Matter of Estate of Kroslack

570 N.E.2d 117, 1991 Ind. App. LEXIS 711, 1991 WL 69549
CourtIndiana Court of Appeals
DecidedApril 29, 1991
Docket45A04-8912-CV-546
StatusPublished
Cited by14 cases

This text of 570 N.E.2d 117 (Matter of Estate of Kroslack) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matter of Estate of Kroslack, 570 N.E.2d 117, 1991 Ind. App. LEXIS 711, 1991 WL 69549 (Ind. Ct. App. 1991).

Opinions

HOFFMAN, Presiding Judge.

Appellant Joseph F. Kroslack, Jr. as personal representative of the estate of his father, Joseph Kroslack, Sr., appeals a trial court award of costs, attorney’s fees and interest in favor of appellee Mary L. Kros-lack, the decedent’s widow. The award followed several years of litigation at both the trial and appellate levels during which appellee sought to recover the statutory widow’s allowance of $8,500.00. See Kroslack v. Estate of Kroslack (1987), Ind., 504 [119]*119N.E.2d 1024, vacating Ind.App., 489 N.E.2d 650. The Supreme Court's opinion in Kroslack found:

“[T]he son consistently exercised bad faith as executor of his father’s estate. From the time of his appointment, the son failed in his fiduciary duty to act in the best interests of the estate. His first inventory did not include three of the four multi-party accounts which the court later found to be liable to the estate. When claims were made against the estate for funeral expenses and estate taxes, he made no effort to collect funds from the multi-party accounts as contemplated by § 32-4-1.5-7. Rather, he compromised the claims, moved to have the estate declared insolvent, and gallantly waived any fee or claim as personal representative.
The son was obviously not motivated by the best interests of the estate, but by his personal interest in protecting the funds of the multi-party beneficiaries. This violation of good faith on the part of the son would preclude him from invoking the equitable authority of the court to approve a compromise because he could not be said to come forward with ‘clean hands.’ [Footnote omitted.]
* * * * * *
Thus, the estate should not have had to bear any cost of ‘good faith’ litigation by the son. In effect, the son has blackmailed both the special administrator and the trial court into approving a settlement which is clearly not in the best interests of the estate by dealing in bad faith and in his own self-interest and threatening to continue such behavior at the expense of the estate. Settlement by the special administrator appears to have been motivated by a desire to conclude a lengthy and unpleasant probate. Nevertheless, approval of the settlement rewarded the son’s obdurate behavior rather than punished it.”

504 N.E.2d at 1027.

The court remanded the cause for further proceedings “relating to the collection of assets and payment of the widow’s share.” Id.

On remand, a hearing was held by the trial court on December 4, 1987 and concluded on June 10, 1988. At the hearing, evidence was presented on appellee’s April 8, 1987 petition for inter alia the widow’s allowance, attorney’s fees and interest. The petition requested $6,630.00 in interest and $36,105.00 in attorney’s fees. Pursuant to appellant’s request, the trial court entered findings of fact and conclusions of law. In summary, the trial court found that the Supreme Court had determined that the appellant acted in bad faith and with obdurate behavior; that the appellant continued to litigate a defense after it became frivolous, groundless and unreasonable; that law regarding the award of attorney’s fees appears in IND.CODE § 34-1-32-1; that the court received evidence as to the appellee’s attorney’s fees; and that “[t]his trial court must balance the legal interest of the [parties] ... [and denial of attorney’s fees to appellee] would be a windfall to [appellant] and [in] complete defiance ... of the Supreme Court’s opinion....” Also, the trial court found that the appellee was entitled to interest from January 14, 1981, the date that she made demand for the widow’s allowance, to September 30, 1988, the date of the order. The trial court concluded that appellee was entitled to recover the widow’s allowance of $8,500.00, interest in the sum of $6,630.00, and attorney’s fees in the sum of $17,500.00. This appeal ensued.

The appellant’s issues may be restated as:

(1) whether the trial court erred in granting $17,500.00 in attorney’s fees; and
(2) whether the trial court erred in awarding $6,630.00 in interest.

As to the award of attorney’s fees, the appellant argues that IND.CODE § 34-1-32-1 does not support the award in this case because the amendment allowing attorney’s fees did not become effective until September 1986. By appellee’s attorney’s admission, the bulk of the fees were incurred between January 1981 and March 1986. The statute, prior to the amendment effective September 1986, provided “[i]n all civil actions, the party recovering judgment [120]*120shall recover costs, except in those cases in which a different provision is made by law.” IND.CODE § 34-1-32-1 (1982) (amended 1986). The 1986 amendment provides in pertinent part that:

“(b) In any civil action, the court may award attorney’s fees as part of the cost to the prevailing party, if it finds that either party:
(1) brought the action or defense on a claim or defense that is frivolous, unreasonable, or groundless;
(2) continued to litigate the action or defense after the party’s claim or defense clearly became frivolous, unreasonable, or groundless; or
(3) litigated the action in bad faith.” IND.CODE § 34-l-32-l(b) (1986 Supp.).

The question whether the statute should be accorded retroactive application may be reserved for another day. An alternative equitable basis for the award exists.

A court’s power to award attorney’s fees to a party has long been established. In Saint Joseph’s College et al. v. Morrison, Inc. (1973), 158 Ind.App. 272, 302 N.E.2d 865, 870-71, the Court addressed the granting of attorney’s fees when not specifically allowed by statute, agreement, or stipulation. The Court determined that when a party fails to comply with a statute allowing attorney's fees, equity cannot be invoked to rescue a claim for attorney’s fees. Id., 302 N.E.2d at 870. However, the Court observed that exceptions to the American rule of not granting attorney’s fees absent a statute had been recognized at common law in the “obdurate behavior” situation, the “common fund” situation, the “private attorney general” situation, and in cases of oppressive and vexatious conduct in the extreme. Id., 302 N.E.2d at 870-71. The Court noted that the ability to grant attorney’s fees “springs from the equitable powers of the court.” [Citations omitted.] Id., 302 N.E.2d at 870.

The theme that a court, through its inherent equitable authority, may grant attorney’s fees has been echoed by members of the court subsequent to the Morrison decision.

See e.g. Maggio v. Lee (1987), Ind.App., 511 N.E.2d 1084, 1086 Sullivan, J. concurring;

Cox v. Ubik (1981), Ind.App., 424 N.E.2d 127, 129. The concurring opinion in Mag-gio, supra, referred to cases in which the court has assessed attorney’s fees against a party based in part upon the court’s inherent equitable power. Maggio, supra, 511 N.E.2d at 1086. In

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Matter of Estate of Kroslack
570 N.E.2d 117 (Indiana Court of Appeals, 1991)

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Bluebook (online)
570 N.E.2d 117, 1991 Ind. App. LEXIS 711, 1991 WL 69549, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matter-of-estate-of-kroslack-indctapp-1991.