Court Opinion

ID: 2789004
Source: CourtListenerOpinion
Date Created: 2015-03-25 15:03:47.907761+00
Date Added: 2024-06-11T09:31:54.556527
License: Public Domain

MEMORANDUM DECISION                                                       Mar 25 2015, 10:29 am

      Pursuant to Ind. Appellate Rule 65(D), this
      Memorandum Decision shall not be regarded as
      precedent or cited before any court except for the
      purpose of establishing the defense of res judicata,
      collateral estoppel, or the law of the case.

      ATTORNEY FOR APPELLANT                                   ATTORNEY FOR APPELLEES
      Joseph A. Sobek                                          Paul D. Refior
      Reed & Earhart Attorneys, P.C.                           Refior Law Office
      Warsaw, Indiana                                          Warsaw, Indiana

                                                   IN THE
          COURT OF APPEALS OF INDIANA

      In the Matter of the Trust of H.                         March 25, 2015
      Paul Lauster, Deceased, and                              Court of Appeals Case No.
      Mary E. Lauster, Deceased,                               43A03-1407-TR-237
                                                               Appeal from the
      Christopher D. Lauster,                                  Kosciusko Superior Court
      Appellant-Petitioner,                                    The Honorable James R. Heuer,
                                                               Special Judge
              v.
                                                               Cause No. 43D01-1208-TR-136

      John M. Lauster and David P.
      Lauster,
      Appellees-Co-Trustees.

      Kirsch, Judge.

[1]   This case involves a dispute between Christopher D. Lauster (“Christopher”)

      and John M. Lauster (“John”) and David P. Lauster (“David”) (together, “the

      Trustees”) regarding the administration of the joint revocable trust of their

      Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015       Page 1 of 11
      parents. Christopher appeals the trial court’s order, which denied the relief

      Christopher sought in his motion to enforce the mediation agreement.

      Christopher raises the following restated issues for our review:

              I. Whether the trial court erred in considering the accounting of the
              trust assets provided by the Trustees and not requiring supporting
              documentation to substantiate the accounting; and
              II. Whether the trial court abused its discretion in the amount of
              attorney fees ordered.
      The Trustees additionally raise an issue requesting appellate attorney fees,

      alleging that Christopher’s appeal is frivolous and brought in bad faith.

[2]   We affirm.

                                 Facts and Procedural History
[3]   In May 2010, H. Paul Lauster passed away, and in September 2010, his wife,

      Mary E. Lauster (together, “the Parents”) also passed away. At the time of the

      Parents’ death, a trust was in place for the equal shared benefit of the Parents’

      eight children, including Christopher, John, and David. John and David were

      named as co-trustees of the trust, and John, an accountant, prepared the

      accounting of the trust. John kept track of all of the trust accounting in a

      spreadsheet, and the detailed ledger was admitted at the hearing. Christopher

      received summaries of the trust accounting annually. The trust accounting

      reflected all amounts received and expended from the trust. Christopher also

      received directly from the bank a copy of the bank statement that reflected the

      trust’s monetary receipts and expenditures.

      Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015   Page 2 of 11
[4]   On August 27, 2012, Christopher filed a petition to docket the trust and to

      remove the Trustees and/or compel the Trustees to perform their duties. On

      November 5, 2012, the trial court ordered the case to mediation. The

      mediation occurred on April 22, 2013, and resulted in a written and signed

      mediation agreement on April 24, 2013. In pertinent part, the mediation

      agreement stated:

              1. An accounting shall be provided to all heirs.
              ....
              3. The Trust shall pay Scott Lennox [sic] fee on behalf of
              [Christopher] which fee is approximately $4,000.00 as of the start of
              the mediation.
      Pet’r’s Ex. 1.

[5]   On September 26, 2013, Christopher filed a motion to enforce the mediation

      agreement, contending that the Trustees, among other things: (1) failed to

      “provide an adequate and appropriate accounting,” which lacked

      “documentation supporting any of the accounting figures” despite his repeated

      requests; and (2) failed to pay the attorney fees incurred by Christopher and

      payable pursuant to the mediation agreement despite his submission of

      documentation of such fees. Appellant’s App. at 6. On the same date, the

      Trustees filed a counter-motion to enforce the mediation agreement, detailing

      how Christopher had not followed the mediation agreement and had declined

      to cooperate and requesting attorney fees incurred since the mediation. Id. at

      28-29. A hearing on the parties’ motions was held on January 31, 2014, and the

      Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015   Page 3 of 11
      trial court took the matter under advisement. On June 17, 2014, the trial court

      issued its order, which found in pertinent part:

              1. The Trust balance which is subject to distribution is $139,799.34.
              2. [Christopher’s] share is one-eighth or $17,474.92.
              ....
              4. The [Trustees] shall deliver the sum of $4,000.00 in attorney fees to
              Attorney Scott Lennox on or before July 11, 2014.
              5. [Christopher’s] claims for additional attorney fees, interest and
              appraisal expenses are denied.
              ....
              10. The [Trustees’] claim for attorney fees and expenses is denied.
      Id. at 45-46. Christopher now appeals.

                                     Discussion and Decision
[6]   When the trial court enters an order containing findings of fact and conclusions,

      we apply a two-step review. In re Wilson, 930 N.E.2d 646, 650 (Ind. Ct. App.

      2010), trans. denied. First, we consider whether the evidence supports the

      findings, and second, whether the findings support the judgment. Id. We will

      neither reweigh the evidence nor assess witness credibility, considering only the

      evidence most favorable to the judgment. Id. We will set aside the trial court’s

      findings and conclusions only if they are clearly erroneous, that is, if the record

      contains no facts or inferences supporting them. Id. We apply a de novo

      standard of review to conclusions of law. Id.

      Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015   Page 4 of 11
                                             I. Accounting
[7]   Christopher argues that the trial court erred in failing to order an accurate

      accounting for the trust. Specifically, he contends that, although he requested

      supporting documentation from the Trustees to substantiate the trust

      accounting, he never received any checks, receipts, or other supporting

      documents. Christopher asserts that, under Indiana law, he was entitled to

      “complete and accurate information concerning any matter related to the

      administration of the trust” and to be permitted to inspect the trust accounts.

      Appellant’s Br. at 6 (citing Ind. Code § 30-4-3-6(b)(6), (7)). He further claims that

      the parties agreed to such an accounting in mediation, but the trial court failed

      to order such a complete and accurate accounting and, instead, concluded that

      the arbitrary amount of $139,799.34 was accurate.

[8]   Generally, a trustee bears the burden of justifying the propriety of items in a

      trust account. In re Riddle, 946 N.E.2d 61, 68 (Ind. Ct. App. 2011). But when a

      trustee files specific accounts and makes a prima facie showing that the accounts

      are proper, the burden of persuasion shifts to the beneficiaries to show specific

      instances of impropriety. Id. With respect to a trustee’s obligation to render an

      accounting, Indiana Code section 30-4-5-12 states, in pertinent part:

              (a) Unless the terms of the trust provide otherwise or unless waived in
              writing by an adult, competent beneficiary, the trustee shall deliver a
              written statement of accounts to each income beneficiary or his
              personal representative annually. The statement shall contain at least:
              (1) all receipts and disbursements since the last statement; and
              (2) all items of trust property held by the trustee on the date of the
              statement at their inventory value.
      Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015   Page 5 of 11
       Ind. Code § 30-4-5-12(a).

[9]    Here, evidence was presented to the trial court that the Trustees provided

       Christopher and the other beneficiaries with an annual accounting of the trust,

       showing the total activity for the trust including the cash balances of the trust

       accounts, home sale proceeds, and the total expenses and distributions.

       Additionally, during much of the duration of the trust, Christopher was

       receiving directly from the bank a copy of the bank statement for the trust

       account that reflected the funds owned by the trust, the income of the trust, and

       the disbursements. At the hearing, the Trustees provided the trial court with an

       exhibit consisting of a detailed ledger with every date, payee, and dollar amount

       of the trust disbursements and expenses. Testimony was given that the

       expenses reflected in the exhibit all directly related to an expense for the trust.

       Tr. at 44.

[10]   The evidence presented by the Trustees made a prima facie showing that the

       accountings were proper, and the burden then shifted to Christopher to show

       specific instances of impropriety by the Trustees. Christopher does not identify

       any portions of the record showing that he raised any specific instances of

       impropriety to the trial court. He presented no evidence that any of the

       amounts of either account balances or disbursements were incorrect or of any

       wrongdoing on the part of the Trustees. We, therefore, conclude that the

       Trustees made a prima facie showing that the trust accounting was proper, and

       Christopher failed to show any specific instances of impropriety. The trial court

       Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015   Page 6 of 11
       did not err in finding the trust accounting sufficient to determine the trust

       balance for distribution.

                                            II. Attorney Fees
[11]   The amount recoverable for an award of attorney fees is left to the sound

       discretion of the trial court. Kotsopoulos v. Peters Broad. Eng’g, Inc., 962 N.E.2d

       97, 109 (Ind. Ct. App. 2011) (quotations omitted). We will reverse the trial

       court’s award of attorney fees only where we find there has been an abuse of

       discretion. Id. The trial court abuses its discretion when its decision is clearly

       against the logic and effect of the facts and circumstances before it. Id. The

       amount of the award must be supported by the evidence. Id.

[12]   Christopher argues that the trial court abused its discretion in failing to award

       the appropriate amount of attorney fees to him. He contends that the trial court

       misinterpreted the mediation agreement and assumed that $4,000.00 was the

       total amount of attorney fees due to him. Christopher asserts that the

       mediation agreement intended $4,000.00 to be an approximation and that such

       amount was only meant to be an estimated starting point for the amount of

       attorney fees.

[13]   Indiana follows the general rule that each party to a litigation must pay his own

       attorney fees. Masonic Temple Ass’n of Crawfordsville v. Ind. Farmers Mut. Ins. Co.,

       837 N.E.2d 1032, 1037 (Ind. Ct. App. 2005). Therefore, attorney fees are not

       allowable in the absence of a statute, agreement, or rule to the contrary. Id. at

       1037-38. Here, the mediation agreement stated: “The Trust shall pay Scott

       Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015   Page 7 of 11
       Lennox [sic] fee on behalf of [Christopher] which fee is approximately

       $4,000.00 as of the start of the mediation.” Pet’r’s Ex. 1. Therefore, under the

       mediation agreement, an exception to the general rule that each party must pay

       his own attorney fees, the trust was ordered to pay Christopher’s attorney fees.

[14]   Settlement agreements are governed by the same general principles of contract

       law as any other agreement. Georgos v. Jackson, 790 N.E.2d 448, 453 (Ind.

       2003). The interpretation and construction of a contract is a function for the

       courts. Fackler v. Powell, 891 N.E.2d 1091, 1095-96 (Ind. Ct. App. 2008), trans.

       denied. When interpreting a contract, a court must ascertain and effectuate the

       intent of the parties. Pinkowski v. Calumet Twp. of Lake Cnty., 852 N.E.2d 971,

       981 (Ind. Ct. App. 2006). If the contract language is unambiguous and the

       intent of the parties is discernible from the written contract, the court is to give

       effect to the terms of the contract. Fackler, 891 N.E.2d at 1096. A contract is

       ambiguous if a reasonable person would find the contract subject to more than

       one interpretation; however, the terms of a contract are not ambiguous merely

       because the parties disagree as to their interpretation. Id.

[15]   When the contract terms are clear and unambiguous, the terms are conclusive

       and we do not construe the contract or look to extrinsic evidence, but will

       merely apply the contractual provisions. Id. However, if a contract is

       ambiguous, it is the responsibility of the fact finder to ascertain the facts

       necessary to construe the contract. Pinkowski, 852 N.E.2d at 981. In construing

       the terms of an ambiguous contract, extrinsic circumstances and rules of

       Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015   Page 8 of 11
       contract construction may be employed to help construe the contract and

       ascertain the intent of the parties. Id.

[16]   On its face, the mediation agreement states that the trust is to pay Christopher’s

       attorney fees “which fee is approximately $4,000.00 as of the start of the

       mediation.” Pet’r’s Ex. 1. We find this language to be ambiguous, so therefore,

       extrinsic evidence may be employed to ascertain the intent of the parties. At

       the hearing, the trial court heard evidence from the parties as to their

       understanding and interpretation of the provision regarding Christopher’s

       attorney fees. Christopher testified that he understood the provision to mean

       that the trust was to pay all of his attorney fees, not limited to only $4,000.00

       pre-mediation fees. Tr. at 14-15. John testified that his understanding was that,

       under the mediation agreement, the trust was only to pay “approximately

       [$4,000.00] up to the start of mediation and was not to continue past that at

       all.” Id. at 46. David testified that it was his understanding that, in signing the

       mediation agreement, they were not agreeing to pay any of Christopher’s

       attorney fees after the start of mediation. Id. at 71. David further stated that he

       would not have signed the agreement if it had required the trust to pay

       Christopher’s attorney fees after the mediation. Id. at 72.

[17]   Both sides testified to as to their understanding of the provision, which created

       an issue of credibility for the trial court to determine. In finding that the trust

       was to pay $4,000.00 in attorney fees to Christopher’s attorney, the trial court

       made a credibility determination that it believed the Trustees’ interpretation of

       the mediation agreement to be the more accurate interpretation of the language.

       Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015   Page 9 of 11
       We conclude that the trial court correctly interpreted the provision to mean that

       the trust was only responsible for $4,000.00 of Christopher’s attorney fees. The

       trial court did not abuse its discretion.

                                  III. Appellate Attorney Fees
[18]   Indiana Appellate Rule 66(E) provides, in pertinent part, “[t]he Court may

       assess damages if an appeal . . . is frivolous or in bad faith. Damages shall be in

       the Court’s discretion and may include attorneys’ fees.” Our discretion to

       award attorney fees under this rule is limited to instances when an appeal is

       permeated with meritlessness, bad faith, frivolity, harassment, vexatiousness, or

       purpose of delay. In re Estate of Carnes, 866 N.E.2d 260, 267 (Ind. Ct. App.

       2007) (citing Thacker v. Wentzel, 797 N.E.2d 342, 346 (Ind. Ct. App. 2003)).

       While we have discretion to award damages on appeal, we must use extreme

       restraint when exercising this power because of the potential chilling effect upon

       the exercise of the right to appeal. Poulard v. Laporte Cnty. Election Bd., 922

       N.E.2d 734, 737 (Ind. Ct. App. 2010). “A strong showing is required to justify

       an award of appellate damages, and the sanction is not imposed to punish mere

       lack of merit, but something more egregious.” Id. at 737-38.

[19]   Here, the Trustees contend that this court should assess damages in the form of

       appellate attorney fees and costs against Christopher because this appeal is

       frivolous and brought in bad faith. Although we conclude that Christopher

       does not prevail in his appeal, we cannot conclude that this appeal is frivolous

       Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015   Page 10 of 11
       or was brought in bad faith. We, therefore, deny the request for appellate

       attorney fees.

[20]   Affirmed.

       Friedlander, J., and Crone, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 43A03-1407-TR-237 | March 25, 2015   Page 11 of 11