Klinkerfuss v. Cronin, ED 85926.
| Decision Date | 11 July 2006 |
| Docket Number | No. ED 86141.,No. ED 85985.,No. ED 85926.,ED 85926.,ED 85985.,ED 86141. |
| Parties | Elaine KLINKERFUSS, Plaintiff/Respondent/Cross-Appellant, v. William L. CRONIN, Defendant/Appellant/Cross-Respondent, and Delores J. Cronin, Defendant. |
| Court | Missouri Court of Appeals |
Irl B. Baris, Baris Law Firm, St. Louis, MO, for cross-appellant.
Michael A. Gross, Joseph F. Yeckel, Law Offices of Michael A. Gross, St. Louis, MO, for cross-respondent.
In this consolidated appeal, both trustee and beneficiary appeal from a judgment awarding trustee's fees and allocating attorney's fees to trustee after a judgment had been entered in trustee's favor in beneficiary's action to remove trustee, to recover damages, and to obtain an accounting. The trial court entered a judgment in which it awarded trustee $14,284.64 in trustee's fees and allocated $21,052.00 of the attorney's fees incurred by trustee against beneficiary's share of the trust estate, but denied all other claims for relief. For her appeal, beneficiary claims that the trial court erred 1) in denying her motion to dismiss for lack of jurisdiction trustee's motions for award of trustee's fees and allocation of attorney's fees; 2) in awarding $14,284.64 as trustee's fees; 3) in allocating $21,052.00 of the attorney's fees against beneficiary's share of the trust estate; and 4) in taxing costs against beneficiary. In his appeal, trustee asserts that the trial court erred 1) in finding one law firm's fees were only $42,104.00 and in allocating only $21,052.00 of those fees against beneficiary's share of the trust estate, and 2) in denying trustee reimbursement for the attorney's fees of another attorney who represented him before and during trial in the removal and accounting action. Trustee also seeks attorney's fees on appeal. We affirm in part, reverse in part, and remand with directions.
On January 5, 1995, Erna Strawn executed a revocable living trust naming her adult daughters, plaintiff Elaine Klinkerfuss and defendant Delores Cronin, as the primary beneficiaries. Ms. Strawn named herself and her grandson, defendant William L. Cronin, as co-trustees. The trust provided that upon Ms. Strawn's death, disability, or incapacity, Mr. Cronin (hereinafter, trustee) would continue as sole trustee. The trust also provided that upon Ms. Strawn's death, if both primary beneficiaries were living, the trust assets were to be divided into two equal shares, each share of the principal to be distributed to the beneficiaries in the following manner: one third upon Ms. Strawn's death, one half on the fifth anniversary of her death, and the remainder on the tenth anniversary of her death. The trust also contained provisions that kept a share in trust if one of the primary beneficiaries died prior to final distribution of all of the principal, and that distributed both shares to descendants if both primary beneficiaries died before final distribution.
After Ms. Strawn's death on July 22, 1999, Ms. Klinkerfuss (hereinafter, beneficiary) notified trustee that she questioned whether the trust should continue to exist and that she intended to "break" the trust and have Mr. Cronin removed and her share of the trust terminated so she could have the property outright. Beneficiary's attorney also told trustee that they wanted to do away with the trust and sent trustee a letter asking him to consider terminating the trust.
Although he was an attorney and CPA, trustee concluded that he did not have the expertise to defend the trust against beneficiary's allegations or to prepare the trust tax returns and required accountings. Trustee decided that he needed to hire a law firm that specialized in this area and in other trust matters. On October 19, 1999 trustee retained the law firm of Greensfelder, Hemker, and Gale, P.C. (Greensfelder) to represent him as trustee of the trust and personal representative of the estate. Greensfelder prepared accountings and tax returns for the trust, and it assisted in the administration of the trust. Greensfelder also represented trustee in communicating with beneficiary's attorney, who was proposing to have the trust terminated.
On November 8, 2000, beneficiary filed a petition in the Circuit Court of St. Louis County for removal of trustee, money damages, and an accounting, naming trustee and Ms. Cronin as defendants. In the petition, beneficiary alleged that trustee had breached his fiduciary duty in performing his duties as trustee. She specifically alleged that trustee failed to file necessary and required tax returns, provide information to her, distribute quarterly income, provide an accounting, and act impartially. She further alleged that trustee committed waste. On December 11, 2000, William G. Jochens, a Greensfelder attorney, entered his appearance for trustee. On January 18, 2001, Greensfelder filed trustee's answer to beneficiary's petition. Greensfelder represented trustee at a settlement conference in July 2001, at which beneficiary's attorney proposed the possibility of terminating the trust if all parties agreed. Greensfelder concluded that trustee could not consent to a termination of the trust.
On October 5, 2001, trustee contacted Jan Adams, an attorney who was not associated with Greensfelder, because he believed there was a conflict of interest between the administration of the trust and the personal attacks on him and he should have separate representation to respond to the attacks made on him as trustee. On October 25, 2001, Ms. Adams filed an entry of appearance in the removal action on trustee's behalf, "individually." Prior to trial, Ms. Adams divided litigation responsibilities with Greensfelder. However, Ms. Adams was the sole attorney to take beneficiary's deposition on trustee's behalf. Ms. Adams was also the sole attorney representing trustee when he was deposed by beneficiary. Likewise, Ms. Adams was the sole attorney representing trustee at trial in April 2002. Greensfelder did not appear as counsel for trustee at these proceedings.
One of the issues at trial was beneficiary's claim that trustee had committed waste by incurring $59,200.00 in attorney's fees. To support this claim, beneficiary called Mr. Jochens to testify to Greensfelder's attorney's fees. Beneficiary also introduced evidence, in the form of a compilation of all of Greensfelder's invoices billed to the trust from October 19, 1999, through March 29, 2002, that Greensfelder's total fees for services rendered to the trust estate were $59,200.00. Mr. Jochens testified that $5,000.00 to $6,000.00 of the charges were for services relating to the probate estate. When he was cross-examined by trustee, Mr. Jochens testified that all of Greensfelder's fees appearing on the invoices were reasonable and necessary under the circumstances.
After beneficiary rested, trustee moved for judgment at the close of plaintiff's case, which the trial court granted. In its judgment, the trial court found that beneficiary's actions caused trustee to engage Greensfelder to represent the trust; that since the day of Ms. Strawn's death, beneficiary had attempted to have her interest in the trust settled upon her immediately, contrary to the trust provisions; that beneficiary had shown animosity toward trustee in her attempt to have the trust provisions relating to her terminated; that, consistent with Ms. Strawn's wishes, trustee divided the personal property, sold the real property, and conservatively and prudently invested the trust assets; that trustee made timely accounting to beneficiary, properly prepared and filed all tax returns, acted impartially, prudently maintained the trust corpus, and had not committed waste; that the attorney's fees in this case were reasonable and necessary, and that the bulk of the attorney's fees involved were occasioned by beneficiary's actions in filing suit; that beneficiary filed the lawsuit for selfish reasons and not to protect the trust; and that beneficiary's actions were such that trustee was required to hire outside counsel, even though he was an attorney and CPA. The court concluded by entering judgment for trustee and against beneficiary, and taxed costs to beneficiary.
Beneficiary filed a motion to set aside, amend, and modify the judgment. At the hearing on this motion, Ms. Adams and Mr. Jochens appeared on behalf of trustee and both attorneys argued in support of the court's judgment. The trial court denied beneficiary's motion to set aside, amend, and modify the judgment, finding that beneficiary "was not a truthful witness and thus the Court was unable to give credit to her testimony."
Beneficiary appealed from the judgment against her in the removal action on the grounds that the evidence supported factual findings in her favor and that the court erroneously applied the law. We affirmed the trial court's judgment by order with a supplemental memorandum. Klinkerfuss v. Cronin, 120 S.W.3d 758 (Mo.App.2003). In our supplemental memorandum, we held that it was within the trial court's discretion to find that beneficiary's actions caused trustee to retain Greensfelder to assist him with the controversies arising from his interaction with beneficiary, and that Greensfelder's legal bill of approximately $60,000.00 was reasonable and did not constitute waste.
On June 7, 2004, trustee sent both beneficiaries a copy of the most recent accounting, the judgments of the trial court, and the opinion of this court, along with a cover memorandum reporting on the deadline for the second distribution of assets...
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