Opinion
Case No. 97-1309
Opinion filed February 25, 1998 JANUARY TERM 1998 Rehearing Denied March 27, 1998.
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; John D. Wessel, Judge; L.T. Case No. CP 96-1223 IY.
Steven Garellek of the Law Offices of Steven Garellek, P.A., Boca Raton, for appellants.
Edward Downey of Downey Downey, P.A., Palm Beach, for Appellee-Sheila Shechtman.
This is an appeal from a cost judgment entered in favor of the appellee, Sheila Shechtman, requiring the trustee to pay, from trust assets, attorney's fees and costs incurred by Shechtman, a beneficiary, in defending against a suit initiated by the appellants. Because we find that the statute relied upon by the trial court does not authorize the award of attorney's fees and costs, we reverse.
This is the second appeal in a case involving the appellants' attempt to set aside a settlement agreement entered into by Carol Frymer, Nancy Tuchman (Frymer's sister), and Sheila Shechtman (Frymer's stepmother) following the death of Henry Tuchman (Frymer's and Tuchman's father). As our prior opinion indicates, the gist of this agreement was that Shechtman would waive any rights she may have had in her late husband's estate in exchange for $50,000 in cash and the establishment of a $200,000 trust. See Frymer v. Brettschneider, 696 So.2d 1266, 1267 (Fla. 4th DCA 1997). Under the terms of the agreement, Shechtman was to be the income beneficiary of the trust during her life and, upon her death, the principal would revert in equal shares to Frymer and Tuchman. In the prior appeal, this court affirmed the trial court's judgment upholding the settlement agreement and, consequently, the trust. See id.
Subsequent to the issuance of that opinion, the lower court entered a second order awarding attorney's fees and costs to Shechtman, a beneficiary, payable from the trust created by the settlement agreement, pursuant to Florida Statutes section 737.402(2)(u). That cost judgment is the subject of this appeal.
It is well settled that neither attorney's fees nor costs may be awarded in the absence of an entitling provision in a contract, statute, or rule. See, e.g., Dade County v. Pena, 664 So.2d 959, 960 (Fla. 1995); Cadenhead v. Gaetz, 677 So.2d 96 (Fla. 1st DCA 1996). Recognizing this principal, the trial judge relied upon Florida Statutes section 737.402(2)(u), which provides
Unless otherwise provided in the trust instrument, a trustee has the power: . . . To pay taxes, assessments, compensation of the trustee, and other expenses incurred in the collection, care, administration, and protection of the trust.
§ 737.402(2)(u), Fla. Stat. (1997).
In construing this statute, we begin with the basic principle that "[a] statute providing authority to award fees must do so expressly." Knealing v. Puleo, 675 So.2d 593, 596 (Fla. 1995). With this principle in mind, we cannot agree with the trial court's conclusion that section 737.402(2)(u) authorizes a trustee to pay attorney's fees and costs incurred by a beneficiary. In other instances where the legislature has intended to authorize the award of fees and costs, the very language of the statutes expressly and unmistakably provide for "fees" and "costs." See, e.g., §§ 57.105, 61.16, 737.2041, 737.627, 768.69, Fla. Stat. (1995). No such language appears in section 737.402(2)(u).
This conclusion finds further support in another rule of construction — ejusdem generis. This rule provides that "where the enumeration of specific things is followed by a more general word or phrase, the general phrase is construed to refer to a thing of the same nature as the preceding specific things." Florida Dep't of Revenue v. James B. Pirtle Constr. Co., 690 So.2d 709, 711 (Fla. 4th DCA 1997). None of the expenses specifically enumerated by section 737.402(2)(u) are expenses of beneficiaries. Rather, the items listed are those that might necessarily be incurred by the trustee.
We also find, as did the trial court, that the "common fund" rule cannot serve as a basis for the award of fees. In Hurley v. Singerland, 480 So.2d 104, 107 (Fla. 4th DCA 1985), this court set forth five prerequisites to the operation of the common fund rule. The third of those requirements — "[t]he existence of a class, which received, without otherwise contributing to the lawsuit, substantial benefits as a result of the litigation" — is not present here. This conclusion is consistent with the general rule that "the legal fees and other expenses of a beneficiary in an accounting or other trust proceeding will be allowed out of the trust funds only if the trust estate and the other beneficiaries are benefitted." George Gleason Bogert George Taylor Bogert, The Law of Trusts Trustees, § 972 (2d ed. 1983)(emphasis added); see also In re Cudahy Family Trust, 131 N.W.2d 882 (Wis. 1965)(holding in a suit between two beneficiaries that "the duty of the trustee as custodian of the trust res for the benefit of all beneficiaries was to treat the claimants impartially and not assume the advocacy on behalf of either or to assume the validity of the contention of either," and that "[i]n such a contest each party must assume the costs of his own legal services.").
REVERSED.
KLEIN, J., concurs.
FARMER, J., specially concurs with opinion.
The appellees in this case confuse the right to attorney's fees from a third party under a statute, with the entirely separate matter of the power of a trustee to pay expenses out of an estate. Section 737.402(1), Florida Statutes (1995), provides that the trustee of a trust has the power to perform certain acts without prior court approval, including all of the acts specified in subsection 737.402(2). Subsection 737.402(2)(u) says:
"Unless otherwise provided in the trust instrument, a trustee has the power . . . [t]o pay taxes, assessments, compensation of the trustee, and other expenses incurred in the collection, care, administration, and protection of the trust."
I note that this statute does not even mention the words "attorney's fees." Clearly section 737.402(2)(u) does not purport to create an entitlement in anyone to recover their attorney's fees from a trust. It merely authorizes a trustee to pay certain expenses of administration to himself without a prior court order. Indeed, the obvious purpose of the statute is to dispense with the necessity of a court order specifically authorizing payment of routine trust expenses. There is no stated intent to enact an entitlement to attorney's fees. It is simply not a fee-authorizing statute.
The supreme court has held that attorney's fees are recoverable from another party only when the parties have so agreed in advance, when the legislature has so provided in an applicable statute, or when a common fund has been generated by the lawyer's efforts. Estate of Hampton v. Fairchild-Florida Const. Co., 341 So.2d 759, 761 (Fla. 1976) ("In general, attorneys' fees are not recoverable unless a statute or a contract specifically authorizes their recovery, or unless equity allows attorneys' fees from a fund or estate which has been benefitted by the rendering of legal services."). Dorner v. Red Top Cab Baggage Co., 160 Fla. 882, 37 So.2d 160 (1948) (express provision of statute required to support award of attorney's fees). The court has flatly stated that "[a] statute providing authority to award fees must do so expressly." Knealing v. Puleo, 675 So.2d 593, 596 (Fla. 1996). Again, here the statute does not even use the term "attorney's fees"; nor does it purport to create a right to fees in anyone.
In Sholkoff v. Boca Raton Comm. Hosp., 693 So.2d 1114 (Fla. 4th DCA 1997), this court addressed the subject and concluded as follows:
"the rule is that if an agreement for one party to pay another party's attorney's fees is to be enforced it must unambiguously state that intention and clearly identify the matter in which the attorney's fees are recoverable. That is not so much a matter of strict construction as it is a rule for resolving ambiguities. If the agreement is clear, no construction is necessary. If it is ambiguous, the court will not struggle by construction of the language employed to infer an intent for fees that has not been clearly expressed; nor will it allow intentions to indemnify another's attorney's fees to be ambiguously stated and then resolved by the finder of fact.
"In this instance, the agreement states unambiguously that the term `costs of collection' includes attorney's fees. It is thus not necessary to engage in construction of the text of the agreement because the parties have made it clear that costs includes fees. The general rule of [ Ohio Realty Investment Corp. v. Southern Bank, 300 So.2d 679 (Fla. 1974)] has thus been satisfied; `there is express language which meets the contractual prerequisite of `a meeting of the minds' required to provide the contractual basis necessary to recover such an attorney's fee.'"
693 So.2d at 1118-1119. Although Sholkoff involves contractual fees, the principle is equally applicable to statutory fees. Cf. Dorner, 37 So.2d at 161.
Applying the method of analysis this court employed in Sholkoff, I concur in a reversal, but not because of any "construction" of the statute employing the principle of ejusdem generis. Rather I have arrived at this conclusion from a simple reading of section 737.402(2)(u), giving the words their ordinary meaning and without resort to statutory construction. On that basis I concur.