United States District Court, W.D. Kentucky, Paducah Division
JONI D. JELLETICH, Plaintiff,
RHONDA J. PAWLAKSI and BOBBY PAWLAWSKI, Defendants/Third-Party, Plaintiffs,
BRECK JELLETICH, Third-Party Defendant.
MEMORANDUM OPINION AND ORDER
GREG N. STIVERS, District Judge.
This matter is before the Court on the Motion Concerning the Defendant's Use of Money Held as a Fiduciary to Pay Attorney's Fees filed by Plaintiff Joni D. Jelletich ("Jelletich") (DN 44). Alternatively, Jelletich requests the removal of the trustee of the Dancliff Family Trust. The motion has been fully briefed by the parties. For the reasons outlined below, the motion is GRANTED IN PART and DENIED IN PART.
I. SUMMARY OF FACTS AND CLAIMS
Jelletich and Defendant Rhonda J. Pawlawski ("Pawlawski") are the daughters of the late Lorna J. Dancliff ("Dancliff"). Jelletich filed this lawsuit against Pawlawski and her husband to contest estate planning documents executed by Dancliff late in her life. (Compl., DN 1). In response, Defendants asserted a counterclaim against Jelletich and filed a Third-Party Complaint against Jelletich's husband. (Answer, Countercl. & Third-Party Compl., DN 6).
On January 5, 2007, Dancliff and her late husband executed the Dancliff Family Trust for themselves and the benefit of their three children-including Jelletich and Pawlawski. (Compl. Ex. A, DN 1-1). Initially, both Dancliff and her husband served as Co-Trustees. On January 7, 2008, Dancliff executed a power of attorney in which she designated Pawlawski as her attorneyin-fact. (Compl. Ex. F, DN 1-6).
Following the death of Dancliff's husband, she executed several amendments to the Dancliff Family Trust. On January 8, 2008, Dancliff executed the first amendment in which she named Pawlawski as Co-Trustee. (Third-Party Def.'s Mot. To Dismiss, Ex. A, DN 16-1). On March 4, 2008, Dancliff executed the second amendment to the Dancliff Family Trust in which she eliminated her third child as a beneficiary, and designated Jelletich and Pawlawski as coequal beneficiaries of the trust estate. (Compl. Ex. A-B, DN 1-1, 1-2).
When Dancliff's husband died in January 2008, she relocated from Utah to Arizona to live with Jelletich. (Compl. ¶ 16). In the summer of 2009, Dancliff underwent a clinical neurological evaluation, and was diagnosed with moderate dementia impairment. (Compl. ¶¶ 18-19). In the summer of 2010, Dancliff traveled to Kentucky to visit Pawlawski and never returned to Arizona. (Compl. ¶ 21). The parties contest whether Dancliff remained in Kentucky under her own free will.
On September 13, 2010, Dancliff executed the third amendment to the Dancliff Family Trust, which removed Jelletich as a beneficiary of the trust and left the residuary of the estate to Pawlawski. (Compl. Ex. D, DN 1-4). On June 17, 2011, Dancliff executed the Fourth Amendment to the Trust in which Dancliff was removed as Co-Trustee and Pawlawski was designated as the sole Trustee. (Compl. Ex. D). On October 10, 2013, Dancliff died. (Compl. ¶ 7).
On January 30, 2014, Jelletich filed this action asserting various claims against Pawlawski and her husband. Pawlawski and her husband then asserted counterclaims against Jelletich and filed a Third-Party Complaint against Jelletich's husband.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332. There is complete diversity of the parties, and the amount in controversy exceeds the jurisdictional limit of this Court. (Compl. ¶ 9).
Plaintiff's motion raises two issues: (i) whether Pawlawski may continue to pay attorneys' fees and costs from the Dancliff Family Trust; and (ii) alternatively, whether there are grounds to remove Pawlawski ...