This opinion is nonprecedential except as provided by

Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA

IN COURT OF APPEALS

A23-0604

In the Matter of the Leonard E. Erlandson and 

Marion L. Erlandson Irrevocable Trust.

Filed January 22, 2024

Affirmed

Florey, Judge*

Clay County District Court

File No. 14-CV-21-1395

Michael T. Andrews, Matthew D. Kirschenmann, ABST Law, Fargo, North Dakota (for 

appellant Kim Aasand)

Robert G. Manly, Bennett A. Lystad, Vogel Law Firm, Fargo, North Dakota (for 

respondent-trustee Richard Erlandson)

Considered and decided by Connolly, Presiding Judge; Reyes, Judge; and Florey, 

Judge. 

NONPRECEDENTIAL OPINION

FLOREY, Judge

On appeal in this trust dispute, appellant argues that the district court erred in 

interpreting the trust; abused its discretion by declining to surcharge respondent-trustee for 

his alleged mismanagement of the trust; and abused its discretion by denying appellant’s 

request for reimbursement of his attorney fees. We affirm. 

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to

Minn. Const. art. VI, § 10.
2

FACTS

Trustors Leonard and Marion Erlandson (the trustors) had seven children, including: 

respondent Richard Erlandson, David Erlandson, JoAnn Aasand, and Kenneth Erlandson.1 

In December 1998, or January 1999, the trustors approached JoAnn and her husband 

appellant Kim Aasand (the Aasands) about the trustors’ financial difficulties and possible 

avenues for alleviating these difficulties. The Aasands subsequently contacted an attorney, 

who recommended creating a trust for the benefit of trustors. 

On June 30, 1999, the Leonard E. Erlandson and Marion L. Erlandson Irrevocable 

Trust (the trust) was created for the benefit of the trustors. Its purpose was to “provide 

assistance to the beneficiaries thereof in addition to that to which they may be entitled to 

via public assistance including by way of illustration and not limitation, Medicaid.” The 

trust estate consisted of the trustors’ Otter Tail County real property (the property), and 

section three of the trust provides: “Trustor, and any other person, shall have the right at 

any time to add property acceptable to Trustee to this trust. Such property, when received 

and accepted by Trustee, shall become part of the trust estate.” 

Section five of the trust provides:

Trustee shall hold, manage, invest, and receive the trust 

estate in the manner provided, shall collect the income, and 

shall dispose of the net income and principal as follows:

(a) Trustor shall be allowed to reside at the [property] for the 

remainder of their natural lives.

(b) If the . . . property . . . is sold, prior to the deaths of the 

Trustor and Trustee does not purchase replacement 

1 Except for respondent, the trustors and their children will be referred to individually by 

first name for clarity. 
3

property, the proceeds from the sale, less repayment of any 

contributions made to this Trust from any part[ies] other 

than Trustor, shall remain in trust and the Trustor shall 

receive the annual income generated by the trust corpus for 

their joint or separate lives.

(c) During the life of the Trustor, Trustee shall pay to Trustor, 

in monthly or other convenient installments an amount, 

which in the Trustee’s discretion is, satisfactory for the 

health, education, maintenance and support of the Trustor 

taking into consideration other sources of income available 

to Trustor.

(d) Upon the death of the surviving Trustor, Trustee shall 

dispose of the principal and income constituting the trust 

estate on said date in the following manner:

i. any contributions made to the Trust by any party 

other than Trustor shall be repaid with interest 

accrued at a rate of eight percent (8%) from the 

time of the original contribution. In the event the 

contributions made by parties other than Trustor 

exceed the funds then remaining in the Trust, 

each Contributor shall receive a pro rata share of 

the funds then remaining;

ii. upon repayment of any and all contributions, any 

and all funds remaining at that time shall be 

disbursed free of trust to Trustor’s children in 

substantially equal shares . . . . Should any of the 

aforementioned children predecease Trustor, 

then their share shall lapse.

The trust was drafted by the attorney, who testified that the trust was created to 

ensure that the trustors had housing for life by allowing individuals to put money into the 

trust to ensure that the trustors’ home was maintained, taxes were paid, and the trustors had 

extra cash when needed. And, after the trust was created, a Dean Witter account was 

opened in the name of the trust. 

JoAnn was appointed trustee, and she served as trustee until she died in December 

2014. Underthe trust terms, respondent became the successor trustee upon JoAnn’s death. 
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Leonard passed away in November 2018, leaving Marion as the sole trustor. 

Respondent subsequently contacted a realtor to assist in selling the property because 

Marion’s health was diminishing, and she could no longer reside at the property. In 

anticipation of the sale, respondent opened a separate trust account with Gate City Bank.2 

To open the account, respondent provided a $2,000 loan to the trust with terms of 0% 

interest and “repayment when property was sold.” 

The property was sold for $155,500 in October 2020, and $144,588.70 was then 

deposited into the Gate City Bank trust account, which represented the amount of the

purchase price less realtor fees and closing costs. Respondent was later repaid, from the 

trust, the $2,000 loan he made to the trust. 

After the property was sold, respondent did not purchase a replacement property for 

Marion. Appellant then began emailing respondent requesting to be paid, from the trust, 

the contributions that he and JoAnn allegedly made to the trust. Respondent informed 

appellant that, upon consulting with legal counsel, he needed more time to make a final 

determination as to the final distribution of the proceeds from the sale of the property. 

Respondent later issued payments in March 2021, related to work that was performed on 

the property to prepare it for sale. Although appellant continued to request information 

from respondent concerning the sale of the property, respondent ignored his requests. 

In April 2021, appellant filed a petition alleging that, “[f]rom 1999 through 2021, 

[appellant] and his late wife, JoAnn . . . made contributions for the benefit of [the trustors] 

2 Counsel for respondent stated at oral argument that a separate trust account needed to be 

opened because the trust’s Dean Witter account had closed. 
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in the principal amount of $100,251.95.” The petition sought an order compelling 

respondent, as trustee, “to repay from the net proceeds from the sale of the . . . [p]roperty 

contributions made for the benefit of [the trustors] that are due and owing to [appellant] in 

the principal amount of $100,251.95, plus interest.” Appellant also sought a “complete 

accounting” of the proceeds from the sale of the property, and his costs and attorney fees. 

In May 2021, respondent paid approximately $20,000 in taxes related to the sale of 

the property, leaving approximately $116,000 in the trust account. In response, appellant 

filed an ex parte motion for a temporary restraining order (TRO) (1) compelling respondent 

to immediately inform the district court and interested parties of the amount of money 

remaining in the trust; (2) requiring respondent to refrain from further expenditures from 

the trust; (3) compelling respondent to turn over all “work papers” used by trust 

accountants to compile the 2020 tax returns; and (4) compelling respondent to provide an

accounting. A referee denied the ex parte request and set the matter for a hearing. 

Following a hearing, appellant’s motion for a TRO and temporary injunction was 

denied. In denying the motion, the referee ordered that respondent “may continue to pay 

the currently due and any future fees and costs from” the attorney and law firm retained by 

the trust “as professional fees and costs associated with the administration of the Trust, 

including defense of this litigation.” Appellant subsequently requested that the order be 

stayed pending judicial review and requested removal of the referee from presiding over 

future proceedings. The district court later affirmed the referee’s order “in its entirety,” 

and denied the request to remove the referee.
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In the meantime, counsel for respondent sent a letter to all interested parties 

requesting information related to contributions to the trust. Respondent, Kenneth, and 

David all submitted claims related to various contributions they allegedly made to the trust. 

Respondent then served a notice of proposed distribution and final account on all interested 

parties identifying those who had made claims against the trust and outlining their alleged 

contribution amounts as follows: (1) appellant, $100,251.05; (2) Kenneth, $18,641.30; 

(3) respondent, $8,198.10; and (4) David, $4,520. But, because money from the trust had 

been expended to pay attorney fees on behalf of the trust, the trust balance was not 

sufficient to cover all the alleged trust contributions. Consistent with the terms of the trust, 

respondent proposed that each claimant receive a proportionate share of the remaining trust 

funds. 

On July 30, 2021, appellant filed an omnibus brief objecting to respondent’s 

proposed distribution of the trust proceeds and requesting his preferred distribution. And 

after Marion passed away in October 2021, appellant filed a motion for partial summary 

judgment seeking a determination that (1) he is a qualified beneficiary of the trust; (2) the 

amount of his contributions equals $100,251.95; and (3) respondent’s, David’s, and 

Kenneth’s claims of trust contributions are not payable from the trust. The district court 

denied the motion. 

An evidentiary hearing was held in October 2022, related to appellant’s objection 

to the proposed distribution of trust proceeds. Following the hearing, the district court 

determined that appellant is not a qualified beneficiary of the trust and, therefore, 

respondent owed him no duty of loyalty. The district court also found that “‘proceeds’ 
7

from the sale of the . . . [p]roperty would include the sale price minus any expenses related

to the preparation and ultimate sale of the property, which included realtor fees, cleaning 

fees, and tax liabilities,” as well as the $2,000 loan from respondent to the trust as it was 

used to open the Gate City Bank trust account to prepare the property for sale. The district 

court then found that, based upon the evidence in the record, the “total trust contributions 

consist of $86,626.35 from [appellant] and $17,191 from Kenneth.” But the district court 

found that, because “sufficient funds will not be available to reimburse the full amount of 

the Trust contributions, [appellant] and Kenneth . . . shall be reimbursed based on their 

respective pro rata share of the remaining Trust corpus.” Finally, the district court 

determined that appellant is not entitled to reimbursement of attorney fees, and that “[a]ny 

and all attorney[] fees associated with this litigation, on behalf of [respondent] as acting 

Trustee, were properly paid from the Trust corpus.” This appeal follows. 

DECISION

I.

Appellant challenges the district court’s interpretation of the trust in calculating the 

trust contributions. We review the district court’s findings of fact concerning a trust for 

clear error. In re Est. of King, 668 N.W.2d 6, 9 (Minn. App. 2003). In conducting this 

review, the record is viewed in the light most favorable to the judgment of the district court.

Id. We will not reverse for clear error unless we have a definite and firm conviction that a 

mistake has been made. Id. But where a trust agreement is unambiguous, we review the 

district court’s interpretation of that agreement de novo. In re Est. & Tr. Anderson, 654 

N.W.2d 682, 687 (Minn. App. 2002), rev. denied (Minn. Feb. 26, 2003).
8

A court’s “purpose in construing a trust agreement is to ascertain and give effect to 

the grantor’s intent.” In re Stisser Grantor Tr., 818 N.W.2d 495, 502 (Minn. 2012). 

“Where the language of the trust instrument is not ambiguous, the intent of the settlor must 

be ascertained from the four corners of the agreement, without resort to extrinsic evidence 

of intent.” In re Tr. Created Under Agreement with McLaughlin, 361 N.W.2d 43, 44-45 

(Minn. 1985). “Therefore, the first step in the analysis of a trust instrument is to determine 

the intent of the settlor from the plain language of the instrument.” Id. at 45.

Appellant argues that the district court erred in interpreting the trust (A) when it 

calculated the trust contributions; (B) by concluding that the term “proceeds,” as used in 

the trust, meant the sale price of the property minus any expenses related to the preparation 

and sale of the property, including capital gains taxes; and (C) by determining that 

respondent owed no duty of loyalty to appellant. These arguments are addressed in turn.

A. Calculation of trust contributions

The district court found that “[u]nder the plain and unambiguous language of the 

Trust, to be considered a trust contributor and entitled to trust contributions, one must have 

contributed to the Trust.” The district court then found that “trust contributions only 

include those payments made (1) while the Trust was in existence, (2) were made to the 

Trust and (3) were received and accepted as trust contributions by the acting trustee when 

the payments were made.” Based on this reasoning, the district court determined that 

payments made by appellant before the trust was created, totaling $2,800, were not trust 

contributions because they were not made when the trust was in existence. Similarly, the 

district court determined that trust contributions did not include “any monies paid to 
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[trustors] in their individual capacity, and not directly to the Trust,” including $10,825.60 

from appellant and his wife that was paid to trustors in their individual capacity and did 

not go into the Dean Witter Trust Account. And the district court found that the additional 

claims submitted by respondent for $8,198.10, David for $4,520, and Kenneth for $1,450 

“were also not paid directly to the Trust and were not received and accepted by the acting 

trustee as trust contributions when the payments were made. They were simply gifts” to 

trustors. As such, the district court determined that the “total trust contributions consist of 

$86,626.35 from [appellant] and $17,191.30 from Kenneth.” 

Appellant agrees that the “district court correctly denied reimbursement of 

[respondent], David, and the excess of Kenneth’s contributions because they were not 

presented to and accepted by JoAnn during her administration.” But appellant contends 

that the district court erroneously interpreted the trust by adding the requirements that 

payments could only be considered Trust contributions if (1) they were made after the trust 

was created, and (2) they “flowed through” the Trust’s Dean Witter account. He argues 

that certain monies paid by him and his wife to trustors that the district court found failed 

to satisfy these requirements should be considered trust contributions because JoAnn 

accepted them into the trust and the record reflects that the monies were never intended as 

gifts. 

We are not persuaded. “[A]s a general rule, an express trust in land must be in 

writing in order to be enforceable.” Dietz v. Dietz, 70 N.W.2d 281, 284 (Minn. 1955). 

Thus, as respondent points out, because the initial trust estate was the property, “[t]here 

could not be a valid Trust that contained the . . . property . . . until the formal trust document 
10

conveying the property was signed and effective, which was on June 30, 1999.” And 

because the trust was not in existence prior to June 30, 1999, there could be no acceptance 

of trust contributions before that date. Therefore, any monies conveyed to trustors before 

the trust was executed cannot be considered trust contributions. 

Moreover, the trust provides that “any contributions made to the Trust” shall be 

disposed of first by the trustee. (Emphasis added.) Thus, as the district court determined, 

the plain and unambiguous language of the trust states that an individual must have 

contributed to the trust in order to be entitled to trust contributions. Consequently, any 

payments that appellant and his wife made to trustors that were not paid directly into the 

trust cannot be considered trust contributions. Although appellant references his own trial 

testimony to support his position that all payments made by appellant and his wife to 

trustors, including payments that did not go into the Dean Witter Trust Account, were 

“conditioned on repayment from the proceeds” of the property, there is no need to consider 

this testimony because the trust is unambiguous. See In re Tr. of Lawrence B. Schwagerl, 

965 N.W.2d 772, 780 (Minn. 2021) (“If we find a term or language to be unambiguous, we 

are not permitted to look at extrinsic evidence to create ambiguity within a document.”). 

Accordingly, the district court did not err in calculating the trust contributions. 

B. Interpretation of the term “proceeds” 

Appellant also challenges the district court’s interpretation of section 5(b) of the 

trust as it relates to “proceeds” from the sale of the property. As the parties acknowledge, 

the term “proceeds” is not defined within the trust. Generally, undefined words and phrases 

in trust agreements are construed according to their common and approved usage. Stisser, 
11

818 N.W.2d at 502. The term “proceeds,” as defined in Black’s Law Dictionary, is “[t]he 

value of land, goods, or investments when converted into money; the amount of money 

received from a sale.” 1458 (11th ed. 2019). Similarly, “net proceeds” are defined as 

“[t]he amount received in a transaction minus the costs of the transaction (such as expenses 

and commissions).” Id.

Here, the district court referenced the definition of “proceeds” contained in Black’s 

Law Dictionary and determined that

“proceeds” from the sale of the . . . [p]roperty would include 

the sale price minus any expenses related to the preparation and 

ultimate sale of the property, which included realtor fees, 

cleaning fees, and tax liabilities. This also includes the $2,000 

loan from [respondent] to the Trust as it was used to open the 

Gate City Bank Trust Account in preparation for the sale of the 

. . . [p]roperty and ultimate termination of the Trust. The Court 

concludes that these expenses were necessary for the Trust to 

realize a true profit from the transaction. 

Appellant disagrees with this determination and argues that the term “proceeds,” as 

used in the trust, means the check issued by the closing company, which had already 

deducted the transaction costs associated with the sale. To support his position, appellant 

relies on the attorney’s testimony that the term “proceeds,” as used in the section 5(b) of 

the trust, means “[a]ny cash or other property received . . . in payment for . . . the sale of 

the [property],” such as the “check that’s cut by the closing company.” But the attorney

testified that his interpretation of the term “proceeds” is based on his “understanding . . . 

of what proceeds means,” and his belief that the “definition of proceeds is relatively 

straightforward.” The district court implicitly found the attorney’s testimony on this issue 

to not be credible, and we defer to that determination. See Pechovnik v. Pechovnik, 765 
12

N.W.2d 94, 99 (Minn. App. 2009) (deferring to the district court’s implicit credibility 

determination); see also Kush v. Mathison, 683 N.W.2d 841, 843-44 (Minn. App. 2004) 

(stating that due regard is given to the district court’s opportunity to judge the credibility 

of witnesses), rev. denied (Minn. Sept. 29, 2004). 

Moreover, the attorney acknowledged that he would look to Black’s Law Dictionary

to resolve any questions related to the definition of “proceeds,” which is the same source 

used by the district court here in defining “proceeds.” After looking to the dictionary 

definition of the term “proceeds,” the district court determined that the proceeds from the 

sale of the property is the sale price “minus closing costs, realtor fees, fees for cleaning, 

taxes, and [a] loan to open [a] trust account for [the] deposit of proceeds.” This 

determination comports with the common and approved usage of “proceeds” as defined in 

the dictionary. And the determination is logical because, until all expenses related to the 

sale of the property are realized, such as cleaning costs and taxes, there can be no 

determination of the realization of actual profits from the sale of the property. Finally, 

appellant cites no legal authority to support his position that the district court erroneously 

interpreted the term “proceeds” as contained in section 5(b) of the trust. As such, appellant 

cannot meet his burden to show that the district court erred in interpreting the term 

“proceeds.” See Waters v. Fiebelkorn, 13 N.W.2d 461, 464-65 (Minn. 1944) (“[O]n appeal 

error is never presumed. It must be made to appear affirmatively before there can be 

reversal. . . . [T]he burden of showing error rests upon the one who relies upon it.”). 

Appellant also appears to argue that respondent’s “withholding of Trust 

contributions indefinitely because the Trust does not specify an amount of time in ‘hours’ 
13

or ‘days’ following a sale when repayment must occur was without merit.” Appellant 

contends that he was prejudiced by respondent’s withholding of trust proceeds because the 

trust no longer has a sufficient balance to repay his trust contributions. Thus, appellant 

argues that this court “should determine that Trust contributors were entitled to repayment 

from the ‘net proceeds’ of the property within a reasonable time after the sale, but in no 

event later than November 29, 2020.” 

Again, appellant is unable to show that he is entitled to the relief he seeks. As 

appellant acknowledges, “a review of the Trust does not indicate that contributions must 

be repaid within a specified period following the sale of the [p]roperty.” Thus, respondent 

was under no obligation to pay appellant within a certain period of time. Instead, 

respondent, as trustee, owed a duty of loyalty to the trust beneficiaries. See Minn. Stat. 

§ 501C.0802(a) (2022). He also had a duty to administer the trust impartially, “giving due 

regard to the beneficiaries’ respective interests.” Minn. Stat. § 501C.0803 (2022). In light 

of these duties, respondent had a duty to fully investigate appellant’s claims. And, as 

respondent points out, “[a]ny delays in this matter were from [appellant’s] own doing—he 

forced [respondent] to defend the Trust by filing the Petition, TROs, objection to the Notice 

of Proposed Distribution, partial summary judgment motion, and finally trial on this 

matter.” Therefore, the district court did not err in interpreting the trust as it related to 

“proceeds” from the sale of the property. 

C. Duty of loyalty

Appellant challenges the district court’s decision that respondent did not owe him a 

duty of loyalty under the trust. Appellant argues that, “[r]egardless of whether [he] is [1] a 
14

qualified beneficiary, [2] the holder of an equitable mortgage, or [3] an ‘interested person’ 

with superior repayment rights, [respondent] breached the clear distribution directive for 

the proceeds of the [p]roperty under the Trust, and [appellant] suffered damage as a result.” 

1. Qualified beneficiary

The Minnesota Trust Code provides that “[a] trustee owns a duty of loyalty to the 

beneficiaries.” Minn. Stat. § 501C.0802(a). A “‘[b]eneficiary’ means a person that: (1) has

a present or future beneficial interest in a trust, vested or contingent; or (2) in a capacity 

other than that of trustee, holds a power of appointment over trust property.” Minn. Stat. 

§ 501C.0103(c) (2022). And a “qualified beneficiary” is defined as 

a beneficiary who, on the date the beneficiary’s qualification is 

determined:

(1) is a distributee or permissible distributee of trust 

income or principal; 

(2) would be a distributee or permissible distributee of 

trust income or principal if the interests of the distributees 

described in clause (1) terminated on that date without causing 

the trust to terminate; or

(3) would be a distributee or permissible distributee of 

trust income or principal if the trust terminated on that date.

Minn. Stat. § 501C.0103(m) (2022). 

Appellant argues that he is a “qualified beneficiary of the proceeds of the [p]roperty” 

because “[u]nder the plain meaning of the term,” the trust provides him with a “beneficial 

interest” in the proceeds of the property as a trust contributor. We disagree. The clear and 

unambiguous terms of the trust reflect that the trustors are the only trust beneficiaries. The 

terms of the trust also reflect that the trustors’ children were the only named individuals 

identified as those who became eligible to receive distributions from the trust upon the 
15

trustors’ death, rendering the trustors’ children first-in-line remaindermen and qualified 

beneficiaries. In fact, nowhere in the trust is appellant named or identified, and there is 

nothing indicating that the trust specifically provided appellant with any sort of beneficial 

interest. Instead, as the district court found, appellant’s rights, as a trust contributor, 

“reflect that of a creditor, with an equal claim to other trust contributors, and superior” to 

the claims of creditors outside of the trust. Therefore, although appellant is a creditor of 

the trust, he not a qualified beneficiary. 

2. Equitable-mortgage holder

Appellant also contends that, based upon his and the attorney’s testimony, “and the 

distribution directives of section five of the Trust, [the trustors’] intent was clearly to 

collateralize repayment of Trust contributions with the equity in the [p]roperty—akin to a 

reverse mortgage.” To support his position, appellant cites First Nat’l Bank of St. Paul v. 

Ramier, which states:

As a general rule, in equity, when the real nature of the 

transaction between the parties is that of a loan, advanced upon 

the security of realty granted to the party making the loan, it 

may be treated as an equitable mortgage, without regard to the 

actual form of the instrument of conveyance. It is within the 

province of the trial court to determine, by looking beyond that 

form, the actual character of the transaction.

311 N.W.2d 502, 503 (Minn. 1981). 

Appellant appears to argue that, because the trust should be treated as an equitable 

mortgage, respondent owed him a duty superior to those of other creditors. And appellant 

argues that, because “it is clear” that he and his wife and the trustors “intended for the 
16

[p]roperty to collateralize Trust contributions,” respondent’s use of proceeds to pay the 

trust’s general debts and himself “amounts to civil conversion.” 

Appellant’s argument fails for two reasons. First, we generally do not consider 

issues not decided by the district court. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) 

(stating that an appellate court must generally limit its review to issues presented to and 

considered by the district court). As appellant acknowledges, the “district court did not 

rule on whether [appellant] had an equitable mortgage in the [p]roperty.” And the record 

reflects that the district court did not consider appellant’s civil-conversion argument. As 

such, these arguments are not properly before us.

Second, there is no need to look to the trustors’ intent in creating the trust because 

the intent is clear from the document itself. See Schwagerl, 965 N.W.2d at 780 (“If we 

find a term or language to be unambiguous, we are not permitted to look at extrinsic 

evidence to create ambiguity within a document.”). The document is clear that the intent 

of the trust’s creation was to create a trust for the benefit of the trustors. If an equitable 

mortgage was intended to be created, such a transaction could have been created. But no 

such transaction was created. Although the trust’s language clearly provides that 

contributors have superior rights to other creditors, respondent did not owe appellant a duty 

of loyalty because appellant was not a beneficiary of the trust. Accordingly, appellant is 

unable to show that respondent owed him a special duty because the trust was actually an 

equitable mortgage. 
17

3. Interested person

Appellant further argues that respondent owed him a special duty because he is an 

interested person under Minn. Stat. § 501C.0201(b) (2022), who has the right to petition 

the district court under Minn. Stat. § 501C.0201(a) (2022), to invoke its jurisdiction. But 

as respondent points out, appellant’s “ability to petition the district court and invoke its 

jurisdiction is not an issue” because, as reflected by this appeal, appellant has already filed 

a petition in this case. And appellant’s ability to petition the district court as an “interested 

person” does not provide appellant with the same rights as a beneficiary of the trust. 

Therefore, appellant cannot establish that the district court erred by concluding that 

respondent did not owe appellant a duty of loyalty. 

II.

Appellant challenges the district court’s decision not to surcharge respondent for his 

management of the trust. Such a decision is generally reviewed for an abuse of discretion. 

See In re Will of Gershcow, 261 N.W.2d 335, 338 (Minn. 1977) (holding that the district 

court did not abuse its discretion in declining to impose a surcharge on the trustee); see 

also In re Tr. of Williams, 631 N.W.2d 398, 407 (Minn. App. 2001) (“Damage awards are 

reviewed under an abuse-of-discretion standard.”), rev. denied (Minn. Sept. 25, 2001). We 

apply a clear-error review to a district court’s findings of fact. Stisser, 818 N.W.2d at 507. 

Under the Minnesota Trust Code, a trustee has a duty to administer a trust “in good 

faith, in accordance with its terms and purposes and the interests of the beneficiaries.” 

Minn. Stat. § 501C.0801 (2022). The trustee must “exercise reasonable care, skill, and 

caution” in prudently administering the trust. Minn. Stat. § 501C.0804 (2022). “Taking 
18

the advice of legal counsel on such matters evidences prudence on the part of the trustee.” 

Restatement (Third) of Trusts § 77 cmt. b(2); see also In re Comstock’s Will, 17 N.W.2d 

656, 664 (Minn. 1945). 

Appellant claims that respondent “paid more than $70,000 to his legal counsel 

resisting [appellant’s] Petition—a petition that [respondent’s] unresponsiveness to 

[appellant’s] serial requests for repayment required.” He asserts that “[i]nstead of 

distributing the proceeds of the [p]roperty in accordance with the trust, [respondent] treated 

them as a kitty to repay general Trust obligations, himself and other creditors,” and 

“proposed to repay claimed contributions that he knew were not received and accepted as 

such by JoAnn, further requiring [appellant] to object to [respondent’s] proposed 

distribution.” Thus, appellant argues that this court “should reverse the district court’s 

determination that [respondent] should not be surcharged for his gross mismanagement and 

breach of the Trust.”

We disagree. The district court found that respondent “acted in good faith while 

Trustee,” and did not mismanage the trust. These findings are supported by the record. As 

addressed above, respondent did not owe appellant a duty of loyalty because appellant is 

not a beneficiary of the trust. And, because appellant was not a beneficiary of the trust, 

respondent would have breached his duties to the trust beneficiaries had he paid appellant 

without fully investigating his claims. Instead, the fact that respondent sought advice from 

legal counsel related to the trust administration demonstrates prudence on the part of 

respondent. See Comstock, 17 N.W.2d at 664. Moreover, the majority of the attorney fees 

incurred were due to appellant’s actions, including filing for a TRO and seeking summary 
19

judgment, both of which required a response by respondent and were ultimately denied by 

the district court. Therefore, appellant is unable to show that the district court abused its 

discretion in declining to surcharge respondent for his management of the trust. 

III.

Finally, appellant challenges the district court’s denial of his request for 

reimbursement of his attorney fees. This court will not reverse a district court’s denial of 

a request for attorney fees absent an abuse of discretion. In re Margolis Revocable Tr., 

765 N.W.2d 919, 928 (Minn. App. 2009). 

Minnesota Statutes section 501C.1004 governs an award of attorney fees from trust 

assets. Lund ex rel. Revocable Tr. of Lund v. Lund, 924 N.W.2d 274, 286 (Minn. App. 

2019), rev. denied (Minn. Mar. 27, 2019). It provides that “[i]n 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 from the trust 

that is the subject of the judicial proceeding.” Minn. Stat. § 501C.1004 (2022). 

Appellant contends that he is entitled to his attorney fees because his litigation 

(1) “successfully established that he and Kenneth were the only Trust contributors entitled 

to repayment from the proceeds” of the property; (2) “prevented the frivolous repayment 

claims” submitted by David, Kenneth, and respondent; and (3) demonstrated respondent’s 

“gross mismanagement and breach” of the trust. We disagree. As addressed above, the 

district court found that respondent acted in good faith and did not mismanage the trust, 

and those findings are supported by the record. Moreover, even if appellant’s petition 

challenging respondent’s administration of the trust were considered successful, or 
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partially successful, this court noted in 2009 that “there is no Minnesota case requiring a 

trustee whose management of a trust has been challenged to pay attorney fees incurred by 

the successful challenger.” Margolis, 765 N.W.2d at 928 (quotation omitted). And 

appellant cites no case since 2009 with such a holding. Further, as the district court found, 

“the majority of the fees incurred [in this case] have been due to appellant’s actions.” 

Accordingly, appellant is unable to show that the district court abused its discretion in 

denying his request for reimbursement of attorney fees. 

Affirmed.