United States District Court, D. New Hampshire
Evan W. Gray
Chester L. Gray, III
M. Hamel, Esq. Ralph F. Holmes, Esq. Roy S. McCandless, Esq.
Neil B. Nicholson, Esq. Andrea Jo Schweitzer, Esq.
A. DICLERICO, JR. UNITED STATES DISTRICT JUDGE
Gray (“Evan”) brought suit against Chester L.
Gray, III (“Skip”), as executor of the estate of
Chester L. Gray, Jr., as sole trustee of a trust (the
“CLG Trust”) created by Chester, and as
co-trustee of a trust (the “BJG Trust”) created
Barbara Gray. Evan alleges that Chester, prior to his
death, breached his fiduciary duties while he was trustee of
the BJG Trust. Evan also alleges that Skip has breached his
fiduciary duties as trustee of the CLG Trust.
filed a third-party complaint against the co-trustees of the
BJG Trust, who are himself, Scott Gray (a third brother), and
Evan, seeking indemnification for any liability,
attorneys' fees, and costs arising from Evan's suit.
Skip also seeks a declaratory judgment to enforce certain
terms of the BJG Trust. Evan then filed an amended complaint.
In his Amended Answer to the Amended Complaint and his Answer
to the Third-Party Complaint, Skip alleges a counterclaim and
a crossclaim, each with three parts, against Evan, seeking
moves to strike and dismiss Skip's Third-Party Complaint
and moves to dismiss Skip's counterclaim and crossclaim.
suit involves three brothers, Skip, Scott, and Evan Gray. In
1996, the brothers' parents, Barbara and Chester Gray,
created, respectively, the “BJG Trust” and the
“CLG Trust.” In 2011, they restated the terms of
their respective trusts by executing the trust documents at
and Chester Gray served as the initial co-trustees of both
the CLG Trust and the BJG Trust, which were revocable until
their respective settlor's death. The CLG Trust includes
among its assets valuable real estate located in Grafton and
Springfield, New Hampshire.
the general purpose of the CLG Trust to maintain and hold the
Grafton and Springfield real estate for Barbara and Chester
Gray's descendants “as long as is reasonably and
prudently possible.” Doc. 15-1 at 5. To that
end, the CLG Trust provides for the creation of a
“Maintenance Fund” consisting of the real estate
and $820, 000, adjusted for inflation, after Chester's
death. After all the provisions of the CLG Trust
have been satisfied, the remainder of the CLG Trust's
assets are to be distributed equally among Skip, Scott, and
Trust has no expressly stated purpose other than to provide
for the disposition of Barbara Gray's assets after her
death. In addition, Article 2.4.A of the BJG Trust provides
If at the time of the death of my husband and myself, the
amount of liquid assets held in the continuing trust for real
estate located in Grafton and Springfield, New Hampshire as
set forth in my husband's trust is less than [$820, 000
plus calculated inflation], I direct that my trustee
distribute from my trust an amount of property that will
increase the sums held in said continuing trust of my
husband's to [$820, 000 plus calculated inflation].
Doc. 15-2 at 5. The BJG Trust documents require that the
remaining trust property be distributed equally among Skip,
Scott, and Evan. In short, the BJG Trust must make up any
deficit in the CLG Trust's Maintenance Fund that exists
“at the time of the death of” Chester and
Barbara, and then distribute the remaining money or assets
equally among Skip, Scott, and Evan.
trusts contained various contingencies for succession of
trustees depending on the order in which Barbara and Chester
died and whether any of their children predeceased them. As
it happened, Barbara Gray died in 2013. Upon his wife's
death, Chester Gray became sole trustee of both trusts.
Although the BJG Trust became irrevocable, Chester retained a
lifetime interest in it.
as to the BJG Trust, Chester was permitted to receive any
income from the trust paid “in convenient
installments.” Doc. 15-2 at 4. He was also
permitted to receive “from the principal of the trust
from time to time such amounts as are in [the] trustee's
discretion necessary for his support and maintenance in his
accustomed manner of living and for his health care, ”
after taking into account any other “resources
available to him, ” including the income from the
trust. Id. The “power to use principal for
[Chester's] benefit shall not be exercised without the
consent of an independent trustee or one of [Barbara's]
remained as trustee of both the BJG Trust and CLG Trust until
his death in 2017. Upon their father's death, Skip,
Scott, and Evan became co-trustees of the BJG Trust; Skip
became sole trustee of the CLG Trust, which became
irrevocable upon the death of Chester. Skip was ...