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United States District Court for the Eastern District of Virginia, Norfolk Division
September 25, 2018, Decided; September 26, 2018, Filed
Civil No. 2:17cv391
OPINION & ORDER
This matter is before the Court on cross-motions for summary judgment. Plaintiff ALPS Property & Casualty Insurance Company ("ALPS" or "Plaintiff") filed its summary judgment motion against: (1) Defendants Philip R. Farthing ("Farthing") and Philip R. Farthing, P.C. ("Farthing, P.C.," and collectively with Farthing, the "Farthing Defendants"); and (2) Ivan L. Higgerson, Sr., Sandra H. Butt, Ivan L. Higgerson, Jr., Christie L. Pauley, Tara L. Greife, Leslie 0. Erickson, and Elizabeth Metts Allen (collectively, the "Higgerson Defendants").1 ECF No. 15. [*4] The Higgerson Defendants subsequently filed a cross-motion for summary judgment against ALPS. ECF No. 19. The Farthing Defendants have not filed a cross-motion seeking summary judgment, but they have filed an opposition to ALPS' summary judgment motion. ECF No. 22.
I. Factual and Procedural Background
The material facts in this case are not in dispute. Farthing is an attorney licensed in the Commonwealth of Virginia and he is the sole member of Farthing P.C., a professional corporation organized under the laws of Virginia. Farthing is the former trustee of the Ivan Higgerson Revocable Trust, the Ivan Higgerson Marital Trust, the Ivan Higgerson Family Trust, and the Irrevocable Life Insurance Trust Agreement of Ivan Higgerson (collectively, the "Higgerson Trusts"). Elizabeth Metts Allen ("Ms. Allen") is a licensed attorney in the Commonwealth of Virginia and is the current trustee of the Higgerson Trusts. With the exception of Ms. Allen, the Higgerson Defendants identified above are all beneficiaries, or contingent beneficiaries, of the various trusts. Edith Higgerson ("Mrs. Higgerson"), who passed away in early 2016, was also a trust beneficiary. ECF Nos. 16, 20.
In 2014, while Farthing [*5] was still serving as the trustee of the Higgerson Trusts, Mrs. Higgerson filed suit in the Circuit Court for the City of Chesapeake, Virginia, alleging both that Farthing was collecting excessive trustee fees and that he had engaged in mismanagement of trust assets, including excessive stock trading.2 ECF No. 1-1. A bench trial was conducted in November of 2016, and a letter opinion was issued by the state court in June of 2017. ECF No. 1-5. The letter opinion concluded that: (1) Farthing was liable for "breach of the prudent investor rule," based on Farthing's reckless "day trading" of stocks and trading on the margin, causing damages to the trusts of approximately $1,383,000; and (2) over the course of several years, Farthing had collected excessive trustee fees of approximately $770,000.3 Id.
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2018 U.S. Dist. LEXIS 175390 *
ALPS PROPERTY & CASUALTY INSURANCE COMPANY, f/k/a Attorneys Liability Protection Society, a Risk Retention Group, Plaintiff, v. PHILIP R. FARTHING, et al., Defendants.
Subsequent History: Affirmed by Alps Prop. & Cas. Ins. Co. v. Higgerson, 2020 U.S. App. LEXIS 9161 (4th Cir. Va., Mar. 24, 2020)
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