Facts
- T. P. Norris conveyed a parcel of land to named trustees in trust to establish a cemetery on the property.
- The trust arrangement provided that the trustees would serve without compensation.
- Norris later deposited $5,000 in the First National Bank to be used for the maintenance and improvement of the cemetery.
- The $5,000 fund was to be managed by designated fiduciaries (including certain bank presidents and the county judge) and their successors.
- For approximately ten years after the conveyance, no cemetery was established on the property.
- Norris filed suit to recover the real property on the ground that the cemetery purpose had not been carried out.
- During the litigation, trustee John Kane—an attorney—represented the trustees/trust.
- Norris succeeded in recovering ownership of the real property.
- The trial court awarded Kane $750 as an attorney’s fee for his legal work, payable from the $5,000 cemetery-maintenance fund.
- Norris appealed the award of attorney’s fees.
Issues
- Whether a trustee who is also an attorney may receive a court-allowed attorney’s fee from the trust fund for legal services rendered in trust-related litigation, even though the trusteeship itself was to be performed without compensation.
Decision
- The Kentucky Court of Appeals upheld the allowance of an attorney’s fee to the trustee-attorney, payable from the trust fund.
- The court rejected the argument that no fee could be allowed as a matter of law simply because the attorney was also a trustee.
- Because the reasonableness of the $750 amount was not challenged, the appeal presented only the entitlement question, which the court resolved in favor of allowing compensation for necessary legal services.
Legal Principles
- A trustee who is also an attorney is not automatically barred from receiving additional compensation for legal services rendered to the trust.
- Courts of equity may allow a trustee-attorney a reasonable fee for professional legal work when the services are genuinely legal in character and reasonably required for the trust’s administration or protection.
- The fact that trustees are to serve “without compensation” does not necessarily prohibit payment for separate legal services, so long as the allowance is justified and the amount is reasonable.
- Objections to such fees may turn on entitlement (whether any fee may be awarded) versus reasonableness (whether the amount is excessive); where only entitlement is disputed, the court addresses that question directly.
Conclusion
Norris v. Bishop holds that a trustee who is also an attorney may be awarded a reasonable attorney’s fee from a trust fund for necessary legal services performed for the trust, and the court affirmed the fee award where the only challenge was a categorical claim that no compensation could ever be allowed to a trustee-attorney.