Atwood v. Atwood

OK CIV APP Atwоod; III; Peter M. Allen A. ATWOOD Perry At- Philip A. A. Atwood through par- their

wood, minors friends, Peter M. Atwood

ents and next Atwood, Plaintiffs/Appel- A.

and Adina

lants. Individually ATWOOD,

Roger M. the Allen A. Atwood

Trustee of February 1, Dated

Ferne Atwood Trust Defendant/Appellee. 94,393.

No. Oklahoma, Appeals of of Civil

Court

Division No.

April3,2001. Hodges, Detrich, James C. Eller and Tul-

sa, OK,for Plaintiffs/Appellants. Jeffrey Hassell, Doss, D. Julie C. Gable & Gotwals, Tulsa, OK, Defendant/Appellee. RAPP, ACTING.PRESIDING JUDGE: T1 plaintiffs, The trial court Allen A. At- III, Atwood, wood Peter Philip M. A. At- wood, Perry ("Beneficiaries"), A. Atwood appeal an order granting summary judgment defendant, in favor of the trial court Roger ("Trustee"), M. individually Atwood and as Trustee of the Allen A. Atwood and Ferne Atwood Trust February dated ("Trust"). aspect appeal This is re- Opinion. viewed as Part I of [ Next, supplemental appeal, the Ben- appeal eficiaries the trial court's decision which expenses, awarded expert witness fees on behalf of Trustee. aspect appeal This reviewed Part II Opinion. of this I any PART distribution has been not indicate yet. made for that child as BACKGROUND ¶7 summary a motion for Trustee filed in that the Trust judgment. He contended es- and Ferne Atwood Allen In liability grant because it precluded strument pay education and tablished to retain power Trustee and discretion ed They the Beneficiariеs. other benefits advisable any long asset for as as he deems with stock primarily the Trust funded limit being without and to make investments company. publicly traded company, a AMP Next, or statute. he ed to rule of law died, the Trustee became Atwood After Allen that he had not violated either argued Trustee. the active Investor Man Rule or the Prudent Prudent Atwood, and Allen Jr. Roger Atwood T4 Rule, granted case the Trust but either Allen, Jr. of the Settlors. the children are beyond those Rules. authority and discretion At- Beneficiaries Allen in 1992. The died ¶8 motion, support Trustee sub of his Atwood are the children III and Peter wood expert showing findings mitted the of his trial, Allen, and, ap- at time of were Jr. frames, ending all that over various time years age. proximately 39 4, 1999, experienced May the rate return minor chil- are the remaining Beneficiaries just ranged from under 14%for by the Trust to his death Atwood. Prior dren of Peter just over 22% for the longest the term to on 1992, Allen, the Trustee Jr. dealt with term. This also calculated shortest of his children. behalf using returns different scenariоs diversifi ¶5 action, Beneficiaries have In this cation, urged by Beneficiaries. including one mismanaged he claiming that sued Trustee that the Trust calculation reflected This holdings diversify its by failing to the Trust ranging from have realized a value would account to them he failed to and that $354,000.00 approximately compared zero to actions as Trustee. for his Beneficiaries approximately to the actual value as Trustee and They sought his removal also $514,000.00.2 alleged mismana from the damages for losses own Beneficiaries countered with their T9 gement.1 experts. experts opined that the fail- These ¶6 kept the AMP stock as The Trustee diversify increased the risk to the ure to Trust's assets approximately 70-80% present value of the Trust and reduced the $440,00.00 1998, The of it was sold. by approximately and cost until when much $1,696,000.00in future value. Fur- that Trust gist contention is the Trust of Beneficiaries' failing diversify by ee breached his duties ther, pointed to the return of Beneficiaries value would the Trust's and had he done so only during being the AMP stock as 8.75% It un substantially higher. was have been years prior being filed. the five to the suit began with a value of disputed that the Trust compared to the much They this return 4, $75,000.00, May approximately and that on greater return from other Trust assets and approximately was value They concluded that Trust- to other indices. value, $514,591.00. present In addition to its and his ee violated his duties as Trustee $600,000.00 had been distrib approximately responsibilities under the Oklahoma Prudent Beneficiaries, benefit, Last, they or for their Act. maintain that Trust- uted to Investor major recipi possessed, he of the Trust. The ee failed to use skills over the life investments, own for the One minor was born that he used for his ent was Peter Atwood. and the record does benefit of the Trust. after the case was filed Trust, having previously only never taken summary judgment dealt with the from the 1. The judgment mismanagement any questions de- claim of but These fee for services as Trustee. 994(B). complies 12 O.S. Opinion. cree with are discussed in Part II of this during pro- resigned the Trustee ceedings accountings were tendеred. The Beneficiaries, if fol- 2. One advocated scenario question Opinion in Part I of this relates sole having a have resulted in the trust lowed, would summary deciding judgment Beneficia- that balance in the late 1970's. zero mismanagement and dam- ries had no claim for ages. claimed an fee and fees Trustee

Q41 summary, 10 In under the Trustee's see- Bank Vinita, & Trust Co. portfolio, whole, outperformed nario the as a 860 P.2d Stanley, Flowers v. proposed and, the seenario Beneficiaries 316 P.2d 840. Because the trial court at the same time distributed substantial has the limited role of determining whether sums. argued The Beneficiaries their fact, there are such issues may it that, evidence shows had the Trustee diversi- determine fact issues on a motion for sum fied, present and future values of the mary judgment nor weigh it the evi Trust would have been substantially higher Stuckey Co., dence. Young Exploration ¶ and that the Trust has lost substantial future 128, 15, 1978OK 586 P.2d response, value. Trustee asserted that ¶12 One who against defends regardless of the outcome of his investment claim and who does not bear the burden of choices and his decision to retain the AMP proof required is not to negate plaintiffs stock, the Trust only gave document not him claims or theories prevail order on unlimited discretion but also exonerated him motion summary judgment. When a de from liability for claims such urged by fendant moves for summary judgment with Beneficiaries. The trial court sustained out relying upon an affirmative defense the Trustee's motion for summary judgment. 1) defendant must show: that no substantial appeal. Beneficiaries controversy factual exists as to at least one STANDARD OF plaintiff's REVIEW fact essential theory cause action; 2) and, the fact is in defen ¶11 appellate standard of review in dant's favor. Onee a defendant has intro summary judgment is de Kirkpatrick novo. evidentiary duced materials to establish ¶ Chrysler Corp., 1996OK points, plaintiff these then has the bur 122, 124. This means without deference. den of showing that evidence is available Hulett v. First Nat. Bank & Trust Co. in justifies which a trial of the issue. Akin v. Clinton, 21, 879; 1998 OK 956 P.2d see Salve Co., 102, ¶ 8, Missouri R.R. 1998 OK Regina Russell, College 225, v. 499 U.S. Pаcific 1040, 1044; 977 P.2d Stephens v. Yamaha 1217, (1991). S.Ct. 113 L.Ed.2d 190 Co., Ltd., Japan, 42, ¶ 11, Motor 1981 OK pleadings evidentiary materials will be 439,441; Reid, P.2d Runyon 25, 1973 OK examined to determine what facts are mate ¶¶ 12-13, 943, 510 P.2d 946. On the other rial and whether there is a substantial con hand, when the upon defendant relies an troversy as to one Sperling material fact. affirmative defendant, defense then the Marler, 81, 577; 1998 OK 963 P.2d Malson v. the party with proof, the burden of must Palmer Broadcasting Group, 42, 1997 OK meet plaintiff the same standards as a 936 P.2d 940. All inferences and conclusions mov- ant. ., Akin v. Missouri R.R. Co. to be drawn from the materials must be Pacific ¶ 102, 9, 1040, 1998OK 977P.2d 1044. light viewed in a most favorable to the non- moving party. Beller, Carmichael v. 48, OK 914 P.2d 1051. though Even ANALYSIS AND REVIEW controverted, facts not be if reasonable 1 13 This Court views the Trustee's motion persons may draw different conclusions from for summary judgment as a two-sided attack these facts summary judgment must be de upon the Beneficiaries' claim: involving one Coleman, nied. 44, Bird v. 1997 OK breach duty by of trust diversify, a failure to ‍‌‌‌​‌​‌​‌​‌‌‌​​‌​‌‌‌​​‌​​‌‌‌‌‌​​​​​‌​‌​‌‌​‌‌​​‌‌‍P.2d Summary 1123. judgment proper is and the second being complex one more only if the record reveals uncontroverted ma involving affirmative defenses of exoneration terial facts failing support any legitimate and authorization. inference in favor of the nonmoving party. OXY, USA, Partnership, N.C. Ltd. v. Corff Summary Judgment Predicated Inc., 1996 OK CIV APP 929 P.2d 288. Upon Beneficiaries Claims genuine When issues of material fact exist summary judgment should be denied and the aspect The first of the Trustee's question becomes one for determination motion examines the elements Beneficia the trier of fact. Brown v. Oklahoma State ries' claim of duty by breach of trust failure under performance act, trustee's then the pru- challenged the This claim diversify. for to a claim give not rise actions, power does advisability of Trustee's dence and duty statutory or common-law of a single asset breach retained that he admits

who Id.; has altered. instrument only the trust which investment and principle as its the Trust Co., 1975 OK CIV Lbr. v. Bank see Bank portfolio. Trustee its minimally diversified ¶¶ 15-16, P.2d lack APP regard to this sought to demonstrate that no under of diversification though argue thаt even T 17 Beneficiaries performance of exists because action discretion, possesses broad here the Trustee distributions, or equaled Trust, including its au nevertheless, not have unbridled he does which conservative performance excelled property. Pip trust thority with the to deal Man the Prudent either under diversification P.2d Pipkin, kin v. Rule would Investor Prudent or the Rule Falls v. Strick Bank Wichita First Nat'l theory, whether Under produced. have Both cases lin, for exonera- provided instrument the trust Rule. the Prudent Man under were decided by the Trustee acts authorization tion or general agrees that the 118 This Court immaterial. is represent in those cases policy statements defendant, Trustee, moving aas T15 The then, Pru- under the and now law the Beneficiaries' negate required to is not 0.8. Rule. See 60 Investor dent Trust- prevail. in order to theories claims or However, policy statements those § 175.65. requisite ee, expert, made through his granting latitude with inconsistent are summary judgment in motion showing his trustee, happened to a and discretion controversy 1) factual that: no substantial here. essential one fact to at least exists as action; and, cause of theory of the Plaintiffs' trustees, $19 re upon all The limits However, 2) favor. fact is in Defendant's vested the latitude and discretion gardless of evidentiary introduction Beneficiaries' instrument, are of in them the trust materials, experts, contradict- their through Kirbie, 1990 OK in Robinson v. nature listed attempt to es- report their ing Trustee's the trust 793 P.2d 315. APP CIV available, justifies a that evidence tablish acts, or refuse engage in criminal may not ee Therefore, summary judg- trial of the issue. directive, engage in perform trust some issue-breach the first not lie as to ment does conduct, or mali as fraud such egregious diversify. on failure to of trust rights of cious, disregard for the intentional 7-8, 793P.2d at Id. at Beneficiaries. ¶¶ the Upon Predicated Summary Judgment have not al here The Beneficiaries 318-19. Defenses Affirmative Trustee's any such issues. leged or raised Beneficia problem for the 116 The Thus, aspect of the second the is, however, Trust instrumеnt the ries presents summary motion attack relating to Trustee's language great a deal of contains and of authorization discretion, defenses it is the affirmative and authority and Trustee's in exoneration, the Trust review, from both derived issue, in this Court's pivotal this theory, the Trustee strument. Under of the trial correctness which determines material fact is that no may must demonstrate A trust instrument decision. court's facts, all inferences and issue and statutory powers of enlarge or restrict he is Supp.2000 them, and that 60 O.S8. are his favor the Trustee. See from 501B.151, § of law. 175.61(B); Ann. Sub. a matter judgment Minn. St. entitled words, and the roles are switched 1(b). acts other instrument leaves the trust When con only show a factual need discretion, Beneficiaries courts will not to trustee's fact essential Hormel, at least one troversy as to by In re Trusts Created intervene. If a Trustee's that such (Minn.App.1993).3 affirmative defenses 504 N.W.2d 505 in their favor. an fact is not to do empowered to do or trustee is Minnesota, Trustee, of the State by a resident of the originally one was drawn 3. Thе Trust law. accord with Minnesota and in the father of settlors, who was trust lawyer T21 The Trust any instrument was exe source properties additional acceptable cuted in Minnesota February on 1957.4 to them. presented portion Trustee of the Trust in, 2. To invest and reinvest or exchange in support instrument of his motion for sum for, any assets securities properties mary judgment. portion This does not con they advisable, deem including without lim- any tain language of specifically exoneration iting generality of the foregoing, com- relieving lability the Trustee of for breach of stocks, mon preferred being without and, therefore, trust the Trustee has not limited in the selection by investments purposes demonstrated for of summary judg statutes, any law, rules custom or us- ment that he is liability exonerated from age; and to commingle for investment all trust, exist, breach of if shown to based any part or of the funds of any this trust in solely upon language in the Trust instru common trust fund or funds now or hereaf- ment. by ter maintained the Trustee. However, question added.) (Emphasis Trustеe's authorization part remains. The the Trust provided by instrument Trustee in clearly possessed the Trustee his Rule 13 materials does state: broad discretion to retain the AMP asset placed into by the Trust the Settlors. The Article VI provided Trust instrument for measurement power trustee shall have and authori- judgment of his according to what he deemed ty any to do act or thing reasonably nee- advisable. the Beneficiaries seek to essary or proper advisable for the admin- impose liability upon upon Trustee based istration and distribution of each trust what someone else deems advisable. In his created this instrument. In order to affidavit, expressly Trustee claims to have proper facilitate the administration abided these instructions. Beneficiaries distribution of each except such trust and materials do not refute Trustee's averment may be in this Agreement other- thereby failing to meet their burden under expressly wise required, directed or summary judgment procedures. in extension but not in any limitation of power, right, or discretion upon conferred However, the Beneficiaries also claim by any present Trustee or future stat- that whatever the Trustee deem "advis ute, decision, law, or rule of and the able" he was ultimately nevertheless to be hereby Trustee is granted power to sell guided by Rule, the Prudent Investor since and convey any properties or seeu- 1995, and the "Prudent Man" standard from comprising

rities said trust without license 1992 to 1995.5 Diversification is a criterion approval person: court or However, under either of these Rules. Ben assets, 1. To retain cash or other whether argument eficiaries' must fail for several rea or not of the kind hereinafter authorized sons. investment, for long they may so First, (which 0.9.1991, § advisable, 125 60 163 sell, has deem and to exchange, mortgage, lease or dispose specifically repealed) otherwise not been the states that a same for terms extending beyond within or may trustee any retain in the property trust trust, the term of this and to receive from originally liability received without for reten 4. The diversify. Trust was moved to Oklahoma when Trust- See cases collected at 24 ALR3d 730. ee moved into this State. However, the Uniform Prudent the parties Investor Act argue do not that Minnesota law controls. (UPIA) specifically became law and this Act re- party any neither asserts that lan- quires diversification of investments. 60 O.S. guage by was inserted into the Trust or on behalf Supp.2000, § 175.63. Beneficiaries have not provisions of the Trustee here so as to invoke the maintained that the Trustee's duties under Sec- 175.57(F)(1)(b) (2). § of 60 0.8. inception tion 175.64 of the UPIA at the of the apply applies only Trust here and the UPIA to 0.$.1991, § 5. Prior to 60 directed the existing decisions made after 1995 for then trustee by to use a Prudent Man standard and Supp.2000, § trusts. 60 0.S. 175.71. duty construction this standard included a to inter- at those intervals and determine claim Beneficiaries property.6

tion of the dispos- advisability retaining or by the duty vals his trustee's that Trustee breached ing property. undisputed It is AMP stock. retention Trust had in the been stock the AMP 501B.151(8). §Ann. Minn. St. by the Settlors and originally placed therе Thus, provide the Minnesota statutes AMP acquire additional not Trustee did 0.8.1991, § parallel to Oklahoma's Therefore, at by than dividends. other stock The Minnesota Court and Oklahoma's UPIA. In of the Prudent the enactment least until inconsistency apparent be- has resolved autho in the statute both Rule vestor duty to retain and permission tween the Trustee and exonerated retention rized Hormel, By diversify. In re Trusts Created originally contributed retention of assets There the (Minn.App.1993). 504 N.W.2d by the Settlors. language diversification ruled that the Court same under be the 126 The result would making initial applied to the of the UPIA Minnesota, the domicile law of permission The by the trustee. investments the Trust was where and the State Settlors language refers to differ- property to retain enacted its Minnesota originally formed. assets, placed originally were ent those which Investor Prudent of the Uniform version at 511-12. The by in trust the settlers. Id. Act, prior the Minnesota in The Rule 1997.7 proposi- also stands for the Hormel decision force, Act, which still Trustee's Powers by is vested tion that when the trustee provides part: discretion, court will not with wide settlor powers of trustee 501B.81. Enumerated intervene. Id. at 512. Assets. The trustee 1. Trust Subdivision Next, the Prudent Investor until, judg- in the may retain trust assets Rule, rule and adopted in is a "default" trustee, disposition of the as- ment of the eliminated, restricted, or "may expanded, be made, regard without sets should be provisions of a otherwise altered on the diversifi- may have effect retention 175.61(B). Supp.2000,§ The trust." 60 0.8. the trust. assets of cation of the conveys language of Article VI of the though even it may retained property be message that the Settlors unequivocal the trustee is an asset which includes that Trustee not be constrained intended personally interested. Investor Rule. The intent of the the Prudent §Ann. 501B.81. Minn. St. Settlors, expressed by the Trust instru of the UPIA version 127 The Minnesota ment, represents a factor that be consid Act but substantially follows the Uniform and to what deciding when whether ered adds: diversify.8 the Prudent In extent property. Disposal of Un- Subdivision not make an absolute re vestor Rule dоes a court order instrument or less trust quirement that the trustee otherwise, a trustee specifically directs Supp.2000, 175.63. 0.8. real, any property, dispose need Finally summary judg mixed, under any kind of invest- personal, or Beneficiaries, needed to ment, trust, procedure, until ment acquired, in the however that at least one fact and failed to show in the exercise of the trustee determines the Trustee's show remained for trial after it is advisable to sound discretion that they defense. ing of an affirmative property. Nothing dispose of the through attempted to meet this burden have the trustee from the subdivision excuses for consider- hindsight by singling out duty discretion at reasonable to exercise 6. Section 163 states: 8. Section 175.63 states: A retain in trust trustee any property diversify shall the in- Diversification. A trustee any originally the trust and sub- received into the trustee rea- vestments of the trust unless liability for such re- stitution therefor without that, special sonably of determines because tention. circumstances, purposes trust are of the 501B.151, diversifying. withоut §§ better served 501B.152. 7. Minn. St. Ann. performance ation AMP stock for the five trustee's fee but the trial court did not decide years prior filing of this action. The that issue instead appeal determined that the proceed.9 Rule, upon should Investor Prudent which Benefi- rely, permits approach. ciaries neither 85 The application Trustee submitted an Supp.2000, 175.62(B), §§ 0.8. 175.68. presented for fees expenses evidence Therefore, applicable in support of under the stan- charged the rates and the rea- review, dard of this Court holds that Trustee requested sonableness amounts. The demonstrated that he had an affirmative de- Beneficiaries, opposition, assert as their fense of authorization property to retain de- principal contention that the Trustee is not that, rived from the Trust instrument legally entitled to recover the fees and ex- statutory notwithstanding, per- rules he was penses. The challenged Beneficiaries mitted to retain the AMP stock. Beneficia- portions reasonablеness of some of the ries have any failed to demonstrate substan- attorney's charges Trustee's and the reason- controversy tial as to a material fact relevant expert ableness of the witness fees. to Trustee's defense or that such fact is in adjusted portion The trial court a their favor. Beneficiaries materials seek to the claim. The trial court judgment awarded by hindsight review Trustee's actions byor $7,516.70 to reimburse Trustee for singling specific out a investment and such is paid him; $79,909.50 amounts for addi- permitted under the UPIA. For the attorney $28,713.00 tional expenses; fees and years preceding UPIA, the enactment of the $8,487.20 expert witness fees for Beneficiaries have failed demonstrate that experts summary judgment utilized showing facts exist that either 60 0.8. and, $3,149.00 proceedings; expert wit- 1991, § 163 or the similar rule in Minnesota expert ness fee for the called in the fee lability does not relieve Trustee of for reten- hearing. All paid sums were ordered to be assets, tion of the Settlors' contributed from the Trust. appeal. Beneficiaries addition granted by to the relief language permitting the Trust instrument retention. STANDARD OF REVIEW Therefore, the trial court's decree of appeal presents 1 37 This question of law summary judgment upon based the Trustee's regarding legally whether Trustee is entitled affirmative defense of authorization is af- fees, expenses, expert witness fees. firmed. appeal presents The also question Having disposed summary charges given reasonableness of those enti- issue, judgment this Court next turns to the that, tlement and the fact because of the question fees, attorney present- which was appeal, outcome of pre- Trustee did not subsequent supplemental ed as a appeal vail on the generated contention that this case but which still retained the same major portion expenses of the fees and al- Supreme Court number. lowed the trial court.

PART II ¶38 appellate court has the plenary, independent, and nondeferential au BACKGROUND thority to reexamine a legal trial court's rul Subsequent to the trial ings. Acquisition, court's sum- Wingrod Neil L.L.C. mary judgment, appeal and while the of that Corp., Investment issue pending, applied was the Trustee to the n. 1. involving legislative Matters intent trial court for present reimbursement from the questions of law which are examined expenses, his independently and without ‍‌‌‌​‌​‌​‌​‌‌‌​​‌​‌‌‌​​‌​​‌‌‌‌‌​​​​​‌​‌​‌‌​‌‌​​‌‌‍deference to the witness fees. applied Trustee also for a ruling. Regina trial court's College Salve jurisdiction 9. The trial court proceeds procedure. retains to determine the merits also under that Sup.Ct. fee 1.36(/), and costs issues. Okla. Sup.Ct. Supp.2000, Okla. Rule 12 O.S. 1.22, 1.26(d), Rules 12 O.S. ch. app. complies ch. The trial court's order app. proceeds Review of the decision under the Supp.2000, with 12 O .S. procedures appeal "accelerated because the on Barnes, 55, In the 162. 1217, 11 P.3d 225, 113 2000 OK Russell, S.Ct. 499 U.S. (1991); Springs Court v. Sand Keizor ruled as follows: L.Ed.2d 190 ¶98, 5, P.2d Co., APP Ry. 1993OK CIV Oklahoma, litigant to right of a In the 326,328. by the attorney governed fees recover Pump v. Brew American Rule. TRW/Reda an appeal raises issue the 139 When 15, 31, 22. This 829 P.2d ington, 1992OK any attornеy fees of reasonableness of the in Oklahoma firmly established Rule is court, then the standard trial by the awarded are without provides that courts and [Id.] an abuse there has been is whether of review attorney in the fees authority to award Bay judge. trial Green by the of discretion contractu specific statute or a of a absence OK Packaging, 1996 Packaging v. Preferred recovery of such provision allowing the al 1091; v. 121, ex rel. Burk State 932 P.2d fees, exceptions. Id. This with certain 115, 659; 598 P.2d City, Oklahoma exceptions to the has ruled that Court Fields, OK Lee Jack In re Estate of Kay narrowly defined. are American Rule appellant 129, 955. The 964 P.2d APP CIV 16, Co., 1991 OK v. Sun Oil Venezuelan clearly trial court made that the must show 648, P.2d judgment, against and conclusion erroneous ¶ 46, 11 P.3d at 178-79. Id. at evidence, an award such and before reason Bay Packaging v. may reversed. Green be ex- litigation-related 141 Trustee seeks 121, Packaging, OK Preferred Trust administration penses, opposed 39, Courtney, 1991 OK 1091; v. Broadwater may attor- damages that include expenses or 161, Tisdale, 1310; 1980OK Abel 809P.2d American like. the ney fees and the Lee re Estate Jack P.2d In of to these Trustee's entitlement governs Rule Fields, APP 964 P.2d 955. CIV 1998OK from must follow outlays so that entitlement Rule. See re Estate exception to the an of AND REVIEW ANALYSIS Katschor, holding P.2d 1981OK attorney's must benefit services that Entitlement estate, is, corpus of the increase the {40 Here, categories seeks three Trustee estate. ex litigation-related for of reimbursement ¶42 statutory two has advanced fees, in Trustee Attorney's expenses penditures: justifications for the award fees attorneys, expert witness' curred and expert fees fees. expert's witness into litigation which are further subdivided and the fees 175.24(A)(9) § Supp.2000, They are 60 0.8. expert fees litigation in the and for services (B)(8) Supp.2000, 60 O.8. and request. supporting the fee 175.57(D).10 language points Trustee also recently reaf Supreme has Court Oklahoma stating that the Trust in the Trust document governs the the American Rule firmed that pay all reasonable authority, "To ee has the fees. Barnes right litigant of a to recover trust".11 expenses charges of the Co., Mutual Ins. Farm Bureau seek, and the trial court Trustee did not (B)(3) 175.24(A)(9) 60 O.S. Supp.2000, award, any against authority the Beneficiaries provides the trustee: fees did not accountants, any party individually. offered (A)(9). attorneys, no employ To reasonably necessary propriety looking argument concerning agents, and brokers Trust, partly of the trust estate.... solely administration to individuals to the Court observes partly to the Trust. This (B)(3). may be shall have a lien and A trustee beneficiaries minors who are there are ... all advances made for ben- reimbursed been, may at least at this have whose interests property protection trust or its efit or regard- stage, the adult beneficiaries adverse to or about exe- expenses ... incurred in and all payment. ing placement the burden of protection the trust. ... cution or 175.57(D) provides: 60 O.S. (D). IV, page of the Trust cited Article 11. Trustee trust, involving judicial proceeding In a provision not make That section does document. discretion, justicе the court in its charges. Language payment expenses and expenses, may require, equity award costs and VI, in Article is found subpart to that effect attorney's including reasonable presented page of the Trust document party party, paid or from the another to be evidentiary judgment proceedings. No summary controversy. subject trust which is (48 $46 strictly Therefore, The Court construes this Court holds 175.57(D) provides any authority expenses. that Section statutory a for fees and Borst Co., 121, Bright Mtg. 1991 OK 824 P.2d exception to excep the American Rule. The Grady Federal Financial Co.v. Coun "justice tion arises when equity may and Oklahoma, 90, ty, 1999 OK CIV APP fees, costs, require" expenses and be Thus, language P.2d 908. neither the Trust awarded.12 provisions nor the Supp.2000, of 60 O.S. highly subjective 147 The phrase 175.24(A)(9) (B)(8) provide and for recov "justice equity" and specific does not state ery litigation-related expenses. of In this guidelines or criteria for by use a trial court regard, the decision in First Nat'l Bank of or by reviewing for use a phrase court. The Stricklin, Falls v. Wiсhita 1959 OK connotes fairness and flexibility invites in distinguished P.2d can be on the authori order to arrive at what is fair on a by case ty of Borst in because First Bank National Hence, general case basis. criteria drawn preserve the action was to against the trust from types provide other of cases nonexclu seeking an attack to cancel the trust there. (a) guides. sive These include reasonable against the action is the Trustee for claims, parties' contentions, ness of the or alleged breaches of the Trust and for remov (b) defenses; unnecessarily prolonging litiga outlays al so that the are for the of benefit tion; (c) ability relative to bear the financial opposed protection the Trustee as burden; (d) litigation result obtained Trust. (e) prevailing party and concepts; and ¶44 However, 60 O.S. party faith, whether a has acted in bad vexa 175.57(D), specific is a authorizing statute tiously, wantonly, or oppressive reasons recovery litigation-related expenditures, at in bringing litigatiоn. conduct of the court, "judicial the discretion of the in trial a proceeding involving a trust." Section "justice T48 The equity" role of in this 175.57(D) part was enacted in 1999 as a phase inquiry before the trial court is legislation dealing with trustees and their distinct from their role in determining what actions. Laws ch. eff. June costs, fees, expenses amount of should be 1999. The context of clearly Section 175.57 example, allowed. For the fact that the na shows that the Section serves to eliminate ture of the case was difficult required foregoing distinction because that statu great goes deal of effort to the amount of the tory section relates to the trustee and viola award rather than whether an award should tions of trust. to the extent Thus, granted. be the criteria enumerated In re requires rejection Estate Katschor in City Burk v. City, case, attorney present fees the Statute ¶ 8, 659, 661, represent changed has that result. computation bases for the of the award rath justification er than for the award. statutory phrasе justice

T45 The "as equity may require" contained Section put 149 Trustee arguments forth six 175.57(D) functions, serves two first in support "justice of his assertion that second, criterion for entitlement as a equity require" that the fees of the Trustee measure of the size of the award. Because paid. arguments be were:1 175.57(D) judicial applies proceed- Section 1. per- Overall and over time the Trust "costs", ings "expenses," the terms and "rea- provided formed well and substantial sonable fees" are to be considered to the adult benefits Beneficiaries. proceedings. terms of such example, "costs" are the costs years authorized Trustee has served for without statute, Supp.2000,§ 0.8. compensation. Record, concerning language Transcript pp.

material of the Trust docu- 140-42. presented hearing. ment was at the fee equity 12. The trial court acts as a court of trust matters. See Rosecrans, Faulk v. 358, 264 P.2d 300. involuntary plaintiff in that of an several similar to were informed

3. Beneficiaries the trial court. Trusteе early dispute in the that times liti- expenses and fees for would seek Last, guilty of whether Trustee is gation. immaterial. The fraud or criminal acts is his presented for review concerned question of the fees would deter 4. Assessment in diversify Trust assets admitted failure general in from unwar- beneficiaries Man and Prudent the face of the Prudent litigation. ranted Rules. Investor of nor found not accused 5. Trustee was Arguments 1 and 6 are interrelated. fraud, overreaching, or of guilty appeal, has not sustained In this this Court conduct. criminal summary judg- position Trustee's that the is, obtained, that that the 6. The result appropriate on the basis of Trust ment was that trial court was ruling of the resulting damages. of performance and lack damages no performed well and his to the extent that Trustee bases so Beneficiaries were sustained justification expenses upon the for fees and adjudicated. summarily claim was their perfor- litigation due to Trust outcome ¶50 2, 3, 4, sup and 5 do not Arguments mance, fails. argument Trustee's facts here. under port Trustee's claim hand, Trustee 155 On the other First, compensation from sought also Trustee "prevailing party" adopted the role of a has computed his claim retro court and the trial justification for the award. general in as one propriety actively. questions of jurisprudence, concept of In Oklahoma Trustee are any fee for the reasonableness of par A "prevailing party" is result oriented. for review.14 presently this Court before ty prevails succeeds on the merits of the who Next, litigation maintained bad Lloyd's at London v. claim. Underwriters of faith, subject to sanctions unreasonably, is Lines, North American Van OK § Trustee Supp.2000, under 12 but 0.8. party prevailing 978. The one P.2d here that Beneficiaries has not established judgment rendered at the conclusion who has justifies proceeded have in a manner which Explora & the action. Oklahoma Oil Gas Likewise, Trustee Drilling Program 1983-4 v. W.M.A. an award as a sanction.15 tion equitable Corporation, APP 877 P.2d 1994 OK CIV has not shown a to invoke basis fees, powers to award Here, of the court prevailed has on sum 605. Trustee litigation example, as in of abusive theory cases mary judgment, on a different albeit Katschor, 1981 OK practices. performance. In re Estate than that of overall Trust ¶¶ 855, 857; 15-16, appeal, Winters Clearly, prevailed in this Trustee has 63, ¶ 11, City, 1987 OK City every theory he advanced although not on P.2d that the trial court. This Court holds before judicial proceeding party prevails when a 1[ Moreover, if the Beneficiaries had en- 175.57, § contemplated by Supp.2000, 60 0.8. practices, then there must gaged in abusive is sufficient to invoke the discre then Trust, showing that the be some additional authority granted tionary Section individually, Beneficiaries opposed to the 175.57(D), so that the trial court then the financial burden. should bear justice equity whether warrant decide Beneficiaries who are minors there are other fees, expenses, and costs. assessment in the Trust will be and whose interests argued 156 Beneficiaries that Sec They separate- were not materially affected. 175.57(D) retroactively. apply eannot they occupy a role tion ly represented here and compensation garding or the trial Supplemental the Trustee's in Error lists fail- 14. The Petition request reject inquiry. the fee ure of trial court court's continuance of However, the trial record before an issue. com- Court the matter of Trustee discloses that subject Litigation under the Trust Code is pensation court with- was continued the trial 60 0.S. the Code of Civil Procedure. objection. judgment, as au- out 175.23(D). appeal under 12 O.S. thorized for immediate 994(A), Supp.2000, § contains no decision re- in cases under the However, 175.57(D) Damages Surface Act this Court views Section burden-shifting derogation as a statute involving from cases condemnation. Andress By analogy the American Rule. to other stat Bowlby, 773 P.2d 1265. In latter, involving authority utes specifically the statute assess authorizes 175.57(D) recovery procedure of certain Section ‍‌‌‌​‌​‌​‌​‌‌‌​​‌​‌‌‌​​‌​​‌‌‌‌‌​​​​​‌​‌​‌‌​‌‌​​‌‌‍relates to witness fees.16 66 Qualls and is retroactive. v. Farmers Ins. 55(D). O.S.1991, § Damages The Surface Act Inc., 61, ¶ 2, 1258, Co. 1981 OK 629 P.2d directs that cases under that Act are con 1259; Phoenix Fed. Sav. & Loan v. Great condemnation, ducted as cases under but the Co., Southwest Fire Ins. 1979 APP Act did OK CIV specifically not recovery authorize ¶¶ 7-8, 603 49, 356, Therefore, P.2d 358. expert witness fees when it authorized recov 175.57(D), pursuant to Section the Trustee ery of all including court costs reasonable may here expenses, "costs recover and in 0.8.1991, 818.5(F). attorney § 52 fees. cluding attorney in reasonable fees" an 'I 60 In permit divorce actions the court is court, discretion, amount that the trial in its ted to expenses" award may "reasonable just equitable. determines to be "just proper." be 48 O.S. 110(C). §

157 This leaves unresolved the In this context "reasonable ex penses" have been question considered to include of what is included both scope within the expert attorney witness fees and fees as an "expenses." Ordinarily, party is not exception Hill, to the American Rule. v. expert entitled to Hill recover witness fees as Owen, 81, litigation. costs in Sloan v. 1977 OK 1983 OK 672 (appraiser); P.2d 1149 O'Connor, 239, ¶ 9, 812, O'Connor v. 1991 OK CIV APP 579 P.2d 814. costs 41, fees.) 813 0.98.1991, (attorney P.2d 544 falling 12 under which the may court "right equitable" deem do not apparent T 61 The may conflict in result be expert Owen, include witness fees. Sloan v. on resolved the basis that when the case ¶ 13, 1977OK 239 at 579 P.2d at 815. involves a in equity court the term "ex- ¶ penses" given has Tayer, 58 The case of v. been a more Porter liberal inter- OK pretation. In this 385 P.2d involved a trust case the trial contention court Therefore, equity sits as an court. holder of a tax deed that this he was entitled to interprets Court "expenses" the word in Sec- have taxpayer-landowner tender as "ex 175.57(D) tion to expert include witness fees. penses" personal expenses his obtaining the tax deed and in defending it. The stat Reasonableness of Award provided

ute there that when a landowner- taxpayer sought to set aside a tax deed that 162 The for review issue relates person expenses." must tender all "costs and to attorney the reasonableness of amounts of 0.S$.1961, § 455. The Court there held exрert fees and witness fees awarded "expenses" that the word did not include trial court.17 The issue be stated as personal expenses of the holder of the tax follows: obtaining deed in or defending the instru just, equitable, Is it and reasonable ¶ 35, ment. Tayer, Porter v. 1963 OK 176 at attorney award expert fees and witness 385 P.2d at 814. optional activity, fees for that is the motion Supreme The Oklahoma summary Court has judgment, light of the fact distinguished expert claims for witness fees Trustee, that as a result of this Court's grant If the performed, condemnation statute failed to predicated value for the services on costs, such failing fees and then it would risk legal community." the standards within the local pass constitutional muster because the Con- Bay Packaging Packaging, Green v. Preferred taking property just stitution bans without Sports OK P.2d Oliver's Center v. compensation. provides The statute then Co., National Standard Ins. property opportunity owner the to receive full P.2d 291. The criteria for calculation of fees are compensation unadjusted by expert witness City City, set out in Burk v. fees. 115, ¶ 8, 661. Counsel for Trustee presented attorney request conformity fee Lawyers seeking an award of fees are with rule. required "present detailed time records to the court and to offer evidence of the reasonable apply expert theory geheral principles when witness upon the prevail not

Opinion, did requested. fees are majority these fees and the vast which devoted? expenses were 165 The Beneficiaries contentions are of the attor- that bulk (1) T It is clear ought There to be a division be- that: with connection ney was incurred fees compensable non-compensable tween summary judgment on (2) quest Trustee's Sisney Smalley, fees similar to is, performance, the issue of granted is excessive. amount their claim not establish Beneficiaries could pres- T 66 The cireumstances here do performance over time of the Trust's because Sisney Smalley where ent a case such result, that, damages. no there were as a claims, apportioned thе fees must be between witness portion A substantial carries with it authoriza- only one of which aspect on this incurred fees also were underlying fees. The tion for not had Trustee obtained case. diversify the claims that Trustee failed to legal then these same summary judgment, and to account to Beneficiaries Trust assets summary judgment, expended toward efforts application of implicate each Section expert presentations of the along with the 175.57(D). addition, In counsel did Trustee's witnesses, utilized to defend would have been apportion among time claims so much as a trial on the claim at against Beneficiaries' aspects aspects These among of the case. merits. following the onset included initial activities administration, dispute, general case of the to reach a decision In order preparation. summary judgment and regarding will be a reasonable sum what categories overlapped somewhat to latter two court, award, conducting a trial after preparation. trial include specifically state hearing, Burk must its deter calculationfor record the basis and hand, the other the record does On is reasonable. mination that the fee awarded portion of the reflect a substantial Packag Bay Packaging v. Green Preferred fees, attorney as well as a substantial claimed Further ing, 1996 932 P.2d 1091.18 OK portion of the witness were de more, involving judg case a multifaceted preparation presentation voted to and the matters only ment in which some of summary judgment predicated upon Benefi- must distin attorney authorize the court fees claims, opposed to Trustee's affir claries' record, compensa- guish, on between unsuccessful endeavor mative defenses-an attorney time and non-compensable ble and upon Opinion.20 this based Court's Bay Packaging v. effort. Green Preferred 1091; dichotomy T68 instead of a based Packaging, 932 P.2d Sis OK upon compensable non-compensable ney 690 P.2d 1048. and Smalley, presents dichotоmy compensatory fee claims this case a based The final calculation unsuccessful, relationship upon optional must successful bear some reasonable leading up controversy. pre-trial activities to this Court the amount Arkoma ‍‌‌‌​‌​‌​‌​‌‌‌​​‌​‌‌‌​​‌​​‌‌‌‌‌​​​​​‌​‌​‌‌​‌‌​​‌‌‍Gas Corp., affirming summary judgment prem- a on one Company Engineering v. Otis result, 392; presented. Bell ise out of three As a OK Southwestern Control, Inc., counsel, trial Parker Pest Trustee's under the court's fee Telephone Co. v. same 737 P.2d 1186.19 The activity, OK judgment would be reimbursed for Here, only judgment specified court's 19. The Arkoma Gas case demonstrated that 18. the trial against requested. a an unfair Oth criterion serves as check from the fees as deductions simple a mathematical calculation. specify result from judgment the facts erwise the does not to review Southwestern Bell used the criterion support computations the award as used "overworked." whether case was City required Burk. Burk v. Oklahoma under ¶ 22, City, at 598 P.2d at 663. 1979 OK 115 However, summary judgment it is clear from the record that thе trial aspect of the was 20. This under Part I above. This Court has reviewed rate, court the hours and the less awarded hourly deductions, presented by summary judgment all as counsel should not the listed determined granted aspect on this of the case. have been for Trustee.

O51 partly optional, ¶¶ which Trustee did not OK 16 at 10-12, 1189; 737 P.2d at Burk v. prevail, including accounting. City City, ¶ 7, Oklahoma 1979 OK 115 at 598 P.2d at 660-61. The time and labor summary, this Court concludes spent by in performing services from the record that fees and ex- compensation sought which is an im pert witness fees were incurred in: portant factor to be in setting considered Preparation presentation 1. of a sum- However, reasonable fee. the time element mary judgment upon per- based must be considered in connectionwith other formance but which was unsuccessful factors. Fees fairly cannot be awarded on appeal; as a result of this basis time alone. Southwestern Bell Preparation presentation of a sum- Telephone Control, Inc., Co. v. Parker Pest mary judgment upon based the affir- ¶ 14, 16OK at 737 P.2d at Burk mative defense of exoneration and City City, 1979 OK 115 at which also was unsuccessful as a result ¶ 7, 660-61; Pipeline P.2d at RJB Gas appeal; of this Co., v.Co. Colorado Interstate Gas Preparation presentation of a sum- ¶ 100, 67, APP CIV 813P.2d 13-14. mary judgment upon based the affir- mative defense of authorization and the record fails to demon which was successful as a result of this necessary findings strate the computa appeal; support tions to the sums awarded as fees Preparation presentation expenses. The absence findings of these Beneficiaries, accounting sought by the has been made more acute as a result of this making thus "prevailing party" them a Court's decision here. It is well known that issue; on that appellate courts of this not State will make 5. General case administration from onset first instance disputed determinations of fact hearing summary on judgment. issues as that is the function of the trial aspect preparation This included trial court. Bivins v. State ex rel. Oklahoma duрlicated especially which Item 1 but Hosp., ¶ 19, Memorial necessary which scheduling was due to 456,457. performance the fact that Trust

was to a principle be element of de- T In just, order to equitable, calculate a at fense trial. fee, and fair including the allowable ex- penses, compute, the trial court must first on Although the trial court not did record, Here, the the lodestar fee. that com- fee, compute the lodestar the granted fee putation shall all including exclude ex- necessarily accepted hourly the hours and pert charges, witness which were devoted to sponsored counsel, by subject rates Trustee's optional, the summary judg- unsuccessful adjustments to the in enumerated the decis ment effort. result, ion.21 As a attorney compensa expert tion and the witness fees included Then, Burk, pursuant the trial payment only activity prov which has may factors, court consider additional ap en to be unsuccessful activity, but also for plicable,to arrive at the final fеe and allowed summary the motion for judgment, which expenses just, the trial court deems optional was in the first instance. This re equitable, process and reasonable. This de weighed sult must light be in of the require cides whether the lodestar in fee will be 175.57(D) ment of Section that the award be tied, creased or enhanced. Enhancement just, equitable, and reasonable. definition, to the court's award attor 171 This recognizes ney's adjustment Court that a upward fees as an may unreasonably lodestar fee high figure be or lodestar the district court calculated. unreasonably low. Southwestern Bell Tele Oklahoma Bar Assoc. v. Weeks, ¶ Control, 969P.2d phone Inc., Co. v. Parker Pest computed 21. The lodestar fee hourly City is the base fee sonable rate. Burk v. ¶ 7, City, reasonable number of hours times the rea 1979 OK 115 at 598 P.2d at 660-61. Rule. addition, court American statutory exception to the the trial option Nevertheless, must be shown stage to the such award at this

give consideration theo unsuccessful involving just, equitable, and rea- al activities on the record be judg summary quest in the used ries must be This record demonstration sonable. of related consists a lawsuit ment. Where guide- following the Burk accomplished by has won claims, who plaintiff or issues present, in the so as to and mandate lines his attor not have should relief substantial record, calculation and lodestar fee the court simply because ney's fee reduced final fee calculation. But raised. contention adopt each did not calculation the lodestar fee limited sue- only achieved plaintiff where summary optional, unsuccessful only award must exclude cess, court should district activities, expenses, is reasonable associated judgment of fees that amount Hensley the results obtained. and costs disallowed witness fees relation Eckerhart, 103 S.Ct. 461 U.S. Thereafter, with this Opinion. accord (1983). Thus, such as factors L.Ed.2d 40 remaining Burk utilizing the Opinion, and activity unsuccessful optional, whether general conjunction with the guidelines reasonable, useful to the or necessary, was 175.57(D), the authority specified in Section may be consid of the case outcome ultimate fee, calculate the final trial court must then ered. expert witness fees expenses, and associated shall deter- trial court T remand the 76 On just, equitable, and reason- it to be deems attorney's fee proper amount of findings mine the and calcula- The trial court's able. The final standards. light of these judgment. award in the are to be shown tions findings, shall calculation, supporting and the determine, must the trial court judgment. in the also set forth be "justice equity," whether the upon based alone, alone, Beneficiaries the adult Charges Miscellaneous adult Benefi- of Trust and some combination Trustee allowed The trial court 177 Beneficiaries should or Trust and all ciaries attorneys for by his incurred to recover costs sums awarded. bear burden of miscellaneous Internet and Westlaw Therefore, of the trial 81 must be disal supplies. These items fice .decision fees, expenses, and attorney granting court Glancy, 1995 OK lowеd. Wilson part, affirmed in re- fees is witness Opinion, 1995 OK Supplemental P.2d for further 292; Turnpike part, and remanded ¶ 9, versed P.2d at Oklahoma at Opinion. with this proceedings consistent Church Pentecostal Auth. v. New of Life 9, ¶¶ 3-4, Jenks, P.2d New, 1993 OK Turnpike Auth. v. Oklahoma CONCLUSION 10, 853 765, those Under P.2d ¶ attorney's cases, part are these items concerning decision 182 The trial court's "expenses" under See rather than overhead upon the Trustee's summary judgment based 175.57(D). tion is af- of authorization affirmative defense granted substan- trial court also T78 The firmed, Opinion. in Part I of this as set out on costs The statute reproduction tial costs. concerning the trial court's decision only costs reproduction permits taxation fees, expenses and witness grant of at trial. 0.8. copies necessarily used Opinion, is fees, II of this as set out in ‍‌‌‌​‌​‌​‌​‌‌‌​​‌​‌‌‌​​‌​​‌‌‌‌‌​​​​​‌​‌​‌‌​‌‌​​‌‌‍Part 942(4). with the other As part, and re- part, reversed affirmed part items, costs were reproduction these proceedings consistent for further manded in the action was no trial overhead as there Opinion. with this reason. for the sаme and must be disallowed [ PART, IN REVERSED 83 AFFIRMED SUMMARY PART, FOR FUR- AND REMANDED IN CONSISTENT THER PROCEEDINGS 175.57(D) Trustee to entitles 179 Section THIS OPINION. fees as a WITH expenses, expert witness COLBERT, by (sitting J. Neufeld, Neufeld and Freida R. Trust concurs, designation), TAYLOR, J., ees; Petrik; Algie Anna Mae F. Smrcka Family Trust, dissents. Algie Smrcka, Trustee; F. Smrcka; Smrcka; Alice Mariann TAYLOR, J., dissenting Taylor April Taylor, Steve Defen dants/Appellees. 11 I provi- must dissent. I believe the 175.57(D) Supp.2000 sions of 60 O.S. were Kremlin; Bank Independent Of School give enacted to courts discretion in trust Schools; District No. 54 Medford Public proceedings such this. the record Carolyn Simms; Kenneth Sims and Sue scrutiny reflects careful judge the trial Lynn Hunter, Vestella Defendants. awarding attorney's fees and costs. The rec- 95,325. No. ord also shows the court considered the fac- tual required by elements City Burk v. City, 598 P.2d 659. Appeals Oklahoma, Court of Civil There was no abuse of discretion the trial Division No. 1. judge. contrary, To the the court below April27,2001. professionalism should be commended for the demonstrated in presiding complex over this

and difficult case. Although likely it is the former trust-

ee's strategic made the decisions

concerning the defense of litigation,

majority opinion will leave the former trustee

exposed potential personal to the liability attorney's substantial fees incurred while

successfully defending his actions as trustee. that,

I circumstances, believe under these exposure

such just equitable. is not

13 I would affirm the trial court in all

respects.

2001 OK CIV APP 67 Oklahoma,

STATE of ex rel. COMMIS OFFICE, SIONERS OF THE LAND intiff/Appellant,

Pla Sally Bruce;

Rex Allen BRUCE and Joe

Kretchmar, Kretchmar, Jr. and Leona

Trustees of the Joe Kretchmar Revoca Trust; Kretchmar,

ble Joe Jr. and Leona

Kretchmar, Trustees the Leona Trust;

Kretchmar Revocable Michael W. McDonald;

McDonald and Michelle

Harry Living Trust, Harry V. Neufeld V.

Case Details

Case Name: Atwood v. Atwood

Court Name: Court of Civil Appeals of Oklahoma

Date Published: Apr 3, 2001

Citation: 25 P.3d 936

Docket Number: 94,393

Court Abbreviation: Okla. Civ. App.