When must trustees file petitions rather than motions for fee approval? Kunkler v. Key Bank Explained

Background and Facts

KeyBank served as trustee of the Irrevocable Jack W. Kunkler Trust, which required investment in raw undeveloped land in Salt Lake County with decennial sales of 25-30% of the trust’s land holdings. After completing two land sales worth over $46 million, KeyBank filed a motion to resign as trustee and requested over $4.7 million in trustee fees—the maximum 10% allowed under the trust terms for unimproved property sales. William Kunkler, the Class II Trustee, opposed the fee request and demanded a jury trial on February 28, 2008, one day after indicating his desire for a jury at a hearing.

Key Legal Issues

The central issue was whether Kunkler’s jury demand was timely under Utah Rule of Civil Procedure 38(b), which requires jury demands within ten days of “the last pleading directed to such issue.” The district court determined that Kunkler’s May 2007 petition to remove KeyBank as trustee was the last pleading addressing trustee fees, making the February 2008 jury demand untimely. Additionally, the case raised questions about proper court jurisdiction over trust administration under Utah Code section 75-7-201.

Court’s Analysis and Holding

The Utah Supreme Court reversed, applying the correctness standard to questions of law regarding statutory and rule interpretation. The court held that under Utah Code section 75-7-201, courts have jurisdiction over trust administration only when “invoked by interested parties” through proper pleading. KeyBank’s motion to resign improperly injected the fee issue into the litigation—trustee fee disputes must be raised by petition, not motion. Since KeyBank’s February 13, 2008 motion was the first filing specifying the fee amount, and it should have been treated as a petition, Kunkler’s February 28, 2008 jury demand was timely.

Practice Implications

This decision clarifies that trustees seeking court approval of fees must invoke jurisdiction through proper petition rather than motion. The ten-day period for jury demands under Rule 38(b) begins running from service of such petition. Practitioners should ensure trustee fee disputes are properly pleaded to preserve jury trial rights and avoid jurisdictional challenges. The ruling also reinforces that courts lack inherent jurisdiction over trust administration matters absent proper invocation by interested parties.