Bad Faith – Attorney Fees

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WI Court of Appeals – District II

Case Name: Suzanne Mullany v. Michael Massie, et al

Case No.: 2015AP318

Officials: Neubauer, C.J., Gundrum and Hagedorn, JJ.

Focus: Bad Faith – Attorney Fees

The respondents, brothers Michael and Loren Massie, and the appellant, Suzanne Mullany, are all beneficiaries of their mother’s trust. Mullany was the co-trustee of that trust. The Massies brought various claims related to Mullany’s purported mishandling of the trust and sought to remove her. The circuit court granted the request, found that the Massies were acting for the benefit of the estate, and found that Mullany had acted in bad faith. On the basis of Mullany’s bad faith, the circuit court charged Mullany personally for the Massies’ attorneys’ fees, leaving her with no remaining share of the trust and a bill to boot. Mullany appeals and argues that WIS. STAT. § 879.37 (2013- 14) precludes an award of fees for a prevailing party out of a particular share of a trust—here, hers. While Mullany is correct as far as it goes, we hold that the circuit court permissibly charged Mullany personally with fees on the basis of its equitable powers and Mullany’s bad faith, and not under § 879.37. Accordingly, we affirm.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.