RICHARD NEAL SCHEUERMANN and JEFFREY RAY GUMM, TRUSTEES OF THE GUMM FAMILY TRUST, Plaintiff-Appellants,
DAVID M. GUMM, TRUSTEE and DAVID M. GUMM, INDIVIDUALLY, Defendant-Appellees.
Appeal from the Iowa District Court for Dallas County, Richard B. Clogg, Judge.
Co-Trustees appeal the district court's award of attorney fees to a third trustee.
Thomas P. Murphy of Hopkins & Huebner, P.C., Adel, for appellant.
John P. Dollar and Steven C. Despotovich of Wilson, Deege, Dollar, Despotovich & Riemenschneider, West Des Moines, for appellee.
Considered by Vogel, P.J., and Vaitheswaran and Bower, JJ.
Richard Scheuermann and Jeffrey Gumm, as co-trustees of the Gumm Family Trust, appeal the district court's ruling awarding attorney fees to their fellow trustee, David Gumm, to be paid from the trust. They assert David's application for fees was untimely as David failed to request attorney fees at the trial and waited forty-seven days after the court's ruling on the posttrial motions to file his application. They further claim res judicata bars David's relitigation of attorney fees. Because there is no statutory deadline for the filing of attorney fee applications, we conclude David's application was not untimely. However, we modify the district court's ruling as we find the district court did abuse its discretion in awarding attorney fees to David that were incurred in a separate action. We therefore modify the district court's ruling to remove the attorney fees associated with that separate action.
I. BACKGROUND FACTS AND PROCEEDINGS.
This appeal arises from a dispute involving the Gumm Family Trust. In February, 2011, David, as one of three co-trustees, filed suit in Greene County against his co-trustees, Richard and Jeffrey, alleging various claims against them. This Greene County petition was dismissed on summary judgment on January 25, 2012, and the court assessed costs against David but did not address attorney fees.
In September of 2011 while the Greene County case was still pending, Richard and Jeffrey filed a declaratory judgment action in Dallas County. They sought a legal determination with respect to various aspects of the trust, as well as removal of David as the third co-trustee. David, both individually and in his capacity as co-trustee, filed an answer generally denying the allegations in the petition and seeking attorney fees. He also filed a counterclaim alleging the same complaints against Richard and Jeffrey that were alleged in the Greene County case.
The district court granted partial summary judgment in the Dallas County case, ruling the trustees could sell the property of the trust by majority action and dismissing the counterclaims made by David based on the preclusive effect of the Greene County case. The case proceeded to trial on the issue of David's removal as a trustee and on Richard and Jeffrey's request to have David's farm lease terminated.
On April 4, 2012, the court issued a ruling in favor of David finding he could continue to farm the land under the terms of the trust, and refusing to remove David as a trustee since the trust had not been damaged or endangered by David's actions. The court assessed costs to Richard and Jeffrey, but made no mention of attorney fees. Richard and Jeffrey then filed a motion to amend or enlarge regarding the substance of the court's ruling, which David resisted. On April 27, 2012, the court denied the motion.
Forty-seven days after the court's ruling on the motion to amend or enlarge, David submitted an application for reimbursement of attorney fees covering both the Greene County and Dallas County actions. Richard and Jeffrey filed a written resistance to the application asserting David's actions in both the Greene County and Dallas County actions have not benefited the trust, and thus, he should not be entitled to attorney fees under Iowa Code section 633A.4507 (2011). A hearing was held, though it was unreported. On August 7, 2012, the district court granted David's application for fees.
In its opinion, the court first noted Richard and Jeffrey's attorney fees of approximately $40, 000 for the Greene County and Dallas County actions had been paid by the trust. The court then reasoned that David's defense of the Dallas County action and the litigation in Greene County benefitted the trust, such that the trust should pay the attorney fees associated with both ...