State appeals court judges argued passionately over the court's role in public policy as it decided a case over a fraction of the fortune of the late Coca-Cola Co. CEO Roberto Goizueta.

At issue are claims by 14 people who worked for Coke under Goizueta, who died in 1997, or with his late widow, Olga, who died in 2015. They say that two Goizueta children improperly forced Olga Goizueta to change a trust document so that it eliminated her intention to bequeath about $5.4 million to the ex-workers.

On March 16, the Georgia Court of Appeals voted 10-4 largely in favor of the Goizueta children, who are co-executors of Olga Goizueta's estate. Most significantly, it upheld a clause in a trust created by Olga Goizueta that forfeits any allotment for a beneficiary who challenges the validity of the trust.

A majority of states void such “in terrorem” or “no contest” provisions when beneficiaries have probable cause to claim something in the trust is amiss, one dissenting judge wrote.

But Judge Lisa Branch—in one of her last decisions before joining the federal appeals court in Atlanta—wrote for the majority that state law allowed such clauses to be enforced. The Legislature, she held, “not this court, determines Georgia public policy.”

Among the dissenters, Judge Charlie Bethel wrote that the majority ruling “deprives the court of one of its basic functions, promotes and facilitates fraud, and produces a genuinely absurd result.”

If the majority is correct, he argued, “those who have committed fraud or otherwise acted improperly in securing the execution of a trust document can now insulate themselves from the consequences of their actions” as long as the trust contains an in terrorem clause.

David Walbert of Parks Chesin & Walbert, who represents the 14 challengers, said they will ask the Georgia Supreme Court to review the case.

“If the law were as the majority interpreted it to be, which it is not, it would make no sense,” said Walbert. “It would also be unconstitutional.”

A lawyer for the Goizueta children, David Balser of King & Spalding, said, “Our clients are pleased with the results in both the trial court and the Court of Appeals, and we look forward to disposing of the few remaining legal issues promptly upon remand.”

In court briefs, Balser wrote that Goizueta trusts had been amended many times over the years, with no-contest clauses included since 1994.

A February 2013 version of the trust included names of the 14 people—former security staff from Coca-Cola, personal caregivers to Olga Goizueta and employees of The Goizueta Foundation—to receive about $5.4 million upon her death, in amounts ranging from $75,000 to $1.5 million.

Balser noted that the trust allowed any changes to be made to those bequests, a power Olga Goizueta employed the next month to reduce some of the gifts and then again in August 2013, when she eliminated them altogether—moves witnessed by her attorney, Benjamin White of Alston & Bird. (He could not be reached.)

After Olga Goizueta died in November 2015 at the age of 81, her estate executors—daughter Olga Rawls and son Javier Goizueta—distributed about $1.4 million to 12 of the original 14 would-be beneficiaries.

In court briefs for the 14, Walbert rejected the notion that the distribution was “generous,” instead claiming Rawls and Javier Goizueta have acted only to increase their wealth.

Although the case is only about the amount claimed by his clients, Walbert included allegations in the brief that Rawls and Javier Goizueta in 2012 “caused $200 million of their mother's funds to be diverted to themselves and an additional $100 million to be diverted to their brother Roberto.” Along with a $176 million tax bill, he wrote, this “conversion of funds had a devastating impact on Mrs. Goizueta's desire to leave the bulk of the money her husband had left her to The Goizueta Foundation for charitable purposes.”

Balser, the lawyer for the two Goizueta children, responded to the Daily Report, “Mrs. Rawls and Mr. Goizueta absolutely deny these ridiculous allegations.”

The Goizueta Foundation reported on its website that it donated $23 million in 2017, including $4 million to the YMCA of Metro Atlanta, $4 million to the Atlanta History Center, $2 million to Sheltering Arms and $1.25 million to Boys & Girls Clubs of Metro Atlanta. Previous years' giving since 2001 has ranged from $6 million in 2008 to $42 million in 2014.

Judge Doris Downs first upheld the in terrorem clause in Fulton County Superior Court.

In the first of four opinions with ping-ponging arguments, Branch agreed for the appeals court majority that the clause met the requirement found in OCGA § 53-12-22 (b)—that in terrorem conditions are void “unless there is a direction in the trust instrument as to the disposition of the property if the condition in terrorem is violated.”

The clause in Olga Goizueta's trust stated that any benefits forefeited from a challenge go to The Goizueta Foundation.

But Bethel wrote in his dissent, “The majority misreads the plain wording of the statute and misapprehends its meaning, as the statute in no way precludes a court from determining whether a trust document containing an in terrorem provision was validly created in the first instance.”

He added later that, when lawmakers have articulated the policy of our state, “we are bound to follow it.”

“Where, as here, it has not articulated a policy, we are duty-bound to fulfill the role of the court and discern that test which serves the interests of justice,” added Bethel, who was joined by Presiding Judge Anne Elizabeth Barnes and, in the dissent's judgment only, Presiding Judge John Ellington.

In a footnote to the majority opinion, Branch responded to Bethel and the dissenters, saying their “rhetorical strawman argument notwithstanding, we have not misread OCGA § 53-12-22 (b) at all.”

She added that the law “says nothing whatsoever” about the existence of an exception to in terrorem clauses based upon a challenger's good faith allegation or probable cause of a problem in the trust.

Branch was joined by Chief Judge Stephen Dillard, Presiding Judges Yvette Miller and Sara Doyle, and Judges Gary Andrews, Carla Wong McMillian and Clyde Reese. Judges Brian Rickman and Amanda Mercier concurred in the judgment on the in terrorem clause but not Branch's opinion on the issue.

Judge Billy Ray, whose nomination to join the U.S. District Court in Atlanta is pending before the U.S. Senate, concurred fully and added a two-page statement saying a good faith exception to the in terrorem clause law “has some appeal” and could be a “desirable expression of public policy for our state.”

But he added he disagreed with dissenters that “it is the role of the courts, and the Court of Appeals of Georgia in particular, to create exception and insert it into our law. It is not.”

Presiding Judge Christopher McFadden wrote a separate dissent “to respond to the majority's argument that, because the legislature did not include the good faith/probably cause rule in OCGA § 53-12-22 (b), we should infer that they rejected it.”

“That is plausible,” he wrote. “But it is an inference drawn from silence.”

Another piece of litigation concerning Olga Goizueta's money is pending in Fulton County Superior Court. In that case, a former employee and confidant of Olga Goizueta, has sued Alston & Bird for more than $35 million, claiming fraud and professional negligence.

Katherine Stearns claims the firm handled legal affairs for both women but engineered “sham” investigations into tens of millions of dollars in gifts and bequests the wealthy widow gave Stearns, forcing their return to Ms. Goizueta and her estate.

The firm has denied any liability, saying Stearns “was not a client of the firm at the time we conducted our investigation of her. We owed no duty to Ms. Stearns in the course of pursuing our client's investigation and the claims that our client filed against her.