Utah Supreme Court
Can trusts be held liable for trustees' sexual misconduct under respondeat superior? M.J. v. Wisan Explained
Summary
M.J., a former FLDS Church member, sued the UEP Trust and Warren Jeffs alleging she was forced into an underage marriage at fourteen and subsequently sexually assaulted. The Trust moved for summary judgment on multiple grounds, which the district court denied.
Practice Areas & Topics
Analysis
The Utah Supreme Court’s decision in M.J. v. Wisan addresses complex questions of vicarious liability when trustees commit tortious acts, including sexual misconduct, in their role as fiduciaries.
Background and Facts
M.J., a former FLDS Church member, alleged that at age fourteen she was forced to marry her first cousin Allen Steed at the direction of Warren Jeffs, who served as both Church president and UEP Trust trustee. M.J. claimed Steed repeatedly sexually assaulted her while they resided on Trust property, and that Jeffs refused to allow divorce or separate living arrangements. She sued both Jeffs and the Trust, asserting various tort claims and seeking to hold the Trust vicariously liable under respondeat superior and through reverse veil-piercing theories.
Key Legal Issues
The Trust moved for summary judgment on four grounds: (1) the reformed Trust was a new entity not liable for predecessor acts under Snow, Christensen & Martineau v. Lindberg; (2) M.J.’s release of claims against Steed foreclosed Trust liability; (3) respondeat superior elements were not satisfied; and (4) reverse veil-piercing should be rejected.
Court’s Analysis and Holding
The court affirmed denial of summary judgment on most issues but granted it on reverse veil-piercing. Significantly, the court held that under Utah Code § 75-7-1010(1), trusts are liable for trustees’ acts performed “in the course of administering” the trust, incorporating traditional respondeat superior standards. The court rejected the Trust’s argument that sexual misconduct categorically falls outside employment scope, noting that given Jeffs’s unique role and the FLDS practice of arranging underage marriages, a reasonable factfinder could conclude his acts were within his trustee duties. However, the court rejected reverse veil-piercing because M.J. had adequate legal remedies through respondeat superior and innocent beneficiaries could be harmed.
Practice Implications
This decision clarifies that Utah’s Uniform Trust Code creates broad potential for trust liability when trustees act within their fiduciary roles, even for egregious conduct. Practitioners should focus on whether challenged conduct occurred “in the course of administering” the trust rather than traditional employment scope factors like time and place. The decision also establishes that reverse veil-piercing, while recognized in Utah, requires showing inadequate legal remedies and minimal harm to innocent parties.
Case Details
Case Name
M.J. v. Wisan
Citation
2016 UT 13
Court
Utah Supreme Court
Case Number
No. 20140189
Date Decided
March 23, 2016
Outcome
Affirmed in part and Reversed in part
Holding
A trust may be held vicariously liable under respondeat superior for a trustee’s tortious acts performed in the course of administering the trust, even when those acts involve sexual misconduct, if the acts were conducted within the scope of the trustee’s duties as perceived under the trust’s purposes.
Standard of Review
The court’s summary judgment decisions are reviewed de novo
Practice Tip
When asserting respondeat superior claims against trusts under the Uniform Trust Code, focus on whether the trustee’s conduct was performed ‘in the course of administering the trust’ rather than traditional employment scope factors.
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