Devine Millimet | NH Law Firm

Undue Influence - Trust Challenge

On August 15, 2018, the New Hampshire Supreme Court issued an order in In re Alice Stedman 1989 Trust 2013 Restatement, Case No. 2017-0288, a case concerning a challenge to a restatement to a trust on the grounds of undue influence.  The petitioner claimed that his sister unduly influenced their 93-year-old mother, causing her to sign a restatement to her 1989 trust that greatly benefitted the sister.  The trial court set aside the trust restatement, concluding that it was the product of undue influence.  The trial court also ordered the sister to pay certain attorneys’ fees incurred by the petitioner in advancing the case.  The respondent challenged the fee award on multiple grounds through her appeal to the New Hampshire Supreme Court.

Two major takeaways come out of the supreme court’s order: (1) there is no right to an evidentiary hearing on a request for an award of attorneys’ fees in undue influence cases involving a trust; and (2) attorneys’ fees can be awarded in undue influence cases without a finding of either “bad faith” or that there were acts of “oppressive conduct” carried out by the party who is ordered to pay.

The supreme court first observed that although there is a right to a hearing on a fee award, it does not need to be an evidentiary hearing.  In its decision, the supreme court reflected on the fact that the trial court was involved in nearly all substantive proceedings in the case since the start of the litigation and had presided over a seven-day trial.  On that basis, the supreme court concluded that there was no need for a further evidentiary hearing.

With regard to the fee award itself, generally, absent some contractual or statutory “hook,” courts do not order one party to pay the other party’s attorneys’ fees without a finding that the party ordered to pay engaged in “bad faith” or “oppressive conduct.”  However, the court observed that attorneys’ fees awards in trust cases are governed by a different standard, now codified at RSA 564-B:10-1004, which allows the trial court to award attorneys’ fees and costs “as justice and equity may require”—a broad standard, one that certainly reaches beyond bad faith or wrongful conduct.  The supreme court in Stedman was unwilling to set aside the trial court’s conclusion that an attorneys’ fees award was warranted and appropriate because of the lengthy litigation, the sister’s lack of credibility, and her inconsistent and evasive testimony.

Stedman highlights the importance of bearing in mind the risk of an attorneys’ fees award when pursuing an undue influence challenge to a trust.  The attorney and client must consider that possibility when evaluating whether to proceed with filing such a case and before taking it to trial.
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