In re Kunkler Trust

2011 UT 7
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
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In the Matter of the Irrevocable No. 20090514
Jack W. Kunkler Trust A.
__________________________________
William Kunkler,
Plaintiff and Appellant,
v.
F I L E D
Key Bank,
Defendant and Appellee. January 21, 2011
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Third District, Salt Lake
The Honorable Denise P. Lindberg
No. 073900333
Attorneys: Michael A. Jensen, Alexander Dushku, Justin W. Starr, Salt Lake City,
for plaintiff
Douglas K. Cummings, Thomas B. Price, Salt Lake City, for defendant
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DURHAM, Chief Justice:
INTRODUCTION
¶1 This appeal is from a district court order denying as untimely a demand
for jury trial on the issue of trustee fees under Utah Rule of Civil Procedure 38. We
conclude that the demand was timely, and therefore reverse and remand.
BACKGROUND
¶2 The Irrevocable Jack W. Kunkler Trust A (the Trust) was established on
June 20, 1983. The Trust requires investment in “raw undeveloped ground,” which

1 KeyBank mailed a letter to the Trust beneficiaries on February 8, 2008,
notifying them of its intention to request fees from the district court. On the record, this
(continued...)
No. 20090514 2
“must be situated in Salt Lake County.” In particular, the Trust calls for decennial land
sales of “between 25% and 30% (in value) of the ground which [the Trust] owns.”
¶3 The Trust provides for two trustee positions. The Class I Trustee is
responsible for managing and investing Trust funds. The original Class I Trustee was
Commercial Security Bank of Utah; KeyBank later assumed the role of Class I Trustee
through acquisition. The Class II Trustee’s responsibilities depend on who occupies the
position. Under the terms of the Trust, the original named Class II Trustee, William B.
Wray, Jr., had “complete discretion” over the selection of land for the decennial land
sales. Upon Mr. Wray’s departure from the position of Class II Trustee, however, the
Class I Trustee would permanently inherit that responsibility.
¶4 In accordance with the Trust, Mr. Wray—acting as Class II
Trustee—began work in 2005 on a sale of two Trust properties together worth over $46
million. The Trust entered into a Purchase and Sale Agreement for the two land parcels
on November 30, 2005, with Mr. Wray signing as Class II Trustee and KeyBank signing
as Class I Trustee. Mr. Wray had notified the Trust of his intent to resign as Class II
Trustee on October 28, 2005, but Mr. Wray’s resignation did not become effective until
the end of January 2006. After Mr. Wray’s resignation, KeyBank assumed his land-sale
responsibilities and the appellant William Kunkler was elected the new Class II
Trustee.
¶5 Under the terms of the Purchase and Sale Agreement, the first land parcel
was sold on July 14, 2006, and the second sale occurred on June 19, 2007. In conjunction
with each of the two land sales, KeyBank conducted tax-free exchanges pursuant to
section 1031 of the Internal Revenue Code, which permits the deferral of capital gains
taxes. The original terms of the Trust contemplated such tax-free exchanges. KeyBank
completed the final tax-free exchange on December 11, 2007.
¶6 The present litigation began on March 2, 2007, when KeyBank filed a
petition to modify the Trust. KeyBank’s petition primarily sought to expand the Trust’s
scope of permissible land purchases to include both developed land and land outside
Salt Lake County. On May 9, 2007, Mr. Kunkler filed a Petition to Remove Key Bank as
Trustee and Objections to Key Bank’s Petition to Amend the Trust. The litigation
slowly advanced on both issues—amending the Trust and compelling KeyBank’s
removal—throughout the remainder of 2007.
¶7 On February 13, 2008, KeyBank filed a Motion to Resign as Class I Trustee
and to Appoint Successor Trustee. As part of this motion, KeyBank for the first time
presented its fee request to the court.1 The Trust provides that for sales of real

(...continued)
appears to be the first time that Mr. Kunkler and the Trust beneficiaries learned of the
amount KeyBank would be seeking in trustee fees; an earlier letter mailed January 23,
2008, had suggested that KeyBank would be requesting fees on the order of two
hundred thousand dollars.
2 KeyBank acknowledged in its motion that “the industry standard in and
around Salt Lake County for payment of a broker of a commercial real property
transaction is 6%,” but justified its request for the full 10 percent by noting that
KeyBank “performed the broker’s duties as well as its own.” In later testimony,
however, a KeyBank employee suggested that KeyBank did less work in the Trust land
sales than is generally required when a broker is involved. KeyBank later reduced its
fee request to 6 percent of the sale value “in order to conform to the local industry
standards and as a sign of KeyBank’s reasonableness to assist in a resolution of this
matter.”
3 The district court did not dispute Mr. Kunkler’s underlying right to a jury trial,
but instead focused on whether Mr. Kunkler’s jury demand was timely. At oral
argument before this court, KeyBank questioned Mr. Kunkler’s right to a jury, but this
argument did not appear in any of KeyBank’s previous court filings or its brief before
this court. We therefore proceed on the assumption that Mr. Kunkler had a right to a
jury, as long as he complied with rule 38 in making his jury demand.
3 No. 20090514
property, the fees are as follows: “Improved, not to exceed 6%. Unimproved, not to
exceed 10%. If a broker is employed—to a maximum of 3%. Minimum, $50.00.”
KeyBank requested the full 10 percent—amounting to over $4.7 million, “the maximum
allowable by the Trust”—in its motion.2
¶8 Mr. Kunkler vigorously opposed KeyBank’s fee request. On February 25,
2008, he filed a Memorandum in Opposition to KeyBank’s motion. This memorandum
outlined Mr. Kunkler’s primary argument against KeyBank’s fee request: Mr. Wray’s
prior successful efforts in negotiating the Purchase and Sale Agreement minimized or
negated KeyBank’s right to claim trustee fees for the land sales. Significantly, Mr.
Kunkler’s filing highlighted that the issue of the amount of trustee fees owed KeyBank
was in dispute and that the language of the Trust provided for fees “up to 10%” rather
than guaranteeing a specific amount. At a February 27, 2008 hearing, Mr. Kunkler for
the first time indicated his desire for a jury trial on the issue of trustee fees. The next
day, Mr. Kunkler filed a Jury Demand and Request to Designate This Case as a Jury
Action.
¶9 On March 31, 2008, the district court denied Mr. Kunkler’s jury demand
as not timely filed under Utah Rule of Civil Procedure 38.3 The district court focused
on the requirement that a jury demand be “not later than 10 days after the service of the
last pleading directed to such issue.” Utah R. Civ. P. 38(b) (emphasis added).
Importantly, the district court determined that the last pleading directed to the issue of

4 Following the July 8, 2008 Decision and Order, Mr. Kunkler sought to have the
district court reconsider its ruling. The district court denied that motion as well.
5 On appeal, Mr. Kunkler also challenges one of the district court’s conclusions of
law. Because we vacate the district court’s denial of the jury demand, all subsequent
proceedings—including the order containing the contested conclusion of law—are
vacated as well. As a result, we need not reach the merits of Mr. Kunkler’s argument
on this point.
No. 20090514 4
KeyBank’s trustee fee request was Mr. Kunkler’s May 9, 2007 petition to remove
KeyBank as Class I Trustee. In denying Mr. Kunkler’s jury demand, the district court
concluded that
the Class II Trustee . . . could not reasonably have
contemplated that Key Bank would be replaced without
payment of compensation earned for services rendered
during the time it administered the Trust. Therefore, the
petition to remove Key Bank as Class I Trustee implicitly
included within it the administration fees to which Key
Bank would be entitled, and the opposition thereto was “the
last pleading addressed to such issue” under [rule 38(b)].
Shortly after this district court ruling, on April 21, 2008, Mr. Kunkler filed a Motion to
Construe Key Bank’s Motion for Fees as a “Petition,” or in the Alternative, to Strike the
Motion and Require Key Bank to File a Petition. Mr. Kunkler also had filed a separate
Petition to Review Trustee’s Fees. KeyBank in response filed a Motion to Strike Class II
Trustee’s Petition and a motion opposing Mr. Kunkler’s April 21, 2008 motion.
¶10 On July 8, 2008, the district court denied Mr. Kunkler’s remaining jury-
related filings. The district court granted KeyBank’s motion to strike Mr. Kunkler’s
new petition, holding that the existing litigation encompassed that petition’s request to
review trustee fees. Relying exclusively on its March 31, 2008 ruling, the district court
also denied Mr. Kunkler’s April 21, 2008 motion.
¶11 Having rejected Mr. Kunkler’s efforts to secure a jury trial,4 the district
court proceeded to hold an evidentiary hearing on the amount of trustee fees owed
KeyBank. After the two-day hearing, the district court issued its Findings of Fact and
Conclusions of Law, in which it awarded KeyBank a fee equal to 6 percent of the value
of the land sales.5 The district court later awarded KeyBank an additional $321,344.75
in attorney fees.

6 On appeal, Mr. Kunkler also contests the district court’s decision to deny him
discovery during court-ordered mediation. Both parties acknowledged in briefs before
this court that this issue is now moot, and neither party raised this issue during oral
arguments before this court. Therefore, we do not reach this issue, although we note
that pursuant to Utah Rule of Court-Annexed Alternative Dispute Resolution 101(f),
“[d]iscovery may proceed during the pendency of the mediation proceedings, except as
stipulated by the parties.”
7 KeyBank is correct that “the granting or denial of a jury trial, in the absence of
proper procedural requirements, is within the sound discretion of the trial court.”
James Mfg. Co. v. Wilson, 390 P.2d 127, 128 (Utah 1964); see also Pete v. Youngblood, 2006
UT App 303, ¶ 9, 141 P.3d 629 (“We will not overturn the trial court’s decision to deny
an untimely jury demand absent an abuse of discretion.”). However, in this case the
issue is whether the district court correctly interpreted the Utah Rules of Civil
Procedure and the Utah Code in assessing the timeliness of Mr. Kunkler’s jury demand.
5 No. 20090514
¶12 Mr. Kunkler timely appealed all relevant district court rulings and
orders.6 We have jurisdiction pursuant to Utah Code section 78A-3-102(3)(j) (Supp.
2010).
STANDARD OF REVIEW
¶13 The district court’s interpretations of Utah statutes and rules of procedure
are questions of law reviewed for correctness. Jaques v. Midway Auto Plaza, Inc., 2010
UT 54, ¶ 11, 240 P.3d 769; Arbogast Family Trust v. River Crossings, LLC, 2010 UT 40, ¶ 10,
238 P.3d 1035. The district court’s characterization of a party’s filing is also a legal
conclusion, “which we review for correctness.”7 Roark v. Crabtree, 893 P.2d 1058, 1061
(Utah 1995); see also Due S., Inc. v. Dep’t of Alcoholic Beverage Control, 2008 UT 71, ¶ 11,
197 P.3d 82.
ANALYSIS
¶14 Judicial supervision of trust administration is governed by Utah Code
section 75-7-201. That section provides in pertinent part:
(1)(a) The court has exclusive jurisdiction of proceedings
initiated by interested parties concerning the internal affairs
of trusts.
. . . .
(2)(b) The . . . payment of trustee’s fees . . . and other aspects
of the administration of a trust shall proceed expeditiously
consistent with the terms of the trust, free of judicial
intervention and without order, approval or other action of
any court, subject to the jurisdiction of the court as invoked

8 This reading of section 75-7-201 comports with the guidance provided in the
Uniform Trust Code, which the legislature adopted by enacting the Utah Uniform Trust
Code, 2004 Utah Laws 89. As noted above, under Utah Code section 75-7-814(1)(o) a
trustee is authorized to “pay . . . compensation of the trustee.” The comments to the
Uniform Trust Code note that “[section 75-7-814(1)(o)] grants the trustee authority to fix
and pay its compensation without the necessity of prior court review, subject to the
right of a beneficiary to object to the compensation in a later judicial proceeding.” Unif.
Trust Code § 708 cmt. (2005) (emphasis added).
9 Indeed, Mr. Kunkler argued with some force in his brief and oral argument
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No. 20090514 6
by interested parties or as otherwise exercised as provided
by law.
Utah Code Ann. § 75-7-201 (Supp. 2010). In interpreting this section, “[w]e look first to
the plain language,” Berneau v. Martino, 2009 UT 87, ¶ 12, 223 P.3d 1128, “and give
effect to that language unless it is ambiguous,” Salt Lake Cnty. v. Holliday Water Co., 2010
UT 45, ¶ 27, 234 P.3d 1105.
¶15 Section 75-7-201 by its plain language instructs courts to restrict their
supervision of trust administration to only those issues raised by interested parties. In
other words, in order for the court to have jurisdiction over an aspect of trust
administration, an interested party must invoke the court’s jurisdiction by pleading.
This principle flows from section 75-7-201(2)(b)’s requirement that unless “the
jurisdiction of the court [is] invoked by interested parties,” trust administration “shall
proceed expeditiously consistent with the terms of the trust, free of judicial
intervention.”
¶16 In this case, the district court erred in holding that the issue of trustee fees
arose prior to KeyBank’s February 13, 2008 motion to resign. The earlier pleadings did
not place the amount of KeyBank’s fees into dispute, nor could they—the second land
sale did not occur until June 19, 2007, after all original pleadings had been filed.
KeyBank’s February 13, 2008 motion to resign was the first judicial filing indicating a
specific amount KeyBank would be claiming as trustee fees under the Trust’s terms.
Under Utah law, KeyBank was within its authority as a trustee to “pay . . .
compensation of the trustee.” Utah Code Ann. § 75-7-814(1)(o). In order to obtain
judicial supervision over the award of trustee fees, an interested party had to explicitly
invoke the court’s jurisdiction. Otherwise, absent challenge to KeyBank’s claimed
trustee fee, the district court would lack authority under section 75-7-201 to supervise
the award of trustee fees.8
¶17 KeyBank’s February 13, 2008 motion to resign therefore injected a new
issue into the dispute between KeyBank and Mr. Kunkler.9 Consequently, the district

9 (...continued)
that KeyBank’s motion to resign not only injected a new issue into the dispute, but
entirely mooted the previous controversy. Although we do not reach the mootness
argument directly, we note that this argument further supports the conclusion that
KeyBank’s motion to resign injected a new issue into the existing proceedings.
7 No. 20090514
court should have granted Mr. Kunkler’s April 21, 2008 motion to either construe
KeyBank’s motion as a petition or strike KeyBank’s motion entirely. Had the district
court construed KeyBank’s motion to resign as a petition, then Mr. Kunkler’s February
28, 2008 jury demand would have been timely. Alternatively, had the district court
struck KeyBank’s motion as improperly injecting a new issue into the proceedings via
motion, then the district court would have lacked jurisdiction over the amount of
trustee fees—although Mr. Kunkler’s March 19, 2008 petition would have properly
placed the issue before the court.
¶18 As a result, we vacate the district court’s July 8, 2008 Decision and Order
and all subsequent proceedings, including the district court’s January 13, 2009 Findings
of Fact and Conclusions of Law. In the interest of judicial economy, we direct the
district court to treat KeyBank’s motion to resign as a petition invoking the court’s
jurisdiction on the issue of trustee fees, and to allow the litigation to proceed from that
point. Mr. Kunkler’s jury demand is therefore timely and the district court should
proceed accordingly upon remand.
CONCLUSION
¶19 Under Utah Code section 75-7-201, a court’s jurisdiction to supervise the
administration of a trust is subject to the invocation of that jurisdiction by the pleading
of an interested party. When KeyBank filed its motion to resign as trustee, it
improperly injected a new issue by motion—rather than by petition—into the
proceedings. Accordingly, we vacate the district court’s July 8, 2008 Decision and
Order and subsequent proceedings, grant Mr. Kunkler’s motion to construe KeyBank’s
motion to resign as a petition, recognize that Mr. Kunkler’s jury demand was timely,
and remand for proceedings consistent with this opinion.
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¶20 Associate Chief Justice Durrant, Justice Parrish, Justice Nehring, and
Justice Lee concur in Chief Justice Durham’s opinion.