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In re Walter F. Brown Trust

Court of Appeals of Oregon

December 24, 2014

IN THE MATTER OF the Walter F. Brown Trust, u/a/d January 20, 1997. JAMES R. MCDONALD, Appellant,
v.
NANCY MACDONALD, Respondent

Argued and Submitted February 12, 2014.

Clackamas County Circuit Court. CV11050638. Elizabeth Welch, Senior Judge.

Matthew Whitman argued the cause and filed the brief for appellant.

No appearance for respondent.

Before Duncan, Presiding Judge, and Hadlock, Judge, and Lagesen, Judge.[*]

OPINION

Page 170

[267 Or.App. 747] HADLOCK, J.

Petitioner is trustee of the Walter F. Brown Trust, a revocable trust established by Walter Brown who, as trustor, retained authority to manage trust assets. Respondent was the conservator for Walter Brown.[1] Petitioner, and his predecessor trustee, retained an attorney to represent them in an action brought by the conservatorship to have the trust declared void and to have the trust property brought under the conservator's control. After that lawsuit settled, petitioner filed a petition in the trial court in which he asked the court to instruct him to pay the attorney approximately $42,000 for services that the attorney had rendered. Respondent, in her capacity as conservator, filed an answer in which she opposed the issuance of those instructions on the ground that the requested amount was unreasonable. The trial court issued a judgment directing petitioner to pay his attorney $20,000. Petitioner appeals, contending that the court erred by not instructing him to pay the full amount of the attorney fees. As explained below, we reject the claims of error that form the basis of petitioner's appeal because he did not preserve them for our review.

The trial court's factual findings are undisputed. Walter Brown established the trust in 1997. Laura Aust eventually became the sole trustee. The only asset of the trust was a piece of real property. Aust sought to sell the property and use the proceeds for Walter Brown's maintenance and support.

One of Walter Brown's sons, Jeffrey, was appointed conservator for his father. In that capacity, Jeffrey brought an action to invalidate the trust and require transfer of the trust property to him. Aust executed a written fee agreement with attorney Cartwright and his firm to represent her in the matter. After the parties litigated a series of dispositive motions, the case settled without a hearing on the merits.

The trust survived the settlement, the property remained in the trust, and petitioner succeeded Aust as trustee. Respondent succeeded Jeffrey Brown as Walter [267 Or.App. 748] Brown's conservator. Petitioner attempted to sell the trust property, but discovered that Jeffrey Brown had clouded its title by filing a notice of lis pendens. Upon petitioner's request that he remove the notice, Jeffrey Brown refused to do so because he was no longer conservator; respondent refused to remove the notice because she had not filed it. Petitioner retained attorney Cartwright, who eventually succeeded in getting the notice removed, thus clearing the way for sale.

Petitioner sold the trust property. He then filed a " Trustee's Petition for Instructions" with the trial court, in which he sought a court order directing him to pay, out of the

Page 171

proceeds of the property sale, three distinct administrative expenses of the trust: Aust's fees for serving as trustee, petitioner's fees for serving as trustee, and Cartwright's attorney fees for representing both of them in the disputes with the conservatorship.[2] Petitioner explained that he sought those instructions because respondent had demanded that he seek court approval before paying the expenses. Petitioner, " [w]ithout conceding that [respondent] has any standing to make that demand," asked the court to issue one of two alternative instructions: (1) that Walter Brown, under the powers reserved to him by the terms of the trust, had directed petitioner to pay all the administrative expenses and that petitioner was therefore directed to pay those expenses; or, (2) that the administrative expenses were " approved" by the court and that petitioner was therefore instructed to pay them to the extent that the trust's assets would permit. With respect to Cartwright's attorney fees, ...


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