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In re Estate of Mouchague

Court of Appeals of Kansas

May 3, 2019

In the Matter of the Estate of Barbara Mouchague.


         1. Standing is a component of subject matter jurisdiction, which any party, or the court on its own motion, may raise at any time.

         2. Whether a party has standing in a judicial action, like other jurisdictional issues, presents a question of law over which an appellate court's scope of review is unlimited.

         3. The determination of jurisdiction and standing rests on the facts in existence at the time of filing.

         4. Generally, the trustee, rather than a beneficiary of the trust, is the proper party to sue or defend actions and claims affecting the trust. An exception to that rule permits a beneficiary of a trust to sue or defend when the trustee improperly or unreasonably refuses to do so.

         5. The Kansas Uniform Trust Code charges the trustee with a duty to prosecute or defend legal actions to protect trust property. This duty includes taking reasonable steps to enforce or realize on other claims held by the trust and to defend actions that may result in a loss to the trust estate. Reasonable steps may include appealing to a higher court when the costs and risk of litigation make such a decision reasonable under all the circumstances.

         6. The party seeking to avail himself or herself of an exception to a general rule carries the burden of establishing the facts necessary to invoke the provisions of that exception. Here, the beneficiary of the trust bears the burden to show that the trustee improperly or unreasonably failed to protect their interest by not appealing a judgment.

         7. A party seeking attorney fees on appeal must attach to the motion an affidavit that specifies the nature and extent of the services rendered, the time expended on the appeal, and the factors considered in determining the reasonableness of the fee.

         8. When a fee applicant fails to submit an affidavit containing the required detail, as required by Supreme Court Rule 7.07(b)(2) (2019 Kan. S.Ct. R. 50), this court has no ability to determine the reasonableness of fees incurred on appeal.

          Appeal from Johnson District Court; Michael P. Joyce, judge.

          Mark D. Lewis, of Gardner, for appellants Patricia and Leonard Kowalski.

          Michelle M. Burge, of Kirkland Woods & Martinsen LLP, of Overland Park, for appellee Terry Diehl, executor of the Estate of Barbara Mouchague.

          Before Bruns, P.J., Schroeder and Gardner, JJ.

          Gardner, J.

         This appeal pertains to ongoing litigation between Terry Chamberlain Diehl (the executor for the estate of Barbara A. Mouchague) and Leonard and Patricia Kowalski, beneficiaries of Mouchague's trust. In addition to the probate case, the parties have been involved in three civil actions below which we need not detail. In this appeal, the Kowalskis claim the probate court erred in awarding attorney fees and expenses to Diehl resulting from one of the civil cases and for previously appealing that case-a case to quiet the Kowalskis' claim to the title and secure Mouchague's property as belonging to the estate. Diehl responds that the Kowalskis, as beneficiaries of Mouchague's trust but not of the estate being litigated in probate court, lack standing to bring this appeal. We agree, finding that the trustee is the proper party to bring an action affecting the trust and that the Kowalskis have not shown that the trustee breached its fiduciary duty so as to permit them to appeal instead of the trustee.

         Diehl has also moved for an award of attorney fees incurred in defending this appeal. But she has failed to include in her affidavit the specific detail required by our Rule, so we deny that motion.

         Factual and Procedural Background

         When Barbara A. Mouchague died in December 2012, Terry Chamberlain Diehl was appointed the executor of her estate. The sole beneficiary of the estate is the Barbara A. Mouchague Trust. The Country Club Trust Company serves as its trustee but is not a party to this appeal. The trust names four beneficiaries: Leonard Kowalski, Patricia Kowalski, and two charitable organizations. The parties to this appeal are Diehl, as the executor of Mouchague's estate, and the Kowalskis, who have an 80% equitable interest in the decedent's trust.

         This appeal has a complicated history because in addition to the probate case, the parties have been involved in three underlying civil cases which the district court tried together. One of those cases is relevant here. In 14 CV 4300, Diehl, in her capacity as executor, sued to set aside a joint tenancy deed in the Kowalskis' and Mouchague's names and to quiet title in the estate when she was gathering estate property. The district court ruled in favor of Diehl on the quiet title action and then ordered the Kowalskis to pay Diehl's attorney fees and expenses of over $60, 000. The Kowalskis appealed. This court reversed and vacated the fee award on appeal, finding that the fees could not be assessed against the Kowalskis because no contractual or statutory basis for doing so was shown. Diehl v. Kowalski, No. 114, 706, 2016 WL 6651575, at *4 (Kan. App. 2016) (unpublished opinion). The general rule thus applied that litigants are responsible for their own attorney fees. Robinson v. City of Wichita Employees' Retirement Bd. of Trustees, 291 Kan. 266, 279, 241 P.3d 15 (2010). This court also stated that the fee award in the quiet title action was not a fee award in the probate proceeding and that the district court had expressly deferred ruling on fees in the probate case until the estate was closed. Kowalski, 2016 WL 6651575, at *1.

         After this court vacated the award for attorney fees in the quiet title action, Diehl petitioned the probate court under K.S.A. 59-1717 for payment of those same fees and expenses. The district court again awarded Diehl the attorney fees and litigation expenses related to the quiet title action but this time assessed them against the decedent's estate instead of against the Kowalskis personally.

         Diehl also petitioned the district court for an award of her attorney fees incurred in defending against the Kowalskis' appeal in the quiet title action-Kowalski, 2016 WL 6651575. The court at first denied Diehl's requested appellate attorney fees, holding that all legal fees and expenses incurred in an appeal must be addressed by appellate courts under Kansas Supreme Court Rule 7.07 (2019 Kan. S.Ct. R. 50). Diehl then sought her fees from the Kansas Court of Appeals under Rule 7.07 but was unsuccessful. She then petitioned the district court again for the award under K.S.A. 59-1717, and the district court awarded the fees.

         The Kowalskis appeal, challenging the probate court's award of Diehl's attorney fees and expenses to pursue the quiet title action and to defend that award on appeal. They contend that Diehl cannot seek fees now because Diehl failed to appeal from the original fee award against the Kowalskis in 2015. Although the Kowalskis appealed that fee award, giving rise to the quiet title action, Diehl did not. The Kowalskis also argue that the probate court abused its discretion by not requiring proper segregation of fees, that the amount of fees the probate court awarded was excessive and unreasonable, and that the probate court lacked jurisdiction to award fees incurred on appeal.

         We note that Diehl moved to strike the Kowalskis' notice of appeal because it stated that the appeal was being filed on behalf of the trustee and the other beneficiaries of the trust, but neither the Country Club Trust Company nor the beneficiaries other than the Kowalskis joined the appeal. The district court denied Diehl's motion to strike the appeal.

         Do the Kowalskis Have Standing to Appeal the District Court's Ruling in ...

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