Gallagher v. Graham (In Re Estate of Graham) ( 2018 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/16/2018 09:10 AM CST
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Nebraska Supreme Court A dvance Sheets
301 Nebraska R eports
IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
In reEstate of Hilda M. Graham, deceased.
Merle Gallagher and Linda Clarke,
appellants, v. Gregory G.
Graham, appellee.
___ N.W.2d ___
Filed November 16, 2018. No. S-17-1296.
1. Decedents’ Estates: Appeal and Error. Appeals of matters arising
under the Nebraska Probate Code are reviewed for error on the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors
appearing on the record, an appellate court’s inquiry is whether the deci-
sion conforms to the law, is supported by competent evidence, and is
neither arbitrary, capricious, nor unreasonable.
3. Decedents’ Estates: Attorney Fees. Ordinarily, the fixing of reasonable
compensation, fees, and expenses, pursuant to Neb. Rev. Stat. § 30-2480
(Reissue 2016), governing compensation of personal representatives;
Neb. Rev. Stat. § 30-2481 (Reissue 2016), governing expenses in estate
litigation; and Neb. Rev. Stat. § 30-2482 (Reissue 2016), governing
compensation of personal representatives and employees of the estate, is
within the sound discretion of the county court.
4. Attorney Fees: Appeal and Error. When an attorney fee is authorized,
the amount of the fee is addressed to the trial court’s discretion, and its
ruling will not be disturbed on appeal absent an abuse of discretion.
5. Pretrial Procedure: Appeal and Error. Determination of an appropri-
ate sanction for failure to comply with a proper discovery order initially
rests with the discretion of the trial court, and its rulings on appropriate
sanctions will not be disturbed on appeal absent a showing of an abuse
of that discretion.
6. Rules of the Supreme Court: Appeal and Error. The cross-appeal
section of an appellate brief must set forth a separate title page, a table
of contents, a statement of the case, assigned errors, propositions of law,
and a statement of the facts.
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Nebraska Supreme Court A dvance Sheets
301 Nebraska R eports
IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
7. ____: ____. When a brief of an appellee fails to present a proper cross-
appeal pursuant to Neb. Ct. R. App. P. § 2-109 (rev. 2014), an appellate
court declines to consider its merits.
8. Appeal and Error. Absent plain error, an appellate court considers only
an appellant’s claimed errors that the appellant specifically assigns in a
separate “assignment of error” section of the brief and correspondingly
argues in the argument section.
9. Decedents’ Estates: Executors and Administrators: Courts:
Jurisdiction. A probate court’s jurisdiction and authority continue until
an executor or administrator has fully complied with all its judgments,
orders, and decrees and the estate has been placed in the possession of
whom it devolves.
10. Decedents’ Estates: Courts: Jurisdiction. Pursuant to Neb. Rev. Stat.
§ 30-2473 (Reissue 2016), county courts in ongoing probate proceed-
ings have jurisdiction over surcharge motions brought against former
personal representatives to recover losses to the decedent’s estate arising
from an alleged breach of fiduciary duty.
11. Decedents’ Estates: Executors and Administrators: Damages: Proof.
A beneficiary or designee seeking a surcharge against the personal rep-
resentative for conversion, damage, or loss of estate property has the
burden of proving that (1) a fiduciary duty was breached, (2) the breach
of the fiduciary duty caused the losses alleged, and (3) the extent of
those damages.
Appeal from the County Court for Douglas County: Thomas
K. H armon, Judge. Affirmed.
Howard Kaiman and Edward W. Hasenjager for appellants.
Norman Denenberg for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Freudenberg, J.
NATURE OF CASE
The designees of the decedent’s estate appeal the county
court’s determination that the evidence was insufficient to
prove damages for the conversion of estate property purport-
edly caused by the personal representative who was removed
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Nebraska Supreme Court A dvance Sheets
301 Nebraska R eports
IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
for breaches of fiduciary duties. They also assert that the per-
sonal representative should have been surcharged for the attor-
ney fees and successor personal representative fees because of
his breaches of fiduciary duties and alleged frivolous defense
to his removal. We affirm.
FACTS
R emoval of Personal R epresentative
and Personal P roperty Damages
Gregory G. Graham (Graham) was the designated personal
representative of the estate of Hilda M. Graham, who died on
September 5, 2013. In accordance with the decedent’s last will
and testament, Graham’s appointment as the personal repre-
sentative followed.
A dispute developed between Graham and two interested
parties in the estate, Merle Gallagher and Linda Clarke. Both
Gallagher and Clarke were to inherit from the decedent’s will.
Specifically, Clarke was to receive a “Peanuts collection” of
figurines and Gallagher was to inherit full ownership of the
decedent’s home, as well as the residual estate. After Graham
distributed the personal property pursuant to the decedent’s
will, Gallagher and Clarke alleged that they did not receive
the entirety of what was bequeathed to them. As a result, they
sought to have Graham removed as personal representative.
After a hearing, Graham was removed as personal repre-
sentative of the estate and a successor personal representative,
Edward Kasl, was appointed by the county court. Graham
subsequently appealed that decision, and in case No. S-14-804,
an unpublished memorandum opinion dated May 21, 2015,
we reversed. We held that the county court erred in removing
Graham as personal representative without having heard his
evidence and testimony. We also held that the court erred in
awarding damages when such relief was not requested. We
remanded the matter, ordering a new hearing and directing that
the case be reassigned to a new judge.
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Nebraska Supreme Court A dvance Sheets
301 Nebraska R eports
IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
At the hearing on remand, exhibit 101 was offered, but the
county court sustained Graham’s relevancy objection to exhibit
101 and did not receive it into evidence. Exhibit 101 consists
of the entire bill of exceptions for the proceedings leading up
to the order that we reversed in our memorandum opinion.
Gallagher and Clarke again presented evidence in sup-
port of Graham’s removal. They also moved for the court to
assess damages against Graham for the alleged conversion,
damage, or loss of estate property. Gallagher and Clarke testi-
fied that Graham maintained exclusive control over the real
estate, as well as its contents, for a period in excess of 90
days after the decedent’s death and failed to properly inven-
tory the contents of the residence or provide an accounting
of how the nonprobate estate assets were disposed of during
that time.1
In support of their claims that certain items were stolen,
damaged, or lost, Gallagher and Clarke offered testimony
from various witnesses that the decedent, at some point before
she died, had at least three jewelry boxes full of “expensive”
jewelry. Gallagher and Clarke testified that the decedent had
several items of “nice” clothing, various tools, and a number
of documents in her home before her death. All of these items
were absent from the decedent’s home at the time the keys to
her home were finally transferred to Gallagher.
The court also received into evidence pictures of the dece-
dent wearing certain pieces of jewelry from her collection.
Additional testimony was received that, while attending the
decedent’s funeral, Gallagher observed Graham’s wife wearing
a pendant and a locket allegedly owned by the decedent.
Clarke testified that she had seen the decedent’s figurine
collection in the past. She stated that it filled an entire hall-
way closet. When she arrived at Graham’s attorney’s office
to retrieve the figurines she was to inherit, some were broken
while others were completely missing.
1
See Neb. Rev. Stat. § 30-2467 (Reissue 2016).
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IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
Graham testified that he was out of town for work during
the months following the decedent’s death. As a result, Graham
was unable to transfer the keys to the home to Gallagher. But
he claimed that he had told Gallagher to contact Graham’s
attorney for further information about obtaining the keys.
Graham attested that he emptied the entire contents of the
decedent’s home and transferred the property to his home for
safekeeping. He then transferred some of the property to his
attorney’s office for distribution, but donated many articles of
the decedent’s clothing. Graham testified that he delivered all
property that was to be distributed to interested parties to his
attorney’s office.
An inventory document was prepared by Graham’s attor-
ney which set forth the items of personal property retrieved
by Gallagher and Clarke at his office. Both Gallagher and
Clarke signed this inventory document to indicate that they
had received the items that were bequeathed to them. However,
Gallagher and Clarke took exception to the contents of that
inventory document, claiming Graham failed to list several
items owned by the decedent that were in her home at the time
of her death.
Graham maintained that the property he distributed was all
that remained in the decedent’s home after her death. It was
undisputed that Graham and Gallagher were both at the home
near the time of the decedent’s death, but neither made a list
of what was in the home. Both testified that hospice work-
ers were also in and out of the home during the decedent’s
final days.
On April 25, 2016, the court removed Graham as personal
representative with an additional order that his status was ter-
minated rather than discharged so he would remain responsible
for any misdeeds he may have committed while acting as
personal representative. The county court found that Graham
had acted negligently and improvidently in denying access and
then in failing to either protect or inventory the contents of
the residence which he maintained under his exclusive control.
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IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
Thus, the court found that he had breached his fiduciary duty
as a personal representative as it related to the filing of an
inventory concerning personal property when he took control
of nonprobate assets. Graham did not appeal within 30 days of
the April 25 order.
In a subsequent order on September 26, 2017, the court
denied Gallagher and Clarke’s motion to assess damages
against Graham for his conversion, damage, or loss of estate
property. The court reasoned that, based on the evidence
presented, it could not determine beyond mere speculation
whether or not Graham had converted, damaged, or lost assets
of the estate.
Attorney Fees and Personal
R epresentative Fees
In addition to damages, Gallagher and Clarke sought attor-
ney fees and personal representative fees for Kasl. Kasl had
obtained counsel and performed services for the benefit of
the estate, such as obtaining records from banks and attend-
ing meetings with his counsel while the first appeal was
pending.
In its September 26, 2017, order, the county court awarded
personal representative fees to Kasl to be paid from the estate.
The court also awarded attorney fees to the attorney repre-
senting Gallagher, Clarke, and Kasl for services rendered on
behalf of Kasl as successor personal representative. These fees
were also to be paid from the estate.
In an order on April 26, 2016, the court appointed a second
successor personal representative to close the estate. Graham
was ordered to provide a full and complete inventory of all
the decedent’s personal property as well as an account of his
actions as personal representative. Graham failed to comply
with this court order. As a result of his noncompliance and his
prior-held breaches of his fiduciary duty, the court ordered as
a form of sanction that Graham pay the second successor per-
sonal representative’s fees personally.
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Nebraska Supreme Court A dvance Sheets
301 Nebraska R eports
IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
Sanctions for Destruction of
Document A fter Ordered
to Compel
Gallagher and Clarke asserted that sanctions should be
imposed on either Graham or his attorney for the spoliation of
a document that they asserted could be relevant to the estate.
Prior to her death, the decedent met with the attorney for
Graham in this case to prepare a will and draft a deed to con-
vey her home to Gallagher while she was still living. Gallagher
was present at this meeting. Graham’s attorney drafted both
the will and the deed shortly after their meeting. According
to the attorney, although the decedent requested that a deed
be prepared, she later decided that the real property would be
conveyed to Gallagher by will instead.
After the commencement of the probate proceedings,
Gallagher’s attorneys sought to compel the production of the
deed three times. In September 2015, the county court ordered
Graham to produce the deed. However, Graham’s attorney
testified that he purposefully “trashed” the document approxi-
mately 4 months after the decedent’s death, stating he believed
that it was attorney work product and not relevant because it
was never delivered.
After an evidentiary hearing related to attorney fees in April
2017, Gallagher and Clarke submitted a written closing argu-
ment requesting that the court levy $3,000 in attorney fees as
a sanction against Graham for the destruction of this deed. The
county court rejected this request for sanctions in its September
26 order.
ASSIGNMENTS OF ERROR
On appeal, Gallagher and Clarke assign, reordered and
rephrased, that the county court erred by not (1) awarding dam-
ages for Graham’s conversion, damage, or loss of property; (2)
awarding fees to the successor personal representative, Kasl,
personally against Graham by way of surcharge; (3) awarding
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301 Nebraska R eports
IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
attorney fees and costs personally against Graham by way of
surcharge; (4) imposing sanctions against Graham or his attor-
ney for the destruction of a deed of conveyance of real estate
executed by the deceased in favor of Gallagher; and (5) receiv-
ing into evidence exhibit 101.
Although Graham attempts to cross-appeal, the format and
substance of his brief on cross-appeal fail to adhere to the
briefing requirements found in Neb. Ct. R. App. P. § 2-109
(rev. 2014). As such, we decline to address his assignments of
error on cross-appeal.
STANDARD OF REVIEW
[1,2] Appeals of matters arising under the Nebraska Probate
Code are reviewed for error on the record.2 When reviewing
a judgment for errors appearing on the record, an appellate
court’s inquiry is whether the decision conforms to the law,
is supported by competent evidence, and is neither arbitrary,
capricious, nor unreasonable.3 When reviewing a decision of
the probate court, the appellate court does not reweigh the evi-
dence and must consider the evidence in the light most favor-
able to the successful party, who is entitled to every reasonable
inference available from the evidence.4
[3] Ordinarily, the fixing of reasonable compensation, fees,
and expenses, pursuant to Neb. Rev. Stat. § 30-2480 (Reissue
2016), governing compensation of personal representatives;
Neb. Rev. Stat. § 30-2481 (Reissue 2016), governing expenses
in estate litigation; and Neb. Rev. Stat. § 30-2482 (Reissue
2016), governing compensation of personal representatives and
employees of the estate, is within the sound discretion of the
county court.5
2
In re Estate of Gsantner, 288 Neb. 222, 846 N.W.2d 646 (2014).
3
Id.
4
In re Estate of Lamplaugh, 270 Neb. 941, 708 N.W.2d 645 (2006).
5
See In re Estate of Odineal, 220 Neb. 168, 368 N.W.2d 800 (1985).
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Nebraska Supreme Court A dvance Sheets
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IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
[4] When an attorney fee is authorized, the amount of the
fee is addressed to the trial court’s discretion, and its ruling
will not be disturbed on appeal absent an abuse of discretion.6
[5] Determination of an appropriate sanction for failure to
comply with a proper discovery order initially rests with the
discretion of the trial court, and its rulings on appropriate sanc-
tions will not be disturbed on appeal absent a showing of an
abuse of that discretion.7
ANALYSIS
Issues Not Properly R aised on
A ppeal and Cross-A ppeal
As a threshold matter, we must determine what assignments
of error were properly raised and argued on appeal.
[6] As stated above, Graham did not properly cross-appeal.
Section 2-109(D)(4) of our court rules of appellate practice
provides:
Where the brief of appellee presents a cross-appeal, it
shall be noted on the cover of the brief and it shall be set
forth in a separate division of the brief. This division shall
be headed “Brief on Cross-Appeal” and shall be prepared
in the same manner and under the same rules as the brief
of appellant.
Thus, the cross-appeal section of an appellate brief must set
forth a separate title page, a table of contents, a statement of
the case, assigned errors, propositions of law, and a statement
of the facts.8
[7] Graham’s cross-appeal section fails to set forth a separate
title page, a table of contents, a statement of the case, assigned
errors, or propositions of law. When a brief of an appellee
fails to present a proper cross-appeal pursuant to § 2-109, we
6
In re Estate of Chrisp, 276 Neb. 966, 759 N.W.2d 87 (2009).
7
Mandolfo v. Mandolfo, 281 Neb. 443, 796 N.W.2d 603 (2011).
8
See Friedman v. Friedman, 290 Neb. 973, 863 N.W.2d 153 (2015).
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IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
decline to consider its merits.9 As such, we do not consider the
merits of Graham’s purported cross-appeal.
[8] Gallagher and Clarke, in their appellate brief, assign as
error that the county court erred in not receiving exhibit 101
into evidence, but they fail to argue this assignment of error
substantively in their brief. Absent plain error, an appellate
court considers only an appellant’s claimed errors that the
appellant specifically assigns in a separate “assignment of
error” section of the brief and correspondingly argues in the
argument section.10 Because Gallagher and Clarke failed to
argue this assignment of error in the argument section of their
brief, and we do not find plain error in the county court’s rul-
ing, we will not consider it.
We turn now to the issues on appeal that were properly
presented. Those are whether the county court erred in failing
to (1) award damages against Graham for conversion, dam-
age, or loss of property; (2) assess successor personal rep-
resentative fees on Graham personally by way of surcharge;
and (3) award attorney fees for the motions to remove and
surcharge Graham.
Conversion, Damage, or Loss
of Estate P roperty
[9] Gallagher and Clarke argue that the court erred in fail-
ing to find that Graham converted, damaged, or lost property
bequeathed to them, and in failing to order Graham to pay
damages to the estate accordingly. Generally, the county court
has exclusive original jurisdiction over all matters relating
to decedents’ estates.11 The relevant portion of the Nebraska
Probate Code, Neb. Rev. Stat. § 30-2473 (Reissue 2016),
9
See id.
10
C.E. v. Prairie Fields Family Medicine, 287 Neb. 667, 844 N.W.2d 56
(2014).
11
See Neb. Rev. Stat. § 24-517 (Supp. 2017). See, also, Line v. Rouse, 241
Neb. 779, 491 N.W.2d 316 (1992).
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provides that “the personal representative is liable to interested
persons for damage or loss resulting from breach of his fidu-
ciary duty.” It has been held that county courts have plenary
powers for the exercise of that jurisdiction.12 A probate court’s
jurisdiction and authority continue until an executor or admin-
istrator has fully complied with all its judgments, orders, and
decrees and the estate has been placed in the possession of
whom it devolves.13
[10] Pursuant to § 30-2473, county courts in ongoing probate
proceedings have jurisdiction over surcharge motions brought
against former personal representatives to recover losses to the
decedent’s estate arising from an alleged breach of fiduciary
duty.14 Our courts have thus reviewed the merits of surcharge
motions that have claimed damages to the estate sustained
from the personal representative’s breach of fiduciary duty
by wrongfully loaning funds of the estate,15 attempting to sell
real estate within the residuary estate to the general public as
opposed to the decedent’s family,16 and failing to file federal
estate tax returns.17 Though we have never addressed a motion
to surcharge the personal representative for his or her direct
conversion, damage, or loss of the decedent’s former personal
property, we conclude that such a motion is properly brought
within the probate proceeding, because the facts underlying
such motions ultimately concern the probate of the decedent’s
will and the distribution of the decedent’s property.
12
Klug v. Seegabarth, 98 Neb. 272, 152 N.W. 385 (1915).
13
In re Estate of Statz, 144 Neb. 154, 12 N.W.2d 829 (1944).
14
See, In re Estate of Watkins, 243 Neb. 583, 501 N.W.2d 292 (1993); In re
Estate of Statz, supra note 13; In re Estate of Snover, 4 Neb. Ct. App. 533, 546
N.W.2d 341 (1996). Compare Line v. Rouse, supra note 11. See, also, 31
Am. Jur. 2d Executors and Administrators § 847 (2012) (stating generally
that court may surcharge personal representative for breach of duty).
15
In re Estate of Statz, supra note 13.
16
In re Estate of Watkins, supra note 14.
17
In re Estate of Snover, supra note 14.
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IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
Gallagher and Clarke’s motion seeking damages for conver-
sion, damage, or loss of estate property, while not using the
word “surcharge,” was in substance a motion to surcharge the
personal representative for his breach of fiduciary duty. The
county court had jurisdiction to determine whether Graham
should restore to the estate the property improperly converted,
damaged, or lost as a result of Graham’s alleged breach
of duty in his capacity as personal representative for the
estate. We next determine whether the court erred in denying
the motion.
We have never specifically addressed the burden of proof
for motions to surcharge. In other jurisdictions, parties seek-
ing surcharge have the burden of proving that the represent­
ative failed to meet his or her duty of care.18 Placing the
burden on the movant is also consistent with other claims of
breach of fiduciary duty in which the plaintiff is required to
prove that the defendant’s breach of fiduciary duty caused
the plaintiff damages and the extent of those damages.19 And
this burden is consistent with the general principle of trust
law that “[w]hen a plaintiff brings suit against a trustee for
breach of trust, the plaintiff generally bears the burden of
proof.”20 Under Nebraska’s trust law related to fraud, a ben-
eficiary establishes a prima facie case of fraud by showing
that a trustee’s transaction benefited the trustee at the benefi-
ciary’s expense.21
[11] Consistent with these principles, we hold that the
party seeking a surcharge carries the burden to show that
the representative failed to meet his or her duty of care.22 A
18
31 Am. Jur. 2d, supra note 14, § 848; 34 C.J.S. Executors and
Administrators § 1024 (2009).
19
McFadden Ranch v. McFadden, 19 Neb. Ct. App. 366, 807 N.W.2d 785
(2011).
20
Restatement (Third) of Trusts § 100, comment f. at 68 (2012).
21
In re Estate of Hedke, 278 Neb. 727, 775 N.W.2d 13 (2009).
22
See, e.g., 31 Am. Jur. 2d, supra note 14, § 848; 34 C.J.S., supra note 18.
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beneficiary or designee seeking a surcharge against the per-
sonal representative for conversion, damage, or loss of estate
property has the burden of proving that (1) a fiduciary duty
was breached, (2) the breach of the fiduciary duty caused the
losses alleged, and (3) the extent of those damages.23
In this case, the county court found that while Graham
breached his fiduciary duty as personal representative by fail-
ing to properly inventory the estate’s property, Gallagher and
Clarke had failed to prove that Graham’s breach involved
or resulted in the conversion, damage, or loss of the dece-
dent’s personal property that allegedly was in her home when
Graham took possession. We conclude that the county court’s
decision in this regard conforms to the law, is supported by
competent evidence, and is neither arbitrary, capricious, nor
unreasonable.
The record indicates that Graham and Gallagher were not
the only people visiting the decedent’s home before her death.
Gallagher and Graham testified that hospice workers frequented
the home during the decedent’s final weeks. Further, there was
no evidence presented to prove that the decedent did not sim-
ply dispose of the property herself. Graham testified that he
delivered all property that was to be distributed to interested
parties to his attorney’s office.
The county court was not unreasonable in concluding, based
upon the evidence presented, that it could not be assumed that
there was malfeasance by Graham nor could it be presumed
that he acted honestly. In other words, the county court did
not err in concluding that Gallagher and Clarke had failed
to meet their burden to show that Graham had breached a
fiduciary duty, causing the losses alleged, and the extent of
those damages.
23
See, Lefkowitz v. Bank of New York, 676 F. Supp. 2d 229 (S.D.N.Y. 2009);
In re Estate of Hedke, supra note 21; McFadden Ranch v. McFadden,
supra note 19.
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Successor Personal
R epresentative Fees
Gallagher and Clarke next assert that the court erred in
ordering Kasl’s fees to be paid out of the estate rather than
by Graham personally. Gallagher and Clarke rely on the lan-
guage of § 30-2473 that “[i]f the exercise of power concerning
the estate is improper, the personal representative is liable to
interested persons for damage or loss resulting from breach of
his fiduciary duty to the same extent as a trustee of an express
trust.” They assert that Graham’s breach was the proximate
cause of Kasl’s fees and that therefore, Graham should be
required to pay Kasl’s fees.
Under § 30-2480, a personal representative is entitled to
reasonable compensation; under § 30-2481, a personal repre-
sentative who defends or prosecutes any proceeding in good
faith is entitled to receive from the estate his or her necessary
expenses and disbursements; and under § 30-2482, the reason-
ableness of the compensation determined by the personal rep-
resentative for his or her own services may be reviewed by the
court. We have held that the fixing of reasonable compensation
is within the sound discretion of the county court.24
We have permitted any person beneficially interested in
the estate embraced in an administration account to cite the
executor or administrator to file an account, object, or file
objections to the terms or matters contained in the account,
and the personal representative in a proper proceeding may
be surcharged with losses occurring because of a breach
of trust.25 An action to surcharge a personal representative
may be brought to recover losses to the estate for an alleged
breach of fiduciary duty by the personal representative.26
The measure of damages is the monetary damage to the
24
In re Estate of Odineal, supra note 5.
25
In re Estate of Statz, supra note 13.
26
Line v. Rouse, supra note 11.
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estate caused by the personal representative’s breach of fidu-
ciary duties.27
However, Gallagher and Clarke fail to present any statu-
tory authority or case law which mandates that a county court
must assess against the removed personal representative the
successor personal representative’s fees and expenses. In the
instant matter, it is unclear from the record exactly how or
to what extent Graham’s breach of fiduciary duty caused the
estate to incur additional personal representative fees. The
record indicates that at the time of Kasl’s appointment, further
actions were necessary to close the estate either by the original
personal representative or by the successor personal representa-
tive, such as preparing inventories and accountings and deter-
mining an inheritance tax. Further, the record indicates that a
portion of Kasl’s actions as successor personal representative
were in line with the actions Graham would have needed to
complete had he continued as personal representative, includ-
ing dealing with the ongoing litigation.
We note that the county court’s order requiring Graham to
personally pay the second successor personal representative’s
fees is distinguishable from its denial of Gallagher and Clarke’s
request to surcharge Graham for Kasl’s fees. According to
the county court’s September 26, 2017, order, Graham was
required to pay the second successor personal representative’s
fees as a form of sanction as a result of his noncompliance
to prior court orders and in contemplation of his prior-held
breaches of his fiduciary duty.
When reviewing a decision of the probate court, the appel-
late court does not reweigh the evidence and must consider
the evidence in the light most favorable to the successful
party, who is entitled to every reasonable inference deduc-
ible from the evidence.28 We conclude that the probate court
27
Id.
28
In re Estate of Lamplaugh, supra note 4.
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did not abuse its discretion by refusing to order Graham be
personally responsible for Kasl’s successor personal repre­
sentative fees.
Attorney Fees for Claims
of R emoval and Damage
to Estate P roperty
Gallagher and Clarke also assign as error that the county
court erred in declining to award them, either from the estate
or against Graham, the attorney fees they incurred while liti-
gating their motion to remove Graham as personal represent­
ative and their motion to surcharge Graham for conversion,
damage, or loss of estate property. As a general rule, attorney
fees and expenses are recoverable only where provided for by
statute or when a recognized and accepted uniform course of
procedure has been to allow recovery of attorney fees.29
In Gallagher and Clarke’s argument to the probate court for
attorney fees incurred in litigating their motions to remove
and to surcharge, they failed to point to any statute or uni-
form course of procedure for such an award. They merely
argued that because of Graham’s breach of his fiduciary duty,
they were required to act in the protection of their interests
by bringing the removal action and, therefore, were entitled
to recover the entirety of their attorney fees. Based on the
arguments presented below, the county court did not abuse its
discretion in refusing to award additional attorney fees beyond
those incurred for Kasl’s representation.
On appeal, Gallagher and Clarke raise for the first time that
attorney fees were proper under Neb. Rev. Stat. § 25-824(4)
(Reissue 2016), which governs frivolous claims or defenses
in civil proceedings. We have never held that § 25-824
applies to probate proceedings, and appellate courts do not
29
Simon v. City of Omaha, 267 Neb. 718, 677 N.W.2d 129 (2004). See, also,
In re Estate of Snover, supra note 14 (applying this principal in probate
case).
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Cite as 301 Neb. 594
generally consider arguments and theories raised for the first
time on appeal.30 Applying that principle, we decline to address
Gallagher and Clarke’s frivolous defense theory for attor-
ney fees.
Attorney Fees as
Discovery Sanction
Gallagher and Clarke also argue that Graham’s attorney’s
destruction of a deed of conveyance, after Graham had been
compelled and ordered to turn over the document, warranted
discovery sanctions in the form of attorney fees. The county
court declined to impose sanctions on Graham or Graham’s
attorney with regard to the destruction, but, as discussed, did
sanction Graham for his failure to provide the second successor
personal representative an account of his actions as personal
representative. The determination of an appropriate sanction
for failure to comply with a proper discovery order initially
rests with the discretion of the trial court, and its rulings on
appropriate sanctions will not be disturbed on appeal absent a
showing of an abuse of that discretion.31
Sanctions for failing to comply with court-ordered discov-
ery are governed under Neb. Ct. R. Disc. § 6-337, commonly
referred to as “Rule 37.” Rule 37 sanctions serve several
purposes. First, they punish a litigant or counsel who might
be inclined to frustrate the discovery process.32 Second, they
deter those who are tempted to break the rules.33 Finally, they
prevent parties who have failed to meet their discovery obliga-
tions from profiting from their misconduct.34 Relevant factors
that are reviewed when determining whether a sanction is
30
Maroulakos v. Walmart Associates, 300 Neb. 589, 915 N.W.2d 432 (2018).
31
Booth v. Blueberry Hill Restaurants, 245 Neb. 490, 513 N.W.2d 867
(1994).
32
Hill v. Tevogt, 293 Neb. 429, 879 N.W.2d 369 (2016).
33
Id.
34
Id.
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IN RE ESTATE OF GRAHAM
Cite as 301 Neb. 594
appropriate include the prejudice or unfair surprise suffered
by the party seeking sanctions, the importance of the evidence
which is the root of the misconduct, whether the court warned
the sanctioned party about the consequences of its miscon-
duct, whether the court considered less drastic sanctions, the
sanctioned party’s history of discovery abuse, and whether the
sanctioned party acted willfully or in bad faith.35
We conclude that the court did not abuse its discretion by
refusing to impose sanctions on Graham or his counsel for
destruction of the deed of conveyance. In considering the
above factors, this deed of conveyance would not have and
did not prejudice or unfairly surprise Gallagher and Clarke. In
fact, the residence was already conveyed by will to Gallagher
when the probate proceedings commenced,36 and Gallagher
and Clarke do not explain on appeal how they were preju-
diced by any possible delay between the time of the alleged
deed and the conveyance by will. We cannot find that the
county court’s decision to decline sanctions in the form of
attorney fees resulted in an outcome that was untenable and
unfairly deprived the litigants of a substantial right or a
just result.
CONCLUSION
For the reasons stated above, we affirm the county court’s
judgment in this matter.
A ffirmed.
35
Id.
36
See Hagn v. Verret, 143 Neb. 820, 11 N.W.2d 551 (1943).