Brady's Estate, Matter of

Decision Date15 July 1981
Docket Number65213,Nos. 64670,s. 64670
PartiesIn the Matter of the ESTATE OF Howard D. BRADY, Deceased. Appeal of Ralph J. BROWN, Thomas B. Brown, and Daniel P. Ernst. In the Matter of the CONSERVATORSHIP OF Howard D. BRADY, Deceased. Ralph J. BROWN, Thomas B. Brown, and Daniel P. Ernst. In the Matter of the ESTATE OF Howard D. BRADY, Deceased. MONTICELLO STATE BANK, Executor of the Estate of Howard D. Brady, Deceased, Monticello State Bank, Simmons, Perrine, Albright and Ellwood, and Robert R.Beckmann, Appellants, v. Ralph J. BROWN, Thomas B. Brown, and Daniel P. Ernst, Appellees-Cross-Appellants.
CourtIowa Supreme Court

Michael A. Stapleton of Klauer, Stapleton & Ernst, Dubuque, for appellants Ralph J. Brown, Thomas B. Brown, and Daniel P. Ernst.

J. E. Heiserman of Remley, Heiserman & Willems, Anamosa, and Robert C. Tilden and Iris E. Muchmore of Simmons, Perrine, Albright, & Ellwood, Cedar Rapids, for appellants Monticello State Bank and lawyers.

Considered by LeGRAND, P. J., and UHLENHOPP, HARRIS, McCORMICK, and LARSON, JJ.

McCORMICK, Justice.

These consolidated appeals involve questions arising from five contested proceedings relating to administration of the conservatorship and estate of decedent Howard D. Brady. In each proceeding the Monticello State Bank was pitted against Ralph J. Brown and Thomas B. Brown, second cousins of the decedent who were the residuary beneficiaries of his estate. Daniel P. Ernst, who is now coexecutor of the Brady estate with the Browns, joined the Browns in objecting to the bank's conservatorship and estate final reports. Nine orders entered by the trial court are challenged in these appeals. We affirm in part and reverse in part.

Decedent was a bachelor who owned a 350-acre farm in Jones County. He lived on the farm with his mother. In late 1974 he learned he was terminally ill with cancer. Upon his voluntary application, the bank was appointed his conservator.

On December 30, 1974, decedent executed a will, making two changes in specific bequests provided in a September 6, 1974, will. His health worsened and he moved to Wisconsin where he lived in a rented trailer on the Browns' farm. Subsequently he entered a hospital in Darlington, Wisconsin. On March 5, 1975, he executed a new will in which he made additional changes in specific bequests.

The Browns were the residuary beneficiaries in all three wills. The bank was nominated as coexecutor with Thomas B. Brown in the first two wills, but the Browns were nominated as coexecutors in the third. Decedent died in the Wisconsin hospital on March 20, 1975. The Browns initiated probate of the March 5 will in LaFayette County, Wisconsin. Despite notification by the Browns' attorney of the existence of the March 5 will, the bank filed the December 30, 1974, will for probate in Jones County and was appointed coexecutor with Thomas B. Brown.

Subsequently, after a contested hearing, the bank obtained an order from the Jones district court allowing it to intervene in the Wisconsin estate proceeding. In its intervention, the bank objected to probate of the March 5 will. It alleged decedent was a resident of Iowa at his death, the will was not duly executed, and the decedent was unduly influenced and lacked testamentary capacity. Because the residency issue involved jurisdiction, the Wisconsin court separated that issue for trial first. After trial of that issue in July 1975, the court held decedent was a resident of Wisconsin at his death.

The bank then dismissed its petition of intervention in the Wisconsin proceeding. Subsequently it obtained an ex parte order authorizing commencement of a declaratory judgment action in Jones County, raising again the residency, undue influence and testamentary incapacity issues. The bank's declaratory judgment petition was filed in December 1975. The action was tried in October 1977. Judgment was entered on a jury verdict for the bank on the residency issue but upholding the March 5 will. That will was admitted to probate in Iowa, and the Browns and Ernst were appointed coexecutors.

Subsequently the bank filed its final reports in the conservatorship and estate. The Browns and Ernst filed objections. The Browns later brought a tort action against the bank in its individual capacity, seeking damages for the bank's alleged malfeasance in the administration of the conservatorship and estate.

On motion of the bank, two counts in the malfeasance action were transferred to probate for trial with the objections to the final reports. Over the Browns' objection, the court ordered that the probate issues be litigated first. The Browns dismissed one of the malfeasance counts, leaving only one for trial in probate. All the probate issues were then tried, and a number of separate orders were entered. The present appeals followed.

The questions are whether the court erred (1) in ordering trial of the probate issues first, (2) in allowing compensation from the estate for the bank and its attorney for the Wisconsin litigation, (3) in allowing compensation from the estate for the bank and its attorney for the declaratory judgment action, (4) in approving the conservatorship final report and allowing conservatorship fees, (5) in approving the estate final report and allowing estate fees, (6) in denying attorney fees from the estate for more than one attorney, (7) in refusing to allow any compensation from the estate to the bank and its attorney for defending the probate portion of the malfeasance action, (8) in denying a claim against the estate for expert witness fees, and (9) in allowing fees to the bank's attorney for extraordinary services in defending the final reports. We must also rule on the bank's application for appellate attorney fees in the appeal taken by the Browns from the conservatorship and estate orders.

I. The order of trial. The Browns contend the court erred in refusing to defer trial of the probate issues until after trial at law of the remainder of their malfeasance action. They argue that the doctrine of issue preclusion will nullify their right to jury trial in the malfeasance case.

Trial of two counts of the malfeasance action was deferred. Only one of those counts involved issues tried in probate; issues involved in the other count, concerning alleged improper sale of cattle, were expressly excluded from the probate trial. The trial court recognized this in overruling a motion for summary judgment on that count.

The elements of issue preclusion are delineated in Hunter v. City, 300 N.W.2d 121, 123 (Iowa 1980). For the doctrine to be applicable, the issues must be the same. Assuming the other elements are present in this case, the doctrine should affect only one count of the malfeasance action. The Browns' right to jury trial should not otherwise be impaired.

In arguing that the law issues should have been tried first, the Browns rely on Morningstar v. Myers, 255 N.W.2d 159, 161 (Iowa 1977), where the general rule concerning order of trial of split issues was stated:

This is a matter which lies within the trial court's discretion and ordinarily is to be decided on considerations of efficiency, conservation of judicial time and avoidance of multiple trials. However, right to jury trial is to be preserved and should not be impaired except for compelling reasons....

Although it has been said that equitable issues should be tried first, this is not an inflexible rule. We have several times expressed the view that the case which is most likely to dispose of the whole controversy should be tried first in order to avoid an unnecessary second trial.

The preference for jury trial is less influential when separate cases rather than split issues are involved.

In addition, the conservatorship had been open since 1974 and the estate since 1975. The malfeasance action was not filed until 1978. The conservatorship and estate disputes involved more issues than the law action, and most were unrelated to the issues in that case. Although the possible effect on the Browns' right to jury trial was an important consideration in the decision concerning order of trial, it was not determinative. The age of the conservatorship and estate and the number and nature of issues were also relevant. Under this record, the trial court did not abuse its discretion in ordering trial of the probate issues to precede trial of the remaining counts of the law action.

II. Compensation for the Wisconsin litigation. The Browns assert the court erred in awarding compensation to the bank and its attorney for the Wisconsin litigation. The court based its finding of compensability on the allegedly preclusive effect of the 1975 Jones district court order authorizing the bank to intervene in the Wisconsin probate proceeding. That order was entered by another judge. The trial court reasoned that a finding of good faith and just cause was implicit in it. Because the order was entered after an adversary hearing and was not appealed, the court concluded the order was a binding adjudication of the issues.

The relevant statute is section 633.315, The Code, which provides:

Allowance for defending will. When any person is designated as executor in a will, or has been appointed as executor, and defends or prosecutes any proceedings in good faith and with just cause, whether successful or not, he shall be allowed out of the estate his necessary expenses and disbursements, including reasonable attorney fees in such proceedings.

Existence of good faith and just cause is ordinarily a question of fact. In re Estate of Cory, 184 N.W.2d 693, 698 (Iowa 1971). Governing principles are explained at 184 N.W.2d 697-99.

We do not believe these issues were adjudicated in the 1975 order. That order expressly provided: "Any and all issues as to the allowance or allocation of litigation fees and expenses are deferred by the Court for later consideration consistent with the matters adjudicated in this Order...." It is ...

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