In re Estate of Glenn G. Forgey, deceased.
Lyle A. Forgey, individually and as Trustee. APPELLEE, CROSS-APPELLANT, AND CROSS-APPELLEE, Dean R. Forgey et al., appellants and cross-appellees. and Bessie I. Forgey-McCoy et al., APPELLEES AND CROSS-APPELLANTS.
Trusts: Equity: Appeal and Error. Absent an
equity question, an appellate court reviews trust
administration matters for error appearing on the record; but
where an equity question is presented, appellate review of
that issue is de novo on the record.
Evidence: Appeal and Error. In a review de
novo on the record, an appellate court reappraises the
evidence as presented by the record and reaches its own
independent conclusions concerning the matters at issue.
___. When evidence is in conflict, the appellate court
considers and may give weight to the fact that the trial
judge heard and observed the witnesses and accepted one
version of the facts rather than another.
Judgments: Appeal and Error. When reviewing
a judgment for errors appearing on the record, the inquiry is
whether the decision conforms to the law, is supported by
competent evidence, and is neither arbitrary, capricious, nor
___ . An appellate court, in reviewing a judgment for errors
appearing on the record, will not substitute its factual
findings for those of the trial court when competent evidence
supports those findings.
Judgments. The existence of a fiduciary duty
and the scope of that duty are questions of law for a court
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.
Wills: Trusts. The interpretation of the
words in a will or a trust presents a question of law.
Neb. 866] 9. 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.
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.
Trusts. A trustee has the duty to administer
the trust in good faith, in accordance with its terms and the
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.
Accounting. An accounting is ordinarily an
appropriate remedy for a breach of the duty to inform and
Decedents' Estates: Jurisdiction. County
courts have exclusive jurisdiction over all matters relating
to decedents' estates, including the probate of wills and
Decedents' Estates: Jurisdiction:
Equity. In exercising exclusive original
jurisdiction over estates, county courts may apply equitable
principles to matters within probate jurisdiction.
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
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.
Trusts. If a trust has two or more
beneficiaries, a trustee has a duty of impartiality among
Attorney Fees. Attorney fees and expenses
may be recovered only where provided for by statute or when a
recognized and accepted uniform course of procedure has been
to allow recovery of an attorney fee.
Attorney Fees: Appeal and Error. When an
attorney fee is authorized, the amount of the fee is
addressed to the discretion of the trial court, whose ruling
will not be disturbed on appeal in the absence of an abuse of
Attorney Fees. To determine the value of
legal services rendered by an attorney, it is proper to
consider the amount involved, the nature of the litigation,
the time and labor required, the novelty and difficulty of
the questions raised, the skill required to properly conduct
the case, the [298 Neb. 867] responsibility assumed, the care
and diligence exhibited, the result of the suit, the
character and standing of the attorney, and the customary
charges of the bar for similar services.
Laches. Laches occurs only if a litigant has
been guilty of inexcusable neglect in enforcing a right and
his or her adversary has suffered prejudice.
Laches: Equity. Laches does not result from
the mere passage of time, but because during the lapse of
time, circumstances changed such that to enforce the claim
would work inequitably to the disadvantage or prejudice of
Laches. What constitutes laches depends on
the circumstances of the case.
from the County Court for Keya Paha County: James J. Orr,
Judge. Affirmed in part, and in part reversed and remanded
A. Domina, of Domina Law Group, PC, L.L.O., for appellants.
Michael L. Johnson, of Leininger, Smith, Johnson, Baack,
Placzek & Allen, for appellee Lyle A. Forgey
S. Irvin for appellees Bessie I. Forgey-McCoy et al.
Miller-Lerman, Stacy, Kelch, and Funke, JJ., and Arterburn,
appeal arises from a trustee's failure to distribute the
corpus of the trust following the grantor's death in
1993. Marvel Forgey and her three children, all beneficiaries
of the Glenn G. Forgey Revocable Trust (the trust), appeal
the order of the county court for Keya Paha County resulting
from their suit against Lyle A. Forgey, who was another
beneficiary and was the trustee. Marvel and her children
sought to remove Lyle as trustee, secure administration of
the trust, value the trust assets, divide those assets into
separate trusts for the beneficiaries, and determine
liabilities for alleged breaches of [298 Neb. 868] fiduciary
duties by Lyle. Bessie I. Forgey-McCoy and her two children,
all three also beneficiaries, joined as interested parties.
Primarily accepting Lyle's version of the facts, the
county court valued and distributed the trust assets,
assessed damages against Lyle for estate tax interest and
penalties, and declined to award attorney fees or costs to
any party. Marvel and her children appealed; Lyle
cross-appealed, and Bessie and her children filed a separate
cross-appeal. While we largely agree with the county
court's findings in this case, we conclude that the
county court committed error by not awarding damages for
Lyle's untimely reports and accountings of his failure to
collect rents on behalf of the trust. We further determine
that the county court abused its discretion in declining to
award attorney fees to Marvel, Bessie, and their respective
children. Accordingly, we affirm in part, and in part reverse
and remand with directions.
G. Forgey died in 1993. He was survived by three children:
Lyle and Bessie, mentioned above, and Wayne Forgey, who is
now deceased. Wayne was survived by his wife, Marvel, and by
their three children.
his lifetime, Glenn transferred property into the trust. Lyle
has been the sole trustee at all relevant times. The trust
gave the trustee broad discretion to make decisions for the
trust in good faith. It required the trustee to provide an
annual report to the beneficiaries upon Glenn's death.
The trust further directed the trustee, upon the
grantor's death, to use the principal or net income of
the trust to pay the grantor's legal debts, death
expenses, estate administration costs, and inheritance and
estate taxes. The trust, as amended, further provided:
Upon the death of the Grantor and distribution of the
Grantor's estate from probate, the Trustees shall divide
the residue of the assets of this trust . . . into
equal shares, so as to provide one share for each
then living child of the Grantor and one share for the then
living issue, collectively, of each deceased child of the
Grantor. In so [298 Neb. 869] dividing the assets of [this
trust], . . . in funding [Lyle's] equal share of the
trust assets the Trustees shall allocate to his share all
common stock which [this trust] may then own in [a bank
in Ainsworth, Nebraska].
administrative proceedings were commenced for the trust until
2013, when Marvel initiated this litigation, along with her
children (hereinafter collectively Marvel). Bessie and her
two children (hereinafter collectively Bessie) joined the
action as interested parties. Marvel sued to remove Lyle as
trustee, secure administration, value assets, divide and
distribute them to separate trusts, determine liabilities for
defalcations by Lyle, and recover attorney fees and costs.
filed her own counterpetition, requesting similar relief.
also counterpetitioned, asking the county court to approve
his actions as trustee; determine or confirm the allocation
of trust assets, income, expenses, and compensation; and
award him attorney fees and costs.
sections immediately below summarize evidence relevant to the
parties' claims on appeal, and we recount additional
relevant facts in the analysis portion of this opinion.
litigation revealed that the corpus of the trust included
agricultural real estate, bank stock, cash, and a promissory
county court, observing that the trust provided that trust
assets were to be distributed upon Glenn's death, applied
the principle that equity considers that done which ought to
have been done and treated the division of the trust as
though it had occurred upon Glenn's death.
county court further determined that "it was clearly
Glenn's intent that his trust be divided equally and that
Lyle's one-third share be funded using the bank stock and
that the remaining assets would be divided between
Wayne's trust and Bessie's trust."
Neb. 870] In dividing the trust this way, the county court
relied on the testimony and report provided by Lyle's
expert, Tyler Bartruff, an attorney working in the field of
forensic accounting and federal estate taxes.
based his report on the hypothetical assumption that the
trust was split into three equal shares as of Glenn's
date of death in 1993. The report also assumed that the
federal estate tax return was timely filed and that the tax
was timely paid on a deferred basis under I.R.C. § 6166
(2012). The report allocated the bank stock to Lyle's
share and added additional liability to Lyle's share to
make the three shares proportionate. Bartruff's report
then proceeded with a cashflow summary for each
beneficiary's share from the split in 1993 until December
31, 2015, using data provided in other exhibits.
time of trial, the trust owned 13, 276 shares (bank stock),
or 66.2 percent, of the holding company for a bank in
Ainsworth, Nebraska. Lyle owned the remaining shares in his
witnesses testified about the bank stock's value: Janet
Labenz and Fred Lockwood, each a certified public accountant