KEMP v. KEMP Et Al.
337 Ga. App. 627
| Ga. Ct. App. | 2016Background
- Decedent Alex created multiple trusts (marital, residual, Green Tree Trust, 1990 Life Insurance Trust) naming Sandra as trustee and Alexander (son) as successor trustee/beneficiary after Sandra’s death.
- After Alex’s death, Sandra received approximately $4.78 million in life-insurance proceeds payable to the 1990 Life Insurance Trust but deposited those funds into her personal accounts and later transferred assets into replacement trusts (SS Kemp Trust, SSK Kemp Trust) that excluded Alexander or changed successor designations.
- Alexander sued Sandra (individually and as trustee) asserting breach of trust, misappropriation of corporate opportunity, self-dealing, conspiracy and related claims; he sought removal of Sandra and appointment as successor trustee and obtained temporary injunctive relief removing Sandra as trustee.
- The trial court found Sandra violated temporary restraining orders, held her in contempt, and granted Alexander preliminary injunctive relief; Alexander then sought attorney fees and costs incurred in obtaining the temporary removal/relief.
- The trial court awarded Alexander $270,789.75 in attorney fees and $24,736.34 in costs under OCGA § 53-12-302(a)(4) (trustee liability statute) for fees incurred through the date of the injunctive order; Sandra appealed.
- The Court of Appeals vacated the fee award and remanded, holding OCGA § 53-12-302(a)(4) does not authorize an award of attorney fees before the breach-of-trust claim is adjudicated and damages awarded; the court noted fees might still be available post-adjudication under § 53-12-302 or earlier under OCGA § 9-15-14 if its requirements are met.
Issues
| Issue | Plaintiff's Argument (Alexander) | Defendant's Argument (Sandra) | Held |
|---|---|---|---|
| Whether OCGA § 53-12-302(a)(4) authorizes interim attorney-fee awards before final adjudication of a breach-of-trust claim | § 53-12-302(a)(4) allows expenses of litigation including fees; awarding fees after prevailing on injunctive relief is proper (some success on merits) | Statute does not authorize interim awards; fees only as part of damages resulting from an adjudicated breach | Held: No — statute authorizes fees as part of damages resulting from a breach or threatened breach; interim fees prior to adjudication/damages are not authorized; fee award vacated. |
| Whether a beneficiary who obtains temporary injunctive relief is a prevailing party for § 53-12-302 purposes | Injunctive relief constitutes success on the merits and supports fee award | Even if injunctive relief granted, § 53-12-302 ties fees to damages from breach; temporary relief is insufficient | Held: Temporary injunctive relief alone does not satisfy § 53-12-302’s requirement because no damages adjudicated; court declined to treat injunctive relief as basis for fees under that statute. |
| Whether absence of explicit prohibition of interim fees in § 53-12-302 means interim awards are allowed | Silence in statute permits courts to award interim fees | Silence insufficient; legislature provided explicit interim-fee authority in OCGA § 9-15-14, so its omission from § 53-12-302 is deliberate | Held: Legislature’s express interim-fee language in § 9-15-14 implies § 53-12-302’s silence was deliberate; strict construction against awarding fees when statute is in derogation of common law. |
| Whether fees could be awarded under OCGA § 9-15-14 instead | Argues fees could alternatively be awarded under § 9-15-14 which permits motions during litigation | Sandra argued § 9-15-14 inapplicable; trial court did not reach it | Held: Court remanded so trial court may consider awarding fees under § 9-15-14 (which expressly allows interim requests) but expressed no opinion on whether § 9-15-14’s elements are met. |
Key Cases Cited
- Bloodworth v. Bloodworth, 277 Ga. App. 387 (2006) (no recovery under trustee-fee statute without a finding of breach of trust)
- Reliance Trust Co. v. Candler, 294 Ga. 15 (2013) (noting the new trustee-liability statute is materially identical to prior version)
- Cason v. Cason, 281 Ga. 296 (2006) (attorney fees are not available at common law and require statutory or contractual authorization)
- Fulton County v. Lord, 323 Ga. App. 384 (2013) (OCGA § 9-15-14 awards are mandatory if statutory requirements are satisfied)
- Holcomb v. Long, 329 Ga. App. 515 (2014) (statutory interpretation principles and canons of construction)
- Cox v. Bank of America, N.A., 321 Ga. App. 806 (2013) (appellate courts presume trial-court factual findings correct when record is incomplete)