Opinion
J-A08007-16 No. 1518 EDA 2015
05-11-2016
IN RE: ESTATE OF JOHN SUSICK, DECEASED, Appellee v. APPEAL OF: RONALD I. ROSEN, Appellant
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Order Entered April 28, 2015
In the Court of Common Pleas of Philadelphia County
Orphans' Court at No(s): O.C. No. 886 DE of 2013 BEFORE: BOWES, OLSON AND STRASSBURGER, JJ. MEMORANDUM BY BOWES, J.:
Retired Senior Judge assigned to the Superior Court.
Ronald I. Rosen, Esquire, Executor of the Estate of John Susick, deceased, appeals the decision of the orphans' court to reduce the amount of fees that Mr. Rosen paid to the lawyer for the estate, Roger A. Johnsen, Esquire, and to order some of those fees to be returned for distribution to the heirs. We affirm.
Mr. Susick died testate on February 23, 2010, and, in his will, bequeathed one-half of his residuary estate to his daughter, Peggy Foyle, and the remaining one-half to a woman with whom he lived, Arhontoula Loulis. Mr. Rosen was named as the executor, and he was issued letters testamentary on May 4, 2011. Mr. Rosen retained Mr. Johnsen as the estate attorney. Ms. Loulis died on July 1, 2011, and Nickolas Loulis was appointed as administrator of her estate, and then Ms. Foyle died on October 3, 2013, and Deborah V. Young was appointed administratrix of her estate.
Mr. Rosen filed a first and final account on August 29, 2013. The estate assets were valued at $102,851.80. The major asset consisted of the decedent's residence, which was worth $96,904.68. There was also cash and a car. Despite the existence of only three assets to administer, Mr. Rosen paid Mr. Johnsen $34,848 in legal fees, over one-third of the value of the inventoried assets. Mr. Loulis filed objections to the amount of fees paid to the lawyer. At the hearing on the objections, Mr. Johnsen presented time records indicating that he charged $320 per hour for 86.3 of his time spent on this $100,000 estate and that paralegal services of 59.9 hours were charged at $120 per hour.
The orphans' court sustained Mr. Loulis' objection to the amount of fees paid to Mr. Johnsen. It analyzed "the time records and the complexities of this case, together with the testimony and applicable case law," determined that the attorney's fees were excessive, and reduced Mr. Johnsen's compensation to $18,000, nearly eighteen percent of the estate's value. Orphans' Court Opinion, 8/18/15, at 5. Mr. Johnsen was ordered to return $16,848. Mr. Rosen filed exceptions to the ruling, and this appeal followed denial of those exceptions. The following issues are raised herein:
1. Whether it was palpable error to rule that Appellant had not met his burden of proof where detailed records of time expended and work performed together with the testimony of
Counsel for the Estate in full explanation of the records was submitted with no evidence offered to contradict the records or testimony and no evidence was presented challenging the reasonableness of the fee.Appellant's brief at 4.
2. Whether it was an abuse of discretion for the Auditing Judge to find that the problems involved in the administration of the estate were not "other than the usual administration of uncomplicated estates."
3. Whether it was palpable error for the Auditing Judge to limit the examination of counsel for the estate thereby precluding him from testifying as to the condition of the house that constituted the principal asset of the estate and the possible dangers that would likely have occurred had he not assumed responsibility and control of the property.
4. Whether it was an abuse of discretion to refuse to receive photographic evidence of the premises and refuse to consider the communication from the Administrator of the Estate of Peggy Foyle that she approved the account.
Our standard of review of an orphans' court ruling is as follows:
When reviewing a decree entered by the Orphans' Court, this Court must determine whether the record is free from legal error and the court's factual findings are supported by the evidence. Because the Orphans' Court sits as the fact-finder, it determines the credibility of the witnesses and, on review, we will not reverse its credibility determinations absent an abuse of that discretion. However, we are not constrained to give the same deference to any resulting legal conclusions. Where the rules of law on which the court relied are palpably wrong or clearly inapplicable, we will reverse the court's decree.In re Estate of Fuller , 87 A.3d 330, 333 (Pa.Super. 2014) (citation omitted).
"The determination of the reasonableness of a fiduciary's compensation is left to the sound discretion of the Orphans' Court." In re Estate of Rees , 625 A.2d 1203, 1206 (Pa.Super. 1993). Under the Probate, Estates and Fiduciaries Code, "the court shall allow such compensation to the personal representative as shall be reasonable and just, and may calculate such compensation on a graduated percentage." 20 Pa.C.S. § 3537. "[A]ttorney's fees in an estate are based on the reasonable value of the service actually rendered." Rees , supra at 1206. Attorneys "seeking compensation from an estate have the burden of establishing facts which show the reasonableness of their fees and entitlement to the compensation claimed." Id. The orphans' court is authorized "to reduce to a 'reasonable and just' level those fees and commissions claimed by the fiduciary and their counsel." Id. We will not overturn an orphans' court's decision to disallow attorney's fees "absent a clear error or an abuse of discretion[.]" Id.
The orphans' court herein made the following observation. The fee schedule outlined by Johnson's Estate , 4 Fid.Rep.2d 6 (Del. Co. 1983), which is based upon a percentage of the assets under administration, justified attorney's fees of only $9,750 for this estate. Indeed, under that schedule, the amount charged by Mr. Johnsen would have been appropriate for an estate valued at $1,000,000. The schedule in question was reproduced in In re Estate of Preston , 560 A.2d 160, 163 (Pa.Super. 1989):
The orphans' court in In re Johnson's Estate , 4 Fid.Rep.2d 6 (Pa.Comm.Pl. 1983) indicated that the schedule was approved by the Attorney General as the fees to be charged by attorneys for probating estates. See 19A West's Pa. Prac., Probate & Estate Administration § 38:1, comment 1. However, "the Attorney General's Office subsequently indicated that it has no such guidelines." Id. (citing In re Nix Estate , 8 Fiduc. Rep. 2d 179 (Pa. C.P. 1988)).
| Per col. | Per total | ||
|---|---|---|---|
| $ 00.01 to $ 25,000.00 | 7% | 1,750.00 | 1,750.00 |
| $ 25,000.01 to $ 50,000.00 | 6% | 1,500.00 | 3,250.00 |
| $ 50,000.01 to $ 100,000.00 | 5% | 2,500.00 | 5,750.00 |
| $ 100,000.01 to $ 200,000.00 | 4% | 4,000.00 | 9,750.00 |
| $ 200,000.01 to $1,000,000.00 | 3% | 24,000.00 | 33,750.00 |
In Preston , we ruled that the above chart could not be used to automatically justify attorney's fees that would otherwise be considered unreasonable. This Court stated that, while "as a matter of convenience the compensation of a fiduciary may be arrived at by way of percentage, the true test is always what the services were actually worth and to award a fair and just compensation therefor[.]" Id. at 165 n. 11. Thus, fees supportable under this schedule can still be considered excessive.
We believe that any difficulties encountered by Mr. Johnsen in the administration of the estate assets were more than adequately accounted for by the fact that he received double the amount recommended under the fee schedule outlined in Johnson's Estate , which itself cannot be used to justify unreasonable fees.
After review of the briefs, record, and applicable law, we conclude that the orphans' court did not abuse its discretion in concluding that $18,000, was the reasonable value of the services actually rendered by Mr. Johnsen for an estate that was worth $100,000. The orphans' court considered the difficulties associated with the administration of this estate. It discounted the amount of time spent and the hourly rate charged in light of the estate assets and their value. We therefore reject Mr. Rosen's first three contentions based upon the comprehensive and cogent analysis in the August 18, 2015 opinion authored by the Honorable Matthew D. Carrafiello, Administrative Judge of the Orphans' Court Division of the Court of Common Pleas of Philadelphia County.
Mr. Rosen also contends that it was error to exclude photographs of Mr. Susick's residence at the hearing on the objections. Appellant's brief at 14. This position was not contained in Mr. Rosen's court-ordered Statement of Matters Complained of on Appeal, and it is therefore waived. Pa.R.A.P. 1925(b)(4)(vii) ("Issues not included in the Statement and/or not raised in accordance with the provisions of this paragraph (b)(4) are waived."). Additionally, the orphans' court considered testimony about the state of the house so any error in this respect was harmless.
Finally, Mr. Rosen suggests that the orphans' court erred in disregarding a communication from Ms. Young, Peggy Foyle's administratrix, whom Mr. Johnsen incorrectly labels an administrator in his brief. Appellant's brief at 15. Ms. Young indicated that she was not dissatisfied with the amount charged by Mr. Johnsen. Mr. Rosen fails to refer us to any case authority suggesting that a layperson's lack of objection to the fees charged by an attorney is a relevant legal consideration. Mr. Loulis objected to the excessive nature of the attorney's fees charged in this matter, and his objection was meritorious under the pertinent law. Hence, there was no error in this regard.
Order affirmed. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary Date: 5/11/2016
Image materials not available for display.