In Re: Petition to Docket Trust of Sadie G. McQueary Gary R. McQueary v. Robert C. Thompson, Jr., Successor Trustee Benjamin McQueary Willis Matthew McQueary and Nathan McQueary , 125 N.E.3d 664 ( 2019 )

FILED
May 29 2019, 8:58 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE –
Bryan H. Babb ROBERT C. THOMPSON, JR.
Bose McKinney & Evans LLP Joseph M. Dietz
Indianapolis, Indiana Meils, Thompson, Dietz, & Berish
Indianapolis, Indiana
ATTORNEYS FOR APPELLEE –
BENJAMIN MCQUEARY
John A. Cremer
Jonathan E. Lamb
Cremer & Cremer
Fishers, Indiana
ATTORNEY FOR APPELLEES –
NATHAN MCQUEARY AND
WILLIS MATTHEW MCQUEARY
William A. Maschmeyer
Haggerty, Haggerty, &
Maschmeyer
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Court of Appeals of Indiana | Opinion 18A-TR-915 | May 29, 2019 Page 1 of 24
In Re: Petition to Docket Trust May 29, 2019
of Sadie G. McQueary, Court of Appeals Case No.
18A-TR-915
Appeal from the Marion Superior
Court
The Honorable Steven R.
Eichholtz, Judge
Trial Court Cause No.
49D08-1404-TR-12478
Gary R. McQueary, Court of Appeals Case No.
18A-TR-915
Appellant-Plaintiff,
Appeal from the Hamilton
v. Superior Court
The Honorable Steven R. Nation,
Robert C. Thompson, Jr., Judge
Successor Trustee; Benjamin Trial Court Cause No.
McQueary; Willis Matthew 29D01-1707-PL-7104
McQueary; and Nathan
McQueary,
Appellees-Defendants.
Najam, Judge.
Statement of the Case
[1] Gary R. McQueary is the former trustee of The Sadie G. McQueary Revocable
Living Trust (“the Trust”) as well as a beneficiary of the Trust. Nathan
McQueary, Willis McQueary, and Benjamin McQueary (collectively, “the
Grandsons”) are also beneficiaries of the Trust. In this consolidated appeal,
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Gary appeals the Marion Superior Court’s order granting a motion by Robert
C. Thompson, as successor trustee (“the Trustee”), to enforce a mediated
settlement agreement that Gary had entered into along with the Grandsons that
settled disputes related to the Trust. Gary further appeals the Marion Superior
Court’s order that he pay $20,831.25 in attorneys’ fees based on the court’s
conclusion that Gary breached the terms of the settlement agreement. Gary
also appeals the Hamilton Superior Court’s dismissal of his action for quiet
title, which related to real property held by the Trust.
[2] Gary presents three issues for our review, which we revise and restate as
follows:
1. Whether the Marion Superior Court erred when it granted the
Trustee’s motion to enforce the settlement agreement.
2. Whether the Marion Superior Court erred when it ordered
Gary to pay attorneys’ fees based on its determination that
Gary breached the terms of the settlement agreement.
3. Whether the Hamilton Superior Court erred when it
dismissed his complaint to quiet title.
Additionally, the Trustee and the Grandsons jointly raise the following issue for
our review:
4. Whether they are entitled to an award of appellate attorneys’ fees.
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[3] We affirm in part, reverse in part, and remand for further proceedings.
Facts and Procedural History
[4] On February 19, 2004, Sadie McQueary established the Trust. One of the
assets of the Trust is a forty-acre parcel of land in Westfield (“the Westfield
property”). The Trust provided that, upon Sadie’s death, the trustee shall
distribute fifty percent of the estate to Gary, who is Sadie’s son, and fifty
percent to the Grandsons. 1
[5] Sadie died on June 10, 2013. At the time of her death, Gary became the
successor trustee of the Trust. On April 17, 2014, Nathan and Willis filed a
petition to docket the Trust in the Marion Superior Court. In that petition,
Nathan and Willis alleged that Gary had failed to carry out his fiduciary
responsibilities under the Trust. Nathan and Willis requested “a full and
complete current accounting” of all actions Gary had taken as trustee.
Appellant’s App. Vol. II at 121. On January 27, 2015, Gary and the Grandsons
entered into an agreed entry in which Gary, as trustee, agreed to list the
Westfield property for sale for a price of $2.2 million.
[6] Gary filed an accounting of the Trust on May 15. Thereafter, Benjamin filed an
objection to the accounting. Specifically, Benjamin asserted that there were “a
1
The Grandsons are the sons of Sadie’s son, Gregory, who predeceased Sadie.
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number of expenditures from the Trust assets” which did not “relate to any
term of the [T]rust.” Id. at 124. Nathan and Willis also filed an objection to
Gary’s accounting.
[7] On August 24, 2015, Gary and the Grandsons entered into a mediated
settlement agreement. Pursuant to that agreement, Gary agreed to resign as
trustee of the Trust, and Gary and the Grandsons agreed to appoint Thompson
as successor trustee. The parties agreed that Gary’s son, Jake McQueary,
would vacate the Westfield property within thirty days. Gary and the
Grandsons agreed to extend the real estate listing for the Westfield property for
three months. Additionally, they agreed to distribute three parcels of real estate
from the Trust to Gary, which were valued at $233,000. The parties also agreed
that Gary would refund $71,707 to the Trust. Gary agreed to pay $48,000 in
attorneys’ fees. In total, the parties agreed that Gary’s share in the Westfield
property would be reduced by $352,707. The trial court approved the
settlement agreement on August 27.
[8] Upon the expiration of the listing contract for the Westfield property, the
Trustee contacted local real estate brokers about the property. The real estate
brokers advised the Trustee that he needed to obtain a survey in order to sell the
property, which would cost between ten and fifteen thousand dollars. Gary and
the Grandsons did not agree to spend the money for the survey at that time.
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[9] In July 2017, Gary and the Grandsons agreed to spend the money for the
survey of the Westfield property. However, Gary quickly revoked his consent.
On July 28, Gary instead filed a complaint to quiet title to the Westfield
property in the Hamilton Superior Court. In his complaint, Gary asserted that
he “is now and has been since . . . the date of Sadie’s death, the owner of an
undivided one-half . . . interest in and to” the Westfield property. Id. at 58. He
also asserted that the Grandsons were equal owners of the other one-half
interest. Accordingly, Gary sought an order from the Hamilton Superior Court
declaring that title to the Westfield property had vested in Gary and the
Grandsons outside of the Trust at the time of Sadie’s death.
[10] On August 8, the Trustee filed a motion to dismiss Gary’s complaint in
Hamilton County pursuant to Indiana Trial Rule 12(B)(8) on the ground that
the same action was pending in the Marion Superior Court. Specifically, the
Trustee asserted that “[c]onfusion will be the prime result if two
Courts . . . attempt to resolve the differences among the beneficiaries of [the
Trust] concerning this land[.]” Appellant’s App. Vol. III at 34. The Grandsons
all joined in the Trustee’s motion to dismiss. In response, Gary asserted that
“[t]he matters for which the Trust was docketed in Marion County were
concluded with the Court’s order” approving the settlement agreement. Id. at
72. He further asserted that “[t]here is no matter pending in any other Court
which relates to the title of” the Westfield property. Id.
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[11] On December 21, the Trustee filed a petition for instructions in which he asked
the Marion Superior Court whether he could spend the money for a survey of
the Westfield property. He further asked the court if he could accept offers on
the property of below one million dollars without the consent of Gary and the
Grandsons if he believed it to be in the best interest of the Trust. 2 Nathan and
Willis filed a response in which they consented to paying for a survey of the
property. In addition, Nathan and Willis stated that they would agree to the
Trustee negotiating a sale for less than one million dollars subject to court
approval following notice and a hearing.
[12] On February 6, 2018, the Hamilton Superior Court held a hearing on Gary’s
complaint to quiet title. Following the hearing, the Hamilton Superior Court
took the matter under advisement pending a determination by the Marion
Superior Court as to whether all of the terms and conditions of the mediated
settlement agreement had been completed and whether the Trust should be
removed from the docket. The Hamilton Superior Court concluded that,
“[o]nce the Marion County Court has made such determination, this Cause will
be dismissed or proceed.” Id. at 155.
2
It is not clear from the record, but it appears that at some point Gary and the Grandsons agreed to list the
property for $1.25 million instead of $2.2 million.
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[13] On February 27, Gary filed a motion to dismiss the Trustee’s petition for
instructions in the Marion Superior Court. Gary asserted that the Trustee’s
petition should be dismissed pursuant to Trial Rule 12(B)(8) because the
Trustee’s petition sought to have the Marion Superior Court exercise
jurisdiction over property that was the subject of Gary’s quiet-title action in the
Hamilton Superior Court, and also because the terms of the Trust could not be
amended by the parties or by the court. In the same motion, Gary requested
that the Marion Superior Court enter an order allowing the quiet title action to
proceed in Hamilton County. In support of his request, Gary asserted that
“[t]here exists no authority” for the Trustee or anyone else to serve as trustee
following Sadie’s death “except for the purpose of distributing the assets” in
accordance with the terms of the Trust, which he asserted required the assets to
be distributed immediately upon Sadie’s death. Appellant’s App. Vol. II at 55.
He further asserted that the settlement agreement approved by the court had
settled the disputes between Gary and the Grandsons.
[14] On March 5, the Trustee filed a motion in the Marion Superior Court to enforce
the mediated settlement agreement. The Trustee asserted that Gary had
violated the terms of the settlement agreement when he filed his quiet-title
action in the Hamilton Superior Court, which the Trustee described as “a
deliberate campaign to prevent Trustee Thompson from selling the Westfield
property which would block the repayment of $352,707 Gary McQueary owes
to the other beneficiaries.” Id. at 77. The Trustee asked the Marion Superior
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Court to notify the Hamilton Superior Court that the terms of the settlement
agreement had not been fulfilled and that the Trust remained docketed in
Marion County and to find that Gary breached the terms of the settlement
agreement when he filed the complaint to quiet title in Hamilton County.
[15] On April 4, the Marion Superior Court issued an order in which it found that it
had “acquired jurisdiction of the trust when the trust was docketed.” Id. at 152.
The court also found that “[t]he title to the Westfield real estate in issue has
remained a trust asset” since Sadie deeded it to the Trust before her death. Id.
at 151. The court further found that the property “remains an asset of the Trust
now and is subject to Trustee Thompson’s efforts to sell” the property at a price
acceptable to Gary and the Grandsons. Id. The court further noted that,
despite Gary’s contentions to the contrary, the Trust “expressly allows” for the
sale of the Westfield property and that there is nothing in the parties’ mediated
settlement agreement “that modifies the terms of the trust.” Id. at 153. The
court granted the Trustee’s motion to enforce the settlement agreement. The
court then directed the Trustee and the Grandsons to file motions for attorneys’
fees as they “have prevailed in their efforts to stop Gary McQueary from
depriving the trust of its last remaining asset[.]” Id. at 154. 3
3
Gary appealed the Marion Superior Court’s order on April 24. However, he subsequently asked this Court
to remand the matter to the trial court. This Court granted his motion and remanded to the trial court with
instructions for the trial court to hold a hearing on the issue of attorneys’ fees.
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[16] The Trustee filed a notice of the Marion Superior Court’s order with the
Hamilton Superior Court and reasserted his claim that the Hamilton Superior
Court should dismiss Gary’s complaint to quiet title. Based on the Marion
Superior Court’s April 4 order, the Hamilton Superior Court dismissed Gary’s
complaint to quiet title on May 7.
[17] Thereafter, the attorneys for the Trustee, Nathan and Willis, and Benjamin filed
their respective petitions for attorneys’ fees in the Marion Superior Court. In
response, Gary asserted that his complaint to quiet title in Hamilton County
was not a breach of the mediated settlement agreement and, as such, there was
no “factual or legal basis” for the award of attorneys’ fees. Id. at 206.
Following a hearing at which the attorneys presented argument regarding
whether Gary breached the settlement agreement, the Marion Superior Court
granted the attorneys’ petitions. The trial court ordered Gary to pay $13,950 to
the Trustee’s attorney, $3,100 to Benjamin’s attorneys, and $3,781.25 to Nathan
and Willis’ attorney. This interlocutory appeal ensued.
Discussion and Decision
Issue One: Mediated Settlement Agreement
[18] Gary first contends that the Marion Superior Court erred when it granted the
Trustee’s motion to enforce the settlement agreement. However, Gary has
invited any error in the trial court’s enforcement of the settlement agreement.
“[T]o establish invited error, there must be some evidence that the error resulted
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from the appellant’s affirmative actions[.]” Batchelor v. State, 119 N.E.3d 550,
557 (Ind. 2019). Here, Gary was a party to the mediation that resulted in the
mediated settlement agreement, he signed the settlement agreement, and he
joined the Grandsons in asking the trial court to accept the settlement
agreement. Accordingly, Gary took affirmative action in asking the court to
accept the mediated settlement agreement. As such, he cannot now claim that
the trial court erred when it enforced the agreement he had asked it to accept.
[19] Invited error notwithstanding, Gary contends that the trial court erred when it
enforced the mediated settlement agreement because the settlement agreement
impermissibly altered the terms of the Trust. To address Gary’s assertion on
appeal, we must interpret the Trust. “The interpretation of a trust document is
a question of law for the court. The primary purpose in construing a trust
instrument is to ascertain and give effect to the settlor’s intention.” Kristoff v.
Centier Bank, 985 N.E.2d 20, 23 (Ind. Ct. App. 2013). “We examine the trust
document as a whole to determine the plain and unambiguous purpose of the
settlor as that intent appears within the four corners of the instrument.”
Graninger v. Nat’l City Bank of Ind. (In re Trust Stonecipher), 849 N.E.2d 1191,
1195 (Ind. Ct. App. 2006).
[20] Gary’s argument on this issue is that the Trust “plainly require[s] the
distribution of assets upon and following the death of the Settlor, which
occurred on June 10, 2013,” Appellant’s Br. at 17, and, as such, by keeping the
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Westfield property within the Trust after Sadie’s death the settlement agreement
violates the terms of the Trust. That is, Gary contends in effect that the
settlement agreement altered the terms of the Trust by allowing the Trustee to
sell the Westfield property instead of immediately distributing the property to
Gary and the Grandsons.
[21] To support his contention that the Trustee was required to distribute the assets
immediately following Sadie’s death, Gary cites two provisions of the Trust.
Article IV(D) provides that, “[u]pon the death of the Grantor, the Trustee
shall . . . divide the remainder of the estate into shares . . . and shall hold,
administer, and distribute each share according to the provisions of” Article
IV(F). Appellant’s App. Vol. II at 62. Article IV(F)(6) provides that, subject to
Article VI(S), “whenever any beneficiary for whom a trust is then held shall
have attained the age of twenty-five (25) years, the Trustee shall distribute to
each beneficiary, free of trust, the entire principal and accumulated income, if
any, of his or her separate trust.” Id. at 63. Based on those two provisions,
Gary contends, in effect, that the plain language of the Trust requires that the
only action the Trustee is authorized to take is to distribute the assets
immediately to Gary and the Grandsons on Sadie’s death. We cannot agree.
[22] As discussed above, one provision of the Trust provides for the distribution of
the Trust assets upon Sadie’s death. And another provision of the Trust
provides that the interest of the beneficiaries vested on Sadie’s death. See
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Appellant’s App. Vol. II at 68. However, there are other provisions of the Trust
that grant the Trustee the discretion to retain and withhold distribution of the
assets. Indeed, one of the provisions that Gary relies on, Article IV(F)(6),
provides for the distribution of assets “[s]ubject to a possible retention of some
or all of the assets of the trust estate by the Trustee” pursuant to Article VI(S).
Id. at 63. Article VI(S) provides that the trustee has the power “[t]o withhold
from distribution, in the Trustee’s discretion, at the time for distribution of any
property in this trust . . . so long as the Trustee shall determine, in the Trustee’s
discretion, that such property may be subject to conflicting claims[.]” Id. at 68.
Accordingly, it is clear that the Trustee has the discretion to withhold
distribution of the assets instead of distributing the assets immediately on
Sadie’s death.
[23] That discretion is further emphasized in Article VI(A), which provides that the
trustee has the power to “continue to hold any property received in trust,
including undivided interests in real property . . . as long as the Trustee, in the
Trustee’s discretion, may deem advisable[.]” Id. at 65 (emphasis added). Thus,
the Trust explicitly grants the Trustee the power to hold any real property as
long as the trustee deems it advisable.
[24] Further, upon any division or distribution of the estate, Sadie granted the
trustee the power to “partition, allot[,] and distribute the trust estate in
undivided interests or in kind, or partly in money and partly in kind, at
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valuations determined by the Trustee, and to sell such property as the Trustee may
deem necessary to make division or distribution[.]” Id. at 66 (emphasis added).
Accordingly, the Trust explicitly granted the Trustee the power to sell the real
estate prior to distribution.
[25] Reading the Trust as a whole, which we are required to do, it is clear that the
intent of the settlor was to grant discretion to the Trustee either to distribute the
assets on her death or to delay their distribution. The Trust further granted the
Trustee the discretion to sell any property in order to make the distributions.
Because the Trustee has the discretion to retain and sell the Trust assets,
including the Westfield property, we cannot say that any term of the settlement
agreement that provided or allowed for the property to be sold instead of to be
distributed immediately to Gary and the Grandsons improperly altered the
terms of the Trust. As the settlement agreement did not alter the terms of the
Trust, the trial court did not err when it granted the Trustee’s motion to enforce
the settlement agreement.
Issue Two: Attorneys’ Fees
[26] Gary next asserts that the Marion Superior Court erred when it ordered him to
pay attorneys’ fees for the Trustee and the Grandsons. Gary specifically asserts
that the court erred when it ordered him to pay attorneys’ fees because he
contends he did not breach a term of the settlement agreement, which breach
was necessary for the award of attorneys’ fees under the agreement.
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Accordingly, in order to determine whether the Marion Superior Court erred
when it ordered Gary to pay attorneys’ fees, we must first determine whether
Gary breached the terms of the settlement agreement.
Breach of Settlement Agreement
[27] Gary contends that the Marion Superior Court erred when it ordered him to
pay the attorneys’ fees because he “did not breach any term or condition of the
2015 Settlement Agreement” when he filed his complaint to quiet title in
Hamilton County and that “the trial court’s April 2018 order does not identify
any term, condition[,] or paragraph of the Settlement Agreement that Gary
McQueary breached.” Appellant’s Br. at 25, 26. Because the question is
whether Gary’s action of filing the complaint to quiet title in Hamilton County
breached the terms of the settlement agreement, we are in as good a position as
the trial court to review the paper record and to determine whether Gary
violated the agreement. As such, we review the Marion Superior Court’s
determination that Gary breached the settlement agreement and, thus, its award
of attorneys’ fees de novo. 4 See Anderson v. Wayne Post 64, Am. Legion Corp., 4
N.E.3d 1200, 1206 (Ind. Ct. App. 2014), trans. denied.
4
The Trustee and the Grandsons contend that the “de novo standard of review does not apply” to the issue of
whether Gary violated the settlement agreement because the trial court heard testimony about Gary’s quiet
title action being the reason for the need to incur attorneys’ fees. Appellees’ Br. at 31. The Trustee and the
Grandsons are correct that the trial court allowed the attorneys to present sworn testimony regarding whether
Gary breached the settlement agreement. However, the attorneys simply testified as to which provisions of
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[28] The Trustee and the Grandsons first assert that Gary’s action to quiet title
violated the settlement agreement because the parties had agreed to extend the
listing contract for the Westfield property so that the Trustee could sell it. On
appeal, Gary contends that the act of filing his complaint to quiet title did not
breach any terms of the settlement agreement because there is no provision in
the settlement agreement that grants the Trustee “an everlasting right” to
market and sell the real estate. Appellant’s Br. at 26. We agree with Gary that
the settlement agreement does not contain a provision that gives the Trustee a
perpetual right to sell the Westfield property. Indeed, in the mediated
settlement agreement, Gary and the Grandsons only “agree[d] to extend the
real estate listing contract of [the Westfield property] . . . for three months after
the date of the Court Order approving this Settlement.” Appellant’s App. Vol.
II at 15. Accordingly, the parties only agreed to list the Westfield property for
sale for three months beginning on August 27, 2015. We cannot say that
Gary’s attempt to quiet title in July 2017, eighteen months after the agreed-
upon three-month listing contract had expired, violated the provision of the
settlement agreement in which the parties agreed to list the property for sale. 5
the settlement agreement they believed Gary breached. There is nothing about that testimony that put the
trial court in a better position than this Court to determine whether the act of filing the quiet title action
constituted a breach of the settlement agreement.
5
The Trustee and the Grandsons also contend that Gary’s action to quiet title violated the settlement
agreement because getting title to the property would allow Gary to prohibit a sale of the property or to
otherwise refuse to pay the Grandsons the $352,707 he owes to them. However, that is merely speculation
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[29] However, our conclusion that Gary’s complaint to quiet title did not violate
that provision of the settlement agreement does not end our inquiry as the
Trustee and the Grandsons also asserted that Gary’s complaint to quiet title
violated the “release language” provision in Paragraph 12 of the settlement
agreement. Appellees’ Br. at 35. We must agree with the Trustee and the
Grandsons. When Gary and the Grandsons signed the mediated settlement
agreement, they also each agreed to
hereby forever release and discharge each other . . . of and from
any and all manner of actions, causes of action, suits, accounts,
contracts, debts, claims, and demands whatsoever, at law or in
equity, and however arising, on or before the date of this release
involving the Trust, related to [Sadie’s] estate or any other property
in which she had an interest during her life and including all
matters asserted, or which could have been asserted
by any of the parties under the cause number related to the docketed Trust.
Appellant’s App. Vol. II at 18 (emphases added). In other words, by entering
into the settlement agreement Gary agreed not to file any cause of action
against any of the other parties to the agreement for any claim that was or could
have been asserted under the Trust’s cause number.
about a potential future breach of the settlement agreement. Gary has not yet refused either to sell the
property or to pay the Grandsons back after the sale of the property.
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[30] Here, Gary was the trustee of the Trust for over two years from the date Sadie
died on June 10, 2013, until he was replaced on August 27, 2015, which time
period included over sixteen months after the Trust was docketed on April 17,
2014. There is no dispute that, during his time as trustee, Gary administered
the Westfield property as an asset of the Trust. Further, Gary makes no
assertion that during the time period in which he served as the trustee he was
unaware of the provision of the Trust that provided for the assets to be
distributed upon Sadie’s death. As such, Gary could have asserted a claim in
the Marion Superior Court that the Westfield property had vested in him and
the Grandsons immediately upon Sadie’s death—which is the claim he asserted
in his complaint to quiet title—after the Trust had been docketed but prior to
entering into the mediated settlement agreement. Further, in addition to
naming the Trustee as a defendant in his complaint to quiet title, Gary named
the Grandsons as defendants.
[31] Gary’s complaint to quiet title was a cause of action related to Sadie’s estate,
which he could have asserted prior to entering into the agreement. 6 That is
precisely the type of claim that Gary agreed not to bring against the Grandsons
6
It is undisputed that Gary’s interest in the Westfield property vested in him upon Sadie’s death. See
Appellant’s App. Vol. II at 68. However, the question is not whether his interest in the Westfield property
had vested. Rather, the question is whether Gary’s action of filing the quiet title action, regardless of whether
his interest had vested, breached a term of the settlement agreement.
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when he signed the agreement. Accordingly, Gary breached the settlement
agreement when he filed his complaint to quiet title to the Westfield property.
Grandsons’ Attorneys’ Fees
[32] As Gary violated a term of the settlement agreement, we next turn to whether
the Marion Superior Court erred when it ordered Gary to pay attorneys’ fees. It
is well settled that Indiana adheres to the American Rule, which provides “that
each party must pay his own attorney fees absent an agreement between the
parties, statutory authority, or a rule to the contrary.” Branham Corp. v. Newland
Resources, LLC, 44 N.E.3d 1263, 1274 (Ind. Ct. App. 2015). Gary acknowledges
that he and the Grandsons entered into an agreement “that is contrary to the
‘American Rule.’” Appellant’s Br. at 25. Indeed, Gary and the Grandsons
agreed that, “[i]f any of the parties to this Settlement Agreement is required to
initiate legal action to enforce the terms of this settlement, the prevailing
party(ies) shall be entitled to recover their reasonable attorney’s fees from the
non-prevailing party(ies).” Appellant’s App. Vol. II at 18.
[33] On appeal, Gary does not contend that the Grandsons were not parties to the
settlement agreement. Neither does he contend that an award of attorneys’ fees
to the Grandsons would be improper if he breached the agreement. Because
Gary breached the settlement agreement, which breach caused the Grandsons
to initiate legal action to enforce the agreement, the trial court did not err when
it ordered Gary to pay the Grandsons’ attorneys’ fees.
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Trustee’s Attorney’s Fees
[34] Gary further contends that, even if he breached a term of the settlement
agreement, the court erred when it ordered him to pay the Trustee’s attorney’s
fees because the Trustee was not a party to the settlement agreement. Again,
Indiana adheres to the American Rule, which provides “that each party must
pay his own attorney fees absent an agreement between the parties, statutory
authority, or a rule to the contrary.” Branham Corp., 44 N.E.3d at 1274. Gary
asserts that, while he and the Grandsons entered into an agreement that was
contrary to the American Rule, the Trustee was not a party to that agreement
and, as such, the Trustee is not entitled to the “fee-shifting right” under the
settlement agreement. Appellant’s Br. at 27. We must agree.
[35] As we have already noted, the settlement agreement specifically provides that,
if any party to the Settlement Agreement is required to initiate legal action to
enforce the terms of the agreement, the prevailing party shall be entitled to
recover its attorneys’ fees from the nonprevailing party. Appellant’s App. Vol.
II at 18. Based on the plain language of that provision of the settlement
agreement, it is clear that the parties only intended to deviate from the
American Rule if another party to the agreement is required to initiate legal
action. And the Trustee is not a party to the settlement agreement.
[36] Nonetheless, the Trustee and the Grandsons contend that the parties extended
the right to seek attorney’s fees to the Trustee because the Trustee was in privity
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with the parties to the agreement. But the Trustee and the Grandsons do not
cite any authority to support their contention that a trustee is in privity with the
parties to a settlement agreement that resolves a dispute related to the Trust
simply because of his role as trustee. 7 Further, even if we were to agree that the
Trustee was in privity with the parties to the settlement agreement, we still
could not agree that the Trustee is entitled to attorney’s fees.
[37] When the parties entered into the agreement, they agreed that the “Settlement
Agreement shall be binding upon the parties’ heirs, assigns[,] and executors.”
Id. While the parties specifically provided for the terms of the settlement
agreement—including the fee-shifting provision—to be binding on their heirs,
assigns, and executors, the parties, notably, did not provide for the agreement to
be binding on those who are in privity with the parties to the agreement. Had
the parties intended for those in privity to be bound by the agreement, they
could have said so. But they did not. As such, the parties did not extend the
fee-shifting rights to the Trustee, and the Trustee was not entitled to an award
of attorney’s fees. We therefore reverse the trial court’s award of attorney’s fees
for the Trustee. While the Trustee is not entitled to an award of attorney’s fees,
we note that the Trust specifically granted the Trustee the power “[t]o
commence or defend, at the expense of the trust, such litigation with respect to the
7
The Trustee and the Grandsons only cite Isp.com LLC v. Theising, which held that a receiver of a
corporation is in privity with the corporation. 805 N.E.2d 767, 774 (Ind. 2004).
Court of Appeals of Indiana | Opinion 18A-TR-915 | May 29, 2019 Page 21 of 24
trust or any property of the trust estate as the Trustee may deem advisable[.]”
Id. at 68. (emphasis added). Accordingly, while the Trustee is not entitled to
have Gary pay his attorney’s fees, the Trustee is authorized to pay his attorney’s
fees out of the Trust.
Issue Three: Complaint to Quiet Title
[38] Gary finally contends that the Hamilton Superior Court erred when it dismissed
his complaint to quiet title pursuant to Indiana Trial Rule 12(B)(8). As this
Court has previously stated:
Indiana Trial Rule 12(B)(8) permits the dismissal of an action
when “[t]he same action [is] pending in another state court of this
state.” Trial Rule 12(B)(8) implements the general principle that,
when an action is pending in an Indiana court, other Indiana
courts must defer to that court’s authority over the case. The rule
applies where the parties, subject matter, and remedies are
precisely the same, and it also applies when they are only
substantially the same.
Beatty v. Liberty Mut. Ins. Group, 893 N.E.2d 1079, 1084 (Ind. Ct. App. 2008)
(alterations in original). We review a trial court’s dismissal of a complaint
under Trial Rule 12(B)(8) de novo. See id.[39] On appeal, Gary simply asserts that, “[i]f this Court finds that the Marion
County trial court erred by enforcing the Settlement Agreement to reform the
terms of the Trust, . . . then this Court should also reinstate the Hamilton
County Quiet Title Action[.]” Appellant’s Br. at 29. Gary’s contention on this
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issue is thus contingent upon this Court’s determination that the settlement
agreement impermissibly altered the terms of the Trust and that the Marion
Superior Court erred when it enforced that agreement.
[40] But, as discussed above, we do not agree with Gary that the settlement
agreement improperly modified the Trust because the Trust provided the
Trustee with the discretion to hold and sell the assets of the Trust. Accordingly,
we do not agree with Gary that the Marion Superior Court erred when it
enforced the settlement agreement. Because the Marion Superior Court did not
err when it enforced the agreement, we cannot say that the Hamilton Superior
Court erred when it dismissed Gary’s complaint to quiet title because a
substantially similar action was pending in Marion County. We affirm the
Hamilton Superior Court’s dismissal of Gary’s complaint.
Issue Four: Appellate Attorneys’ Fees
[41] Finally, the Trustee and the Grandsons request that we award them appellate
attorneys’ fees. It is well settled that, “when a contract provision provides that
attorneys fees are recoverable, appellate attorney fees may also be awarded.”
Cavallo v. Allied Physicians of Michiana, LLC, 42 N.E.3d 995, 1010 (Ind. Ct. App.
2015). Here, it is undisputed that the settlement agreement provides for
attorneys’ fees. As the Grandsons have prevailed on appeal, we grant their
request for appellate attorneys’ fees, and we remand to the trial court for a
determination of reasonable fees to award the Grandsons. See id. However, as
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discussed above, the Trustee is not entitled to attorney’s fees, so we decline his
request for appellate attorney’s fees.
Conclusion
[42] In sum, we hold that the Marion Superior Court did not err when it enforced
the settlement agreement because the settlement agreement did not alter the
terms of the Trust. We also hold that the Marion Superior Court did not err
when it awarded attorneys’ fees to the Grandsons because Gary violated a
provision of the settlement agreement. However, the trial court erred when it
awarded attorney’s fees to the Trustee because the Trustee was not a party to
the settlement agreement. We further hold that the Hamilton Superior Court
did not err when it dismissed Gary’s complaint to quiet title because the same
matter was pending in Marion County. Finally, we grant the Grandsons’
request for appellate attorneys’ fees, but we deny the Trustee’s request.
[43] Affirmed in part, reversed in part, and remanded for further proceedings.
Baker, J., and Robb, J., concur.
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