Hastings v. PNC Bank

Marion Brevard established a trust appointing a predecessor of PNC Bank (defendant) as trustee. When the sole beneficiary died, the remainderman had also died, so the trust directed distribution to his four children: Barbara Hastings, Cort Kirkwood, Ann Robinson (plaintiffs), and their brother. PNC sent each beneficiary a letter with a release agreement to sign it if they approved of an enclosed trust accounting. The letter said “[u]pon receipt of the executed Releases from all of the [beneficiaries], we will be in a position to have the cash disbursed.” The agreement specified that each beneficiary “[r]eleases, indemnifies, and holds PNC in its corporate capacity and as Trustee, harmless from and against any and all losses, claims, demands, surcharges, causes of action, costs and expenses (including legal fees), which may arise from its administration of the Trust, including . . . all decisions made and actions taken or not taken with regard to the administration of the Trust.” Robinson’s husband, an attorney, objected to the agreement as overly favoring PNC, overly broad, and unlawful, contending PNC could not demand its execution before distribution. PNC responded that executing the release was not required because it could petition for a judicial termination to obtain the protection the release sought, explaining that most beneficiaries preferred terminating their trusts by private agreement instead of through court. Three beneficiaries sued, challenging the demand and requesting prompt distribution. PNC countered it had only requested the release, and subsequently PNC filed an inventory and final accounting to terminate the trust judicially. The court granted PNC judgment, reasoning no Maryland law prevented a trustee from requesting a release agreement. The beneficiaries appealed. After the appellate court affirmed, Maryland’s highest court granted certiorari.