Opinion
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. P-252588.
Lambden, J.
Jessie Annie Bell McGee (mother) had four children, Shar’ron Wilkins (Wilkins), Raoul Jerome Robinson (Robinson), Odell McGee, Jr. (McGee), and Deborah Brown (Brown). When mother died, the only asset in her estate was a home in Oakland (Oakland property). Wilkins attempted to sell the Oakland property prior to any probate proceeding, but the sale did not close because Wilkins did not own the house. The buyer, James Beverly (Beverly), sued Wilkins and the real estate agent and company representing Wilkins in the real estate transaction for, among other things, breach of contract and fraud (Beverly lawsuit or Beverly action). Charla R. Duke (Duke) provided legal representation for Wilkins in the Beverly action.
Beverly v. Wilkins, Alameda County Superior Court No. 834129-9, filed on December 15, 2000.
Duke is an appellant; she is representing Wilkins and herself on this appeal. There is nothing in this record to indicate that Wilkins was apprised of and waived the conflict between Wilkins and her counsel.
Subsequently, the probate court appointed Wilkins the administrator with will annexed for mother’s estate. Wilkins then sold the Oakland property to a third party. Wilkins through her counsel filed various petitions and accounts in the probate proceedings and the court awarded them statutory fees for services rendered on behalf of the estate.
Duke prepared an agreement for the four siblings to sign, which included a provision that Duke would be compensated $20,000 for her work related to the Beverly lawsuit. Prior to signing this agreement, Robinson signed a letter typed and prepared in Duke’s office, which terminated the services of his attorney. Duke had not informed Robinson’s counsel about this meeting or the agreement.
Wilkins through Duke filed an amended second petition, which requested among other things, the court’s approval of the advancement of $20,000 to Duke for extraordinary attorney’s fees related to the Beverly lawsuit. Robinson objected to Wilkins’s account and to the payment of extraordinary fees. He also requested a surcharge against Wilkins based on her failure to deposit estate funds in an interest-bearing bank account. Robinson also filed a petition to recover the $20,000 paid to Duke in attorney’s fees and requesting double damages pursuant to Probate Code section 859.
After a bench trial, the court determined that Wilkins was obligated to the estate for lost interest income and that Wilkins and Duke had misrepresented to the court in earlier probate proceedings the nature of the Beverly lawsuit. The court ruled that both Wilkins and Duke were jointly and severally obligated to repay the amount of $20,000, plus interest, and to reimburse the estate for costs of the Beverly action paid from estate funds. The court ordered Duke to disgorge partial statutory attorney’s fees and to reimburse costs that had previously been approved by the court. The court denied Robinson’s request for double damages but it did order Wilkins to pay costs, including attorney’s fees, pursuant to Probate Code section 11003, subdivision (b).
Duke and Wilkins appeal and challenge the lower court’s ruling that Duke is not entitled to attorney’s fees related to the Beverly action and that Wilkins is jointly liable with Duke to repay the $20,000. Wilkins also challenges the finding that she must pay the estate lost interest due to her failure to place the funds from the sale of the Oakland property into an interest-bearing account. She also objects to the court’s order requiring her to pay Robinson’s costs, including attorney’s fees. Finally, Duke also contends that the record evinces judicial bias, which warrants a new trial. We are unpersuaded by the arguments on appeal by Duke and Wilkins and affirm the judgment.
Robinson filed a motion pursuant to California Rules of Court, rule 8.276(a)(1), requesting monetary sanctions in the amount of $75,495 against Wilkins and Duke for filing a frivolous appeal. We award sanctions in the amount of $20,000 against Duke for challenging that portion of the judgment related to her $20,000 fee, and refer the matter to the State Bar of California. (Bus. & Prof. Code, § 6086.7, subd. (a)(3).)
BACKGROUND
Mother, Her Will, and Her Death
Mother had four children: Wilkins, Robinson, Brown, and McGee. In 1978, mother transferred her Oakland property into joint tenancy with Wilkins. Four years later, in 1982, Wilkins deeded the property back to her mother.
On April 22, 1985, mother wrote a holographic will. The second paragraph in the will stated the following: “I want Raoul Jerome Robinson to be over the house to give the money out from the sell of the house [sic].”
A little more than 13 years later, mother died. The only known asset mother had was the Oakland property.
Wilkins Attempts to Sell the Oakland Property
After mother’s death, but prior to the commencement of a probate proceeding, Wilkins and Robinson met with attorney Carolyn Leftridge (Leftridge). Robinson produced mother’s holographic will and Wilkins submitted to Leftridge the 1978 joint tenancy grant deed. Leftridge did not know about the 1982 deed and advised Wilkins and Robinson that Wilkins was the owner of mother’s Oakland property, since a joint tenancy deed takes precedence over a will.
Leftridge prepared a declaration of fact of death of joint tenancy, which Wilkins executed on May 20, 1999. Leftridge arranged for its recordation with the Alameda County Recorder. Robinson contacted real estate agent Winifred Madison (Madison), who worked at Re/Max Realty (ReMax), regarding the sale of the Oakland property.
An attorney for McGee sent Wilkins a copy of the deed indicating Wilkins had reconveyed the property to her mother prior to her mother’s death. The letter stated that transfer of the Oakland property had to proceed through probate court. Wilkins sent Leftridge a letter informing her that Wilkins’s name was not on the grant deed. On July 20, 1999, Leftridge learned that Wilkins was still attempting to sell the Oakland property; Leftridge informed Wilkins that she would no longer represent her.
On July 29, 1999, Wilkins signed an acceptance of a real estate purchase agreement and a counteroffer to sell the Oakland property to Beverly for $118,000 with certain credits back to the buyer for repairs. Madison prepared a contract addendum signed by all four children, but not the buyer Beverly, which stated that all of the proceeds of the sale would be disbursed equally among the four children at the close of escrow after the amount for the taxes had been deducted. Robinson claimed that he signed this agreement because Madison told him that Wilkins was the owner of the Oakland property and it could not be sold unless all four children signed an addendum agreeing to split the proceeds.
Since Wilkins did not own the Oakland property, escrow on the sale of the Oakland property could not close. Wilkins and her brother McGee consulted attorney Duke. Following the meeting, Duke spoke to each of the four siblings by telephone. McGee, Wilkins, and Brown told Duke that they thought mother’s holographic will was invalid. Despite their doubts about its validity, Duke testified that the four siblings had an understanding that they would probate the will.
Initiating Probate Proceedings
On January 24, 2000, Duke filed a petition on behalf of Wilkins to probate mother’s holographic will and to appoint Wilkins as administrator with will annexed. The petition included Wilkins’s request to be appointed administrator of her mother’s estate and a declaration by Robinson that he did not want to act as the executor. On March 22, 2000, the court issued its order admitting mother’s holographic will to probate, appointing Wilkins as administrator with will annexed, and authorizing Wilkins to administer the estate with full authority under the Independent Administration of Estates Act. Bond was fixed at $125,000. The order contained the following bolded statement in all capital letters: “Warning: This appointment is not effective until letters have issued.”
An amended and a second amended petition were filed.
The order also states that instead of a bond a deposit may be ordered “to be placed in a blocked account.”
Wilkins had a poor credit history and the bonding company refused to issue a bond without an agreement that the proceeds from the sale of the Oakland house would be deposited in Duke’s trust account. Wilkins testified that she was aware that Duke’s general trust account did not bear interest. It was undisputed that Wilkins signed the form entitled, “Duties and Liabilities of Personal Representative” and that Duke explained the form to her. The form contained the following language under the bold heading of “Interest-bearing accounts and other investments”: “Except for checking accounts intended for ordinary administration expenses, estate accounts must earn interest. You may deposit estate funds in insured accounts in financial institutions, but you should consult with an attorney before making other investments.”
The actual order signed is missing from the record but Robinson attached the blank form as an exhibit to his brief in this court. We take judicial notice of this form.
The agreement with the bonding company to hold estate funds in Duke’s general trust account was confirmed by letter dated May 1, 2000. The bond was posted on May 8, 2000, and letters of administration with the will annexed were issued by the clerk of the court that same day.
Second Sale of the Oakland Property and Lawsuit Filed by Beverly
Wilkins, through Duke, was unable to negotiate a new contract of sale for the Oakland property with Beverly and the property was placed back on the market. A contract to sell the Oakland property for $160,000 was entered into with another buyer.
On December 15, 2000, Beverly filed an action against Wilkins in her personal capacity and against Madison and ReMax. Beverly alleged claims for intentional fraud, conspiracy to commit fraud, fraud by suppression of fact, negligent misrepresentation of fact, breach of contract, and professional negligence. Wilkins asked Duke to represent her; she agreed, but they did not enter into any written or oral fee agreement. Wilkins filed a cross-complaint against Madison, ReMax, and attorney Leftridge and filed an answer to Beverly’s pleading. Wilkins answered and filed her cross-complaint in her personal capacity.
The sale of the Oakland property to the third party closed on March 22, 2001. The net sales proceeds in the amount of $136,462.43 were deposited in Duke’s non-interest-bearing, general trust account.
Hearing on the Petition
From June 5, 2001, until February 28, 2002, Wilkins filed several different petitions and accounts in the probate proceedings. On June 5, 2001, she filed a “petition for settlement of first and final account and final distribution and allowance of compensation for extraordinary services . . . .” The petition stated that statutory attorney’s fees in the amount of $4,576.50 were owed to Duke. Additionally, the petition asserted that Duke had performed extraordinary services on behalf of the estate and that the reasonable value of those services was $6,915. The petition also requested that Wilkins be authorized to withhold $50,000 to provide for the settlement of the Beverly lawsuit. Wilkins also maintained in the petition that the complaint in the Beverly action was filed against her “acting as the administrator of the estate in the sale of the real property of the estate.” Duke attached her declaration, which avowed under penalty of perjury as follows: “As attorney for the personal representative of the Estate of Jessie Annie Bell McGee I rendered extraordinary services on behalf of the estate. These services were all rendered in the defense of the personal representative in a complaint and cross-complaint involving the sale of the real property of the estate.” In other documents filed with the court, Duke also declared that the Beverly lawsuit was against Wilkins as the executor of the estate of mother.
On February 28, 2002, Wilkins filed her amended first petition for preliminary distribution. The hearing on the petition was set for April 16, 2002. Two days prior to the hearing, Robinson retained Michael Dougherty (Dougherty) as his attorney. After reviewing the documents in the court file, Dougherty asked Duke if Beverly filed the complaint against Wilkins individually or in her capacity as personal representative. Dougherty testified that Duke “very specifically told [him that Wilkins] was sued as the personal representative.” Dougherty responded that no creditor’s claim in the estate was filed and that a party cannot sue on a debt owed by the estate unless the party first files a creditor’s claim. He then asked Duke if she had demurred to the complaint in the Beverly lawsuit; she responded that she had not. He asked her if she raised the failure to file a creditor’s claim as an affirmative defense and, according to Dougherty, Duke replied that “the case was in such a posture that she was absolutely certain that there would be no judgment against the estate.”
At the hearing on April 16, 2002, the court stated that it would defer action on attorney’s fees for extraordinary services until after the Beverly action concluded. Robinson requested that the estate’s funds be deposited in an interest-bearing or blocked account. Duke represented that the trial in the Beverly lawsuit was starting the following week and that she expected the estate to be ready to be distributed within 30 days. Dougherty responded by withdrawing his request.
The court issued its order for preliminary distribution on April 22, 2002. It noted that there was no opposition to the petition. It awarded partial statutory attorney’s fees in the amount of $2,175 to Duke. The court also authorized partial reimbursement of expenses in the amount of $700 to Duke and authorized reimbursement of expenses in the amount of $2,969.67 to Wilkins.
Judgment in the Beverly Lawsuit
The trial in the Beverly lawsuit was continued and did not start a week after the April 2002 hearing, as originally scheduled. A special verdict was not filed in the Beverly lawsuit until December 4, 2002. The jury returned a verdict for Beverly against Wilkins for $53,955 on the breach of contract claim, against Madison and ReMax for $89,955 on the negligence claim with 60 percent of the damages attributable to others, against Wilkins, Madison, and ReMax for $36,000 on the concealment and intentional misrepresentation claims, and against Wilkins, Madison, and ReMax for $30,000 on the negligent misrepresentation claim. The jury also found Wilkins guilty of fraud. However, Beverly did not pursue a judgment for punitive damages against Wilkins after learning more about Wilkins’s financial condition. After a settlement between Beverly and defendants Madison and ReMax, the net judgment entered against Wilkins was for $32,945. The jury found that attorney Leftridge was not liable on Wilkins’s cross-complaint.
On June 26, 2003, Wilkins filed a no-asset personal bankruptcy. The bankruptcy court on October 7, 2003, discharged Wilkins’s debts and entered a final decree on October 14, 2003. Wilkins never paid the judgment she owed to Beverly.
Duke’s Meetings with the Siblings and Wilkins’s Petition for Settlement and Final Distribution
In 2003, after the verdict in the Beverly lawsuit, Duke met twice with Robinson without the knowledge or consent of his attorney. Wilkins testified that Robinson told her that he had fired his attorney and that he needed money and wanted an advance from the estate. Duke testified that McGee told her that Robinson had terminated the services of his attorney. In response to a question from the trial judge, Duke acknowledged that she did not ask for any written corroboration from Robinson that he had terminated the services of his attorney. Robinson testified that Duke told him to terminate the services of his attorney.
At the first meeting between Duke and the siblings in March 2003, the four children entered into an agreement that, after certain minor distributions to grandchildren, the balance of the estate would be divided equally among the four of them. This agreement, signed March 6, 2003, stated in pertinent part: “In consideration of Shar’ron Wilkins not bringing civil action against Jessie Annie Bell McGee’s Estate for judgment [entered in the Beverly lawsuit] and in further consideration of the ‘remaining beneficiaries’ listed below not contesting the holographic will in the Estate of Jessie Annie Bell McGee the ‘remaining beneficiaries’ agree to the following distribution . . . .” Robinson was given a check in the amount of $5,000 from Duke’s client trust account.
Duke stated that she learned several days after the meeting on March 6, 2003, that Dougherty was still representing Robinson. Yet, she did not tell Dougherty about the March 6 meeting.
On May 14, 2003, Wilkins filed a “petition for allowance of compensation for extraordinary services of attorney and expenses; final account of personal representative; petition for settlement; and petition for final distribution . . . .” The petition requested a reserve account because “[t]he estate has potential liabilities from a complaint filed against Shar’ron Wilkins acting as the administrator of the estate in the sale of the real property of the estate.”
In early March 2003, Robinson telephoned Wilkins to request advances from the estate funds. He also told Wilkins that he did not want to pay any extraordinary attorney’s fees to Duke. Wilkins contacted Duke for a meeting; Duke told Wilkins that she would not meet with Robinson unless he “fired his attorney Michael Dougherty.” According to Wilkins, Robinson responded that he would terminate the services of Dougherty “to settle the case and get some more money.”
This was not the first time Robinson had telephoned Wilkins to request funds from the estate.
Duke held a second meeting with all of the siblings on May 20, 2003. Duke’s staff person informed Robinson that Duke could not personally speak to him until he signed a statement terminating the services of Dougherty. While at Duke’s office, Robinson signed a written notice of termination of the legal services of Dougherty. Robinson demanded $16,500, and told his siblings that “he would walk away” if he received this sum. Robinson was given a check for $6,500. Duke testified that Wilkins and she agreed to give Robinson the balance of $10,000 once Dougherty received the notice terminating his services.
Brown, who lived in another state, appeared by telephone.
An agreement between the siblings and Duke was signed by everyone but Brown in Duke’s office on May 20, 2003; Brown, who appeared at the meeting by telephone, signed the agreement on May 23, 2003. All of the terms of the agreement were on the first page and the signatures were on the second page. This agreement contained the same consideration as the March 6, 2003 agreement. It provided for payment to Duke of “$20,000 for extraordinary legal services.” Robinson testified that he was not aware that the agreement contained a provision to provide attorney’s fees to Duke.
McGee testified that he believed Robinson was intoxicated while at the May 20 meeting, although he could not recall the exact date of the meeting. McGee stated that when he signed the agreement he was not aware of the provision providing payment to Duke of $20,000 in fees and, had he known about this provision, he would not have signed the agreement.
When Dougherty received the written notice terminating his legal services for Robinson, he responded by letter to Robinson and told him that he had the right to terminate his legal services and that a formal substitution of attorney form would have to be signed. Dougherty advised Robinson that Duke had acted unethically in communicating with him. Subsequently, Dougherty told Duke that he was continuing to represent Robinson; he instructed Duke not to communicate with Robinson unless and until a substitution of attorney form was signed.
On October 20, 2003, Wilkins filed an “amended second petition for preliminary distribution . . .; [and] petition for expenses of attorney and allowance of compensation for extraordinary services of attorney . . . .” The petition requested the court’s approval of various “advancements and distributions,” including the advancement with “written consent of residual beneficiaries” of $20,000 for extraordinary attorney’s fees. On February 13, 2004, Duke filed a “final petition for preliminary distribution . . ., [and] petition for expenses of attorney and allowance of compensation for extraordinary services of attorney . . . .”
Robinson’s Objection and Petition
On April 27, 2004, Robinson filed his “objection to account and report of status of administration, objection to request for reimbursement, objection to request for statutory compensation, and request for surcharge.” On this same date, Robinson also filed a petition to appoint a successor administrator with will annexed; he requested that Wilkins be removed as the administrator.
On June 21, 2004, Wilkins filed an amended “final petition for distribution . . ., petition for expenses of attorney and approval of allowance of compensation for extraordinary services of attorney . . . .” On this same date, Robinson filed a petition against both Duke and Wilkins requesting recovery of the $20,000 attorney’s fees paid to Duke and for double damages pursuant to Probate Code section 859.
The First Trial
On April 1, 2005, Wilkins and Duke failed to appear for the trial on Wilkins’s account, Robinson’s objections to it, and Robinson’s petition. At the conclusion of the unopposed trial, the court removed Wilkins as administrator with will annexed, appointed a neutral party as successor administrator with will annexed, and directed Wilkins to pay the balance of cash in the estate to the successor administrator and to deliver documents to him concerning the estate. The court also entered a monetary judgment jointly and severally against Wilkins and Duke for having made improper expenditures from the estate related to the Beverly action and for having failed to hold the funds of the estate in an interest-bearing bank account.
On July 5, 2005, Wilkins and Duke filed a motion to vacate and set aside the monetary judgment and the order appointing a successor administrator with will annexed. Subsequently, an order was filed pursuant to stipulation granting in part and denying in part the motion to vacate and set aside the judgment after court trial. The order dated September 23, 2005, denied the motion to set aside the appointment of the successor administrator with will annexed. The monetary portions of the judgment were set aside and the matters of Wilkins’s most recent account, the objections to the account, and the petition to recover property from Wilkins and Duke were reset for trial. The request that Wilkins and Duke be required to pay the attorney’s fees of Dougherty for defending the motion to vacate and set aside the judgment was denied without prejudice.
Second Trial and the Court’s Statement of Decision
After the parties were unable to settle their differences, the trial of Wilkins’s account, Robinson’s objections to it, and Robinson’s petition went to trial in April 2006. After considering briefs and arguments, the trial court on April 13, 2006, concluded that there were eight issues for trial, which were as follows: reimbursement of fees and expenses paid in connection with the Beverly action, reimbursement of six other minor items of expense from the estate unrelated to the Beverly action, interest on items improperly paid, a penalty for wrongfully taking assets from the estate pursuant to Probate Code section 859, statutory compensation for Wilkins and Duke and their requests for surcharge, payment of any further fees or expenses incurred in connection with the Beverly action, the $700 already paid to Duke for reimbursement of expense in the Beverly lawsuit, and the failure to deposit funds of the estate in an interest-bearing bank account and surcharge for that failure. The court noted that both Wilkins and Duke were fiduciaries.
At the bench trial in April 2006, Duke represented Wilkins and also was a witness. Duke testified that she personally wrote all of the checks for the expenditures of estate funds from her trust account. Duke maintained that she discussed each expenditure with Wilkins, including the $20,000 she paid to herself, and Wilkins authorized each expense. Wilkins confirmed that she authorized payment of all the disbursements. Both Wilkins and Duke admitted they were aware that the law required all of the estate funds to be deposited in an interest-bearing bank account, and that Duke’s general trust account was a non-interest-bearing bank account.
After six days of trial, the court on June 7, 2006, filed its statement of decision. The court noted that “[i]n early 2003[,] . . . both Robinson and McGee had personal issues regarding the use of drugs and alcohol. Due in part to that dependency, neither proved at trial to be very reliable historians of the events surrounding the various meetings in the spring of 2003.” The court continued: “But it is clear that they both had a pressing need for money, were frustrated by the pace of the probate proceedings and wanted their sister to disburse as much as she could to them.” Since Duke listened to various telephone messages Robinson left for Wilkins, the court concluded that “Duke knew that Robinson was probably addicted and desperate to settle. Duke also knew that Robinson did not want her to receive any compensation.”
With regard to the meeting on May 20, 2003, where the parties signed the agreement, which included the $20,000 fee for Duke, the court declared that “Robinson was so desperate for money he simply signed what was given to him without reading it and did not focus on the money being paid to Duke until his attorney later reviewed the agreement with him.” After the siblings signed the May agreement, Duke paid herself the $20,000 fee without seeking any court approval. On June 20, 2003, Wilkins distributed $5,000 to herself.
The trial court decided that the contract addendum on July 29, 1999, which provided that the four siblings would split the sale proceeds of the Oakland property, was not invalid for lack of consideration. By the time the addendum was signed, Robinson knew that Wilkins had reconveyed her interest in the Oakland property back to her mother. The court found that Wilkins’s undertaking the sale of the Oakland property in her personal capacity was sufficient consideration.
The court determined that Duke violated the California Rules of Professional Conduct by meeting with Robinson twice when she knew he had legal representation in the matter. The court added: “While it is true that parties may settle a matter themselves without the consent of their attorneys, that does not mean that opposing counsel can meet secretly with a represented party and effectuate such a settlement.” The court continued: “Moreover, here, Duke’s motives can be questioned because she was not simply brokering a family quarrel but settling her own fee and knew her most outspoken critic in the family was particularly vulnerable due to his desperate condition. In addition, the agreements themselves recited as ‘consideration’ factors that were patently insubstantial given the facts of the case. These recitals are indicative of the kind of pressure brought to bear on Robinson at these meetings and clearly reflect overreaching by Duke. Her conduct under these circumstances was unconscionable. Because of Duke’s violations [of the California Rules of Professional Conduct], as well as Robinson’s vulnerable circumstance, the agreements of March and May 2003 entered into by him in her office are entirely unenforceable and all distributions pursuant to them were improper unless otherwise justified and procedurally appropriate.”
With regard to the fees and expenses incurred in connection with the Beverly lawsuit, the trial court decided that the defense of that lawsuit was not for the benefit of the estate because “(a) there was no legal theory on which the estate could have been exposed to liability for the acts of Wilkins before she became the administrator and (b) no benefit was conferred upon the estate by any of Duke’s services in defense of the action.” The court determined that Duke again violated the California Rules of Professional Conduct by obfuscating in her papers filed in the probate court the critical fact that Wilkins was sued in her personal capacity. The court noted that Duke acted in this manner “to increase the likelihood that her request for extraordinary fees would be granted.” This action was “sufficient grounds for requiring her to disgorge all fees and costs previously paid by the estate for the Beverly action.” Further, the court ruled that the court never approved those fees as required by Probate Code section 10811, subdivision (a).
The trial court concluded that Duke must disgorge the $2,175 previously awarded as partial statutory fees together with interest thereon. The court found that the award was the result of misrepresentation in the moving papers before the court.
The trial court concluded that the prior distributions had not been equitable and were pursuant to void contracts; it set forth the proper disbursement of the estate funds. The court found that Wilkins was jointly and severally liable with Duke for the $20,673 plus interest paid to Duke in attorney’s fees related to the Beverly action. It also ruled that Wilkins was personally liable for $781.08 plus interest for the other improper disbursements related to the Beverly lawsuit.
The court further found that, as a fiduciary, Wilkins was responsible for the loss of interest suffered by the estate as a result of the failure to deposit the proceeds from the sale of the Oakland property in an interest-bearing account. Additionally, it ruled that neither Wilkins nor Duke was entitled to any statutory compensation, and that Duke was not entitled to any fees for extraordinary services. The court rejected Robinson’s request for penalties pursuant to Probate Code section 859, but it determined that Wilkins was liable for Robinson’s expenses and costs of litigation, including attorney’s fees, incurred in the prosecution of the objection to Wilkins’s account and request for reimbursement.
On June 19, 2006, counsel for Robinson submitted his declaration calculating prejudgment interest and requesting expenses and costs; he requested attorney’s fees for the sum of $91,684.50. Wilkins and Duke filed opposition and the trial court issued its order on July 17, 2006. The court initially awarded $62,700 in attorney’s fees and subsequently, on August 23, 2006, entered its order awarding an additional $7,300 for a total of $70,000 in attorney’s fees.
Wilkins and Duke filed a timely notice of appeal. Robinson filed a motion to dismiss the appeal on the grounds that Wilkins had not authorized or consented to the appeal filed by Duke. In response, Duke submitted Wilkins’s declaration ratifying the conduct of her attorney. We denied this motion to dismiss on October 20, 2006.
DISCUSSION
Preliminarily, we note that Duke is representing both Wilkins and herself on appeal. The trial court’s findings that Duke committed multiple violations of the Professional Rules of Conduct while representing Wilkins in the proceedings in the lower court raises serious questions regarding her continued representation of Wilkins on this appeal. At a minimum, her representation of Wilkins represents a conflict of interest.
When determining liability regarding the inappropriate distributions related to the Beverly action, the trial court stated: “As Wilkins was entirely dependent on Duke for the analysis of whether these disbursements were proper or not, in its proposed decision the court was inclined not to charge Wilkins for them. However, the objector correctly notes that the Supreme Court has held that the ‘executor is responsible for the misconduct, negligence, or want of skill of [his or her] attorney.’ . . . In light of these authorities, the court has reconsidered the issue of Wilkins’s responsibility for the Beverly disbursements.”
I. Denying Duke Fees Related to the Beverly Lawsuit
Duke does not set forth any specific challenge to the trial court’s finding that she must disgorge partial statutory attorney’s fees and reimbursement of costs previously approved. She has therefore waived any appeal from this part of the order.
A. The Trial Court’s Finding that the May 2003 Agreement for Payment of $20,000 to Duke Was Unenforceable
Despite knowing that Robinson had legal counsel, Duke met with Robinson twice without advising Robinson’s attorney of these meetings. At the second meeting the siblings signed an agreement, which provided that Duke would receive compensation related to Wilkins’s defense in the Beverly action. Duke contends that she is entitled to fees pursuant to this contract and that the lower court exceeded its authority when it invalidated this agreement because it found she had violated the California Rules of Professional Conduct, rule 2-100 (rule 2-100). She maintains that the State Bar Court has the sole authority to determine matters of attorney discipline. Further, she claims that no impermissible contact occurred and substantial evidence did not support the lower court’s determination.
Duke’s argument is directed to the trial court’s invalidation of both the March and May 2003 agreements. However, the March 2003 agreement did not concern the payment of extraordinary fees to Duke. The trial court did invalidate the disbursements made pursuant to the March agreement, but no challenge to those disbursements has been made in this appeal.
1. Standard of Review
We apply our independent judgment to the ultimate question of whether the trial court acted outside its authority or had jurisdiction over an issue, but to the extent that question turns on factual issues, we apply the substantial evidence standard of review. (E.g., In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 113-114; see also Estate of Lingenfelter (1952) 38 Cal.2d 571, 585 [issue of undue influence is “ ‘one of fact’ ” and therefore subject to the substantial evidence standard of review].) “ ‘When a finding of fact is attacked on the ground that there is no substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the finding of fact. [Citations.] [¶] When two or more inferences can reasonably be deduced from the facts, a reviewing court is without power to substitute its deductions for those of the trial court.’ [Citation.]” (Scott v. Common Council (1996) 44 Cal.App.4th 684, 689, quoting Green Trees Enterprises, Inc. v. Palm Springs Alpine Estates, Inc. (1967) 66 Cal.2d 782, 784-785.) The testimony of a single credible witness may constitute substantial evidence. (In re Marriage of Mix (1975) 14 Cal.3d 604, 614.)
2. The Trial Court’s Authority to Invalidate the Agreements
On March 6, 2003, Duke and the four siblings signed an agreement that stated, after certain minor distributions to grandchildren, the balance of the estate would be divided equally among the four of them. It provided: “In consideration of Shar’ron Wilkins not bringing civil action against Jessie Annie Bell McGee’s Estate for judgment [entered in the Beverly lawsuit] and in further consideration of the ‘remaining beneficiaries’ listed below not contesting the holographic will in the Estate of Jessie Annie Bell McGee the ‘remaining beneficiaries’ agree to the following distribution . . . .”
In May 2003, the siblings and Duke signed another agreement. This agreement contained the same consideration as the March 6, 2003 agreement. It provided for payment to Duke of “$20,000 for extraordinary legal services.”
The trial court, when invalidating the March and May 2003 agreements, stated that Duke had violated rule 2-100, and her misconduct and “overreaching” pressured Robinson to sign the agreements. Duke argues that the court exceeded its authority when it determined she had violated rule 2-100 and this adjudication violated her due process rights.
Rule 2-100 provides in pertinent part: “While representing a client, a member shall not communicate directly or indirectly about the subject of the representation with a party the member knows to be represented by another lawyer in the matter, unless the member has the consent of the other lawyer.” As explained in Jackson v. Ingersoll-Rand Co. (1996) 42 Cal.App.4th 1163, 1167, the rule is intended “to preserve the attorney-client relationship from an opposing attorney’s intrusion and interference.”
When an attorney violates rule 2-100, the trial court must balance “competing interests” and exercise its discretion in determining how to best address the improper consequences of the misconduct. (Mills Land & Water Co. v. Golden West Refining Co. (1986) 186 Cal.App.3d 116, 126, superseded by statute on another issue.) The court’s goal is not to impose a penalty, as the propriety of punishment for violation of the California Rules of Professional Conduct is a matter within the purview of the State Bar, not of a court presiding over the affected case. (See Bus. & Prof. Code, § 6077; Noble v. Sears, Roebuck & Co. (1973) 33 Cal.App.3d 654, 658-659.) Instead, what the court must do is focus on identifying an appropriate remedy for whatever improper effect the attorney’s misconduct may have had in the case before it. Thus, the court’s role is not to oversee the ethics of those that practice before it, but it is within the court’s power to ensure that an attorney’s misconduct does not create an unfair advantage, or impact the fairness of the trial or the integrity of the judicial system. (See Mills Land & Water Co. v. Golden West Refining Co., supra, at pp. 126, 137.)
In accordance with the foregoing principle, courts have invalidated fee splitting agreements between attorneys when the attorney violated the California Rules of Professional Conduct. (See, e.g., Scolinos v. Kolts (1995) 37 Cal.App.4th 635.) Thus, the court in Scolinos, when invalidating a fee splitting agreement, held it was contrary to public policy to condone a violation of the ethical duties an attorney owed a client and “[i]t would be absurd if an attorney were allowed to enforce an unethical fee agreement through court action, even though the attorney potentially [was] subject to professional discipline for entering into the agreement.” (Id. at p. 640.) Similarly, here, it would be absurd for Duke to be able to enforce an agreement providing her with attorney’s fees in the amount of $20,000 through court action based on an agreement that she obtained while violating rule 2-100.
Further, in the present case, the trial court did not invalidate the agreements as a penalty for Duke’s violating rule 2-100. Rather, the court determined that Duke’s misconduct had the effect of pressuring Robinson, a particularly vulnerable and desperate person, to sign an agreement that he would not ordinarily sign. The court believed that “Duke’s motives” could be questioned “because she was not simply brokering a family quarrel but settling her own fee” and she “knew her most outspoken critic in the family was particularly vulnerable due to his desperate condition.” The court explained that the “agreements themselves recited as ‘consideration’ factors that were patently insubstantial given the facts of the case. These recitals [were] indicative of the kind of pressure brought to bear on Robinson at these meetings and clearly reflect[ed] overreaching by Duke. Her conduct under these circumstances was unconscionable. Because of Duke’s violations of rule 2-100, as well as Robinson’s vulnerable circumstance, the agreements of March and May 2003 entered into by him in her office are entirely unenforceable . . . .”
Accordingly, we conclude the trial court did not usurp the authority of the State Bar and properly adjudicated the effect of Duke’s misconduct on the parties.
3. Substantial Evidence Supported the Trial Court’s Findings that Duke Violated Rule 2-100 and that this Misconduct Induced Robinson to Sign the May 2003 Agreement
The trial court found that Duke violated rule 2-100 in March and May 2003, but it declared that the May 2003 violation “was particularly egregious because [Duke] knew as a result of the March meeting that Robinson’s statements could not be trusted on the issue of representation and yet she repeated the violation in the context of a meeting where she was negotiating her right to extraordinary fees and the amount of those fees.” The trial court ruled that this direct communication with Robinson actually impaired Robinson’s ability to make a reasoned decision. On appeal, Duke contends that substantial evidence did not support a finding that she had any impermissible communication with Robinson or that she improperly influenced him.
It is undisputed that Robinson had a probate attorney representing him and that Duke knew Robinson had legal representation. Therefore, under rule 2-100, Duke could not meet with Robinson to discuss any matters related to mother’s estate without the consent of Robinson’s attorney. Discipline has been imposed under rule 2-100 and its predecessors when an attorney knows the opposing party has legal representation but still has an ex parte communication with the opposing party. (See, e.g., Crane v. State Bar (1981) 30 Cal.3d 117 [attorney communicated directly with opposing party]; Mitton v. State Bar (1969) 71 Cal.2d 525 [attorney for the plaintiff communicated with defendant]; Turner v. State Bar (1950) 36 Cal.2d 155 [attorney culpable when he had opposing party sign settlement papers]; Chronometrics, Inc., v. Sysgen, Inc. (1980) 110 Cal.App.3d 597 [member disqualified for communicating with a represented cross-defendant in a civil action].)
“[The no contact rule] shields the opposing party not only from an attorney’s approaches which are intentionally improper, but, in addition, from approaches which are well intended but misguided. [¶] The rule was designed to permit an attorney to function adequately in his proper role and to prevent the opposing attorney from impeding his performance in such role. If a party’s counsel is present when an opposing attorney communicates with a party, counsel can easily correct any element of error in the communication or correct the effect of the communication by calling attention to counteracting elements which may exist. Consequently, before any direct communication is made with the opposing party, consent of the opposing attorney is required.” (Mitton v. State Bar, supra, 71 Cal.2d at p. 534.)
In the present case, the record is clear that Duke never received consent from Robinson’s attorney to meet with Robinson. Although she knew Robinson had legal representation, she met with him in March 2003 and again in May 2003. The May meeting was especially pernicious given that she knew from her prior interactions that she could not rely on Robinson’s statements that he had fired his attorney. Duke conceded that she did not ask for any written corroboration from Robinson that he had terminated the services of his attorney. Accordingly, we conclude that the record overwhelmingly supports the lower court’s finding that Duke violated rule 2-100.
The record also supports a finding that Duke’s direct communication with Robinson in May 2003 constituted undue influence. Civil Code section 1575 defines undue influence as the following: “1. In the use, by one in whom a confidence is reposed by another, or who holds a real or apparent authority over him, of such confidence or authority for the purpose of obtaining an unfair advantage over him; [¶] 2. In taking an unfair advantage of another’s weakness of mind; or, [¶] 3. In taking a grossly oppressive and unfair advantage of another's necessities or distress.” In determining whether an agreement was the result of undue influence, the court is “concerned with whether from the entire context it appears that one’s will was overborne and [the person] was induced to do or forbear to do an act which [the person] would not do, or would do, if left to act freely.” (Keithley v. Civil Service Bd. (1970) 11 Cal.App.3d 443, 451.)
The evidence at trial established that Duke knew Robinson had a drinking and drug problem and was desperate for money. Further, the evidence established that Duke knew Robinson was “her most outspoken critic in the family.” Robinson testified that he would not have signed the agreement had he known it contained a provision that provided Duke with attorney’s fees in the sum of $20,000. Moreover, Wilkins testified that Duke listened to the messages Robinson left on Wilkins’s answering machine. The exchange between Duke and Wilkins at trial makes it clear that both were aware that Robinson did not want to pay for the fees in the Beverly action.
Duke contends that the record contains no evidence to support a finding that she induced Robinson or pressured him to terminate his attorney’s legal services. She notes that the trial court determined that Robinson’s testimony lacked credibility. Duke conveniently ignores the court’s finding that Robinson’s testimony was unreliable because his substance abuse at the time prevented him from recalling specific events with any clarity. Such a finding clearly supported a finding that Duke took advantage of him.
The following exchange occurred at trial when Duke was questioning Wilkins:
“Q. Okay. In that message, does [Robinson] tell you to contact me regarding settlement of the case?
“A. Yes.
“Q. Does he tell you in that message that he does not want to pay my extraordinary fees but he wants to settle the case?
“A. Yes.”
Thus, Duke encouraged Robinson to sign an agreement without consulting his attorney. The agreement provided for payment to her of $20,000 in fees for the Beverly action and she was aware that Robinson had expressed his objection to her being paid any money. Duke’s behavior was unconscionable, and the record clearly supports the court’s finding that Robinson’s consent was not real or free within the meaning of Civil Code section 1575, but had been obtained through Duke’s undue influence.
Duke argues no impermissible contact or pressure occurred and relies on Estate of Mueseler (1950) 98 Cal.App.2d 334 (Mueseler)and Witte v. Kaufman (2006) 141 Cal.App.4th 1201 (Witte). Mueseler has no applicability to this case. The evidence in Mueseler was that the elderly client wrote a letter discharging his attorneys and then served his attorneys with the discharge. (Mueseler, at p. 335.) The written dismissal of the attorneys ended the attorneys’ authority and therefore a notice of appeal filed by them after their discharge had no effect. (Id. at p. 338.) There was no evidence that any person, especially opposing counsel, played any role in encouraging the client to terminate legal counsel.
In contrast to Mueseler, here, Duke encouraged Robinson to terminate his attorney, had the letter terminating services typed at her office, and had Robinson sign the letter in her office. Moreover, after writing the letter to discharge Robinson’s attorney, she had Robinson sign a settlement agreement that gave her $20,000 in fees. Duke claims that Robinson stated that he wanted to settle the case and that he no longer had legal representation. Duke ignores that she never confirmed this assertion, despite knowing his prior statements of firing his attorney had proved unreliable. There quite simply is no similarity between the facts of this case and the facts in Mueseler, supra, 98 Cal.App.2d 334. Indeed, Duke’s argument in this court that “[t]he more likely scenario is that Robinson, far from [being] ‘vulnerable’ in any legally cognizable sense, was as manipulative and in control at the meetings in the spring of 2003 as he was manipulative and contrived in the fashioning of his testimony in court[,]” establishes that Duke completely fails to recognize and appreciate the effect of her misconduct. The evidence showed that Robinson was a desperate man with a substance abuse problem and that Duke took advantage of this to have him sign a document giving her money.
Duke incredibly asserts that it made no difference that Robinson signed the termination letter at her office and cites Witte, supra, 141 Cal.App.4th 1201. Witte concerns an appeal by a plaintiff attorney after the lower court granted the defendant law firm’s special motion to strike pursuant to the anti-strategic lawsuit against public participation and after the court awarded the law firm attorney’s fees. In Witte, the plaintiff attorney had represented his client in a lawsuit by his client’s prior law firm for attorney’s fees. (Id. at p. 1203.) The client wanted to accept the arbitration award in favor of the law firm, but the attorney refused to carry out his client’s wishes, arguing that he could negotiate a lower amount. (Id. at p. 1204.) After the client repeatedly told him that he would fire him if he did not carry out his wishes and the attorney refused to tell the opposing counsel that his client wanted to accept the award, the client told the law firm that he wanted the law firm to accept the arbitration award. (Id. at p. 1205.) The law firm responded that it could not deal with the client directly because the client had legal representation. (Ibid.) Consequently, the client sent a letter to his attorney terminating his attorney’s services. (Ibid.) He then sent by facsimile a letter to the law firm stating that he had terminated the services of his attorney and that he now was representing himself. (Ibid.) The law firm prepared a substitution of attorney form for the client. (Ibid.)
Even a cursory reading of Witte, supra, 141 Cal.App.4th 1201 establishes that it has no relevance to the present case. First, there was no dispute in Witte that the client wished to terminate the services of his attorney. In the present case, as the trial court found, Duke knew that Robinson’s statements that he had fired his attorney were unreliable. Second, the plaintiff had directly told his attorney that he wanted to fire him and the law firm played no part in that decision. The client typed the letter terminating the attorney’s services and, subsequently, the law firm merely prepared the substitution of attorney form. (Id. at p. 1205.) In contrast, here, Duke encouraged Robinson to fire his attorney and typed the letter of termination. Third, the law firm in Witte did not engage in any misconduct. In fact, because the firm was a party in the lawsuit, it was not prohibited from directly or indirectly communicating on its own behalf with the client. (See rule 2-100, discussion following rule.) Here, Duke was not a party, but had a pecuniary interest in convincing Robinson to sign the agreement. Thus, Duke’s reliance on Witte is misplaced.
Accordingly, we conclude that Duke’s argument that she did not engage in any impermissible communication with Robinson is entirely without merit. Additionally, substantial evidence supported the lower court’s ruling that this misconduct resulted in Duke’s exerting undue influence over Robinson and therefore his signature on the May 2003 agreement was not voluntary.
B. The Trial Court’s Denial of Attorney’s Fees Pursuant to Probate Code Section 10811
Duke maintains that she is entitled to extraordinary fees pursuant to Probate Code section 10811. Probate Code section 10811, subdivision (a) provides that “the court may allow additional compensation for extraordinary services by the attorney for the personal representative in an amount the court determines is just and reasonable.”
The law with respect to the allowance of fees claimed for extraordinary services rendered in probate proceedings is well settled. The grant or denial of such fees is addressed to the sound discretion of the probate court. (Prob. Code, § 10811, subd. (a); Estate of Trynin (1989) 49 Cal.3d 868, 874.) “If, under all the relevant circumstances, the amount awarded as ordinary compensation is fair and reasonable for all the attorney services, the court may disallow a request for extraordinary compensation even though some extraordinary services have been performed.” (Estate of Trynin, supra, at p. 874.)
Duke’s handling of the sale of the Oakland property may have ultimately resulted in a sale price higher than the original sale price involving Beverly but, as the lower court found, these services were not extraordinary. Duke’s lack of competence and misconduct prolonged the probate proceedings and delayed the final settlement of the estate. The court noted Duke’s incompetence in failing to have a probate court determine at the outset the enforceability of the contract addendum and the disposition of the Oakland property. Even after letters finally were issued, Duke never moved to resolve the status of the contract addendum. Further, the improper disbursements to the siblings and the failure to place the sale proceeds in an interest-bearing account were the result of Duke’s inadequate legal advice. Finally, as discussed more extensively below, Duke was not entitled to any extraordinary fees related to the Beverly action because that lawsuit did not benefit the estate.
The court did not abuse its discretion in refusing to award attorney’s fees under Probate Code section 10811 to Duke. Indeed, any compensation under this provision would have been an abuse of discretion, as Duke did not perform extraordinary services but violated the California Rules of Professional Conduct by not providing competent legal representation.
C. The Trial Court’s Denial of Attorney’s Fees Under the Doctrine of Quantum Meruit
Duke argues that she is entitled to attorney’s fees under the doctrine of quantum meruit. We, however, conclude that substantial evidence supported the lower court’s refusal to give Duke any attorney’s fees under this doctrine. (See, e.g., Watson v. Wood Dimension, Inc. (1989) 209 Cal.App.3d 1359, 1365-1366 [substantial evidence standard of review for quantum meruit].)
Duke maintains that she had an agreement with the four siblings to provide her compensation for the legal services rendered in the Beverly action. Duke does not understand the doctrine of quantum meruit. Where there is an express contract between the parties governing the compensation in question, quantum meruit will not lie because the law will not imply a promise to pay the reasonable value of the services at variance with the parties’ agreement. (Hedging Concepts, Inc. v. First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1419.)
Quantum meruit is an equitable theory of recovery based on the notion that where one renders services to another who benefits thereby, the person performing such services is entitled to receive reasonable compensation for the services even in the absence of an express contract requiring compensation. (Hedging Concepts, Inc. v. First Alliance Mortgage Co., supra, 41 Cal.App.4th at p. 1419.) Under such circumstances, a contract to pay for the services is implied by law for reasons of justice and to avoid unjust enrichment to the party for whose benefit the services are provided. (Ibid.)
The lower court found that the defense of the Beverly lawsuit was not for the benefit of the estate because “(a) there was no legal theory on which the estate could have been exposed to liability for the acts of Wilkins before she became the administrator and (b) no benefit was conferred upon the estate by any of Duke’s services in defense of the action.” Duke argues that the estate was exposed to liability for Wilkins’s acts because Wilkins was her siblings’ agent and the estate benefited from Duke’s representation because, among other reasons, the second sale was for more money. We consider each of these contentions.
1. No Agency Relationship
On July 29, 1999, Madison prepared a contract addendum for the sale of the Oakland property to Beverly. All four siblings, but not Beverly, signed this addendum, which stated that all of the proceeds of the sale would be disbursed equally among the four children at the close of escrow after the taxes had been deducted. Duke maintains that this created an agency relationship, and the siblings were jointly liable for Wilkins’s misrepresentations.
Initially, we note that this argument regarding agency is irrelevant to the issues on appeal. Even if Wilkins had acted with ostensible or actual authority on behalf of her siblings when selling the Oakland property to Beverly, her actions were not on behalf of the estate. Wilkins had not initiated any probate proceedings prior to the sale of the Oakland property to Beverly.
The trial court found that there was no evidence that any of the siblings “were aware that the 1982 reconveyance had actually been recorded, appreciated the impact that its recording would have on any attempted sale by Wilkins or understood how the will might affect their ability to proceed with the sale outside of probate.” Thus, the record did not contain evidence that McGee, Brown, or Robinson was involved in the misrepresentations at issue in the Beverly lawsuit.
In any event, the record does not support a finding of agency. Other than signing the contract addendum prepared by Madison, no family members other than Wilkins had any involvement in the sale. Nothing in this agreement created an agency relationship. This agreement merely established that the net profit would be divided evenly among the siblings. This agreement does not suggest that Wilkins was acting as an agent when attempting to sell the Oakland property.
2. No Benefit Conferred on the Estate
In the present case, the evidence was overwhelming that Duke’s services in defending Wilkins in the Beverly action conferred no benefit on the estate. Beverly’s lawsuit was not for specific performance. All of the causes of action in the lawsuit requested money damages against Wilkins, individually, and her real estate agent and the real estate broker for negligence, misrepresentation, and fraud. The claims arose prior to Wilkins’s appointment as administrator of the estate. The judgment was against Wilkins, individually, and therefore Duke’s defense of Wilkins in the Beverly lawsuit provided no benefit to the estate.
Duke argues that the reason Wilkins could not conclude the original sale to Beverly was that she lacked the money needed for the costly repairs specified in the contract addendum and selling the property with those repairs would have violated Probate Code section 10309, subdivision (a)(3). Duke asserts that the probate court would not have approved the sales contract because the sale amount of $118,000 plus the costs of repairs was less than 90 percent of the value of the property. Duke points out that she attempted to renegotiate the contract for a sum of $118,000 and to place a ceiling on the cost of repairs at $10,000, to be credited to the buyer at the close of escrow.
Robinson responds that the costs of repairs in sales of property are routinely paid out of escrow and therefore it was immaterial whether Wilkins had cash to pay for repairs. He also argues that the reappraisal for purposes of sale by the probate referee was $118,000 and this sum controls the 90 percent rule under Probate Code section 10309, subdivision (a). Thus, Robinson argues that the sale price Wilkins negotiated before she was appointed as administrator was within 90 percent of the appraised value.
We conclude that the questions of whether Robinson had sufficient cash to do the repairs and whether a probate court would have approved the sale are not relevant. Beverly did not sue for either of these reasons. Moreover, Beverly did not sue for specific performance, which potentially could have impacted the estate asset.
Beverly initiated the Beverly action because Wilkins and her real estate agent and broker fraudulently represented to Beverly that Wilkins held legal title to the Oakland property. The pleading further alleged: “In September, 1999, defendants . . . represented to plaintiff James Beverly that (a) defendant Shar’ron Wilkins held equitable title to the Property and/or had the authority to convey title to the Property insofar as legal title to the Property was held by Jessie Annie Bell McGee, deceased, defendant Shar’ron Wilkins’s mother; (b) that defendant Shar’ron Wilkins was the heir of Jessie Annie Bell McGee; and (c) that title to the Property could and would be conveyed to plaintiff James Beverly at the conclusion of probate proceedings that had been initiated by defendant Shar’ron Wilkins.” The pleading asserted that these representations were false and that the defendants knew they were false when they made them.
Thus, Beverly sued Wilkins and her real estate agent and real estate broker because of their misrepresentations regarding title to the property, not because the probate court would not approve the sale. Further, it is immaterial that the property later sold for $160,000, which was more than the original price. Duke proposes a number of reasons why the increased price benefited the estate and why that should result in her compensation. She is, however, requesting fees associated with the Beverly action and those fees have no relevance to whether the Oakland property eventually sold for a higher price. The Beverly action concerned the conduct of Wilkins and her real estate agent and broker, which occurred prior to submitting the will to probate.
Similarly, Duke’s argument that the siblings could have been sued by Beverly is immaterial. There is no evidence that the siblings knew about the misrepresentations made to Beverly. Further, if some or all of the siblings were aware of the misrepresentations and were potentially liable, they were liable as individuals. Their potential liability as individuals did not potentially impact the estate.
We conclude that Duke’s legal services related to the Beverly action did not confer any benefit on the estate and therefore she is not entitled to compensation for those services based on quantum meruit. Additionally, as already explained, Duke violated the California Rules of Professional Conduct and did not act competently. Accordingly, we uphold the lower court’s rejection of her claim that she was entitled to her fees under the doctrine of quantum meruit.
II. Wilkins’s Joint Liability for the $20,000 Paid to Duke
Wilkins contends that she used ordinary “care and diligence” as required by Probate Code section 9600 in managing the estate and therefore she should not be jointly liable with Duke for the $20,000 fee paid to Duke. She claims that she acted in good faith reliance on an agreement signed by all of the siblings, which provided for the $20,000 payment to Duke.
Wilkins, as the administrator, had a fiduciary relationship to her siblings, the other heirs to her mother’s estate. “[T]he executor or administrator occupies a fiduciary relationship in respect to all parties having an interest in the estate including heirs, beneficiaries under the will and creditors [citations] and, as a fiduciary, has the duty towards such parties to protect their legal rights in the estate [citations].” (Nathanson v. Superior Court (1974) 12 Cal.3d 355, 364-365.)
The trial court found that Wilkins breached her fiduciary duty as the administrator of the estate. “Application of the standards of fairness and good faith required of a fiduciary is a factual question for the trier of fact not subject to independent review.” (Biren v. Equality Emergency Medical Group, Inc. (2002) 102 Cal.App.4th 125, 138.)
Here, Wilkins in her personal capacity incurred legal expenses for her defense in the Beverly action. She then attempted to use estate funds to pay for that defense. The use of estate funds to pay for Wilkins’s personal obligations is a breach of her fiduciary duty. The proper measure of damages for the breach of a fiduciary duty is the full payment of the amount wrongfully taken. (See, e.g., Cal Pak Delivery, Inc. v. United Parcel Service, Inc. (1997) 52 Cal.App.4th 1, 13-15.) Thus, the evidence established that Wilkins breached her fiduciary duty and, since $20,000 was improperly paid for her defense in the Beverly lawsuit, she was liable for that amount plus interest.
Whether the administrator should be excused from being liable for the loss in the estate because of a breach of a fiduciary duty is left to the sound discretion of the trial court. (Prob. Code, § 9601.) Here, the trial court noted that courts have held that the “executor is responsible for the misconduct, negligence, or want of skill of [his or her] attorney.” (Highfield v. Bozio (1922) 188 Cal. 727, 729.) Further, Wilkins knew that her name was not on the grant deed and she acknowledged receiving the letter from McGee’s attorney informing her that the transfer of the Oakland property had to proceed through probate court. Moreover, Wilkins knew that the May 2003 agreement provided a $20,000 payment to Duke and was aware that Robinson did not want to pay Duke any fees related to the Beverly action. She did not tell Robinson about the attorney’s fees provision prior to his signing the agreement.
Probate Code section 9601 provides: “(a) If a personal representative breaches a fiduciary duty, the personal representative is chargeable with any of the following that is appropriate under the circumstances: [¶] (1) Any loss or depreciation in value of the decedent’s estate resulting from the breach of duty, with interest. [¶] (2) Any profit made by the personal representative through the breach of duty, with interest. [¶] (3) Any profit that would have accrued to the decedent’s estate if the loss of profit is the result of the breach of duty.
Accordingly, we conclude that the trial court did not abuse its discretion in concluding that, since Wilkins benefited from having the estate pay her defense costs and since she knew the estate was paying for this defense, she was jointly liable to return this sum to the estate.
III. Wilkins’s Liability for Failing to Place the Sale Proceeds into an Interest-bearing Fund
The trial court ruled that, as a fiduciary, Wilkins was responsible for the loss of interest suffered by the estate due to her failure to deposit the proceeds from the sale of the Oakland property into an interest-bearing account. The court also determined that the measure of damages was 10 percent per annum. Wilkins argues that the lower court incorrectly concluded that Probate Code section 9652, subdivision (a), imposes strict liability for failing to place the funds in an interest-bearing account. She maintains that she should not be liable because she acted in good faith. Additionally, she contends that Robinson failed to present evidence that a “blocked account” was an option in this case or evidence of the rate of interest that may have been paid. We consider each of these contentions.
A. Wilkins’s Assertion that She Acted in Good Faith
Probate Code section 9600, subdivision (a) provides: “The personal representative has the management and control of the estate and, in managing and controlling the estate, shall use ordinary care and diligence. What constitutes ordinary care and diligence is determined by all the circumstances of the particular estate.” With limited exceptions not applicable to the facts of this case, “the personal representative shall keep all cash in his or her possession invested in interest-bearing accounts or other investments authorized by law.” (Prob. Code, § 9652, subd. (a).)
It is undisputed that Wilkins breached her fiduciary duty by failing to place the sale proceeds from the Oakland property into an interest-bearing account as mandated by Probate Code section 9625, subdivision (a). Wilkins, however, argues that the trial court should not have imposed liability on her because she acted in good faith. She cites a number of cases predating the enactment of Probate Code section 9652 that state an administrator cannot be surcharged for actions detrimental to the value of an estate if the actions were undertaken reasonably and in good faith. (See, e.g., Estate of Armstrong (1899) 125 Cal. 603, 605 [“He appears to have acted in good faith and for what he deemed to be the best interest of the estate, and he could not legally be charged with the loss of the sum unless it had been made to appear that he was guilty of negligence in not using ordinary care and diligence in connection with the matter”].)
We agree that Wilkins is not automatically liable simply because she breached her fiduciary duty. However, we disagree that a finding of good faith always exempts the administrator from liability. Although a court must consider whether an administrator acted reasonably and in good faith, the court is not obligated to excuse the administrator from liability. (Prob. Code, § 9602, subd. (b).) The court, “in its discretion, may excuse” the administrator from liability if it concludes that the administrator “has acted reasonably and in good faith under the circumstances as known to the personal representative.” (Ibid., italics added.)
Here, Wilkins received a copy of and signed the form entitled, “Duties and Liabilities of Personal Representative.” The form contained the following language under the bold heading of “Interest-bearing accounts and other investments”: “Except for checking accounts intended for ordinary administration expenses, estate accounts must earn interest. You may deposit estate funds in insured accounts in financial institutions, but you should consult with an attorney before making other investments.”
Duke testified that she explained the foregoing form to Wilkins. Duke confirmed that Wilkins was aware and understood that the sale proceeds had to be placed in an interest-bearing account. Wilkins testified that she knew that Duke’s trust account did not bear any interest on the money placed in it.
Wilkins argues that both Duke and she relied upon the requirement imposed by the bonding agency and Duke testified that she was not aware that she had any option other than complying with the bonding agency’s demands. These facts must be balanced by the facts that Wilkins had been apprised by the form that an interest-bearing account was necessary. Wilkins, as the trial court found, should have made further inquiry about placing the funds into an interest-bearing account. Nothing in this record suggests that Wilkins asked about the fact that Duke’s account did not comply with the interest-bearing requirement.
Additionally, the court had to consider that there was no legal basis to charge Duke for the loss of interest income. Under the Probate Code, a surcharge may be imposed on the personal representative for losses resulting from a breach of fiduciary duty. “However, while the estate representative is empowered to employ an attorney to act in behalf of the estate [citations], no similar statutory authority exists to surcharge such attorney for estate losses due to negligence or misconduct for which the duly appointed representative is held exclusively accountable to the estate.” (Estate of Lagios (1981) 118 Cal.App.3d 459, 463.)
The evidence establishes that Wilkins understood that the sale proceeds had to be placed in an interest-bearing account and knew that Duke’s account was not interest-bearing. The record therefore supports a finding that Wilkins knowingly acted in a manner that was not in the best interest of the estate. Accordingly, we conclude the court did not abuse its discretion in concluding that Wilkins was not excused from liability.
B. The Basis for the Surcharge
Wilkins argues that she is not liable for failing to place the funds in an interest-bearing account because Robinson failed to establish that a “blocked account” would have satisfied the bonding agent. Further, she claims that Robinson failed to present any evidence at trial regarding the rate of interest that a bank or other entity may have paid on an estate interest-bearing bank account and therefore no evidence supported the court’s ruling that the interest would have accrued at 10 percent per annum.
We can easily dismiss Wilkins’s latter claim. Robinson did not need to present any evidence regarding the rate of interest because the interest rate for a breach of fiduciary duty is established by statute. Probate Code section 9602, subdivision (a) reads: “(a) If the personal representative is liable for interest pursuant to section 9601, the personal representative is liable for the greater of the following amounts: [¶] (1) The amount of interest that accrues at the legal rate on judgments. [¶] (2) The amount of interest actually received.” No interest was received; thus, subdivision (a) applies. Under Code of Civil Procedure section 685.010, subdivision (a), “Interest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied.” Thus, the interest imposed by the trial court complied with the statutes.
Although her argument is difficult to decipher, Wilkins appears to be arguing that Probate Code section 9601 does not apply. As already discussed, Probate Code section 9601, subdivision (a)(1), which sets forth the damages for breach of the fiduciary duty, applies to the facts of the present case.
Wilkins’s argument that the lower court’s ruling was unsupported by evidence because Robinson failed to present evidence that the bonding agent would accept a “blocked account” also merits little discussion. She maintains that Robinson had the burden of proving negligence and that he failed to meet his burden by establishing that a blocked account was available. It is true that Robinson had the burden of proof, but he met his burden by showing Wilkins breached her duty of care by not placing the money in an interest-bearing account. Moreover, blocked accounts are ordered by the probate court (Prob. Code, § 9703), and the purpose of placing funds in a blocked account is to avoid bond or to reduce the amount of the bond otherwise ordered by the court. (Prob. Code, § 8483, subds. (b)(1) & (2).) It was undisputed that neither Wilkins nor her attorney requested a blocked account from the probate court.
Probate Code section 9703 reads: “(a) Upon application of the personal representative, the court may, with or without notice, order that money or other personal property be deposited . . . and be subject to withdrawal only upon authorization of the court. [¶] (b) The personal representative shall deliver a copy of the court order to the financial institution or trust company at the time the deposit is made. [¶] (c) No financial institution or trust company accepting a deposit . . . shall be on notice of the existence of an order that the money or other property is subject to withdrawal only upon authorization of the court unless it has actual notice of the order.”
Accordingly, we uphold the lower court’s finding that Wilkins was obligated to the estate for failure to deposit estate funds in an interest-bearing bank account and the court did not err in fixing the measure of damages at the interest that would have accrued at 10 percent per annum.
On appeal, Wilkins does not address the trial court’s refusal to award her statutory personal representative commissions. She has therefore forfeited any challenge to this portion of the court’s judgment.
IV. Awarding Robinson Costs and Fees
The trial court ordered Wilkins to pay Robinson’s costs, including attorney’s fees, pursuant to Probate Code section 11003, subdivision (b). Probate Code section 11003, subdivision (b) states: “If the court determines that the opposition to the contest was without reasonable cause and in bad faith, the court may award the contestant the costs of the contestant and other expenses and costs of litigation, including attorney’s fees, incurred to contest the account. . . .”
Neither party addresses the standard of review, but the law is well settled that orders denying or granting an award of attorney’s fees are generally reviewed for abuse of discretion. (Walker v. Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1169.) However, the question of whether the criteria for an award of attorney’s fees have been met is one of law. (Ibid.)
A. Opposition to Robinson’s Objection was Unreasonable
As to the objective element of reasonable cause set forth in Probate Code section 11003, subdivision (b), the trial court found “that the opposition in this case was unreasonable for the following reasons: (a) the defense of the Beverly action was clearly not for the benefit of the estate; (b) Duke’s representations to the court in the filings and to counsel preceding the April 16 hearing were misleading and designed to disguise the nature of that case; and (c) Duke’s dealings with Robinson in March and May 2003 were indefensible . . . . To continue to defend these actions and force this matter to trial after all of these shortcomings were set forth in the April 27 objections and June 21 petition was patently unreasonable.”
As already discussed, we agree that the pleading in the Beverly action established that the defense of Wilkins did not benefit the estate. Additionally, once Wilkins received the form entitled “Duties and Liabilities of Personal Representative,” she could not have reasonably believed that she was not obligated by law to deposit estate funds in an interest-bearing bank account.
Wilkins claims that her action was reasonable because Robinson was seeking double damages pursuant to Probate Code section 859 in his petition and the court did reject this claim. Further, Robinson in his petition alleged that Duke and Wilkins embezzled and in bad faith took $20,000 from the estate. She claims that it was reasonable for her to defend against these claims. Additionally, she maintains that it was reasonable for her to argue that the agreement signed by Robinson in May 2003 was enforceable.
The trial court disallowed any costs associated solely with the drafting of the petition; thus, the court disallowed the costs related exclusively to Robinson’s request for double damages. An attempt to enforce the May 2003 agreement when Wilkins knew that Robinson was desperate for money and had voiced opposition to paying the extraordinary fees to Duke was unconscionable. Further, for the reasons already extensively discussed, Wilkins’s defense to Robinson’s objection to the account was objectively unreasonable.
B. Opposition to Robinson’s Objection was in Bad Faith
Probate Code section 11003, subdivision (b) also includes a bad faith element. With regard to the bad-faith prong, the trial court noted that this question would have been easy if applied to Duke, but the statute does not provide for an award of fees against the administrator’s attorney; the statute applies only to the administrator. Thus, the court had to consider Wilkins’s good or bad faith.
In deciding that the record established a finding of bad faith, the court noted that, “except for a cameo appearance as a witness, Wilkins did not even attend the trial and apparently abandoned her role as an active administrator after she filed her bankruptcy petition. From all appearances, the control of this entire proceeding has been in Duke’s hands, and as a correspondent she has vigorously opposed both the objection and the petition in large part because her receipt of the $20,000.00 in fees for Beverly (and the way she obtained it) had been at the heart of this controversy.”
The trial court emphasized that Duke and Wilkins did not have the same interests. The court explained: “The interests of Duke and Wilkins have not been aligned in this regard. While it is true that the allegations regarding Beverly and the payment of fees are directed at both respondents, Wilkins discharged any personal liability for those fees when she filed for bankruptcy. It is thus Duke who has had the greater interest in defending that payment because, if it were overturned, she would have no recourse against Wilkins. Wilkins, on the other hand, clearly just wants to be done with the whole estate and its burdens. Indeed, it would appear that she may be judgment proof, and thus the ultimate outcome of the contest may have no [e]ffect on her.”
The trial court, however, still found Wilkins acted in bad faith because she “had the power to put a stop to her counsel’s stubborn defense of the account. She could have directed counsel not to contest the April 27 objection or terminated her [services]. Instead, she has allowed this contest to proceed and thereby imposed costs on the objector. She must bear responsibility for that.”
Although we agree that the bad-faith prong is a difficult question, especially given the misconduct and poor advice Wilkins received from her attorney, we agree with the trial court that Wilkins was an active participant and therefore culpable. Nothing in this record indicates that Wilkins challenged any of the outrageous acts of her attorney and thus she bears responsibility for continuing this litigation. Accordingly, we affirm the lower court’s determination that Wilkins is responsible for costs and attorney’s fees under Probate Code section 11003, subdivision (b).
C. The Amount of Costs and Fees Awarded
The trial court found that the expenses and costs of litigation, excluding attorney’s fees, was $3,369.43. The court noted that Robinson requested $91,684.50 in attorney’s fees, based on an hourly rate of $285. The court found the hourly rate reasonable and pointed out that the $95 an hour rate proposed by Wilkins was unsupportable. The court concluded that 220 hours was a reasonable lodestar and the appropriate fee award was $62,700. Subsequently, the court amended its order to add $7,300 in fees for a total award of attorney’s fees in the amount of $70,000.
The trial court also stated that it had “considered the relatively modest amount of the estate but has concluded that this consideration does not justify a reduction of the fee award otherwise beneficiaries of modest estates would be hindered in their ability to retain counsel to pursue bona fide objections to accountings that were clearly inadequate and/or improper.”
On appeal, Wilkins does not challenge the hourly rate or the lodestar. However, citing Conservatorship of Levitt (2001) 93 Cal.App.4th 544, 549, Wilkins maintains that the trial court should have given more weight to the fact that the estate was modest. She claims that the trial court’s discounting the modest size of the estate because of its policy concerns “amounts to a vitiation of a factor which has an equitable bearing on the determination.”
The size of the estate is just one factor among many that the trial court may consider when determining attorney’s fees. “ ‘Every [probate] attorney should be fully and fairly paid for his [or her] services, having in mind their nature, their difficulty, the value of the estate, and the responsibility thus cast upon the counselor.’ ” (Estate of Trynin, supra, 49 Cal.3d at pp. 873-874.) Similarly, the Supreme Court in Estate of Beach (1975) 15 Cal.3d 623, 645, noted that the trial court “could properly consider not only the time spent but also such factors as the value of the estate, the skills exercised, the amount in dispute, and the results obtained.”
Here, the trial court’s decision establishes that it did consider the modest size of the estate, but concluded that the other policy considerations, namely protecting beneficiaries of small estates, took precedence. Further, it is not the estate, but Wilkins who must pay the fees. We conclude that the court gave a reasoned basis for its award and it did not abuse its discretion when ordering $70,000 in attorney’s fees.
V. Alleged Bias by Trial Court Against Duke
Duke claims that a new trial is warranted because the trial court demonstrated irregularity and bias towards her. The burden is on the complaining party to prove bias because “[i]t is presumed that official duty has been regularly performed.” (Evid. Code, § 664.)
Duke claims that the trial court exhibited bias against her when the judge asked her questions, which she claims were motivated to make her admit that she had intentionally taken a $94 overpayment on a fee owed to her by the estate. Duke protests that throughout her “attempts to explain the probate examiner’s error, the judge maintained his onslaught and launched repeated, abrupt and angry interruptions advising that he did not want to hear about the probate examiner’s errors.” Duke declares that by the end of the session she was in tears and needed a recess to recover from what she describes as the “judge’s badgering.”
Duke mischaracterizes the judge’s questioning. The judge said the following to Duke: “I don’t know if you’re telling me, Ms. Duke, whether or not on April 30 you, in fact, were paid that amount, or if that is an error. That’s the first thing. I don’t know what you’re telling me.” Duke responded that the petition was corrected to reduce the fee by $94 and the judge responded: “Ma’am, I’m just trying to get the basic facts.” The court then said that it was trying to determine whether she believed this was a proper payment or there was a clerical error. The court continued to ask Duke foundational questions because it could not understand Duke’s answers and because she had not set forth the events in chronological order. Indeed, when the court finally understood what had happened, the court stated: “All right. Thank you for giving me the chronology. Now I understand the chronology.” When Duke apologized, the court responded: “There’s no need to apologize. I was just trying to find out the chronology. And you were confusing me when I kept asking about what was happening in 2002 and you kept referring to 2003. And now I understand. Thank you. I was being dense about it.”
There was absolutely nothing wrong with the court’s questioning. The court was polite to Duke and would have been derelict in its duty if it had not clarified the matter.
Duke complains about various rulings of the court, including the court’s ruling that permitted Robinson’s attorney additional time to obtain certified records from Wilkins’s bankruptcy proceedings. Duke may disagree with these various rulings, but they exhibit no bias. There are two parties in litigation, and therefore a ruling will invariably favor one side. Duke also asserts that the judge told Robinson’s attorney to object to evidence she wanted admitted. Again, Duke misrepresents what happened; the court merely asked if there was any objection to having the documents being admitted.
Duke argues that there was a disparity in the rulings because the judge approved distributions to Robinson but disapproved of other distributions to other beneficiaries. According to Duke, these distributions were less than $10,000 and should have been approved under Probate Code section 10520. Again, simply because Duke disagrees with the court’s ruling does not indicate bias. Further, we note that Duke makes absolutely no citation to the record on appeal when making this argument and has therefore forfeited any challenge on this basis.
Duke also raises some issues related to the bankruptcy records, but this argument is muddled and never specifies the relationship between the bankruptcy records and alleged judicial bias. A portion of Duke’s discussion relates to her disagreement with the court’s rulings but, as already stressed, her disagreement with the court’s rulings does not establish bias.
Finally, Duke sets forth a hodgepodge of claims related to the trial court’s findings, such as the trial court’s findings that Dougherty’s testimony was credible. However, the court’s role is to weigh the evidence and to make credibility determinations.
Duke’s entire argument regarding bias is frivolous. The record establishes that the court was patient and courteous and we therefore reject her unfounded claims of judicial bias.
VI. Sanctions and Referral to State Bar
Robinson requested that we impose monetary sanctions in the amount of $75,495 against Wilkins and Duke for filing a frivolous appeal. (Cal. Rules of Court, rule 8.276(a)(1).) No opposition was filed to this motion.
We agree that Duke’s appeal was frivolous, especially given the lower court’s findings that she had committed multiple violations of California’s Professional Rules of Professional Conduct. Specifically, the trial court found Duke had violated the rules by meeting twice with a represented party without obtaining the attorney’s consent, by not revealing in her papers filed in the probate court the critical fact that Wilkins was sued in her personal capacity, and by taking on the representation of an estate case without having sufficient learning and skill in this area. To discourage further frivolous conduct and to compensate for the loss resulting from this action we order Duke to pay sanctions to Robinson in the amount of $20,000.
We do not impose sanctions against Wilkins, because we conclude that her appeal was not frivolous. However, Duke’s representation of Wilkins in this appeal appears to be a clear conflict of interest, especially given the lower court’s findings that Wilkins’s liability was principally due to her attorney’s inadequate and/or improper advice. We do not in this forum make the determination whether there was in fact a conflict of interest, but we consider it appropriate to refer the matter to the State Bar of California for further investigation of this apparent conflict. (See Bus. & Prof. Code, § 6086.7.) We recognize that Duke’s apparent conflict of interest with her client is not the subject of mandatory reporting. However, this misconduct considered with Duke’s various acts of misconduct in the proceedings below is serious and merits review by the appropriate disciplinary body.
DISPOSITION
The judgment is affirmed. Not later than 30 days from the issuance of the remittitur, Duke shall pay to Robinson the sum of $20,000 as sanctions for prosecuting a frivolous appeal (Code Civ. Proc., § 907; Cal. Rules of Court, rule 8.276(a)(1) & (2)), and report the sanctions order to the State Bar of California (Bus. & Prof. Code, § 6068, subd. (o)(3)). The clerk of this court is directed to send a copy of this opinion to the State Bar of California upon the issuance of the remittitur. (Bus. & Prof. Code, § 6086.7, subd. (a)(3).) Duke is to pay the costs of appeal.
We concur: Kline, P.J., Richman, J.
Additionally, with regard to Wilkins’s liability for the loss of interest due to the failure to deposit the sale proceeds into an interest-bearing account, the court noted that Wilkins’s error “may also be attributable to Duke’s advice” but Wilkins was on notice because she signed the “Duties and Liabilities of Personal Representative” form. The court further explained that Wilkins’s failure “was primarily the result of Duke’s actions or inactions. No reasonable attorney would simply have acceded to the surety’s request regarding depositing funds in his or her trust account instead of seeking permission to deposit the funds in a blocked account.” The court further commented that Duke violated the California Rules of Professional Conduct “by taking on the representation of this estate when she had insufficient learning and skill to do so and apparently did not associate or consult with another lawyer reasonably believed to have such competence.”
Finally, the court concluded: “As for Wilkins, she clearly failed in her duties as an administrator. . . . In most cases, those failings were due to her complete reliance—indeed, in light of her obvious lack of sophistication or experience in these matters, dependence—on Duke. But given all the failures and shortcomings, it is fair to say that she has not earned a right to claim any portion of the statutory fee.”
“(b) If the personal representative has acted reasonably and in good faith under the circumstances as known to the personal representative, the court, in its discretion, may excuse the personal representative in whole or in part from liability under subdivision (a) if it would be equitable to do so.”