July 11, 2013
Authored by: Luke Lantta
Perhaps more than other types of litigation, fiduciary litigation can be driven by emotion and understandably so. Litigation over a trust or estate is often the battleground on which other deep-seated intrafamily issues are fought. In Georgia, one potential check against letting matters go too far afield is the threat of attorney’s fees against a party who asserts a claim, defense or other position with respect to which there existed such a complete absence of any justiciable issue of law or fact that it could not be reasonably believed that a court would accept the asserted claim. In Williams v. Warren, however, the Georgia Court of Appeals may have taken some teeth out of the attorney’s fees statute, particularly when it is implicated in fiduciary litigation.
Victor Warren sought the cancellation of a deed from his mother to him and his two sisters on the grounds of fraud, undue influence, inadequate consideration, and improper recordation. Victor’s sisters refused to cancel the deed and the case was hard fought for years. During trial, one of Victor’s sisters testified that, notwithstanding the deed that their mother signed conveying the property to her, her sister, and Victor, she still considered the property to be her mother’s property. Furthermore, she testified that giving the property back to the mother would serve no purpose because “[i]t’s the same thing.” Based largely on this testimony, the trial court awarded Victor attorney’s fees. In the order, the trial court noted that, “notwithstanding the deed, [Victor’s sisters] considered the property to be their mother’s property” and that Victor’s sisters “maintained their position that the deed should not be set aside even though they simultaneously asserted that the property transferred by the deed to the parties herein was still their mother’s property.” A divided, whole court of the Georgia Court of Appeals, however, reversed the award of attorney’s fees.
The appellate court found that there was no evidence to sustain the award of fees stating that
[t]he trial court’s interpretation of [the sister’s] testimony is unsustainable under any standard of review. Her testimony was clear. The trial court misconstrued it in a way possible only for a lawyer. When she said that she still considered the subject property her mother’s and that conveying it back would make no difference, [the sister] was not offering an opinion about the scope of her legal rights. Her testimony – legalistically paraphrased – was that whatever the scope of her legal rights, her exercise of those rights would be constrained by her filial duties.
The appellate court stated that, if the sister was testifying as to a legal opinion of the deed’s invalidity, that testimony was inadmissible. If examined for an admission of a factual predicate of her brother’s claims, there was none – she did not admit elements of fraud or undue influence (though the testimony may have been tangentially related to the issue of inadequate consideration).
There was a sharp dissent that noted that Victor asked his sisters to cancel the deed, they vigorously opposed the suit for two years, and when the case came to trial one of the sisters testified that she believed the property belonged to their mother – the very objective of Victor’s suit. The sister could not articulate a factual or legal basis for opposing the cancellation of the deed and, thus, in the dissent’s opinion some evidence existed to support the award of fees.