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In re Estate of Stuchlik

Supreme Court of Nebraska

December 12, 2014

IN RE ESTATE OF EDWARD J. STUCHLIK, JR., DECEASED, AND IN RE TRUST CREATED BY EDWARD J. STUCHLIK, JR., DECEASED. JOHN E. STUCHLIK, APPELLANT,
v.
MARGARET STUCHLIK, PERSONAL REPRESENTATIVE AND COTRUSTEE, AND KENNNNETH STUCHLIK, COTRUSTEE, APPELLEES

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Appeal from the County Court for Saunders County: PATRICK R. MCDERMOTT, Judge.

AFFIRMED IN PART, AND IN PART REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.

SYLLABUS

1. Decedents' Estates: Appeal and Error. In reviewing a judgment of the probate court in a law action, the Supreme Court does not reweigh evidence, but considers evidence in the light most favorable to the successful party and resolves evidentiary conflicts in favor of the successful party, who is entitled to every reasonable inference deducible from the evidence.

2. Decedents' Estates: Appeal and Error. The probate court's factual findings have the effect of a verdict, and an appellate court cannot set those findings aside unless they are clearly erroneous.

3. Judgments: Appeal and Error. On a question of law, an appellate court is obligated to reach a conclusion independent of the determination reached by the court below.

4. Fraud: Judgments. The existence of a fiduciary duty and the scope of that duty are questions of law for a court to decide.

5. Wills: Contracts. Oral testimony as to a contract for wills is allowed only where the will itself references the contract.

6. Decedents' Estates: Wills: Contracts: Breach of Contract. The effect of a valid contract for wills is not to create a cause of action against the decedent's estate, but instead is to create a cause of action for breach of contract.

7. Wills: Contracts. Even where a valid contractual will exists, that existence does not make the surviving party's will irrevocable.

8. Decedents' Estates: Wills: Contracts: Breach of Contract. If a surviving party revokes or breaches a mutual contractual will, an action lies for a breach of contract against the estate of the survivor.

9. Decedents' Estates: Jurisdiction. County courts have exclusive jurisdiction over all matters relating to decedents' estates, including the probate of wills and construction thereof.

10. Decedents' Estates: Jurisdiction: Equity. In exercising exclusive original jurisdiction over estates, county courts may apply equitable principles to matters within probate jurisdiction.

11. Decedents' Estates: Jurisdiction: Wills: Trusts: Minors: Mental Competency. County courts have jurisdiction over all subject matter relating to estates of decedents, including construction of wills and determination of heirs and successors of decedents, estates of protected persons, protection of minors and incapacitated persons, and trusts.

12. Courts: Jurisdiction. County courts have full power to make orders, judgments, and decrees and to take all other actions necessary and proper to administer justice in the matters which come before them.

13. Trusts: Property. A trust creates a fiduciary relationship in which one person holds a property interest subject to an equitable obligation to keep or use that interest for the benefit of another.

14. Trusts. Trustees owe the beneficiaries of a trust duties that include loyalty, impartiality, prudent administration, protection of trust property, proper recordkeeping, and informing and reporting.

15. Trusts. The duty of loyalty requires a trustee to administer the trust solely in the interests of the beneficiaries.

16. Trusts. In exercising powers of control over interests in an enterprise held by a trust, a trustee shall act in the best interests of the trust beneficiaries.

17. Trusts. If a trust has two or more or more beneficiaries, a trustee has a duty of impartiality among beneficiaries.

18. Trusts: Words and Phrases. Impartiality means that a trustee's treatment of beneficiaries or conduct in administering a trust is not to be influenced by the trustee's personal favoritism or animosity toward individual beneficiaries.

19. Trusts: Conflict of Interest. A cause for removal is appropriate for the best interests of the trust estate where hostile relations exist between a trustee and beneficiaries of such a nature as to interfere with proper execution of the trust, particularly where it appears that the trustee's personal interests conflict with, or are antagonistic to, his or her duties as trustee under the terms of the trust.

20. Trusts: Conflict of Interest. When an entity is held by a trust, and particularly where a controlling share of that entity is exercised against the best interests of any trust beneficiary, it is a breach of the duty of loyalty.

21. Trusts: Attorney Fees: Costs. Attorney fees and expenses will ordinarily be allowed to a trustee where they were incurred for the benefit of the estate.

22. Trusts: Attorney Fees: Costs. If a fiduciary's defense of his or her acts if fully successful, he or she is entitled to recover the reasonable costs necessarily incurred in preparing his or her final account and in successfully defending it against objections.

23. Trusts: Attorney Fees: Costs. A fiduciary's defense must be only substantially successful, not 100 percent successful, in order for the fiduciary to be entitled to recover costs and attorney fees.

24. Courts: Trusts: Attorney Fees: Costs: Appeal and Error. The county court or district court on appeal has discretionary power and authority to order payment out of the trust estate for costs of litigation and, in proper cases, to order payment of reasonable fees to attorneys for services rendered to a trustee in good faith.

Paul R. Elofson, of Fitzgerald, Schorr, Barmettler & Brennan, P.C., L.L.O., for appellant.

Richard L. Rice and Andrew C. Pease, of Crosby Guenzel, L.L.P., for appellees.

HEAVICAN, C.J., WRIGHT, CONNOLLY, STEPHAN, MCCORMACK, MILLER-LERMAN, and CASSEL, JJ.

OPINION

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[289 Neb. 675] McCormack, J.

I. NATURE OF CASE

This matter involves petitions filed by John E. Stuchlik seeking removal of the personal representative of the Edward J. Stuchlik, Jr., estate and removal of the cotrustees of the Edward J. Stuchlik, Jr., Family Trust. The personal representative and one of the cotrustees is John's mother and the spouse of the decedent. The other cotrustee is John's brother. The probate dispute involves assets held in

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a testamentary trust established by the last will and testament of the decedent.

II. BACKGROUND

On March 22, 2012, Edward J. Stuchlik, Jr. (Stuchlik), died testate. He was survived by his wife, Margaret L. Stuchlik, and his five children, John, Edward J. Stuchlik II, LeAnne M. Bullock, Linda M. Voboril, and Kenneth G. Stuchlik. This action is by John against Margaret as both personal representative and cotrustee and Kenneth as cotrustee. John filed a petition in the probate proceedings to remove Margaret as personal representative. John also asked for trust administration and to have Margaret and Kenneth removed as cotrustees. Among other things, John alleged that Margaret was managing trust assets against ...


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