First Nat. Bank of Mishawaka v. Kamm
| Decision Date | 13 June 1972 |
| Docket Number | No. 172A53,172A53 |
| Citation | 152 Ind.App. 353,283 N.E.2d 563 |
| Parties | The FIRST NATIONAL BANK OF MISHAWAKA, Trustee, Appellant, v. Gerald KAMM and Doran, Manion, Boynton and Kamm, Appellees. |
| Court | Indiana Appellate Court |
Joseph T. Helling, Crumpacker, May, Levy & Searer, South Bend, for appellant.
Gerald A. Kamm, Charles M. Boynton, Doran, Manion, Boynton & Kamm, South Bend, for appellees.
This is an appeal from a judgment of the St. Joseph Superior Court awarding the sum of $15,745.42 to the Petitioners-Appellees for attorney's fee in regard to services rendered a former trustee of a family trust which is commonly referred to as the Kamm Trust.
At the outset it should be noted that Appellant is not contending that the services were not rendered nor is it contending that the monetary fee is not fair and reasonable. What Appellant is contesting is whether the attorney's fee should be paid out of the trust assets.
The Kamm Trust was an undocketed family trust established in 1929 by a group of nine brothers and sisters who were also the original beneficiaries. One of the original settlor-beneficiaries died in 1952 and his children succeeded to his interest as beneficiaries under the trust. From 1952 to 1957 these adult beneficiaries allegedly did not receive any detailed itemization or accounting regarding the affairs of the trust and in the latter year they brought an action for an accounting, for removal of one of the three cotrustees and for damages. The suit was filed against the one cotrustee, both individually and in his capacity as trustee, his wife and family, and various other individuals and corporations.
The law firm of Doran, Manion, Boynton & Kamm was retained under contract by the three cotrustees to defend the action. Pursuant to said contract the law firm filed a Plea in Abatement on behalf of all defendants which contained as one of its grounds that te other two cotrustees and beneficiaries had not been named as parties to the action. An amended complaint was thereafter filed naming the additional parties. This amended complaint was also attacked by a Plea in Abatement since two of the former cotrustees had subsequently died and their personal estates had not been substituted as parties. Several pleas in abatement of this nature were filed, the last of which was granted and a Judgment in Abatement was entered by the LaPorte Circuit Court in 1965. An appeal was taken and was defended by the law firm of Doran, Manion, Boynton & Kamm on behalf of the individual and corporate defendants. The judgment was affirmed by the Indiana Appellate Court in Nye, et al. v. Kamm, et al., 139 Ind.App. 687, 212 N.E.2d 397 (1966).
Neither of the two deceased cotrustees nor their personal estates were named in the final Plea in Abatement since that was the primary ground for the plea. To have named the personal estates would have negated the effect of the plea.
Upon successful completion of the above lawsuit, the law firm of Doran, Manion, Boynton & Kamm submitted a bill to the successor trustee for the services rendered in said suit. The successor trustee resisted payment of the bill for the attorney's fee. Finally Appellee petitioned the trial court to order Appellant Trustee to pay the attorney's fee out of the trust assets. When beneficiaries objected, and the trustee required proof, the matter was assigned to a Special Judge as a contested case. A corrected judgment was ultimately rendered against the trustee in favor of one of the petitioning lawyers for $15,745.42. A second Motion to Correct Errors was denied and this appeal was then duly perfected.
Although the argument section of Appellant's Brief is divided into numerous subsections, there are only two fundamental issues raised and for the purposes of this opinion the various subsections will be combined and treated only as they relate to the principal issues.
Is a suit for attorneys' fees the proper forum to consider the alleged misconduct of a cotrustee who was represented by said attorneys?
This suit was brought by the law firm of Dorn, Manion, Boynton & Kamm for services rendered cotrustees of the Kamm Trust under a written contract. The services were rendered in defense of an action against one of the cotrustees for failure to account, for comingling of trust funds and for refusing beneficiaries access to trust records. There was never an adjudication on the merits of the controversy concerning the alleged misconduct of the cotrustee. The question then becomes whether the alleged misconduct can be raised as a defense to the petition for attorney fees. We believe not and now so hold.
Although Appellant is correct in the assertion that a Plea in Abatement determines and decides nothing regarding the merits of the controversy and allows the parties to renew their suit in another place or forum, Powers v. Ellis, 231 Ind. 273, 108 N.E.2d 132 (1952), the controversy is still one between the parties to the original action and can only be decided as between them.
The conduct of the cotrustee is not an issue in this case. The beneficiaries had the opportunity to litigate the alleged misconduct of the cotrustee and they failed in their initial attempt. They did not renew the action against the original defendants. Appellant, by attempting to raise the conduct of the cotrustee as a defense, is endeavoring to relitigate the old lawsuit anew and to thereby place upon Appellees, not only the burden of justifying their expenses, but also the burden of showing that if the prior lawsuit had been heard on the merits, the cotrustee would have been exonerated. It is a burden Appellees need not and should not have to assume.
Appellant relies upon the clearly established rule of law to the effect that a trustee who has been adjudged guilty of misconduct cannot charge the expenses of the defense of the suit to the trust fund. Hass v. Wishmier's Estate, 99 Ind.App. 31, 190 N.E. 548 ...
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