Derkatsch v. Thorp, Purdy, Jewett, Urness & Wilkinson

Attorney's fees can be recovered from the client's trust pursuant to ORS 125.095 for services rendered while the client was designated a protected person.

In 1999, Erna Derkatsch established a revocable living trust (RLT) designating herself as trustee and naming Erick and Natalie, her two children, as co-successor trustees in the event she became incapacitated. Erna was designated incapacitated in 2006 and thereafter became concerned about what the trustees had been doing with the assets. Erna, through her attorney, attempted to regain control over the trust, as well as suing the co-trustees for financial abuse. During this process Erna was designated a protected person and appointed a professional guardian. Erna settled her suit in 2007. As part of the settlement, the financial abuse case was dismissed. Erna’s attorney sought payment for attorney's fees in both the financial abuse case and the guardianship proceedings. The trial court awarded attorneys fees and the trustees appealed. On appeal the trustees argued: (1) the court did not have the power to order the payment of attorney's fees under ORS 125.095; (2) the court could not authorize the payment of fees incurred before Erna was rendered a protected person under ORS 125.095(1); and (3) that fees could not be authorized because they were not incurred for services that benefited the protected person. The Court of Appeals held that (1) the court did have authority to authorize the fees; (2) the fees could only be authorized for the period after Erna was designated a protected person; and (3) the fees were incurred while rendering services that benefited the protected person. Reversed and remanded.