Twete v. Mullin

Summary

The North Dakota Supreme Court reversed a district court judgment awarding attorney’s fees to Richard Twete in litigation involving a breach of trust and constructive trust. The court held that neither contractual nor statutory authority supported the award, and that the common-fund exception to the American Rule did not apply because Twete was the trust’s sole beneficiary.

Holdings

1. North Dakota's statutory remedies for breach of trust do not include an award of attorney's fees, and the constructive trust imposed as a remedy supplies no contractual authority for such an award.
2. North Dakota's adoption of the Uniform Trust Code without section 1004 did not foreclose all common-law attorney's-fees awards in breach-of-trust cases; instead, the common law of trusts and principles of equity continue to supplement the statutory trust chapters except where modified by statute.
3. The common-fund exception to the American Rule does not authorize an attorney's-fees award in a breach-of-trust action brought by and benefiting only the trust's sole beneficiary.
4. The district court abused its discretion by misinterpreting the law and awarding Twete attorney's fees without applicable statutory, contractual, or common-fund authority.

Questions Presented

1. Whether the North Dakota Uniform Trust Code provides statutory authority for an award of attorney's fees in a breach-of-trust action.
2. Whether the omission of Uniform Trust Code section 1004 from North Dakota's adoption of the Code displaced the common-law authority to award attorney's fees in breach-of-trust cases.
3. Whether the common-fund exception to the American Rule authorizes attorney's fees when the action is brought by and benefits only the trust's sole beneficiary.
4. Whether the district court abused its discretion by awarding Twete attorney's fees.

Disposition

reversed