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Judge made mistake on FLDS trust case, Utah Supreme Court says

Published March 13, 2013 1:01 am

FLDS • High court says judge made mistake in secularizing trust with a religious function.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

A Utah Supreme Court decision issued Tuesday says a judge took the wrong approach to reforming a hotly-contested polygamous trust, but adds the mistake won't matter much because everyone missed the deadline to challenge the judge's decision.

While the ruling appears to have no tangible benefit for members of the Fundamentalist Church of Jesus Christ of Latter-Day Saints, it may provide them with some vindication.

The Utah Supreme Court said 3rd District Judge Denise Lindberg's error came when she secularized the United Effort Plan (UEP). The plan is a trust originally created by the FLDS and holds most of the land in Hildale, Utah, and Colorado City, Ariz.

The ruling explains that the trust had two purposes: advancing the goals of the FLDS religion and providing for the "just wants and needs" of church members.

Lindberg's approach focused only on the second purpose and reformed the trust according to what the ruling called "secular principles."

The ruling says the state can't fundamentally alter the purpose of a trust the way Lindberg did. The ruling describes the purposes of the post-reform trust and the original UEP as "vastly different."

However, that portion of the ruling may be moot for the FLDS who want to regain control of the trust. FLDS leadership initially ignored the state's involvement and didn't raise any legal challenges until, according to the Utah Supreme Court, it was too late.

The UEP holds an estimated $110 million in assets. In 2005, the state took over the trust in response to concerns over mismanagement. At that time Lindberg appointed accountant Bruce Wisan as fiduciary.

Attorney Michael Zimmerman, who represents the lawyers who worked for FLDS and former FLDS members, said the ruling means that the entire UEP case — which has dragged on for eight years and only now appears to be gaining any momentum — might have been avoided if someone had challenged the state's reforms from the get-go.

"If it had been timely challenged, the actions that were taken by Mr. Wisan and the court would not have been permissible," Zimmerman said. "What the state had done, according to the court, would not have been appropriate."

While the ruling may not help the FLDS, Zimmerman said, the state won't be able to fundamentally alter trusts in the future.

Wisan, Lindberg and representatives from the Utah and Arizona attorney general's offices are currently working to resolve the case and end the state's involvement. At present, that means asking lawmakers for nearly $5.7 million to pay Wisan. The various parties have also agreed to explore appointing a new board of trustees to oversee the UEP.

Though Tuesday's decision won't end the UEP case, it will have some less monumental impacts. Among them, it gives Salt Lake City law firm Snow, Christensen and Martineau the right to continue representing members or former members of the FLDS church in the UEP case. The law firm originally worked on the case, but Lindberg barred it after reforming the trust.

Snow, Christensen and Martineau also will not have to turn over documents to Wisan's office. The ruling states that those documents are protected by attorney-client privilege. The questions related to attorney-client privilege and other issues are what brought the case before the supreme court in the first place and provide the major thrust of the new ruling.

jdalrymple@sltrib.com

Twitter: @jimmycdii