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IN RE ESTATE OF FORGEY

Cite as 298 Neb. 865

In re Estate of Glenn G. Forgey, de

Dean R. Forgey et al., appellants and cross-app

v. Lyle A. Forgey, individually and as

appellee, cross-appellant, and cross-appell

and Bessie I. Forgey-McCoy e

appellees and cross-appellan

___ N.W.2d ___

Filed February 9, 2018. No. S-16-1027.

1. Trusts: Equity: Appeal and Error. Absent an equity question, an 

appellate court reviews trust administration matters for error appearing on the record; but where an equity question is presented, appellate 

review of that issue is de novo on the record.

2. Evidence: Appeal and Error. In a review de novo on the record, an 

appellate court reappraises the evidence as presented by the record and 

reaches its own independent conclusions concerning the matters at issue.

3. ____: ____. When evidence is in conflict, the appellate court considers 

and may give weight to the fact that the trial judge heard and observed 

the witnesses and accepted one version of the facts rather than another.

4. Judgments: Appeal and Error. When reviewing a judgment for errors 

appearing on the record, the inquiry is whether the decision conforms 

to the law, is supported by competent evidence, and is neither arbitrary, 

capricious, nor unreasonable.

5. ____: ____. An appellate court, in reviewing a judgment for errors 

appearing on the record, will not substitute its factual findings for those 

of the trial court when competent evidence supports those findings.

6. Judgments. The existence of a fiduciary duty and the scope of that duty 

are questions of law for a court to decide.

7. Judgments: Appeal and Error. On a question of law, an appellate court 

is obligated to reach a conclusion independent of the determination 

reached by the court below.

8. Wills: Trusts. The interpretation of the words in a will or a trust presents a question of law.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

03/16/2018 01:11 AM CDT
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9. Attorney Fees: Appeal and Error. A trial court’s decision awarding 

or denying attorney fees will be upheld on appeal absent an abuse of 

discretion.

10. Judgments: Words and Phrases. A judicial abuse of discretion 

requires that the reasons or rulings of the trial court be clearly untenable insofar as they unfairly deprive a litigant of a substantial right and 

a just result.

11. Trusts. A trustee has the duty to administer the trust in good faith, in 

accordance with its terms and the purposes and the interests of the beneficiaries, and in accordance with the Nebraska Uniform Trust Code.

12. ____. The Nebraska Uniform Trust Code states that trustees owe the 

beneficiaries of a trust duties that include loyalty, impartiality, prudent 

administration, protection of trust property, proper recordkeeping, and 

informing and reporting.

13. Accounting. An accounting is ordinarily an appropriate remedy for a 

breach of the duty to inform and report.

14. Decedents’ Estates: Jurisdiction. County courts have exclusive jurisdiction over all matters relating to decedents’ estates, including the 

probate of wills and construction thereof.

15. Decedents’ Estates: Jurisdiction: Equity. In exercising exclusive original jurisdiction over estates, county courts may apply equitable principles to matters within probate jurisdiction.

16. Decedents’ Estates: Jurisdiction: Wills: Trusts: Minors: Mental 

Competency. County courts have jurisdiction over all subject matter 

relating to estates of decedents, including construction of wills and 

determination of heirs and successors of decedents, estates of protected 

persons, protection of minors and incapacitated persons, and trusts.

17. Courts: Jurisdiction. County courts have full power to make orders, 

judgments, and decrees and to take all other actions necessary and 

proper to administer justice in the matters which come before them.

18. Trusts. If a trust has two or more beneficiaries, a trustee has a duty of 

impartiality among beneficiaries.

19. Attorney Fees. Attorney fees and expenses may be recovered only 

where provided for by statute or when a recognized and accepted uniform course of procedure has been to allow recovery of an attorney fee.

20. Attorney Fees: Appeal and Error. When an attorney fee is authorized, 

the amount of the fee is addressed to the discretion of the trial court, 

whose ruling will not be disturbed on appeal in the absence of an abuse 

of discretion.

21. Attorney Fees. To determine the value of legal services rendered by 

an attorney, it is proper to consider the amount involved, the nature of 

the litigation, the time and labor required, the novelty and difficulty of 

the questions raised, the skill required to properly conduct the case, the 
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responsibility assumed, the care and diligence exhibited, the result of 

the suit, the character and standing of the attorney, and the customary 

charges of the bar for similar services.

22. Laches. Laches occurs only if a litigant has been guilty of inexcusable neglect in enforcing a right and his or her adversary has suffered 

prejudice.

23. Laches: Equity. Laches does not result from the mere passage of time, 

but because during the lapse of time, circumstances changed such that to 

enforce the claim would work inequitably to the disadvantage or prejudice of another.

24. Laches. What constitutes laches depends on the circumstances of 

the case.

Appeal from the County Court for Keya Paha County: 

James J. Orr, Judge. Affirmed in part, and in part reversed and

remanded with directions.

David A. Domina, of Domina Law Group, P.C., L.L.O., for 

appellants.

Michael L. Johnson, of Leininger, Smith, Johnson, Baack, 

Placzek & Allen, for appellee Lyle A. Forgey.

Kyle S. Irvin for appellees Bessie I. Forgey-McCoy et al.

Miller-Lerman, Stacy, Kelch, and Funke

Arterburn, Judg

Kelch, 

I. INTRODUCTION

This appeal arises from a trustee’s failure to distribute the 

corpus of the trust following the grantor’s death in 1993. 

Marvel Forgey and her three children, all beneficiaries of the 

Glenn G. Forgey Revocable Trust (the trust), appeal the order 

of the county court for Keya Paha County resulting from their 

suit against Lyle A. Forgey, who was another beneficiary and 

was the trustee. Marvel and her children sought to remove 

Lyle as trustee, secure administration of the trust, value the 

trust assets, divide those assets into separate trusts for the 

beneficiaries, and determine liabilities for alleged breaches of 
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fiduciary duties by Lyle. Bessie I. Forgey-McCoy and her two 

children, all three also beneficiaries, joined as interested parties. Primarily accepting Lyle’s version of the facts, the county 

court valued and distributed the trust assets, assessed damages 

against Lyle for estate tax interest and penalties, and declined 

to award attorney fees or costs to any party. Marvel and her 

children appealed; Lyle cross-appealed, and Bessie and her 

children filed a separate cross-appeal. While we largely agree 

with the county court’s findings in this case, we conclude that 

the county court committed error by not awarding damages 

for Lyle’s untimely reports and accountings of his failure to 

collect rents on behalf of the trust. We further determine that 

the county court abused its discretion in declining to award 

attorney fees to Marvel, Bessie, and their respective children. 

Accordingly, we affirm in part, and in part reverse and remand 

with directions.

II. BACKGROUND

Glenn G. Forgey died in 1993. He was survived by three 

children: Lyle and Bessie, mentioned above, and Wayne 

Forgey, who is now deceased. Wayne was survived by his wife, 

Marvel, and by their three children.

During his lifetime, Glenn transferred property into the trust. 

Lyle has been the sole trustee at all relevant times. The trust 

gave the trustee broad discretion to make decisions for the 

trust in good faith. It required the trustee to provide an annual 

report to the beneficiaries upon Glenn’s death. The trust further 

directed the trustee, upon the grantor’s death, to use the principal or net income of the trust to pay the grantor’s legal debts, 

death expenses, estate administration costs, and inheritance and 

estate taxes. The trust, as amended, further provided:

Upon the death of the Grantor and distribution of the 

Grantor’s estate from probate, the Trustees shall divide 

the residue of the assets of this trust . . . into equal shares, 

so as to provide one share for each then living child of 

the Grantor and one share for the then living issue, collectively, of each deceased child of the Grantor. In so 
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dividing the assets of [this trust], . . . in funding [Lyle’s]

equal share of the trust assets the Trustees shall allocate 

to his share all common stock which [this trust] may then 

own in [a bank in Ainsworth, Nebraska].

(Emphasis supplied.)

No administrative proceedings were commenced for the trust 

until 2013, when Marvel initiated this litigation, along with 

her children (hereinafter collectively Marvel). Bessie and her 

two children (hereinafter collectively Bessie) joined the action 

as interested parties. Marvel sued to remove Lyle as trustee, 

secure administration, value assets, divide and distribute them 

to separate trusts, determine liabilities for defalcations by Lyle, 

and recover attorney fees and costs.

Bessie filed her own counterpetition, requesting similar 

relief.

Lyle also counterpetitioned, asking the county court to 

approve his actions as trustee; determine or confirm the allocation of trust assets, income, expenses, and compensation; and 

award him attorney fees and costs.

The sections immediately below summarize evidence relevant to the parties’ claims on appeal, and we recount additional 

relevant facts in the analysis portion of this opinion.

1. Div

Pretrial litigation revealed that the corpus of the trust 

included agricultural real estate, bank stock, cash, and a promissory note.

The county court, observing that the trust provided that trust 

assets were to be distributed upon Glenn’s death, applied the 

principle that equity considers that done which ought to have 

been done and treated the division of the trust as though it had 

occurred upon Glenn’s death.

The county court further determined that “it was clearly 

Glenn’s intent that his trust be divided equally and that Lyle’s 

one-third share be funded using the bank stock and that the 

remaining assets would be divided between Wayne’s trust and 

Bessie’s trust.”
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In dividing the trust this way, the county court relied on the 

testimony and report provided by Lyle’s expert, Tyler Bartruff, 

an attorney working in the field of forensic accounting and 

federal estate taxes.

Bartruff based his report on the hypothetical assumption that 

the trust was split into three equal shares as of Glenn’s date of 

death in 1993. The report also assumed that the federal estate 

tax return was timely filed and that the tax was timely paid 

on a deferred basis under I.R.C. § 6166 (2012). The report 

allocated the bank stock to Lyle’s share and added additional 

liability to Lyle’s share to make the three shares proportionate. 

Bartruff’s report then proceeded with a cashflow summary for 

each beneficiary’s share from the split in 1993 until December 

31, 2015, using data provided in other exhibits.

2. Valuat

(a) Bank Stock

At the time of trial, the trust owned 13,276 shares (bank 

stock), or 66.2 percent, of the holding company for a bank in 

Ainsworth, Nebraska. Lyle owned the remaining shares in his 

individual capacity.

Two witnesses testified about the bank stock’s value: Janet 

Labenz and Fred Lockwood, each a certified public accountant 

(CPA) with experience in bank valuation.

Labenz’ testimony and her written report gave a clear and 

concise explanation of her reasoning, which resulted in her 

applying a lack of marketability discount and valuing the 

trust’s bank stock at $7,209,000 as of September 13, 2013.

Lockwood did not apply a lack of marketability discount 

and valued the trust’s bank stock as of September 30, 2013, 

at $9,804,000. Counsel were unable to elicit a straightforward 

explanation to support Lockwood’s conclusion; and because 

Lockwood was not a certified valuation analyst, as was Labenz, 

he was unable to submit a written report.

The county court expressly accepted Labenz’ $7,209,000 

valuation of the bank stock.
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(b) Land

Upon Glenn’s death, the trust owned three substantial parcels of agricultural real estate located in Brown and Keya Paha 

Counties in Nebraska and in Tripp County in South Dakota.

On January 15, 2016, the Brown County real estate was distributed and sold by stipulation of the parties. The sale price of 

$9,148,172.70 was equally distributed to the separate trusts for 

Wayne and Bessie.

At trial, Marvel’s counsel presented the reports of Larry 

Radant, who appraised the three parcels as of 2015. Radant 

determined values of $1,065,000 for the Keya Paha County 

real estate, $5,630,000 for the Tripp County real estate, and 

$9,700,000 for the Brown County real estate.

In addition, Marvel’s counsel also presented values for the 

Keya Paha County and Tripp County real estate prepared by a 

different appraiser.

The county court relied on the real estate values established by Radant, valuing the trust’s real estate at $16,395,000 

total. This valuation included Radant’s appraisal of the Brown 

County real estate, which had been previously sold below 

Radant’s appraised value.

(c) Cash

The county court awarded the parties cash based on 

Bartruff’s report, which calculated each party’s share of the 

trust had Lyle divided the trust into three equal shares upon 

Glenn’s death, timely filed the estate tax return, and paid the 

associated taxes on a deferred basis. That report allocated the 

trust’s cash as follows: $1,960,910 to Lyle and $382,169 to 

Wayne and Bessie ($191,084.50 to Wayne and $191,084.50 to 

Bessie). The county court apparently considered past distributions to Bessie totaling $167,550 and added these distributions to Bartruff’s total of $382,169. Accordingly, the county 

court awarded $1,960,910 to Lyle’s trust and divided $549,719 

between Wayne’s trust and Bessie’s trust, resulting in $274,860 

to Wayne’s trust and $274,860 to Bessie’s trust. The county 
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court then subtracted $167,550 from Bessie’s share, allocating 

$107,310 to Bessie’s trust.

(d) Bradley Williams Note

The parties do not dispute that as of the time of trial, Bradley 

Williams owed the trust $61,423. As described in more detail 

below, the county court allocated the note representing that 

debt to Lyle in its final distribution, deducted its cash value 

from Lyle’s trust, and divided its cash value equally between 

Wayne’s and Bessie’s trusts.

3. Breaches of Fiducia

Marvel and Bessie presented evidence attempting to show 

various breaches of fiduciary duty by Lyle and resulting 

damages.

(a) Estate Taxes

The parties do not dispute that Lyle was late in filing the 

trust’s federal estate tax return and in paying the resulting tax 

liability. There was evidence that although Lyle’s CPA, Bruce 

Hocking, timely prepared the federal estate tax return for 

Lyle’s signature, Lyle neglected to sign and mail it on time. 

Due to Lyle’s tardiness, the Internal Revenue Service (IRS) 

assessed penalties and interest against the trust amounting to 

approximately $2,200,000.

To pay the estate tax liability, Lyle obtained loans for the 

trust, borrowing from himself in his individual capacity and 

from the bank in which he and the trust held stock. Hocking 

admitted that this benefited Lyle, as owner of one of the notes 

representing the trust’s debt and a shareholder at the bank, 

more than it benefited Wayne and Bessie. However, neither 

Marvel nor Bessie wanted Lyle to sell the trust’s land to pay 

the federal estate tax obligation; nor did Bessie want Lyle to 

sell the bank stock.

Hocking negotiated with the IRS and achieved a settlement 

which allowed the trust to deduct the interest on the loans as 

an administrative expense, which, in turn, directly reduced 
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the federal estate tax liability and resulted in a fiduciary 

income tax benefit.

Using the settlement negotiated by Hocking, Bartruff, 

Lyle’s expert, opined that the trust incurred damages totaling 

$854,803 as a result of Lyle’s late payment to the IRS. Bartruff 

explained that this number represented the difference between 

the amount that the trust actually paid for estate taxes, penalties, and interest and what would have been paid had the estate 

tax return been timely filed and had a proper election under 

§ 6166 been made.

Lockwood, Marvel’s expert, testified that the damage to the 

trust for Lyle’s breach regarding the estate taxes, penalties, 

and interest was $2,258,141. To obtain this figure, Lockwood 

added $552,052 in penalties to $1,706,089, which included 

interest on the principal ($976,432), interest for federal penalties ($308,339), interest on the bank note ($380,734), and 

interest on money borrowed from Lyle ($141,382). However, 

Lockwood overlooked that the $976,432 in interest on the principal already included $308,339 in interest for penalties.

The county court accepted the testimony of Lyle’s expert, 

Bartruff, on the matter of damages related to federal estate 

taxes. Accordingly, the county court determined that Lyle’s 

breach of his duty to timely handle matters pertaining to estate 

taxes damaged the trust in the amount of $854,803.

(b) Cattle Operation Rents

Marvel and Bessie alleged a breach of trust by Lyle for failing to charge rent to himself and to Wayne for use of the trust’s 

land for their cattle operations.

Prior to Glenn’s death, Glenn, Lyle, and Wayne conducted 

a cattle operation using 12,000 acres of pasture belonging to 

Glenn, as well as real estate belonging to Lyle and Wayne. 

Glenn, Lyle, and Wayne shared the profits 20 percent, 45 

percent, and 35 percent, respectively. At some point, the land 

became part of the trust. After Glenn’s death, from 1993 to 

2009 or 2010, Lyle and Wayne continued to share the cattle 
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operation on the same terms, with the trust assuming Glenn’s 

20 percent.

After Glenn’s death, Lyle paid no rent to the trust, nor did 

Lyle collect rents from Wayne on behalf of the trust. Lyle 

testified that the cattle operation handled rents in this manner 

before Glenn’s death.

Lyle testified that the trust’s cattle operation used some of 

his land and his labor, management, and equipment and that he 

did not charge the trust, nor did the trust pay Wayne, for his 

labor, management, and equipment. Lyle also testified that the 

trust did not pay for using pastureland owned by the family’s 

limited partnership or for any inputs for crops grown there 

and used to feed the trust’s cattle. However, there was also 

evidence that the trust borrowed money for feed, other general 

operating expenses, and real estate taxes for its portion of the 

cattle operation.

Lyle pointed out that the terms of the cattle operation 

allowed the trust to pay down its federal estate tax obligation 

without selling trust property.

Marvel did the bookkeeping for Wayne, and she testified 

that when they settled up each year, they did not have any 

claim against the trust.

Marlin Krohn, an agricultural land manager, testified 

that based on the industry standard, the value of Lyle’s and 

Wayne’s labor and management of the cattle operation was 

$550,000 from 1994 to 2009. Krohn further testified that had 

the trust’s pastureland been rented out at market rates between 

1993 and 2009, those rents would have totaled $2,100,000. He 

opined that the trust could have received $600,000 more in 

net income if the cattle had been liquidated in 1993 or 1994 

and the real estate leased from that time until 2009, yet that 

it was reasonable for the cattle operation to have continued. 

Krohn observed that cattle feeding operations were profitable 

in 1993 or 1994, despite the subsequent unexpected downturn 

in the market.

The county court found that Lyle and Wayne ran the cattle 

business with Glenn until his death and that there was never 
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an agreement that they would be charged rent to continue 

using the land. The county court also noted that continuing 

the cattle operation under those terms allowed for the payment 

of tax liability. Thus, it found that Lyle’s actions regarding 

this issue were authorized and of benefit to the beneficiaries. 

Consequently, the county court assessed no damages against 

Lyle arising from the cattle operation.

(c) Cash Distributions

Lyle did not make cash distributions from the trust to the 

other beneficiaries until 2008. It was alleged that this was a 

breach of Lyle’s fiduciary duty.

In 2008, 2009, and 2010, Bessie received distributions totaling $167,550. Bessie testified that during this period, she told 

Lyle when she needed money from the trust and he would 

give her money, sometimes a little more than she requested. 

Bessie testified that she had the understanding that she chose 

to forgo her distributions prior to 2008 to facilitate payment 

of IRS obligations and avoid the trust’s having to sell land or 

bank stock.

After Marvel filed suit in 2013, Lyle began making equal 

trust income distributions. In 2015, the county court ordered 

equal distributions to separate trusts for Lyle, Wayne, and 

Bessie.

Joel Wiegand, a CPA, calculated that if all the distributable 

income had been distributed from the trust to Bessie for her 

one-third share, total taxes for one-third of the trust tax plus 

Bessie’s individual tax would have been $124,265 lower for 

1993 through 2012. Wiegand pointed out that cash distributions did not become available until 2008 when debts were 

retired. According to Wiegand, Bessie would have been taxed 

$37,284 less had a one-third share of cash been distributed to 

her when available in 2008 and thereafter. Wiegand opined 

that it was prudent to retain funds to make payments on debts 

incurred to pay federal estate taxes.

Hocking, Lyle’s CPA, testified that until all federal estate 

tax obligations were paid in full in 2000, he advised Lyle 
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from time to time that no distributions should be made to the 

trust beneficiaries. He testified that at that time, an election 

under § 6166 was still a possibility, and that § 6166 required 

any distributable trust income to be used to defray federal 

estate tax liability.

Lockwood testified that the lack of distributions allowed 

more assets to remain in the trust and resulted in $191,381 of 

excess, avoidable taxes.

The county court accepted Wiegand’s testimony that the 

available cash of the trust did not exceed its liabilities until 

2008. Because Lyle’s refusal to make cash distributions 

allowed the tax liability to be paid without selling trust assets, 

the county court found that Lyle’s actions allowed the trust to 

grow from approximately $3 million at Glenn’s death to over 

$25 million at the time of trial and thus actually benefited the 

beneficiaries. Additionally, the county court noted that Bessie 

received $167,550 of cash distributions and that Bessie herself 

testified that Lyle distributed cash to her whenever she asked 

and sometimes gave her more than she requested.

(d) Williams Note

Marvel and Bessie claimed that Lyle breached his fiduciary 

duty and caused damages by failing to collect on the Williams 

note. At the time of Glenn’s death in 1993, Williams owed the 

trust $136,423. The record shows payments of $25,000 in 2004 

and $40,000 in 2013. Deducting these payments results in a 

balance of $71,423, but no one disputes that the balance was 

$61,423 at the time of trial. Lockwood testified at trial that 

he learned that Lyle believed he could collect the balance of 

the note.

The county court found that there was no evidence as to 

how Lyle breached his fiduciary duties in not collecting the 

debt. It concluded that equity required allocating the note to 

Lyle’s trust, deducting $61,423 in cash from Lyle’s distribution 

and distributing $30,711 in cash to Wayne and $30,711 in cash 

to Bessie.
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On appeal, Marvel claims that the county court ought to 

have allocated the note to Lyle. This is what the county court 

did in the body of its order, but as described in more detail 

below, the allocation is not entirely clear on the county court’s 

balance sheet.

(e) Failure to Account

Marvel claimed that Lyle had failed to abide by the terms 

and purposes of the trust by failing to maintain sufficient 

records and to account for trust income and expenses annually. 

Bessie made similar claims.

Lyle admitted that as trustee, he had not provided a formal accounting. Members of Wayne’s family and Bessie’s 

family confirmed that prior to the litigation, they had not 

received any report or balance sheet that gave a picture of the 

trust’s affairs.

According to the transcript of a family meeting in 2008, 

Hocking provided Wayne’s family and Bessie’s family with 

the trust’s fiduciary income tax returns from 1993 through 

2007. At the 2008 meeting, Hocking also provided income 

tax returns for the trust showing a “general ledger,” rather 

than a transaction-by-transaction account, for the income and 

expenses of the trust from 2003 to 2007.

In 2013, Lyle provided the other beneficiaries with fiduciary 

income tax returns from 1993 to 2012. After the proceedings 

commenced in 2013, Lyle provided a full accounting for 2003 

to 2012 to Wayne’s family and Bessie’s family. During the 

litigation, Lyle provided accountings and fiduciary income tax 

returns for 2013 to 2015.

The county court found no showing that the untimely 

accounting caused any loss to the beneficiaries and awarded 

no damages.

4. Attorney Fees and C

All parties requested attorney fees and costs. The county 

court conducted a posttrial hearing on the matter and received 

affidavit evidence.
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The county court determined that each party should pay 

his or her own attorney fees and costs. It noted that while it 

did not believe Lyle had poor intentions, his own actions and 

neglect opened the door to accusations of breaches of fiduciary 

duty. As for the remaining parties, the county court noted that 

most of their claims against Lyle lacked merit and amounted 

to “microscopically probing” Lyle’s actions for nearly criminal 

activity with the goal of “receiving a bigger piece of the pie,” 

while contingency agreements between the parties and their 

counsel “fan[ned] the flames.”

5. County Court’s Final Dis

In accordance with its analysis, the county court ordered 

Lyle to distribute the trust’s assets as follows:

Lyle’s Trust

Bank Shares $7,209,000

Cash 1,960,910

Estate Tax Penalties and Interest (854,803)

Adjustment for Williams Note, Allocated to Lyle (61,423)

TOTAL for Lyle $8,253,684

Wayne’s Trust

One-half Land $8,197,500

Cash for one-half Williams Note 30,711

Cash 274,860

TOTAL for Wayne $8,503,071

Bessie’s Trust

One-half Land $8,197,500

Cash for one-half Williams Note 30,711

Cash 274,860

Cash Adjustment (167,550)

TOTAL for Bessie $8,335,521

III. ASSIGNMENTS OF ERROR

On appeal, Marvel assigns the county court erred when it 

(1) held that no damages were associated with Lyle’s failure 

to render accountings; (2) failed to hold Lyle liable for excess 

interest on estate tax debt caused by failure to pay taxes on 
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time and for loss of installment payment interest benefits; 

(3) failed to find that Lyle caused damages for loss of the 

alternative valuation election of § 6166, requiring payment 

of avoidable taxes; (4) failed to value assets as of the filing 

date or the date of trial and to assess damages for delayed 

administration; (5) awarded Lyle substantially all trust income 

retroactively to the time of Glenn’s death; (6) failed to award 

damages against Lyle for nonpayment of rents; (7) failed to 

award damages against Lyle for failure to collect valid debts 

owed to the trust; and (8) failed to award attorney fees and 

costs to Marvel.

On cross-appeal, Bessie assigns that the county court erred 

in (1) retroactively and hypothetically setting the creation 

of the shares of the trust as of the date of Glenn’s death in 

1993 and then awarding Lyle substantially all trust income 

retroactively to Glenn’s date of death; (2) considering Lyle’s 

actions as trustee in failing to collect rents from both himself 

and Wayne; (3) failing to award Bessie damages for Lyle’s 

failure to distribute income to Bessie, consistent with the testimony of Wiegand; (4) failing to award Bessie attorney fees 

against Lyle for his multiple breaches of trust; and (5) holding 

that no damages were associated with Lyle’s failure to render accountings.

On cross-appeal, Lyle assigns that although the county court 

properly divided the trust, it erred in (1) failing to hold that 

the claims for breach of fiduciary duty were barred by laches, 

because there should be no damages for breach of fiduciary 

duty if income from the bank stock is not allocated to Lyle’s 

trust since Glenn’s death; (2) failing to hold that Wayne’s family and Bessie’s family are barred from claims for breach of 

fiduciary duty by estoppel, waiver, release, consent, ratification and acquiescence; and (3) failing to award attorney fees, 

costs, and expenses to Lyle.

IV. STANDARD OF REVIEW

[1-3] Absent an equity question, an appellate court reviews 

trust administration matters for error appearing on the record; 
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but where an equity question is presented, appellate review 

of that issue is de novo on the record. In re Margaret Mastny 

Revocable Trust, 281 Neb. 188, 794 N.W.2d 700 (2011). In a 

review de novo on the record, an appellate court reappraises 

the evidence as presented by the record and reaches its own 

independent conclusions concerning the matters at issue. Id. 

When evidence is in conflict, the appellate court considers 

and may give weight to the fact that the trial judge heard and 

observed the witnesses and accepted one version of the facts 

rather than another. In re Estate of Radford, 297 Neb. 748, 901 

N.W.2d 261 (2017).

[4,5] When reviewing a judgment for errors appearing on 

the record, the inquiry is whether the decision conforms to the 

law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable. In re Trust of Rosenberg, 

273 Neb. 59, 727 N.W.2d 430 (2007). An appellate court, in 

reviewing a judgment for errors appearing on the record, will 

not substitute its factual findings for those of the trial court 

when competent evidence supports those findings. In re Estate 

of Dueck, 274 Neb. 89, 736 N.W.2d 720 (2007).

[6,7] The existence of a fiduciary duty and the scope of that 

duty are questions of law for a court to decide. In re Estate of 

Stuchlik, 289 Neb. 673, 857 N.W.2d 57 (2014), modified on 

denial of rehearing 290 Neb. 392, 861 N.W.2d 682 (2015). 

On a question of law, an appellate court is obligated to reach 

a conclusion independent of the determination reached by the 

court below. Id.

[8] The interpretation of the words in a will or a trust presents a question of law. In re Estate of Shell, 290 Neb. 791, 862 

N.W.2d 276 (2015).

[9,10] A trial court’s decision awarding or denying attorney 

fees will be upheld on appeal absent an abuse of discretion. In 

re Conservatorship of Abbott, 295 Neb. 510, 890 N.W.2d 469 

(2017). A judicial abuse of discretion requires that the reasons 

or rulings of the trial court be clearly untenable insofar as 

they unfairly deprive a litigant of a substantial right and a just 

result. Id.
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V. ANALYSIS

1. Marvel’s Appeal 

Bessie’s Cross-App

Glenn died in 1993, and Lyle, the trustee, did not distribute 

the trust assets upon Glenn’s death as required by the trust. 

As the county court observed, “Now, more than twenty years 

later, serious and difficult controversies have arisen . . . .” The 

county court made factual findings and applied equitable principles to craft a remedy. Marvel and Bessie now challenge that 

remedy, along with some of the factual findings upon which 

it is based.

The complications in this case have arisen, in large part, 

from Lyle’s failure to inform the beneficiaries concerning the 

state of the trust over the course of many years. Accordingly, 

Marvel first assigns that the county court erred by finding no 

damages resulted when Lyle breached his fiduciary duty by 

failing to render timely accountings. Bessie also seeks damages 

resulting from Lyle’s failure to render accountings.

[11,12] Marvel properly notes that a trustee has the duty 

to administer the trust in good faith, in accordance with its 

terms and the purposes and the interests of the beneficiaries, 

and in accordance with the Nebraska Uniform Trust Code. In 

re Conservatorship of Abbott, supra. The Nebraska Uniform 

Trust Code states that trustees owe the beneficiaries of a trust 

duties that include loyalty, impartiality, prudent administration, protection of trust property, proper recordkeeping, and 

informing and reporting. Id. Prior to January 1, 2005, a trustee 

was required to keep the beneficiaries of the trust reasonably 

informed of the trust and its administration and, on reasonable 

request, provide a beneficiary with a statement of the accounts 

of the trust annually. See, Neb. Rev. Stat. § 30-2814 (Reissue 

1995); 2003 Neb. Laws, L.B. 130, § 78. Commencing January 

1, 2005, the Nebraska Uniform Trust Code required a trustee to 

send to distributees at least annually a report of the trust property, liabilities, receipts, and disbursements. See, Neb. Rev. 

Stat. § 30-3878 (Reissue 2016); L.B. 130, § 78.
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Lyle clearly violated the requirement, prior to 2005, to keep 

the beneficiaries of the trust reasonably informed; and after 

2005, he violated his duty to send to distributees a report at 

least annually. The record reflects that Lyle did not provide 

any reasonable reports to Marvel and Bessie until 2008. Then, 

after this action was filed, Lyle provided an accounting from 

2003 to 2012. Lyle contends that this was adequate, but we 

disagree. Failing to provide any information to the beneficiaries from the date of Glenn’s death in 1993 until 2008 reflects 

a violation of Lyle’s duties to report. Marvel and Bessie 

should not be required to initiate legal action to compel Lyle 

to comply with his statutory obligation. However, the question 

becomes, other than attorney fees, what damages have been 

shown by Marvel and Bessie.

[13] An accounting is ordinarily an appropriate remedy 

for a breach of the duty to inform and report. In re Rolf H. 

Brennemann Testamentary Trust, 288 Neb. 389, 849 N.W.2d 

458 (2014). However, here, Marvel and Bessie have further alleged that Lyle must account for the damages he 

caused by his breach of duty as trustee and that a judgment 

should be entered against him. Specifically, Marvel claims 

that the measure of damages is a different distribution than 

was ordered by the county court, which difference would 

account for tax penalties, avoidable taxes, and excess interest paid when favorable IRS rates became unavailable, all 

due to Lyle’s defaults, as well as unpaid rents, extra income 

taxes that would have been avoided by proper distributions, 

and attorney fees. Similarly, Bessie groups Lyle’s failure to 

account with her assigned errors relating to the cattle operation, income distributions, and attorney fees and ultimately 

requests a different distribution as the remedy. Essentially, 

Marvel and Bessie incorporate all of their assigned errors in 

suggesting a measure of damages for Lyle’s failure to render 

accountings. Therefore, we shall address these intertwined 

assignments of error together.

[14-17] In analyzing these assigned errors, we recognize 

that under Neb. Rev. Stat. § 24-517(1) (Cum. Supp. 2012), 
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county courts have exclusive jurisdiction over all matters 

relating to decedents’ estates, including the probate of wills 

and construction thereof. In re Estate of Stuchlik, 289 Neb. 

673, 857 N.W.2d 57 (2014), modified on denial of rehearing

290 Neb. 392, 861 N.W.2d 682 (2015). Although this case is 

not an equity action, in exercising exclusive original jurisdiction over estates, county courts may apply equitable principles 

to matters within probate jurisdiction. Id. We have held that 

county courts have jurisdiction over all subject matter relating to estates of decedents, including construction of wills and 

determination of heirs and successors of decedents, estates 

of protected persons, protection of minors and incapacitated 

persons, and trusts. Id. Such courts have full power to make 

orders, judgments, and decrees and to take all other actions 

necessary and proper to administer justice in the matters which 

come before them. Id.

In regard to distribution and valuation of trust assets, the 

county court was faced with when to value the assets, because 

contrary to the terms of the trust, the trust assets were not 

distributed at Glenn’s date of death into three separate trusts. 

Lyle suggested that the county court divide Glenn’s trust as 

of his date of death, according to the calculations of Lyle’s 

expert, Bartruff. In finding that it could follow such an 

approach, the county court quoted the following portion of 

the Restatement (Third) of Trusts § 89, comment g. at 285-

86 (2007):

Occasionally the time for trust termination arrives and a 

directed division into separate trusts or distribution of the 

property is unduly delayed or disregarded even though 

the trustee has, in one way or another, performed other 

aspects of winding up the trust’s affairs. . . . It would 

seem appropriate to treat the beneficiary . . . as owner [of] 

(or holder of a power of withdrawal over) the trust property or appropriate portion thereof—an example of equity 

treating as done what ought to have been done.

Rather than offering an alternative distribution schedule for 

the trust as of the time of Glenn’s death, Marvel and Bessie 
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want the distributions and valuations to be deemed made at 

the time of trial. Marvel argues that the county court ought 

to have valued the trust assets as of 2016. She contends that 

we should adopt a rule that where distribution is delayed, as 

here, the assets should be valued as of the date of distribution. Marvel acknowledges that Nebraska has not addressed 

the valuation date for distributed assets. She points to King v. 

Onthank, 152 N.H. 16, 871 A.2d 14 (2005), where the lower 

court, upon termination of the trust, valued the assets at the 

time of distribution, which was 3 years after the grantor’s 

death. The appellate court in King v. Onthank noted that the 

grantor’s intent would control the date of valuation if such 

intent could be determined from the trust document. It ultimately held that under the particular facts presented, the lower 

court was not plainly erroneous in finding that the equitable 

date for valuation was approximately the date the trust assets 

were distributed.

Marvel also cites Van Schaack v. AmSouth Bank, N.A., 530 

So. 2d 740 (Ala. 1988), where the appellate court determined 

that trust assets should be valued at the date of distribution. 

However, in Van Schaack v. AmSouth Bank, N.A., unlike the 

instant case, the terms of the decedent’s will created and 

funded the residual trust.

We find King v. Onthank, supra, where the date of valuation 

of trust assets is determined by the particular facts presented 

to the lower court, to be more in line with our existing jurisprudence. For instance, in domestic relations cases, we have 

found that generally, the date on which a court values the 

marital estate should be rationally related to the property composing the marital estate. See Brozek v. Brozek, 292 Neb. 681, 

874 N.W.2d 17 (2016). In other words, we look to the facts of 

each case.

Here, Lyle’s expert, Bartruff, presented a report to opine 

a hypothetical balance sheet of the trust had Lyle timely 

filed the estate tax return, used all beneficial tax options, 

and paid the associated taxes on a deferred basis. Bartruff 

based the beginning values for the balance sheet on the final 
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values accepted by the IRS after negotiations. As provided 

by Glenn’s trust, Bartruff split the beginning values into 

three equal trusts, with Lyle receiving the bank stock and 

Wayne’s and Bessie’s trusts receiving the remaining assets. 

He determined the net change to each trust based upon the 

cash inflows and outflows for various items, such as dividend 

income, ranching operations, fiduciary tax payments, and 

estate tax and interest payments. Additionally, Bartruff based 

his report on the position that the trust would not have been 

able to pay the estate tax liability as of the date of filing without having to liquidate some of the estate’s assets. The record 

supports that Bessie did not want land or bank stock sold to 

pay the trust’s tax obligations and that from 1993 to 2009, 

Marvel did not want land sold. Therefore, Bartruff determined 

the prudent course of action would have been to apply for a 

deferred payment plan with the IRS, which allowed reduced 

interest rates over several years. Based upon this analysis, he 

determined, using 2013 values, the ultimate division of the 

trust between the beneficiaries.

Marvel and Bessie assert that this approach is erroneous. 

They argue that Lyle benefited, since Lyle’s treatment of 

expenses resulted in positive net income for the bank, whereas 

the assets assigned to Wayne and Bessie had negative income. 

Marvel and Bessie claim that Lyle should account for the 

loss of income to Wayne and Bessie because Lyle paid trust 

administration expenses using cattle operation income and not 

bank income. Bessie argues that the bank dividends at their 

present value should have been part of the residue, with the 

beneficiaries’ trusts funded therefrom. However, an appellate 

court, in reviewing a judgment for errors appearing on the 

record, will not substitute its factual findings for those of the 

trial court when competent evidence supports those findings. 

In re Estate of Dueck, 274 Neb. 89, 736 N.W.2d 720 (2007). 

In its factual findings, the county court accepted the facts 

posited by Bartruff’s calculations that divided the trust assets 

as of Glenn’s date of death. In turn, the income and expenses 

associated with the trust assets followed the respective owners 
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of those assets. We conclude that the county court was not 

clearly wrong in adopting this approach. Therefore, with 

Bartruff’s approach controlling, Marvel and Bessie’s position 

concerning expenses and income has no merit.

The valuation of bank stock was another major difference 

of opinion between the parties that greatly affected valuation 

and distribution of trust assets. Marvel and Bessie endorse the 

testimony of Marvel’s expert, Lockwood, who opined that the 

value of the bank stock was $9,804,000. On the other hand, 

Lyle’s expert, Labenz, applied a lack of marketability discount 

and valued the bank stock at $7,209,000.

The county court found Lyle’s experts to be more credible 

and accepted their opinions concerning these factual issues. In 

doing so, the county court was not applying an equitable principle, but simply, as the trier of fact, determining which expert 

was more credible. As such, we review the county court findings of fact for error on the record. See In re Margaret Mastny 

Revocable Trust, 281 Neb. 188, 794 N.W.2d 700 (2011). We 

find the decision to accept the testimony of Lyle’s experts 

is supported by competent evidence and is neither arbitrary, 

capricious, nor unreasonable. See In re Trust of Rosenberg, 

273 Neb. 59, 727 N.W.2d 430 (2007), and In re Estate of 

Dueck, supra.

As previously noted, the county court distributed the trust 

assets as follows:

Lyle’s Trust

Bank Shares $7,209,000

Cash 1,960,910

Estate Tax Penalties and Interest (854,803)

Adjustment for Williams Note, Allocated to Lyle (61,423)

TOTAL for Lyle $8,253,684

Wayne’s Trust

One-half Land $8,197,500

Cash for one-half Williams Note 30,711

Cash 274,860

TOTAL for Wayne $8,503,071
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Bessie’s Trust

One-half Land $8,197,500

Cash for one-half Williams Note 30,711

Cash 274,860

Cash Adjustment (167,550)

TOTAL for Bessie $8,335,521

The county court accepted the blueprint for distribution as 

outlined by Lyle’s experts, but the final values used by the 

county court were similar to the values that Marvel and Bessie 

requested in their briefs. The difference between the county 

court’s final distribution of assets and that of Marvel and 

Bessie mainly stems from Marvel’s and Bessie’s claims that 

the bank stock should have been valued at $9,804,000, rather 

than $7,209,000, and that the bank dividend income increased 

the cash for Lyle.

Although we review the equitable question of distribution 

of the trust de novo, under the facts of this case, the county 

court could not render an equitable solution without first making factual findings as to which experts’ opinions to accept. 

Because the county court accepted the expert opinions presented by Lyle as more credible, this, in turn, controlled the 

court’s method of distribution. Certainly, other methods of 

distribution exist, but here, the distribution under this circumstance was reasonable.

The primary difference between Marvel’s and Bessie’s position and the county court’s distribution is the extent to which 

the county court offset any alleged damages caused by Lyle. 

The county court only offset Lyle for any additional taxes and 

interest due to late filing, but Marvel and Bessie requested 

offsets for other issues, namely cattle operation rents, estate 

taxes, and the Williams note.

Marvel and Bessie contend that Lyle was not impartial in 

failing to collect rent for use of trust land for the cattle operation and that he should pay the associated damages.

[18] If a trust has two or more beneficiaries, a trustee has 

a duty of impartiality among beneficiaries. In re Estate of 
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Stuchlik, 289 Neb. 673, 857 N.W.2d 57 (2014), modified on 

denial of rehearing 290 Neb. 392, 861 N.W.2d 682 (2015). 

This includes a duty to act impartially in investing, managing, 

and distributing the trust property, giving due regard to the 

beneficiaries’ respective interests. Id.

“It is not only appropriate but required by the duty 

of impartiality that a trustee’s treatment of beneficiaries, 

and the balancing of their competing interests, reasonably 

reflect any preferences and priorities that are discernible from the terms . . . , purposes, and circumstances of 

the trust and from the nature and terms of the beneficial 

interests.” . . .

Id. at 689, 857 N.W.2d at 70 (emphasis omitted), quoting 

Restatement (Third) of Trusts § 79 (2007).

Prior to Glenn’s death, Glenn, Lyle, and Wayne conducted 

a joint cattle operation using trust land without either Lyle’s 

or Wayne’s paying rent. Any profits were divided with Glenn 

receiving 20 percent, Lyle receiving 45 percent, and Wayne 

receiving 35 percent. This division of any profits continued 

after Glenn’s death, with the trust receiving Glenn’s 20-percent 

share. Marvel and Bessie claim that Lyle violated his fiduciary duties by continuing the cattle operation without collecting rents.

The county court concluded that Lyle had not breached 

his fiduciary duty regarding rents. It relied on the testimony 

of Krohn, an agricultural land manager. Krohn valued Lyle’s 

and Wayne’s labor and management of the cattle operation 

from 1994 to 2009 at $550,000. Krohn admitted that the trust 

could have received $600,000 more if they had liquidated 

the operation in 1993 or 1994 and leased the real estate until 

2009. However, he also observed that it was reasonable for the 

cattle operation to continue at that time, despite the subsequent 

unexpected downturn in the cattle market, because cattle feeding operations were profitable in 1993 or 1994. In addition 

to Krohn’s testimony, the county court acknowledged other 

evidence that Lyle and Wayne contributed real estate, cattle, 
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and equipment to the cattle operation. The county court did not 

expressly assign a value to these contributions, but it apparently found them, along with the labor and management valued 

by Krohn, similar to Lyle’s and Wayne’s rent obligations, had 

they been assessed.

In this case, the county court accepted Lyle’s proposal to 

treat Glenn’s trust as having been divided at Glenn’s date 

of death. As a result, the county court effectively found that 

Lyle’s trust should be entitled to the bank dividends, since the 

bank stock was his property. We find that a similar approach 

should have been applied to the land, which was treated by 

Lyle’s expert as belonging jointly to Wayne and Bessie. If the 

land had been distributed upon Glenn’s death, then the cattle 

operation would have been required to pay rent for using it. 

Any such rents would have been paid as follows: 20 percent by 

the trust, 45 percent by Lyle, and 35 percent by Wayne. Krohn 

opined that at market rates, the rent for pastureland would have 

been $2,100,000 between 1993 and 2009. Marvel claims that 

the county court should have assessed Lyle $1,433,544 (80 

percent of $1,791,930) in uncollected land rent, and Bessie 

requested $1,716,743 (80 percent of $2,145,929).

We agree with Marvel and Bessie that Lyle, acting as an 

impartial trustee, should have treated the land as belonging 

to Wayne and Bessie, which, in turn, would have required 

the cattle operation to pay rent for using the land. Here, the 

record is clear that Bessie was unaware that rents were even 

an issue, since Lyle provided her no accounting as to the land. 

Wayne’s situation is problematic because he was part of the 

cattle operation and had inside information as to whether rents 

were being paid. And the record is not clear as to whether 

Wayne demanded rent during his life, with Marvel testifying 

that she did the bookkeeping for Wayne’s ranch operation and 

that when they “settled up” each year, they did not have any 

claim against the trust. Further, the reality is that Wayne, as 

co-owner of the cattle operation and of the land, could choose 

not to collect rent in regard to himself, and he has already 
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benefited by not being charged rents for his share of the 

cattle operation.

Although this is a breach of fiduciary duty action against 

Lyle, not Wayne, Lyle was still in a position of control in 

regard to Bessie’s land, since he failed to provide her with any 

relevant financial information. Consequently, we conclude that 

Lyle breached his fiduciary duty as trustee to Bessie by his use 

of her one-half interest in the land and by personally benefiting 

from not collecting rents for his share of the cattle operation 

in the amount of $472,500 (45 percent of $1,050,000, which 

is one-half of $2,100,000). In addition, we conclude that Lyle 

further breached his fiduciary duty as to Bessie by failing to 

collect rents from Wayne for Wayne’s use of Bessie’s land, 

amounting to uncollected rent of $367,500 (Wayne’s 35 percent of $1,050,000).

On remand, therefore, the distribution to Lyle’s trust shall 

be reduced by $840,000 ($472,500 + $367,500) and said property shall be transferred directly to Bessie’s trust.

Concerning federal estate tax obligations, the trust clearly 

provided that when Glenn, the grantor, died, Lyle’s first obligation as trustee was to pay, either from trust principal or 

income, all of Glenn’s legal obligations and all estate and 

inheritance taxes. Only after these obligations were paid was 

the residue of the trust to be divided equally among Glenn’s 

living children or their surviving children. The evidence shows 

that Hocking prepared the federal estate tax return for Lyle to 

sign and that Lyle, without any adequate explanation, failed to 

timely file it. This resulted in the trust’s incurring penalties and 

additional interest.

Marvel and Bessie claim that the county court erred in 

not awarding them damages by subtracting from Lyle’s share 

approximately $2,200,000 representing the gross amount of 

penalties and interest associated with Lyle’s lapses in filing and 

paying federal estate taxes. However, as noted by Lyle, Hocking 

negotiated a settlement with the IRS that allowed the trust to 

deduct the interest as an administrative expense, which in turn 
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directly reduced the federal estate tax liability and resulted in a 

fiduciary income tax benefit. Using this negotiated settlement, 

Bartruff calculated that the trust incurred damages of $854,803, 

which represented the difference between the amount that the 

trust actually paid for estate tax obligations and what would 

have been paid had the estate tax return been timely filed and 

the available beneficial election made. The county court again 

accepted the testimony of Lyle’s experts and offset the amount 

of $854,803 against Lyle’s share. We find the record contained 

competent evidence to support this decision.

Regarding the Williams note, Marvel claims that the county 

court erred when it failed to award damages against Lyle for 

failure to collect this valid debt owed to the trust. Lyle was not 

able to explain why he failed to collect on the note, but there 

was some evidence that he believed he could still do so. In the 

body of its order, the county court stated:

The trust is the holder of a promissory note from 

. . . Williams where $61,423.00 remains uncollected. 

Although there was no evidence as to how Lyle breached 

his duties in not collecting this debt, this court believes 

equity requires allocating this note to Lyle’s trust and 

therefore $30,711.00 additional cash should be allocated 

to Wayne’s trust and $30,711.00 additional cash allocated 

to Bessie’s trust.

The conclusion of the order contained a similar provision. 

However, the balance sheet attached to the court’s order, entitled “EXHIBIT ‘A,’” simply reflects that Wayne and Bessie 

each receive an “[u]ndivided one-half of . . . Williams [n]ote.” 

This wording has apparently led Marvel to the conclusion that 

Wayne’s and Bessie’s trusts each received one-half of the note, 

rather than its cash value. We understand the confusion; and on 

remand, the county court shall amend the order’s exhibit A to 

clarify that Wayne’s and Bessie’s trusts each receive an additional $30,711 of cash, as the body and conclusion of its order 

provide. With this finding and direction to the county court, 

this assigned error has no merit.
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[19,20] Lastly, Marvel and Bessie claim that the county 

court erred in failing to award attorney fees and costs to them. 

Attorney fees and expenses may be recovered only where 

provided for by statute or when a recognized and accepted 

uniform course of procedure has been to allow recovery of 

an attorney fee. See In re Trust Created by Martin, 266 Neb. 

353, 664 N.W.2d 923 (2003). And in a judicial proceeding 

involving the administration of a trust, the court, as justice 

and equity may require, may award costs and expenses, 

including reasonable attorney fees, to any party, to be paid 

by another party or from the trust that is the subject of 

the controversy. Neb. Rev. Stat. § 30-3893 (Reissue 2016). 

When an attorney fee is authorized, the amount of the fee 

is addressed to the discretion of the trial court, whose ruling will not be disturbed on appeal in the absence of an 

abuse of discretion. In re Conservatorship of Abbott, 295 

Neb. 510, 890 N.W.2d 469 (2017); Barnett v. Peters, 254 

Neb. 74, 574 N.W.2d 487 (1998); Rapp v. Rapp, 252 Neb. 

341, 562 N.W.2d 359 (1997). A judicial abuse of discretion requires that the reasons or rulings of the trial court be 

clearly untenable insofar as they unfairly deprive a litigant of 

a substantial right and a just result. In re Conservatorship of 

Abbott, supra.

The county court denied Marvel and Bessie attorney fees 

and stated in part:

As for Lyle’s attorney fees and costs, generally a 

trustee would be allowed to be reimbursed from the 

trust those fees incurred in successfully defending against 

claims for breach of duty. Although in this court’s opinion Lyle was largely successful in defending against 

the claims against him, there is no hiding that the trust 

lost $854,803.00 due to his neglect involving the estate 

tax issue. Further, although this court does not believe 

Lyle had mal intentions, it is true that Lyle’s actions 

opened the door to being accused of breaches of fiduciary 

duties. His neglect with the [IRS], not providing annual 
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accountings, and lending money himself and through 

the bank, could reasonably create a suspicion of selfdealing. Lyle incurred significant attorney fees and costs 

in defending his actions, most of which this court has 

found to be acceptable. But, it’s only because Lyle created the circumstances where it maybe was not unreasonable for others to doubt his conduct as being in their best 

interests. It is for these reasons this court feels that justice 

and equity require Lyle to be responsible for his own 

attorney fees and costs.

. . . .

. . . Again, to this court, the majority of those accusations were without merit. It is for these reasons this 

court feels that justice and equity require [Marvel and 

Bessie] to be responsible for their own attorney fees 

and costs.

We understand the county court’s reluctance to award 

attorney fees, since the majority of the claims against Lyle 

were determined to be unfounded. But without an award of 

attorney fees, there is no penalty for not reporting to the 

beneficiaries for many years until the litigation occurred. As 

Marvel points out, in In re Rolf H. Brennemann Testamentary 

Trust, 288 Neb. 389, 849 N.W.2d 458 (2014), we found 

attorney fees were warranted where, similarly to this case, 

the trustees clearly breached their duty to inform and report 

for decades and the beneficiary had little choice but to file 

litigation to resolve any doubts about the trust’s administration. And if we do not impose a penalty such as attorney fees 

in the instant case, then future trustees may believe that the 

statutory requirement to report has no significance. In addition, we have now found that Lyle breached his duties by the 

additional amount of $840,000. As a result, we find that the 

county court abused its discretion by not awarding attorney 

fees to Marvel and Bessie.

[21] We have previously found that to determine the value 

of legal services rendered by an attorney, it is proper to 
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consider the amount involved, the nature of the litigation, the 

time and labor required, the novelty and difficulty of the questions raised, the skill required to properly conduct the case, the 

responsibility assumed, the care and diligence exhibited, the 

result of the suit, the character and standing of the attorney, and 

the customary charges of the bar for similar services. See In 

re Guardianship & Conservatorship of Donley, 262 Neb. 282, 

631 N.W.2d 839 (2001). And we have approved a contingent 

fee in trust litigation. See In re Estate of Stull, 261 Neb. 319, 

622 N.W.2d 886 (2001).

The record reflects that this litigation was extensive, spanning several years. Trial lasted 4 days, and numerous exhibits 

and depositions were offered. We have concluded that Marvel 

and Bessie were successful in showing that Lyle breached his 

fiduciary duties and caused damages by failing to report and 

account for his failure to pay rents. Further, Lyle failed to act 

on several issues until litigation commenced; and the attorneys 

showed a high level of skill.

As set forth in the affidavit received at the hearing on 

attorney fees, Marvel’s counsel seeks a contingent fee of 10 

percent of the recoveries or distributions to Marvel, along 

with costs of $6,439.52. The actual recovery found by the 

county court was $854,803. We have now added damages of 

$840,000, but those are in regard to Bessie. Therefore, in light 

of the factors enumerated above, Marvel shall be awarded a 

total of $85,480 (10 percent of $854,803) in attorney fees and 

costs of $6,439.

Bessie requests an award for attorney fees of $81,910.13, 

costs of $4,510.66, and other expenses of $12,960.43, for a 

total of $99,381.22. Considering again the factors above, and 

the fact that Marvel brought this action, we award Bessie attorney fees of $40,955 and costs in the amount of $17,470.

This judgment against Lyle for attorney fees and costs 

in the total amount of $150,344 shall be a reduction in the 

distribution his trust receives, and $150,344 from the property in Lyle’s trust or to be distributed shall be directly 
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transferred to the attorneys for Marvel and Bessie, according 

to this opinion.

2. Lyle’s Cross-Appe

On cross-appeal, Lyle assigns that the county court erred 

in failing to find that any claims by Marvel and Bessie were 

barred by the doctrine of laches.

[22-24] Laches occurs only if a litigant has been guilty of 

inexcusable neglect in enforcing a right and his or her adversary has suffered prejudice. Cleaver-Brooks, Inc. v. Twin City 

Fire Ins. Co., 291 Neb. 278, 865 N.W.2d 105 (2015). Laches 

does not result from the mere passage of time, but because 

during the lapse of time, circumstances changed such that to 

enforce the claim would work inequitably to the disadvantage 

or prejudice of another. Id. What constitutes laches depends 

on the circumstances of the case. Id.

Lyle contends that it would be inequitable for Marvel and 

Bessie to bring actions against Lyle for breach of fiduciary 

duty after Lyle contributed part of his dividends from the 

bank stock toward payment of federal estate tax obligations. 

However, for laches to apply, the bank dividends would need 

to have been Lyle’s property in the first place. This lawsuit was 

initiated, in part, to resolve whether the bank dividends were 

Lyle’s. Therefore, the doctrine of laches does not apply. This 

assigned error is without merit.

Lyle also assigns that the county court erred in failing to 

find that any claims by Marvel and Bessie were barred by 

estoppel, waiver, release, consent, ratification, and acquiescence. Specifically, Lyle points out that Wayne and Bessie 

either participated in or knew about the cattle operation. We 

have already dealt with this allegation in addressing claims 

that Lyle failed to account for rents in the cattle operation. As 

a result, we will not address this issue again.

Lastly, Lyle claims that he should have been awarded attorney fees. We have already determined that Lyle breached his 

fiduciary duties; and, accordingly, he is not entitled to attorney fees.
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VI. CONCLUSION

Although we agree with most of the county court’s findings, we conclude that the county court was clearly wrong in 

not awarding damages caused by Lyle’s breaches of fiduciary 

duty in failing to provide timely reports and accountings 

that showed his failure to collect rents on behalf of the trust. 

Further, we conclude that the county court abused its discretion in declining to award attorney fees to Marvel and Bessie. 

Thus, we affirm in part, and in part reverse and remand with 

directions to apportion damages, attorney fees, and costs in 

accordance with this opinion.

 Affirmd in part and in part 

and remanded with dire

Heavican, C.J., and Wright and Cassel, JJ., not partici