Trust Agreement Did Not Empower Trustee To Compel Arbitration Of Claims He Breached Fiduciary Duties

In Burgess v. Johnson, the Tenth Circuit affirmed a lower court’s decison refusing to impose upon trust beneficiaries an obligation to arbitrate claims that the trustee wrongfully took trust assets and spent trust money. The trustee argued that he could compel arbitration because the trust instrument authorized the trustee “[t]o compromise, contest, submit to arbitration or settle all claims by or against, and all obligations of, the Trust estate or the Trustees[.]”

Rejecting this argument, the Tenth Circuit held that “the Arbitration Provision only allows the Trustee to agree to resolve disputes through arbitration and does not empower him to compel others—even trust beneficiaries—to submit their disputes to arbitration. The Trustee cannot invoke the Arbitration Provision to compel Plaintiffs to arbitrate this dispute.”

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