A18-1656

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-1653
A18-1656

In re the Trust of the Charles W. J. Curry
Trust Dated June 5, 1991, as amended,

and

In re the Trust of the Phyllis A. Curry
Trust Dated June 5, 1991, as amended.

Filed June 24, 2019
Affirmed in part, reversed in part, and remanded
Smith, Tracy M., Judge

Dakota County District Court
File Nos. 19HA-CV-16-954, 19HA-CV-16-955

Timothy W. Ridley, Hannah E. Be llanger, Julia J. Nierengarten, Meagher & Geer,
P.L.L.P., Minneapolis, Minnesota (for appellant Janet Curry)

Theresa M. Bevilacqua, Tiana M. T owns, Dorsey & Whitney LLP, Mi nneapolis,
Minnesota (for respondent Charles Curry, Jr.)

Considered and decided by Sche llhas, Presiding Judge; Jesson, Judge; and Smith,
Tracy M., Judge.

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U N P U B L I S H E D O P I N I O N
SMITH, TRACY M., Judge
Appellant Janet A. Curry (Janet) 1 is a beneficiary of her deceased parents’ trusts.
She sued respondent Charles W.J. Curry Jr. (Charlie), her brother and trustee of the trusts,
for breach of fiduciary duty. Fo llowing a bench trial, the dist rict court made factual
findings, concluded that Janet had not established her claim fo r breach of fiduciary duty,
and ordered repayment of two sum s to the trusts. The district c ourt further ordered that
Charlie’s attorney fees be paid from the trusts and denied payment of Janet’s attorney fees.
On appeal, Janet does not challenge the district court’s factua l findings or the ordered
repayments to the trusts. Rather, she argues (1) that, given the factual findings, the district
court made a reversible legal error by concluding that Charlie did not breach his fiduciary
duty, and (2) that the district court abused its discretion by awarding payment of Charlie’s
attorney fees and denying payment of hers. We affirm the distri ct court’s rejection of
Janet’s claim for breach of fiduciary duty, but we reverse and remand for redetermination
of attorney-fee awards to both parties.
FACTS
The district court found the following facts. Charles W.J. Cur ry Sr. (Charles) and
Phyllis A. Curry (Phyllis) were married and had three children: Carol O.A. Curry (Olivia),
Janet, and Charlie. In 1991, Charles created the Charles W.J. C u r r y T r u s t ( t h e C h a r l e s
trust), and Phyllis created the Phyllis A. Curry Trust (the Phy llis trust), which was the

1 Because the family members involved in this case share the same last name, we use their
first names for ease of reference.

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mirror image of the Charles trust. Both trusts made the other spouse the lifetime beneficiary
and a trustee. They also made the children—Olivia, Janet, and C harlie—equal remainder
beneficiaries. The trusts furthe r provided that, if any of the children were to die before
Charles or Phyllis, the predecease d child’s issue was to take t he child’s share by right of
representation. The trusts were subsequently amended so that, by 2000, Charlie was a co-
trustee of each trust, along with his parents.
Charles died in 2003, leaving an estate worth approximately th ree million dollars.
Starting then, Charlie and Phyllis managed the trusts as co-trustees. At the end of each year,
Charlie and Phyllis discussed “the performance of the trusts’ i nvestments, the balance in
various accounts, and tax implications.” Charlie also kept good records of the expenses of
the trusts. Charlie was “competen t and knowledgeable in investi ng,” and “the trusts’
investments or their performance” were nothing but suitable.
In 2008, Olivia died unexpectedly, and Morgan LaManna (Morgan) —Olivia’s
daughter—became entitled to Olivia’s share in the trusts. In the wake of this event, Charlie
and Phyllis discussed the possibility of amending the Phyllis t rust so that Phyllis’s other
grandchildren would receive som e distributions on her death fro m the Phyllis trust as
Morgan unchangeably w ould from the Charles trust. Phyllis’s onl y other grandchildren
were Charlie’s two daughters. In 2009, the Phyllis trust was va lidly amended, and the
beneficiaries were changed to Janet (30%), Charlie (30%), Charl ie’s wife (20%), and
Charlie’s daughters (10% each).

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In 2009, 2010, 2012, and 2013, co-trustees Phyllis and Charlie withdrew some of
the trust principal from the Char les trust and transferred it t o the Phyllis trust. The
withdrawals were made under article 6.1(1) of the trust agreement of the Charles trust:
[Phyllis] shall have the absolute right to withdraw the
greater of Five Thousand and 00/ 100 ($5,000.00) Dollars or
five percent (5%) of the value of the principal of the trust as of
the end of the preceding fiscal year of the trust, from the
principal of the trust, in any one year, by submitting a writte n
request for such withdrawal to the trustee.

The withdrawal amounts were all within the financial limits of this trust provision, but only
the 2009 withdrawal was made u pon a written request. Phyllis di d not submit her request
in writing for the 2010, 2012, or 2013 withdrawals. Charlie tes tified that Phyllis and he
“just thought [a written request] wasn’t necessary” because the exercise seemed too formal
given their relationship. Howeve r, wanting to “keep the balance s o f t h e t w o t r u s t s
somewhat equal to one another,” Phyllis intended to effectuate the principal withdrawals.
The Charles trust permitted inc ome distributions to Phyllis as the lifetime
beneficiary of that trust. Phyllis died in 2013, and Charlie be came the sole trustee of both
trusts. A few months after Phy llis’s death, Charlie made an inc ome distribution in the
amount of $38,958 from the Charles trust to the Phyllis trust. Also, he began to compensate
himself for the services he provided as trustee at a rate of $30 per hour.
Janet commenced this action in 2016, alleging that the 2009 am endment was the
result of Charlie’s undue influence on Phyllis and that Charlie breached his fiduciary duty.
The district court rejected both claims, rendering judgment in favor of Charlie. While the
district court concluded that Charlie did not breach his fiduciary duty, it did make factual
findings that the three acts challenged by Janet—the principal withdrawal, the post-mortem

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income distribution, and the trus tee compensation—were against the clear terms of the
trust. The district court ordered the income distribution and the trustee compensation to be
returned to the respective trus t from which each came. Also, th e district court declined
Janet’s request that her attorney fees be paid from the trusts while allowing, over Janet’s
objection, Charlie to charge his attorney fees to the trusts.
Janet appeals.2
D E C I S I O N
I. The district court did not err by rejecting the breach-of-fiduciary-duty claim.

Janet argues that the district court should have concluded that Charlie breached his
fiduciary duty because it found that he violated the clear terms of the trusts. It is undisputed
on appeal that, in three specific ways, Charlie violated the cl ear terms of the trusts: by
making principal withdrawals without a written request from Phy llis, by making a post-
mortem income distribution from the Charles trust, and by charging trustee compensation
to the trusts.3
Despite these violations, the district court rejected Janet’s breach-of-fiduciary-duty
claim, reasoning that she failed to prove that Charlie did not exercise reasonable care, skill,
and caution in carrying out his duties. Janet argues that, under Minnesota caselaw and the

2 Janet does not appeal the district court’s rejection of her undue-influence claim.

3 Charlie argues that the Charles trust “specifically permitted fees to be charged by a
trustee,” implying that the district court’s order making him repay the trustee compensation
is erroneous as applied to the Charles trust. We decline to add ress that issue, however,
because Charles did not file a notice of related appeal. Failur e to file a notice of related
appeal limits the issues on appeal to those properly raised by the appellant. Nordling v.
N. States Power Co., 465 N.W.2d 81, 87 (Minn. App. 1991), rev’d on other grounds, 478
N.W.2d 498 (Minn. 1991).

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Restatement (Second) of Trusts, a trustee breaches his fiduciary duty whenever he fails to
follow the unambiguous terms of the trust instrument. See, e.g., In re Revocable Tr. of
Margolis, 731 N.W.2d 539, 546 (Minn. App. 2007) (“Trustees also have a duty to act
pursuant to the terms of the trust, and they commit a breach of trust when they fail to do
so.”) (citing Restatement (Second ) of Trusts at § 201); Restate ment (Second) of Trusts
§ 201 cmt. b (commenting that “[a] trustee commits a breach of trust . . . where he violates
a duty because of a mistake as to the extent of his duties and powers”). Because Charlie
violated the clear terms of the trust in three ways, she argues , he necessarily breached his
fiduciary duty.
On appeal, if a complaining party shows that the district cour t committed an error,
the mere existence of that erro r is, by itself, insufficient to require a grant of relief; the
complaining party must also show that the error prejudiced the complaining party. See In
re Tr. of Hill, 499 N.W.2d 475, 488 (Minn. App. 1993) (citing Minn. R. Civ. P. 61), review
denied (Minn. July 15, 2003). We need not decide whether the district court erred by
concluding that Charlie did not v iolate his fiduciary duty if t he district court’s error was
harmless. Minn. R. Civ. P. 61 (requiring harmless error to be i gnored). We turn to that
question.
A. The principal withdrawals

Janet argues that the distric t court erred by not concluding that Charlie breached his
fiduciary duty when he permitted Phyllis to make principal withdrawals without a written
request. “To prevail on a breach-of-fiduciary-duty claim, a pla intiff must prove four
elements: duty, breach, causation, and damages.” Lund as Tr. of Revocable Tr. of Kim A.

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Lund v. Lund , 924 N.W.2d 274, 284 (Minn. App. 2019), review denied (Minn. Mar. 27,
2019). Janet’s argument addresses the first two elements—duty and breach. But the district
court also addressed the element of causation. And the court found it lacking.
The district court found that “[i]t was completely up to Phyllis whether to withdraw
5% of the principal from [the Charles trust] each year” and that, “when these withdrawals
were made, it was by [Phyllis’s] intention.” The district furth er found that there was no
evidence of injury “based on”—in other words, caused by—the lack of writing from Phyllis
requesting the withdrawal. Janet does not challenge these findi ngs. They establish that,
even if Charlie had fully discharged the duty that Janet argues he was bound with (the duty
to enforce the trust instruments and require Phyllis to submit a written request), the
principal withdrawals would still have occurred. Phyllis, inten ding to effectuate the
principal transfers and having every right to do so, would have produced the written
request. The lack of a written request therefore did not cause harm.
Because Janet’s breach-of-fiduciary-duty claim fails for lack of causation based on
the district court’s findings, any error by the district court in concluding that Charlie did
not breach his fiduciary duty by allowing the principal withdra wals to happen without a
writing is harmless.
B. The income distribution and trustee compensation

Janet also asserts error by the district court regarding the i ncome distribution and
trustee compensation. But, on both matters, the district court granted the remedies that
Janet sought. Janet asked the district court to order repayment of the income distribution
and trustee compensation to the t rust from which the funds came , and the district court

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ordered exactly that. Janet does not explain how she was prejud iced by the fact that the
harm corrected by the district court was not labeled as the res ult of a breach of fiduciary
duty. She therefore fails to show prejudice. Nevertheless, while Janet has not shown a basis
for reversal on the merits of her claim, the fact that the district court ordered remedies that
Janet sought is relevant to the parties’ requests for attorney fees, which we address next.
II. The district court abused its discretion by awarding Charli e his full attorney
fees from the trusts and denying all attorney fees to Janet.

Appellate courts do not reverse a district court’s decision on attorney fees absent an
abuse of discretion. In re Stisser Grantor Tr., 818 N.W.2d 495, 509-10 (Minn. 2012). “A
trustee is entitled to reasonabl e attorneys’ fees, to be paid o ut of the trust estate, incurred
in good faith in defending his administration of the trust.” In re Freeman’s Tr., 75 N.W.2d
906, 910 (Minn. 1956).
The district court found that the alleged breaches of fiduciary duty were mistakes
and concluded that Charlie’s attorney fees were incurred in good faith. With respect to two
narrow issues, we conclude that the district court’s decision is an abuse of discretion. It is
undisputed that the single post-mortem income distribution and the trustee compensation
violated the clear terms of the trusts, that the payments unjus tifiably diminished the value
of the trusts that they came from, and that the district court rightly ordered the payments to
be returned to the respective trust. Charlie argues that those two acts were honest mistakes
as opposed to breaches of fiduciary duty. But once those mistakes came to light, if he was
acting in good faith, Charlie would have conceded liability and made amends. He did not
do so, making the litigation on the two issues necessary. The district court therefore abused
its discretion by allowing Charlie to charge all of his attorne y fees to the trusts. See In re

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Drake’s Will , 263 N.W. 439, 442 (Minn. 1935) (holding that the trustee’s re fusal to
concede his liability on an issue brought the issue into court and that the attorney-fee award
to the trustee on that issue should therefore not be allowed).
The rule regarding the right of a beneficiary to recover attor ney fees is similar to
that regarding a trustee. “[A]ttorneys’ fees and expenses incurred in good faith in litigation
brought and prosecuted for the benefit of the estate may be allowed by the court.” Freeman,
75 N.W.2d at 911. The district court decided that Janet was not entitled to any attorney fees
because she had not conferred any benefit on the trusts. But, a s discussed above, Janet
effectively won on the issues of the income distribution and the trustee compensation, and
the payments were returned to th e respective trust. Therefore, the trusts in fact benefited
from Janet’s action by the amount returned to them. As to those two issues, the district
court abused its discretion by denying Janet’s request for attorney fees.
We reverse the district court’s determinations with respect to a t t o r n e y f e e s a n d
remand for the district court to re-determine both parties’ req uests for attorney fees in a
manner consistent with this opinion. The district court may, in its discretion, reopen the
record for this purpose.
Affirmed in part, reversed in part, and remanded.