RACHEL CAVANAUGH GORBY, et al. v. JOEL R. ABERTH, et al.
C.A. No. 28021
IN THE COURT OF APPEALS NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT, OHIO
January 25, 2017
2017-Ohio-274
HENSAL, Judge.
APPEAL FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO CASE No. 2013-CV-114
HENSAL, Judge.
{1} Plaintiffs-Appellants, Rachel Cavanaugh Gorby and Robert Donnan Cavanaugh, appeal from a judgment of the Summit County Court of Common Pleas, Probate Division. This Court affirms.
I.
{2} This appeal involves a dispute between the beneficiaries of a trust and the trustee. Dr. Richard K. Cavanaugh died testate on April 6, 2012, and was survived by his two adult children. Attorney Joel Aberth, Defendant-Appellee herein, is the executor of Dr. Cavanaugh‘s estate. The probate court admitted Dr. Cavanaugh‘s will to probate in May 2012. The will contained two specific bequests and a residual bequest to the Richard K. Cavanaugh Revocable Trust, which named his children, Plaintiffs-Appellants Rachel Cavanaugh Gorby and Robert Donnan Cavanaugh (the “Beneficiaries“), as income beneficiaries, and the University of San Francisco (a non-party to the proceedings below and to this appeal) as the remainder beneficiary.
{3} In July 2014, Mr. Aberth filed an accounting of the estate, and the Beneficiaries filed exceptions. Thereafter, the Beneficiaries sued Mr. Aberth, alleging breach of trust and breach of fiduciary duty, requesting his removal as the trustee and executor, and an accounting. The magistrate consolidated the estate case with the trust case for purposes of judicial economy.
{4} After a five-day hearing, the magistrate found in favor of Mr. Aberth on all of the Beneficiaries’ claims, and the Beneficiaries timely filed objections. The Beneficiaries made several arguments in support of their position that Mr. Aberth committed a serious breach of the trust, warranting his removal. In particular, they argued that Mr. Aberth failed to: (1) distribute income to them on a quarterly or more frequent basis as required under the trust; (2) keep them reasonably informed and promptly respond to their requests for information; (3) inform them regarding his compensation; (4) comply with the annual reporting requirements under
II.
ASSIGNMENT OF ERROR I
THE PROBATE COURT ERRED AS A MATTER OF LAW WHEN IT CONSIDERED PAROL EVIDENCE AND HEARSAY IN INTERPRETING THE TRUST DOCUMENTS.
{6} In their first assignment of error, the Beneficiaries argue that the probate court erred as a matter of law when it considered parol evidence and hearsay while interpreting the trust documents. More specifically, the Beneficiaries argue that the probate court erred by relying on Mr. Aberth‘s testimony regarding Dr. Cavanaugh‘s wishes with respeсt to the trust, namely, that Dr. Cavanaugh wanted Mr. Finkes (Dr. Cavanaugh‘s financial advisor) to continue as the trust‘s financial advisor, and that Dr. Cavanaugh wanted to prevent Mr. Fogg (Dr. Cavanaugh‘s ex-wife‘s boyfriend) from interfering with the trust. The Beneficiaries argue that “[i]f Dr. Cavanaugh desired Mr. Finkes’ continued managing of the Trust‘s assets or wanted the
{7} As an initial matter, we note that thе Beneficiaries called Mr. Aberth and Mr. Finkes as witnesses and, therefore, their cross examinations occurred before their direct examinations. Mr. Finkes, who testified before Mr. Aberth, testified on cross examination that Dr. Cavanaugh told him that he wanted him to continue as the financial advisor for the trust. Mr. Aberth then testified on cross examination that Dr. Cavanaugh was concerned about others, particularly Mr. Fogg, attempting to control his assets and insisted that Mr. Aberth serve as the trustee tо protect the trust. Thereafter, on direct examination, Mr. Aberth similarly testified that Dr. Cavanaugh wanted to keep the trust safe from outside influences and that Dr. Cavanaugh wanted Mr. Finkes to serve as the trust‘s financial advisor.
{8} Counsel to the Beneficiaries objected to Mr. Aberth‘s testimony on the basis of hearsay and parol evidence, which the probate court overruled. On appeal, the Beneficiaries argue that by relying on this testimony, the probate court erroneously used parol evidence to modify the trust documents, and then used those modifications to justify Mr. Aberth‘s behavior. The Beneficiaries further argue that this testimony constituted inadmissible hearsay because it was not offered to rebut testimony as required under
{9} Our review of the record indicates that Mr. Aberth‘s testimony regarding Dr. Cavanaugh‘s concern about Mr. Fogg and other outside influences was, in fact, first elicited by counsel to the Beneficiaries. Specifically, counsel to the Beneficiaries elicited the following testimony from Mr. Aberth on cross examination:
Q: Mr. Aberth, why haven‘t you resigned as the trustee and the executor, considering all the friction with the family?
A: I made a promise to Dr. Cavanaugh, which he implored that I serve as trustee, because he was very, very concerned about people -- namely, Mr. Fogg -- trying to -- to control his assets. * * *.
{10} Additionally, counsel to the Beneficiaries first elicited testimony regarding Dr. Cavanaugh‘s wishes with respect to Mr. Finkes serving as the trust‘s financiаl advisor. In this regard, during his cross examination, Mr. Finkes testified as follows:
Q: Were you pretty happy with getting to keep the account for Dr. Cavanaugh?
A: It was Dr. Cavanaugh‘s wishes. That‘s what he indicated to me.
{11} Although these issues were subsequently addressed on direct examination, the Beneficiaries cannot now complain of testimony that their counsel first elicited. “Under the doctrine of invited error, a party will not be permitted to take advantage of an error that he himself invited or inducеd the trial court to make.” State v. McCombs, 9th Dist. Summit No. 22837, 2006-Ohio-3289, ¶ 13. Thus, because the Beneficiaries’ counsel induced the allegedly improper testimony, they cannot now take advantage of any error in that regard. Id. Accordingly, the Beneficiaries’ first assignment of error is overruled.
ASSIGNMENT OF ERROR II
THE PROBATE COURT ERRED AS A MATTER OF LAW WHEN IT CONCLUDED NO SERIOUS BREACH OF THE TRUST OCCURRED.
{12} In their second assignment of error, the Beneficiaries argue that the probate court erred as a matter of law when it concluded that Mr. Aberth did not commit a serious breach of the trust. They argue that: (1) the probate court mistakenly believed that the Beneficiaries had to demonstrate that they suffered economic harm as a result of the alleged breaches; (2) the probate court failed to consider whether Mr. Aberth‘s unexplained delay in taking control of the trust‘s assets, failure to respond to the Beneficiaries’ requests for information, and failure to fulfill his statutory duties all constituted unfitness, unwillingness, or persistent failure to administer the
{13} In light of the number of issues presented in the Beneficiaries’ second assignment of error, we will address each issue in turn, but will address their first argument (i.e., that the trial court mistakenly believed that the Beneficiaries had to demonstrate that they suffered economic harm as a result of the alleged breaches) last.
{14} As noted above, the Beneficiaries argue that the probate court failed to consider whether Mr. Aberth‘s conduct constituted unfitness, unwillingness, or persistent failure to administer the trust effectively under
{15} A review of the probate court‘s order indicates that it did, in fact, consider and apply
{17} While the Beneficiaries are correct in noting that the trust did not require Mr. Aberth to pay debts of the estate with trust assets, they concede that Article III of the trust gave him discretion to do so. Further, Article III provides that “[t]he Trustee shall administer as hereafter provided all the remaining trust property * * *.” (Emphasis added.) The following section, Article IV, provides that “the Trustee shall hold and invest and reinvest all the remaining trust property as one fund, and the Trustee shall pay one-half of the net income therefrom to * * * [the Beneficiaries] quarterly or oftener.” When considered together, these sections contemplate that the trustee has discretion to pay debts of the estate prior to commencing income payments to the Beneficiaries. We, therefore, find no error in the probate court‘s holding that Mr. Aberth‘s decision to delay making the first income payments until the will contest period expired did not result in a breаch of the trust.
{19} Mr. Aberth, however, testified that he advised the Beneficiaries of his hourly rate during their initial meeting, and that he reiterated it on numerous occasions. While the Beneficiaries testified that Mr. Aberth never informed them regarding his fees, a letter dated January 31, 2013, from the Beneficiaries’ counsel to Mr. Aberth specifically references the fact that the issue of fees had been discussed on numerous occasions and that Mr. Aberth had advised them he was inclined to bill at an hourly rate of $225. Although the Benefiсiaries argue that Mr. Aberth never confirmed his hourly rate (i.e., that he simply indicated he was inclined to bill $225 per hour), Mr. Aberth testified that he did, in fact, confirm his hourly rate on multiple occasions. To the extent that the probate court‘s holding relied upon credibility determinations, those determinations are within the province of the trier of fact and are entitled to considerable deference. State v. Scheiman, 9th Dist. Medina No. 04CA0047-M, 2005-Ohio-15, ¶ 22, 23.
{20} Aside from arguing that Mr. Aberth failed to inform them of his method of compensation, the Bеneficiaries have not provided citations to parts of the record in support of their assignment of error or created an argument around those facts of record.
{21} Next, the Beneficiaries argue that the probate court erred as a matter of law by concluding that Mr. Aberth complied with the annual reporting requirements under
{22} Next, the Beneficiaries argue that Mr. Aberth engaged in self-dealing in violation of
{23} Next, the Beneficiaries argue that Mr. Aberth breached his duty to use his special skills and expertise as an attorney in his capacity as trustee, which is required under
{24} We now turn to the Beneficiaries’ first argument, that is, that the probate court mistakenly believed that the Beneficiaries had to demonstrate that they suffered economic harm as a result of the alleged breaches. In light of our determination that the Beneficiaries have not
ASSIGNMENT OF ERROR III
THE PROBATE COURT ERRED AS A MATTER OF LAW WHEN IT DECLINED TO ENFORCE THE PROVISIONS OF THE OHIO PROBATE CODE.
{25} In their third assignment of error, the Beneficiaries argue that the probate court erred as a matter of law by failing to enforce the provisions of the Ohio Probate Code to the facts presented. In particular, they argue that Mr. Aberth breached his duty of cаre by not listing himself as a creditor on the Standard Probate Form 4.0, but listing himself as such on the Ohio Estate Tax Return. Thus, they argue that Mr. Aberth was “sloppy in his handling of the Estate‘s finances and breached his duty of care to the Estate.” The Beneficiaries further argue that Mr. Aberth breached his duty of care by not listing fees paid to his law firm on the Fiduciary‘s Account filed with the probate court. As a result, they argue, the probate court erred by finding that no breach had occurred.
{26} Despite arguing that the prоbate court failed to enforce the provisions of the Ohio Probate Code to the facts presented, the Beneficiaries’ assignment of error does not contain
ASSIGNMENT OF ERROR IV
THE PROBATE COURT ERRED AS A MATTER OF LAW BY PERMITTING THE TRUSTEE TO WITHDRAW TRUST FUNDS TO PAY HIS LAW FIRM AND HIMSELF.
{27} In their fourth assignment of error, the Beneficiaries argue that the probate court erred as a matter of law when it permitted Mr. Aberth to use trust funds to pay himself and his law firm. The Beneficiaries acknowledge that a trustee may be permitted to pay attorney‘s fees from a trust to defend his actions, but argue that he cannot do so when he breaches the trust.
{28} The Beneficiaries further argue that the probate court‘s decision in this regard violated their right to due process. Specifically, they note that they relied upon the probate court‘s April 1, 2015, judgment entry that indicated that the question of attorney‘s fees would not be addressed until Mr. Aberth filed an application for fees. Because the probate court later approved Mr. Aberth‘s attorney‘s fees despite the fact that Mr. Aberth did not file an application, they argue that they were denied notice and an opportunity to be heard on this issue.
{29} In light of our analysis and disposition of the preceding assignments or error, we hold that the Beneficiaries’ first argument (i.e., that Mr. Aberth was not entitled to pay attorney‘s fees from the trust because he breached the trust) lacks merit. Regarding their due process argument, we note that the Beneficiaries did not raise this argument in their objections to the
ASSIGNMENT OF ERROR V
THE PROBATE COURT ERRED AS A MATTER OF LAW AND ABUSED ITS DISCRETION BY FAILING TO REMOVE THE TRUSTEE AS TRUSTEE AND EXECUTOR.
{30} In their fifth assignment of error, the Beneficiaries argue that the probate court abused its discretion by failing to remove Mr. Aberth as the trustee and executor in light of the serious breaches of the trust and his mishandling of the estate. They also argue that the probate court abused its discretion by failing to remove Mr. Aberth as the trustee as a result of his persistent failure to administer the trust effectively. In response, Mr. Aberth argues that the probate court considered all of the evidence, applied the applicable law, and properly concluded that the Beneficiaries failed to prove their case by clear and convincing evidence.
{31}
{32} In light of our analysis and disposition of the Beneficiaries’ preceding assignments of error, we hold that the Beneficiaries have not established that the probate court abused its discretion by not removing Mr. Aberth as the trustee or executor. Accordingly, the Beneficiaries’ fifth assignment of error is overruled.
III.
{33} Plaintiffs-Appellants Rachel Cavanaugh Gorby and Robert Donnan Cavanaugh‘s assignments of error are overruled. The judgment of the Summit County Court of Common Pleas, Probate Division, is affirmed.
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Summit, State of Ohio, to сarry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to
Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
Costs taxed to Appellants.
JENNIFER HENSAL
FOR THE COURT
MOORE, J. CONCURS.
CARR, P. J. CONCURS IN JUDGMENT ONLY.
APPEARANCES:
DOUGLAS G. LEAK, Attorney at Law, for Appellants.
JAMES T. STIMLER, Attorney at Law for Appellants.
JOHN P. SUSANY and KATHLEEN A. HAHNER, Attorneys at Law, for Appellee.