S.E.2d 612 (1985). \u201cA discretionary ruling by the trial judge should not be disturbed on appeal unless the appellate court is convinced by the cold record that the ruling probably amounted to a substantial miscarriage of justice.\u201d Boyd v. L. G. DeWitt Trucking Co., 103 N.C. App. 396, 406, 405 S.E.2d 914, 921, disc. review denied, 330 N.C. 193, 412 S.E.2d 53 (1991). We discern no \u201csubstantial miscarriage of justice\u201d and no abuse of the trial court\u2019s discretion where Sarah Pittman designated the additional expert nearly a month after the date fixed by agreement for doing so, after all other experts for both sides had been deposed, and approximately ten business days prior to trial. This assignment of error is without merit.\nB.\nWe also reject Sarah Pittman\u2019s contention that because the trust instrument does not require the trustee to invest the trust assets so as to increase the value of the trust corpus for the remaindermen, the trial court erred by applying the prudent man standard to Raymond Pittman\u2019s actions as trustee. By simply granting Raymond Pittman \u201csole discretion\u201d to manage the trust corpus, the trust instrument did not obviate his obligation to the remaindermen as required by G.S. \u00a7 36A-2:\n(a) In acquiring, investing, reinvesting, exchanging, retaining, selling, and managing property for the benefit of another, a fiduciary shall observe the standard of judgment and care under the circumstances then prevailing, which an ordinarily prudent man of discretion and intelligence, who is a fiduciary of the property of others, would observe as such fiduciary ....\nThe present case is similar to Fortune v. First Union Nat. Bank, 87 N.C. App. 1, 359 S.E.2d 801 (1987), reversed on other grounds, 323 N.C. 146, 371 S.E.2d 483 (1988). There, an executor acting as trustee for the beneficiaries was given \u201cabsolute discretion\u201d to accumulate and distribute the estate\u2019s income and principal. Despite such language, this Court held that \u201can executor, in performing those duties related to managing the estate\u2019s assets, acts as a trustee to beneficiaries of the estate. As such, the executor is liable for the depreciation of assets which an ordinarily prudent fiduciary would not have allowed to occur.\u201d Id. at 5, 359 S.E.2d at 804. (Citations omitted.) See also First National Bank of Catawba County v. Edens, 55 N.C. App. 697, 286 S.E.2d 818 (1982).\nThe foregoing cases make clear that the prudent man fiduciary standard of G.S. \u00a7 36A-2 is not superseded by a grant of discretion in the trust document and is the proper standard by which to judge the conduct of Raymond Pittman as trustee. There is competent evidence in the record to support the trial court\u2019s findings and conclusion that Raymond Pittman violated the prudent man standard by failing to balance the investment of the trust\u2019s assets between income and growth investments and by favoring the interests of the life beneficiaries over those of the remaindermen. The trial court did not err in applying the prudent man standard to Raymond Pittman\u2019s exercise of his fiduciary duty, nor in its finding that he breached that duty.\nC.\nIn her answer to Lupton Pittman\u2019s crossclaim for breach of fiduciary duty, Sarah Pittman asserted the affirmative defenses of the statute of limitations, estoppel, laches, ratification and waiver. Because pledging a fiduciary duty to a trust is most similar to the acceptance of a contract, our Supreme Court has determined that the statute of limitations applicable to an action for breach of such a fidu-ciaxy duty is the same as that applicable to an action for breach of contract, i.e., three years. Tyson v. North Carolina National Bank, 305 N.C. 136, 286 S.E.2d 561 (1982). The statute of limitations begins to run when the claimant \u201cknew or, by due diligence, should have known\u201d of the facts constituting the basis for the claim. Hiatt v. Burlington Industries, Inc., 55 N.C. App. 523, 286 S.E.2d 566, disc. review denied, 305 N.C. 395, 290 S.E.2d 365 (1982). The equitable defenses of estoppel, laches, ratification, and waiver similarly require, inter alia, a determination of when Lupton Pittman knew of the breach. See One North McDowell Assn. v. McDowell Development Company, 98 N.C. App. 125, 389 S.E.2d 834 (1990) (estoppel); Cieszko v. Clark, 92 N.C. App. 290, 374 S.E.2d 456 (1988) (laches); Link v. Link, 278 N.C. 181, 179 S.E.2d 697 (1971) (ratification); and Fetner v. Granite Works, 251 N.C. 296, 111 S.E.2d 324 (1959) (waiver).\nThe evidence at trial was conflicting. Lupton Pittman\u2019s evidence tended to show that he first became aware of the manner in which Raymond Pittman was managing the trust in the summer of 1990, when he consulted with a friend, Robert Warren, a stockbroker. Mr. Warren provided Lupton Pittman with a performance report of the trust\u2019s investments. Lupton Pittman testified that he had not been able to understand the annual reports from the trustee because they were confusing and difficult to understand, and that it was not until Mr. Warren compiled the analysis that it became apparent to him that Raymond Pittman had breached his duty to the remainder beneficiaries of the trust. His crossclaim was filed 4 February 1992, within three years of the time when he knew of the breach.\nSarah Pittman offered evidence tending to show that Lupton knew or should have known of the facts constituting the basis for his claim no later than the time of a meeting with Paul Weick, a trust officer with United Carolina Bank, on 30 October 1986. At that meeting, the trust\u2019s investments were reviewed, and Lupton Pittman indicated his understanding of, and disagreement with, the investment strategy. Paul Weick maintained contact with Lupton Pittman regarding the trust\u2019s investments and made himself available to answer any questions Lupton Pittman might have had.\n\u201cIn a trial without a jury, it is the duty of the trial judge to resolve all issues raised by the pleadings and the evidence by making findings of fact and drawing therefrom conclusions of law upon which to base a final order or judgment. Small v. Small, 107 N.C. App. 474, 477, 420 S.E.2d 678, 681 (1992). To resolve the issues raised by the affirmative defenses, the trial court was required to resolve the conflict in the evidence as to when Lupton Pittman first knew or should have known of the facts giving rise to his claim for alleged breach of fiduciary duty. Without such findings, the judgment is incomplete, and we are unable to consider the arguments raised on appeal. \u201cWhen all issues are not so resolved by the trial court, this Court has no option other than to vacate the order and remand the cause to the trial court for completion.\u201d Id. Thus, we must vacate the judgment and remand this case to the trial court for its findings of fact, from the evidence already presented, as to when Lupton Pittman knew, or by the exercise of due diligence, should have known, of the facts giving rise to his claim for breach of fiduciary duty, and the legal conclusions to be drawn therefrom with respect to the affirmative defenses raised by Sarah Pittman.\nIV.\nBy additional assignments of error, Sarah Pittman contends that the trial court erred by entering judgment against Raymond Pittman\u2019s estate and against her, individually, for costs and attorneys\u2019 fees incurred by Lupton Pittman in prosecuting his claim, and by denying her motion for relief from the judgments pursuant to G.S. \u00a7 1A-1, Rule 60(b). The judgment for costs and attorneys\u2019 fees and the order denying the motion for relief from the judgment are both dependent upon the judgment entered upon Lupton Pittman\u2019s claim for fiduciary duty, which we have vacated. Thus, we must also vacate the judgment for attorneys\u2019 fees and the order denying Sarah Pittman\u2019s motions for relief. The assignments of error with respect thereto may or may not become moot, depending upon the trial court\u2019s findings upon remand, and we decline to address their merits at this time.\nBecause the trial court did-not fully resolve the issues raised by the pleadings and the evidence, as above noted, we must vacate the judgment and remand the case for additional findings of fact, upon such evidence as the parties have presented at the trial of this matter, which will resolve those issues. The trial court will then enter judgment according to its findings and its conclusions of law drawn therefrom.\nVacated and Remanded.\nChief Judge ARNOLD and Judge THOMPSON concur.\nJudge Thompson concurred prior to 30 December 1994.", "type": "majority", "author": "MARTIN (JOHN C.), Judge." } ], "attorneys": [ "Wyrick Robbins Yates & Ponton, L.L.P., by Samuel T Wyrick, III, and L. Diane Tindall, for plaintiff-appellee.", "The Law Firm ofH. Terry Hutchens, by H. Terry Hutchens, and John M. Owens for defendant-appellant." ], "corrections": "", "head_matter": "CRYSTAL DIANE PITTMAN, Plaintiff v. DAN TAYLOR BARKER, SR., Trustee of the Trust under the Will of R. L. Pittman, Sr., RAYMOND LUPTON PITTMAN, III, JEANETTE GRACE PITTMAN (FORD), SARAH DELLA PITTMAN, and SARAH GUY PITTMAN, executrix of the estate of Raymond L. Pittman, Jr. Defendants and R. LUPTON PITTMAN, III, Third Party Plaintiff v. SARAH GUY PITTMAN, Third Party Defendant R. LUPTON PITTMAN, III, Plaintiff v. SARAH GUY PITTMAN, individually and as executrix of the estate of Raymond L. Pittman, Jr., Defendant\nNo. 9312SC1278\n(Filed 17 January 1995)\n1. Trusts and Trustees \u00a7 274 (NCI4th)\u2014 breach of fiduciary duty of trustee \u2014 beneficiaries proper but not necessary parties\nTwo remainder beneficiaries of a testamentary trust were proper but not necessary parties to an action by the third remainder beneficiary alleging that the trustee, who was the primary life beneficiary, breached his fiduciary duty by depleting the trust corpus in order to maximize the income of the trust for himself since they were not essential parties to the court\u2019s determination of the total damages caused by the trustee\u2019s breach of his fiduciary duty, and the court could determine, without their joinder, plaintiff beneficiary\u2019s share of the total damages because the trust is explicit in determining the proportionate share of each remainder beneficiary, and there is no unascertained interest in the trust. N.C.G.S. \u00a7 1A-1, Rule 19.\nAm Jur 2d, Trusts \u00a7\u00a7 672 et seq.\nTrust beneficiaries as necessary parties to action relating to trust or its property. 9 ALR2d 10.\n2. Actions and Proceedings \u00a7 21 (NCI4th)\u2014 deeds not on exhibit list \u2014 admission proper\nIn an action arising out of the distribution of an estate, the trial court did not err in allowing into evidence two deeds which had not been listed by plaintiff as exhibits in the pretrial order, since the deeds were not discovered until the trial was underway; defendant was a grantee in one of the deeds, and both were in her chain of title; and there was a recess after the deeds were introduced, allowing defendant additional time to examine the documents, explore the transactions, and meet the exhibits.\nAm Jur 2d, Pretrial Conference and Procedure \u00a7\u00a7 29 et seq.\n3. Evidence and Witnesses \u00a7 2403 (NCI4th)\u2014 expert witness testimony excluded \u2014 offer of witness not timely\nIn an action involving breach of fiduciary duty by a trustee, the trial court did not err in excluding the testimony of one of defendant\u2019s expert witnesses on trust management where defendant designated the additional expert nearly a month after the date fixed by agreement for doing so, after all other experts for both sides had been deposed, and approximately ten business days prior to trial.\nAm Jur 2d, Witnesses \u00a7\u00a7 4, 74.\nPropriety of allowing state court civil litigant to call expert witness whose name or address was not disclosed during pretrial discovery proceedings. 58 ALR4th 653.\n4. Trusts and Trustees \u00a7 260 (NCI4th)\u2014 trustee\u2019s exercise of fiduciary duty \u2014 prudent man standard applicable\nThe trial court did not err in applying the prudent man standard of N.C.G.S. \u00a7 36A-2 to a trustee\u2019s exercise of his fiduciary duty, and that standard was not superseded by a grant of discretion in the trust document; furthermore, the court did not err in finding that the trustee breached his duty by failing to balance the investment of the trust\u2019s assets between income and growth investments and by favoring the interests of the life beneficiaries over those of the remaindermen.\nAm Jur 2d, Trusts \u00a7\u00a7 391 et seq.\nDuty of trustee to diversify investments, and liability for failure to do so. 24 ALR3d 730.\n5. Trusts and Trustees \u00a7 291 (NCI4th)\u2014 breach of fiduciary duty \u2014 statute of limitations \u2014 time from which facts known by plaintiff \u2014 failure to make findings \u2014 remand\nPlaintiff\u2019s cross-claim for breach of fiduciary duty must be remanded for a determination, from the evidence already presented, as to when plaintiff knew or by the exercise of due diligence should have known of the facts giving rise to his claim and for the legal conclusions to be drawn therefrom with respect to the affirmative defenses of the statute of limitations, estoppel, laches, ratification, and waiver.\nAm Jur 2d, Trusts \u00a7\u00a7 712 et seq.\nAppeal by defendant Sarah G. Pittman from judgments entered 30 April 1993 and 24 May 1993 and from order entered 2 June 1993 by Judge Wiley F. Bowen in Cumberland County Superior Court. Heard in the Court of Appeals 26 September 1994.\nThe facts giving rise to these two actions which were consolidated in the trial court, and the procedural history leading to this appeal, follow: Dr. R. L. Pittman died testate in 1963. His will created a testamentary trust (hereinafter \u201cthe trust\u201d), and he appointed his son, Raymond L. Pittman, Jr. (hereinafter \u201cRaymond Pittman\u201d), as trustee. The trust established three classes of beneficiaries: a minor class of life beneficiaries consisting of Dr. Pittman\u2019s sister and widow, whose interests are not an issue in this case; a main class of life beneficiaries consisting of Raymond Pittman, who w\u00e1s to receive no less than 75% of the trust income during his lifetime, and Raymond Pittman\u2019s children, who upon reaching designated ages were to receive the remaining trust income during the lifetime of Raymond Pittman; and a class of remainder beneficiaries, consisting of Raymond Pittman\u2019s children, who were to divide the trust corpus in specified shares upon his death. The trust instrument gave the trustee the power to manage the trust estate as he in his \u201csole discretion shall deem to be for the best interest of the beneficiaries . . ., and ... to do any and all things whatsoever which [he] in [his] sole discretion may deem advisable or needful for the effectuation of the purposes of the trust and for the promotion, conservation and protection of the trust estate and the interest of the beneficiaries thereunder.\u201d\nRaymond Pittman was first married to Jeannette S. Pittman, and they had two children before divorcing in 1966: Raymond Lupton Pittman, III (hereinafter \u201cLupton Pittman\u201d) and Jeannette G. Pittman (Ford) (hereinafter \u201cJeannette Ford\u201d). Raymond Pittman then married Sarah Guy Pittman (hereinafter \u201cSarah Pittman\u201d); they had one daughter, Sarah Della Pittman (hereinafter \u201cDella Pittman\u201d). Raymond Pittman also adopted Sarah Pittman\u2019s daughter from a previous marriage, Crystal Diane Pittman (hereinafter \u201cCrystal Pittman\u201d).\nIn June 1991, Raymond Pittman instructed the custodian of the trust assets to begin making income distributions from the trust to Crystal Pittman. He died in August 1991, leaving his entire estate to his widow, Sarah Pittman, and appointing her as his executrix.\nOn 4 December 1991, Crystal Pittman instituted the first of these actions. She sued the successor trustee of the trust, the beneficiaries of the trust, and her mother, as executrix of the estate of Raymond Pittman, seeking a remainderman\u2019s proportionate share of the trust corpus and such share of the income distributions of a life beneficiary as she would have been entitled had she been considered a natural child of Raymond Pittman. In their answers, Lupton Pittman and Jeannette Ford asserted crossclaims against Sarah Pittman, as executrix, alleging that Raymond Pittman had breached his fiduciary duty as trustee by directing income distributions to Crystal Pittman. Lupton Pittman also asserted crossclaims against the estate alleging that Raymond Pittman had breached his fiduciary duty by depleting the corpus of the trust in favor of the life beneficiaries to the detriment of the remaindermen, and that he had been negligent in the performance of his duties as trustee. In addition, Lupton Pittman filed a third party complaint against Sarah Pittman individually, alleging that she had convinced Raymond Pittman to include Crystal Pittman as an income beneficiary of the trust. Lupton Pittman sought to assert claims for undue influence, duress, tortious interference with a fiduciary relationship, and punitive damages.\nOn 5 June 1992, Lupton Pittman filed a second action, which is the other case involved in this appeal, against Sarah Pittman, individually and as executrix of the estate of Raymond Pittman. In this second action, Lupton Pittman alleged claims for breach of contract and conversion of certain property.\nIn October 1992, the parties to the suit brought by Crystal Pittman entered into a settlement agreement with respect to her interest in the trust. As a part of that agreement, Lupton Pittman dismissed with prejudice his crossclaims against the executrix for Raymond Pittman\u2019s negligence and breach of fiduciary duty for distributing trust income to Crystal Pittman. He also dismissed the claims contained in his third party complaint against Sarah Pittman, individually, for undue influence and duress. Jeannette Ford also dismissed her crossclaims against the executrix. Although no order appears in the record on appeal, the two cases were apparently consolidated and extensive discovery was conducted by the parties.\nIn February 1993, Sarah Pittman moved for summary judgment as to all of Lupton Pittman\u2019s remaining claims. In March 1993, Lupton Pittman voluntarily dismissed, without prejudice, the breach of contract claims contained in the second action. Approximately four weeks before the trial, Superior Court Judge Coy E. Brewer, Jr., denied summary judgment specifically as to the remaining claims in Lupton Pittman\u2019s third party complaint, entered various discovery orders, and reserved the remaining summary judgment motions for Judge Bowen, who was assigned to preside at the trial commencing 12 April 1993.\nOn 8 April 1993, Sarah Pittman moved to dismiss Lupton Pittman\u2019s remaining claims pursuant to G.S. \u00a7 1A-1, Rule 12(b)(7) for failure to join Jeannette Ford and Della Pittman as necessary parties. She moved, alternatively, to continue the trial in order that the two could be joined as parties. Upon commencement of trial, and after hearing arguments on the pending motions, the trial judge announced that he would proceed with the evidence, implicitly denying the motion.\nThe trial was conducted by the court without a jury. At the conclusion of the evidence, the court dismissed the claims contained in Lupton Pittman\u2019s third party complaint against Sarah Pittman individually for tortious interference with fiduciary relationship and for punitive damages, as well as the claim for conversion contained in the complaint filed in the second suit. As to the sole remaining claim for relief contained in Lupton Pittman\u2019s crossclaim against Sarah Pittman in her capacity as executrix of Raymond Pittman\u2019s estate, the trial court found and concluded that Raymond Pittman had breached his fiduciary duty to the remainder beneficiaries of the trust and that Lupton Pittman had been damaged in the amount of $750,000. Judgment was entered in favor of Lupton Pittman against the Estate of Raymond Pittman in the amount of $750,000, and impressing a constructive trust on an undivided interest in certain real estate. The trial court subsequently found that Sarah Pittman had engaged in mismanagement and had acted in bad faith in the defense of the action and entered an additional judgment against her individually for Lupton Pittman\u2019s costs and attorneys\u2019 fees incurred in prosecuting the claim. Sarah Pittman\u2019s subsequent motions for relief from the judgments were denied and Lupton Pittman was awarded additional attorneys\u2019 fees. Sarah Pittman appeals.\nWyrick Robbins Yates & Ponton, L.L.P., by Samuel T Wyrick, III, and L. Diane Tindall, for plaintiff-appellee.\nThe Law Firm ofH. Terry Hutchens, by H. Terry Hutchens, and John M. Owens for defendant-appellant." }, "file_name": "0580-01", "first_page_order": 612, "last_page_order": 624 }