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:
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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
[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