Settlor Intent, Charitable Beneficiaries, and Limits on Trustee Removal under Guam Law: Commentary on 2025 Guam 12 (Hemlani v. Melwani)

Settlor Intent, Charitable Beneficiaries, and Limits on Trustee Removal under Guam Law:
Commentary on Kamlesh K. Hemlani v. Manu & Anita Melwani, 2025 Guam 12

I. Introduction

The Supreme Court of Guam’s decision in Kamlesh K. Hemlani, individually and derivatively in the name of and on behalf of Radhi Puran Trust v. Manu & Anita Melwani, 2025 Guam 12, is the third appellate chapter in an extended family and trust dispute surrounding the multimillion‑dollar Radhi Puran Trust (“RPT” or “the Trust”).

This 2025 opinion does two things of lasting doctrinal importance:

  • Clarifies how Guam courts determine the beneficiary of a trust when there is a technical misdescription of a charitable entity in the trust instrument—emphasizing settlor intent and adopting California‑style principles of trust interpretation.
  • Defines the standards and procedure for removing a trustee under 15 GCA § 3317, holding that conflicts of interest and hostility are not automatic grounds for summary removal, especially where the trustee was specifically chosen by the settlor.

While the trial court had relied heavily on collateral estoppel (issue preclusion) and removed Kamlesh Hemlani as co‑trustee, the Supreme Court:

  • Affirmed that “Radhi’s Foundation” (now “Radhi Puran Foundation,” referred to as “the Foundation”) is the named beneficiary of the Trust based on a de novo interpretation of the trust instrument, rather than on preclusion doctrines, and
  • Reversed Kamlesh’s removal as successor co‑trustee because genuine disputes of material fact existed regarding his alleged conflict of interest and hostility, making summary judgment improper.

The opinion has significant implications for trust drafting and litigation in Guam, particularly for charitable trusts and for any attempt to remove a trustee chosen by a settlor.

II. Case Background

A. The Radhi Puran Trust and Family Structure

P.D. Hemlani (“P.D.”) and his wife, Radhi Puran Hemlani (“Radhi”), amassed assets worth millions. Their estate plan revolved around the Radhi Puran Trust, a Guam private trust (¶¶ 3, 6).

Key features of the original Trust instrument:

  • Initial trustees: P.D. and Radhi.
  • Successor co‑trustees: upon the death of the last surviving settlor, three successor co‑trustees were to serve, initially Jack (“Jack”), Ishwar (“Don”) Hemlani, and Vasudev (“Vashi”) Hemlani. Later, Kamlesh replaced Jack by amendment (¶ 7).
  • Decision‑making: a majority of successor co‑trustees could bind the Trust “for all purposes” (¶ 7).
  • Sub‑trusts and charitable disposition: upon the first settlor’s death, a survivor’s trust and a residuary trust were created. Critically, section 5.05(B) provided:
    “Upon the death of the Surviving Settlor, the Trustee shall distribute the balance then remaining of the Residuary Trust to the Radhi Foundation, a Guam not for profit corporation.” (¶ 8, emphases omitted)

The identity of this “Radhi Foundation” has been a recurring point of contention. There was:

  • “Radhi’s Foundation” (now “Radhi Puran Foundation”): a charitable association created in the early 1990s.
  • The “Kishore‑Created Foundation”: a Guam not for profit corporation named “Radhi Foundation” incorporated in 2015 by Kishore (with Kamlesh’s involvement), which the trial court labeled the “Kishore‑Created Foundation” (¶ 2 n.2, ¶ 28).

The Trust language calls the beneficiary “Radhi Foundation, a Guam not for profit corporation.” The 1990s entity, however, was not a corporation but a non‑profit association. This misalignment of labels is central to the beneficiary‑identity dispute.

B. Earlier Litigation Involving the Trust

1. Probate and Guardianship

  • After P.D.’s death in 2004, his will was probated; Radhi was named sole beneficiary (¶ 13).
  • The probate court found that Radhi removed Vashi as successor trustee around the time of P.D.’s death and that Don resigned (¶ 13).
  • In 2011, Kishore sought a guardianship over Radhi. The Guardianship Court appointed the Office of the Public Guardian (“OPG”) as trustee ad litem of the Trust but expressly did not find Radhi incompetent (¶ 15).

2. Vashi’s Trust Litigation and the 2011 Memorandum of Settlement (MOS) – CV0506‑09

In 2009, Vashi sued Radhi, Manu, Don, the Foundation, and others challenging amendments and revocation of the Trust (¶ 14). In 2011, they settled via a Memorandum of Settlement (MOS):

  • Assets were returned or allocated among Radhi, the Foundation, the Trust, and a new entity, the P.D. Hemlani Foundation, Ltd. (PDHF), created with “the same charitable purpose as Radhi’s Foundation” (¶ 14).
  • The Trust transferred millions in assets to PDHF (including $1.3 million in cash), and P.D.’s probated assets were divided so that PDHF received half (¶ 14).
  • Kamlesh was not a party to this case or to the MOS (¶ 14).

3. Kamlesh’s First Superior Court Case – CV0758‑12

In 2012, Kamlesh sued Radhi, contending she was incompetent and asserting that he had become a successor co‑trustee. The Superior Court rejected this:

  • It held that Radhi had not been adjudicated incompetent and remained the sole trustee.
  • Kamlesh lacked standing; his complaint was dismissed, and he did not appeal (¶ 16).

4. PDHF’s Federal RICO Case – CV12‑00028 (District Court of Guam)

In 2012, PDHF filed a civil RICO action in federal court seeking to address alleged fraudulent transfers and misuse of Trust assets (¶ 17). Several points are important:

  • PDHF alleged that defendants’ actions threatened “irreparable harm to the Trust and its beneficiaries” and claimed the Trust was “unable, unavailable, and/or unsuitable” to protect its interests (¶ 17).
  • The defendants challenged PDHF’s standing, arguing PDHF was neither trustee nor beneficiary.
  • The Magistrate Judge, and later the District Court, held:
    • The Trust document expressly identified the beneficiary as “the Radhi Foundation, a Guam not for profit corporation,” not PDHF (¶ 18).
    • PDHF was neither a beneficiary nor a party with a “special interest” in the Trust; only the Guam Attorney General had authority to sue to enforce the charitable trust (¶ 18–19).
    • The action was dismissed with prejudice for lack of standing (¶ 19).

5. Kamlesh’s Present Lawsuit – CV1527‑13 (This Case)

Radhi died on August 18, 2013 (¶ 20). Kamlesh then filed the present derivative and individual suit, alleging:

  • That Manu, Jethmal, and Don had deceived or imposed upon Radhi, resulting in amendments and transactions that wasted or diverted millions from the Trust (¶ 20).
  • Claims linked to the contentious 2011 MOS and allegedly improper transfers of Trust assets.

At first instance, the Superior Court twice granted summary judgment against Kamlesh on standing grounds:

  1. Hemlani I – 2016 Guam 33: The trial court held Kamlesh lacked standing because the Trust had terminated. The Supreme Court reversed, holding that even after termination, successor trustees retain powers to “wind up” the trust and sue to recover trust property (¶ 21).
  2. Hemlani II – 2021 Guam 26:
    • On remand, the trial court again dismissed, reasoning that the Trust’s “majority‑to‑bind” clause prevented Kamlesh, as a single co‑trustee, from unilaterally suing.
    • The Supreme Court reversed again: a co‑trustee may sue fellow co‑trustees to enforce duties or prevent breach, notwithstanding majority‑action clauses (¶ 22; see also ¶ 57 of the present opinion).
    • The Court specifically noted genuine issues of material fact remained regarding:
      • whether Kamlesh is the only remaining co‑trustee,
      • whether there was undue influence surrounding the 2011 MOS,
      • whether some property transferred belonged to the residuary trust, and
      • “the correct identity of the trust’s beneficiary” (¶ 22).

After Hemlani II, the case returned to the Superior Court for resolution of the merits. The present appeal arises from the trial court’s rulings on:

  • Identity of the Trust beneficiary, and
  • Removal of Kamlesh as successor co‑trustee under 15 GCA § 3317.

III. Summary of the 2025 Guam 12 Opinion

The Supreme Court’s key holdings and dispositions are:

  1. Trust Beneficiary:
    • Although the trial court relied on collateral estoppel (particularly a federal decision in PDHF’s RICO case) to conclude that the Foundation is the beneficiary, the Supreme Court affirmed on a different basis.
    • On de novo interpretation of the Trust instrument, the Court held that “Radhi Foundation, a Guam not for profit corporation” refers to the Foundation created in the early 1990s—i.e., Radhi’s Foundation / Radhi Puran Foundation (¶¶ 39–43).
    • The Court emphasized settlor intent and held that the trust language is “clear and definite” in naming the Foundation as the sole beneficiary; technical mislabeling of the entity’s form (corporation vs association) does not negate that intent (¶¶ 42–43).
  2. Collateral Estoppel / Issue Preclusion:
    • The Supreme Court noted the trial court improperly imported the criminal collateral estoppel standard from People v. Angoco into this civil case (¶ 37).
    • Without definitively establishing a comprehensive civil issue‑preclusion test, the Court pointed trial courts toward the Appellate Division’s approach in Abrenilla v. China Insurance Co. and the Restatement (Second) of Judgments (¶¶ 37–38 & n.12).
    • Because it could resolve the beneficiary issue directly from the Trust instrument, the Court declined to decide whether Kamlesh was collaterally estopped (¶ 38 & n.12).
  3. Removal of Kamlesh as Successor Co‑Trustee:
    • The Supreme Court held that removal of a trustee under 15 GCA § 3317 is reviewed for abuse of discretion, while the grant of summary judgment is reviewed de novo for the existence of genuine disputes of material fact (¶ 35).
    • Applying trust law principles (including California and Restatement authorities), the Court held that:
      • Conflicts of interest and hostility can justify removal, but only if there is a demonstrated detriment to the trust or its administration (¶¶ 46–48, 55–57).
      • Because the record contained conflicting evidence about Kamlesh’s motives, conduct, and the alleged diversion of assets, there were genuine issues of material fact precluding summary judgment on removal (¶¶ 52–57).
    • The Court therefore reversed the trial court’s order removing Kamlesh as co‑trustee (¶¶ 55–59).
  4. Disposition:
    • The judgment was affirmed in part (as to the Foundation being the named trust beneficiary) and reversed in part (as to the removal of Kamlesh as co‑trustee).
    • The case was remanded for further proceedings consistent with the opinion (¶ 60).

IV. Analysis of the Court’s Reasoning

A. Civil Issue Preclusion: The Court Declines to Decide and Affirms on Alternative Grounds

The trial court had treated the District Court’s decision in PDHF’s RICO case (CV12‑00028) as collaterally estopping Kamlesh from disputing that the Foundation is the Trust’s beneficiary. It used the criminal collateral‑estoppel test from People v. Angoco, 2004 Guam 11 (¶ 27, ¶ 37).

The Supreme Court observed:

  • Collateral estoppel (issue preclusion) operates differently in criminal and civil contexts (¶ 37).
  • In civil cases, the Superior Court is bound by Appellate Division precedent, notably Abrenilla v. China Insurance Co., which follows the Restatement (Second) of Judgments (¶ 37).
  • The Court summarized the general elements of civil issue preclusion as comprising six components (¶ 38 & n.12), including:
    • same issue,
    • same party or party in privity,
    • full and fair opportunity to litigate,
    • issue actually litigated,
    • final, valid judgment, and
    • issue necessarily decided as essential to that judgment.

However, the Court expressly declined to resolve whether Kamlesh was in fact precluded, stating this was “not the appropriate one to wade into the turbulent waters of issue preclusion,” because the beneficiary issue could be resolved directly from the Trust document (¶ 38 & n.12).

This approach is doctrinally significant:

  • It signals that future Guam civil cases must apply a civil‑specific issue‑preclusion analysis, not the criminal test from Angoco.
  • It reinforces the principle that an appellate court may affirm on any ground supported by the record (¶ 44), enabling it to bypass potentially complicated or unnecessary preclusion questions when the merits can be resolved more cleanly.

B. Determining the Beneficiary of the Radhi Puran Trust

1. Governing Principles of Trust Interpretation

The Court relies heavily on standard trust‑interpretation principles, aligning Guam with California’s law (on which Guam’s trust statutes are modeled) (¶¶ 34, 40):

  • De novo review: Interpretation of a trust instrument is a question of law reviewed de novo (¶ 34).
  • Settlor’s intent controls: The “intention of the trustor” is the governing principle; courts must look to the whole instrument, not isolated phrases (¶ 40, citing Wells Fargo Bank v. Marshall).
  • Extrinsic evidence:
    • The court may consider the circumstances under which the trust instrument was made to place itself in the settlor’s position (¶¶ 34, 40–41).
    • Such evidence may clarify ambiguity but cannot assign the document a meaning to which it is not reasonably susceptible (¶ 34).
  • Ascertainment of beneficiaries:
    • “The ascertainment of trust beneficiaries primarily depends on the correct interpretation of the words used in the trust instrument, with the settlor’s intention governing” (¶ 40, quoting C.J.S.).
    • If the instrument is indefinite, surrounding facts and statutory analogies may help, but if the text is clear and definite, the court enforces that meaning (¶¶ 40–41, 43).

Using these principles, the Court grounds its beneficiary determination in settlor intent as evidenced in the Trust instrument, coupled with the factual context when the Trust was created.

2. Application: The Foundation vs. the Kishore‑Created Corporation

The core dispute is whether the beneficiary named as “Radhi Foundation, a Guam not for profit corporation” in section 5.05(B) refers to:

  • the early‑1990s entity “Radhi’s Foundation” (a non‑profit association, later named “Radhi Puran Foundation”) or
  • the 2015 corporation created by Kishore (the “Kishore‑Created Foundation”).

Kamlesh’s main arguments (¶ 39):

  • The instrument specifies a “Guam not for profit corporation” but the 1990s entity is an association, not a corporation; hence, it is purportedly not the named beneficiary.
  • The Foundation’s charter uses terms like “trust” and “trustee,” and Kamlesh tries to characterize it as a charitable trust, suggesting that “a Charitable Trust is not a beneficiary, it has beneficiaries,” implying that the Trust’s beneficiary designation is conceptually flawed (¶ 39 & n.13).

The Court firmly rejects these contentions:

  • It holds that California trust law (persuasive in Guam) recognizes that a trust may distribute to:
    • a charitable corporation,
    • a charitable association, or
    • a charitable trust itself, including as part of a “subtrust” arrangement (¶ 39 & n.13).
  • The Court notes that even if the Foundation is properly characterized as a charitable trust, nothing in law prevents a trust from making a distribution to another trust (¶ 39 & n.13).
  • Most importantly, considering “the circumstances under which the Trust Instrument was made,” it holds that P.D. and Radhi clearly intended the entity they had created—the Foundation—as the charitable beneficiary (¶¶ 42–43).

The Court concludes:

“Based on a de novo review of the Trust Instrument, its terms are clear and definite: the Foundation is the sole named beneficiary of the Trust.” (¶ 43)

Thus, any argument that the Kishore‑Created corporate “Radhi Foundation” is, or ever was, the named beneficiary under the trust document is categorically foreclosed (¶ 43 & n.14).

3. PDHF and the Earlier Federal Standing Decision

The Court also puts the PDHF issue in perspective:

  • The District Court in CV12‑00028 explicitly held PDHF was not a beneficiary and not a party with a special interest, and that the Foundation was the beneficiary (¶ 18–19).
  • That ruling deprived PDHF of standing to sue, confirming that only the Attorney General could enforce the charitable trust (¶ 18–19).
  • In this appeal, although the trial court invoked that decision as having preclusive effect, the Supreme Court instead directly construes the Trust instrument to reach the same substantive result: PDHF is not the named beneficiary; the Foundation is (¶ 38, ¶ 43–44).

This approach preserves the District Court’s effect as to PDHF while making clear that Kamlesh’s dispute about the interpretation of the Trust instrument is resolved on its own terms, not simply by preclusion.

4. Interaction with Cy Pres and Equitable Deviation

Kamlesh’s strategy also included an explicit plea that the court ultimately declare the Foundation “not, or no longer, a proper beneficiary” and invoke cy pres or similar doctrines to substitute the Kishore‑Created Foundation or some other entity (¶ 26 & n.14).

The Supreme Court carefully distinguishes between:

  • Who the Trust document names as beneficiary (a question of interpretation, which is now definitively answered: it is the Foundation), and
  • Whether changed circumstances or other equitable grounds justify modifying how the charitable intent is carried out (a question of equitable power and remedy).

The Court observes (¶ 43–44 & n.15):

  • Kamlesh is not barred from arguing, in principle, that the Foundation is “no longer a proper beneficiary,” but that is a different claim than who is named in the instrument.
  • Guam’s law, following California, recognizes:
    • Equitable deviation: courts may authorize deviation from trust terms if post‑creation circumstances make literal compliance impracticable or threaten the trust’s main purpose (¶ 43 & n.15, citing California cases).
    • Cy pres: where a charitable beneficiary is merely a conduit for charitable purposes, a court may redirect gifts to another suitable charity if carrying out the original scheme exactly has become impossible or impracticable (¶ 43 & n.15).
    • Clean hands are generally required to invoke these equitable doctrines; given serious mutual accusations of misconduct, the Court declines to apply cy pres itself on appeal (¶ 43 & n.15).

In short, the beneficiary designation itself is not defective. Any argument that the Foundation should be replaced or bypassed must proceed, if at all, through a properly pleaded and fact‑developed equitable proceeding, not through textual attacks on the original designation.

C. Removal of a Successor Co‑Trustee under 15 GCA § 3317

1. Standard of Review and Burdens

A major doctrinal contribution of this case is the explicit articulation of the standard of review for removing trustees:

  • The grant of summary judgment is reviewed de novo, with all inferences drawn in favor of the non‑movant (¶¶ 32, 45, 52–53).
  • The decision to remove a trustee (or co‑trustee) under 15 GCA § 3317 is reviewed for abuse of discretion (¶ 35).

The Court analogizes to California’s Probate Code and cases like Trolan v. Trolan, noting that:

“Although Appellants argue the standard of review is de novo, all relevant legal authority indicates we must review the trial court's removal of the parties as trustees for abuse of discretion.” (¶ 35, quoting Trolan)

It synthesizes the two layers of review this way:

  • First, on summary judgment, the appellate court asks whether any genuine dispute of material fact exists regarding the grounds for removal.
  • If not, it then reviews whether the trial court properly exercised its discretion in applying § 3317 to those undisputed facts (¶ 35).

On the parties’ burdens, the Court follows treatise law (C.J.S.) (¶ 46):

  • The party seeking removal must “clearly and definitely establish” facts justifying removal.
  • Courts are particularly reluctant to remove a trustee chosen by the settlor, as opposed to a court‑appointed trustee (¶¶ 46–47, 56–57).
  • Removal is considered a drastic step that is only appropriate when necessary to protect the estate and secure a tangible benefit for the trust (¶ 46–47).

2. Statutory Grounds: Conflicts of Interest and Hostility

15 GCA § 3317 authorizes the Superior Court to remove:

  • a trustee “who has violated or is unfit to execute the trust or has acquired any interest or become charged with any duty adverse to the interest of any beneficiary in the subject of the trust”; and
  • a co‑trustee where “hostility, ill feeling, or continued lack of cooperation among and between cotrustees has impaired the proper administration of the trust” (¶ 48).

The Supreme Court emphasizes limitations on both grounds:

  • Conflicts of interest:
    • A trustee with a potential conflict is not removed merely for that reason; courts ask whether the conflict has produced mismanagement or a negative effect on trust administration (¶ 47).
  • Hostility:
    • Personal hostility is “not per se a ground for removal” (¶ 47).
    • Removal is justified only if hostility “interferes with the proper administration of the trust” (¶ 47), particularly when the trustee’s role demands ongoing personal interaction.

These principles align Guam with California case law (Bixby, Gilliland, Trolan) and with Restatement‑based doctrine, reinforcing a strong presumption in favor of leaving settlor‑designated trustees in place absent proven detriment.

3. Why Summary Judgment on Removal Was Inappropriate

The trial court removed Kamlesh on two main grounds:

  • Conflict of interest:
    • Kamlesh was a successor co‑trustee of the RPT, and simultaneously a director and vice‑president of the Kishore‑Created Foundation (¶ 28).
    • He had stated an intention to have the Kishore‑Created Foundation substitute for the Foundation as beneficiary, invoking cy pres (¶¶ 26, 28).
    • The trial court viewed this as an “interest adverse” to the Foundation and violative of statutory duties, justifying removal (¶ 28).
  • Hostility and non‑cooperation:
    • Kamlesh admitted he had not communicated with other co‑trustees (Vashi and Don) (¶ 29).
    • He had named the Foundation—the beneficiary—as a defendant in his suit.
    • The court found “hostility” impairing proper administration and concluded that removing Kamlesh would improve cooperation and serve the interests of the Trust and the Foundation (¶ 29).

The Supreme Court reverses, focusing on the summary judgment posture:

  • On a motion for summary judgment, courts must draw all inferences in favor of the non‑moving party and cannot weigh credibility or choose among competing factual inferences (¶¶ 32, 52).
  • Even if Kamlesh did not directly address the removal request in his written opposition, an unopposed motion does not automatically entitle the movant to judgment; the court still must ensure no genuine factual disputes exist (¶ 53).
  • The record contains:
    • Evidence supporting Kamlesh’s narrative that he is trying to protect the Trust and counter diversion of assets (¶ 54; citing OPG counsel’s report about asset transfers as violations of the Hemlanis’ estate plan).
    • Evidence supporting the Foundation’s narrative that Kamlesh is attempting to supplant the Foundation and divert assets to a “fake foundation,” and that he is hindering charity (¶ 54).

The Court concludes that the trial court effectively made factual findings and credibility determinations—an approach incompatible with summary judgment (¶ 52). It emphasizes:

“[T]he record presents a genuine issue of material fact regarding Kamlesh's disloyalty and hostility.” (¶ 55)

Given the high bar for removing a trustee chosen by the settlors, the Court follows California authority:

“[We] will 'never remove [a trustee named by the settlor] for potential conflict of interest but only for demonstrated abuse of power detrimental to the trust.’” (¶ 56, quoting Bixby)

Because that kind of “demonstrated abuse” has not yet been fact‑found (and is instead vigorously contested), summary removal is premature.

4. Litigation by a Trustee Is Not Itself Grounds for Removal

The Court also clarifies that a trustee’s act of suing co‑trustees or beneficiaries does not, by itself, warrant removal:

  • In Hemlani II, the Court had already held that one trustee may sue another to enforce duties or prevent breach, even where the trust requires majority consent for other actions (¶ 57, citing Restatement (Third) of Trusts § 94 cmt. c).
  • Here, the Court reiterates that merely naming the Foundation or co‑trustees as defendants is not per se evidence of disloyalty or hostility justifying removal (¶ 57).
  • Any such removal must be grounded in a showing that the litigation amounts to breach of fiduciary duty or materially impairs trust administration—again, a fact‑intensive inquiry not suited to summary judgment (¶¶ 55–57).

The Court further notes that if hostility genuinely does prevent proper administration, courts have less drastic tools than removal, such as appointing a trustee ad litem with limited powers to handle contested litigation (¶ 58, citing Getty v. Getty).

V. Precedents and Authorities Cited

The opinion draws on a range of Guam, federal, California, and treatise authorities. Key influences include:

  • Hemlani I (2016 Guam 33) and Hemlani II (2021 Guam 26):
    • Establish that successor trustees have winding‑up powers and can sue to recover trust property after termination.
    • Hold that majority‑action clauses do not bar one co‑trustee from suing others to enforce the trust.
  • People v. Angoco, 2004 Guam 11:
    • Articulates a collateral‑estoppel standard for criminal cases.
    • The present opinion explains that this criminal test cannot simply be ported into civil litigation (¶ 37).
  • Abrenilla v. China Insurance Co. (D. Guam App. Div. 1988):
    • The leading Appellate Division decision on civil issue preclusion in Guam.
    • Applies Restatement (Second) of Judgments § 27, forming the basis for the six‑element civil collateral‑estoppel framework referenced by the Court (¶¶ 37–38 & n.12).
  • Wells Fargo Bank v. Marshall and other California trust‑interpretation cases:
    • Used to reinforce that settlor intent governs, construed from the whole instrument and in the light of surrounding circumstances (¶¶ 34, 40–41).
  • California trustee‑removal cases, including In re Estate of Bixby, In re Estate of Gilliland, Trolan v. Trolan, and Städel Art Museum v. Mulvihill:
    • Emphasize reluctance to remove a settlor‑appointed trustee, the need for “demonstrated abuse” and actual detriment to the trust, and the limited role of hostility as a removal ground (¶¶ 35, 46–48, 56).
  • Treatises:
    • 90 C.J.S. Trusts: provides general principles on removal, conflicts of interest, hostility, and deference to settlor‑appointed trustees (¶¶ 46–47).
    • Bogert’s Law of Trusts and Trustees: cited for the acceptability of “subtrust” arrangements and distributions from one charitable trust to another charitable organization (¶ 39 & n.13).
    • Witkin, Summary of California Law (Trusts): referenced for distinctions (and practical similarity) between charitable trusts and charitable corporations (¶ 39 & n.13).

VI. Simplified Explanation of Key Legal Concepts

1. Trusts, Settlors, Trustees, and Beneficiaries

  • Trust: A legal arrangement where a settlor transfers property to a trustee to hold and manage for the benefit of one or more beneficiaries.
  • Settlor: Person(s) who create the trust (here, P.D. and Radhi).
  • Trustee: Person(s) holding legal title to trust assets, obligated to manage them in the beneficiaries’ best interests and in line with the trust terms.
  • Successor trustee: Replacement trustee designated to act when initial trustees die, resign, or are removed.

2. Survivor’s Trust vs. Residuary Trust

  • Survivor’s trust: Holds the surviving spouse’s separate property and half of any community property after the first spouse dies.
  • Residuary trust: Holds the deceased spouse’s separate property and the other half of community property (¶ 8).
  • In the RPT, it is the residuary trust that is ultimately to be distributed to the charitable beneficiary—the Foundation—upon the surviving settlor’s death.

3. Charitable Association vs. Corporation vs. Charitable Trust

  • Charitable association: An unincorporated body organized for charitable purposes.
  • Charitable corporation: A corporation formed under nonprofit statutes to carry out charitable activities.
  • Charitable trust: A trust established to benefit a segment of the public or further a charitable purpose, enforceable primarily by the state’s Attorney General.

The opinion underscores that, for purposes of being a trust beneficiary, these distinctions are often formal rather than substantive: a trust may validly name any of these entities or even another charitable trust as its beneficiary (¶ 39 & n.13).

4. Cy Pres and Equitable Deviation

  • Cy pres (French for “as near as possible”):
    • Applies to charitable trusts.
    • If the specific charitable purpose or named charitable beneficiary has become impossible, impracticable, or illegal, a court may direct the trust property to another charitable purpose that approximates the settlor’s original intent.
  • Equitable deviation:
    • Allows a court to modify administrative terms (and, in limited cases, dispositive terms) of a trust when changed circumstances threaten to defeat or impair the trust’s main purpose.

Both are equitable remedies and usually unavailable to a party with “unclean hands” (¶ 43 & n.15). The Supreme Court here recognizes their existence but does not apply them on the current record.

5. Collateral Estoppel (Issue Preclusion) vs. Res Judicata (Claim Preclusion)

  • Res judicata / claim preclusion:
    • Bars relitigation of the same claim or cause of action once there has been a final judgment on the merits between the same parties or their privies.
    • Here, the trial court correctly found claim preclusion did not bar Kamlesh because the District Court’s dismissal of PDHF’s RICO action was for lack of standing and did not adjudicate his claims on their merits (¶ 43 & n.15).
  • Collateral estoppel / issue preclusion:
    • Prevents relitigation of a specific issue of fact or law that was actually litigated and necessarily decided in a prior proceeding.
    • The Supreme Court declines to rule conclusively on its application here and instead decides the case by interpreting the Trust instrument directly (¶ 38 & n.12).

6. Termination of a Trust and Winding‑Up Powers

  • When a trust reaches its natural endpoint (e.g., after the death of the last settlor and completion of specified distributions), it is said to have terminated.
  • Even after termination, trustees retain powers to:
    • “Wind up” the trust,
    • Collect and marshal remaining assets,
    • Litigate to recover misappropriated or wrongfully transferred trust property.

In Hemlani I and reaffirmed here, the Court holds that termination does not strip successor trustees of standing to sue for purposes of winding up (¶ 21).

VII. Likely Impact of the Decision

A. Trust Drafting and Administration in Guam

The beneficiary‑interpretation holding carries important lessons:

  • Substance over form: Technical misdescription of an entity’s legal form (association vs. corporation) will not defeat a plainly intended beneficiary designation when the overall document and circumstances show who the settlor meant (¶¶ 42–43).
  • Importance of clarity: Nonetheless, drafters should:
    • Use correct legal names and forms of charitable entities,
    • Include identifying details (e.g., date of formation, registration number) to avoid later disputes.
  • Reliance on California law: Guam courts will continue to look to California trust statutes and decisions as persuasive guides, particularly on interpretive and administrative issues (¶¶ 34, 40, 48, 56).

B. Charitable Litigation and Standing

Though only indirectly addressed, the case reinforces:

  • The District Court’s view that only the Attorney General generally has standing to enforce charitable trusts, absent a beneficiary with a “special interest” (¶ 18–19).
  • PDHF’s difficulty in establishing itself as a beneficiary or special‑interest party in light of the RPT’s explicit designation of the Foundation (and this opinion’s confirmation of that interpretation).
  • The complexity caused by multiple related entities (Foundation, PDHF, Kishore‑Created Foundation) and the importance of aligning settlement agreements and governance documents with original trust purposes.

C. Trustee Removal and Litigation Strategy

For trustees and beneficiaries in Guam, the decision sends several clear signals:

  • Removal is exceptional: Courts will be extremely reluctant to remove a trustee chosen by the settlor without a very strong, fact‑proven showing of detriment to the trust (¶¶ 46–47, 56–57).
  • Summary judgment is disfavored for removal disputes:
    • Allegations of breach, conflict, and hostility are typically fact‑intensive and often hinge on credibility.
    • These issues are “ill‑suited” to summary judgment absent an undisputed record (¶¶ 55, 57).
  • Litigation by a trustee is not automatically “disloyal”:
    • Trustees remain free to sue co‑trustees or beneficiaries to protect the trust, including challenging prior settlements or suspicious transfers (¶ 57).
    • Using litigation as a sword to remove an opposing trustee will require far more than showing that the trustee filed suit.
  • Incremental equitable tools: Courts may use intermediate measures such as appointing a trustee ad litem instead of outright removal if hostility primarily concerns particular litigation (¶ 58).

D. Civil Issue Preclusion in Guam

While the Court refrains from formally adopting a definitive civil test in this case, it:

  • Clarifies that criminal precedents like Angoco should not govern civil preclusion analysis (¶ 37).
  • Directs trial courts to the Appellate Division’s Restatement‑based framework in Abrenilla as the controlling authority unless and until the Supreme Court issues a more specific civil standard (¶¶ 37–38 & n.12).

Future civil litigants should expect Guam courts to employ the familiar six‑element Restatement approach when analyzing collateral estoppel, with particular attention to privity, “full and fair opportunity,” and whether the prior decision was on the merits.

VIII. Conclusion

Kamlesh K. Hemlani v. Manu & Anita Melwani, 2025 Guam 12, marks a significant development in Guam’s trust and civil‑procedure jurisprudence.

On the substantive trust side, the Court:

  • Firmly anchors Guam trust interpretation in settlor intent,
  • Holds that the Foundation—the non‑profit association created in the early 1990s—is the sole named beneficiary of the Radhi Puran Trust, despite technical misdescription, and
  • Rejects attempts to exploit entity‑form distinctions to overturn a clear charitable designation.

On the administrative and procedural side, the decision:

  • Clarifies that removal of a trustee under 15 GCA § 3317 is subject to abuse‑of‑discretion review,
  • Insists that conflicts of interest and hostility must be shown to harm trust administration before justifying removal, and
  • Holds that such determinations are rarely appropriate for summary judgment when the factual record is contested.

The opinion also hints at, but does not fully resolve, further development of Guam’s civil issue‑preclusion doctrine and confirms the relevance of cy pres and equitable deviation in charitable‑trust disputes, while emphasizing the need for clean hands and careful factual development.

Going forward, 2025 Guam 12 will likely be the leading authority in Guam for:

  • Interpreting and enforcing charitable beneficiary designations,
  • Constraining aggressive use of trustee‑removal motions and summary judgment in intra‑trust conflicts, and
  • Guiding courts in balancing settlor intent, equitable flexibility, and the integrity of charitable estate plans in complex family trust disputes.

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