Justia Virginia Supreme Court Opinion Summaries

Appellant Sara Forbes (Trustee) created a trust to convey a parcel of real estate to the City of Newport News in which she acted as trustee. The trust provisions prohibit the trustee from selling the property except to a condemner in the event the property is condemned. The provisions require the trustee to distribute all net income generated by the trust to grantor for her lifetime. The principal of the trust would be distributed to Appellee Riverside Healthcare Association (Riverside). In 2008, the Commonwealth acquired a portion of the property in trust by certificate of take. Because the trustee and Riverside disagreed as to whether the compensation received in the eminent domain action should be allocated to principal or income, they entered an escrow agreement directing the escrow agents to hold the condemnation compensation and disburse the fund in accordance with future directions from the trustee and Riverside. Subsequently, the Trustee sought declaratory relief against Riverside asking that the condemnation compensation be paid as income for distribution to the grantor according to the terms of the trust. The parties filed cross-motions for summary judgment on the issue of who got the compensation; the circuit court granted partial summary judgment in favor of the Trustee. Riverside appealed, seeking Supreme Court review of whether the state Uniform Principal and Income Act controlled the distribution of the condemnation compensation, and whether the remainder beneficiary could bring suit seeking an equitable accounting of the trust. The Court found the lower court did not err in granting partial summary judgment to the Trustee, but reversed the lower court's ruling on the equitable accounting issue, and remanded for further proceedings.