A woman who claimed a bank acting as trustee breached its fiduciary duties by selling stock of JP Morgan Chase over the course of several years is still on the hook for more than $100,000 in attorney fees and costs to the trustee, the Indiana Court of Appeals affirmed Thursday. The COA agreed Susan Moeder brought a groundless claim against Salin Bank and Trust Co. after it sought to resign as trustee.
Moeder’s mother established the trust with her two children, Moeder and John Moeder, as beneficiaries. After her mother’s death, Moeder was successor trustee, but she later resigned and Salin was appointed successor trustee. At that time, Moeder received half of the trust’s assets and now John Moder, who is blind and subject to a guardianship, is the primary beneficiary.
Salin decided to diversity the trust after discovering 85 percent of the trust’s assets were JP Morgan stock. It sold approximately half off in June 2007 and waited until 2009 to sell more shares. Overall, the trust portfolio value increased by nearly $65,000 under Salin’s management by the time it petitioned the probate court to be removed as trustee in 2011.
Moeder objected, alleging that Salin “generally and consistently failed to administer the trust as a ‘prudent investor.’” But the trial court found Moeder’s claims were time-barred and her objection had done nothing but erode her brother’s share of the trust. Marion Superior Judge Gerald Zore ordered her to pay $106.001.28 in attorney fees and litigation costs.
In In the Matter of the Irrevocable Trust of Mary Ruth Moeder; Susan R. Moeder v. Salin Bank & Trust Company, 49A05-1403-TR-142, Moeder appealed both the ruling in favor of Salin and the amount of fees awarded.
“Moeder raised an objection to Salin’s accounting and alleged that Salin breached its fiduciary duties. Although she pointed at the hearing to several actions taken (or not taken) by Salin, she failed to provide the court with any competent evidence that such action constituted legal wrongdoing. Instead, Moeder relied on her own lay testimony that Salin’s actions or omissions constituted imprudent management of the Trust assets,” Judge L. Mark Bailey wrote.
“Overall, the value of the Trust grew under Salin’s management, and Moeder offered no evidence that any other approach Salin could have taken would have resulted in a greater benefit. Because Moeder presented to the probate court no evidence to support her objection and claims, the court did not err in concluding that Moeder brought or continued to litigate a groundless claim.”
Salin Bank provided a detailed list of attorney fees incurred defending Moeder’s objection, so the COA affirmed the amount. The appeals court denied the bank’s request for appellate attorney fees, finding it reasonable that Moeder would appeal such a large judgment against her.