{¶ 2} Joseph W. Diemert Sr. executed a Trust Agreement for the benefit of his wife and six children in April 1996, shortly before his death. His estate was probated and its assets distributed to the Family Trust. After the death of Joseph Sr.'s wife, Evelyn, in December 1996, the trust estate was divided equally among the couple's six children, and each share, except for Patrick's, was distributed outright.
{¶ 3} The language of the Family Trust created a separate trust for Patrick. According to the terms of the Family Trust, the assets of this separate trust were to be distributed to Patrick only under certain conditions.
{¶ 4} In August 2000, Patrick filed a complaint for declaratory judgment and for an accounting, seeking a distribution of his trust interest and/or a complete accounting of the trust assets from its inception. Joseph filed an answer and counterclaim seeking the return of $15,000, which the previous trustee had distributed to Patrick. The counterclaim alleged that Patrick was not entitled to this income.
{¶ 5} In August 2000, Joseph moved for summary judgment arguing that Patrick had not met the conditions set forth in the trust and, therefore, he was not entitled to an accounting or income.1 Patrick also moved for summary judgment arguing that he was entitled to an accounting because he received income from the Family Trust indirectly. In January 2001, the trial court found that because the trust made Patrick's child support payments and thus satisfied a legal obligation on his behalf, he received income from the trust indirectly and was therefore entitled to "a full and complete accounting of the Patrick Diemert Trust from its inception."
{¶ 6} In June 2001, Joseph moved for summary judgment on the counterclaim. Patrick opposed the motion and also moved for sanctions and removal of the trustee.
{¶ 7} In July 2002, the magistrate's report found that the trustee failed to comply with the court's order to provide a full and complete accounting and also recommended that Joseph be removed as trustee.
{¶ 8} Joseph objected to the magistrate's report. Patrick filed a reply, and the parties subsequently filed a series of additional briefs. The matter finally proceeded to a hearing in open court, where the court permitted limited additional evidence. Specifically, the court allowed Joseph to call Attorney Mark Swary to testify as an expert on inter vivos trusts and the propriety of the accounting provided to Patrick.
{¶ 9} Swary testified that he reviewed all the trust documents and records from the date of its inception through December 2000. He further testified that the accounting provided as of December 2000 was complete and complied with all of the appropriate accounting requirements set forth in R.C.
{¶ 10} In its findings of fact and conclusions of law, the court relied on Swary's statement and found that Joseph, the trustee of both the Family and Patrick Diemert Trusts, provided an accounting of the trust from its inception. The court also found that Joseph had not breached his fiduciary duty and should not be removed as trustee. The court further denied Patrick's request for sanctions and awarded $7,000 in attorney fees to Diane Calta for her defense of the trustee between April 2000 and September 2001. Patrick appeals, raising five assignments of error.
{¶ 12} This court's review is limited to a determination of whether it was error to find that Joseph provided a full and complete accounting of the trust from its inception. Whether a trustee satisfies the burden of proof necessary to support an accounting is essentially a factual determination and, as such, will not be disturbed absent an abuse of discretion. Huntington Natl. Bank v. Wolfe (1994),
{¶ 13} Here, the record supports the trial court's determination that Joseph provided a full and complete accounting. As noted above, Attorney Mark Swary testified that the accounting provided was complete and complied with all of the appropriate accounting requirements set forth in R.C.
{¶ 14} Accordingly, the first assignment of error is overruled.
{¶ 16} In another case involving an inter vivos trust, In re Estateof Bost (1983),
"`The removal of a trustee by a court in the exercise of its equitablejurisdiction from duties imposed upon him at the direction of thesettlors, his selection for the office being as directed by thesettlors, is a drastic action, and such action should be taken only whereintervention is necessary to protect the trust's assets. "`The court is less ready to remove a trustee who was named by thesettlor than it is to remove a trustee appointed by the court or by athird person in the exercise of a power to appoint trustees.
"`* * *
"`The removal of a trustee is a drastic action which should only betaken when the estate is actually endangered and intervention isnecessary to save trust property.'" (Citation omitted.)
{¶ 17} In the instant case, Patrick failed to establish by clear and convincing evidence, any breach of fiduciary duty or grounds for removal of the trustee. As previously noted, there was competent credible evidence to support the trial court's finding that Joseph provided a complete accounting of the trust. Therefore, there was competent, credible evidence that he maintained adequate records of all transactions involving the trust.
{¶ 18} Further, Joseph's failure to prevail on the counterclaim seeking return of the $15,000 paid to Patrick by the prior trustee, does not necessarily indicate that the counterclaim was frivolous. Under the terms of the Patrick Diemert Trust, the trustee was to make distributions to Patrick only "if he is leading a stable life, and current in child support payments." It is undisputed that Patrick was more than $50,000 in arrears at the time the prior trustee made the disbursement to Patrick. Therefore, Joseph had a valid basis within the terms of the trust to seek repayment and such a claim, albeit ultimately unsuccessful, was not frivolous.
{¶ 19} Similarly, the motion for summary judgment in which Joseph sought sanctions against Patrick and argued that Patrick was not entitled to an accounting because he was not entitled to income under the trust, is similarly valid even though it was unsuccessful. Again, the terms of the trust specifically provided that Patrick was only entitled to income if, inter alia, he was current in child support payments. Because he was not current in his child support obligation, he was not entitled to receive income from the trust. Although the trial court ultimately found that Patrick was entitled to an accounting because he received trust income indirectly in the form of child support payments paid on his behalf, the argument was not frivolous.
{¶ 20} Accordingly, the second and third assignments of error are overruled.
{¶ 22} As previously noted, there was competent credible evidence to support the trial court's finding that Joseph provided a full and complete accounting and, therefore, did not violate the trial court's order. Although some of Joseph's motions and the counterclaim were ultimately unsuccessful, there is nothing to indicate they were frivolous or warranted sanctions. Accordingly, the fourth assignment of error is overruled.
{¶ 24} Ohio courts allow reasonable attorney fees when the services of an attorney have been used in the course of administering a trust estate. See R.C.
{¶ 25} In the instant case, Patrick filed the complaint seeking disbursement of his interest under the trust and/or a complete accounting of the trust funds. Article XI(B)(18) of the trust gave the trustee authority "to make such expenditures and do such other acts as are reasonably required to manage, improve, protect, preserve, invest or sell any of the Trust Estate or Estates or otherwise properly to administer this Trust." Additionally, Article XI(B)(9) gave the trustee authority to employ attorneys and to pay their reasonable fees and expenses. Thus, the trustee was within his authority to retain an attorney to defend the trust and ensure that it was properly administered.
{¶ 26} Patrick also filed a motion alleging that Joseph breached his fiduciary duty to the beneficiaries of the trust. Ohio courts specifically allow a trustee to recover attorney fees from the trust after the trustee successfully defends allegations of a breach of fiduciary duty. Goff v. Key Trust Co., Cuyahoga App. No. 71636,
{¶ 27} Accordingly, the fifth assignment of error is overruled.
{¶ 28} The judgment is affirmed.
Judgment affirmed.
It is ordered that appellee recover of appellant his costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the Probate Division of the Cuyahoga County Court of Common Pleas to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
Anne L. Kilbane, P.J. and Ann Dyke, J. Concur.