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A 3rd District judge has ordered the state to cover about $4.7 million in past-due fees to the fiduciary overseeing a polygamous sect's property trust.
In a ruling issued Monday, Judge Denise Lindberg rejected the Utah Attorney General Office's argument that acting on fiduciary Bruce R. Wisan's request for payment violated a temporary stay in the United Effort Plan Trust case, and she ordered the state to pay Wisan until the trust is able to reimburse the costs.
Utah Attorney General Mark Shurtleff said his office will now decide whether to appeal what he called a "strange and surprising ruling" that included "very personal and very biased ... misstatements of fact."
Since 2008, Wisan, his attorneys and other professionals hired by the fiduciary have received only a fraction of the money owed them for their work on behalf of the trust, which holds virtually all property in Hildale, Utah, and Colorado City, Ariz., Lindberg said.
The UEP Trust, formed nearly 70 years ago by the group now known as the Fundamentalist Church of Jesus Christ of Latter-Day Saints, "faces the real and substantial threat that it will be left without someone to manage it, attorneys to defend it, or other professional assistance," Lindberg wrote.
She said the trust's "dire financial circumstances" have increased since the FLDS initiated a federal lawsuit objecting to its takeover by the state and the ongoing failure of residents to pay a $100 a month occupancy fee approved by the court.
Wisan filed a motion in May asking Lindberg to order the state of Utah to pay his costs, expenses and reasonable attorney fees. Lindberg said it was the AG's Office that recommended Wisan for the fiduciary post, initially asked the court to consider his fees a "priority claim" and later asked the court to expand Wisan's management role.
"Having acquiesced at each step of the process with the fee and expense requests, the state of Utah must now stand behind the obligations incurred as part of the trust's administration," Lindberg said.
In court documents, the AG argued Wisan was "legally obligated to protect the assets of the trust only to the extent that the trust property was sufficient to reimburse him and his attorneys for the services they provided." The AG said Wisan "assumed the risk that the assets of the trust would not be sufficient to reimburse him."
Val Oveson, a partner at Wisan's firm, said the trust, indeed, has the assets to cover the fiduciary's costs, but the $110 million in real estate has been tied up in litigation and temporary restraining orders.
"The FLDS Church, Warren Jeffs in particular, has chosen to take a very litigious path," Oveson said. "Obviously, they want to starve us of our cash and hope that we'll go away and the court will give them back their property and let them go on down the road the way they were."
Once the fiduciary is able to sell property, Oveson said the trust will be able to reimburse the state for Wisan's fees. In the interim, the state can receive a lien against trust property to ensure payment.
Lindberg chided Shurtleff for "taking actions that undercut the special fiduciary's ability" to get paid and oversee the trust, specifically referring to a settlement proposal he supported that would have returned the trust to FLDS control.
Shurtleff called Lindberg's ruling "shocking."
"There's no finding of liability and no judgment in the case," Shurtleff said. "I think they should be paid. But I think it's amazing that the court has supposedly controlled this fiduciary, and for her to turn around and make us pay is just very shocking to me."
The AG said Wisan and his attorneys have failed to provide documentation of their expenses and services for the past three years and said he disagreed with Lindberg's assessment that the trust was in trouble.
"There's no imminent threat," he said. "Everything is stayed right now. The property isn't going anywhere."