Court Opinion

ID: 4542804
Source: CourtListenerOpinion
Date Created: 2020-06-19 15:05:17.052945+00
Date Added: 2024-06-11T12:48:02.614287
License: Public Domain

NOT DESIGNATED FOR PUBLICATION

                                             No. 120,865

             IN THE COURT OF APPEALS OF THE STATE OF KANSAS

                                      KAREN SCHMITENDORF,
                                     Appellee/Cross-Appellant,

                                                   v.

                              DEBORAH TAYLOR, as Trustee of
                     the V. LOUISE PARK REVOCABLE LIVING TRUST; and
                              DEBORAH TAYLOR, Individually,
                                Appellants/Cross-Appellees.

                                   MEMORANDUM OPINION

       Appeal from Douglas District Court; JAMES R. MCCABRIA, judge. Opinion filed June 19, 2020.
Affirmed.

       Geri L. Hartley, of Paola, for appellants/cross-appellees.

       Jeffrey R. King, of Sage Law LLP, of Overland Park, for appellee/cross-appellant.

Before BRUNS, P.J., GREEN, J., and TIMOTHY J. CHAMBERS, District Judge, assigned.

       PER CURIAM: This is a companion appeal to Schmitendorf v. Taylor (No. 120,123,
this day decided). The facts applicable to this appeal are set forth in that opinion. Because
this appeal and cross-appeal involve only the question of attorney fees, we will limit our
discussion of the facts to those relevant to our analysis of that question. For the reasons
set forth in this opinion, we conclude that the district court appropriately exercised its
discretion in ruling on the conflicting motions for attorney fees filed by the parties. Thus,
we affirm.

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                                       PROCEDURAL HISTORY

       On November 8, 2016, Schmitendorf filed a petition against Taylor both in her
capacity as trustee of the V. Louise Park Revocable Living Trust and individually. More
than a year later, the district court granted summary judgment against Schmitendorf and
in favor of Taylor. In doing so, the district court found that the plain and unambiguous
language of a prior Family Settlement Agreement entered into by the parties precluded
the claims asserted by Schmitendorf against Taylor in this case.

       Both Schmitendorf and Taylor filed motions asking the district court for an award
of attorney fees and expenses. Prior to the district court's granting of summary judgment,
Schmitendorf requested that Taylor be prevented from paying her attorney fees and
expenses out of the trust assets. Schmitendorf also asked that the district court require
Taylor to reimburse the trust for any funds already paid. In the alternative, Schmitendorf
sought to have the district court authorize the payment of her attorney fees and expenses
from trust assets. Later, after the district court granted summary judgment in her favor,
Taylor sought to have Schmitendorf pay her attorney fees and expenses.

       The district court denied both motions. However, the district court authorized the
payment of Taylor's attorney fees and expenses out of trust assets. In its memorandum
decision, the district court concluded:

               "This Court declines to find the petition [filed by Schmitendorf against Taylor]
       was frivolous or brought in bad faith. Regardless of how it is cast, the action was clearly
       an attempt to nullify the [Family Settlement Agreement] which Plaintiff had executed. It
       forced Ms. Taylor to defend the Trust. And thus, justice and equity under K.S.A. 58-
       1004a does weigh in favor of having the Trust pay the attorney fees of Ms. Taylor and all
       other expenses associated with the prosecution of this action. The Court declines to
       require Ms. Schmitendorf to reimburse the Trust for those fees."

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       Thereafter, Taylor filed a timely notice of appeal from the district court's order,
and Schmitendorf filed a timely notice of cross-appeal.

                                           ANALYSIS

Failure to Assess Attorney Fees Against Schmitendorf

       Taylor contends that the district court erred in ordering that her attorney fees and
expenses be paid out of trust assets rather than by Schmitendorf. "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." K.S.A. 58a-1004;
see also In re Estate of Somers, 277 Kan. 761, 773, 89 P.3d 898 (2004) (award of
attorney fees involving the administration of a trust). Similarly, K.S.A. 58a-709
empowers the district court to restrict or grant reimbursement to the trustee for reasonable
trust-related expenses from the trust property.

       Where the district court has authority to award attorney fees and expenses, we
view its decision under the abuse of discretion standard. Wiles v. American Family Life
Assurance Co., 302 Kan. 66, 81, 350 P.3d 1071 (2015). A district court abuses its
discretion only if "no reasonable person would adopt the position taken by the district
court." Cresto v. Cresto, 302 Kan. 820, 848, 358 P.3d 831 (2015). A judicial action
constitutes an abuse of discretion if (1) it is arbitrary, fanciful, or unreasonable; (2) it is
based on an error of law; or (3) it is based on an error of fact. Consolver v. Hotze, 306
Kan. 561, 568-69, 395 P.3d 405 (2017).

       In Kansas, judges "are experts as to the reasonableness of attorneys' fees and may,
in the interest of justice, fix counsel fees when in disagreement with views of the trial
judge." In re Somers, 277 Kan. at 773. In a case involving a trust, an award of attorney

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fees and expenses is deemed to be reasonable if the litigation proved beneficial to the
trust estate. Moore v. Adkins, 2 Kan. App. 2d 139, 151, 576 P.2d 245 (1978). As a general
rule, legal proceedings benefit a trust estate if questions are resolved so the estate can be
properly administered. In re Trusteeship of the Will of Daniels, 247 Kan. 349, 357, 799
P.2d 479 (1990).

       Here, on November 20, 2018, the district court conducted a hearing on the issue of
attorney fees. The district court took the matter under advisement and requested that the
parties submit additional documentation in support of their claims for attorney fees. After
receiving the additional documentation, the district court found that the lawsuit was not
frivolous and ordered that Taylor's attorney fees and expenses be paid out of trust assets
rather than by Schmitendorf. Additionally, the district court ordered that Schmitendorf
would be responsible for paying her own attorney fees and expenses.

       On January 18, 2019, the district court entered a memorandum decision setting
forth its findings and conclusions relating to the attorney fee issue. Although the district
court expressed doubt that Schmitendorf truly believed she had reserved her claims, it
noted that an affidavit signed by her former attorney stated that he did not view the
Family Settlement Agreement as waiving her right to subsequently challenge the validity
of the 2013 Trust Amendment. Based on the attorney's affidavit, the district court found
that it was "at least willing to accept the notion that Plaintiff had reason to think that there
was potential legal merit to her claim." Thus, the district court determined that
Schmitendorf's petition was not frivolous and that "justice and equity under K.S.A. 58-
1004a does weigh in favor of having the Trust pay the attorney fees of Ms. Taylor and all
other expenses associated with . . . this action."

       Reasonable minds could disagree regarding whether Schmitendorf should be
required to pay Taylor's attorney fees and expenses or if they should be paid out of the
trust assets. Certainly, it is a close call. However, it was one for the district court to make
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in the exercise of its sound discretion. Under these circumstances, Taylor has not shown
that the district court abused its decision in declining to order Schmitendorf to pay her
attorney fees and expenses.

Payment of Taylor's Attorney Fees from the Trust

       In her cross-appeal, Schmitendorf asserts the district court erred in allowing
Taylor's attorney fees and expenses to be paid out of the trust assets. As we noted in the
previous section, K.S.A. 58a-1004 expressly authorizes the district court to order that
attorney fees and expenses in judicial proceedings involving the administration of a trust
be paid "from the trust that is the subject of the controversy." Once again, our standard of
review is whether the district court abused its discretion. Wiles, 302 Kan. at 81. Also, as
discussed above, legal proceedings generally benefit a trust estate if questions are
resolved so the estate can be properly administered. In re Daniels, 247 Kan. at 349.

       Our review of the record on appeal confirms that in defending against
Schmitendorf's lawsuit, Taylor and her attorney benefitted the trust estate so that it could
be properly administered. In particular, Taylor defended Schmitendorf's attack on Park's
2013 amendment to the trust as well as the validity of the Family Settlement Agreement
previously entered to resolve the disputes over the "trust assets and distributions" as well
as over "future estate matters" that could have led to even more litigation, attorney fees,
and expenses. Under these circumstances, we do not find that the district court abused its
discretion in allowing for the payment of Taylor's attorney fees and expenses relating to
the defense of this lawsuit to be paid out of trust assets. In fact, we find the district court's
thoughtful decision to be a reasonable—if not noble—attempt to bring this unfortunate
family dispute to an end.

       Affirmed.

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