Beneficiaries who successfully defended settlor’s capacity to execute trust not entitled to attorney’s fees.

Curran v. Building Fund of the United Church of Ludlow, 2013 VT 118 (06-Dec-2013)

BURGESS, J. Plaintiffs appeal from a judgment based on a jury verdict finding that the testator Phyllis Agan possessed the capacity and free will to execute a trust, leaving sizable bequests to defendants, various nonprofit organizations in the Town of Ludlow, Vermont. Defendants cross-appeal, claiming that the trial court erred in denying their requests for attorney’s fees and prejudgment interest. We affirm.

The motion for attorney’s fees had two bases. First, defendants relied on 14A V.S.A. § 1004, which provides: “In a judicial proceeding involving the administration of a trust, the probate division of the superior court, as justice and equity may require, may award costs and expenses, including reasonable attorney’s fees, to any party, to be paid by another party or from the trust that is the subject of the controversy.” Second, defendants argued that the court should invoke its inherent equitable power to award attorney’s fees in the interests of justice. See In re Gadhue, 149 Vt. 322, 327, 544 A.2d 1151, 1154 (1987) (noting the “historic powers of equity courts to award attorney’s fees as the needs of justice dictate”). The trial court observed that this was a contest between beneficiaries and that defendants were defending their interests in receiving the gifts and no other purpose related to the trust itself. 

Even assuming that “administration” of the estate could be construed to include a contest between beneficiaries over the testator’s capacity or free will in establishing the trust, the issue would remain whether “justice and equity” require an award of attorney’s fees under the statute—a question which in this case is largely indistinguishable from whether the court abused its discretion under its common-law authority in ruling that attorney’s fees were not required for “reasons of justice.” On this issue, we discern no basis to conclude that the court abused its discretion in determining that this dispute between beneficiaries under the trust implicated no considerations of justice or equity that warranted an award of attorney’s fees. See Knappmiller v. Bove, 2012 VT 38, ¶ 4, 191 Vt. 629, 48 A.3d 607 (mem.) (observing that awards for attorney’s fees are generally reviewed for abuse of discretion)