by Dan Conlisk
In M.J. v. Wisan, 2016 WL 1165669 (Ut. March 23, 2016), the Utah Supreme Court recently held that a trust affiliated with the Fundamentalist Church of Jesus Christ of Latter-Day Saints (the “FLDS Church” or the “Church”) could be held liable for the tortious conduct of Warren Jeffs, the Church’s former president and the former president of the trust’s Board of Trustees. In M.J., the predecessor of the FLDS Church established the United Effort Plan Trust (the “Trust”) in 1942. Id. at *1. Church members funded the Trust by transferring their property to it and, in turn, the Trust was to be managed to address the members’ needs. Id. The Trust was also administered for the express purpose of furthering Church doctrine, including plural marriage involving underage girls. Id. at **1-2.
Against this background, in 2001, M.J., a 14 year old Church member and beneficiary of the Trust, was forced to marry her older first cousin, Allen Steed. Id. at *3. Jeffs performed the wedding. Id. Steed and M.J. thereafter resided on Trust property. Id. M.J. claimed that Steed repeatedly sexually assaulted and raped her while on Trust property. Id. Despite repeated requests, Jeffs would neither allow her to divorce Steed nor to live separately from him on other property of the Trust. Id. None of the other members of the Trust’s Board of Trustees objected to Jeffs’s conduct. Id.
In 2007, M.J. sued Jeffs for intentional infliction of emotional distress, outrage and negligence. She sought to hold the Trust liable for Jeffs’s actions under the doctrine of respondeat superior. Id. Generally, “[u]nder the doctrine of respondeat superior, an employer may be held vicariously liable for the acts of its employee if the employee is [acting] in the course and scope of his employment at the time of the act giving rise to the injury.” Sutton v. Byer Excavating, Inc., 271 P.3d 169, 171 (Ut. 2012). Likening the Trust to an employer, in M.J., the Utah Supreme Court’s primary analysis of the respondeat superior issue focused upon whether Jeffs was acting within the scope of his Trust “employment” in his dealings with M.J. (rendering the Trust liable for his conduct) or whether he was undertaking an “independent course of conduct” outside the scope of his employment (for which the Trust would not be liable).
The Utah Supreme Court held that Jeffs’s conduct could be considered as being within the scope of his duties as Trustee of the Trust. It explained:
Given Jeffs’s unique role as leader of the FLDS Church, and in light of the unusual, troubling function of plural marriage involving young brides in the FLDS culture, we hold that a reasonable factfinder could conclude that Jeffs was acting within the scope of his role as a trustee in directing Steed to engage in sexual activity with M.J.
2016 WL 1165669 at *12; see also id. at *13 (“Jeffs was called upon to administer the Trust in accordance with the doctrines and principles of the FLDS Church. Those doctrines and principles, according to M.J.’s allegations and evidence in the record, included the arrangement of plural, underage marriages. Thus, as abhorrent and troubling as this may appear to be, there is a basis in the record for the conclusion that Jeffs’s acts were aimed in part at advancing the interests of the Trust as he perceived them. And there is also reason to conclude that Jeffs’s conduct was ‘of the general kind’ he was expected ‘to perform’ as trustee.”).
In so holding, the Court reasoned that – although Utah common law did not allow a trust to be held vicariously liable for the acts of a trustee – Utah’s enactment of the Uniform Trust Code altered this common law regime. Id. at *9. The Court relied on §75-7-1010(1) of the Utah Uniform Trust Act – the same as the Missouri Uniform Trust Code in relevant part – in reaching this conclusion. Id. But Subsection 1010(1) provides: “[e]xcept as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee’s fiduciary capacity in the course of administering the trust if the trustee in the contract disclosed the fiduciary capacity.” (Emphasis added).
The Court focused on “in the course of” as the traditional formulation of the standard for vicarious liability under the doctrine of respondeat superior and, based upon the presence of this language, “interpret[ed] the Uniform Trust Act as incorporating the established standard of respondeat superior liability.” Id. Thus, it concluded, “under section 1010 of that act, a trust is liable for the acts of a trustee when the trustee was acting within the scope of his responsibility as a trustee.” Id.
In seeking to avoid liability for Jeffs’s actions, the Trust argued that equitable considerations should preclude the application of the respondeat superior doctrine. Primarily, the Trust urged the Court to consider the effect that imposition of liability would have on the Trust’s innocent beneficiaries. Id. at *13. The Court flatly rejected this argument, reasoning that the Uniform Trust Act required the imposition of liability upon the trust for the misconduct of a trustee: “[u]nder that statute an injured party has a cause of action against a trust for actions of a trustee ‘in the course of administering a trust.’ UTAH CODE § 75–7–1010(2). That provision leaves no room for us to second-guess the imposition of vicarious liability on a trust for the acts of a trustee.” 2016 WL 1165669 at *14. Subsection 1010(2) provides: “a trustee is personally liable for torts committed in the course of administering a trust, or for obligations arising from ownership or control of trust property, including liability for violation of environmental law, only if the trustee is personally at fault.”
As their language makes clear, both subsections 1010(1) and 1010(2) of Utah’s Uniform Trust Act govern the personal liability of a trustee. Subsection 1010(1) concerns contractual liability of trustees acting in their fiduciary capacity – a subject unrelated to any issues in M.J. Under subsection 1010(2), Jeffs is personally liable because the torts he committed in the course of administering the trust were unquestionably his own fault. Neither subsection directly addresses the imposition of vicarious liability upon a trust for the tortious acts of a trustee. The Utah Supreme Court’s reliance on those sections is based on substantial extrapolation – that regardless of whether a trustee is liable on a contract or in tort for his/her own conduct – the trust must be if the conduct is undertaken in the course of administering the trust.
Whether the Court’s interpretation of these portions of the Utah Uniform Trust Act is correct may be an appropriate subject for scholarly analysis and contemplation. But the import of the decision is clear: trusts cannot cavalierly claim immunity for the tortious conduct of their trustees. The extent to which this holding might apply in less extreme factual situations is a matter for future litigation.
Nonetheless, M.J. is another example of the legal and factual complexity that fiduciary and trust disputes routinely involve. In turn, it highlights the importance of knowledgeable and experienced legal representation in those disputes.
 The Court considered several other issues as well.
 See Mo. Rev. Stat. §456.10 – 1010.1
 The Missouri Uniform Trust Code is the same, See Mo. Rev. Stat. ¶456.10 – 1010.2.