Frank Gick, Individually and as Trustee of the Lois Jean Johnson Testamentary Trust, Appellant-Respondent v. Rebecca Henry, Appellee-Petitioner (2025)

MEMORANDUM DECISION

Case Summary

[1] Upon her death, Lois Jean Johnson established the Lois Jean Johnson Testamentary Trust (“the Trust”), naming Frank Gick as the trustee and beneficiary of the Trust for as long as he met certain conditions. Rebecca Henry was named as the sole remainder beneficiary. After a fire damaged some of the Trust property, Gick admitted to Henry that he was co-mingling the insurance funds received following the fire with his personal funds. Henry petitioned for an accounting of the Trust. The trial court ultimately granted Henry's request, finding that Gick had a duty to provide an accounting of the Trust to Henry, a trust beneficiary. The trial court also awarded Henry attorney's fees, an award that Gick challenges on appeal. We affirm.

Facts and Procedural History

[2] Johnson died testate on March 4, 2019, and her will established the Trust. The Trust property included a residential home (“the residence”) and approximately 300 acres of farmland in Benton, Warren, and Tippecanoe counties. Gick was named Trustee and beneficiary of the Trust so long as he occupied the residence “as his primary residence within six (6) months of [Johnson's] death, for as long as he is able to occupy [the residence] as his primary residence[.]” Appellant's App. Vol. II p. 30. The Trust would terminate upon Gick's “death or his disqualification as trust beneficiary.” Appellant's App. Vol. II p. 8. Henry was named the sole remainder beneficiary.

[3] The residence was severely damaged by a fire on January 21, 2023. On February 22, 2023, Henry requested an accounting and access to financial records relating to the Trust. Gick provided some, but not all, financial records to Henry. Gick informed Henry that he had received insurance payouts, which were to be used to rebuild the residence, and that he had comingled those funds in his personal bank account. Although he had provided Henry with some information, Gick maintained that he had no obligation to provide Henry with any information regarding the Trust's finances.

[4] On September 25, 2023, Henry petitioned for an accounting of the Trust. Gick opposed Henry's petition, claiming that he had provided sufficient information to Henry regarding the Trust. Gick also filed a number of counterclaims, all of which were subsequently dismissed after Gick “conceded during the hearing” that Henry's motion to dismiss the counterclaims should be granted. Appellant's App. Vol. II p. 10. On November 13, 2023, Henry moved for judgment on the pleadings. On August 9, 2024, the trial court entered judgment in favor of Henry and ordered Gick to pay “the costs of this action plus [Henry's] attorney[’s] fees pursuant to [Ind. Code sections 30-4-3-11(b)(4) and 30-4-3-22(e)].”¹ Appellant's App. Vol. II p. 13.

Discussion and Decision

[5] Gick contends that the trial court erred in awarding Henry attorney's fees, arguing that Henry had not shown, and the trial court had not found, that he had “breached any duty to Henry, or that the necessary elements under either statute were established to justify” the award. Appellant's Br. p. 10.

“We review a trial court's award of attorney's fees for an abuse of discretion.” River Ridge Dev. Auth. v. Outfront Media, LLC, 146 N.E.3d 906, 912 (Ind. 2020). “An abuse of discretion occurs when the court's decision either clearly contravenes the logic and effect of the facts and circumstances or misinterprets the law.” Id. “To make this determination, we review any findings of fact for clear error and any legal conclusions de novo.” Id.

Zartman v. Zartman, 168 N.E.3d 770, 782 (Ind. Ct. App. 2021), trans. denied.²

[6] The trial court awarded Henry attorney's fees pursuant to Indiana Code sections 30-4-3-11(b)(4) and 30-4-3-22(e). Indiana Code section 30-4-3-11(a) provides that “[t]he trustee is accountable to the beneficiary for the trust estate.” “If the trustee commits a breach of trust, the trustee is liable to the beneficiary for ․ (4) reasonable attorney's fees incurred by the beneficiary in bringing an action on the breach.” Ind. Code § 30-4-3-11(b). Furthermore, Indiana Code section 30-4-3-22(a) provides that

[a] beneficiary of a trust may maintain an action:

(1) to compel the trustee to perform his duties;

(2) to enjoin the trustee from committing an act which may be a breach of trust;

(3) to compel the trustee to redress a breach of trust; or

(4) to remove a trustee for cause and to appoint a successor trustee.

“If a beneficiary successfully maintains an action under subsection (a) of this section ․, [s]he is entitled to a judgment for reasonable attorney's fees.” Ind. Code § 30-4-3-22(e).

[7] Gick argues that Indiana Code sections 30-4-3-11(b)(4) and 30-4-3-22(e) do not support the award of attorney's fees. Specifically, Gick asserts that the trial court did not find that he had “committed any breach of trust, or that he [had] failed to account for, or report, any trust assets or income.” Appellant's Br. p. 13. For her part, Henry argues that “the record readily demonstrates that [Gick] breached his duties as trustee by violating Indiana Code [section] 30-4-3-11(b)(5)–(b)(7).” Appellee's Br. p. 9. Henry also argues that “there is no requirement to prove a breach in order to award fees under Indiana Code [section] 30-4-3-22(e).” Appellee's Br. p. 9.

[8] A trustee “has a duty to administer a trust according to the terms of the trust.” Ind. Code § 30-4-3-6(a). A trustee also has a duty, inter alia, to:

(5) Keep the trust property separate from the trustee's individual property and separate from or clearly identifiable from property subject to another trust.

(6) Maintain clear and accurate accounts with respect to the trust estate.

(7) ․ [K]eep the following beneficiaries reasonably informed about the administration of the trust and of the material facts necessary for the beneficiaries to protect their interests:

(A) A current income beneficiary.

(B) A beneficiary who will become an income beneficiary upon the expiration of the term of the current income beneficiary, if the trust has become irrevocable by:

(i) the terms of the trust instrument; or

(ii) the death of the settlor.

A trustee satisfies the requirements of this subdivision by providing a beneficiary described in clause (A) or (B), upon the beneficiary's written request, access to the trust's accounting and financial records concerning the administration of trust property and the administration of the trust.

Ind. Code § 30-4-3-6(b).

[9] While the trial court did not explicitly use the word “breach” in its order, the record demonstrates that Gick breached his duties. The term “breach” means “unfulfillment or nonfeasance constituting [an] infraction” of a duty. Webster’s Third New International Dictionary 270 (Phillip Babcock Gove et al. eds., G. & C. Merriam Company 1964). In the unchallenged portions of its order, the trial court found that Gick had failed to provide Henry with a full accounting of the Trust, upon being asked to provide one. Gick's failure to do so constitutes “unfulfillment or nonfeasance” of his duties as trustee. See Ind. Code § 30-4-3-6(b)(7). The trial court also noted Gick's statements to Henry regarding the comingling of Trust assets with his own personal assets. The fact that the trial court may not have explicitly used the word “breach” to describe Gick's actions does not change the fact that his failure to perform his statutory duties as trustee resulted in a breach of said duties.

[10] Likewise, there is no question from either record or the trial court's order that Henry successfully maintained an action to compel Gick to perform his duties, i.e., to provide her with an accounting of the Trust. Henry initiated the underlying action after Gick had refused to perform his duties as trustee. To the extent that Gick cites to authority suggesting that an award of attorney's fees under Indiana Code section 30-4-3-22(e) is only proper upon a showing of wrongdoing, see In re Miller, 935 N.E.2d 729, 745 (Ind. Ct. App. 2010), the facts of this case support a reasonable inference that Gick had committed a wrongdoing, i.e., refusing to provide a full and complete accounting of the Trust upon being asked for one by a beneficiary. We cannot say that the trial court abused its discretion in awarding Henry attorney's fees.³

[11] The judgment of the trial court is affirmed.

FOOTNOTES

1.   Henry subsequently filed an affidavit for attorney's fees, seeking $65,000.00 in fees. Collection of the fees was stayed pending appeal.

2.   While Gick claims that we should have applied a de novo standard of review, relevant authority is clear that we review an award of attorney's fees for an abuse of discretion. See Zartman, 168 N.E.3d at 782.

3.   Assuming that she would be successful on appeal, Henry requests an award of appellate attorney's fees. While we have previously found the language of Indiana Code sections 30-4-3-11(b)(4) and 30-4-3-22(e) to be “broad enough to encompass reasonable appellate attorney[’s] fees”, see In re Riddle, 946 N.E.2d 61, 71 (Ind. Ct. App. 2011), we reject Henry's request for appellate attorney's fees, because we cannot say that Gick's appellate arguments were frivolous or made in bad faith. See Ind. Appellate Rule 66(E) (“The Court may assess damages if an appeal, petition, or motion, or response, is frivolous or in bad faith. Damages shall be in the Court's discretion and may include attorney's fees.”).

Bradford, Judge.

Judges Pyle and Kenworthy concur. Pyle, J., and Kenworthy, J., concur.