Opinion
No. A-10-1169.
12-06-2011
IN RE GILBERT M. GIBREAL RESIDUARY TRUST. GILBERT M. GIBREAL, BENEFICIARY OF THE GILBERT M. GIBREAL RESIDUARY TRUST, APPELLEE AND CROSS-APPELLANT, v. ANN COLLINS AND MARY GIBREAL, APPELLANTS AND CROSS-APPELLEES.
David B. Latenser, of Latenser & Johnson, P.C., for appellants. Daniel D. Walsh, of Walsh Law, P.C., L.L.O., for appellee.
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).
Appeal from the County Court for Douglas County: DARRYL R. LOWE, Judge. Affirmed.
David B. Latenser, of Latenser & Johnson, P.C., for appellants.
Daniel D. Walsh, of Walsh Law, P.C., L.L.O., for appellee.
INBODY, Chief Judge, and SIEVERS and PIRTLE, Judges.
SIEVERS, Judge.
I. INTRODUCTION
Ann Collins (Ann) and Mary Gibreal, who are sisters, appeal from orders of the county court for Douglas County that found them jointly and severally liable for $88,250.98 to the successor trustee of the trust of their brother, Gilbert M. Gibreal, and for $55,507.16 for attorney fees, as well as postjudgment interest and fees. The county court found that while Ann was trustee of Gilbert's trust, she breached her fiduciary duties by fraudulently making trust account checks out to herself and to Mary and that Mary engaged in constructive fraud by accepting the checks. On appeal, Ann and Mary claim that the transactions were to reimburse them for furniture and personal items that Gilbert stole from their deceased parents, to which items they were entitled. They assert that they should receive a recoupment for loans they claim Gilbert owes to them. They also argue that the award of attorney fees was excessive and an abuse of the trial court's discretion. On cross-appeal, Gilbert contends that he should have been awarded prejudgment interest.
II. FACTUAL BACKGROUND
The Gibreal family consists of Gilbert G. Gibreal (Gilbert Sr.) and Laurice F. Gibreal, husband and wife, and their three adult children, Ann, Mary, and Gilbert. On July 14, 1995, the Laurice F. Gibreal Revocable Trust and the Gilbert G. Gibreal Revocable Trust were created. Both trusts contain provisions whereby, upon the death of the first of the spouses, the remaining trust principal and any accumulated income in that spouse's revocable trust will continue in the form of a separate family trust in the deceased spouse's name. Both trusts direct that under said family trust, the trust income of the first spouse to die will benefit the surviving spouse, and upon the death of the surviving spouse, any remaining principal or accumulated income in the family trust will be distributed outright to the three Gibreal children in equal parts. The same distribution is to occur with respect to the remaining trust principal and income from the surviving spouse's revocable trust upon his or her death.
Both trusts were amended in 2000. Under the amendments, Gilbert's one-third share of any trust principal and income was to go to a separate residuary trust, the Gilbert M. Gibreal Residuary Trust ("Gilbert's Trust"), for Gilbert's maintenance and support during his lifetime, rather than to him outright. Residuary trusts were not created for Ann or Mary. No explanation is provided in the record as to the reasoning behind the creation of Gilbert's Trust. Also under the amendments, Ann and Mary are given an equal interest in all of their parents' tangible personal property, "including without limitation, household furniture and furnishings, personal effects, and other articles of personal use and ornament, and jewelry, and any automobiles."
Beginning in 1978, Gilbert Sr. and Laurice owned and operated Gibreal Auto Sales, Inc. (Gibreal Auto or GAS), a used car sales and leasing business located in Omaha, Nebraska. On March 13, 2003, Ann and Mary executed and delivered to Gilbert Sr. and Laurice a promissory note in the amount of $417,000 for the purchase of all of Gibreal Auto's stock. From that date, Ann and Mary continued the operation of Gibreal Auto as joint owners until the business closed in 2007. The record reflects that the unpaid balance on the note, including interest, at the time of Laurice's death was $420,430.08.
Gilbert Sr. passed away on December 12, 2005, and the Gilbert G. Gibreal Family Trust (Family Trust) was created on December 27, 2005. Great Western Bank (Great West) accepted the appointment as successor trustee of the Family Trust and of Laurice's revocable trust through the nomination and consent of Ann and Mary on March 8, 2007. Laurice's death on September 21, 2007, triggered the distribution of her remaining trust principal and income, as well as the remaining principal and income from the Family Trust, to Ann, Mary, and the trustee of Gilbert's Trust. Ann accepted the appointment as trustee of Gilbert's Trust on October 11, 2007, and at some point thereafter, she opened a checking account for Gilbert's Trust at Great West (referred to as "Great West checking account" or "Gilbert's trust account").
From October 15, 2007, to January 9, 2008, the successor trustee of their parents' trusts, Great West, distributed a total of $237,727.80 to Ann, as the trustee of Gilbert's Trust. According to the sworn affidavit of Thomas V. Van Robays, vice president of Great West, Ann deposited the entire $237,727.80 into the Great West checking account. The record reveals that a significant portion of this distribution to Gilbert's trust was his one-third share of the outstanding principal and interest on Ann and Mary's promissory note for the purchase of Gibreal Auto, which became an asset of the Family Trust and of Laurice's revocable trust. Ann closed the Great West checking account without Gilbert's knowledge or consent on April 6, 2009, and as of that time, the account only had $2,000 remaining.
Gilbert purchased a townhome on June 30, 2008, for $115,000 with funds from his trust account. Ann assisted Gilbert with the purchase of the home, and her signature appears on the closing documents. Gilbert had lived with his parents off and on throughout his life, and he was living there prior to moving into the townhome. He apparently needed essentially all the furnishings required for his entire new home. Gilbert testified that he and Ann went shopping and picked out several items--two couches and a television. With respect to furnishing the rest of the townhome, Gilbert testified that he and Ann discussed moving furniture there from his parents' home. His testimony was that he and Ann agreed to hire a moving company for the move.
Gilbert testified that on the day of the move, July 5, 2008, he, Ann, and Mary all met at their parents' residence—which, as stated above, is where Gilbert was living at that time. Gilbert testified that he was not allowed to take all of the items of furniture that he wanted from their parents' home. He said there was an entertainment unit, for example, which Ann wanted to take to her home. He testified that there was an agreement with his sisters regarding the items he was allowed to take.
Trial exhibit 10 depicts photographs of the items that were moved to Gilbert's townhome from the Gibreal residence. Ann and Mary each testified that they did not give Gilbert permission to remove the items from the Gibreal residence. A copy of a $247.50 check payable to the moving company on July 5, 2008, signed by Ann, is in evidence. Ann testified that she was not present for the move and that she merely signed the check.
Gilbert testified that in early June 2009, Ann told him that there was only $2,000 left in the Great West checking account because she had withdrawn $40,000 for the furniture he had taken from the Gibreal residence. He testified that was the first time Ann raised the issue of him having to pay for the furniture, let alone using funds from his trust account to do so. Without the trust funds, Gilbert did not have money to pay his bills, including the utilities in his home, which were subsequently shut off.
As will be explained below, First Nebraska Trust Company (First Nebraska) was appointed successor trustee of Gilbert's Trust on July 30, 2009. Thereafter, First Nebraska opened a $60,000 line of credit for Gilbert at First State Bank to cover his bills and expenses associated with the administration of his trust.
III. PROCEDURAL HISTORY
1. PRETRIAL
On June 17, 2009, Gilbert filed a petition in the county court for Douglas County for the removal of Ann as trustee of his trust, along with other relief for breach of trust provided for under Neb. Rev. Stat. § 30-3890 (Reissue 2008). The petition alleged that Ann recently admitted that (1) all funds distributed to her as trustee of Gilbert's trust had been spent, (2) she withdrew $40,000 from the Great West checking account for furniture Gilbert received from his parents' home, and (3) she closed the Great West checking account. The petition also alleged that Ann breached her fiduciary duties to Gilbert by using his trust funds for her own benefit, by failing to provide an accounting for said funds and by paying an excessive price ($40,000) to herself and to Mary for the furniture. Gilbert requested that Great West be enjoined from distributing any other funds or property to Ann from their parents' trusts until further order of the court.
Gilbert filed an amendment to his petition on June 30, 2009, alleging that Ann converted $92,311 of the funds that were held in the Great West checking account for the personal benefit of herself and Mary. The amendment also alleged that Mary participated in the conversion by receiving $41,500 of the $92,311. The amendment further provided that Gilbert desired to have First Nebraska appointed as successor trustee of his trust.
A hearing on the petition and amendment thereto was held on July 30, 2009. Gilbert appeared personally with his lawyer. Also present were counsel for First Nebraska, counsel for Great West, and counsel for Ann. Initially, Ann's lawyer disclosed to the court that he had a conflict of interest due to his prior representation of other members of the Gibreal family in his capacity as an attorney for Great West. He moved for his withdrawal, which the court granted in a later order.
After the oral motion to withdraw was submitted, Gilbert's counsel informed the judge that he had filed a motion for summary judgment that same day and that he wished to offer several affidavits in support thereof. Gilbert's counsel suggested that the hearing be continued so that Ann could seek other representation and respond to his evidence at a later date. The court set the continued hearing for August 13, 2009, and received exhibits 1 through 3 in support of Gilbert's summary judgment motion: (1) Van Robays' affidavit, (2) Gilbert's affidavit, and (3) Gilbert's counsel's affidavit. Copies of all of the checks Ann signed with respect to the Great West checking account are attached to exhibit 1. Included in exhibit 2 is a summary of each of the allegedly unauthorized transactions made by Ann with respect to Gilbert's trust account.
An order, the terms of which the parties agreed to in advance, was entered on July 30, 2009. It removed Ann as trustee of Gilbert's Trust and appointed First Nebraska as successor trustee. The order imposed a lien against the interests of Ann and Mary in the assets held by Great West as successor trustee of Laurice's revocable trust. The order also enjoined Great West from making any disbursements to Ann or Mary until any future judgments against them were satisfied, and ordered that if such judgments were not paid, Great West was required to make distributions to the trustee of Gilbert's Trust until any and all debts were satisfied.
Although a bill of exceptions for the August 13, 2009, continued hearing on Gilbert's motion for summary judgment does not appear in evidence, the record reveals that one additional exhibit, Ann's affidavit, was received at that time. Attached to the affidavit is a list of each of the allegedly fraudulent transactions, which Ann marked by interlineation with the purpose for the withdrawal. Ann's affidavit recited, "With the exception of $379.20 inadvertently withdrawn or overlooked as indicated, each such transaction was for the benefit of [Gilbert], and each such transaction was made with [Gilbert's] prior knowledge and consent . . . ." Also attached to Ann's affidavit was a list of the personal property she alleged Gilbert removed from the Gibreal residence without permission. Ann alleged that she and Mary were entitled to such property, which she valued at $85,000 to $90,000, under the terms of Laurice's revocable trust, as amended.
Ann further alleged in her affidavit, among other things, that in 2008, she and Mary met with Van Robays, the vice president of Great West. She claimed that she informed Van Robays of the fact that Gilbert removed the aforementioned property from the Gibreal residence without authority and that he advised her that Gilbert was required to "buy" back the property. She alleged that she and Mary contacted Gilbert and demanded either the return of the property or the payment of its value. She asserted that Gilbert agreed to repay her and Mary for the property and that he knew or should have known that Ann, as trustee, intended to repay herself and Mary from Gilbert's Trust because such was his only asset.
Although there is no order evidencing such in the record, Gilbert's motion for summary judgment was at least implicitly overruled, given that Gilbert's claims proceeded to trial. Ann and Mary filed a joint answer on August 27, 2009. In it, they denied every material allegation in the petition and amendment. They affirmatively pled that Gilbert's petition failed to state a claim upon which relief could be granted and that he was precluded by the doctrine of unclean hands from receiving any relief. With respect to the unclean hands defense, the answer specified that in 2008, Gilbert admitted that he had removed property and assets to which Ann and Mary were entitled without their permission or consent. They alleged that "the amount of money necessary to repay [them for the stolen items] is approximately $90,000."
In a section of the answer labeled "Counterclaims," Ann and Mary first alleged that a receivable of Gibreal Auto is money due and owing from Gilbert on a loan in the principal amount of $60,000, plus interest. They claimed that no portion of said amount had been paid and that Gilbert owed the money to them as successors in interest of Gibreal Auto. Next, they asserted that Gilbert agreed to repay them for the property which he removed without authority, i.e., furniture from their parents' home, and the only method available for him to do so was by distributions from his trust. They alleged that the amount of money reasonably necessary to repay them for the property was $90,000. Finally, they contended that in approximately July 2008, Gilbert converted $6,000 from Laurice's checking account. They alleged that he is indebted to them for that amount because it should have been available as a distribution from her revocable trust upon her death. Ann and Mary's answer prayed for a judgment against Gilbert on their counterclaims in the amount of $156,000, plus interest.
In Gilbert's reply and answer, he denied the material allegations asserted in Ann and Mary's answer and counterclaim. He also set forth a series of affirmative defenses. He alleged a statute of limitations defense with respect to any obligations he allegedly owed to Gibreal Auto; he alleged that Ann and Mary consented to the removal of any furniture items from the Gibreal residence; he alleged that some of the property in dispute was given to him as a gift; he alleged a right pursuant to Neb. Rev. Stat. § 30-3867 (Reissue 2008) to void Ann's transactions on his trust account which amount to a breach of her duty of loyalty; he alleged that Ann and Mary should be barred by the doctrine of unclean hands from denying that they consented to the move of the furniture; and he alleged that they lacked standing to assert the conversion of $6,000 from Laurice's checking account because they were not the real parties in interest with respect to that transaction.
2. TRIAL
Trial was held on November 2, 2009. A total of six witnesses testified, and, in addition to the four exhibits previously received into evidence at the summary judgment hearings, exhibits 5 through 19 were received by the court. Of particular import was the competing evidence presented with respect to the value of the furniture Gilbert allegedly took without authority from the Gibreal residence, as well as evidence of the allegedly improper transactions made by Ann with regard to Gilbert's Great West checking account. Other evidence will be set forth in the analysis section as necessary.
Regarding the furniture, Ann testified that at some point in 2008, she observed that certain items of property were missing from the Gibreal residence. It is undisputed that such personal property was to pass to Ann and Mary under the terms of the 2000 amendments to Gilbert Sr.'s and Laurice's revocable trusts. Ann first testified that she and Mary asked Gilbert about the missing property and that he told them he had some of it and had sold some of it. Contrary to Gilbert's version of events, Ann testified that neither she nor Mary ever gave Gilbert permission to remove items from the Gibreal residence.
As mentioned above, in her sworn affidavit, Ann testified that Van Robays told her and Mary that Gilbert would have to buy back the stolen property. That was the justification she provided for withdrawing money from Gilbert's Trust to pay for the property. Van Robays testified at trial that he recalled a meeting with Ann and Mary, sometime between March and June 2008, at which they discussed the allegation that Gilbert had stolen property from the Gibreal residence. Van Robays' testimony was that he told Ann and Mary that under the terms of Laurice's revocable trust, all of the property from the residence was theirs. He testified, "So from that point forward . . . anywhere that property went, it would be up to Ann and Mary to either make a gift of that property or be reimbursed for the property or have the property paid for." However, Van Robays testified that he did not directly advise Ann and Mary to take money out of Gilbert's Trust as reimbursement for the items.
Ann created an inventory of the furniture allegedly stolen by Gilbert, and such inventory was received into evidence at trial over objection as exhibit 19. Ann assigned a value to each of the items on the inventory. Ann testified that she reached the values by visiting a retail store, finding similar items, and recording their prices. Ann conceded at trial that she has no experience appraising property. She assigned a total value of $85,453 to the property listed on exhibit 19.
Another witness, Joella Cohen, provided her expert opinion as to the valuation of the personal property from the Gibreal residence that is now in Gilbert's townhome. Cohen has owned an auction company since 1978. She has been a personal property and antique appraiser since 1975. Upon request from Gilbert's counsel, Cohen visited Gilbert's townhome on October 23, 2009, and viewed the disputed property. Her appraisal was received into evidence as exhibit 12. The document reflects that Cohen is a member of the Appraisers Association of America and is a fully qualified appraiser. The total value she placed on the identified items in Gilbert's home is $880. When asked on direct examination to describe why she is confident in her appraisal, she testified:
Well, I deal with this sort of merchandise all day, every day. We do two auctions a month where we sell this type of furniture. A lot of this, truthfully, in today's work I wouldn'tCohen later testified that if a person were to sell everything in a home such as the Gibreal residence, that person would receive, on average, $5,000 to $10,000 total. "We're talking dated, used items with no value," she said. Cohen testified that "emotional value" is not included in her appraisals.
even bring in for auction because it wouldn't sell. People today have gotten very minimalistic and they are buying fewer items and they are buying better. And this is just not the quality that I like to auction.
Gilbert later testified that one of the pieces of property included in Cohen's appraisal, a three-drawer chest that originally belonged to his grandmother, was actually given to him as a gift from his uncle. No evidence was offered to rebut Gilbert's testimony in that regard.
Notably, Ann and Mary both testified that they never asked Gilbert to return any of the allegedly stolen items of furniture, nor did they ever disclose to Gilbert that they were going to take $83,000 out of his trust account to reimburse themselves for the items. This testimony conflicts with Ann's sworn affidavit, which recites that, with the exception of $379.20 "inadvertently withdrawn or overlooked," each transaction was made with Gilbert's knowledge and consent and for his benefit. Ann characterized the missing items as "irreplaceable," yet, she testified that she did not want them back. Mary also testified that she did not want physical possession of the property because of the "people [Gilbert] associates with."
An updated summary of Ann's allegedly fraudulent transactions on the Great West checking account was received into evidence at trial as exhibit 14. The total reflected in that document is $88,099.10. Ann's testimony was that $83,000 of that amount was checks she made out to herself and to Mary in equal parts for the furniture she claims Gilbert stole from the Gibreal residence—although we note that curiously this was done with a series of checks, rather than simply one payment. She testified that the money was not intended as a reimbursement for money Gilbert allegedly owed to Gibreal Auto, although the memo line on two checks to Ann, in the amounts of $5,000 and $25,000, and one check to Mary for $5,000 all read "reimburse GAS." Gilbert seeks $88,099.10 from Ann and Mary, in addition to $151.88 in interest accrued on the $60,000 line of credit he opened to pay for bills and other expenses after he learned that his trust account had been drained.
On November 17, 2009, Gilbert's counsel filed the sworn affidavit of Van Robays, which was received in evidence by the court at a later date. In it Van Robays testified that between October and November 2007, he had discussions with Mary regarding the disbursement of funds from their parents' trusts. During those discussions, he informed Mary that Great West would be allocating Ann and Mary's liability for the $417,000 promissory note for the purchase of Gibreal Auto in equal shares to each estate. He testified that at no time during those discussions did Mary state that Gilbert owed Gibreal Auto funds for vehicles, loans, fees, or expenses, nor did Mary inquire as to whether Ann and Mary's promissory note liability could be offset by any of such debts. Van Robays testified that he was unaware of any debt owed by Gilbert to Gibreal Auto until he received a copy of Ann's August 11, 2009, affidavit.
The county court entered an order in this matter on July 20, 2010. In the order, the court concluded that Gilbert established a prima facie case for fraud by showing that the multiple checks from the Great West checking account written to Ann and Mary were indeed transactions that benefited Ann and Mary at Gilbert's expense and were not in Gilbert's best interests. Mary was found to be complicit in Ann's fraud by accepting the checks "under the guise that the payments were to reimburse the pair for payments owed to [Gibreal Auto]." The court determined that Ann's and Mary's testimony that the checks were to reimburse them for furniture and mementos Gilbert took from the Gibreal home without permission was not credible. The court found that the value they assigned to the objects was greatly exaggerated and "wanes" in comparison to the appraisal by expert witness Cohen.
Further, the court found that Ann was responsible for $88,099.10 in unauthorized transactions, as reflected in exhibits 14 and 16. That amount was awarded to First Nebraska, as successor trustee of Gilbert's Trust. The court also awarded the successor trustee $151.88 for interest accrued on Gilbert's $60,000 line of credit, for a total award of $88,250.98 for which Ann and Mary were found jointly and severally liable. The court noted that the sale of the Gibreal residence was pending and that the proceeds from such should be applied in accordance with the July 30, 2009, order described above, so as to satisfy the judgment against Ann and Mary.
The court dismissed Ann's and Mary's counterclaims, finding that any obligation Gilbert owed to Gibreal Auto was barred by the applicable statute of limitations; that Ann and Mary consented to moving the furniture from the Gibreal residence to Gilbert's home; and that they failed to meet their burdens of proof because (1) the real purpose of $60,000 of the checks was to "reimburse GAS" when any such claims against Gilbert flowing from Gibreal Auto were barred by the statute of limitations and (2) Ann and Mary were simply not telling the truth regarding reimbursement for missing property, where there was no bill of sale or other document describing what property Gilbert was to receive in exchange for the checks and that the value of such property was grossly exaggerated. The court also found that Gilbert voided the transactions listed in exhibits 14 and 16 pursuant to § 30-3867. The order recites that "as such, the only remedy [Ann and Mary] have which is consistent with [Gilbert's] unqualified right to void those transactions is to have [Ann and Mary] retrieve and receive the personal property described in exhibits 10 and 11," with the exception of the chest Gilbert received as a gift from his uncle.
3. ATTORNEY FEES AND EXPENSES
On January 15, 2010, while resolution of the issues presented at trial was still pending, Gilbert filed a motion for an order awarding him attorney fees and expenses in the amount of $53,212.16. Ann and Mary filed an objection to the motion 1 month later in which they claim, among other things, that the amount of attorney fees requested is excessive. A hearing was held on February 5, 2010. Arguments on the issue of attorney fees were heard, and the record was left open for Ann and Mary to respond to the November 17, 2009, affidavit of Van Robays. Mary's affidavit was filed for that purpose on February 8, 2010.
On July 29, 2010, Gilbert filed a motion for an order substituting his attorney as successor trustee of his trust and awarding him prejudgment interest in the amount of $22,004.25; postjudgment interest at a rate of 12 percent per year from July 20, 2010 (the date the trial order was entered); attorney fees in the amount of $55,507.16; and fees to Gilbert's counsel for his service as successor trustee in the amount of $10,170. The motion recites that on or about January 13, 2010, First Nebraska resigned as successor trustee and Gilbert's counsel became successor trustee, as was allowed for in the court's July 30, 2009, order. Notice of a change in successor trustee was filed on January 15, 2010.
The county court entered its order in the above matters on October 28, 2010, in which the court approved the substitution of Gilbert's counsel as successor trustee of Gilbert's Trust. The court also sustained Ann and Mary's objection to prejudgment interest in the amount of $22,004.25, but awarded postjudgment interest at the rate of 12 percent per year beginning July 20, 2010. Attorney fees were awarded in the amount of $55,507.16, as were separate fees to be paid to Gilbert's counsel for his service as successor trustee, in the amount of $10,170. Ann and Mary now appeal, and Gilbert cross-appeals.
IV. ASSIGNMENTS OF ERROR
Ann and Mary allege, restated and renumbered, that the trial court erred in (1) finding that furniture and mementos claimed by Gilbert were "to be shared by all"; (2) failing to hold that the measure of damages for the converted property was the value to its owners; (3) failing to permit the money Gilbert owes to Gibreal Auto to reduce or defeat his judgment; (4) failing to enter an order requiring the trustee to retain Gilbert's obligations to Gibreal Auto or to Ann and Mary; (5) awarding an excessive amount of $55,507.16 in attorney fees; and (6) failing to find that Gilbert's testimony was impeached.
On cross-appeal, Gilbert alleges that the trial court erred in failing to award prejudgment interest pursuant to Neb. Rev. Stat. § 45-104 (Reissue 2010).
V. STANDARD OF REVIEW
Absent an equity question, an appellate court reviews trust administration matters for error appearing on the record; but where an equity question is presented, appellate review of that issue is de novo on the record. In re Margaret Mastny Revocable Trust, 281 Neb. 188, 794 N.W.2d 700 (2011). In a review de novo on the record, an appellate court reappraises the evidence as presented by the record and reaches its own independent conclusions concerning the matters at issue. Id.
VI. ANALYSIS
1. ANN AND MARY'S APPEAL
(a) Trial Court Did Not Commit Plain Error
Ann and Mary first allege that the emphasized portion of the following sentence from the trial court's July 20, 2010, order amounts to plain error: "The assertions made by [Ann and Mary] that the checks were to reimburse themselves for furniture and mementos claimed by [Gilbert], but to be shared by all, is without merit." (Emphasis supplied.) Plain error is error plainly evident from the record and of such a nature that to leave it uncorrected would result in damage to the integrity, reputation, or fairness of the judicial process. Cesar C. v. Alicia L., 281 Neb. 979, 800 N.W.2d 249 (2011). Ann and Mary assert that such erroneous finding "denied relief to Ann and Mary for loss, for the reason that the court believed Gilbert was just taking his 'share'." Brief for appellants at 19.
While it is clear that the furniture and other personal property of the parents was to pass jointly to Ann and Mary, to the exclusion of Gilbert, the trial court's error in the quoted language did not impact the result reached by the court in any way. When reduced to its essence, the trial court found that Ann and Mary grossly overvalued the personal property and, thus, improperly paid themselves with Gilbert's trust funds for property of Ann and Mary that had little or no value.
Moreover, in the court's July 20, 2010, order, Ann and Mary are given the right to "retrieve and receive" the allegedly stolen property, with the exception of the chest Gilbert testified he received as a gift from his uncle. Thus, the court's decision makes it clear it understood that the property in question was solely owned by Ann and Mary, as the court made no provision for compensating Gilbert for a one-third share. When the trial court's order is viewed in its entirety, it is clear that the court was aware of and understood the evidence presented at trial. Thus, the erroneous statement was merely harmless error.
(b) Trial Court Did Not Use Improper Measure of Damages
Next, Ann and Mary contend that the trial court erred in finding in its order that they "greatly exaggerated" the value of the allegedly stolen property and in finding that the value they assigned "wanes in comparison to the assessed and appraised value in an opinion expressed through the testimony of [Cohen]." They claim that "the proper measure of damages in this instance requires the court to determine damages for converted property based on the converted property's value to the owner at the time and place of the conversion." Brief for appellants at 20. No Nebraska case has articulated the premise that valuation of property is its owner's subjective valuation. In any event, working from this flawed proposition, they conclude that the evidence supports an award to them of "at least $45,000" for the property, which they do not want "[d]ue to the people Gilbert associates with." Id. at 33. This argument suffers from obvious logical shortcomings--if it were really worth that amount, adamantly choosing money over the property makes little sense. Plus, their argument that it is worth "at least $45,000" is clearly inconsistent with the fact that they paid themselves an extra $83,000-- a tidy profit under their reasoning. But, in the end, the valuation of the property was a fact issue for the trial judge to determine in the context of whether Ann had breached her fiduciary duty to Gilbert and if Mary had conspired with Ann in a fraud. There was ample evidence that their values suffered from miniscule foundation, whereas Cohen's opinions of value had solid foundation and reasoning behind them.
Suffice it to say that the two cases Ann and Mary cite in their brief in the context of this assignment of error, Linn v. Dodge County Bank of Hooper, 113 Neb. 446, 203 N.W. 546 (1925), and Woodworth v. Hascall, 59 Neb. 124, 80 N.W. 483 (1899), are factually distinguishable and do nothing to advance their argument. We do not burden the opinion with analysis of authority that is off point and does not support the argument they set forth. They also cite to 1 Dan B. Dobbs, Dobbs Law of Remedies § 5.16(3) (2d ed. 1993), which provides:
Some property held for personal use or pleasure has a market value but a very small one. Items like household furnishings and personal clothing are in this category. Other property held for personal use is held primarily for associational and affect value. Items such as family photographs, heirlooms and mongrel pets are in this category. When any such property is destroyed, the suspicion arises that an award of market value is likely to be less than fully compensatory. As a result courts seem to have struggled to
find some adjustment in the usual formula for damages to permit something more-than market recovery.
When clothing or household goods are destroyed the courts have departed from the market value formula in favor of one that gives the plaintiff the "value to the owner" or "real value," frequently adding that this does not include "sentimental value." Such statements provide a goal but not a measure of damages. "Value to the owner" cannot yield any dollar figure by computation, by analysis or by empirical investigation. The point seems to be to give the plaintiff something more than the market value, but something less than the full replacement cost of a new item.
Although we do not believe that Dobbs' reasoning yields any usable formulation for valuation, the fact here is that the items in question are simply used furniture, rather than an irreplaceable family heirloom or some other item that a reasonable person would attach great sentimental value. Moreover, the court did not find that Gilbert converted the disputed property, and it did not attribute a particular figure to the value of the items. Rather, the court implicitly used Cohen's $880 market value appraisal as support for its ultimate determination that Ann's and Mary's testimony that the $83,000 they received from Gilbert's trust was to compensate them for the missing property was "simply not credible." And, naturally, the fact that the memo line on checks totaling $35,000 made out to Ann and Mary from Gilbert's trust reads "reimburse GAS," lends further support to the conclusion that their story lacked credibility. Put another way, when writing these checks, they were for one purpose—the repayment of Gibreal Auto loans to Gilbert. But at trial, the money was for another purpose—to reimburse them for what the evidence (including the photographs) shows is essentially run-of-the-mill used furniture and furnishings. That the trial court found Ann and Mary not to be credible as they struggled to explain why they helped themselves to so much of Gilbert's trust funds is hardly surprising.
Finally, we note that determining the weight that should be given witness testimony, including that of experts, is uniquely the province of the fact finder. Reavis v. Slominski, 250 Neb. 711, 551 N.W.2d 528 (1996). We consider the fact that the trial court saw and heard the witnesses and observed their demeanor while testifying, and we give great weight to the trial court's judgment as to credibility. In re Interest of J.R., 277 Neb. 362, 762 N.W.2d 305 (2009). For the reasons expressed above, we disagree that the trial court used an improper measure of damages, because the evidence of value was really used by the trial court only to assess credibility and to determine that there had been breaches of fiduciary duty and fraud. We give due weight to the trial court's determination regarding credibility. This argument lacks merit.
(c) Gilbert's Alleged Debt to Gibreal Auto Does Not Reduce or Defeat Judgment Against Ann and Mary
Ann and Mary assert that because they are the successors in interest of Gibreal Auto, Gilbert's outstanding loans from Gibreal Auto should have been deducted from their judgment, under a theory of either recoupment or unjust enrichment. Trial exhibit 8 is a list of 27 separate "loans" totaling $74,041.28 over a timeframe beginning February 21, 1982, and ending October 24, 2002, which amount Ann and Mary assert Gilbert still owes to Gibreal Auto. Comprising exhibit 8 is a hodgepodge of receipts Ann and Mary claim represent loans Gibreal Auto made to Gilbert and one financing agreement between Gilbert and Gibreal Auto for the purchase of a car. The first installment under the financing agreement was due November 23, 2002.
Initially, we must determine the question of whether Ann and Mary's operative answer on appeal pleads a counterclaim or a recoupment defense. See Becker v. Hobbs, 256 Neb. 432, 590 N.W.2d 360 (1999). While a "counterclaim" seeks an affirmative judgment and need not arise out of the same transaction or occurrence which is the basis of plaintiff's action, a "recoupment" must arise out of the same transaction or occurrence which is the basis of plaintiff's action and is merely defensive, that is, it does not seek affirmative judgment in the action. Ed Miller & Sons, Inc. v. Earl, 243 Neb. 708, 502 N.W.2d 444 (1993). According to Becker v. Hobbs:
[T]he defense of recoupment "survives as long as plaintiff's cause of action exists, even if affirmative legal action upon the subject of recoupment is barred by the statute of limitations." . . . Although a pleading should not leave uncertainty as to the theory on which the pleader wishes to proceed, we have held that in actions not involving extraordinary remedies, general pleadings are to be liberally construed in favor of the pleader. ... It is the facts well pleaded, not the theory of recovery or legal conclusions, which state a cause of action. . . .256 Neb. at 437, 590 N.W.2d at 364.
A counterclaim in this jurisdiction "'must be an existing, valid, and enforceable cause of action in favor of the defendant against the plaintiff" ... It "must be one in favor of a defendant and against a plaintiff between whom a several judgment might be had . . . ." . . . On the other hand, recoupment can be used only defensively. ... In summary, "there is a difference between recoupment and a counterclaim. The former is purely defensive, while the latter seeks to recover an affirmative judgment."
With respect to Gilbert's alleged outstanding obligations to Gibreal Auto, Ann and Mary's answer characterizes such as a "counterclaim." Nevertheless, we look at the content of the pleading and not its label. The answer recites, "A receivable of [Gibreal Auto] is money due and owing from [Gilbert] to [Gibreal Auto] in the principal amount of $60,000, plus interest." The answer pleads necessary facts to assert an independent action, and it seeks damages separate from those demanded by Gilbert—a total of $156,000 plus interest on all counterclaims. Most important, this particular allegation does not arise out of the same transaction which forms the basis of Gilbert's cause of action, namely, that Ann breached her fiduciary duties as Gilbert's trustee by fraudulently writing checks to herself and Mary on Gilbert's trust account. Thus, we conclude that the answer asserts a counterclaim and not a recoupment defense. The significance of the fact that it is not a recoupment defense is that the statute of limitations is applicable.
A counterclaim, setoff, or cross-petition, to be available as a matter of affirmative defense or affirmative relief, must be a claim upon which the defendant could, at the date of the commencement of the plaintiff's suit, have maintained an action on the defendant's part against the plaintiff. Becker v. Hobbs, supra. Ann and Mary assert in their reply brief that we should look to the Uniform Commercial Code for the appropriate statute of limitations for the financing agreement between Gilbert and Gibreal Auto. See Neb. Rev. Stat. (U.C.C.) § 3-118 (Cum. Supp. 2010). Pursuant to § 3-118, the statute of limitations for any action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within 6 years after the due date. The first installment under the loan was due on November 23, 2002. Ann and Mary allege that Gilbert has not made any payments on that loan. At the date of the commencement of Gilbert's suit, June 17, 2009, the 6-year statute of limitations to enforce that debt had expired.
With respect to the remaining receipts and other documents contained in exhibit 8, the dates of the transactions span from 1982 to 2002. The statute of limitations on repayment of those "loans" has clearly run. For those reasons, the trial court did not err when it failed to reduce or defeat the judgment against Ann and Mary for Gilbert's alleged debts or loans to Gibreal Auto, or to otherwise award Ann and Mary a money judgment for any of those amounts. This claim is without merit.
(d) Gilbert's Obligation to Gibreal Auto Is Not Subject to Right of Retainer
Ann and Mary next allege, for the first time on appeal, that the trial court erred when it failed to order the successor trustee of Laurice's revocable trust to retain from future distributions to Gilbert sufficient sums to pay Gilbert's obligations to Gibreal Auto. Appellate courts do not consider arguments and theories raised for the first time on appeal. See Tolbert v. Jamison, 281 Neb. 206, 794 N.W.2d 877 (2011). And, as we have already established in the preceding section, Gilbert's alleged debts to Gibreal Auto were barred by the applicable statute of limitations, to say nothing of the lack of evidence that such were actually loans. We need not discuss this argument further.
(e) Award of $55,507.16 in Attorney Fees Was Not Improper
Ann and Mary contend that the award of $55,507.16 in favor of the successor trustee of Gilbert's trust and against them jointly and severally was excessive and an abuse of discretion. When an attorney fee is authorized, the amount of the fee is addressed to the discretion of the trial court, whose ruling will not be disturbed on appeal in the absence of an abuse of discretion. In re Trust of Rosenberg, 273 Neb. 59, 727 N.W.2d 430 (2007). An "abuse of discretion" occurs when a trial court's decision is based upon reasons that are untenable or unreasonable or if its action is clearly against justice or conscience, reason, and evidence. Schwartz v. Schwartz, 275 Neb. 492, 747 N.W.2d 400 (2008).
Ann and Mary concede that Neb. Rev. Stat. § 30-3893 (Reissue 2008) allows for reasonable attorney fees in trust administration cases such as this one. Section 30-3893 provides, "In a judicial proceeding involving the administration of a trust, the court, as justice and equity may require, may award costs and expenses, including reasonable attorney's fees, to any party, to be paid by another party or from the trust that is the subject of the controversy." Nonetheless, they claim that they "should not be required to pay attorney fees for litigation of Gilbert's debt, Gilbert's conversion of Ann and Mary's personal property, and Ann and Mary's right to recoupment of their just counterclaims." Brief for appellants at 44. They assert that the award of $55,507.16 for all attorney fees requested by Gilbert's counsel was an abuse of discretion. We disagree.
The record reveals that the actions of Ann during her tenure as trustee of Gilbert's Trust demonstrate a complete disregard of the fiduciary duties she owed to Gilbert. Ann repeatedly put her interests ahead of Gilbert's by engaging in self-serving transactions without Gilbert's knowledge or consent. Ann fraudulently wrote checks to herself and Mary totaling $41,500 each from Gilbert's trust account, and Mary participated in the fraud by accepting the checks. Their actions virtually exhausted his trust. Both Ann and Mary testified they did not disclose to Gilbert that they were going to pay themselves for the furniture they claim he stole from the Gibreal residence or that they were going to reimburse themselves for Gilbert's alleged outstanding debt to Gibreal Auto.
The trial court found that Gilbert made out a prima facie case of fraud and constructive fraud against Ann and Mary, respectively. It found that their testimony was not credible regarding the reason they took $83,000 from Gilbert's trust account. Contrary to Ann and Mary's brief, the court did not find Gilbert guilty of conversion. It actually found that Ann and Mary "consented to the moving of furniture by [the moving company] from the parents' home to [Gilbert's] townhome." We find it telling that Ann and Mary did not assign error to any of those findings. What is more, the portions of the litigation related to Gilbert's debt to Gibreal Auto, Gilbert's conversion of Ann and Mary's personal property, and Ann and Mary's right to recoupment were all initiated by the Gibreal sisters and were properly decided against them. In light of those realities, we cannot say that the award of $55,507.16 in attorney fees was an abuse of discretion. This argument is meritless.
(f) Gilbert's Testimony Was Not Impeached
Finally, Ann and Mary assert that Gilbert's testimony was impeached due to his criminal history. Gilbert testified in the affirmative when asked at trial whether he had been convicted of a felony within the past 10 years. The judge stopped the questioning there. After trial, Gilbert offered Van Robays' affidavit. The bill of exceptions from the February 5, 2010, hearing reflects that the record was left open to allow Ann and Mary to reply to that affidavit. Mary's responsive affidavit was filed thereafter. Attached to it were several documents reflecting that Gilbert was convicted of bank fraud and felony forgery within the past 10 years. We note that evidence of Gilbert's convictions was not responsive to any of the testimony contained in Van Robays' affidavit.
In any event, Gilbert's criminal history goes to his credibility as a witness. And, as we stated previously, determinations of credibility are uniquely the province of the fact finder. See Reavis v. Slominski, 250 Neb. 711, 551 N.W.2d 528 (1996). We consider the fact that the trial court saw and heard the witnesses and observed their demeanor while testifying, and we give great weight to the trial court's judgment as to credibility. In re Interest of J.R., 277 Neb. 362, 762 N.W.2d 305 (2009). There is an embarrassment of evidence aside from Gilbert's testimony to support the findings of the trial court. After consideration of all the evidence presented, including the documents attached to Mary's posttrial affidavit, the court clearly believed Gilbert rather than his sisters. We give great weight to that judgment, and we cannot say, after our independent review, that such was erroneous. This argument lacks merit.
2. GILBERT'S CROSS-APPEAL
Gilbert's sole argument on cross-appeal is that the trial court erred by failing to award him prejudgment interest pursuant to § 45-104 in light of the court's finding that Ann and Mary's testimony was not credible. Section 45-104 provides, "Unless otherwise agreed, interest shall be allowed at the rate of twelve percent per annum . . . on money received to the use of another and retained without the owner's consent, express or implied, from the receipt thereof . . . ." In the case at bar, because Ann, in her capacity as Gilbert's trustee, wrongfully converted for her own use and retained money belonging to Gilbert without Gilbert's consent, interest is allowable pursuant to § 45-104.
However, where a reasonable controversy exists as to the plaintiff's right to recover or as to the amount of such recovery, the claim is generally considered to be unliquidated and prejudgment interest is not allowed. Land Paving Co. v. D. A. Constr. Co., Inc., 215 Neb. 406, 338 N.W.2d 779 (1983). The amount of a claim is liquidated, for purposes of determining entitlement to prejudgment interest, only when the evidence furnishes a basis to compute an exact amount determinable without opinion or discretion inherent in the factfinding process. Lange Indus. v. Hallam Grain Co., 244 Neb. 465, 507 N.W.2d 465 (1993).
Here, a reasonable controversy exists as to the amount of Gilbert's recovery. The trial court was required to go through each of the challenged transactions and determine whether such were self-serving on Ann's part or otherwise a breach of her fiduciary duties to Gilbert. In doing so, the court had to assess the credibility of the witnesses. Accordingly, it was proper for the trial court to decline an award of prejudgment interest to Gilbert. For the foregoing reasons, we affirm the judgment of the trial court in all respects.
AFFIRMED.