- Greetings from the Steering Committee Cochairs
- 2008-2009 Luncheon Program Series
- Community Outreach and Pro Bono Opportunities
- Superior Court Events
- Other Notes and Announcements
- Recent Court Decisions
- Estates, Trusts and Probate Law Section Steering Committee 2008-2009
- Steering Committee Officers and Committee Assignments
GREETINGS FROM THE STEERING COMMITTEE
COCHAIRS
Welcome to the latest edition of the Estates, Trusts and Probate
Section newsletter!
We want to remind you to attend one or all of the excellent upcoming
section events. The monthly lunch program series continues on the third
Thursday of every month through June 2009. The guardianship support
group will be meeting on the second Friday of March and May 2009 in
the conference room at the Probate Division. The three-part CLE series
"Basic Estate Planning" will be offered on May 4, 11, and
18, 2009. The steering committee is also planning another evening
program—stay tuned for an announcement. Last but not least, mark
your calendars for the annual Judicial Reception on April 29—you
will be receiving your invitations soon!
It is not too early to suggest ideas for programs for next year. The steering committee is already developing the programs for the upcoming year, which begins in September. We welcome your input and suggestions.
The section is in the process of making e-mail the primary method of communication between the section and the membership. As required by Bar policy, you will receive a letter formally notifying you of the change over and what you need to do to make sure you will receive the e-mail notifications.
The increased use of e-mail will allow us to improve communications and to help keep costs down. Unfortunately, the changes in our economy have increased budgetary pressures on the provision of section services. The switch to e-mail is one attempt to control costs. The need to control costs has prompted the section, along with almost all the other sections, to increase dues. Our planned increase in the annual membership dues is very modest (three dollars) and in line with increases by other sections.
This past holiday season the section collected more than 350 gifts for the residents at the Washington Nursing Facility. The residents greatly appreciated the presents. We thank Andrea Sloan, the D.C. Bar staff, and all of our members who donated gifts for making this program a success.
If you are interested in writing an article for the next issue of the newsletter, please contact our Editor, Kate Kilberg.
Morris Klein, Cochair
Catherine Mary Rafferty, Cochair
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2008-2009 LUNCHEON PROGRAM SERIES
To keep members abreast of legal concepts and current developments, our section offers a luncheon program series. The February, March, April, and May 2009 programs will be held in the D.C. Bar Conference Center, 1250 H Street, NW, B-1 Level. The June 2009 program is expected to be held in the Bar’s new office space located at 1101 K Street, NW. All programs run from 12 p.m.1:45 p.m. A light lunch will be served at each program. Upcoming programs are as follows:
Thursday, February 19, 2009: What To Do When There is Fraud in Your
Case
Auditor Master Louis Jenkins and Deputy Auditor Master Sandra Arrington
Thursday, March 19, 2009: Estate Freeze Techniques and Grantor Trusts
Anne Coventry, Esq. of Pasternak & Fidis, P.C.
Thursday, April 16, 2009: Domicile and Residency Issues for State
Income and Estate Taxes
Bruce F. Hoffmeister, JD, CPA of Wachovia Wealth Management
Thursday, May 21, 2009: Nursing Home Regulations and Problems
Panelists to be announced
Thursday, June 18, 2009: District of Columbia, Maryland and Virginia
Update
William E. Davis, Esq. of Ross, Marsh & Foster (DC)
Charles S. Abell, Esq. of Furey, Doolan & Abell, LLP (MD)
Kimberly Martin Turner, Esq. of the Law Office of Kimberly Martin Turner,
PLLC (VA)
(Program cosponsored by the taxation section estate planning committee)
A special thank you to Don Nichols, of the Daily Washington Law Reporter,
for publishing information about our lunch program series.
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COMMUNITY OUTREACH AND PRO BONO OPPORTUNITIES
10th Annual D.C. Bar Youth Law Fair
On March 7, 2009, the D.C. Bar litigation section and the Superior Court
will cosponsor the 10th annual Youth Law Fair, from 9:00 a.m. to 4:15
p.m., at the H. Carl Moultrie Courthouse, 500 Indiana Ave., NW. With
the theme “OMG!! Can U Say That? IDK…,” this year’s
fair will look at the challenges posed by teens spreading rumors, inciting
violent acts, cyber-bullying, and soliciting gang affiliation on the
Internet and through text-messaging, and how the First Amendment factors
into the use of such media. Members of our section have been asked to
act as mentors to the students participating in the fair. For more information,
or to volunteer, contact Twanda Washington at (202) 626-3463, or visit
the D.C.
Bar Youth Law Fair page.
D.C. Bar Pro Bono Program Advice & Referral Clinic
Section members are encouraged to participate in the D.C. Bar Pro Bono
Program's Advice and Referral Clinics held on the second Saturday of
each month from 10:00 a.m. to 12:00 noon (orientation at 9:30 a.m.)
at Bread for the City, 1525 Seventh Street, N.W. The D.C. Bar Pro Bono
Program Advice & Referral Clinic is designed to provide those brief
services by offering pro se individuals the opportunity to discuss with
volunteer attorneys certain kinds of matters governed by D.C. or federal
law, including bankruptcy/debt collection, consumer law, employment
law, family law, health law, housing law, immigration/asylum, personal
injury, probate, public benefits, and tax law. All services are provided
free of charge. The Clinic is limited to providing general information,
advice, and brief services, and does not provide representation. To
volunteer, contact the D.C. Bar Pro Bono Program at (202) 737-4700,
ext. 380. Estate planning and probate volunteers are especially needed
for March 14, 2009, April 11, 2009, and June 13, 2009.
D.C. Bar Pro Bono Program Probate Resource Center
The D.C. Bar Pro Bono Program operates the Probate Resource Center to
provide free legal services to unrepresented parties or potential parties
in the Probate Division of D.C. Superior Court. The Probate Resource
Center represents a continuum of services currently offered by the Pro
Bono Program’s Advice and Referral Clinics, with the capacity
to provide customers with an extended level of analysis, advice and
brief services. Volunteer attorneys are not expected to retain clients
served through the Resource Center. Volunteers should have experience
in estate administration. Attorneys interested in volunteering for the
Probate Resource Center should contact Margaret Duval.
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Judicial Reception
Our section will be hosting the 17th Annual Judicial Reception on Wednesday,
April 29, 2009 from 6:00 p.m. to 8:00 p.m. The Judicial Reception is
a great opportunity to mingle and chat with the Superior Court judges
and other attorneys. Please mark your calendars and look for more details
this Spring.
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Nominations for Section Steering Committee Elections
Anyone interested in being nominated for the section’s steering
committee is encouraged to notify Larry Frazier, chair of the nominating
committee, at (202) 544-9455 or by email,
at your earliest convenience. The section’s slate of candidates
must be submitted to the Bar by March 2, 2009.
Intervention and Elder Law Support Group
The Intervention and Elder Law Support Group will hold its next meeting
on Friday, March 13, 2009, from 12:00 noon to 2:00 p.m in the Superior
Court Probate Division’s third Floor jury room. This informal
group meets several times a year to share information and to discuss
legal and practical issues related to guardianship and conservatorship
cases. Participants supply their own lunch and beverage. Another meeting
will be held on May 8, 2009. For more information, contact Archie Palmore
at (301) 277-3955 or by email.
Updates to Forms on Register of Wills Web Site
The Office of the Register of Wills is in the process of updating the
forms available on its Web site, which can be found here.
If you have any corrections or comments about the forms, please contact
the Office of the Register of Wills.
Thank You, Volunteers!
The steering committee wishes to thank the following individuals who
gave presentations at our November, December, and January lunch programs:
Anne Meister, Esq., Register of Wills
Kenneth E. Labowitz, Esq. of Dingman Labowitz, P.C.
Patrick T. Hand, Esq.
Morris Klein, Esq.
Amy Mix, Esq. of Legal Counsel for the Elderly
Karon Powell, Esq. of Legal Counsel for the Elderly
V. Elizabeth Powell, Esq. of Stanco & Associates
We also wish to thank the following individuals who volunteered as probate mentors for the D.C. Bar Pro Bono Program's Advice and Referral Clinics in November, December, and January:
Ed Varrone, Esq.
Larry Frazier, Esq.
Morris Klein, Esq.
Finally, we wish to thank Bill Davis, Esq. of Ross, Marsh & Foster,
and Barbara Miller, Esq. of Reuss & Miller, for reviewing and revising
the D.C. Practice Manual chapter on Decedent’s Estates, and Kimberly
Edley, Esq. and Steven Weinberg, Esq. for reviewing and revising the
chapter on Intervention Proceedings.
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RECENT COURT DECISIONS
The steering committee wishes to thank Judge Burgess for providing the following opinions for publication in this edition of our newsletter:
In re Estate of Brenda Jay, D.C. Superior Court, Probate Division, Case No. ADM 1387-06 (November 7, 2008)
MEMORANDUM AND ORDER
This case is before the Court on Charles Roland’s Objection to
Account of Personal Representative and Petition for Review of Compensation,
and Request for Award of Attorney Fees. The personal representative
has filed a response and the Court has held an evidentiary hearing.
The issues before the Court are whether to approve the final account; whether and to what extent to approve counsel fees requested by the personal representative; whether to award Roland counsel fees on account of bad faith by the personal representative; and whether to allow fees for preparation of a tax return and an amended return.
Findings of Fact
Brenda Jay and Charles Roland, husband and wife, resided at 661 Emerson
Street, N.E., a property Brenda Jay solely owned. Brenda Jay died on
September 21, 2006, leaving a will. Roland paid most of her funeral
and burial expenses. He continued to live in the house, paying the mortgage
and utilities, and no rent, until it was sold. The house was the decedent’s
principal asset, but a lawsuit was initiated for wrongful death and
the estate also ultimately got a settlement out of that.
Brenda Jay’s will directed that the personal representative pay burial and funeral expenses from estate funds “in such amount as my Personal Representative may deem proper.” It authorized the personal representative to hire an attorney and directed that the attorney’s fees be paid out of the estate. The will directed that the decedent’s personal property and the Emerson Street house be sold and the proceeds divided equally between Roland and Sylvia Williams. It also directed that any residue in the estate be divided between Williams and Roland.
Sylvia Williams petitioned for abbreviated probate and was appointed personal representative on December 7, 2007. The order appointing her authorized her to pay to Roland a homestead allowance of $15,000, a family allowance “in a reasonable sum not to exceed $15,000,” and a personal property allowance “not exceeding the value of $10,000” as exempt property.
On December 18, 2007, Williams sold the house, realizing $139,076.66, and Roland moved out. The next day, Williams called Roland and told him she would give him $15,000, but would have to get all the bills together before she could give him any more. He said he would need to talk to an attorney (he had already consulted with his attorney), giving her the impression that she should not yet send him any money. She did pay herself $21,700 as a distribution because she was out of work and there was an impending foreclosure on her house.
On February 4, 2008 Roland’s attorney, Edward Varrone, wrote Williams’ attorney, Michelle Smith. He wrote:
As surviving spouse, Mr. Roland is entitled to the following allowances;
- homestead allowance
$15,000
- family allowance
$15,000
- exempt property
$10,000
Varrone represented that Roland had received an automobile worth $4,480 in Blue Book value so he demanded the total of the above in exempt property allowance less that amount. He also asked for reimbursement of burial expenses, and for mortgage and utility expenses he had incurred. He enclosed a list of expenses for which he was requesting reimbursement. They included burial expenses of $1,160.00; litigation expenses of $258.25; mortgage expenses of $47,907.52, water and sewer expenses of $95.56; electric utility expenses of $344.00; gas utility expenses of $1,331.67; appraisal expenses of $175; and maintenance and repair expenses of 232.04. The expenses totaled $51,504.04.
Varrone called Smith on February 6. There is no evidence of what they discussed.
On February 7, Smith met with Williams and Williams executed a check for $15,000 for the homestead allowance. She did not execute a check for the other allowances because she did not understand why she needed to pay them and needed “proof” that she was required to pay them. She did not authorize payment of burial expenses because she understood that the hospital where Brenda Jay worked had a fund from which those expenses would have been paid and she was not satisfied that Roland had paid the expenses. Neither Smith nor Williams sent the $15,000 check to Roland or Varrone.
On February 20, Smith met with Williams and discussed with her Varrone’s letter of February 4. She also did “research on family allowance, homestead, and personal property allowance.”
On February 22, Smith talked to Varrone by telephone. She stated that the personal representative would pay the $15,000 homestead allowance but not the family allowance of $15,000. She asked Varrone about an appraisal of the personal property. Varrone thereafter called Roland and learned specifics about the personal property, which he detailed in a follow-up letter of February 24. In that letter, he again demanded payment of the allowances, by February 29, 2008. He suggested that an appraisal of the personal property would be less than $500. He offered to value the personal property at $750, and stated that that amount, combined with the $4,480 for the automobile, would reduce the personal property allowance to $4,770. Finally, he asked for Williams’ position on “reimbursement of expenses relating to real property and funeral expenses.”
On March 3, 2008, Smith talked to Williams twice and with Varrone once. She sent a letter to Varrone enclosing the $15,000 check for the homestead allowance. She said she was scheduled to meet with Williams on March 5 to go over the account. She stated that Williams refused to pay the mortgage and other expenses, agreed to the $750 valuation of the personal property, and refused to pay the “funeral expenses because” “the insurance was designated for it.”
On March 5, Williams met with Smith, went over the account, and executed two checks, one for $15,000 for the family allowance and one for $4,960 for the property allowance. She left those checks with Smith, who did not send them.
On March 13, Varonne responded to Smith’s March 3 letter. He enclosed the $15,000 homestead allowance check, on which was written “void”, stating that Roland had directed him to return it as it was “only part payment of the allowances to which he is entitled.” He stated that his client insisted on receiving “full payment” of the two $15,000 allowances and of the agreed-on $4,770 property allowance. He rejected what he reported as Smith’s position that the personal representative could await paying those allowances until after the accounting was complete. He accused the personal representative of withholding the allowances as “negotiating leverage” in the dispute over reimbursement of expenses. He demanded payment by March 18. He also stated that “whether Mr. Roland was the beneficiary of an insurance benefit[] has nothing to do with whether he is entitled to be reimbursed [funeral and burial] expenditures he made,” and stated that Roland was not claiming for funeral expenses, which were paid from an employee benefit fund to which he was not beneficiary.
On March 21, Smith met with Williams, obtained a new check for $15,000 for the homestead allowance, and personally delivered to Varrone that and the checks for the other allowances.
The dispute over the reimbursement for burial and funeral expenses and for those related to the house continued. Smith prepared the account and Williams executed it on May 7, 2008. Apparently, the parties had resolved the issues relating to the burial and funeral expenses by this point, as the account reports reimbursement to Roland in the amount for $7,626.32 for funeral expenses and $1,160 for burial expenses. Varrone had demanded $1,160 for burial charges in his February 4 letter but had not demanded any reimbursement for funeral expenses. The expenses related to the house were resolved after a mediation that occurred in June, 2008. Also resolved was the issue of Ms. Williams compensation for her services as personal representative.
During the course of the administration, Williams had an accountant prepare an estate tax return. The Court has heard uncontradicted evidence from an expert on taxation that the return was filled with errors, all of which the court need not detail. The bottom line, however, is that because of the erroneous tax return, the estate failed to recognize a capitol loss on the sale of the property, a loss that would be passed through to the beneficiaries, allowing them a deduction from their gross income that could have been carried forward for several years. This is a significant error in the return. Williams’ reference to Internal Revenue Publication 559 does not assist her because, as explained by the expert, the loss is not recognized only if the personal representative “intends to permit the beneficiary to live in the residence rent-free and then distributes it to the beneficiary to live in.” Here, Williams intended to sell the property, not distribute it to Roland to live in.
The Court also is satisfied that the account, for reasons stated by Mr. Varrone, is not adequate in several respects, and its errors in reporting make it impossible to get an accurate picture of what occurred in this estate.
Analysis
Roland argues that the estate should not be required to pay for any
of Williams’ counsel fees, and that, as sanction, Williams should
be required to pay Roland $3,500 toward his counsel fees. The Court
takes up these issues in reverse order, and also separately addresses
payment of the expenses for preparation of tax returns.
1. Roland’s Counsel Fees
Roland seeks sanctions in the form of attorney fees under the “bad faith” exception to the American Rule, which ordinarily leaves parties to pay their own attorney fees. Our jurisdiction recognizes a “narrow exception to this general rule in a case `where a party…withholds action to which the opposing party is patently entitled…because of a fiduciary relationship, and does so in bad faith, vexatiously, wantonly or for oppressive reasons…’” In re Estate of King, 769 A.2d 771, 779 (D.C. 2001), quoting Wyoming Avenue Cooperative Ass’n v. Lee, 345 A.2d 456, 464-465 (D.C. 1975). Roland’s theory is that Williams, a fiduciary, withheld his allowances and reimbursement for expenses, which he was entitled to by statute or under the will.
Roland’s principal focus is on the allowances because, he argues, he was entitled to these immediately upon his request on February 4, 2008. (He does not accuse Williams of bad faith before then.) The Court starts first with the question of whether Roland was “patently entitled” to the allowances he asked for.
He was patently entitled to the homestead allowance. D.C. Code § 19-101.02 (2005 pocket part) states that the decedent’s surviving spouse is entitled to $15,000. That allowance is “exempt from and has priority over all claims against the estate, except as provided in § 20-906.” That section makes the homestead allowance subject to “[c]ourt costs, publication costs, and bond premiums; [f]uneral expenses, not exceeding $1,500; and [f]iduciary and attorney fees not exceeding $1,000.” The assets of the estate were more than sufficient to cover these costs; hence, Roland was patently entitled to the $15,000 homestead allowance. Smith sent him the $15,000 homestead allowance on March 3, almost a month after he demanded it.
Section 19-101.03 provides that the surviving spouse “is entitled from the estate to a value, not exceeding $10,000 in excess of any security interests therein [in the decedent’s personal property].” The personal property allowance has priority over all claims except the homestead allowance and those that have priority over the homestead allowance. D.C. Code §§ 19-101.02; 20-906.
While Roland was entitled to a property allowance, he was not entitled to a check for $10,000. As Varrone recognized in his letter, Roland had already received a car, and, as revealed in subsequent correspondence, furniture and other personal effects from the house. Thus, he was not “patently entitled” to $10,000 less the blue book value of the car, but the value of the personal property allowance was something that Williams could herself determine after considering the information bearing on the value of what Roland had already received.
Roland also was not “patently entitled” to a family allowance in the amount of $15,000, and Varrone was in error in asserting Roland’s entitlement to that amount in his February 4 letter. D.C. Code § 19-101.04(a) provides that “the decedent’s surviving spouse…[is] entitled to a reasonable allowance in money out of the estate for [his or her] maintenance during the period of administration.” Thus, the allowance must be “reasonable”, and the allowance is only for the term of the administration. The personal representative “may”, but is not required to, disburse the allowance “in a lump sum not exceeding $15,000 in cash or personalty at its fair value as the surviving spouse…may elect.” D.C. Code § 19-101.05. What the personal representative determines is a “reasonable allowance” takes priority over other claims, except the homestead allowance and those claims that take priority over the homestead allowance. Section 19-101.04(a). The spouse or any interested person may appeal the personal representative’s determination. D.C. Code § 19-101.05(a).
Our Court of Appeals has not determined the factors to be considered in determining what a reasonable allowance is, but the court in In re Estate of Seymour, 671 N.W.2d 109, 115 (Ct. App. Mich. 2003), addressed that question in interpreting the same provision as it appears in Michigan law. The court stated in part:
In determining the amount of the family allowance, account should
be taken of both the previous standard of living and the nature of other
resources available to the family to meet current living expenses until
the estate can be administered and assets distributed.
* * * *
Obviously, need is relative to the circumstances, and what is reasonable
must be decided on the basis of the facts of each individual case.
* * * *
Thus, the reasonableness requirement of the family allowance provision permits examination of multiple factors, including the decedent’s intent and the other resources available to the petitioner to meet expenses that could include other allowances…. Furthermore, appellate court decisions examining “reasonableness” requirements have concluded that reasonableness is to be determined on the basis of all the relevant facts and circumstances of each individual case.
Id. at 115.
What was required of Williams in this case was to determine what a reasonable allowance would be for Roland. In making that determination, she could have considered, among other things, his prior standard of living, his present circumstances, the money he would get from the other allowances, the time expected to make distributions, and the time in which she expected to close the estate. She could have decided to make periodic payments, rather than a lump sum.
The Court concludes from the evidence in this case that Williams did not withhold the allowances in bad faith. She forwarded to Roland the homestead allowance to which he was entitled within a month of his demand. (She herself had actually executed the check almost immediately after receiving the February 4 letter demanding it.) She was not required to accede to Roland’s demand for immediate disbursement of the property allowance he wanted, because she could reasonably seek to determine the value of the personal property he had received so as to ascertain the amount of cash to which he was entitled. When Varrone proposed foregoing an appraisal on the property in his February 24 letter, Smith acceded to his proposal on March 3 and Williams executed a check for the agreed-on amount on March 5. This conduct does not approach bad faith.
It is true that the reasons Williams offered for failure to pay the family allowance were not precisely those on which she could have relied to withhold payment. She could have asked Roland to provide her with the facts and circumstances to provide a basis for determining a reasonable allowance. She did not. Nevertheless, the court finds plausible and therefore credible her testimony that she did not understand the family allowance. Unlike the provision for the homestead allowance, the two sections governing the family allowance are not that easy to parse, as perhaps best demonstrated by Varrone’s own mistake in thinking that his client was entitled to $15,000, the maximum he could receive under any circumstances, rather than a reasonable sum based on the amount needed to maintain Roland while the estate was being administered. When Williams was satisfied, she wrote the check, and the attorney later personally delivered it after Varrone’s third demand.
That the check was not sent earlier is ascribable to the fact that Varrone returned the homestead allowance check, marked void, with the insistence that Roland be paid all he demanded. Varrone or Roland may have believed that Roland would be considered to have waived his right to the family and personal property allowance checks unless he refused to cash the homestead allowance check. The Court does not view this as a step necessary to protect Roland’s rights, but the main point is that the return of the check clearly helped delay Roland’s receiving all the checks, which had been executed before the homestead check was returned.
It is implausible to infer, as Roland asks the Court to do, that the delay in payment was leverage to get a better settlement of the other disputes. If that was the tactic, the court is left to wonder why Williams executed the three checks on March 5, and delivered them so promptly after receipt of the March 13 letter. She could have continued to withhold the checks until the other disputes were solved at mediation, had that been her tactic.
Moreover, Williams has offered a plausible explanation for failure to pay the other expenses demanded by Roland. Varrone’s February 4 letter, with its itemized list of expenses, demanded “burial charges” of $1,600. Williams at first resisted paying these charges because she thought Providence Hospital, where the decedent had worked, covered them. In his February 24 letter, Varrone asked for Williams’ position on reimbursement to expenses “relating to…funeral expenses,” but in his March 13 letter clarified that the hospital did have a fund for payment of funeral expenses, which, he wrote, were used to pay the decedent’s funeral expenses. Williams cannot be held to bad faith in confusing the funeral expenses with the burial expenses. In any event, she paid both after the mediation. (The Court is unable to reconcile her payment of both with Varonne’s March 13 assertion that Roland “[was] not claiming for funeral expenses, which were paid from an employee benefit fund to which he was not the beneficiary.”)
The claim for reimbursement for mortgage and utility expenses were also subject to reasonable dispute, since Roland paid no rent after his wife died.
In sum, the Court concludes that Roland’s argument for a finding of “bad faith” is unpersuasive, and will not award him sanctions.
2. Williams’ Counsel Fees
An interested person may challenge the reasonableness of the compensation of an attorney employed by a personal representative. D.C. Code § 20-753(a). In determining the reasonableness of compensation, the Court
shall consider the following factors (as shown in the verified statements
of the personal representative or of any other recipient of such compensation),
as well as any other factors deemed relevant by the Court:
(l) the reasonable relationship of the compensation to the nature of
the work performed;
(2) any estimate of such compensation provided to the personal representative…;
(3) the reasonableness of the time spent, including the number of hours spent and the usual hourly compensation for the work performed;
(4) the nature and complexity of the matters involved and difficulties encountered, and the results achieved; and
(5) whether or not all relevant time limitations have been met (or the reasons for any delay).
The Court is required to consider all of these statutory factors in determining the reasonableness of compensation. In re Estate of Murrell, 878 A.2d 462, 464 (D.C. 2005).
a. The relationship of the compensation to the nature of the work
performed
Smith asks for compensation in the amount of $4,588. ($4,735.72 in fees
- $147.72 in costs.) The Court estimates that $1,513.20 in fees were
incurred in the period October 6 through February 7, 2008, before the
dispute over the expenses and allowances developed. Another $800 in
fees are chargeable to preparation of the expenses and estimates of
the time remaining for closing the estate. (May 7, 2008 entry.) Thus,
some $2,300 of the services do not directly involve the disputes that
brought the parties to the Court. This is approximately one-half of
the compensation requested.
The Court agrees with Roland that the account, for reasons he states, is deficient. Moreover, the tax return, as already held, is deficient. The Court concludes, however, that a large part of the work in dealing with the dispute over the allowances and expenses was expended reasonably, for the reasons the Court has indicated above. The demands for the property and family allowances were subject to dispute and the personal representative’s counsel could reasonably expend estate resources in dealing with them.
The Court does agree with Roland that the account, for the reasons he stated, was deficient in respect to the way items were reported, and this deficiency perhaps in part led to the very deficient tax return. The Court will take this into account in awarding a fee.
b. Estimate of compensation provided to the personal representative
The Court is unaware of any estimate provided to the personal representative.
c. The reasonableness of the time spent, including the number of hours spent and the usual hourly compensation for the work performed
Smith has charged an hourly rate of $200, which Roland does not challenge. He does challenge the number of hours spent.
The Court finds that Smith spent the following time on the account itself: March 21, 2007, 2 hours; March 31, 2002, 1 hour; April 2, 2007, 1 hour; April 2, 2007, 1 hour; May 5, 2007, 1.75 hours. The foregoing totals 6.75 hours.
The presentation of the numbers on the account was faulty, and had to be redone with the assistance of Varrone. Smith’s time will be reduced by four hours because of the defects in the account.
The Court concludes that part of the delay in paying the allowances to Roland was attributable to Smith’s failure to understand what was needed to determine the family allowance. Thus, her time will be reduced an additional two hours.
d. The nature and complexity of the matters involved and difficulties
encountered, and the results achieved
This estate was not particularly complicated. It became somewhat complicated
by the dispute over the allowances and was made unnecessarily complicated
by the failure to prepare a proper account and the failure to prepare
a correct tax return. The Court has considered these factors and has
made appropriate deductions in the time allowed to Smith. Smith assisted
the personal representative in opening the estate, selling the real
property, reaching a settlement on the disputed items, and organizing
the figures for the final account. The Court has made reductions for
work that did not benefit the estate, and no further reductions are
warranted.
e. Whether or not all time limitations have been met (or the reasons
for any delay)
There is no evidence that time limitations have not been met.
The Court concludes that counsel’s time should be reduced by six hours, and therefore that her compensation should be reduced by $1,200. The Court therefore will allow her compensation in the amount of $3,388. The Court finds unpersuasive Roland’s argument that she should be allowed no fees at all. The Court is of the opinion that she should be fairly compensated for the work she did, and that fair compensation is determined by an analysis of the appropriate statutory factors, as the Court has attempted in the foregoing paragraphs.
3. Tax Preparation Fee
The Court agrees with Roland that the estate should bear none of the
costs of the tax preparation and any proposed amendment. Roland is correct
that the tax return is extremely deficient and could have cost the beneficiaries,
had it not been corrected.
For these reasons, the fees in the account will not be allowed.
For the foregoing reasons, the Court ORDERS as follows:
1. Charles Roland’s Objection to Account of Personal Representative
and Petition for Review of Compensation, and Request for Award of Attorney
Fees is GRANTED IN PART AND DENIED IN PART.
2. The Request for Award of Attorney Fees is DENIED.
3. The objection to that part of the account that pays $4,735.72 is sustained, and $3,388 in fees and $147.72 is allowed in costs, to be paid to Smith.
4. The objection to the two fees for tax preparation of $450 each is sustained.
5. An amended account shall be served that reflects the Court’s rulings and the changes Mr. Varrone has suggested to the preparation of the account.
SIGNED IN CHAMBERS
November 7, 2008
A. Franklin Burgess, Jr.
Judge
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In the Estate of Douglas Allen Johnson, D.C. Superior Court, Probate Division, Case No. ADM 23-05 (January 30, 2009)
MEMORANDUM AND ORDER
This case is before the Court on the special administrator’s (“SA”)
First through Fourth Account and his Petition for Compensation, and
the opposition. The main issue is whether the SA should be compensated
for his time and services in connection with a will contest and his
time and services in petitioning for standard probate and for appointment
of himself as personal representative.
The Court will first review the procedural history of this case.
This case began with a petition for standard probate brought by Tara
Stoney-Mack, who alleged that she was the guardian of the decedent’s
biological son. The petition alleged that the decedent died without
a will. Ms. Stoney-Mack also filed a complaint to establish the heirship
of her ward. Shortly after Ms. Stoney-Mack filed her petition, Mary
Gill petitioned for abbreviated probate, alleging that she was the named
personal representative in the decedent’s will. The will did not
name Ms. Stoney-Mack’s ward as a legatee. The Court consolidated
the cases.
Ms. Stoney-Mack petitioned for the appointment of a special administrator pending a decision on the complaint. On March 1, 2005, the Court granted the petition and appointed the SA as special administrator.
On April 18, 2005, the SA filed a consent motion to set bond, representing that the decedent’s house was worth $70,000 and the estate had $33,000 in cash.
Litigation ensued. The principal issues were whether the ward was the decedent’s son and, if so, whether the will should be revoked as a matter of law so that the ward, whom the decedent did not know as his son, could inherit by intestate succession. Ms. Stoney-Mack sought to prove her ward’s heirship by DNA evidence secured after the decedent’s death. She argued that if her ward was the decedent’s son, the decedent’s will should be revoked as a matter of law under the doctrine of revocation by implication of law.
The parties conducted discovery and went to mediation. Mediation was continued by agreement pending the completion of discovery. The Court amended its scheduling order to allow completion of discovery.
Ms. Stoney-Mack filed a motion for summary judgment on the issue of whether her ward was the decedent’s son. The Court denied the motion. Ms. Gill also filed a motion for summary judgment. She argued that the DNA evidence could not be used to prove paternity, and that the will should not be revoked as a matter of law. The plaintiff opposed the motion.
The SA also filed a response to the defendant’s motion for summary judgment. He referred to his prior efforts to encourage settlement of the case and pointed out that litigation expenses were mounting. Although he stated that he took no position on the merits of the motion, he suggested that the birth of a child out of wedlock was a sufficient change in circumstances to warrant revocation of the will and pointed out that the public policy of the District did not allow differentiating between legitimate and illegitimate children. He also suggested reasons why the DNA evidence could be used to determine paternity.
On June 21, 2006, the Court denied defendant’s motion for summary judgment. The effect of the ruling was that the plaintiff had established a prima facie case of paternity and that, if paternity was established at trial, the Court would revoke the will and allow the ward to inherit by intestate succession. On August 28, 2006, the Court denied the defendants’ Motion for Reconsideration.
The Court then scheduled a further mediation. On November 1, 2006, the parties filed a settlement agreement. The agreement provided that the two legatees of the will would receive cash from the estate, that Ms. Stoney-Mack would be personal representative, that the decedent’s real property would be sold and one of the legatees would have first right to buy it, and that the ward was sole beneficiary of the estate. Thus, the will was not proffered for probate and the estate was treated as an intestate estate.
No party, however, moved or petitioned the Court to appoint Ms. Stoney-Mack as personal representative. Instead, on February 15, 2008, Ms. Stoney-Mack filed a Petition to Modify, Revoke or Set Aside the Settlement Agreement, asserting as her principal ground that when she executed the settlement agreement she was unaware of the uninhabitable state of the decedent’s house and its diminished value from the time of his death. The defendants opposed that motion.
On February 22, the SA filed an opposition. He pointed out that the terms of the settlement agreement remained unexecuted, the decedent’s house was under uncompleted renovation, and assets were diminishing. He stated that he had informed Ms. Stoney-Mack of the property’s diminished value of $70,000 in his motion to set bond, and questioned whether Ms. Stoney-Mack was unaware of the diminished value of the property. He pointed out that his duty was to preserve estate assets, that the property should be sold promptly when the spring season came, and that he could “no longer sit on the sidelines and see the estate’s assets diminish any further.”
On the same day, February 22, the SA filed a petition for standard probate, requesting that he be appointed personal representative because as special administrator, he “[stood] in the best position to serve as PR.”
On March 10, the Court denied the Petition to Revoke, Modify or Set Aside Settlement agreement and appointed Ms. Stoney-Mack personal representative. She thereafter posted bond and was issued letters of administration. She then filed a motion to dismiss the SA’s Petition for Standard Probate, which the SA opposed. The Court granted the motion to dismiss, ruling that it had already appointed a personal representative and that, in any event, the settlement agreement should be enforced.
Discussion of the Objections
Ms. Stoney-Mack’s opposition to the SA’s account focuses on the compensation he requests. The SA’s amended statement of time and services reflects compensation in the amount of $27,842.50 plus expenses in the amount of $290.09, for a total $28,132.59. The SA’s ending balance is $131,484.00, so the requested compensation (excluding expenses) amounts to approximately 21% of the estate assets. Ms. Stoney-Mack claims this is excessive and makes several specific objections to the statement of time and services.
The parties agree that the objections must be resolved under the guidelines provided by D.C. Code § 20-753(b), which provides that the court should consider the following factors, “as well as any other factors”:
(l) the reasonable relationship of the compensation to the nature
of the work performed;
* * *
(3) the reasonableness of the time spent, including the number of hours
spent and the usual hourly compensation for the work performed;
(4) the nature and complexity of the matters involved and difficulties encountered, and the results achieved; and
(5) whether or not all relevant time limitations have been met (or the reasons for the delay).
1.
Of the several objections, one merits extended discussion. Ms. Stoney-Mack
objects to paying the SA anything for the time he spent participating
in the will contest and in filing his petition for probate. The Court
will consider that objection first.
The SA proposes to charge the estate for his time in reading the pleadings and orders in the litigation, attending the court hearings, filing motions and objections, and filing the petition for probate. The compensation he requests for these services amounts to $9,135.50.
Following are the entries for which the SA requests compensation that involve, in whole or in part, work that Ms. Stoney-Mack challenges:
