Summary
In Dayton v. Conger, 448 So.2d 609 (Fla. 3d DCA 1984), the court held that beneficiaries could not be held personally liable for a trustee’s attorney’s fees incurred in prosecuting an action to set aside a power of appointment, because no contract or statute authorized such an award and section 733.106(3) does not impose personal liability. The court affirmed the probate court’s order directing that the attorney’s fees be paid out of the beneficiaries’ shares of the estate under section 733.106(4), given their undue influence. It also upheld the personal assessment of costs against the beneficiaries, as chancery courts may tax costs against the losing party as justice requires.
Topics
Practice areas
Questions Presented
- Whether the beneficiaries can be held personally liable for attorney's fees, thus subjecting their non-estate assets to execution.
- Whether the probate court properly ordered that the attorney's fees be paid out of the beneficiaries' shares of the estate.
- Whether the portion of the court's order assessing costs against the beneficiaries personally was proper.
Holdings
- Beneficiaries cannot be held personally liable for the trustee's attorney's fees incurred in prosecuting the action to set aside the exercise of the power of appointment, because attorney's fees incurred during the lawsuit between the parties may only be awarded pursuant to a statute or contract, and neither Section 733.106(3), Florida Statutes, nor any other statute authorizes personal liability against a beneficiary for such fees.
- The probate court has discretion under Section 733.106(4) to direct that attorney's fees be paid from beneficiaries' shares of the estate when warranted by appropriate circumstances, including findings that the beneficiaries engaged in wrongdoing (undue influence, procuring a void exercise).
- The probate court may, as in chancery actions, assess costs against the losing parties personally, and also order costs paid from beneficiaries' interest in the estate, especially when the beneficiaries wrongfully procured the exercise of the power of appointment.
Key quotations
“We held, in Sheridan, that where the fees sought are those incurred during the lawsuit between the parties, the rule is that attorney's fees will be awarded only pursuant to a contract or statute.” (611)
“In other words, pure attorney's fees incurred in prosecuting or defending the action itself may only be awarded under the general rule requiring a statute or contract, but attorney's fees allowed as special damages do not fall within this general rule.” (611)
“Although section 733.106(3), Florida Statutes (1983), provides for awarding fees for services rendered to the estate by attorneys, it must be strictly construed. Roberts v. Carter, 350 So.2d 78 (Fla.1977). So construed, it does not authorize the imposition of personal liability upon the beneficiary for the attorney's fees at issue here.” (611)
“This provision gives the probate court latitude in determining which assets of the estate should be used to pay attorney's fees. The statute authorizes the court to order that attorney's fees be borne unequally by different portions of the estate when warranted by appropriate circumstances.” (612)
Factual background
The decedent's will created a marital trust naming appellee as trustee. The trust granted the decedent's spouse a special inter vivos power of appointment in favor of decedent's descendants. The spouse exercised the power in favor of the appellants (beneficiaries). The trustee filed a petition to set aside the exercise, and the probate court found that the spouse lacked capacity, that the beneficiaries exerted undue influence, and that the distribution violated the decedent's intent. The court declared the exercise ineffective, and those findings were not appealed. Subsequently, the trustee sought attorney's fees and costs, leading to the order on appeal.
Procedural history
The trustee successfully petitioned the probate court to declare the exercise of a power of appointment ineffective. The probate court found lack of capacity, undue influence, and distribution contrary to the decedent's intent. After these findings went unchallenged, the trustee petitioned for attorney's fees and costs. The probate court awarded $50,000 in fees and $4,626.25 in costs, holding the beneficiaries jointly and severally liable. The beneficiaries appealed.