HEAVICAN, C.J.
First National Bank North Platte (FNBNP), as successor trustee of the trust of Leo A. Hrnicek, brought an action seeking to retain proceeds of the trust due to Adrienne H. Brietzke. The county court found Brietzke in contempt and otherwise granted FNBNP's request. Brietzke appeals. The primary issue on appeal is whether FNBNP can recover amounts owed to the trust by a beneficiary by retaining trust proceeds owed to that beneficiary. We affirm.
Leo A. Hrnicek and his wife had six children. In 1995, Hrnicek loaned $85,000, at 7 percent interest, to his daughter, Brietzke, and her husband. The loan was to be repaid beginning on April 1, 1995, over 15 years, for a total of 180 payments of $764.01 each. According to the terms of the loan, the last payment was to be made on March 1, 2010.
Hrnicek died on November 2, 1997. Upon his death, Hrnicek bequeathed all his property to the trustees of the "L.A. Hrnicek, M.D. Living Trust," dated May 30, 1997. Included in this property was the promissory note reflecting the loan from Hrnicek to Brietzke.
It appears that family drama ensued after Hrnicek's death, and litigation followed. On April 23, 2003, the county court approved a settlement entered into by various members of the family. That settlement provided that Brietzke and her cotrustee would both resign as trustees, to be replaced by FNBNP. In addition, Brietzke, whose counsel was a signatory to this settlement, "acknowledge[d] that she is indebted to [the] Trust," and that she agreed to "pay such debt in full according to the terms of the note." According to the record, payment on the loan had last been received from Brietzke on April 18, 2002.
Despite her promise to repay, Brietzke made no further payments on the loan. Thereafter, on June 1, 2009, FNBNP filed a motion asking the court to approve "retainage of trust distribution" otherwise owed to Brietzke on the ground that she had not repaid amounts due to the trust under the court's April 23, 2003, order. Brietzke objected. Then on July 13, 2009,
A hearing was held on August 26, 2009, on both FNBNP's motion and its contempt application. At that hearing, a representative for FNBNP indicated that Brietzke had made no payments since April 18, 2002, had received about $103,000 in distributions under the trust, and could expect about $350,000 more before the trust was closed. The representative indicated that letters requesting repayment of the loan had been sent to Brietzke's counsel.
On September 28, 2009, following the hearing and prior to the court's decision, Brietzke filed a motion for distribution of the proceeds of the trust. On February 3, 2010, the county court found Brietzke in contempt of court and allowed FNBNP to "retain sufficient funds from any future distributions ... to fully satisfy the outstanding balance of the promissory note owed to the trust in the amount of $55,600.11, plus per diem interest accumulating at a rate of $10.67 from April 18, 2002." Brietzke appeals.
Brietzke assigns that the county court erred in (1) allowing FNBNP to retain funds from her distribution to repay the loan owed the trust and (2) calculating the amount due, since recovery of all or a portion of the amount due is barred by the applicable statute of limitations.
Appeals of matters arising under the Nebraska Probate Code are reviewed for error on the record.
In reviewing the judgment awarded by the probate court in a law action, an appellate court does not reweigh evidence, but considers the evidence in the light most favorable to the successful party and resolves evidentiary conflicts in favor of the successful party, who is entitled to every reasonable inference deducible from the evidence.
In her first assignment of error, Brietzke assigns that the county court erred in allowing FNBNP to retain, or offset, from her distribution from the trust the unpaid amount of her debt owed to the trust, plus interest. Brietzke argues that while the probate code allows for such retention, the trust code makes no specific reference to this type of remedy.
The probate code does allow for retention:
This rule was the common-law rule.
However, Neb.Rev.Stat. § 30-3806 (Reissue 2008), a part of Nebraska's trust code, provides that "[t]he common law of trusts and principles of equity supplement the Nebraska Uniform Trust Code, except to the extent modified by the code or another statute of this state." And as we noted in Fischer v. Wilhelm,
Moreover, the Restatement (Second) of Trusts also supports the conclusion of the county court that FNBNP can retain a portion of Brietzke's distribution. Section 251A provides that
There is nothing in this record that would indicate any contrary intention.
This general rule has been relied upon again and again in trust cases in other jurisdictions—some citing to the Restatement and others to common law.
We conclude that the retainer of a distribution is a valid, equitable remedy available to trustees in situations such as this. It was therefore not error for the county court to order such in this case. Brietzke's first assignment of error is without merit.
Brietzke next assigns that the county court erred in ordering the particular amount retained from her distribution, because a portion of the principal and interest could no longer be recovered, as it was barred by the applicable statute of limitations.
Brietzke overlooks the fact that the note signed by her and evidencing her
Brietzke's second assignment of error is also without merit.
We finally note that at oral argument before this court, Brietzke took issue with the calculation of the amount due, and thus to be retained, from Brietzke's distribution from the trust. But Brietzke did not assign this as error, nor argue this in her brief. We therefore decline to address it further.
Retainer is a valid, equitable remedy available to the trustee in this case. And the trust's right of retainer is not barred by any statute of limitations. The decision of the county court is therefore affirmed.
AFFIRMED.