Woodward v. Woodward

Mary Woodward established the Mary Woodward Trust in 1972 for the benefit of her grandchildren and named Orator Woodward (defendant) as trustee. In 1996, Gregor Woodward (plaintiff), one of the grandchildren, sued Orator for breach of trust, alleging Orator had failed to produce accountings and had misused trust assets. The trial court dismissed Gregor’s complaint. In 2002, Orator terminated the Mary Woodward Trust and transferred all its assets into two new trusts, the El Bravo Trust and the Serena Woodward Trust (the new trusts). Gregor was not a beneficiary of either new trust. Orator produced his first trust accounting for all three trusts in October 2011, whereby Gregor learned the Mary Woodward Trust had been terminated and replaced with the two new trusts for which he was not a beneficiary. The accounting contained the required notice of the six-month statute of limitations on raising claims related to matters disclosed in the accounting. Gregor commenced an action in April 2012, within the six-month window, alleging that Orator had breached his fiduciary duty by terminating the Mary Woodward Trust in favor of the two new trusts. Orator countered, arguing that (1) res judicata barred Gregor’s claim because he had previously and unsuccessfully sued Orator for breach of trust in 1996; and (2) the trust transfers were made in 2002, and laches therefore barred Gregor’s claim because it was not raised within the statute of limitations. The trial court held that res judicata and laches barred Gregor’s claim. Gregor appealed.