Isle v. Brady, 109,394.

• Decision Date: 04 October 2012
• Docket Number: Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2.,No. 109,394.,109,394.
• Citation: 288 P.3d 259,2012 OK CIV APP 99
• Parties: William A. Belle ISLE and James P. Brady, Petitioners, v. Michael A. BRADY a/k/a Mike Brady, Trustee of the Living Trust of Bonner Brady and Marguerite Brady, Respondent/Appellant, and P. Gae Widdows, Interim Successor Trustee, Appellee.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

288 P.3d 259

2012 OK CIV APP 99

William A. Belle ISLE and James P. Brady, Petitioners,

v. Michael A. BRADY a/k/a Mike Brady, Trustee of the Living Trust of Bonner Brady and Marguerite Brady, Respondent/Appellant,andP. Gae Widdows, Interim Successor Trustee, Appellee.

No. 109,394.Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2.

Court of Civil Appeals of Oklahoma, Division No. 2.

Oct. 4, 2012.

Appeal from the District Court of Tulsa County, Oklahoma; Honorable Jesse S. Harris, Trial Judge.

AFFIRMED.

Michael James King, M. Jean Holmes, S. Gregory Pittman, Winters & King, Inc., Tulsa, Oklahoma, for Respondent/Appellant.

P. Gae Widdows, Mark T. Hamby, Katherine R. Morelli, Bonham & Howard, PLLC, Tulsa, Oklahoma, for Appellee.

JANE P. WISEMAN, Judge.

¶ 1 Michael A. Brady appeals from an order of the trial court awarding the interim successor trustee of the Living Trust of Bonner and Marguerite Brady (Trust) interim fees and costs. The issue on appeal is whether the trial court's decision awarding fees and costs to the interim successor trustee, who was appointed by the trial court, was contrary to the clear weight of the evidence or contrary to law. We hold that Michael Brady failed to show that the award of fees and costs was not supported by the evidence or was contrary to law, and we affirm the trial court's decision.

FACTS AND PROCEDURAL BACKGROUND

¶ 2 William A. Belle Isle, James P. Brady (collectively, Petitioners) and Bonnie Brady ¹ are three of the four named beneficiaries of the Trust. Michael Brady (Mike) is the successor trustee of the Trust and the fourth beneficiary. On October 8, 2009, Petitioners filed a motion for accounting and partial distribution of trust assets and a memorandum of law in support of their motion. Petitioners stated that they are three of the four children of the Trustors of the Trust, Bonner and Marguerite Brady, and Mike is the fourth child. Petitioners claim they are entitled to a combined 70 percent share of the entire Trust estate and that Mike is entitled to 30 percent.

¶ 3 In their motion, Petitioners state that the Trust requires Mike as trustee (1) to provide them with a comprehensive accounting of all trust assets and the income and expenses connected with the Trust's real property, (2) to include in the accounting a report on the condition and insurance coverage of all real property, (3) to allow Petitioners or professionals designated by them to examine the Trust's rental properties, (4) to promptly distribute certain named assets, and (5) not to sell, liquidate, transfer, or encumber the remaining Trust assets.

¶ 4 They assert Mike failed to provide an accounting after the deaths of Bonner and Marguerite Brady, ignored James' written request for an accounting, ignored the Trust provisions requiring distribution of certain assets, and wasted and damaged Trust assets. According to Petitioners, the Trust's rental properties have been neglected to the point that insurers have revoked policies covering two of the three rental properties, and squatters lived in one of the properties for more than a year without paying rent. They claim Mike has engaged in a pattern of self-dealing conduct and has misappropriated Trust assets and that Mike's actions have caused more than $120,000 damage to the Trust estate.

¶ 5 Petitioners also filed an application for a restraining order and to compel an accounting, make partial distribution, remove Mike as trustee, and award damages. They allege Mike breached his fiduciary duties when he failed to render an accounting of trust assets, losses, and expenses, and neglected and caused the waste of Trust properties. Petitioners assert that all of the Trust's rental properties have been vacant for at least 48 months and that the only rental income during the 68 months of Mike's control came from a tenant whose tenancy began before Mike assumed control of the Trust. Petitioners claim that Mike neglected the rental properties causing considerable loss to the Trust and that Mike's self-dealing and misappropriation of Trust property caused additional loss to the Trust. They contend that Mike breached his fiduciary duty by failing to provide support for Bonnie Brady, who has special needs due to her medical condition, and by failing to make distributions to beneficiaries as the Trust requires.

¶ 6 Petitioners sought a temporary restraining order and a preliminary injunction commanding Mike as trustee to act as directed by the Trust. They also sought to remove Mike as the trustee, appoint William as a successor trustee, hold Mike personally liable for the losses and harm suffered by the Trust, and require Mike to pay damages, attorney fees and costs.

¶ 7 The trial court issued an order directing Mike to provide Petitioners with an accountingof all the Trust's real and personal property, including the Trustors' personal property, and to allow Petitioners, or a professional designated by them, to enter and examine the rental properties. The court additionally ordered Mike not to sell, liquidate, transfer, or encumber any Trust assets without further order of the court and issued a temporary restraining order to that effect.

¶ 8 Petitioners continued to seek Mike's removal as trustee and his replacement by William as successor trustee. Mike opposed their request. At a hearing held on December 23, 2009, the trial court on its own motion appointed Gae Widdows, an attorney, as an interim successor trustee to serve until the court could make a decision on the merits of Petitioners' claims. The court stated that Widdows' task is to “collect, preserve, maintain and create an accounting that James has alleged is missing” and to “collect, preserve, appraise, determine the status of what the Trust contains of the real property, or otherwise, and to provide an accounting to the Court and, certainly, copies to the parties.” The court later stated that Widdows' duties were to be the same as a normal successor trustee, meaning she should “collect, [pre]serve, value, repair property, and, to quite honestly, determine whether or not in her view a corpus of the estate has been handled in a fashion that's consistent with the way she's doing it.” The court noted that it was not saying that Mike had done anything wrong. The court relieved Mike of the duty to make an accounting.

¶ 9 In the court's January 11, 2010, order reciting its decision on the interim successor trustee, the court noted that it was neither removing Mike as trustee nor prejudging the issue of whether he should be removed. The court granted Widdows the same powers as those vested in the trustee by virtue of the terms of the Trust and Oklahoma law. The court directed Widdows to “collect, preserve, value, and if needed repair the Trust's assets” and to prepare an accounting. The court directed Mike within 48 hours to deliver to Widdows possession of and keys to the Trust's real property, possession of the storage unit and safe deposit box containing Trust property, and “photocopies of such documents regarding the Trust's affairs as are in [Mike's] possession, custody, or control.” The court also ordered Petitioners to provide Widdows information in their possession, custody, and control regarding Trust affairs. The court provided that “Widdows' fees as trustee shall be paid from the Trust upon application and approval by the Court, with notice to the parties to this action.”

¶ 10 Widdows accepted her appointment on January 14, 2010, and began her work as interim successor trustee. On April 15, 2010, she filed an application for an award of interim fees and costs seeking $71,582 in attorney fees and $1,162.25 in costs. In her affidavit attached to the application, Widdows states that her standard hourly rate is $210 per hour but she reduced her hourly rate to $200 per hour for this case. She listed the rate for B. Gail Brown, an attorney who assisted Widdows in performing work for the Trust, at $60 per hour and states that a paralegal who worked on the case was also billed at $60 per hour.

¶ 11 Mike filed a response requesting the trial court to (1) deny Widdows' application “with respect to any fees attributable to preparation of estate tax returns” which amounted to approximately $1,400, (2) reduce or deny items that are block billed, and (3) reduce or deny the requested fees for services performed by Widdows' paralegal. Petitioners, on the other hand, endorsed the application and stated that “Widdows and her associates have been diligent and effective in performing the duties assigned to them by [the] Court.” Petitioners asserted, however, “that the failure of the former Trustee, Mike Brady, to cooperate with the Successor Trustee has resulted in substantial otherwise avoidable cost to the Trust.” Petitioners took the position that Mike should be personally surcharged with more than half of Widdows' fees and costs.

¶ 12 In its order, the trial court noted that Mike withdrew his objection to the fees attributable to the tax review and the estate tax returns. The court sustained in part Mike's objection to the charges made by B. Gail Brown that were block billed and reduced those charges by the amount of $2,280. The court awarded Widdows interim fees in the amount of $69,302 and costs in the amount of $1,162.25.

¶ 13 Widdows filed a second application for interim fees and costs on December 15, 2010, in which she sought $98,016 for attorney fees and $820.45 for costs. Mike filed a response and objection to the application, claiming that Widdows exceeded the scope of her appointment when she expressed opinions about Mike's handling of the Trust, spent too much time pursuing certain property alleged to be included in the Trust, billed repeatedly for the same task, paid an attorney to balance checkbooks and pay bills, and used her brother to perform property management functions.

¶ 14 A hearing was held on Widdows' second application for fees on ...