Trusts and Estates; Costs and fees

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Trusts and Estates; Costs and fees

A district court has authority to order that a trust be reimbursed for fees and costs when the trustee was unsuccessfully sued for bad faith.

“Usually the fees and costs are paid from the corpus of the trust, but here the district court ordered the Frenches personally to pay. There is no dispute that the court has the equitable power to do this. See Cleveland v. Second Nat’l Bank & Trust Co., 149 F.2d 466, 469 (6th Cir. 1945); duPont v. S. Nat’l Bank of Hous., Tex., 771 F.2d 874, 885 (5th Cir. 1985); Brisacher v. Tracy-Collins Trust Co., 277 F.2d 519, 524 (10th Cir. 1960); see also Robert L. Rossi, 2 ATTORNEYS’ FEES § 11:63 (3d ed. 2011) (collecting cases). The court held that the equities favored ordering the beneficiaries to pay the trustee’s attorney’s fees and costs. The successor trustee was not a party, and the court concluded that requiring Wachovia to pursue its fees
award in a separate action against the new trustee would needlessly “multiply costs and delay the inevitable.” The court also noted that the successor trustee had agreed to reimburse the Frenches for their own attorney’s fees.

Finally, the court observed that the Frenches “are of substantial means” and “can determine the proper allocation of the . . . fee award amongst themselves and the successor trustee.”

Affirmed.

11-2781 & 11-3437 French v. Wachovia Bank, N.A.

Appeals from the United States District Court for the Eastern District of Wisconsin, Randa, J., Sykes, J.

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