Brigham v. Brigham, 3D05-2403.

• Citation: 934 So.2d 544
• Decision Date: 31 May 2006
• Docket Number: No. 3D05-2403.,3D05-2403.
• Parties: Dana BRIGHAM, individually and as trustee of the Defendant trusts, Patricia Brigham, individually and as successor trustee of the Defendant trusts, the Marion W. Brigham Trust, the EFP Brigham Land Trust No. 1, the Blue Rock Land Trust No. 1, the Seven Mile Ridge Land Trust No. 1, the Rice Road Land Trust No. 1, the Halls Chapel Land Trust No 1., the Cloud Valley Land Trust No. 1, and the Coxes/Jacks Creek Land Trust No. 1, Appellants, v. Edward BRIGHAM, Sandra Forbes Beran, Dana Forbes, Robin Forbes and Allen Forbes, Appellees.
• Court: Court of Appeal of Florida (US)

934 So.2d 544

Dana BRIGHAM, individually and as trustee of the Defendant trusts, Patricia Brigham, individually and as successor trustee of the Defendant trusts, the Marion W. Brigham Trust, the EFP Brigham Land Trust No. 1, the Blue Rock Land Trust No. 1, the Seven Mile Ridge Land Trust No. 1, the Rice Road Land Trust No. 1, the Halls Chapel Land Trust No 1., the Cloud Valley Land Trust No. 1, and the Coxes/Jacks Creek Land Trust No. 1, Appellants, v. Edward BRIGHAM, Sandra Forbes Beran, Dana Forbes, Robin Forbes and Allen Forbes, Appellees.

No. 3D05-2403.

District Court of Appeal of Florida, Third District.

May 31, 2006.

Williams, Parker, Harrison, Dietz & Getzen and M. Lewis Hall, III and David A. Wallace, Sarasota; Lisa B. Lehner, for appellants.

Kluger, Peretz, Kaplan & Berlin and Bruce A. Katzen, Michael L. Cotzen, Miami, and Leslie P. Sharpe; Michael J. Schlesinger, Miami, for appellees.

Before WELLS, CORTIÑAS, and ROTHENBERG, JJ.

CORTIÑAS, Judge.

Appellants, Dana Brigham and his wife, Patricia Brigham, in their individual capacities, as well as trustee and successor trustee, respectively, of the Marion Trust (the "trust"), appeal from an order which (1) precluded them from paying their personal attorneys' fees out of the trust in their defense of the underlying lawsuit filed by Appellees, and (2) required them to return to the trust all monies paid from the trust for defense of the underlying litigation. We affirm.

Appellants are the son and daughter-in-law of Marion Brigham (the "settlor"), who created the trust in 1994. Appellees, Sandra Forbes Beran, Dana Forbes, Robin Forbes, and Allen Forbes are the settlor's grandchildren, and Appellee Edward Brigham is the settlor's son. Appellees and Appellants are beneficiaries of the trust.

The settlor died in 2002. In June 2003, Appellees filed a multi-count complaint against Appellants alleging, among other things, undue influence, breach of fiduciary duty, self-dealing, conversion of trust assets, mismanagement of trust assets, intentional interference, fraud, and conspiracy. Appellants were sued in their individual capacities as well as their capacities as trustee and successor trustee.

After receiving an accounting, Appellees discovered that Appellants were using trust funds to pay their legal fees in the underlying litigation. In November 2004, Appellees filed a Motion to Restrict Payment of Attorneys' Fees, arguing that Appellants were prohibited from paying their individual attorneys' fees with the trust funds and without prior Court approval.

On January 18, 2005, the trial court, after a hearing, granted Appellees' motion in part, finding that Appellants were prohibited from paying their individual attorneys' fees with trust funds, and concluding that court approval was necessary to pay litigation expenses out of the trust, as a personal conflict may exist since Appellants were sued in their individual capacities as well as in their trustee roles.

In March 2005, upon motion by Appellants, the trial court appointed a Special Master to assist the court in determining which of the attorneys' fees and costs, already paid by the trust, were for the benefit of Appellants as trustee and successor trustee rather than as individuals.

In June 2005, the Special Master issued his Report and Recommendation, noting that he "does not believe that any of the fees incurred to date can be separated into [Dana Brigham's] individual defense as opposed to [Dana Brigham's] defense as trustee," and recommending that Appellants personally pay all attorneys' fees necessary to defend themselves against the litigation, and return all monies taken out of the trust for payment of attorneys' fees in the underlying litigation.

After a hearing on Appellants' Objection to the Report and Recommendation, the trial court adopted the Report and Recommendation and held that Appellants must pay the attorneys' fees back to the trust and refrain from paying further attorneys' fees and costs with trust assets without court approval.

Appellants argue that, pursuant to the trust instrument, Dana Brigham, as trustee, had absolute discretion over the payment of expenses relating to the trust. Additionally, Appellants maintain that sections 737.402 and 737.2041, Florida Statutes (2003) permit Dana Brigham, in his capacity as trustee, to pay his attorneys' fees using the trust assets. Appellants argue that the Special Master's inability to distinguish and separate claims against Dana Brigham in his individual capacity from claims in his capacity as trustee should not preclude Dana Brigham, in his trust role, from being able to use trust assets to defend himself.

Conversely, Appellees contend that the trust instrument does not permit Appellants to recover attorneys' fees when defending against claims of fraudulent and tortious acts. Appellees also maintain that Appellants violated both section 737.403, Florida Statutes (2003),¹ and the trial court's January 18, 2005 Order when they failed to seek court approval before transferring trust assets to themselves. Finally Appellees argue that, since Appellants failed to meet their burden of presenting record evidence either to the Special Master or the trial court demonstrating that the attorneys' fees were incurred by them in their capacities as trustee and successor trustee or for the management of the trust, the trial court properly approved the Special Master's recommendations.

We find that the trial court did not abuse its discretion in ordering Appellants to return to the trust all of the money previously paid to them in defense of the underlying litigation and precluding them from using...