Opinion
No. 2-828 / 02-0243.
Filed December 30, 2002.
Appeal from the Iowa District Court for Webster County, GARY L. McMINIMEE, Judge.
Carol Arlo Petersen appeals an award of attorney fees granted to Ezra Petersen for legal expenses incurred in defending an action under the will of Chris Petersen. AFFIRMED.
Eric Eide of Johnson, Erb, Bice, Kramer, Good Mulholland, P.C., Fort Dodge, for appellant.
Steven Hendricks, Fort Dodge, and Kurt Pittner, Fort Dodge, for appellee.
Heard by VOGEL, P.J., and ZIMMER and HECHT, JJ.
Chris Petersen died testate in 1982 and was survived by his wife, Mabel, and three sons, Ezra, Leroy, and Carol (C.A.). The will devised Chris's half interest in the "east farm" to First National Bank, in trust for Carol Petersen. The trust was directed to pay the net income to Carol during his life and upon his death to his children, if any. Carol has no children. Jeff Petersen and Cynthia Ikey, Leroy's two children, are the remainder beneficiaries of the trust. Chris's will required the trustee to "obtain approval from my sons, Leroy E. Petersen and Ezra Julian Peterson, as to decisions with reference to any farming operations." Ezra Petersen farmed the land in the C.A. Petersen Trust until 1997, when Jeff Petersen became the farm tenant, renting on a cash basis.
In December of 2000, Carol filed an action against Ezra, alleging Ezra had breached fiduciary duties owed to Carol in managing the farm. In particular, Carol alleged that Ezra entered into a below-market cash rent with his nephew, Jeff. Carol sought to have Ezra removed as "consultant" under the will or, in the alternative, require him to rent the farm to Carol. The district court assumed without deciding that "Ezra, by reason of the discretionary power granted to him regarding the operation of the farm, owes a fiduciary duty to the beneficiaries" of the trust. It then concluded Ezra set forth a reasonable basis for his decision to rent the farm to Jeff rather than Carol, that Ezra had not breached a fiduciary duty, and therefore dismissed the action. Carol did not appeal from this ruling.
Iowa Code section 633.3(1) defines a "fiduciary" non-exclusively as including a "personal representative, executor, administrator, guardian, conservator and trustee."
Ezra later sought reimbursement from the trust for attorney fees expended in defending the suit. The court granted Ezra an award of $5,438.29. Carol appeals from this ruling.
Because this proceeding was tried in equity, our review is de novo. Iowa R.App.P. 6.4; see In re Receivership of Mt. Pleasant Bank Trust Co., 526 N.W.2d 549, 553 (Iowa 1995). We give weight to the district court's factual findings; however, we are not bound by them. Mt. Pleasant Bank, 526 N.W.2d at 553.
Carol's only contention on appeal concerns the award of attorney fees to Ezra. We first note Carol did not appeal the trial court's initial ruling in which it assumed Ezra owed a fiduciary duty to the beneficiaries of the trust. This conclusion is thus the law of the case. See In re Estate of Hermence, 235 Iowa 745, 748, 15 N.W.2d 905, 907 (1944) (noting the doctrine of the law of the case represents the practice of courts to refuse to reconsider what has once been decided). Moreover, Carol's brief on appeal characterizes Ezra's role as a fiduciary and therefore appears to concede the matter. Iowa Code section 633.200 (2001) provides:
The court shall allow and fix from time to time the compensation for fiduciaries, other than personal representatives, and their attorneys for such services as they shall render. . . .
A fiduciary's entitlement to indemnification for attorney fees turns on whether its defense of the litigation is for its personal protection against claims of malfeasance or for expenses properly incurred to defend the management of the trust. In re Trust of Killian, 459 N.W.2d 497, 503 (Iowa 1990). The burden is on the applicant for fees to show the services were reasonably necessary and the charges are reasonable in amount. In re Estate of Brady, 308 N.W.2d 68, 73 (Iowa 1981).
On our de novo review of the record, we concur in the district court's characterization of Carol's action as basically an action to force Ezra to exercise his discretion in a way favorable to Carol, without consideration of the remaindermen. We therefore agree with the district court's conclusion that the funds were not expended for Ezra's personal protection against claims of malfeasance, but rather to defend the management of the trust. Chris Petersen's will clearly required Ezra to give consent to any action of the trustee regarding farming operations. Accordingly, we conclude the fees sought were properly incurred to defend the management of the trust, see In re Trust of Killian, 459 N.W.2d at 503, and the court properly awarded Ezra the fees.