Eiteljorg v. Eiteljorg
2011 Ind. App. LEXIS 1208
Ind. Ct. App.2011Background
- Probate dispute: trustees allegedly breached duties by not distributing trust corpus timely after settlor's death.
- Trust established 1997; Sonja (settlor's wife) died 2003 leaving remainder beneficiaries Nick and Jack; trust taxes unsettled until 2006.
- October 2004 trustees discussed distributions totaling about $1M, but concluded and distributed nothing; Nick demanded more than $1M and left meeting.
- July 2005 court-ordered distribution of $1.2M; trustees ultimately distributed assets following court instruction.
- Trial court (Dieter) found breach and awarded damages and fees; successor judge Pratt re-evaluated damages and reduced fees; partial reversal on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of trust liability | Nick/Jack: trustees failed to distribute despite available funds. | John/Roger: actions were prudent; dispute over shares justified withholding. | Evidence supports breach; trustees failed to timely distribute trust property. |
| Damages for breach and attorney’s fees | Lost profits/oppportunities and fees should be recoverable. | Restatement 205(3) does not apply; only interest on withheld funds awarded. | Damages limited to interest on $1.2M for nine months; reduce attorney’s fees to $150,000. |
| Reasonableness of fee award and damages computation | Attorneys’ fees justified given complexities. | Fees excessive given limited successful claims. | Remand for compensatory damages; $150,000 attorney’s fees awarded on remand. |
Key Cases Cited
- In re Wilson Revocable Trust, 930 N.E.2d 646 (Ind. Ct. App. 2010) (trustee breach duties; affirmative duties to administer terms; evidence supported breach)
- In re Trust of Johnson, 469 N.E.2d 768 (Ind. Ct. App. 1984) (trustee not compelled to act at his peril; need for court guidance when disputes arise)
- Farner v. Farner, 480 N.E.2d 251 (Ind. Ct. App. 1985) (substitute judge authority; deference to factual determinations on record)
- G & N Aircraft, Inc. v. Boehm, 743 N.E.2d 227 (Ind. 2001) (damages awards within scope of evidence; credibility not re-weighed)
- Nance v. Miami Sand & Gravel, LLC, 825 N.E.2d 826 (Ind. Ct. App. 2005) (measure of damages for use of funds; interest and value of use)