Sister versus brother


The spectacular lodge at the heart of an ugly family dispute/Sheldon photo

One of the saddest family feuds in recent Alaska history came to an end Friday with the state Supreme Court unanimously ruling that Robert Sheldon – the son of legendary Bush pilot Don Sheldon and the late Talkeetna businesswoman Roberta Sheldon – did nothing wrong in his management of a family trust.

The case dates back to February 2015, less than a year after Roberta’s death. It was then Holly Sheldon Lee, one of Robert’s two sisters, and Sheldon Air Service, a Talkeetna air taxi she owns and runs with husband David Lee, filed a lawsuit charging that Robert unlawfully obtained trust assets and breached his fiduciary responsibilities.

At the heart of the litigation is the Sheldon Mountain House overlooking the Ruth Ampitheatre in Denali National Park and Preserve. Years before her death, Roberta created Mountain House LLC, a limited liability corporation, to oversee management of what was once referred to simply as the “Sheldon Hut.”

Zach Fields, writing in the Anchorage Press in 2015, called it “the best hut trip on earth.” And indeed it was, albeit primitive.

“Built by the pilot at the 6,000-foot level of Mount McKinley (now officially Denali) on a rock and ice outcrop of the Ruth Glacier, the hut is now rented out by his wife, Roberta Sheldon,” Summit Post noted in 2006. “Sitting on a five-acre inholding inside Denali National Park and Preserve, it is primitive but offers bunks and a wood stove….The cabin comfortably sleeps about five or six. Larger groups usually use the cabin as a base and sleep outside in tents.”

The story noted Roberta was screening potential guests to make sure they were comfortable with going off the grid, way off the grid, and quoted her saying, “I wouldn’t put the average tourist off the street there.”

Then and now

But that was then, and this is now.

After Roberta’s death, Robert, an entrepreneurial sort, was put in charge of Mountain House LLC per his mother’s wishes. He dug up plans his father had once drawn for a luxury retreat on the site where the hut sat, and began an effort to make his father’s dream a reality.

Exactly how much that cost has not been disclosed, but the new Sheldon Mountain House is spectacular.

“Previously accessible only to experienced mountain climbers, visitors can now enjoy true luxury in the middle of an icy paradise retreat,” travel writer Jim Dobson observed at Forbes. 

“Robert Sheldon is proud of what he has accomplished, ‘My sister and I decided that it would be honorable for us to take that which our mother left to us and use it to begin to fulfill our parents vision for at least one chalet on Denali that would achieve our parents goal of forever providing a crown jewel destination to further assist in engaging people with the Nature and beauty there, and perhaps even inspiring some to come alongside of worthy support organizations related to Denali National Park. We also considered this a legacy project that would assist in reminding others of the incredible people that Don and Roberta were and that our state of Alaska is a young and vibrant place where almost any challenge can be met and overcome when people agree to advance together.'”

Back when the Sheldon Chalet as it is now called was still more dream than reality, Holly sued, alleging that “Robert had failed to adequately respond to her request for an accounting and that he also had failed to distribute trust assets that she had requested and that he had stated he would provide,” according to court documents.

She moved for summary judgment, asking a Superior Court judge to rulewithout trial that Robert was required ‘to immediately distribute the Mountain House, LLC, to its three, equal owners.'”

Instead of getting what she wanted, she got the opposite. The judge held that Robert had been put in charge of the trust, and Holly would have to live with it, given that Roberta had named Robert successor before her death.

Still, the judge didn’t buy the argument put forth by Robert’s attorney that Holly’s behavior rose to the level wherein it would trigger a clause in the trust, as stipulated by Roberta, that anyone who contested the document “shall not benefit in any way under this Trust . . . and shall not receive any distribution whatsoever.”

After that ruling, Robert and Holly ended up in mediation.

An unsettled settlement

The mediation went well right up until the time it didn’t.

Former Superior Court judge Eric Sanders, who now specializes in mediation, worked out what he thought was a fair agreement between Robert and Holly.

“Under the terms of the proposal, Holly would pay $25,000 into Mountain House, LLC,” the Supreme Court decision says. “She would receive a one-third, non-voting interest in the LLC as well as various personal effects from the trust’s corpus, and she would be granted periodic access to the Mountain House.”

Other claims were left to be worked out later under the proviso that “[a]ny disputes concerning terms or the execution of these terms and the settlement and release shall be resolved finally and completely by Eric Sanders,” the record states.

Holly and Robert signed the Sanders settlement, but Holly later went back to court to claim she “believed [the] document was merely a proposal . . . and that her signature would not result in a binding agreement.”

A Superior Court judge didn’t buy it, noting that not only did Holly sign the agreement but that her attorney was at her side when she did so. The judge rejected Holly’s request to overturn the settlement, but the case didn’t end there.

Robert subsequently filed for compensation for the costs he’d incurred fighting the lawsuit. Under Alaska law, the winner in a lawsuit can ask the court to order the loser to pay the winner’s court costs.

The Superior Court agreed to make Holly pay Robert’s attorney fees, but then went a step beyond.

“Concluding that Holly’s post-mediation litigation conduct had been vexatious, the court awarded enhanced attorney’s fees to Robert,” the Supreme Court justices noted.

“Vexatious:  lacking a sufficient ground and serving only to annoy or harass when viewed objectively.”

Having none of it

Holly’s reaction to the Superior Court ruling was to battle on. Her appeal to the Supreme Court argued that:

  1. The Sanders decision was not an enforceable arbitration award;
  2. The Superior Court erred by recognizing it as such;
  3. And the Superior Court wrongly awarded attorney fees.

The Supreme Court rejected all three claims.

“She contends that Robert was not the ‘prevailing party’ in the suit and was thus not entitled to recover a percentage of reasonable attorney’s fees,” the justices wrote. “In the alternative, she argues that the court erred by characterizing her litigation conduct
as ‘vexatious.'”

“Holly argues that she should be ‘deemed the prevailing party’ in the post-mediation litigation because she received ‘significant information . . . concerning Robert’s actions and expenditures as Trustee’  over the course of the proceedings,” the decision says. “However, Holly’s suggestion that she “achieve[d] the goals of [her] litigation” is unconvincing.

“Holly first unsuccessfully attempted to dispute the finality of the parties’ settlement. She then sought to proceed to trial, at which point the Superior Court enforced Sanders’s arbitration decision and ended the litigation.

“Robert prevailed at every stage of post-mediation litigation; accordingly, the
Superior Court did not abuse its discretion in concluding that he was the prevailing party. The Superior Court based its decision to enhance the attorney’s fees award
largely on one factor: the vexatious nature of Holly’s post-mediation litigation.

“After signing the proposal, Holly argued that it did not constitute a binding settlement
agreement — a claim ‘soundly rejected’ by Sanders. The Superior Court noted that
Sanders had overseen the parties’ mediation and was thus well-situated to ‘gauge
[Holly’s] understanding of the various counterproposals and participation in the
discussions that led to the agreement.’

“After Sanders issued his decision, Holly ‘ignored the result that she did not like’ and attempted to ‘restart the trial process.’ While Holly contends that ‘the record evidences that [she] litigated reasonably and in good faith,’ she neither cites evidence to support this contention nor disputes the evidence the Superior Court relied upon in arriving at its decision to enhance attorney’s fees.

“Because the record adequately supports the Superior Court’s rationale, we conclude that the decision to enhance attorney’s fees was not an abuse of discretion.”

Holly was not immediately available for comment.

“If anyone bothered to read the trust docs on file with the court they would see that my Mom structured it so that Kate and I wouldn’t ever have to be in business with (Holly),” Robert messaged in response to an email. “I’ve tried my best throughout the years. That’s about all anyone can be asked to do. It is so very sad. I will never understand what drives people like Holly.”

He was not hopeful of a family reconciliation.