United States District Court, D. Arizona
Terry C. Danziger, Plaintiff,
University of Louisville, et al., Defendants.
RUSSEL HOLLAND UNITED STATES DISTRICT JUDGE
Terry C. Danziger, is the residual beneficiary of her
husband, Dr. Franklin S. Danziger's revocable living
trust IRA. Defendant Merrill Lynch, Pierce, Fenner &
Smith, Inc., administered the Danziger IRA and, a dispute
having arisen between Mrs. Danziger and defendants University
of Louisville and University of Louisville Foundation, Inc.,
$500, 000 was deposited in the Registry of the Court by
Merrill Lynch to fund Dr. Danziger's gift of $500, 000 to
the University defendants if they prevailed. In due course,
the parties reached a binding settlement with respect to
distribution of the $500, 000 held by the court: the
University defendants are to receive $350, 000 and Mrs.
Danziger is to receive $150, 000.
held in the Registry of the Court earn interest; and, as of
September 23, 2019, interest in the amount of $7, 464.58 had
accrued on the funds held by the court. In reaching their
settlement, the parties apparently did not realize that funds
deposited in the Registry of the Court would earn interest.
The parties have endeavored but have failed to resolve their
differences concerning the earned interest. Each of plaintiff
and the University defendants contend that they should
receive all of the interest. A brief telephonic conference
with the court led to the establishment of a briefing
schedule with respect to accrued interest. But before taking
up the substance of the parties' briefing, there are
procedural matters which have intervened.
the court's conference with counsel, Terry C. Danziger,
pro se trustee, moved to compel distribution of
interest earned on the deposit with the court to Mrs.
Danziger as trustee. Mrs. Danziger as trustee would have all
the interest disbursed to seven sub-trusts and eight
qualified beneficiaries. Mrs. Danizger as trustee moves to be
allowed to file with the court electronically,  and seeks pro
se party electronic notification. The University
defendants move to strike Mrs. Danziger's motion as trustee
for distribution of interest. Taking a cue from the latter
motion, Mrs. Danziger as trustee filed a motion to intervene
with respect to the interest dispute. The latter motion was
followed by a second motion by Mrs. Danziger as trustee, to
allow electronic filing. Mrs. Danziger as trustee next filed a
brief in support of her motion for distribution
of interest and motion to intervene. The
University defendants have filed a motion to strike the
trustee's brief,  and have responded to the
trustee's motion to intervene.Mrs. Danziger as trustee
opposed the University defendants' motion to
the University defendants request that the court enter a
scheduling order with respect to the foregoing. The
University defendants seek expedited consideration of the
foregoing request. Expedited consideration is granted.
However, the University defendants' request for a
scheduling order is denied. At this point, a scheduling order
is not necessary.
University defendants' several motions to
strike are granted. Mrs. Danziger as
trustee's motion to compel distribution of interest to
her as trustee and to several trusts and her motion to
intervene, as well as the related motions having to do with
electronic filing, are denied.
non-lawyer trustee cannot appear pro se to represent
a trust or trust beneficiaries. Alpha Land Co. v.
Little, 238 F.R.D. 497, 502 (E.D. Cal. 2006);
Knoefler v. United Bank of Bismark, 20 F.3d
347, 348 (8th Cir. 1994); and C.E. Pope Equity Trust v.
United States, 818 F.2d 696, 697 (9th Cir. 1987). The
trust and/or trust beneficiaries must be represented by an
attorney. Mrs. Danziger has an obvious interest in these
proceedings and is represented by an attorney with respect to
her claim for distribution of interest earned on funds held
in the registry of the court.
with the briefing schedule established by the court,
the court has received statements of position with respect to
the interest dispute from the University defendants,
plaintiff Terry C. Danziger,  and the University
defendants' opposition to plaintiff's position
statement. Terry C. Danziger, trustee, pro se, has
also filed a response to the University defendants'
position paper with respect to the distribution of interest,
and a reply with respect to distribution
of interest. These filings by Mrs. Danziger as
trustee are stricken for the same reason that the
trustee's other, like filings were stricken.
court has carefully considered the plaintiff's and
University defendants' respective arguments concerning
the division of accrued interest. Neither party relies upon
any legal authority but, rather, expressly or by inference
suggests that an equitable division of the accrued interest
should be accomplished. Plaintiff contends that she should
receive all of the interest money because - but for the
deposit of $500, 000 with the Registry of the Court - she
would have had the benefit of the earnings of those funds
until such time as the dispute with respect to the 500, 000
gift was resolved. Similarly, the University defendants argue
that they should receive all of the accrued interest because
they should have received “the $500, 000 [gift] from
Dr. Danziger's IRA three years ago.”
there had been no disagreement about the $500, 000 gift, the
University defendants would have received the $500, 000 and
would have invested it. The University defendants would have
been entitled to all of those earnings. On the other hand,
had there been no gift to the University defendants, or if
the final outcome of this litigation were that the University
defendants should receive no part of the $500, 000, plaintiff
would have been in a position to benefit from all of the
earnings of the $500, 000. This case did not follow either of
those possible courses; and, as a consequence, neither
plaintiff nor the University defendants are entitled to all
of the interest which the $500, 000 has earned.
the parties apparently supposed, the deposit of funds with
the court had not earned interest, then the parties would
presumably proceed with their settlement, with plaintiff
receiving $150, 000 and the University defendants receiving
$350, 000. In fact, the money available for distribution
exceeds the parties' expectations as to the total amount
of money they would receive as a result of the settlement. In
consideration of the foregoing and the parties'
respective arguments, the University defendants' motion
for an award of accrued interest is granted in part and
denied in part. The court concludes that the equitable
resolution here is to divide the interest money earned while
the parties negotiated on the same 70%-30% basis agreed to
for the division of the $500, 000.
already done, the parties shall promptly proceed to document
their settlement and provide the court with specific
instructions regarding the payees of the $350, 000 and $150,
000. Upon receipt of that information, the court will direct
the distribution of the funds presently held in the Registry
of the Court, ...