In the Matter of the Mashburn Marital Trust
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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NUMBER 2010 CA 0278 IN THE MATTER OF THE MASHBURN MARITAL TRUSTS Judgment Rendered December 22 2010 Appealed from the TwentyFirst Judicial District Court In and for the Parish of Tangipahoa Louisiana Trial Court Number 2001003363 c 71 w 685 Honorable Ernest G Drake Jr Judge L Kevin Coleman Attorney for Appellants Joseph Patton Mashburn and Richard Anthony Mashburn in Their Capacities as the CoTrustees of the Mashburn Family Trust and Joseph Patton Mashburn and Donald J Mashburn in their Capacities as Managing Co Trustees of the Jack and Sadie Pugh Mashburn Marital Mandeville LA Trust Walter Antin Jr Attorney for Appellee Timothy R Mashburn Hammond LA Pierre V Miller Attorneys for Appellee Metairie LA Helen Mashburn Penton and Pierre V Miller II New Orleans LA Craig J Robichaux Attorney for Appellee Mandeville LA Rita Mashburn BEFORE CARTER C AND GAIDRY AND WELCH JJ J fit C Ss f r r CIAs RVj WELCH J In this protracted litigation Joseph Patton Pat Don Mashburn and Donald J Mashburn in their capacities as the managing cotrustees of the Jack and Sadie Pugh Mashburn Marital Trust marital trust and Pat Mashburn and Richard A Mashburn in their capacities as the cotrustees of the Mashburn Family Trust family trust appeal a trial court judgment that ordered the nine beneficiaries of the marital trust and the nine beneficiaries of the family trust to be paid equal amounts of income for the year 2008 ordered the managing cotrustees of the marital trust and the cotrustees of the family trust to disburse to Timothy R Tim Mashburn and Helen Mashburn Penton both of whom are beneficiaries of the marital trust and the family trust the same sums of income that they distributed to the other beneficiaries of those trusts and rendered judgment for those sums in favor of Tim Mashburn and Helen Mashburn Penton and against the respective co trustees of each trust Tim Mashburn has answered the appeal seeking damages for frivolous appeal For reasons that follow we affirm in part and reverse in part the judgment of the trial court and deny the answer to appeal FACTUAL AND PROCEDURAL HISTORY John S Jack and Sarah Sadie Pugh Mashburn had nine children Helen Mashburn Penton John S Mashburn Jr Pat Mashburn Don Mashburn Michael F Mashburn Rita A Mashburn Tim Mashburn William T Mashburn and Richard Mashburn By an authentic act executed on December 18 1975 Jack and Sadie Mashburn created the family trust with their nine children designated as both the income and principal beneficiaries of the trust By an authentic act executed on June 8 1984 Jack and Sadie Mashburn also created the marital trust With regard to the marital trust Jack and Sadie Mashburn were the initial income beneficiaries and upon their death their nine children were to succeed to their interest as the secondary income beneficiaries 2 Jack and Sadie Mashburn nine s children were also designated as the principal beneficiaries Following the deaths of Jack and Sadie Mashburn the two trusts they established have been the subject of extensive litigation in both the trial court and this court See In Re Mashburn Marital Trust 20041678 La App 1 Cir St 05 29 12 924 So 242 writ denied 20061034 La 9 937 So 384 2d 06 22 2d Mashburn Marital Trust I In Re Mashburn Marital Trusts 2006 0741 20060742 20050887 La App 1 Cir 12 951 So 1136 writs denied St 06 28 2d 20070403 20070446 La 4 954 So 164 167 07 20 2d Trust II Mashburn Marital In Re Mashburn Marital Trust 20061753 20061754 2005 0887 La App 1 Cir 12 947 So 852 unpublished opinion writ denied St 06 28 2d 2007 0403 La 4 954 So 164 Mashburn Marital Trust III and 07 20 2d In Re Mashburn Marital Trust 2008 0450 La App 1 Cir 10 994 st 08 31 2d So 157 unpublished opinion Mashburn Marital Trust IV see also In Re Mashburn Marital Trust 2005 1343 La App 0 Cir 8 unpublished 05 writ action In Re Mashburn Marital Trust 2005 1759 La App 1 Cir 05 7 1 10 unpublished writ action In Re Mashburn Marital Trust 2005 1785 La App 1S Cir 1017 unpublished writ action In Re Mashburn Marital 05 Trust 2008 0534 La App 1 Cir 3 unpublished writ action In Re St 08 20 Mashburn Marital Trust 2008 1 La App I Cir 4 unpublished writ 619 09 9 action Both the authentic act creating the family trust and the authentic act creating the marital trust settled nine separate trusts one for the sole benefit of each of Jack and Sadie s Mashburn nine children who are the income and principal beneficiaries of their respective trusts See Mashburn Marital Trust II 2006 0741 at p 14 951 So at 11461147 2d Each of the nine trusts settled by the family trust are to be considered managed and administered by one trustee or one set of cotrustees and each of the nine trusts established in the marital trust are to K be considered managed and administered by one trustee or one set of managing cotrustees The assets of the nine trusts established by the family trust may be commingled and managed as one and the assets of the nine trusts established by the marital trust may be commingled and managed as one See Mashburn Marital Trust II 20060741 at pp 1415 951 So at 1147 2d Pat Mashburn and Richard Mashburn were appointed by the court on August 19 1997 as the co trustees of the family trust See Mashburn Marital Trust II 20060741 at pp 3 951 So at 11391140 After the deaths of Jack and Sadie 4 2d Mashburn Helen Mashburn Penton John Mashburn Pat Mashburn Don Mashburn Michael Mashburn and Richard Mashburn all qualified for and were recognized by the court as cotrustees of the marital trust Pursuant to a majority vote of the cotrustees Pat Mashburn and Don Mashburn were elected as the managing cotrustees of the marital trust See Mashburn Marital Trust II 20060741 at p 6 951 So at 1141 1142 and Mashburn Marital Trust I 2d 20041678 at pp 23 924 So at 243 244 2d All of the litigation referenced above has involved either Helen Mashburn Penton or Tim Mashburn or both of them against the managing cotrustees of the marital trust or the cotrustees of the family trust or both The present dispute involves a motion to compel the trustees to distribute the 2008 income which was filed by Tim Mashburn on April 27 2009 In his motion Tim Mashburn requested an order compelling the cotrustees of the family trust to distribute to him the 2008 income from his family trust in the amount of 6 and an order compelling 89 970 the managing cotrustees of the marital trust to distribute to him the 2008 income from his marital trust in the amount of 1 Tim Mashburn also asserted 00 736 and it was undisputed that seven of his siblings had been distributed their shares of income from their respective family trusts and marital trusts but that he had not received his share of income which had been divided and distributed to his seven 4 siblings Helen Mashburn Penton also did not receive her share of income from her marital trust or her family trust and also claimed that her share of income from both trusts was divided and distributed to her seven siblings Therefore on May 13 2009 Helen Mashburn Penton filed a similar motion to compel the distribution of her 2008 income from both trusts A hearing on both motions was held on May 18 2009 At the hearing it was undisputed that neither the cotrustees of the family trust nor the managing co trustees of the marital trust had distributed any income from those trusts to either Tim Mashburn or Helen Mashburn Penton for 2008 and evidently only a partial distribution was made to them in 2007 The cotrustees of the family trust and the managing cotrustees of the marital trust maintained that Tim Mashburn and Helen Mashburn Penton were not entitled to be distributed income from either trust for three reasons with only one of those reasons being applicable to Helen Mashburn Penton First the cotrustees of the family trust and the managing cotrustees of the marital trust determined that after the above cited decisions of this court became final since Helen Mashburn Penton and Tim Mashburn had litigated for their own individual benefit rather than for the benefit of all the beneficiaries of the trusts the litigation expenses incurred by the cotrustees of the family trust and the managing cotrustees of the marital trust would be allotted on a pro rata basis to the individual trusts of Helen Mashburn Penton and Tim Mashburn Second the managing cotrustees of the marital trust determined that since Helen Mashburn Penton motion was not set for hearing on May 18 2009 and was not s served on either the managing cotrustees of the marital trust or on the cotrustees of the family trust Nevertheless the trial court addressed her motion Although the managing cotrustees of the marital trust and the cotrustees of the family trust assigned error to the trial court action in s this regard at oral argument this objection was withdrawn in the interest of judicial efficiency Accordingly in this appeal we will address the motions of both Tim Mashburn and Helen Mashburn Penton 2 A motion to compel the distribution of the 2007 income is one of the issues raised in the companion case also rendered this date In Re Mashburn Marital Trust 20101104 La App I Cir 12 Mashburn Marital Trust Vl 10 22 5 Tim Mashburn had received principal distributions from his marital trust that he was not entitled to receive see Mashburn Marital Trust II 20060741 at p 13 951 So at 1146 and had not returned or paid back those distributions there was 2d little or no principal remaining in Tim Mashburn marital trust to produce income s to be distributed to him Finally the cotrustees of the family trust determined that Tim Mashburn had caused a significant loss to the family trust which loss should be assessed to Tim Mashburn family trust Specifically Tim Mashburn had filed a notice of lis s pendens in the mortgage records of Tangipahoa Parish affecting immovable property owned by the family trust which later affected the cotrustees ability to obtain a construction loan related to that immovable property Although the notice of lis pendens was eventually cancelled there was a delay in a construction loan being issued and in the commencement of the construction itself which resulted in an increase in the cost of the construction due to that delay Since the co trustees of the family trust believed that the lis pendens was improper they determined that the increase in the cost of the construction due to the delay caused by the lis pendens would be assessed to Tim Mashburn family trust s Therefore the managing cotrustees of the marital trust and the cotrustees of the family trust contended that after a full pro rata portion of the legal expenses was allotted to the family trust and marital trust of both Helen Mashburn Penton and Tim Mashburn the amount of principal still owed to Tim Mashburn marital s trust was considered and the family trust construction delay losses assessed to Tim s Mashburn family trust the result was that neither Helen Mashburn Penton nor s Tim Mashburn marital or family trust had any income to distribute s After the hearing the trial court issued written reasons determining that an arbitrary and unilateral allocation of litigation expenses incurred by arital rust m t for a total of s nine separate f t and amily rusts ourt 18 trust is not authorized Until this c or some higher s Cs ourt c determines the allocation of costs and the reasonableness of the attorney fees such arbitrary and unilateral charging of these s costs to two individual beneficiaries of four individual trusts is unwarranted the t hereby are ordered to distribute to rustees Helen Mashburn Penton and Tim Mashburn the same sum that was and that the nine beneficiaries be paid paid to the other trustees an equal sum for the year 2008 Therefore On June 17 2009 the trial court signed a written judgment ordering the nine beneficiaries of the marital trust and the nine beneficiaries of the family trust to be paid equal amounts of income for the year 2008 ordering the managing cotrustees of the marital trust and the cotrustees of the family trust to disburse to Tim Mashburn and Helen Mashburn Penton the same sums of income that they distributed to the other beneficiaries of those trusts rendering judgment in favor of Tim Mashburn and Helen Mashburn Penton against the cotrustees of the family trust in the amount of 6 each and rendering judgment in favor of Tim 89 970 Mashburn and Helen Mashburn Penton against the managing cotrustees of the marital trust in the amount of 1 each From this judgment the managing 00 736 cotrustees of the marital trust and the cotrustees of the family trust have appealed asserting that the trial court erred in finding that the managing cotrustees of the marital trust and the cotrustees of the family trust lacked the authority to allocate costs and expenses to the various beneficiaries of the trust in accordance with which beneficiary caused such expenses to be incurred Tim Mashburn has answered the appeal seeking damages for frivolous appeal LAW AND DISCUSSION Paragraph 1 of the family trust provides that t property delivered to 3 he 3 The trial court reasons for judgment were silent with respect to the claim of managing s cotrustees of the marital trust concerning the principal distributions Tim Mashburn improperly received from the marital trust and the claim of the cotrustees of the family trust concerning the loss sustained by the family trust due to the notice of lis pendens Silence in a judgment as to any issue or claim that is placed before the trial court is deemed a rejection of that claim or demand Robertson v Sun Life Financial 20092275 p 5 La App I Cir 6 40 10 11 3d So 507 510 Therefore we conclude that the trial court denied those claims VA the Trustee under this Trust shall be divided into equal shares one share for the benefit of each of the Settlors children as beneficiaries of both principal and income Each share shall be held as and shall constitute a separate Trust Additionally paragraph 1 of the family trust provides that a of the income of 4 11 each Trust shall be paid to the beneficiary of that Trust annually or such more frequent intervals as the Trustee may see fit Paragraph 4 of the marital trust provides that 05 Upon termination of the interest of the first income beneficiaries SETTLORS children or if any be deceased their children per stirpes shall succeed to such interest and become secondary income beneficiaries At that point the TRUSTEE shall distribute to or for the benefit of the secondary income beneficiaries all of the income of the trust the frequency of such payments to be at least annually As previously noted the cotrustees of the family trust and the managing co trustees of the marital trust contend that Tim Mashburn and Helen Mashburn Penton were not entitled to be distributed the 2008 income from their respective family trust and marital trust for three reasons two of which applied solely to Tim Mashburn Therefore we will separately address each of these reasons Allocation ofLitigation Expenses At the outset we recognize the well settled principle that attorney fees are not recoverable unless expressly authorized by statute or by a contract between the 2d parties See Huddleston v Bossier Bank and Trust Co 475 So 1082 1085 La 1985 Tassin v Golden Rule Ins Co 940362 p 14 La App 1s Cir 94 22 12 649 So 1050 1058 However the issue herein is not the recovery of 2d attorney fees by the managing cotrustees of the marital trust and the cotrustees of the family trust from Tim Mashburn and Helen Mashburn Penton but rather whether litigation expenses including attorney fees that were incurred by the managing cotrustees of the marital trust and the cotrustees of the family in the 8 administration of the trusts can be allocated to and deducted solely from the income of Tim Mashburn and Helen Mashburn Penton In determining whether the cotrustees of the family trust and managing co trustees of the marital trust were authorized to allocate those expenses to Tim Mashburn and Helen Mashburn Penton we must look to the specific provisions of the trust instruments See La R 9 providing that the nature and extent of S 2061 the duties and powers of the trustee are determined from the provisions of the trust instrument except as otherwise expressly provided in the Louisiana Trust Code Paragraph 6 of the family trust instrument provides 1 The Trustee shall have all of the powers that may be exercised by the Trustee under Louisiana law including but not limited to those powers that Trustees are permitted to exercise under the provisions of the Louisiana Trust Code Chapter 1 Part 5 and such additional powers as may hereinafter be permitted Trustees by Louisiana law Additionally Paragraph 6 provides 11 The Trustee shall have in the administration of the property forming the subject of this Trust the widest latitude and authority permitted by Louisiana law Section VII of the marital trust provides The Trustees are granted all of the authority which may be conferred on Trustees by the Louisiana Trust Code Such authority shall include but not limited to the following powers 01 7 To determine what is principal and what is income with respect to all receipts and disbursements to determine the proper basis for any transactions between the trusts administered by it and to allocate to each trust its proportionate part of said income receipts and expenses and to partite and to distribute property of the trust in kind or in undivided interests and to determine the value of such property Thus both trust instruments provide the trustees with the maximum powers allowable under Louisiana law However the maximum powers allowable under Louisiana law are not synonymous with unlimited powers Louisiana law provides that a trustee shall administer the trust solely in the interest of the beneficiary W when there is more than one beneficiary a trustee shall administer the trust impartially based on what is fair and reasonable to all of the beneficiaries except to the extent that the trust instrument manifests an intention that the trustee shall or may favor one or more of the beneficiaries La R 9 S 2082 The trustee shall S 2090 administer the trust as a prudent person La R 9 The trustee shall also take keep control of and preserve trust property La R 9 The trustee is S 2091 also commanded to defend actions that may result in a loss to the trust estate unless doing so would not be reasonable La R 9 S 2093 The powers of the trustee are those conferred upon the trustee by the trust instrument or those that are necessary or appropriate to carry out the purposes of the trust and not forbidden by the trust instrument La R 9 If discretion S 2111 is conferred upon a trustee with respect to the exercise of a power its exercise of discretion shall not be subject to control by the court except to prevent an abuse of discretion by a trustee La R 9 A trustee may incur expenses necessary S 2115 to carry out the purposes of the trust not forbidden by the trust instrument and other expenses authorized by the provisions of the trust instrument 2117 9 La R S The trustee has the right to be indemnified from trust property for all properly incurred expenses La R 9 S 2191 The trustee is also authorized to select an attorney to represent the trust La R 9 S 2241 Based on these provisions there is no dispute that the cotrustees of the family trust and the managing cotrustees of the marital trust were authorized to defend the trust in these protracted proceedings to incur litigation expenses including attorney fees and to pay or be indemnified for those expenses from trust funds as such expenses were necessary in the administration of the trust However the cotrustees of the family trust and managing cotrustees of the marital trust contend that since Tim Mashburn and Helen Mashburn Penton have 4 In this case neither the marital trust instrument nor the family trust instrument manifests the intent that the trustee shall or may favor one or more of the beneficiaries 10 instigated these proceedings and have been litigating over the years for their own interests and not in the interests of the other beneficiaries the litigation expenses incurred by the cotrustees of the family trust and by the managing cotrustees of the marital trust in responding to that litigation should be allocated to Tim Mashburn and Helen Mashburn Penton respective family and marital trusts under s La R 9 which provides that a trust shall be administered with due S 2141 regard to the respective interests of the beneficiaries in the allocation of receipts and expenditures They further contend that to allocate those expenses equally among all of the beneficiaries of those trusts would be unfair unreasonable and without due regard to the interests of the other seven beneficiaries of the trust Additionally the cotrustees of the family trust and the managing cotrustees of the marital trust contend that the Louisiana Supreme Court holding in Hughes v s Burguieres 276 So 267 La 1973 supports their position on this issue 2d First we find that La R 9 is not applicable to the resolution of this S 2141 issue Louisiana Revised Statutes 9 is entitled General rule and is the first 2141 statute contained in subpart D Allocation to Income and Principal of the Louisiana Trust Code A cursory review of the statutes following the general rule S 2142 2157 e i La R 9 9 indicates that the allocation of receipts and expenditures referenced in La R 9 is an allocation between income and S 2141 principal not an allocation among beneficiaries Therefore this provision concerns the allocation of expenditures such as the litigation expenses at issue between income or principal not the allocation of those expenses to particular beneficiaries However we do find Hughes to be instructive on this issue In Hughes a suit for declaratory judgment was filed by Abner Hughes the trustee of 26 trusts provided in the last will and testament of Jules Burguieres against the beneficiaries of those trusts After Jules Burguieres died and his will was probated 26 separate th s trusts were set up each encompassing 1 of the decedent residual estate The 26 s decedent will contained a proviso that the bequest to any legatee named in the will was revoked if the legatee instituted any suit making demand upon the decedent his brothers their estates the estate of their deceased father decedents will or the management of J Burguieres Company Ltd Hughes 276 So at M 2d 267 268 Gregory Burguieres one of the trust beneficiaries sent a letter to the family corporation demanding that certain actions be taken and thereafter filed a s stockholder derivative action against the corporation The trustee then instituted the suit for declaratory judgment seeking a determination as to whether Gregory s Burguieres actions violated the conditions of the will so as to warrant forfeiture of his trust The trial court determined that Gregory Burguieres did not violate the proscriptive provisions of the decedent will by the institution of a suit against the s corporation It concluded however that since Gregory Burguieres actions were s solely responsible for causing the suit for declaratory judgment he alone should bear the court costs and attorney fees of 1 that were incurred by the 00 500 trustee The trial court ordered the costs to be deducted from the income of the 2d trust administered for the benefit of Gregory Burguieres Hughes 276 So at 268 An appeal was taken by Gregory Burguieres and this court affirmed the trial s court ruling casting him for court costs and attorney fees However the supreme court granted writs as to the issue of who should pay the court costs and attorney fees incurred by the trustee in the suit for declaratory judgment Hughes 276 2d So at 269 The supreme court found that the trustee actions in filing the suit for s declaratory judgment were justified given that Gregory Burguieres derivative s action presented a question of possible forfeiture of rights as a trust beneficiary under the conditions of the decedent will The supreme court found no doubt that s 12 the trustee was entitled to have the court costs and attorney fees paid The issue to be determined was whether those expenses were to be charged to Gregory s Burguieres trust or whether the expenses should be prorated and charged to all 26 trusts provided by the decedent will Hughes 276 So at 269 s 2d The supreme court noted The 26 trusts provided in the testament are all contingent upon the same assets and are managed by the same trustee The trusts are all subject to the proscriptive conditions of the testament and each bears a direct relationship to the others with regard to any action taken in violation of those conditions In the petition in this suit the trustee recognized his duty to institute this suit on behalf of the trusts and for the benefit of all beneficiaries The fiduciary obligations owed by the trustee are the same for each beneficiary In finding that the 26 trusts should be treated as a single trust the appellate court stated By the terms of the testator will we are s here concerned with the situation novel of 26 separate and individual but nonetheless related trusts under the management and control of a single trustee The will also proscribes certain designated actions which if committed by any beneficiary will directly affect not only his own interests but also those of the beneficiaries of the remaining 25 trusts To this extent each individual trust bears a relationship to and has an inchoate interest in every other trust To this degree the individual trusts may in effect be deemed one Equally certain is the fact that it is the obligation of the trustee to protect the interest of each individual beneficiary in the event of a suspected violation of the terms of the decedent will by one or more s beneficiaries Hughes 276 So at 270 2d Thus in Hughes the supreme court determined that because the trustee had instituted suit for the benefit of all of 26 trusts or all 26 beneficiaries the attorney fees and court costs or litigation expenses incurred by the trustee should be charged to the income and if necessary from the principal of all 26 trusts Hughes 276 So at 270271 2d The cotrustees of the family trust and the managing cotrustees of the marital trust contend that from this holding it follows that if litigation expenses incurred by a trustee are not incurred for the benefit of all trusts or beneficiaries like the litigation instigated by Tim Mashburn and Helen 13 Mashburn Penton then those expenses should be allocated to the trust or beneficiary that caused those expenses to be incurred However we do not interpret Hughes so broadly The nine trusts settled by the marital trust are contingent upon the same assets and managed by the same set of cotrustees and the nine trusts settled by the family trust are contingent upon the same assets and managed by the same set of cotrustees While we agree with the cotrustees of the family trust and the managing cotrustees of the marital trust that Tim Mashburn and Helen Mashburn Penton have litigated for their own personal benefit rather than for the benefit of all of the trusts or beneficiaries the cotrustees of the family trust and the managing cotrustees of the marital trust have both maintained and defended these actions in order to protect the trusts or trust property and therefore acted on behalf of all the trusts and all of the beneficiaries Therefore the litigation expenses incurred by the cotrustees of the family trust and the managing cotrustees of the marital trust should be assessed pro rata from the income and if necessary from the principal of all nine marital trusts and all nine family trusts 6 Accordingly we find that the trial court correctly determined that the co 5 Tim Mashburn and Helen Mashburn Penton are already responsible for their own litigation expenses that they have incurred See engerally Mashburn I 20041678 at pp 1012 924 2d So 248 249 G Although we agree that Tim Mashburn and Helen Mashburn Penton have litigated for their own benefit there has been no finding that Tim Mashburn and Helen Mashburn Penton have instigated frivolous or unfounded proceedings against the trustees in bad faith or are otherwise abusing the process of the court if a trust beneficiary instigates an unfounded or frivolous proceeding against the trust or trustee in bad faith the trial court may have the power to charge the reasonable and necessary fees incurred by the trustee in opposing the proceeding against that s beneficiary share of the trust estate See Rudnick v Rudnick 179 Cal App 4 1328 1335 th 102 Cal Rptr 493 498 Conley v Waite 134 Cal 505 506 25 P 496 496 497 3d App 2d 1933 Bogert Trusts and Trustees rev ed 1981 2d 802 pp 143 144 Furthermore although we recognize as a general rule that attorney fees are not allowed as an item of damages or costs except where authorized by statute or called for in a contract abuse of process has been Taxpayers of Tangipahoa Parish recognized as an exception to that rule Citizens Electors v Layrisson 449 So 613 616 La App 1 st Cir 1984 writ denied 454 So 170 La 2d 2d 1984 Additionally to the extent that any party files a pleading in violation of La C art P 863 the appropriate sanctions are available under that article See also Matter of Alvin R Albritton Testamentary Trust 597 So 23 26 1992 2d 14 trustees of the family trust and the managing cotrustees of the marital trust were not entitled to allocate litigation expenses to Tim Mashburn and Helen Mashburn Penton based on the nature of the litigation to date Since the allocation of litigation expenses was the only issue applicable to Helen Mashburn Penton the provisions of the June 17 2009 judgment of the trial court that ordered Helen Mashburn Penton to be paid the same sums of income from the marital trust and the family trust that the other seven beneficiaries had received and rendered judgment in favor of Helen Mashburn Penton against the managing cotrustees of the marital trust in the amount of 1 and against the cotrustees of the 00 736 family trust in the amount of 6 are affirmed 89 970 Principal Payments from the Marital Trust to Tim Mashburn Prior to the appeal in Mashburn Marital Trust II the trial court ordered the managing cotrustees of the marital trust to distribute the sum of 2 per 00 000 month to Tim Mashburn from the income of his marital trust and if necessary from its principal Mashburn Marital Trust II 20060741 at p 2 951 So at 2d 1139 In Mashburn Marital Trust II 20060741 at pp 1213 951 So at 2d 1145 1146 we reversed the judgment of the trial court concluding that Tim Mashburn was not entitled to distributions from the principal of his marital trust However prior to the managing cotrustees of the marital trust perfecting a suspensive appeal of the trial court judgment ordering the monthly payment s distributions from the principal of Tim Mashburn marital trust were made to s him The managing cotrustees of the marital trust assert and Tim Mashburn does not dispute that the principal distributions made to Tim Mashburn from his marital trust total 41 and that Tim Mashburn has not returned or paid that sum 00 848 7 In Mashburn Marital Trust III 20061753 at p 3 we also determined that Tim Mashburn was not entitled to distributions from the principal of his family trust however it appears that the cotrustees of the family trust perfected a suspensive appeal of that judgment prior to any distributions from the principal of Tim Mashburn family trust being made to him s 15 back to the principal of his marital trust Thus the managing cotrustees of the marital trust claimed that Tim Mashburn was not entitled to be distributed any income for 2008 from his marital trust because there was no principal remaining in Tim Mashburn marital trust to produce income and because Tim Mashburn owed s the principal back Louisiana Revised Statutes 9 provides If a trustee makes an advance 2195 or loan of trust money to a beneficiary the beneficiary interest is subject to a s charge for repayment of the amount advanced or lent Since Tim Mashburn received an advance that he was not entitled to of principal from his marital trust in the amount of 41 Tim Mashburn interest in the marital trust is subject 00 848 s to a charge for repayment of that amount Tim Mashburn interest in the marital s trust is as income beneficiary and principal beneficiary Therefore the managing cotrustees of the marital trust can retain any amounts payable to Tim Mashburn from income or principal until the amount of the advance is paid back Accordingly we find that the managing cotrustees of the marital trust are authorized to retain the income that Tim Mashburn is entitled to receive from the marital trust until the amount of the principal advanced has been repaid However as noted herein the trial court did not rule on whether Tim Mashburn owed the principal distributions that he improperly received back to his marital trust and in fact never mentioned that Tim Mashburn had received such distributions Rather the trial court ruled that Tim Mashburn was entitled to be paid the same equal amount of income for 2008 from his marital trust that the other beneficiaries were entitled to receive from their marital trusts and rendered judgment for that amount 1 00 736 Since we have determined that the managing cotrustees of the marital trust were authorized to retain the income to be distributed to Tim Mashburn until the amount of the principal previously advanced has been paid back we must conclude that the trial court erred in ordering that Tim IIr Mashburn was entitled to receive the same income for 2008 from the marital trust as the other beneficiaries had received and in rendering judgment in favor of Tim Mashburn and against the managing cotrustees of the marital trust in the amount of 1 00 736 Accordingly we reverse these portions of the judgment of the trial court Notice ofLis Pendens filed by Tim Mashburn On August 3 2005 Tim Mashburn filed a notice of lis pendens in the mortgage records of Tangipahoa Parish filing number 69 recorded in book 8417 1380 page 799 that affected four parcels of immovable property including one owned by the family trust and referred to by the parties as the Gateway Shopping Center in Ponchatoula Louisiana The cotrustees of the family trust were not aware that the notice of lis pendens had been filed until it was discovered during a title search by the bank that was issuing a construction loan to the cotrustees for making improvements to the Gateway Shopping Center Since the construction loan was to be secured by the Gateway Shopping Center property the bank refused to issue the construction loan until the notice of lis pendens was removed Tim Mashburn refused to voluntarily remove the notice of lis pendens citing his pending claim for the distribution of income or retained earnings from the family trust See Mashburn Marital Trust IV 2008 0450 at pp 1 3 Therefore the cotrustees of the family trust had to file a motion in these proceeding requesting the removal of the notice of lis pendens After a hearing on the matter the trial court granted the motion However the delay between the discovery of the notice and its actual removal or cancellation from the mortgage record resulted in a delay in issuing the construction loan to the cotrustees which in turn delayed the construction of the improvements on the Gateway Shopping Center According to the cotrustees the delay in construction caused an approximate 178 increase in the cost of the construction 00 000 17 The cotrustees of the family trust asserted that while the propriety of the initial filing of the notice of lis pendens was questionable Tim Mashburn refusal to s voluntarily remove the notice was clearly improper once judgment had been rendered against his claims in Mashburn Marital Trust IV Therefore the co trustees contended that the 178 increase in construction costs should be 00 000 assessed to Tim Mashburn family trust s First we can find no authority that allows a trustee to assess an increased cost or a potential loss to a beneficiary Although the cotrustees of the family trust contend that their actions are authorized by La R 9 we disagree with S 2141 their interpretation of this statute Louisiana Revised Statutes 9 requires that 2141 the trust be administered by the trustee with due regard to interests of the beneficiaries in the allocation of receipts and expenditures to principal or income Although the entire cost of construction on the Gateway Shopping Center was an expenditure to be allocated only the expenditure itself is authorized to be allocatednot the amount by which the expenditure was increased Thus the increase in the cost of construction due to a delay in the construction loan was not a receipt or expenditure to be allocated to principal or income under La R S OPPIE11 Furthermore if there was a 178 increase in the cost of construction 00 000 due to a delay in the construction loan that amount constitutes a financial loss to or a damage sustained by the trust If this loss or damage was through the fault of or caused by Tim Mashburn actions s either in initially filing the notice of lis pendens or in subsequently refusing to remove itthen the cotrustees remedy is an action for damages against Tim Mashburn for the wrongful filing of a notice of lis pendens See La C art 2315 La R 9 However like any other S 2231 claim for damages there must be a determination of liability and damages and until there is such a determination the claim for damages is unliquidated IL Since there has been no determinationjudicial or otherwise Tim Mashburn of s liability andor the damage sustained by the trust the claim of the cotrustees of the family trust against Tim Mashburn for the wrongful filing of the notice lis pendens is an unliquidated claim for damages Louisiana law does not permit the use of an unliquidated claim for damages 2d to offset a liquidated claim See American Bank v Saxena 553 So 836 844 46 La 1989 As such the cotrustees of the family trust cannot use their unliquidated claim for damages against Tim Mashburn to offset the income Tim Mashburn is entitled to be distributed from his family trust on an annual basis Therefore we find that the trial court implicit rejection of this claim of co s trustees of the family trust was correct Accordingly the provisions of the June 17 2009 judgment of the trial court that ordered Tim Mashburn to be paid the same sums of income from the family trust as the other beneficiaries received and that rendered judgment in favor of Tim Mashburn against the cotrustees of the family trust in the amount of 6 are 89 970 affirmed ANSWER TO APPEAL Tim Mashburn has filed an answer to appeal seeking damages for frivolous appeal pursuant to La C art 2133 and 2164 and Uniform RulesCourts of P Appeal Rule 219 In order to assess damages for a frivolous appeal it must appear that the appeal is taken solely for the purpose of delay or that counsel does not seriously believe in the view of the law that he advocates Guarantee Systems Construction Restoration Inc v Anthony 971877 p 13 La App 1 Cir st 98 25 9 728 So 2d 398 405 writ denied 982701 La 12 734 So 636 98 18 2d Because we have found merit to this appeal and because we do not find that this appeal was taken solely for the purpose of delay or harassment or that counsel for the managing cotrustees of the marital trust and the cotrustees of the family trust 19 did not seriously believe the position he advocated Tim Mashburn request for s frivolous appeal damages is denied CONCLUSION For all of the above and foregoing reasons the June 17 2009 judgment of the trial court is affirmed insofar as it ordered that Tim Mashburn and Helen Mashburn Penton were entitled to receive the same sums of income for 2008 from their family trust as the other seven beneficiaries rendered judgment in favor of Tim Mashburn and against the cotrustees of the family trust in the amount of 89 970 6 rendered judgment in favor of Helen Mashburn Penton and against the cotrustees of the family trust in the amount of 6 ordered that Helen 89 970 Mashburn Penton was entitled to receive the same sum of income for 2008 from her marital trust as the other seven beneficiaries and rendered judgment in favor of Helen Mashburn Penton and against the managing cotrustees of the marital trust in the amount of 1 00 736 The June 17 2009 judgment of the trial court is reversed insofar as it ordered that Tim Mashburn was entitled to receive the same sum of income for 2008 from his marital trust and rendered judgment in favor of Tim Mashburn and against the managing cotrustees of the marital trust in the amount of 1 Tim Mashburn request for damages for frivolous appeal is 00 736 s denied All costs of this appeal are assessed in equal amounts to Timothy Mashburn Joseph Patton Mashburn and Richard Anthony Mashburn in their capacities as the cotrustees of the Mashburn Family Trust and Joseph Patton Mashburn and Donald J Mashburn in their capacities as the managing cotrustees of the Jack and Sadie Pugh Mashburn Marital Trust AFFIRMED IN PART REVERSED APPEAL DENIED PIC IN PART ANSWER TO STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NO 2010 CA 0278 IN THE MATTER OF THE MASHBURN MARITAL TRUSTS GAIDRY J concurring in part and dissenting in part I concur with the majority conclusions with one exception s I disagree with the trial court conclusion that the cotrustees allocation or s assessment of the litigation costs and expenses including attorney fees attributable to the Mashburn Penton unilateral litigation instigated by Tim Mashburn and Helen to those beneficiaries trusts was arbitrary and I accordingly dissent in part from that portion of the majority opinion affirming the trial court ruling that the cotrustees could not assess s the litigation costs and expenses against those beneficiaries trusts While it may be true as the majority suggests that the allocation of receipts and expenditures in La R 9 refers to the allocation of those S 2141 items between principal and income of the trusts I do not read that statute as strictly limiting the cotrustees powers of allocation to that limited purpose The cotrustees had the authority to make a goodfaith assessment or allocation of litigation costs and expenses on an unequal basis among the beneficiaries of the trusts consistent with their necessary or appropriate powers under La R 9 and the broad discretion conferred upon them S 2111 by La R 9 and the unambiguous language of the trust instruments S 2115 Considering the circumstances of this matter I conclude that the cotrustees actions in the foregoing respect accorded with an impartial administration of all of the trusts and that their assessment of the litigation costs and expenses was fair and reasonable to all of the beneficiaries under La R 9 S 2082 and both prudent and reasonable under the standards of La R 9 S 2090 While the cotrustees actions in defending the litigation might be said to generally inure to the benefit of all of the trusts for purposes of protecting and conserving the trusts common property and income the unmeritorious litigation instituted by Tim Mashburn and Helen Mashburn Penton in their own individual interests served to indirectly deplete the common trust assets It is only fair and equitable that those beneficiaries interests should bear more of the burden of the trusts litigation costs and expenses and the co trustees actions to that end are not inconsistent with their fiduciary duties to them This is not a case where the courts should interfere with the considered exercise of discretion by a trustee See La R 9 S 2115 N
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