Kim A. Lund, as trustee and beneficiary of the Revocable Trust of Kim A. Lund; as co-trustee and beneficiary of the Trusts created by the Trust Agreement of Russell T. Lund, Jr. dated February 14, 1990 for the benefit of Kim Lund; as beneficiary of the Trusts created by the Irrevocable Trust Agreement of Russell T. Lund dated July 8, 1969; and as beneficiary of the Qualified Marital Trust under Complete Amendment to Trust of Russell T. Lund, dated September 21, 1984, Respondent,
Russell T. Lund, III, et al., Appellants.
Hennepin County District Court File No. 27-CV-14-20058
Richard T. Ostlund, Janel M. Dressen, Shannon M. Awsumb,
Anthony Ostlund Baer & Louwagie P.A., Minneapolis,
Minnesota (for respondent)
J. Wells, Jaime Stilson, Timothy J. Droske, Dorsey &
Whitney LLP, Minneapolis, Minnesota (for appellants)
Jonathan M. Bye, Kim M. Ruckdaschel-Haley, Mavis J. Van
Sambeek, Ballard Spahr LLP, Minneapolis, Minnesota (for
amicus curiae The Probate and Trust Law Section of the
Minnesota State Bar Association)
Considered and decided by Cleary, Chief Judge; Bjorkman,
Judge; and Rodenberg, Judge.
there is no genuine issue of material fact that unfairly
prejudicial conduct occurred, a district court may, without
conducting an evidentiary hearing, exercise its equitable
authority to grant a buy-out under Minn. Stat. §§
302A.751, 322B.833 (2014).
Minn. Stat. § 501C.0709 (2018), as supplemented by the
common law, governs a trustee's entitlement to
reimbursement out of trust property for attorney fees and
expenses incurred in administration of the trust.
challenge the district court's grant of a buy-out of
respondent's business interests, valuation of the
interests, removal of a trustee, and denial of appellant
trustees' motion for attorney fees and costs. By
cross-appeal, respondent/cross-appellant challenges the
district court's grant of summary judgment on her
breach-of-fiduciary-duty claims against appellant trustees,
denial of her request to remove a second trustee, and
determination of the valuation date for the buy-out of her
interests. We affirm all rulings except the district
court's denial of appellant trustees' motion seeking
reimbursement of their attorney fees and costs from
applicable trusts. On this issue, we remand to the district
court for reconsideration of the motion under the correct
appeal arises from decades-long friction among the Lund
siblings, grandchildren of grocery-chain founder Russell T.
Lund Sr., over one sibling's desire to divest her various
trusts of interests in three privately held Lund family
business entities. Like her three siblings, respondent Kim A.
Lund (Kim) is an indirect 25% owner, through certain
trusts, of appellants Lunds, Inc., Lund Food Holdings, Inc.
(LFHI), and Lund Real Estate Holdings, LLC (LREH) (together,
the Lund entities). Appellant Russell T. Lund III (Tres) is
the Lund entities' chairman, president, and CEO. He is
the only one of the four Lund siblings who is actively
involved in running the family businesses.
December 2014, Kim commenced this litigation against
appellants Tres, the Lund entities, trustee Stanley Rein, and
directors Gene Gerke and Mitch Avery, alleging breach of
fiduciary duty, unfairly prejudicial conduct under Minn.
Stat. §§ 302A.751, 322B.833, and civil
conspiracy. She sought damages, a buy-out of her interests or
alternatively the sale of the Lund entities, removal of Tres
and Rein as trustees of her trusts,  attorney fees, expenses, and
2016, Kim filed a buy-out motion under Minn. Stat. §
302A.751 and Minn. Stat. § 322B.833,  and appellants
moved for summary judgment. The district court held a hearing
on these and other motions in August. In an order filed on
October 4, the district court granted Kim's buy-out
motion, denied appellants' summary-judgment motion on
Kim's unfairly-prejudicial-conduct and equitable-relief
claims; and granted appellants' summary-judgment motion
on Kim's breach-of-fiduciary-duty and civil-conspiracy
claims. The district court denied appellants' request to
file a motion to reconsider the October 4 order.
another hearing, the district court set the valuation date
for Kim's interests as October 2, 2016, the close of the
Lund entities' 2016 fiscal year. When the parties failed
to agree on fair value and other buy-out terms within the
statutory time period, the district court held a weeklong
court trial on these terms and Kim's trustee-removal
claims. The district court ultimately determined the fair
value of the Lund entities was $191.5 million on October 2,
2016, and the fair value of the interests held by Kim's
trusts was $45.2 million. The district court granted Kim's
request to remove Tres as trustee of her Russ Jr. and
Canadian Oil trusts, but denied Kim's request to remove
Rein as trustee of her Canadian Oil trusts. Tres and Rein
filed a motion for trustees' attorney fees and costs,
which the district court denied. This appeal follows.
the district court abuse its discretion in granting a buy-out
under Minn. Stat. §§ 302A.751, 322B.833?
the district court abuse its discretion in setting the
valuation date or in determining fair value?
Did the district court err in determining Kim's
breach-of-fiduciary-duty claims against appellant trustees
fail as a matter of law?
the district court abuse its discretion in granting in part
and denying in part Kim's trustee-removal claims?
the district court err in concluding the common-law standard
for an award of trustees' attorney fees and costs is
superseded by Minn. Stat. § 501C.1004 (2018)?
The district court did not abuse its discretion by
granting a buy-out under Minn. Stat. §§ 302A.751,
primary argument on appeal is that the district court erred
as a matter of law in granting Kim's buy-out motion. They
contend a decision on a buy-out motion is akin to summary
judgment or a directed verdict and therefore subject to de
novo review. Kim argues the proper standard of review is