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In re Steinhoefel Trust (***)

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Tuesday, March 18, 2014

A-13-0038, In the Matter of the Estate of Louise V. Steinhoefel, Settlor and Pioneer Manor Foundation and Campbell County School District No. 1 (Appellants) v. Vicki Schlautmann, Michael Addison and Renee Wetherelt (Appellees) and David Steffensmeier, Trustee (Appellee/Cross-Appellant)

Cuming County, County Court Judge Richard W. Krepela

Attorney for Appellants:  Mark D. Fitzgerald (Fitzgerald, Vetter & Temple)

Attorney for Appellees (Michael Addison and Renee Wetherelt):  David E. Copple, Michelle M. Schlecht (Copple, Rockey, McKeever & Schlecht, P.C., L.L.O.)

Attorney for Appellee (Vicki Schlautmann):  Andre R. Barry, Kara J. Ronnau (Cline Williams Wright Johnson & Oldfather, L.L.P.)

Attorney for Appellee/Cross-Appellant (David Steffensmeier, Trustee):  Kenneth W. Hartman, Erin E. Busch (Baird Holm LLP)

Civil Action:  Breach of Fiduciary Duty

Action Taken by Trial Court:  The county court found that the appellee/cross-appellant breached his fiduciary duty as trustee of the trust, but that no damages resulted from the breach.

Assignments of Error on Appeal:  On appeal, the appellants assign that the trial court erred in: (1) finding that a competing offer had “contingencies and reservations” which permitted the court to ignore the offer in its decision, (2) assigning the burden of proof on the appellants with respect to the competing offer, (3) failing to account for appellants’ interest in Parcel A and failing to make a separate determination of the fair market value of Parcel A apart from its inclusion in the sale of all of the parcels, (4) failing to provide for attorneys’ fees payable to the appellants’ attorneys where the court found a breach of fiduciary duty by the trustee, (5) assigning the burden of proof to the appellants with respect to the value of the mineral rights, (6) failing to account for an immediate royalty payment paid to the real estate buyers in its analysis of fair market value, (7) permitting the trustee to pay attorneys’ fees from the trust assets for defense of litigation caused by the breaches and negligence of the trustee, (8) failing to remove the trustee, (9) failing to order the appraisal of the mineral interests once it determined that the trustee had breached his duty with regard to the valuation of such mineral interests, (10) failing to impress a constructive trust upon any trust distributions otherwise distributable to Vicki Schlautmann, (11) failing to consider appropriate equitable remedies permitted by the Uniform Trust Code, (12) utilizing an improper standard of “substantially close” in evaluating the trustee’s sales conduct. On cross-appeal, the cross-appellant assigns that the trial court erred in (1) ruling that there was a breach of fiduciary duty and (2) failing to allow Steffensmeier to recover and costs and attorney fees.

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