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Losing on appeal, son must pay family’s appellate fees in trust dispute

May 29, 2019

A man who appealed judgments against him in a trust case involving a 40-acre Westfield property lost in virtually all respects and now is on the hook for the appellate legal fees of relatives who sued to block his actions.

The Indiana Court of Appeals ruled against Gary R. McQueary, the former trustee of the Sadie G. McQueary Trust, affirming a Marion Superior Court ruling that found him in breach of a mediated settlement. The trial court ordered Gary to pay the legal fees of Sadie’s grandsons, Nathan McQueary, Willis McQueary and Benjamin McQueary, who together held a 50 percent share in the Westfield property, with Gary holding a share for the other half.

After Sadie died, Gary became the successor trustee in 2013, and the next year the grandsons moved to docket the trust, claiming Gary was breaching his fiduciary duties. In January 2015, the parties reached a mediated settlement, agreeing to list the property for sale for $2.2 million. Gary later stepped aside as trustee, and Robert C. Thompson Jr. was appointed successor trustee.

After the listing expired and the property went unsold, the parties agreed to pay $10,000 to $15,000 for a survey, which listing agents insisted on, to remarket the property. But Gary revoked his consent, instead bringing a quiet title action in Hamilton Superior Court while the trust matter was still open in Marion Superior Court.

The grandsons moved to dismiss the Hamilton County suit, which ultimately was granted after Marion Superior Court issued an order in April 2018 stating it had acquired jurisdiction of the trust when the trust was docketed, and that jurisdiction remained. The court granted the grandsons’ motion to enforce the mediated settlement agreement with Gary and also ordered him to pay grandsons’ attorney fees of about $6,900 and the trust’s legal fees of $13,950.

The COA affirmed the trial court in all respects except the award of the trustee’s legal fees, finding the trustee was not subject to the mediation agreement between the parties, though the trust’s attorney fees could be paid from the trust itself. And because the COA affirmed that Gary breached the settlement agreement, “it is undisputed that the settlement agreement provides for attorneys’ fees. As the Grandsons have prevailed on appeal, we grant their request for appellate attorneys’ fees, and we remand to the trial court for a determination of reasonable fees to award the Grandsons,” Judge Edward Najam wrote for the court.

“…(B)y entering into the settlement agreement Gary agreed not to file any cause of action against any of the other parties to the agreement for any claim that was or could have been asserted under the Trust’s cause number,” Najam wrote.

“In sum, we hold that the Marion Superior Court did not err when it enforced the settlement agreement because the settlement agreement did not alter the terms of the Trust. We also hold that the Marion Superior Court did not err when it awarded attorneys’ fees to the Grandsons because Gary violated a provision of the settlement agreement,” the appellate panel concluded. “However, the trial court erred when it awarded attorney’s fees to the Trustee because the Trustee was not a party to the settlement agreement. We further hold that the Hamilton Superior Court did not err when it dismissed Gary’s complaint to quiet title because the same matter was pending in Marion County. Finally, we grant the Grandsons’ request for appellate attorneys’ fees, but we deny the Trustee’s request.”

The case was remanded for further proceedings.

The case is In Re: Petition to Docket Trust of Sadie G. McQueary; Gary R. McQueary v. Robert C. Thompson, Jr., Successor Trustee; Benjamin McQueary; Willis Matthew McQueary; and Nathan McQueary, 18A-TR-915.

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