Court Opinion

ID: 9797298
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:18:02.09977+00
Date Added: 2024-06-11T08:54:22.648369
License: Public Domain

THORNE, Judge
(concurring in part and dissenting in part):
1 29 I concur with the analysis and conclusion in sections I and II of the lead opinion regarding conversion of the cattle and credit for payment of property taxes and water assessments, but I dissent with respect to the lead opinion's determination in section III that the trial court erred in denying attorney fees to Respondent. I also dissent from the lead opinion's consideration and analysis of the trust's limitation of lability clause in section IV.
180 Specifically, I disagree with the lead opinion's determination that Respondent is statutorily entitled to receive reimbursement for the reasonable attorney fees incurred in his defense because Respondent defended against Petitioner's claims in good faith. The litigation, in this instance, was caused by Respondent's acts of self-dealing. Indeed, the trial court found that Respondent used the trust lands for his farming operation without paying rent and converted fifty head of cattle. By so acting, Respondent violated his duty as trustee to the beneficiaries. Defense of such acts should not be chargeable against the estate. A trustee is required to administer the trust " 'solely in the interest of the beneficiary,'" Wheeler v. Mann, 763 P.2d 758, 760 (Utah 1988) (quoting Restatement (Second) of Trusts § 170 (1959)), and is not permitted to engage in self-dealing, see id. In the trustee context, "a trustee engages in self-dealing if he place[s] himself in a position where it would be for his own benefit to violate his duty to the beneficiaries." Eagar v. Burrows, 2008 UT 42, ¶ 32, 191 P.3d 9 (alteration in original) (internal quotation marks omitted).
131 The lead opinion concludes that Respondent is entitled, pursuant to Utah Code section 75-7-1004(2), to reimbursement of reasonable attorney fees despite Respondent's self-dealing because the trial court indicated its conclusion that Respondent defended against Petitioner's claims in good faith when it stated "[wlhere claims are grossly overstated, it is reasonable that a defense be made." See supra ¶21. I agree that section 75-7-1004(2) allows a trustee to recover reasonable attorney fees from the trust when defending against any proceeding in good faith, whether or not the defense is successful, see Utah Code Ann. § 75-7-1004(@2) (Supp.2009), but I disagree that Respondent's defense was objectively in good faith. Furthermore, this proceeding alleged acts that benefitted Respondent personally, not merely actions affecting the trust. Although Respondent's self-dealing acts may, as the district court found, have been born of good faith and it may have been reasonable for Respondent to have raised a defense against "claims [that] are grossly overstated," that does not, however, mean that the entirety of Respondent's actions to defend himself against charges of self-dealing were reasonable or in good faith.
 32 First, it should be noted that "[the prohibition against self-dealing does not depend upon proof of bad faith, but is absolute so as to avoid the possibility of fraud and the temptation of self-interest," Wheeler, 763 P.2d at 760. Respondent's actions, even if done in good faith, violated the prohibition against self-dealing, and reimbursement of reasonable attorney fees used to defend against self-dealing is not appropriate or allowed under Utah Code section 75-7-1004(2). See Utah Code Ann. § 75-7-1004(2). Second, the record demonstrates that Respondent's defense included a claim that there were no cattle in the estate and as such there had been no conversion. Respondent, by his self-dealing acts of conversion, made the litigation necessary. Certainly, such a defense is not consistent with a trustee's duty to *856place the interests of the beneficiaries before his own. See Wheeler, 763 P.2d at 760 ("A trustee's duty of loyalty requires the trustee to administer the trust solely in the interest of the beneficiary." (internal quotation marks omitted)). Indeed, the trial court appears to have considered Respondent's role in necessitating the litigation when it stated, "Given all the cireumstances in this case, no attorney fee will be awarded." An estate should not be charged with payment of attorney fees for services occasioned by a trustee's own self-dealing actions. Cf. Webb v. Webb, 250 Ala. 194, 33 So.2d 909, 927 (1948) ("But an estate should not be charged with payment of attorneys for services rendered the personal representative of a deceased executor, which services have been occasioned by the gross negligence, willful default and conversions of the deceased executor.").
133 Lastly, regarding prejudgment interest, I agree with the lead opinion that the loss relating to the cattle was not fixed at a particular time or measurable by facts and figures, and that the trial court erred in awarding prejudgment interest. However, I do not agree with the lead opinion's analysis of the trust's limitation of liability clause, and based on the determination that the trial court erred in awarding prejudgment interest, I do not believe it is necessary to consider the limitation of liability clause.
34 In sum, the litigation in this case was necessitated by Respondent's own self-dealing actions, the defense of which should not be charged against the estate. Accordingly, I would affirm the trial court's decision to deny attorney fees to Respondent. I also disagree with the lead opinion's consideration of the limitation of liability. I further believe that it is unnecessary in the context of this case.
1 35 I CONCUR: PAMELA T. GREENWOOD, Presiding Judge.