In re Louise v. Steinhoefel Trust ( 2014 )

Decisions of the Nebraska Court of Appeals
IN RE LOUISE V. STEINHOEFEL TRUST 293
Cite as 22 Neb. Ct. App. 293
permanently and totally disabled. Accordingly, we affirm the
trial court’s order in its entirety.
Affirmed.
Inbody, Chief Judge, participating on briefs.
In re Louise V. Steinhoefel Trust.
Pioneer Manor Foundation and Campbell County
School District No. 1, Gillette, Wyoming, appellants
and cross-appellees, v. Vicki Schlautmann et al.,
appellees, and David Steffensmeier, Trustee,
appellee and cross-appellant.
___ N.W.2d ___
Filed August 26, 2014. No. A-13-038.
1. Decedents’ Estates: Appeal and Error. Absent an equity question, an appellate
court reviews probate matters for error appearing on the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors appear-
ing on the record, the inquiry is whether the decision conforms to the law,
is supported by competent evidence, and is neither arbitrary, capricious, nor
unreasonable.
3. Decedents’ Estates: Appeal and Error. In reviewing a judgment of the probate
court in a law action, an appellate court does not reweigh evidence, but considers
the evidence in the light most favorable to the successful party.
4. Evidence: Appeal and Error. An appellate court resolves evidentiary conflicts in
favor of the successful party, who is entitled to every reasonable inference deduc-
ible from the evidence.
5. Decedents’ Estates: Appeal and Error. The probate court’s factual findings
have the effect of a verdict, and an appellate court will not set those findings
aside unless they are clearly erroneous.
6. Negligence: Proof. In order to prove a cause of action for breach of a fiduciary
duty, the moving party must prove the elements of negligence.
7. Trusts. The Nebraska Uniform Trust Code requires that a trustee administer a
trust in accordance with its terms.
8. ____. The Nebraska Uniform Trust Code establishes that trustees owe the ben-
eficiaries the duties of loyalty, impartiality, prudent administration, protection of
trust property, proper recordkeeping, and informing and reporting.
9. Trusts: Liability: Damages. A violation by a trustee of a duty required by law,
whether willful, fraudulent, or resulting from neglect, is a breach of trust, and the
trustee is liable for any damages proximately caused by the breach.
10. Trusts: Words and Phrases. A breach of trust includes every omission or
commission which violates in any manner the obligation of carrying out a trust
according to its terms.
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294 22 NEBRASKA APPELLATE REPORTS
11. Damages. The amount of damages to be awarded to a plaintiff is a question
of fact.
12. Principal and Agent: Proof: Damages. To succeed on a claim for breach of
fiduciary duty, a plaintiff must prove that the defendant’s breach of fiduciary duty
caused the plaintiff damages and the extent of those damages.
13. Real Estate: Valuation: Words and Phrases. Appraisals are estimates of the
fair market value of a property based upon sales of comparable properties and
other factors.
14. Equity: Trusts. Under Neb. Rev. Stat. § 30-3890(b) (Reissue 2008), the court
may impose various equitable relief to remedy a violation by a trustee of a duty
the trustee owes to a beneficiary.
15. Trusts: Proof. A party seeking to establish a constructive trust must prove by
clear and convincing evidence that the individual holding the property obtained
title to it by fraud, misrepresentation, or an abuse of an influential or confiden-
tial relationship and that under the circumstances, such individual should not,
according to the rules of equity and good conscience, hold and enjoy the property
so obtained.
16. Attorney Fees: Appeal and Error. On appeal, a trial court’s decision awarding
or denying attorney fees will be upheld absent an abuse of discretion.
17. Equity: Trusts: Costs: Attorney Fees. 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.
18. Decedents’ Estates: Costs: Attorney Fees. In general, if a court concludes that
a fiduciary breached his duty or requires him to account to the estate, the estate
is not liable for his attorney fees. If the fiduciary’s defense of his acts is fully
successful, he is ordinarily entitled to recover the reasonable costs necessar-
ily incurred.
Appeal from the County Court for Cuming County: Richard
W. K repela, Judge. Affirmed in part, and in part vacated and
remanded with directions.
Mark D. Fitzgerald, of Fitzgerald, Vetter & Temple, for
appellants.
Andre R. Barry and Kara J. Ronnau, of Cline, Williams,
Wright, Johnson & Oldfather, L.L.P., for appellee Vicki
Schlautmann.
David E. Copple and Michelle M. Schlecht, of Copple,
Rockey, McKeever & Schlecht, P.C., L.L.O., for appellees
Michael Addison and Renee Wetherelt.
Decisions of the Nebraska Court of Appeals
IN RE LOUISE V. STEINHOEFEL TRUST 295
Cite as 22 Neb. Ct. App. 293
Kenneth W. Hartman and Erin E. Busch, of Baird Holm,
L.L.P., for appellee David Steffensmeier.
Irwin, Riedmann, and Bishop, Judges.
Riedmann, Judge.
I. INTRODUCTION
Pioneer Manor Foundation and Campbell County School
District No. 1, Gillette, Wyoming, appeal and David
Steffensmeier cross-appeals from an order of the county court
for Cuming County. The county court found that Steffensmeier
breached his fiduciary duty as the trustee of the Louise V.
Steinhoefel Trust, but that no damages resulted from the
breach. We affirm these findings, but vacate the order granting
interim attorney fees and remand the matter for further findings
on this issue.
II. BACKGROUND
Steffensmeier is the trustee of the Louise V. Steinhoefel
Trust, which was originally established in 1999. The appel-
lants, along with the appellees Michael Addison and Renee
Wetherelt, are among the beneficiaries of the trust. The trust
was partially funded with approximately 1,471 acres of real
property located in Gillette. After Louise V. Steinhoefel passed
away in 2004, the trust was to provide funds to take care of her
son, Robert Steinhoefel. At the time, the trust had sufficient
funds to care for Robert, but his expenses increased when he
was moved to a nursing home in 2006. Thus, Steffensmeier
determined that he needed to sell some trust assets in order to
continue to provide for Robert’s care. Robert ultimately died in
September 2007.
Steffensmeier contacted a bank in Gillette in the spring of
2007 and asked for the name of a real estate agent who could
help him sell the 1,471-acre ranch property. He was given the
name of Robert Ostlund, a broker with 30 years of experience
selling real estate in Gillette. Steffensmeier spoke to Ostlund
about selling the property and then sent him the most recent
appraisal of the land, which had been completed in January
2004. Steffensmeier told Ostlund he thought they would need
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an appraisal done on the property and another on the min-
eral interests, but Ostlund said no appraisals were necessary.
Steffensmeier let Ostlund determine the fair market value of
the property because Ostlund had more expertise in that area
than Steffensmeier did. After reviewing the 2004 appraisal
and conducting some market research in the area, Ostlund
determined that an appropriate price for the property was
$1,425,000. He was confident in this price and communicated
his confidence to Steffensmeier.
The trust provided that upon the death of Robert, Vicki
Schlautmann (Vicki), one of the beneficiaries, had the option
to purchase the approximately 735-acre portion of the property
described as “parcel A.” Steffensmeier mistakenly believed that
Vicki had an active option to purchase all of the real property
at the time he was putting it up for sale. As a result of this
mistaken belief, Steffensmeier gave Vicki the opportunity to
purchase the entire property before Robert’s death, and she and
her husband submitted an offer for the full purchase price on
June 8, 2007.
Steffensmeier testified that he signed his acceptance of
the Schlautmanns’ offer on June 12, 2007, but did not mail
the signed offer back to Ostlund until June 25. In the mean-
time, a Gillette real estate broker, Jim Engel, submitted
an offer to purchase the property under the name “BDG,
LLC,” to Ostlund on June 22 in the amount of $2,100,000.
Ostlund testified that he had talked to Engel prior to his
making the offer and told Engel that the Schlautmanns had
already submitted an offer that had been verbally accepted.
BDG’s offer indicated that it was a backup offer contingent
upon the cancellation of the existing sales contract and that
if the existing contract was not canceled, then BDG’s offer
became null and void. Ostlund testified that he did not think
BDG’s offer was legitimate, and he told Steffensmeier so.
Ultimately, the Schlautmanns’ purchase of the property closed
in August 2007.
After Steffensmeier filed an application with the trial court
for final accounting and discharge, the appellants brought
this action claiming that Steffensmeier breached his fiduciary
duty as trustee of the trust by selling the property to the
Decisions of the Nebraska Court of Appeals
IN RE LOUISE V. STEINHOEFEL TRUST 297
Cite as 22 Neb. Ct. App. 293
Schlautmanns for less than fair market value. During the pend­
ency of this action, the court granted Steffensmeier’s applica-
tions for interim attorney fees and costs on September 1, 2009,
and September 28, 2011.
Trial was held in August 2012. At trial, the appellants’
expert witness, Carol McCracken, testified that she appraised
the property and concluded that at the time of the sale, the fair
market value was $3,480,000. McCracken is from Billings,
Montana. She became a certified general real estate appraiser
in 2006 and completed 29 ranch appraisals. At the time of trial,
she was no longer working as an appraiser and was employed
as a correctional counselor at a women’s prison.
Steffensmeier also had an expert witness testify, as to his
valuation of the property. This expert, Robert Zabel, esti-
mated that the property’s value at the time of the sale was
$1,477,000. At the time of trial, Zabel had lived in Gillette
for 31 years and been a real estate appraiser in Gillette for
20 years. He also worked as a real estate land developer in
Gillette from 2002 until 2010. Zabel has been a certificated
appraiser since 1994 and is a member of several professional
organizations. He estimated that he has performed approxi-
mately 1,800 appraisals in his career, completing 1,600 of
those prior to 2007.
Zabel did not believe that McCracken reached a reasonable
conclusion as to the market value of the property. He did not
believe that she was fully aware of the market, including the
volume of sales that had occurred and the amount of property
that was coming to market. He also recognized immediately
that she did not understand which type of appraisal approach
she was using. Zabel noted that among her errors, she assumed
that if a smaller parcel of property could be sold for a certain
price per acre, then a larger parcel could too, but she had no
real evidence that that could happen.
After trial, the court concluded that the trust required
Steffensmeier to sell the property at fair market value and
that he failed to ascertain that value at the time of the sale by
failing to get an updated appraisal, failing to promptly offer
the property for public sale, and mistakenly giving Vicki an
opportunity to purchase the property under the assumption that
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she had an active option. The court determined that BDG’s
offer had so many contingencies and reservations that it was
not a valid offer or true reflection of market value. It also
concluded that Zabel’s estimate of the property’s value was
substantially more credible than McCracken’s. Consequently,
the court held that although Steffensmeier breached his fidu-
ciary duty, the property sold at or substantially close to the
market value, and that therefore, the appellants failed to prove
any damages as a result of the breach. The court therefore
dismissed the appellants’ complaints and ordered each party
to pay its own costs and attorney fees.
The appellants filed this timely appeal, and Steffensmeier
cross-appeals.
III. ASSIGNMENTS OF ERROR
The appellants assign, restated and renumbered, that the
trial court erred in (1) determining that the property was sold
at or near the fair market value and that there were therefore
no damages, (2) discounting the offer from BDG, (3) failing
to award any equitable remedies, and (4) failing to award the
appellants attorney fees but allowing Steffensmeier, the trustee,
to pay attorney fees from the trust assets.
On cross-appeal, Steffensmeier assigns that the court erred
in finding that he breached his fiduciary duty and failing to
allow him to recover costs and fees.
IV. STANDARD OF REVIEW
[1-5] Absent an equity question, we review probate matters
for error appearing on the record. In re Estate of Hedke, 278
Neb. 727, 775 N.W.2d 13 (2009). When reviewing a judg-
ment for errors appearing on the record, the inquiry is whether
the decision conforms to the law, is supported by competent
evidence, and is neither arbitrary, capricious, nor unreason-
able. Id. In reviewing a judgment of the probate court in a law
action, we do not reweigh evidence, but consider the evidence
in the light most favorable to the successful party. Id. And we
resolve evidentiary conflicts in favor of the successful party,
who is entitled to every reasonable inference deducible from
the evidence. Id. The probate court’s factual findings have the
Decisions of the Nebraska Court of Appeals
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Cite as 22 Neb. Ct. App. 293
effect of a verdict, and we will not set those findings aside
unless they are clearly erroneous. Id.
V. ANALYSIS
[6] Before addressing the claims before us, it is helpful to
define what constitutes a cause of action for breach of fidu-
ciary duties. The Nebraska Supreme Court has likened a claim
for breach of fiduciary duties to professional malpractice.
See Community First State Bank v. Olsen, 255 Neb. 617, 587
N.W.2d 364 (1998). Accordingly, we have previously deter-
mined that in order to prove a cause of action for breach of a
fiduciary duty, the moving party must prove the elements of
negligence. See McFadden Ranch v. McFadden, 19 Neb. Ct. App.
366, 807 N.W.2d 785 (2011). Therefore, in order for the appel-
lants to prove that they are entitled to judgment on the breach
of fiduciary duty cause of action, they needed to establish that
Steffensmeier owed them a fiduciary duty, that Steffensmeier
breached that duty, that his breach was the cause of the injury
to them, and that they were damaged. See id. Establishing a
breach of a fiduciary duty is but one element of a breach of
fiduciary duty cause of action.
[7,8] The Nebraska Uniform Trust Code requires that a
trustee administer a trust in accordance with its terms. Neb.
Rev. Stat. § 30-3866 (Reissue 2008). The Nebraska Uniform
Trust Code establishes that trustees owe the beneficiaries the
duties of loyalty, impartiality, prudent administration, protec-
tion of trust property, proper recordkeeping, and informing and
reporting. In re Estate of Robb, 21 Neb. Ct. App. 429, 437, 839
N.W.2d 368, 375 (2013).
[9,10] A violation by a trustee of a duty required by law,
whether willful, fraudulent, or resulting from neglect, is a
breach of trust, and the trustee is liable for any damages proxi-
mately caused by the breach. Trieweiler v. Sears, 268 Neb. 952,
689 N.W.2d 807 (2004). A breach of trust includes every omis-
sion or commission which violates in any manner the obliga-
tion of carrying out a trust according to its terms. In re Estate
of Linch, 136 Neb. 705, 287 N.W. 88 (1939).
The trial court found that Steffensmeier acted contrary to
the terms of the trust when he allowed Vicki to purchase the
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entire property when her option to purchase parcel A alone
was not yet active. Such action, according to In re Estate of
Linch, constitutes a breach of Steffensmeier’s fiduciary duty.
In order to recover on their claim, however, the appellants
were also required to prove that Steffensmeier’s breach was a
cause of injury to them and that they were damaged. This they
failed to do.
1. Damages
[11] The trial court found that although there was a breach
of fiduciary duty, no damages resulted from the breach because
the property was sold at or as substantially close to fair mar-
ket value as could be determined retroactively. The amount of
damages to be awarded to a plaintiff is a question of fact. See
Connelly v. City of Omaha, 284 Neb. 131, 816 N.W.2d 742
(2012). As stated above, we will not set aside the court’s fac-
tual findings unless they are clearly erroneous. In re Estate of
Hedke, 278 Neb. 727, 775 N.W.2d 13 (2009).
In this case, the trial court found Zabel’s testimony substan-
tially more credible than McCracken’s. Zabel had significantly
more experience doing appraisal work than McCracken and
was very familiar with the market in Gillette. He thoroughly
explained the process he used to arrive at a valuation of the
property and explained why he disagreed with McCracken’s
estimated value. Zabel concluded that the value of the prop-
erty at the time it was sold was $1,477,000, which, as the trial
court found, was substantially close to the $1,425,000 purchase
price. Consequently, the trial court’s conclusion with respect to
damages was not clearly erroneous.
The appellants argue that the trial court erred when it failed
to make a separate determination of the fair market value of
parcel A. Zabel testified that there would not be an increase in
price per acre if parcel A were sold separately. He was asked
if the property could have been subdivided, and he said that
it could have, but he thought that it would be very difficult to
establish a price and determine how long it might take to get
sold. In fact, he estimated in 2007 that it would have taken
more than 8 years to sell separate tracts of the property. So in
his opinion, subdividing the property would not have been the
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Cite as 22 Neb. Ct. App. 293
highest and best use of the property. Because the trial court
found Zabel’s testimony to be credible, it was not clearly erro-
neous for the court not to separately value parcel A when Zabel
opined that that was not the best use of the property and would
not result in a higher price per acre for parcel A.
The appellants also claim that the trial court improperly
assigned the burden of proof on the appellants to prove
the value of any mineral interests present on the property.
We disagree.
[12] To succeed on a claim for breach of fiduciary duty, a
plaintiff must prove that the defendant’s breach of fiduciary
duty caused the plaintiff damages and the extent of those dam-
ages. See McFadden Ranch v. McFadden, 19 Neb. Ct. App. 366,
807 N.W.2d 785 (2011). Thus, the burden is on the party mak-
ing the claim to prove the extent of its damages. The trial court
in this case found there was little competent evidence upon
which to determine the value of the gas and mineral interests.
This conclusion is supported by the record.
According to Steffensmeier, the value of the mineral inter-
ests on the property began decreasing in 2006. Vicki testified
that although she received $30,342.65 immediately after the
sale, that amount was for surface damages and rent, not min-
eral royalties. She said that as of the time of trial, she had
not received any royalty payments for minerals. As such, the
appellants failed to prove that the mineral interests had any
value at the time of the sale.
We also note that the appellants assert the trial court erred
in failing to account for an immediate royalty payment to the
Schlautmanns in its analysis of fair market value. But based on
Vicki’s testimony that the amount the Schlautmanns received
was not a royalty payment for mineral interests, we reject
this argument.
[13] Finally, without citing any case law, the appellants
argue that the trial court’s use of the standard “substantially
close” was improper. We disagree. Appraisals are estimates of
the fair market value of a property based upon sales of compa-
rable properties and other factors. See In re Estate of Craven,
281 Neb. 122, 794 N.W.2d 406 (2011). Thus, there was no
requirement that the property be sold for the exact amount of
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302 22 NEBRASKA APPELLATE REPORTS
the appraised value, particularly when Zabel’s appraisal was
conducted 5 years after the sale.
Accordingly, the trial court did not err in concluding that
the appellants failed to prove that any damages resulted from
Steffensmeier’s breach of fiduciary duty when the property
was sold as close to fair market value as could be determined
retroactively. This assignment of error lacks merit.
2. Competing Offer
The appellants assign that the trial court erred in finding
that the offer from BDG was invalid and in placing the burden
of proving the offer was valid on the appellants. Without cit-
ing any case law, the appellants claim that BDG’s offer was
“an effective offer” and that the burden should have been on
Steffensmeier to prove that the offer was not viable. Brief for
appellants at 37.
It is not apparent from the trial court’s order that it placed
the burden with respect to the BDG offer on the appellants.
The trial court merely noted that the appellants point to BDG’s
offer as evidence of the value of the property; but the court
found that the “back-up offer had so many contingencies and
reservations . . . as to appear to be not a valid offer” and that
“there is evidence to support a finding that it was less than a
sincere effort to purchase the property and not a true reflection
of market value.”
The trial court’s decision to discredit the backup offer and
find that it was not a true reflection of market value was not
clearly erroneous. When Engel discovered the property listed
for public sale on June 18, 2007, the listing indicated that the
property had been under contract since June 13. Engel then
contacted Ostlund to inquire about the property, and Ostlund
told him that it was under contract with the Schlautmanns
and that the deal was “pretty solid.” Ostlund told Engel that
he had not received the paperwork back yet, but that the offer
had been verbally accepted. Engel testified that at the time
he submitted his offer, he understood that the property was
under contract, but that he submitted his offer as a backup
offer, which meant that if the original offer did not go through,
his offer would move into the first position. The offer itself
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contained this language, noting that it was a backup offer and
contingent upon the cancellation of the existing sales contract.
If the Schlautmanns’ sales contract was not canceled, then
BDG’s offer was null and void. BDG also reserved the right to
declare the offer null and void at any time prior to the cancel-
lation of the Schlautmanns’ offer. Based on this evidence, the
trial court did not err in discounting the backup offer.
Similarly, the court did not err in concluding that BDG’s
offer was not a true reflection of the market value of the
property. Engel testified that when he makes offers on proper-
ties as an investor, he typically determines the amount he is
going to offer based on a 30-percent return on his estimated
proceeds after the property is broken up and completely sold
off. He did not indicate that his offer was based on what he
estimated to be the fair market value. In fact, neither Zabel nor
McCracken factored BDG’s offer into their valuation estimates.
Consequently, the trial court did not err in disregarding the
backup offer and finding that it was not representative of the
market value of the property.
3. Equitable R emedies
[14] The appellants argue that the trial court erred in fail-
ing to consider any equitable remedies, including removing
the trustee, ordering an accounting, ordering an appraisal
of the mineral interests, and imposing a constructive trust
upon any trust distributions otherwise distributable to Vicki.
Steffensmeier asserts that this claim was not properly preserved
for appeal because such relief was not specifically requested
from the trial court. We note, however, that the appellants’
operative complaints requested monetary damages and other
relief provided by Neb. Rev. Stat. §§ 30-3890, 30-3891, and
30-3893 (Reissue 2008). Under § 30-3890(b), to remedy a vio-
lation by a trustee of a duty the trustee owes to a beneficiary,
the court may
(1) compel the trustee to perform the trustee’s duties;
(2) enjoin the trustee from committing a breach of
trust;
(3) compel the trustee to redress a breach of trust by
paying money, restoring property, or other means;
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(4) order a trustee to account;
(5) appoint a special fiduciary to take possession of the
trust property and administer the trust;
(6) suspend the trustee;
(7) remove the trustee as provided in section 30-3862;
(8) reduce or deny compensation to the trustee;
(9) subject to section 30-38,101, void an act of the
trustee, impose a lien or a constructive trust on trust prop-
erty, or trace trust property wrongfully disposed of and
recover the property or its proceeds; or
(10) order any other appropriate relief.
Accordingly, the option to impose equitable remedies was
properly before the trial court. We review equity questions in
a trust administration matter de novo on the record. See In re
Margaret Mastny Revocable Trust, 281 Neb. 188, 794 N.W.2d
700 (2011).
We find no error in the denial of any equitable remedies.
Because the trial court did not err in dismissing the complaints
in this case, there was no reason for the court to remove
Steffensmeier as trustee. It was Steffensmeier’s application for
final accounting and discharge that prompted the commence-
ment of this action, and following the sale of the property,
the only remaining trust administration duty left was the dis-
tribution of the proceeds. The court, therefore, did not err in
denying equitable relief of removing the trustee, and a final
accounting had already been filed.
In addition, the appellants claim that the court should have
considered additional evidence relating to the value of the
mineral interests. Ordering an appraisal of the mineral inter-
ests is not an equitable remedy, because the result would be
additional monetary damages due to the beneficiaries of the
trust. The appellants had the opportunity at trial to present
sufficient evidence of the value of the mineral interests, and
they failed to do so. The court did not err in refusing to allow
them a second opportunity to prove the value of the min-
eral interests.
[15] Finally, the appellants argue that the trial court should
have imposed a constructive trust on any further distribu-
tions to Vicki. A party seeking to establish a constructive
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trust must prove by clear and convincing evidence that the
individual holding the property obtained title to it by fraud,
misrepresentation, or an abuse of an influential or confiden-
tial relationship and that under the circumstances, such indi-
vidual should not, according to the rules of equity and good
conscience, hold and enjoy the property so obtained. See
Eggleston v. Kovacich, 274 Neb. 579, 742 N.W.2d 471 (2007).
There was no evidence in this case that Vicki’s purchase of
the property was the result of any wrongdoing on her part.
Steffensmeier mistakenly offered her the ability to purchase
the entire property at fair market value, and she did so. Thus,
the imposition of a constructive trust on any distributions
due to her as a beneficiary of the trust was unnecessary. This
assignment of error is without merit.
4. Attorney Fees
The appellants claim that the county court erred in failing
to award them attorney fees and in permitting Steffensmeier
to pay attorney fees from the trust assets. On cross-appeal,
Steffensmeier argues that the county court erred in failing to
award him costs and attorney fees after trial. We note that on
two occasions during this action, the court approved interim
attorney fees and costs for Steffensmeier payable from the
trust assets. We presume it is these orders for payment that the
appellants now challenge, as well as the order after trial deny-
ing appellants any attorney fees.
Because the county court determined after trial that the
trustee had breached his fiduciary duty, we first discuss its
decision denying either party attorney fees after trial. We will
then turn to the award of interim fees.
(a) Attorney Fees After Trial
[16] The appellants and Steffensmeier argue that the county
court erred in not awarding them attorney fees. On appeal,
a trial court’s decision awarding or denying attorney fees
will be upheld absent an abuse of discretion. In re Rolf H.
Brennemann Testamentary Trust, 288 Neb. 389, ___ N.W.2d
___ (2014).
[17] Neb. Rev. Stat. § 30-3893 (Reissue 2008) provides
when attorney fees are appropriate in trust administration
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306 22 NEBRASKA APPELLATE REPORTS
cases. Section 30-3893 states: “In a judicial proceeding involv-
ing the administration of a trust, the court, as justice and equity
may require, may award costs and expenses, including reason-
able attorney’s fees, to any party, to be paid by another party or
from the trust that is the subject of the controversy.”
[18] In general, if a court concludes that a fiduciary breached
his duty or requires him to account to the estate, the estate is
not liable for his attorney fees. If the fiduciary’s defense of his
acts is fully successful, he is ordinarily entitled to recover the
reasonable costs necessarily incurred. See In re Guardianship
of Bremer, 209 Neb. 267, 307 N.W.2d 504 (1981).
In the present action, the appellants were successful in
proving a breach of fiduciary duty; however, Steffensmeier
was successful in proving that neither the appellants nor the
trust was harmed. The Nebraska Supreme Court confronted
a similar situation in In re Rolf H. Brennemann Testamentary
Trust, supra.
In In re Rolf H. Brennemann Testamentary Trust, a trust
beneficiary sued the trustees for breach of their fiduciary
duties. The county court dismissed her complaint. On appeal
to this court, we found that the trustees had breached their
fiduciary duty, but found that the breach was harmless. See In
re Rolf H. Brennemann Testamentary Trust, 21 Neb. Ct. App. 353,
838 N.W.2d 336 (2013). On further review to the Nebraska
Supreme Court, that court agreed there was a harmless breach,
but remanded to the county court the issue of whether the
beneficiary was entitled to an attorney fee. In doing so, the
Nebraska Supreme Court stated that it was reluctant to award
fees itself, because the county court was in the best position
to determine whether “‘justice and equity’” required an award
of attorney fees and, if so, in what amount. In re Rolf H.
Brennemann Testamentary Trust, 288 Neb. at 404, ___ N.W.2d
at ___.
As in In re Rolf H. Brennemann Testamentary Trust, the
present case involves a situation in which the trustee breached
his fiduciary duty, but no damage to the trust or beneficiaries
was proved. In such a situation, whether attorney fees are to
be awarded is left to the sound discretion of the trial court to
determine if justice and equity require an award of attorney
Decisions of the Nebraska Court of Appeals
IN RE LOUISE V. STEINHOEFEL TRUST 307
Cite as 22 Neb. Ct. App. 293
fees. In the present case, the county court, being in the best
position to determine this issue, denied both parties’ requests
for attorney fees. Given the county court’s finding on the mer-
its, that there was a breach but no damages, we find no abuse
of discretion in its decision to deny both parties’ requests for
attorney fees.
(b) Interim Attorney Fees
The county court approved Steffensmeier’s applications for
interim attorney fees and costs on September 1, 2009, in the
amount of $44,693.29 and on September 28, 2011, in the
amount of $62,481.57. The trustee incurred these fees in con-
nection with his preparation and filing of an accounting and in
connection with the litigation from which this appeal stems.
The county court approved these applications prior to its deter-
mination that Steffensmeier breached his fiduciary duty but
after the complaints had been filed against him.
Because the county court ordered the interim fees prior to its
determination that Steffensmeier breached his fiduciary duty,
we vacate the award of the interim fees and remand the mat-
ter to the county court to determine whether justice and equity
require that the trust bear the cost of these fees. See In re Rolf
H. Brennemann Testamentary Trust, 288 Neb. 389, ___ N.W.2d
___ (2014). This determination is to be made in conjunction
with the final accounting, because some of the fees requested
relate to both the litigation and general trust administration,
to which Steffensmeier may be entitled under Neb. Rev. Stat.
§ 30-3865 (Reissue 2008).
5. Steffensmeier’s Cross-Appeal
On cross-appeal, Steffensmeier argues that the trial court
erred in finding that he breached his fiduciary duty when it
also determined there were no damages. Based on the terms
of the trust and the requirements of § 30-3866, the trial court
did not err in finding that Steffensmeier breached his duty to
administer the trust in accordance with its terms. But as set
forth above, that does not entitle the appellants to recover,
because they failed to prove they suffered any damages as a
result of the breach. Since a breach of a fiduciary duty is but
Decisions of the Nebraska Court of Appeals
308 22 NEBRASKA APPELLATE REPORTS
one element of a cause of action for breach of fiduciary duty,
there is nothing inconsistent in the trial court’s findings.
VI. CONCLUSION
We conclude that the trial court did not err in finding that
the property was sold at or near fair market value and that
therefore, the appellants suffered no damages. Additionally, the
court did not err in discounting the offer from BDG; nor was it
error for the court to decline to impose any equitable remedies.
Although we find no abuse of discretion in denying each party
attorney fees after trial, we vacate the orders granting interim
attorney fees and remand the matter to the trial court for a
determination of whether justice and equity require the trust to
bear these costs.
Affirmed in part, and in part vacated
and remanded with directions.
John Camden and Mary Camden, appellees,
v. Papio -M issouri R iver Natural
R esources District, appellant.
___ N.W.2d ___
Filed August 26, 2014. Nos. A-13-266 through A-13-268.
1. Eminent Domain: Appeal and Error. An appeal from the district court’s deter-
mination that good faith negotiations occurred prior to the filing of a condemna-
tion petition presents a mixed question of law and fact.
2. Eminent Domain: Jurisdiction. Statutory provisions requiring good faith
attempts to agree prior to institution of condemnation proceedings are jurisdic-
tional, and objection based on the failure of the record to show that the parties
cannot agree may be raised at any time by direct attack.
3. Jurisdiction: Appeal and Error. The question of jurisdiction is a question of
law, which an appellate court resolves independently of the trial court.
4. Actions: Eminent Domain: Courts. Pursuant to Neb. Rev. Stat. § 76-704
(Reissue 2009), if any condemnee fails to agree with the condemnor with respect
to the acquisition of property sought by the condemnor, a petition to condemn the
property may be filed by the condemnor in the county court of the county where
the property or some part thereof is situated.
5. Eminent Domain. In order to satisfy Neb. Rev. Stat. § 76-704.01(6) (Reissue
2009), there must be a good faith attempt to agree, consisting of an offer made in
good faith and a reasonable effort to induce the owner to accept it.