In re Conservatorship of Marcia G. Abbott. A PROTECTED PERSON. Cynthia J. Sellon and Russell G. Abbott, appellees and cross-appellants, Mark D. Abbott, conservator, appellant and cross-appellee. In re Abbott Living Trust. Cynthia J. Sellon and Russell G. Abbott, appellees and cross-appellants,
Mark D. Abbott, Designated Successor Trustee, appellant and cross-appellee.
Guardians and Conservators: Appeal and Error. An appellate
court reviews conservatorship proceedings for error appearing
on the record in the county court.
Judgments: Appeal and Error. When reviewing a judgment for
errors appearing on the record, an appellate court's
inquiry is whether the decision conforms to the law, is
supported by competent evidence, and is neither arbitrary,
capricious, nor unreasonable.
Trusts: Equity: Appeal and Error. Appeals involving the
administration of a trust are equity matters and are
reviewable in an appellate court de novo on the record.
Attorney Fees: Appeal and Error. A trial court's decision
awarding or denying attorney fees will be upheld on appeal
absent an abuse of discretion.
Standing: Words and Phrases. Standing involves a real
interest in the cause of action, meaning some legal or
equitable right, title, or interest in the subject matter of
Trusts. Neb. Rev. Stat. § 30-3855 (Reissue 2016) does
not dictate who may petition for the removal of a trustee,
but, rather, describes to whom fiduciary duties are owed.
Trusts: Standing. Generally, standing in a trustee removal
proceeding is governed by Neb. Rev. Stat. § 30-3862(a)
Trusts. A serious breach of a fiduciary duty is only one of
the grounds for removal of a trustee.
Trusts: Intent. The extent of the beneficiary's interest
in a trust depends upon the discretionary power that the
settlor intended to grant the trustee.
__:__. When the parties do not claim that the terms are
unclear or contrary to the settlor's actual intent, the
interpretation of a trust's terms is a question of law.
Trusts. In general, trustees of support trusts have
discretion to determine what is needed for the
beneficiary's support and to make payments only for that
The discretion afforded to a trustee of a support trust does
not preclude a beneficiary from seeking to show that the
trustee has abused its discretion in failing to make support
Trusts: Liability. A trustee is liable for the action of
another trustee if he joins in the action, fails to prevent
the cotrustee from committing a serious breach of trust, or
fails to compel the cotrustee to redress a serious breach of
Trusts. A trustee has the duty to administer the trust in
good faith, in accordance with its terms and purposes and the
interests of the beneficiaries, and in accordance with the
Nebraska Uniform Trust Code.
The Nebraska Uniform Trust Code states that trustees owe the
beneficiaries of a trust duties that include loyalty,
impartiality, prudent administration, protection of trust
property, proper recordkeeping, and informing and reporting.
Trusts: Conflict of Interest. A cause for removal of a
trustee 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.
Pleadings. The issues in a given case will be limited to
those which are pled.
Rules of the Supreme Court: Pleadings: Notice. The Nebraska
Rules of Pleading in Civil Actions, like the federal rules,
have a liberal pleading requirement for both causes of action
and affirmative defenses, but the touchstone is whether fair
notice was provided.
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
Trusts. A finding of one serious breach of fiduciary duty is
enough to warrant removal of a trustee.
Appeal and Error. An appellate court is not obligated to
engage in an analysis that is not necessary to adjudicate the
case and controversy before it.
Attorney Fees: Appeal and Error. On appeal, a trial
court's decision awarding or denying attorney fees will
be upheld absent an abuse of discretion.
Judgments: Words and Phrases. A judicial abuse of discretion
requires that the reasons or rulings of the trial court be
clearly untenable insofar as they unfairly deprive a litigant
of a substantial right and a just result.
Trial: Evidence: Appeal and Error. In a civil case, the
admission or exclusion of evidence is not reversible error
unless it unfairly prejudiced a substantial right of the
Final Orders: Appeal and Error. An order affects a
substantial right if the order affects the subject matter of
the litigation, such as diminishing a claim or defense that
the appellant had before the court entered the order.
from the County Court for Douglas County: Lawrence E.
Barrett, Judge. Appeal in No. S-15-967 dismissed. Judgment
and final order in No. S-16-040 affirmed.
Michael F. Coyle, Elizabeth A. Culhane, and Jacqueline M.
DeLuca, of Fraser Stryker, P.C., L.L.O., and G. Rosanna Moore
and, on brief, John K. Green, of Pickens & Greene,
L.L.P., for appellant.
M. Lingelbach, James A. Tews, and Minja Herian, of Koley
Jessen, PC, L.L.O., for appellees.
Heavican, C.J., Wright, Cassel, Stacy, Kelch, and Funke, JJ.
decide two consolidated appeals from county court
proceedings-the first from a final order appointing a
conservator and the second from a county court order that
acted both as a judgment in a trustee removal proceeding and
as a final order denying fees and expenses in the
the conservatorship appointment order became moot upon the
protected person's death while the first appeal was
pending, we dismiss the first appeal in its entirety and
dismiss the cross-appeal to the extent that it pertains to
the first appeal.
second appeal, a successor trustee appeals and two
beneficiaries cross-appeal from an order removing the
successor trustee, declining to surcharge him, disposing of
competing attorney fee applications, and otherwise disposing
of the trust and conservatorship proceedings. Applying our
respective standards of review to the remaining trust and
conservatorship issues, we affirm.
consolidated appeals arise from proceedings initiated by
Russell G. Abbott and Cynthia J. Sellon (Cynthia) to appoint
a conservator for their mother, Marcia G. Abbott, and to
remove Marcia as trustee of the "Abbott Living
Trust"; to remove their brother, Mark D. Abbott, as
successor trustee; to surcharge Mark; and for an accounting.
Marcia resigned as trustee before trial, and the county court
dismissed the claim seeking to remove her as moot.
to oral argument, a suggestion of Marcia's death was
filed in this court, accompanied by a motion to remand the
conservatorship proceeding with directions to vacate and
dismiss. At oral argument, we granted leave to file a written
response, which we have considered. Marcia's death
renders moot the issue of the appointment of her conservator,
but it does not abate the cause of action. Accordingly, we
do not summarize the facts surrounding the appointment of a
conservator, and recite only the facts relating to issues not
mooted by Marcia's death.
Abbott Living Trust Agreement
and her husband created a revocable living trust in which
they named themselves cotrustees. When Marcia's husband
died, the living trust assets were divided between a
revocable "Survivor's Trust" and an irrevocable
"Family Trust.'' The two trusts primarily
consist of investment accounts.
trust agreement provided that Marcia, as the surviving
spouse, was entitled to the entire net income from the
Survivor's Trust account. It also permitted her to
withdraw from the principal of the Survivor's Trust as
much as she desired.
the Family Trust, Marcia had four primary rights or
interests. First, she was entitled to the entire net income.
Second, she had a "five-and-five power, " which
limited her to annually withdrawing the greater of $5, 000 or
5 percent of the assets from the principal. Third, the
trustee could apply an "ascertainable standard."
That power permitted the trustee, in his or her discretion,
to pay Marcia or her and her husband's shared
descendants-Russell, Mark, and Cynthia-so much of the
principal as the trustee deemed proper for their health,
maintenance, support, and education. Finally, she had a
"sprinkling" testamentary power of appointment-that
is, a limited power allowing her to dispose of Family Trust
assets by will or by a living trust. With this limited power,
Marcia could appoint "some or all of the principal and
any accrued but undistributed net income of the Family Trust
as it exist[ed] at the death of [Marcia]" to Russell,
Mark, or Cynthia in "equal or unequal amounts."
There is no evidence that Marcia ever exercised this limited
power of appointment.
2011, Marcia suffered a stroke that left her paralyzed on her
right side. She had difficulty with speech and communication
and was ultimately diagnosed with expressive aphasia-a
disorder that affects the brain's ability to use and
understand language. Prior to her stroke, Marcia lived at
home and handled her own financial affairs, including
management of the two trusts. After her stroke, Marcia needed
assisted living and physical therapy and moved into a
skilled-care facility. As a necessary result, Marcia's
monthly living expenses grew from $500 to over $8, 000. Since
2011, Mark has acted as Marcia's agent under a power of
Mark's Management of Trust Assets
2011, after her stroke, Marcia "resigned" as
trustee over two financial accounts that were trust assets.
She appointed Mark as successor trustee of both accounts. In
2015, before trial, Marcia resigned as trustee in all matters
for both trusts and Mark accepted the appointment as
successor trustee in all matters.
Mark assumed his role as successor trustee of both trusts in
the entirety, he understood his roles to be that of successor
trustee of two financial accounts associated with the trusts
and that of Marcia's agent under the power of attorney.
Evidence at trial showed that Mark performed other actions
within those roles, purporting to be the trustee of the two
trusts in his signature. For example, the evidence showed
that Mark signed a bill of sale for a vehicle owned by one of
the trusts as "Trustee" in 2013. He also signed a
state severance tax return for oil and gas royalties as
"Trustee" in 2012. Mark explained that he
'"used [his] signatures, [Marcia's] signatures,
[power of attorney]/Trustee interchangeably because it really
[did]n't matter.'" He believed his power to sign
as trustee came from his authority under the power of
attorney executed by Marcia.
time, Mark also facilitated several transfers of money
between different financial accounts associated with the
Family Trust and the Survivor's Trust. Several of the
transfers exceeded $200, 000. At trial, an estate-planning
attorney testified concerning the tax consequences of these
transfers and opined that the transfers were a violation of
the trust terms. Specifically, the witness testified that the
two trusts had substantially different terms and that as a
result, the trusts' assets could not be commingled. The
witness further testified that because the Family Trust was
irrevocable and the Survivor's Trust was revocable, the
Family Trust's assets should have been kept separate from
the Survivor's Trust's assets to maintain the
appropriate tax basis for the assets. Additionally, the
witness opined that the assets transferred to the Family
Trust would have been subject to gift taxation and that Mark
appeared not to have considered these tax issues in managing
the trusts' assets.
evidence at trial also showed that in managing the
trusts' assets, Mark worked with Marcia's financial
advisor in making investment decisions and all of his
investments were recommended by the financial advisor. During
the time that Mark managed the trusts, their ...