Hachar v. Hachar, 153 S.W.3d 138 (Tex. App.—San Antonio 2004, no pet. h.).
In a case with a complex factual background, the trial court awarded attorney fees from the trust in favor of both Trustee and Beneficiaries who were involved in litigation against each other. Beneficiaries argued that the court’s award in favor of Trustee was inappropriate because Trustee was not the prevailing party in the lawsuit. The appellate court agreed that the trial court could make the award because Trust Code § 114.064 permits the court to make an award which is “equitable and just.” There is no limitation that an award of reasonable and necessary attorney’s fees be made only in favor of a prevailing party.
The appellate court next had to determine whether the court’s award of attorney’s fees in favor of Beneficiaries was appropriate. The court explained that, “Unreasonable fees cannot be awarded, even if the court believes them just, but the court may conclude that it is not equitable or just to award even reasonable and necessary fees.” Id. at 142. Trustee contended that the amount awarded was neither (1) equitable and just nor (2) reasonable and necessary. The appellate court reviewed the evidence and found that the trial court’s determination that the fees satisfied both conditions was not in error.
The appellate court also agreed with the trial court that it did not abuse its discretion in not awarding conditional appellate attorney’s fees. The court explained that the awarding of appellate attorney’s fees is not required and that the court may have decided against awarding such fees to discourage an appeal which given the “tortured history” of the case would be a reasonable thing to do.
Moral: Any party involved in trust litigation should seek an award of attorney’s fees under Trust Code § 114.064 because the court has the authority to award fees even in favor of the losing party if the court believes it is equitable and just to make such an award.