In re Masek Children's Trust ( 2019 )

IN THE NEBRASKA COURT OF APPEALS
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
(Memorandum Web Opinion)
IN RE MASEK CHILDREN’S TRUST
NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).
IN RE MASEK CHILDREN’S TRUST.
MARK A. MASEK ET AL., APPELLANTS AND CROSS APPELLEES,
V.
BARRY M. MASEK, APPELLEE AND CROSS APPELLANT,
AND COLLEEN A. EAMES, APPELLEE.
Filed May 14, 2019. No. A-18-408.
Appeal from the County Court for Gage County: STEVEN B. TIMM, Judge. Affirmed.
Brian S. Koerwitz, of Endacott, Peetz & Timmer, P.C., L.L.O., for appellants.
Douglas W. Ruge II for appellee Barry M. Masek.
William E. Seidler, Jr., of Seidler & Seidler, P.C., for appellee Colleen A. Eames.
PIRTLE, ARTERBURN, and WELCH, Judges.
WELCH, Judge.
I. INTRODUCTION
Five siblings were cotrustees and beneficiaries of a trust whose sole asset was farmland
located in Gage County, Nebraska. Three of the siblings, Mark A. Masek, Diane M. Yahiro, and
Richard C. Masek (Petitioners), allege that the oldest brother, Barry M. Masek, represented that
he would manage the trust, failed to manage the trust with sufficient care, and that his violation of
that duty caused damages. Finding that there was insufficient evidence that Barry undertook the
duty to manage the trust, and that Petitioners were in pari delicto with Barry, we find that
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Petitioners may not pursue a claim for breach of fiduciary duty against Barry in his capacity as
trustee. For the reasons stated below, we affirm.
II. STATEMENT OF FACTS
1. TRUST FORMATION AND MANAGEMENT PRIOR TO LAWSUIT
Patricia and Charles Masek, parents of the parties to this action, owned a farm with several
hundred acres of farmland in Gage County, Nebraska. After Charles died in 2000, Patricia gifted
an equal and undivided interest in the farm to her children, Barry, Mark, Dianne, Colleen Eames,
and Richard.
In November 2000, the Masek children formed the Masek Children’s Trust to hold the farm
and transferred the farm to the trust. Barry, who is a CPA, and Mark, who is a tax attorney, took
the lead on working to prepare the trust with David Lepant, who had previously served as their
parents’ attorney. When a draft of the trust was ready to send to Colleen and Dianne, Barry
included a note which stated that the trust was being established for estate tax purposes. In the
note, Barry also stated that he would take care of “miscellaneous trust administration: bank checks,
pay bills, etc.” but that major transactions such as disbursements would require majority approval.
Although Richard was a beneficiary and grantor, and was formally a trustee, he was left out of
most conversations about the farm. Lepant stated that he was almost certain Richard had no input
in the trust’s formation because Richard “just is not the type of a person that would have an opinion
probably on this sort of thing . . . I am not sure that he has the mental capabilities to do that.”
When the trust was formed, each sibling was named as a grantor, a trustee, and a
beneficiary. The trust’s sole income was the rental income from the land. The trust allowed income
to be paid out equally to the siblings during Patricia’s lifetime, but the principal was to be held in
trust until after Patricia’s death, except that, upon the majority vote of the trustees, the principal
could be “paid out [during Patricia’s lifetime] for the benefit of a charitable organization, including
hospitals, nursing homes, or other organizations existing for the health and well-being of the aged.”
Barry testified that the purpose of these provisions was to provide for Patricia in her old age. The
trust conferred certain powers in the trustees, including the power to lease trust property. The trust
also contained a “Right of Withdrawal” feature which allowed any of the beneficiaries to demand
a withdrawal of their interest in the farmland which would then require all beneficiaries to
withdraw their proportionate share of the farmland.
In the early 2000s, Barry paid Patricia a $1,000-per-month management fee from the trust
account. Email correspondence among the siblings, excluding Richard, demonstrates that Mark
and Dianne were aware of these payments and had evidently discussed them with Barry in advance.
Barry testified that, at some point, Patricia decided she did not need the management fee and would
rather leave the money in the trust and continued to manage the farm without a fee.
Near the end of 2013, the four siblings began to discuss withdrawing the land from the
trust. Mark thought that separating it might be preferred and stated “If this is the collective view,
then I suggest that any separation occur after Mom moves to Dianne’s in March.” Barry responded,
expressing his reservation because “The farm is not ours until Mom is gone- physically or
mentally. And she/we may need to sell some pieces if she needs the money [for a nursing home.]”
The record does not demonstrate that anyone questioned or challenged Barry’s statements at the
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time. A few days later, in an email to Dianne, Mark expressed his view that Barry was not keeping
them up to date on farm matters. He then said that “I want to get Mom and Rick to your house.
Then in the summer have a joint call to collectively discuss rent and any other matter.”
In 2014, Patricia moved from her home near the farm to live with Dianne. That same year,
Barry, acting pursuant to Patricia’s direction, contacted long-term farmland tenants Ronald and
Richard Zarybnicky and Brian Vitosh regarding rent for 2014, which yielded a small increase in
revenue. The Zarybnickys and Melvin and Vitosh had been tenants of the farmland dating back
many years before the farmland was gifted to the siblings and transferred to the trust. In 2014, the
Zarybnickys paid $72 per acre of cropland and Vitosh paid a similar rate. None of the siblings did
anything to raise rents for 2015.
In May 2015, Mark asked about the rent they were charging per acre, and Barry provided
the information. Mark made some rough estimates of the land’s rental value and determined that
the trust had forgone roughly $300,000 in potential profits. Barry disagreed with Mark that there
was a problem because he claimed the rents were set in accordance with their parents’ wishes.
Mark hired an appraiser to determine the fair market rent value of the farm. After hearing from the
appraiser, Mark wanted to charge $150 per acre for the farm’s better land and $135 per acre for
the other cropland. Dianne agreed, but Barry and Colleen had reservations.
In June 2015, Mark contacted the trust’s tenants and informed them that their oral leases
would not be renewed for the 2016 season, and provided written leases with cropland prices of
$135 and $150 per acre. Although both the Zarybnickys and Vitosh signed the leases, they were
informed that the leases would not be final until signed by all trustees. Barry still had reservations,
and in July, Barry suggested setting the rental rate at $25 per acre less than the rate Mark had
negotiated and telling the tenants that the price would increase the following year.
2. PLEADINGS AND RENT HEARING
In August 2015, the Petitioners brought an action to remove Barry as trustee and to recover
for the trust’s losses that they alleged he had caused. The petition alleged that: Barry was a certified
public accountant, represented he was qualified to manage the trust, and on that basis they agreed
to allow him to be primarily responsible for managing the trust; despite the trust requiring approval
of all trustees to lease land, Barry unilaterally leased the trust’s land at rates far below market
value; and even after Mark confronted Barry about leasing the land at market value, Barry
attempted to lease the land at below market value for the 2016 farming season. Petitioners alleged
that this was a breach of Barry’s fiduciary duty as trustee, that the trust received $275,000 less in
rental income as a result of Barry’s breach, and therefore Barry was liable for the loss. Petitioners
also sought costs and attorney fees.
Barry filed an answer denying damages or that he breached his fiduciary duties. He pled
that Patricia had managed the farm and denied that he undertook to manage it. He filed a
counterclaim for the same damages that Petitioners sought from him, alleging, in substance, that
if he was guilty of anything, so were Petitioners. He also pled that Richard did not have the capacity
to initiate this action and that Mark and Dianne had overreached and exercised undue influence in
bringing the action in his name and requested that a guardian ad litem be appointed for Richard.
He also requested the parties be removed as trustees and a corporate trustee appointed.
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Colleen filed a response to the petition. She was in substantial agreement with Barry
regarding his liability and also pled that Patricia had managed the farm. She requested that the
court remove the siblings as trustees and appoint a corporate trustee. She also asked the court to
reform the trust to provide that all distributions of income or principal to the beneficiaries be equal
and to include a termination provision.
In February 2016, the court held a rent hearing. Barry and Colleen argued that setting the
2016 rent at $150 and $135 per acre was too high and they might lose their tenants at that price.
Barry expressed concern that, as absentee owners, they would not know how the farm would be
cared for if they found a new tenant. He opined that a rent of no more than $125 and $110 per acre
for the land types would be more appropriate. Tenants Ronald and Richard Zarybnicky testified
that, until 2014, they had not really negotiated a price since the trust was formed; Instead, they
paid what they thought was fair and paid a little bit extra when they had a good year. The
Zarybnickys generally increased the rent slightly on their own as time went on and expressed their
worry that with low crop prices, they might lose money that year with such a high rent, and might
be forced to look for cheaper land in the future. At the close of the rent hearing, the judge offered
that if the parties would agree, he would set the rent for cropland at $125 per acre. Counsel for all
of the trustees agreed to the rate, which was adopted for 2016. The parties were not required to
agree on a 2017 rental rate because in August 2016, the court appointed a bank as trustee and
removed the siblings as trustees.
3. TRIAL
Trial was held over several days in 2017. Factual issues contested at the trial included
whether Patricia actually managed the farm and whether Barry represented he would manage the
trust. Additionally, Mark and Dianne presented some evidence that Barry may have had ulterior
motives in refusing to sign the leases that Mark prepared for the 2016 growing season.
(a) Petitioners’ Testimony
Mark testified that after Charles, their father, died, Barry and Mark worked with attorney
David Lepant to prepare the Masek Children’s Trust. He said Patricia was not a beneficiary of the
trust. When asked about the provision that the principal could not be distributed until after
Patricia’s death and the provision for the giving of gifts to organizations that care for the elderly,
he made no connection between them and claimed the gift provision was not for Patricia’s benefit.
Mark testified that Barry told him he would manage the farm, but did not specifically say
he would set rent with tenants. He testified that the siblings never had a meeting where they
discussed Patricia managing the farm and, to his knowledge, Patricia never expressed a preference
or opinion about rent prices. In an May 17, 2015, email, Barry stated he agreed with Mark that
“It’s really still Mom’s farm and Mom’s money,” and Mark testified that he did not say that, but
did not contradict Barry in that email chain.
In a May 23, 2015, email, Barry stated “[a]s you may remember, Mom handled all farm
matters: the rents, rent checks, and worked with the renters.” Mark responded that “I was vexed
when I read that an elderly widow with a retarded son had been meeting with the renters, handled
all rent matters [and managing the farm]” and then said that he would “take that over for her”
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because she was no longer able to take care of faming matters. Mark testified those statements and
much of the email was sarcasm because he thought it was clearly false that Patricia could be
managing the farm. Mark also said he saw Barry’s email as an attempt to “foist his responsibility
onto” Patricia.
Dianne testified that Barry told her privately that he would talk to the renters and manage
the trust, but admitted that he did not say specifically that he would negotiate rent. She testified
that she did not do her own research about what the rent should be set at until 2015, even though
Mark suggested they discuss rent in 2013.
Richard testified regarding his observations of the farm’s management. He testified that
he lived with his mom and, in 2000 and 2001, he observed her negotiate rent, but not after that
time. He said that Patricia would forward requests to hunt or fish on the land to Barry. He testified
Barry had him sign papers for the Farm Service Agency on behalf of the trust. When Barry was
visiting, he asked Richard if he knew anyone who did tree removal because the county had
contacted him about removing some trees near the road. Richard also testified that the Natural
Resources Division (NRD) sent Barry a letter about trees and shrubs growing in the spillway of
the watershed dam, and Barry found someone to do the work and asked Richard to sign related
papers. Richard believed that Barry was managing the farm but Barry did not tell him he would
manage the farm.
(b) Barry and Colleen’s Testimony
Petitioners called Barry as a witness. Barry testified that he never said he would manage
the farm, that Patricia managed the farm through 2013, and his role was limited to taking care of
the checkbook and some administrative matters on behalf of the trust including working with
government entities such as NRD and the Gage County Highway Department. He further testified
that Patricia had been setting rents and he did not research whether the rents were fair. Despite
contacting tenants to set rents in 2014 for the 2014 season, he did nothing to raise rents from 2014
to 2015. Barry also acknowledged that, in his deposition, he had stated that the main reason he did
not sign the 2016 lease Mark prepared was that Mark and Dianne had sued him.
Colleen testified that she did not want to raise the 2016 rent to $150 because she felt that
doubling rental land in a year was not the right thing to do and she believed the tenants had been
good tenants for many years. Colleen visited and talked with Patricia often and testified that she
was aware Patricia was negotiating rents based on a few conversations with her.
(c) Testimony by Nonparties
Petitioners also called Lloyd Dickinson, tenants Ronald and Richard Zarybnicky and Brian
Vitosh, and lawyer David Lepant as witnesses. Dickinson provided an appraisal for the rental value
of the trust property estimating the fair rental value of the farm to be about $150 per acre in each
year from 2012 to 2016.
The Zarybnickys testified that they did not negotiate rent with anyone for years. Ronald
testified they raised rent on their own until Barry talked with them about rent in 2014. Vitosh
testified that prior to 2014, he never dealt with Patricia or Barry regarding rent and, when asked if
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he “never raised rent or it just kind of carried on on its own,” Vitosh responded that he was not
sure.
Lepant, the attorney who drafted the trust, testified that he performed legal work relating
to the farm since before Charles died in 2000. He testified that he believed that Patricia managed
the farm, but was not aware of any agreement for her to do so. After Charles died, Patricia worked
with Lepant on legal work for the farm including boundary issues dating back before the trust was
created. Lepant testified that this work continued into at least 2007.
4. TRIAL COURT’S ORDERS
In its order, the county court found that Petitioners did not meet their burden to show that
Barry agreed to manage the trust and concluded that all trustees shared equally in any fault for
losses at least until 2015, and that in 2016, the rent was set by court order. The court further found
that Barry’s counterclaim had not been proven by a preponderance of the evidence. The court did
not reform the trust, but did state that “Colleen’s request that the court reform the Masek Children’s
Trust has merit but, because of the doctrine of unintended consequences, I am reluctant to do so
without further input from the other parties including the successor trustee.” The court prohibited
amendment of the trust and distributions from the trust without court approval.
The parties moved for attorney’s fees. Following a hearing, the court ordered Petitioners
to pay their own attorney’s fees, half of Barry’s attorney’s fees in the amount of $40,884.38, and
Colleen’s attorney’s fees in the amount of $49,420.00. Petitioners were also ordered to pay their
own costs, Barry’s costs in the amount of $2,592.76, and Colleen’s costs in the amount of
$1,708.40. Petitioners timely appeal the judgment as well as the award of attorney’s fees, and
Barry cross-appeals seeking to have Petitioners pay all of his attorney fees.
III. ASSIGNMENTS OF ERROR
Petitioners’ assignments of error, combined and restated, are that the trial court erred: (1)
in failing to find that Barry had breached his fiduciary duty and awarding Petitioners damages
against Barry for the breach, (2) in failing to award damages against Barry in favor of petitioner
Richard, and (3) in awarding attorney fees and costs to Barry and Colleen instead of awarding fees
and costs to Petitioners. Barry cross-appeals contending that the trial court erred in failing to award
him all of his attorney fees.
IV. STANDARD OF REVIEW
Appeals involving the administration of a trust are equity matters and are reviewable in an
appellate court de novo on the record. In re Trust of Alexis, 16 Neb. Ct. App. 416, 744 N.W.2d 514
(2008). When credible evidence is in conflict on a material issue of fact, the appellate court
considers and may give weight to the fact that the trial judge heard and observed the witnesses and
accepted one version of the facts rather than another. In re R.B. Plummer Memorial Loan Fund
Trust, 266 Neb. 1, 661 N.W.2d 307 (2003).
When an attorney fee is authorized, the amount of the fee is addressed to the discretion of
the trial court, whose ruling will not be disturbed on appeal in the absence of an abuse of discretion.
In re Estate of Forgey, 298 Neb. 865, 906 N.W.2d 618 (2018). A judicial abuse of discretion
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requires that the reasons or rulings of the trial court be clearly untenable insofar as they unfairly
deprive a litigant of a substantial right and a just result. Id.
V. ANALYSIS
Petitioners claim that Barry violated his duty as trustee because he claimed he would
manage the trust and failed to do so. As explained below, the trustees as a group did not delegate
management functions to Barry. All trustees therefore had an equal duty to manage the trust, and
if Barry violated his duties, the other trustees are equally responsible for violating theirs.
1. BARRY’S LIABILITY AS MANAGER
The Uniform Trust Code contemplates the delegation of management of a trust to a trust
agent. Under Neb. Rev. Stat. § 30-3888(c) (Reissue 2016), a trustee who delegates management
functions to an agent will not be liable for the actions of the agent if the trustee complies with
§ 30-3888(a), which reads, in part:
The trustee shall exercise reasonable care, skill, and caution in:
(1) Selecting an agent;
(2) Establishing the scope and terms of the delegation, consistent with the purposes
and terms of the trust; and
(3) Periodically reviewing the agent’s actions in order to monitor the agent’s
performance and compliance with the terms of the delegation.
In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care
to comply with the terms of the delegation. § 30-3888(b).
Mark and Dianne testified that Barry agreed he would manage the trust and Petitioners cite
to functions Barry performed, such as dealing with Gage County and other government entities on
behalf of the trust, as evidence that he managed the trust. In contrast, Barry and Colleen denied
Barry agreed to manage the trust and argued that management of the trust remained vested in
Patricia. Further, Mark and Dianne concede that Barry never specifically told them he would be
responsible for leasing trust property and admitted that they were aware that Barry paid Patricia a
management fee on behalf of the trust. Additionally, the tenants testified that no one negotiated
rent with them dating back before the trust was created through 2014.
Emails among the siblings, excluding Richard, demonstrate that all of the siblings had
knowledge that Patricia remained involved with the farm. For example, Mark expressed that the
siblings should meet after Patricia moved from her house by the farm to Dianne’s house in Chicago
to discuss rents and other matters. Around the same time, he expressed an interest in dividing up
the land, but suggested it be after Patricia moved. Barry responded that he was not in favor of
splitting up the farm, noting that “[t]he Farm is not ours until Mom is gone- physically or
mentally.” No one objected to this statement. In May 2015, at about the time Mark first raised an
issue governing the rental rate for the farmland, Barry stated that he agreed with a remark made
by Mark a few years earlier, that the farm really belonged to Patricia. Mark did not object to this
statement. Finally, in 2015, after Mark estimated the lost income to the trust for charging below
market rents, Barry stated that “[a]s you may remember, Mom handled all farm matters: the rents,
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rent checks, and worked with the renters.” Mark responded saying he was vexed to learn she was
handling those things, and at trial disavowed most of the email, claiming it was sarcasm in response
to the clearly false assertion that Patricia had been dealing with renters. Finally, we note that
Patricia was paid a management fee for a time and Colleen testified that Patricia remained
responsible for farm management.
While we review the trial court’s determinations de novo, we are entitled to rely on the trial
court’s determinations of credibility and resolve conflicts in the evidence in favor of the trial
court’s order. We find the evidence wholly insufficient to support the petitioner’s theory that trust
management was delegated to Barry. As such the petitioner’s claim that he violated a fiduciary
duty to the trust in that capacity fails.
2. BARRY’S LIABILITY AS TRUSTEE
The Nebraska Uniform Trust Code states that trustees owe the beneficiaries of a trust duties
that include loyalty, impartiality, prudent administration, protection of trust property, proper
recordkeeping, and informing and reporting. In re Conservatorship of Abbott, 295 Neb. 510, 890
N.W.2d 469 (2017). A trustee shall administer the trust as a prudent person would, by considering
the purposes, terms, distributional requirements, and other circumstances of the trust. Neb. Rev.
Stat. § 30-3869 (Reissue 2016). In satisfying this standard, the trustee shall exercise reasonable
care, skill, and caution. Id. Every violation by a trustee of a duty required of it by law, whether
willful and fraudulent, or done through negligence, or arising through mere oversight or
forgetfulness, is a breach of trust. In re Robert L. McDowell Revocable Trust, 296 Neb. 565, 894
N.W.2d 810 (2017).
A cotrustee must participate in the performance of a trustee’s function unless the cotrustee
is unavailable to perform the function or the cotrustee has properly delegated the performance of
the function to another trustee. Neb. Rev. Stat. § 30-3859 (Reissue 2016). As discussed above,
there was no delegation of the duty to negotiate rents to Barry. All of the trustees were charged
with the administrative function of leasing the farmland, but none of them raised the issue of the
trust charging below market rents until May 2015. If there is legal fault for charging below market
rent, all of the trustees share in that responsibility.
As the Nebraska Supreme Court stated in Chambers v. Martin, 165 Neb. 482, 486, 86
N.W.2d 49, 51 (1957):
The Court of Appeals of Kentucky has held: “It is where the party seeking relief is
wholly guilty of fraud, or the grantor and grantee equally acted wrongfully or illegally,
i. e., are in pari delicto, that a court of equity will leave him or them where they are to abide
the consequences of the wrongdoing.”
Because we find that, even if the trustees breached a duty to the trust by charging below market
rents for the farmland, a matter we need not determine, the Petitioners equally bore responsibility
under the terms of the trust. As such, we decline to determine whether Barry breached his duty
because Petitioners would merit no relief, being in pari delicto with Barry.
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3. BARRY’S LIABILITY FOR 2014-2016 CROP SEASONS
Petitioners contend that, even if Barry is not liable for losses before 2014, he is liable at
least for the losses in the 2014 to 2016 crop seasons based on his negotiation of rent in 2014 and
his refusal to sign the lease for 2016. We disagree.
For the 2014 season, Barry did not undertake to negotiate rent until the year 2014, at which
point he obtained a slightly higher rent than the trust had received in 2013. None of the other
siblings objected to the negotiated rent nor appear to have expressed any interest in doing so
notwithstanding their joint responsibility to lease the trust’s property under the terms of the written
trust document. We find that for the 2014 crop season, if there was any fault for the rental rate
obtained, the parties were equally at fault in their failures.
It appears no trustee made any attempt to negotiate rents for the 2015 crop season. Barry’s
act of negotiating rents for the 2014 season did does not relieve the other trustees of their
obligations to be prudent trustees and ensure a reasonable rent was negotiated for the 2015 season.
Again, insofar as Barry breached his duties, the cotrustees were equally at fault.
Finally, for the 2016 crop season, Mark negotiated rent with tenants, but Barry and Colleen
refused to sign the lease. Barry cited concerns that, with such a large increase in rent, the tenants
would look for other land, leaving the trustees to seek tenants they did not know. As absentee
owners, Barry expressed concern about locating a tenant with whom they were not familiar. The
court ultimately set the rent within Barry’s suggested range. Under these facts, we are not
persuaded that Barry breached his fiduciary duties to the trust. This assignment of error fails.
4. DAMAGES IN FAVOR OF RICHARD
Petitioners assign that the trial court should have awarded damages to Richard even if not
awarding damages to the other petitioners. They claim that the county court’s findings mandated
a finding that, at a minimum, Barry was liable to Richard. The county court found that Richard’s
“siblings did not believe Richard was suitable to act in a fiduciary capacity, and he did not
participate in the drafting of the trust or decisions regarding the trust until he joined with Mark and
Dianne in this action.”
Petitioners did not raise this argument with the county court. Absent plain error, when an
issue is raised for the first time in an appellate court, it will be disregarded inasmuch as the trial
court cannot commit error regarding an issue never presented and submitted to it for disposition.
Maroulakos v. Walmart Associates, 300 Neb. 589, 915 N.W.2d 432 (2018). This assignment of
error is therefore not considered.
5. BARRY’S ATTORNEY FEES
Petitioners assign that they should not be liable to pay half of Barry’s attorney fees as
awarded by the court. They claim that Barry was not substantially successful because he was not
awarded relief on his counterclaim and that they had a duty to bring an action to redress and prevent
a serious breach of trust. Additionally, they blame Barry and Colleen for the attorney fees
associated with the rent hearing. Barry, on the other hand, claims he was substantially successful
and should have been awarded all his attorney fees.
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In a judicial proceeding involving the administration of a trust, the court, as justice and
equity may require, may award costs and expenses, including reasonable attorney fees, to any
party, to be paid by another party or from the trust that is the subject of the controversy. Neb. Rev.
Stat. § 30-3893 (Reissue 2016).
We find no abuse of discretion. Because Barry had a business reason to seek lower rent
and was ultimately successful at the rent hearing, we cannot say he was unreasonable to refuse to
approve a $150 per acre lease. His counterclaim did not raise new issues, but was simply a form
of claiming that the parties were in pari delicto. Finally, we note that before the action was
commenced, Barry was willing to raise rents to approximately the same rate they were finally set
by the court in 2016, and then to raise them again. Any benefit to the trust from this litigation has
been is dwarfed by the attorney fees. Mark and Dianne brought a suit to recover from Barry for
losses in which responsibility they shared. While litigating to set the 2016 rent appears to have
been a reasonable attempt to increase trust revenue, suing one trustee for collective misfeasance
was not reasonable, and the court only awarded Barry half of his attorney fees. We do not find that
the arguments against charging Petitioners with Barry’s attorney fees are entirely without merit,
but we find that valuing them at half of Barry’s attorney fees was within the discretion of the trial
court. This assignment of error fails.
6. COLLEEN’S ATTORNEY FEES
Petitioners claim that because they did not sue Colleen and because Colleen was not
successful in having the trust reformed, Colleen should be liable for her own attorney fees. We
disagree.
Colleen’s pleading requested that the court remove the siblings as trustees and appoint a
corporate trustee. She also asked that the court reform the trust. She wanted the trust to provide for
only equal distributions of income and principal to the five siblings and include a termination
provision. She was substantially successful. The court removed the individual trustees and
appointed a corporate trustee, as Colleen sought. While the court stated it would not reform the
trust, it entered an order “prohibiting amendment of the trust or distribution of income, principal,
or trust assets other than equally unless such action is approved by the court.” This did not include
a termination provision, but did, in substance, reform the trust to require equal distributions as
Colleen asked. Finally, we note that the court stated that “Colleen’s request that the court reform
the Masek Children’s Trust has merit but, because of the doctrine of unintended consequences, I
am reluctant to do so without further input from the other parties including the successor trustee,”
indicating the court was open to a later reformation of the trust. Colleen was not sued directly, but
was still brought into the lawsuit against her will. She was successful on most of what she sought
and the court was open to reforming the trust in the future. We find that she was substantially
successful and the county court did not abuse its discretion in awarding her attorney fees.
7. PETITIONER’S ATTORNEY FEES
Having found that Petitioners are liable for Barry’s and Colleen’s attorney fees, we find
that they were not entitled to attorney fees.
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VI. CONCLUSION
In sum, the siblings did not properly delegate management responsibilities to Barry and
therefore insofar as Barry may have violated his fiduciary duties as trustee, Petitioners were in pari
delicto with him and are not entitled to damages. Additionally, we find no abuse of discretion on
attorney fees. Therefore, the judgment of the county court is affirmed.
AFFIRMED.
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