Opinion
J-A23014-15 No. 1457 WDA 2014
10-28-2015
IN RE: ESTATE OF ELIZABETH J. RODGERS, Deceased ELIZABETH J. RODGERS, Irrevocable Trust, ELIZABETH J. RODGERS, Revocable Trust, APPEAL OF: RONALD S. JONES AND JONES & CWALINA, LLP, Appellants
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Order entered on August 7, 2014, in the Court of Common Pleas of Westmoreland County, Orphans' Court Division, No(s): 65-09-250; 65-10-2409; 65-11-1301 BEFORE: GANTMAN, P.J., LAZARUS and MUSMANNO, JJ. MEMORANDUM BY MUSMANNO, J.:
Ronald S. Jones and Jones & Cwalina, LLP (collectively "Jones"), appeal from the Order dated August 7, 2014, denying Jones's Exceptions to the Order dated March 27, 2014, which sustained the objection to the payment of attorney fees from the Estate of Elizabeth J. Rodgers ("the Estate"). We affirm.
Elizabeth J. Rodgers ("Rodgers") died on January 19, 2009, leaving an Estate in excess of $2 million, which included liquid assets in a Family Limited Partnership business, and a 50% interest in a funeral home business. Rodgers did not have any children. Mark D. Bradley ("Bradley") was named the Executor of the Estate, Successor Trustee of the Revocable and Irrevocable Trusts, and Liquidator of the Family Limited Partnership. Bradley engaged Jones to represent the Estate, trusts, and partnership. Jones made a claim for attorney fees, for Estate administration and litigation matters, in the amount of $118,000.
Jones had previously represented Rodgers in preparing the Estate plan in 1996. Jones suggested that Rodgers make annual tax-free gifts to her Irrevocable Trust. Further, Rodgers assigned approximately $2 million to Jones to be managed through the firm's advisory group, which utilized Charles Schwab.
Gregory V. Rodgers ("Gregory Rodgers"), a beneficiary of the Estate, filed an Objection to various accounts filed by Bradley, including the payment of any fees to Jones. A hearing was held, wherein Gregory Rodgers presented evidence that the fees should have totaled only $17,000. The Orphans' Court determined that the fees should be returned and held in escrow until proper fees could be determined. On March 27, 2014, the Orphans' Court issued an Order sustaining the Objection to the payment of attorney fees in the amount of $118,000, and stating that the fees shall be returned to the Estate, and that the fees were the personal responsibility of Bradley. Jones filed Exceptions to the Order. The Orphans' Court issued an Order denying the Exceptions on August 7, 2014. Jones filed a timely Notice of Appeal.
The Orphans' Court did not specify the amount of attorney fees due to Jones.
We note that under Pa.R.A.P. 342(a)(5), an appeal may be taken as of right from "[a]n order determining the status of fiduciaries, beneficiaries, or creditors in an estate, trust, or guardianship[.]" Pa.R.A.P. 342(a)(5); see also Pa.R.A.P. 342, cmt. (stating that "an appealable Orphans' Court order concerning the status of individuals or entities means an order determining if an individual or entity is a fiduciary, beneficiary or creditor, such as an order determining if the alleged creditor has a valid claim against the estate"). The Order in question denied Jones's claim for fees from the Estate and determined that Jones does not have a claim against the Estate. Thus, the appeal is properly before us. See Pa.R.A.P. 342(a); see also Pa.O.C. 7.1(a).
On appeal, Jones raises the following questions for our review:
1. Did the [Orphans'] Court incorrectly conclude that the efforts of [Jones] were of little value and that the Estate Plan was too complex and unnecessary, thereby completely ignoring the Federal Estate and Pennsylvania Inheritance Taxes and results obtained?
2. Did the [Orphans'] Court error in finding that [Jones] knew that the assets in the Family Limited Partnership were taxable for inheritance tax purposes due to the expenditures made for [] Rodgers' home nursing care and that the inquiries made by the Department of Revenue were occasioned by inadequate legal services?
3. Did the [Orphans'] Court error in finding that [Jones] failed to proceed with the administration of the [E]state[] in a timely manner and that the accountings were incompetently prepared?
4. Did the [Orphans'] Court error in finding that the legal services provided to the Estate were not for the benefit of the [E]state or the beneficiaries in interest but that the legal services were designed to advance the interest of [] Bradley to the detriment of the other beneficiaries and created the legal chaos that resulted in the excess fees paid for by all parties and that the conduct of Jones resulted in an enormous amount of litigation?
5. Did the [Orphans'] Court error in finding that all litigation initiated by [] Bradley was occasioned by the improper conduct and inadequate legal services of [Jones]?Brief for Appellant at 19-20.
6. Did the [Orphans'] Court error in finding that the fees incurred by the [E]state to correct the work of [Jones] exceed any amount that could be billed by them under the percentage fee calculated pursuant to the Johnson Estate case?
7. Did the [Orphans'] Court error in finding that there is no fee agreement to allow a fee to be charged for litigation services and that [Jones] cannot bill on litigation time based on an hourly rate?
Our standard of review of Orphans' Court decisions is as follows:
The findings of a judge of the [O]rphans' [C]ourt division, sitting without a jury, must be accorded the same weight and effect as the verdict of a jury, and will not be reversed by an appellate court in the absence of an abuse of discretion or a lack of evidentiary support. This rule is particularly applicable to findings of fact which are predicated upon the credibility of the witnesses, whom the judge has had the opportunity to hear and observe, and upon the weight given to their testimony. In reviewing the Orphans' Court's findings, our task is to ensure that the record is free from legal error and to determine if the Orphans' Court's findings are supported by competent and adequate evidence and are not predicated upon capricious disbelief of competent and credible evidence. However, we are not limited when we review the legal conclusions that [the] Orphans' Court has derived from those facts.In re Estate of Cherwinski , 856 A.2d 165, 167 (Pa. Super. 2004) (citation omitted).
"[A]ttorney's fees in an estate are based on the reasonable value of the service actually rendered." In re Estate of Rees , 625 A.2d 1203, 1206 (Pa. Super. 1993) (citations omitted). "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 has discretion to determine the reasonableness of an attorney's compensation. Id.
What is a fair and reasonable fee is sometimes a delicate, and at times a difficult question. The facts and factors to be taken into consideration in determining the fee or compensation payable to an attorney include: the amount of work performed; the character of the services rendered; the difficulty of the problems involved; the importance of the litigation; the amount of money or value of the property in question; the degree of responsibility incurred; whether the fund involved was "created" by the attorney; the professional skill and standing of the attorney in his profession; the results he was able to obtain; the ability of the client to pay a reasonable fee for the services rendered; and, very importantly, the amount of money or the value of the property in question.In re Larocca Estate , 246 A.2d 337, 339 (Pa. 1968) (citations omitted).
We address Jones's first two claims together. Jones contends that the Orphans' Court erred in finding that their services in establishing an Estate plan for Rodgers provided little or no value to the Estate. Brief for Appellant at 25, 27. Jones argues that Rodgers desired a more sophisticated plan to minimize death taxes and probate. Id. at 25. Jones argues the Orphans' Court failed to comprehend the Estate plan in light of evolving tax laws. Id.; see also Reply Brief for Appellant at 2, 3. Jones contends that by converting the General Partnership funeral home business to a Family Limited Term Partnership, the Estate realized an inheritance tax savings of $30,000. Brief for Appellant at 26. Jones also argues that the firm provided value to the Estate, because by giving away 87% of her Investment Partnership, Rodgers avoided inheritance taxes, in addition to achieving $400,000 of investment gain. Id. at 26, 27; see also Reply Brief for Appellant at 2, 3. Jones argues that the business interests were reviewed by the Department of Revenue not because of inadequacies, but because the Department of Revenue routinely audits valuations of business interests. Brief for Appellant at 28-29.
Here, the Orphans' Court set forth the relevant law and determined that Jones's claims are without merit. See Orphans' Court Opinion, 3/27/14, at 4; see also id. at 5 (wherein the Orphans' Court discusses Jones's argument relating to the complexity of the Estate). The Orphans' Court's findings are supported by competent evidence and its legal conclusions are sound. In re Estate of Cherwinski , 856 A.2d at 167. Thus, we adopt the sound reasoning of the Orphans' Court for the purpose of this appeal. See Orphans' Court Opinion, 3/27/14, at 4, 5.
In the third claim, Jones asserts that the administration of the Estate was complex due to the various legal entities comprising the Estate, each with its own issues. Brief for Appellant at 29-30. Jones claims that delay occurred in order to obtain certified appraisals and to attempt to settle a dispute among beneficiaries over the funeral home capital accounts and ownership interests. Id. at 30.
We note that Jones fails to cite to any pertinent legal authority to support his claim. See Pa.R.A.P. 2119(a); In re Estate of Sagal , 901 A.2d 538, 541 (Pa. Super. 2006).
The Orphans' Court addressed Jones's third claim and determined it is without merit. See Orphans' Court Opinion, 3/27/14, at 5. The Orphans' Court's findings are supported by the record, and we adopt its sound reasoning for the purpose of this appeal. See id.
We address Jones's next three claims together. Jones contends that the Orphans' Court erred in finding that the legal services were not provided for the benefit of the Estate, but rather, for Bradley's interest, to the detriment of the other beneficiaries. Brief for Appellant at 31-34. Jones argues that the services were performed on behalf of all beneficiaries, in accordance with their beneficial interests. Id. at 31, 32. Jones asserts that the litigation did not create legal chaos, but instead determined the correct values and ownership interests in the business and investment partnerships. Id. at 32. Jones points out that all corrective counsel fees have been paid by Jones, or Jones had reached an agreement with beneficiaries' counsel to have them paid. Id. at 32, 33-34. Jones claims that he cannot be held accountable for Bradley's actions as executor. Id. at 32-33. Jones argues he never personally represented Bradley, and that any legal actions brought by Bradley were through separate and independent counsel. Id. at 33, 34.
Again, Jones fails to cite to any pertinent legal authority to support his claims. See Pa.R.A.P. 2119(a); In re Estate of Sagel , 901 A.2d at 541.
Here, the Orphans' Court set forth the relevant law, addressed Jones's claims, and determined they are without merit. See Orphans' Court Opinion, 3/27/14, at 5-6, 7. The Orphans' Court's findings are supported by the record, and we adopt the sound reasoning of the Orphans' Court for the purpose of this appeal. See id.
In his final claim, Jones contends that the Orphans' Court erred in finding that there was no fee agreement to allow a fee to be charged for litigation services, and that the firm could not bill this time at an hourly rate. Brief for Appellant at 34. Jones argues he remitted an engagement letter to Bradley detailing how the firm would be charging for its services regarding the administration of the Estate. Id. at 34-35. Jones explains that the letter detailed the modified guideline fee under In re Johnson Estate , 4 Fid.Rep.2d 6 (O.C. Chest. 1993), which would include all assets, regardless of class, under the probate fee calculation. Brief for Appellant at 34-35. Jones points out that this letter specifically excluded litigation matters, which were handled on an hourly billing basis. Id. at 34. Jones claims he notified Bradley in writing that, in light of the litigation and the Orphans' Court mandate that fees be reasonable, the firm would be keeping detailed time records and billing the Estate $150.00 per hour for out of court time and $200 per hour for court appearances. Id. at 34, 35. Jones argues that Bradley's failure to sign and remit the letter back to Jones does not negate the Estate's obligation to pay for litigation matters. Id. at 34.
Here, the Orphans' Court set forth the relevant law and determined that Jones's claims are without merit. See Orphans' Court Opinion, 3/27/14, at 6, 7. We adopt the sound reasoning of the Orphans' Court for the purpose of this appeal. See id.
Order affirmed. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/28/2015
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