Attorney Fee Application Not Untimely, but Must Be Attributable to Current Suit
When a trustee is required to employ the services of an attorney for an action to benefit the trust, the trust can be ordered by the court to pay the attorney fees. In a recent Iowa case there was a dispute between co-trustees regarding declaratory judgment requests and removal of one or more of the trustees. A request for attorney fees was made 47 days following the court’s ruling. The court granted the request and the co-trustee appealed the timeliness of the request.
Initially, a case was filed by the defendant in Greene County against the two plaintiff co-trustees alleging various claims. This case was eventually dismissed on summary judgment, but while the case was pending, the plaintiffs sued in Dallas County seeking to remove the defendant and terminate his lease. The defendant filed a counterclaim alleging the same complaints as stated in the Greene County suit.
The court ruled that the counterclaim should be dismissed because the Green County suit had preclusive effects. The remaining claims went to trial. The court ruled that the defendant could continue to farm the land under the terms of the trust and that he should not be removed as a trustee because the trust had not be damaged or endangered by his actions. Costs were assessed against the plaintiff co-trustees. Forty-seven days later the defendant submitted an application for reimbursement of attorney fees for the Greene County and Dallas County suits. The court noted that the plaintiffs’ attorney fees in the amount of $40,000 had been paid by the trust and the application was granted. The plaintiffs appealed.
On appeal, the court held that the application for fees was not untimely because there is no time requirement for filing the application, the plaintiffs were not prejudiced by the short delay and there was no evidence of any adverse impact to the trust. The court did, however, deny the attorney fee award for the Greene County lawsuit. The Greene County lawsuit had been dismissed by the court and costs assessed to the defendant. The question of attorney fees for the Greene County case should have been litigated in that case and it was error for the court to award attorney fees for the separate action in the Dallas County suit. The court reduced the award by the amount attributed to the Greene County suit and affirmed the remaining award to be payable from the trust. Scheuermann v. Gumm, No. 3-556/12-1946, 2013 Iowa App. LEXIS 769 (Iowa Ct. App. Jul. 10, 2013).
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