This appeal concerns the performance by Wachovia Bank of Georgia hereinafter “Wachovia” of its duties as trustee of a trust. The settlor of the trust was General Ibrahim N. Ali hereinafter “Ali”, a citizen and resident of Iraq, who traveled to Atlanta in March 1989 to visit his son, Issam Namik. During his visit, Ali purchased a six-month $2,650,000 certificate of deposit from Wachovia and met with Slaughter, a trust officer, who successfully solicited Ali to establisha revocable living trust. During a two-hour meeting at which the trust agreement was discussed, Ali verbally gave instructions for funding the trust six months later with the proceeds of the CD he had just purchased and for investing the proceeds only in U.S. government issues. When the CD matured in September 1989, Slaughter prepared a memorandum hereinafter “the Slaughter memo” recounting the creation of the trust and Ali’s instructions. The trust officer assigned to the account, unsuccessful in his efforts to contact Ali for further information on investment goals, invested the entire corpus in an income-tax-free money market fund where it remained for the life of the trust. Wachovia subsequently learned Ali had been imprisoned upon his return to Iraq, and was informed by Issam Namik in 1994 that Ali died in prison in Iraq in 1990. After Ali’s estate paid almost $1.5 million in estate tax and interest, the beneficiaries of the estate hereinafter “Namik” sued Wachovia on various theories based on their claim that investment of the funds in accordance with Ali’s instruction would have avoided all the estate tax and interest because the funds of nonresident aliens are not subject to estate tax when invested in certain U.S. government issues. At trial, Namik put on evidence that a professional trustee in Wachovia’s position should have known about the availability of investments for a person such as Ali which would have been exempt from estate taxes. A witness characterized Wachovia’s failure to consider the estate tax consequences of its investment decisions as a fundamental mistake. Expert testimony was adduced to the effect that the trustee had two primary duties with regard to the trust at issue: to protect the corpus and to follow Ali’s instructions. Based on that evidence, the trial court found Wachovia should have known investing the corpus as it did subjected the trust to a potential liability which eventuated, and Wachovia had a duty to invest the corpus in accordance with Ali’s instructions memorialized in the Slaughter memo. Based on those findings, the trial court concluded Wachovia breached its fiduciary duty as trustee by failing to avoid estate taxes and by failing to follow Ali’s instructions, and breached its contract by failing to invest Ali’s funds in accordance with his instructions. In an opinion addressing appeals by both sides of the litigation, the Court of Appeals reversed the judgment for Namik and rejected all of Namik’s enumerations of error. Wachovia Bank of Georgia v. Namik , 265 Ga. App. 80 593 SE2d 35 2003. This Court granted the writ of certiorari to consider the correctness of the Court of Appeals’ reversal of the judgment for Namik. 1. Before addressing the question of the correctness of the decision of the Court of Appeals reversing the trial court’s ruling on breach of fiduciary duty and breach of contract, we must first address the issue of the admissibility of the Slaughter memo. This is so because Wachovia’s knowledge of Ali’s investment directions is key to consideration of whether its disregard for those instructions constituted a breach of its fiduciary duties as trustee and a breach of its contract with Ali.
The Court of Appeals correctly cited the basic rule that a court will “turn to parol evidence only if the trust agreement is ambiguous . . .,” Ovrevik v. Ovrevik , 242 Ga. App. 95 1 527 SE2d 586 2000, but incorrectly found no ambiguity in the portion of the trust agreement concerning the types of investments permissible under the agreement. The Court of Appeals held the Slaughter memo was admissible to explain the source of funding for the trust because that provision of the trust agreement was left blank, but was not admissible to specify the types of investments in which the funds were to be placed. The latter ruling was based on a holding that a clause in the trust agreement providing the trustee with discretion to “hold, manage, invest, and reinvest” the corpus of the trust made the trust agreement a “valid, complete written agreement with regard to the types of investments in which the trustee was authorized to invest. . . .” Wachovia Bank v. Namik , supra at 84. However, that clause makes no reference to the type of investments in which Ali intended his funds to be invested. Such an incomplete provision may helpfully be contrasted to that in Thomas v. Wood , 228 Ga. 206, 209 184 SE2d 561 1971,where a trustee “was empowered to sell, exchange or otherwise dispose of the trust property at public or private sale for cash or on terms; to retain, sell, invest and reinvest in any stocks, bonds, securities or other property, real or personal, which he deemed proper, necessary or expedient, without any responsibility for the exercise of his discretion except that of using ordinary care and without being confined to legal investments.” As the Court of Appeals points out in its opinion in this case, such instruction could have been placed in the agreement at issue in this case, but was not. Wachovia Bank of Georgia v. Namik , supra at 84. The trust agreement was drafted by Wachovia and is, therefore, to be construed most strongly against Wachovia. Hertz Equipment Rental Corp. v. Evans , 260 Ga. 532, 533 397 SE2d 692 1990. With that consideration in mind, we conclude the omission of the type of investment instrument to be used renders the agreement incomplete and ambiguous. Preferred Risk Mut. Ins. Co. v. Jones , 233 Ga. 423 1 211 SE2d 720 1975. See also Judge v. Wellman , 198 Ga. App. 782, 783 403 SE2d 76 1991; Sosebee v. Atha , 140 Ga. App. 555 3 231 SE2d 381 1976. “Where, as here, ambiguities exist, we may look outside the written terms of the contract and consider all the surrounding circumstances to determine the parties’intent.” Southern Federal Sav. and Loan Ass’n of Atlanta v. Lyle , 249 Ga. 284, 287 290 SE2d 455 1982.
