Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
San Benito County Super. Ct. No. PR936671
RUSHING, P.J.
Introduction
In this appeal, an attorney complains that he has been inadequately compensated for extraordinary services rendered to the personal representative of a probate estate. The will of Patricia Louise Ott (decedent) was admitted to probate in November 1994. This is the fifth appeal this court has considered arising out of this estate, resulting in three prior unpublished opinions.
Ott v. Superior Court and Ott v. Tucker (Aug. 27, 2006, H013852, H014058) [nonpub. opn.]; Estate of Ott (May 22, 2002, H021249) [nonpub. opn.]; Estate of Ott (Feb. 27, 2007, H029348) [nonpub. opn.]. Due to similarity of these appeal names, we will refer to them by the lead appeal numbers.
In September 2005, James Simoni (attorney), attorney for Betty Tucker, personal representative of decedent’s estate, filed a petition for compensation of extraordinary services, seeking fees of $151,854.20 in addition to the $11,887.04 he calculated is due for the statutory “ordinary” services. (Prob. Code, § 10810.) This petition was filed prior to either a final accounting or a petition for distribution of the estate. A preliminary accounting in December 2003 valued the estate at $200,208.81. On appeal, attorney asserts that the probate court abused its discretion in awarding him only $29,175.25 for extraordinary fees. For the reasons stated below, we will affirm the award.
Attorney’s petition offered to take $120,000 for compensation for both extraordinary and ordinary services unless one of the heirs objected to his claim. The heirs objected.
Unspecified section references are to the Probate Code.
The court also ordered attorney and the personal representative to show cause why the estate has not been distributed and closed.
The Claim for Compensation for Extraordinary Services
Attorney asserts that he has been compelled to render a number of extraordinary services in response to continuous opposition by decedent’s disinherited husband, Joel Dan Ott, who once vowed to exhaust the value of the estate in litigation. Attorney submitted a 178-page itemization of time and expenses related to this estate. He summarized his services and totaled his hourly fees under eleven separate headings, which we set out in a table. Attorney’s hourly fee was $175 from 1994 until 2001, $200 until July 2004, and $250 thereafter.
This table reflects attorney’s petition in including the total fees but not the costs related to each heading.
$12,132.00
Will contest
1/1994 through 7/1995
$12,361.00
Property division in dissolution
2/1994 through 5/1995
$5,892.50
Defense of suit to set aside deed
3/1994 through 12/1997
$20,509.50
Appeals in above actions
4/1995 through 11/1996
$473.00
Injunction
8/1995 through 11/1995
$15,237.10
Petition to quiet title
9/1996 through 6/2000
$23,424.10
Defense of quiet title ruling
7/2000 through 11/2002
$9,803.00
General litigation
5/1994 through 12/1998
$12,191.50
Fees for property sale
Unlawful detainer
6/2002 through 11/2003
$36,522.50
Petition to approve account
12/2003 through 4/2005
This summary describes the dates of the main services provided by attorney. His itemization of the will contest also includes one letter in January 1997. His itemization of the defense of suit to set aside deed includes two telephone calls and drafting a pleading in 1999. The property sale efforts primarily occupied two distinct time periods, February 1994 through April 1994 and May 2002 through November 2003.
Attorney’s original petition sought fees of $3,308 for the unlawful detainer. His brief on appeal acknowledges that half of this amount should be charged to Joel Ott as co-owner of the residence, although he has miscalculated half to be $1,650.40. His request for fees on appeal is therefore reduced by a small amount from that submitted to the trial court. Attorney has not similarly halved his request for fees involved in selling the residence.
We consider attorney’s explanation of these headings in the context of our prior opinions. As stated in our original opinion, decedent got “married in 1967. Patricia was diagnosed with cancer on February 3, 1993. Before undergoing surgery on March 29, 1993, she wrote and had witnessed a will which left her estate to her children and expressly disinherited her spouse, Joel Ott. She filed for dissolution of the marriage on May 28, 1993.” (Ott v. Superior Court and Ott v. Tucker, supra, H013852, H014058.) On September 14, 1993, decedent signed and recorded a deed purporting to sever her joint tenancy in their Hollister residence (severance deed). She died on November 30, 1993.
After decedent’s death, husband filed an objection to the probate of her will, filed a complaint to set aside the severance deed, petitioned for a probate homestead, and filed a complaint to remove Betty Tucker as the special administrator. (Ott v. Superior Court and Ott v. Tucker, supra, H013852, H014058.) In February 1994, the parties agreed in the probate action that the special administrator would set up an account for income from estate properties. In April 1994, the parties agreed to consolidate the dissolution and probate actions in San Benito Superior Court. In November 1994, the court admitted the will to probate, denied the probate homestead, and appointed Tucker as the special administrator. (She later became the personal representative.) In December 1994, in an action that was not consolidated, the court declared decedent’s purported severance deed void as in violation of standard dissolution restraining orders. In January 1995, in the consolidated actions, the court declared the marriage dissolved as of decedent’s death and characterized all marital property as community.
These rulings were challenged in the first set of appeals, Ott v. Superior Court, supra, H013852 (which was actually a mandate petition) and Ott v. Tucker, supra, H014058. Our opinion, filed August 27, 1996, concluded in part that the dissolution action abated upon decedent’s death. “Accordingly the superior court lacked power in the dissolution action to adjudicate property rights in the house. Also, a fortiori, it lacked power to enter the judgment of dissolution of the marriage. The rights of petitioner and decedent in the property are not subject to adjustment in the abated dissolution action, but rather must be established outside that action according to the state of the title at the time of decedent’s death.” We observed that upon the death of a spouse, the nature of a property interest is presumed to be as described by the deed, not by community property law. Until the estate brought an action to establish otherwise, the residence was presumptively joint tenancy property that passed to husband upon decedent’s death. We upheld the order declaring void the purported severance deed.
The legal work leading up to our first opinion is described under attorney’s headings “dissolution property division,” “defense of suit to set aside deed,” and “defense of writ of mandate and appeal of deed set aside.” (Capitalization omitted.)
When the matter returned to the trial court, the estate petitioned the probate court to recognize decedent’s community and separate interests in certain property. After a trial, in April 2000, the court characterized the residence and a promissory note as community property and a pension as husband’s separate property. The court found that decedent had no separate interest in the residence. (Estate of Ott, supra, H021249.) Husband and the estate both appealed from this judgment, leading to our second opinion in Estate of Ott, supra, H021249, filed May 22, 2002. We upheld each of the court’s determinations, except as to decedent’s separate interest in the residence. We found that husband had conceded that decedent had contributed $12,000 from an inheritance to purchase the residence and had a corresponding separate interest in that amount.
The legal work leading up to our second opinion is described under attorney’s headings “petition to quiet title and transfer” and “defense of quiet title ruling.”
According to attorney, he has performed some legal work related to the residence that has not resulted in an appeal or even litigation. In late 1995, the estate obtained an injunction keeping husband away from the residence. In June 2002, the personal representative filed an unlawful detainer action to evict the tenants from the residence. The property was cleaned up and sold for $560,000 in November 2003.
In December 2003, the personal representative filed a petition seeking approval of her accounting for amounts due to husband in her role as trustee of community property. She also sought fees from husband to compensate her as a trustee for managing property for him and as personal representative for causing protracted litigation. In June 2004, the court assessed husband attorney fees of $1,650 and costs of $1,500. In January 2005, the court approved an interim accounting. In July 2005, the court approved a final accounting “of the court created trust” in favor of husband, finding that he had received distributions of all his trust property. Tucker was discharged from her duties as trustee. Husband appealed from this order, resulting in our third opinion, Estate of Ott, supra, H029348, filed February 27, 2007. That opinion concluded that husband was not entitled to (a) an advisory opinion from this court about the resjudicata effect of this order in other pending actions or (b) a ruling by the trial court on an unasserted claim of trustee mismanagement.
It is this petition to approve account and assess fees that comprises attorney’s final heading of services.
Attorney also has a catchall category called general litigation, which “includes the defense against [husband’s] Petitions to remove the personal representative, the request to set aside a probate homestead, and a myriad of in pro per motions for accountings, requests for funds, for permission to live in the house.” Among those fees was $2,012.50 for 11.5 hours of work in 1998 at $175 per hour in researching and drafting points and authorities regarding disqualification of a judge.
Attorney’s Entitlement to Fees for Extraordinary Services
An attorney is not ordinarily entitled to compensation in advance of the final distribution of the estate unless good cause is shown. (§ 10832.) In awarding attorney $29,175.25 for extraordinary fees, the trial court implicitly found that good cause was shown.
For an award of extraordinary compensation prior to final distribution, section 10832 requires a showing of good cause (subd. (c)), such as when “(a) It appears likely that administration of the estate will continue, whether due to litigation or otherwise, for an unusually long time” or “(b) Present payment will benefit the estate or the beneficiaries of the estate.”
Section 10811 states in part: “(a) Subject to the provisions of this part, in addition to the compensation provided by Section 10810, 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.”
California Rules of Court, rule 7.703(a) states in part: “An award of extraordinary compensation to the personal representative or to the attorney for the personal representative is within the discretion of the court. The court may consider the amount of statutory compensation when determining compensation for extraordinary services.”
Rule 7.703, which was adopted effective in 2003 after most of the services were rendered in this case, provides an illustrative list of services which may merit extraordinary compensation.
We quote at length the applicable law summarized in Estate of Trynin (1989) 49 Cal.3d 868 at pages 873-874: “For conducting ‘the ordinary probate proceedings,’ an attorney is compensated in the same amount allowed as a commission to the estate representative [citation], which is determined as a percentage of the estate’s value [citation]. Fees for extraordinary services, on the other hand, are not determined by a fixed formula but instead require the exercise of judicial discretion to determine what amount is ‘just and reasonable’ [citation]. (Estate of Fraysher (1956) 47 Cal.2d 131 . . .; Estate of Turino (1970) 8 Cal.App.3d 642, 648-649 . . . .) Because the attorney’s right to compensation is founded upon statute, the court, in determining the amount due an attorney for extraordinary services to an estate, is not bound by the terms of compensation specified in a contract of employment between the attorney and the estate’s representative, such compensation provisions being generally unenforceable. (Chapman v. Pitcher ([1929]) 207 Cal. 63, 69; Hatch v. Bush ([1963]) 215 Cal.App.2d 692, 705.)
“As this court has stated, ‘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 Byrne (1898) 122 Cal. 260, 266 . . . .) Other factors which may be considered by the court in determining compensation for extraordinary services include the nature of the estate assets and the amount awarded as ordinary compensation. (Estate of Walker (1963) 221 Cal.App.2d 792, 795 . . . .) 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. (Ibid.; see also, Estate of Fulton (1937) 23 Cal.App.2d 563, 567 . . . .)
“Although benefit to the estate is one of the factors to be weighed by the court in fixing compensation (Estate of Stokley (1980) 108 Cal.App.3d 461, 473 . . .; Estate of Briggs (1964) 230 Cal.App.2d 592, 595 . . .), an attorney may be entitled to compensation even though the extraordinary services rendered ‘turn out to be entirely valueless’ (Estate of Merritt (1950) 98 Cal.App.2d 70, 76 . . .; see also, Estate of Turino, supra, 8 Cal.App.3d 642, 648-649). Services that do not directly benefit the estate in the sense of increasing, protecting, or preserving it are nonetheless compensable if the estate’s attorneys or representatives in performing the services were ‘acting in consonance with the fiduciary duties imposed upon them’ (Ludwig v. Superior Court (1933) 217 Cal. 499, 500 . . .).”
Factors relevant to a claim for extraordinary compensation are set out in California Rules of Court, rule 7.702, as follows. “A petition for extraordinary compensation must include, or be accompanied by, a statement of the facts upon which the petition is based. The statement of facts must:
The probate court’s authority to attach varying degrees of significance to the benefit to the estate illustrates that the amount of the extraordinary compensation, if any, is a matter consigned to the trial court’s discretion. Estate of Fulton, supra, 23 Cal.App.2d 563 explained long ago at page 567 that the statutory scheme “leaves the matter within the sound discretion of the trial court, and does not make it mandatory upon the court to grant extra allowance of fees on account of services. In making such allowance or disallowing a claim therefor, the trial court necessarily takes into consideration the value of the estate, the work performed by the attorney in the routine administration thereof, and the amount to which the attorney would legally be entitled, calculated according to the provisions of the Probate Code, and if the sum allowed by law appears to be a reasonable compensation, even though the attorney may have performed some extraordinary services, it is within the sound discretion of the trial court to disallow claims for extra compensation, and unless it appears that there has been an abuse of discretion, an appellate court is not at liberty to disturb the conclusion of the trial court.” (Quoted by Estate of Hilton (1996) 44 Cal.App.4th 890, 918-919, and Estate of Stevenson (2006) 141 Cal.App.4th 1074, 1091.) “An attorney who prosecutes an appeal from an order addressed to the trial court’s sound discretion is confronted with more than a daunting task. This is an uphill battle . . . .” (Estate of Gilkison (1998) 65 Cal.App.4th 1443, 1448.)
Attorney is requesting an award of over 80 percent of the value of the estate as both ordinary and extraordinary compensation. He recognizes that the award of extraordinary compensation is within the probate court’s discretion. To establish an abuse of discretion, he asserts that the only reason he did not resign as attorney for the personal representative on two occasions was that “at all times in the litigation the heirs [Jeff Battelle, Lisa Battagliola, and Dan Ott] told the attorney that they would pay his full fee as billed if he continued,” even if it consumed the entire estate. (Emphasis omitted.) He also asserts that “[t]he estate agreed the attorney would be paid at his hourly rate.” He claimed to have reached an understanding at some unidentified time with the heirs and the personal representative that his fee would be $120,000.
At the hearing, there was substantial evidence that there was no such agreement with the heirs. Battagliola agreed that at some time she had told attorney that he would be paid if he remained on the case even if it consumed the entire estate, but she said that “[t]he boys didn’t ever want to do that.” Battelle testified that he never guaranteed attorney any amount of monies. “We don’t decide what he gets, and that’s not true, we didn’t agree to pay him $120,000.” More importantly, as attorney acknowledges in his reply brief, “An agreement between the personal representative and the attorney for higher compensation for the attorney than that provided by this part is void.” (§ 10813.) The amount of extraordinary compensation is determined by the court, not by the personal representative or the heirs. Attorney concedes that the probate court would not be bound by any fee agreement he made with the personal representative or the heirs and that he is not claiming that the heirs retained him. (Compare Estate of Lagersen (1962) 210 Cal.App.2d 788, 795.)
Attorney also asserts that “on this set of facts it is by definition an abuse of discretion to award an amount that could not give the attorney doing the work a profit.” “The attorney must be allowed a profit when he has performed successfully.” (Emphasis omitted.) He also reiterates the principle that attorneys may recover for extraordinary services that result in no benefit to the estate.
Attorney also appears to argue that the trial court should have given him a cost markup. “As shown above, the total fees rendered were $184,832.70. An office using a 50% cost markup yields costs of $138,624.52. An office using a 100% cost markup would have had costs of $92,416.35. Even considering the award of statutory fees the fee award would not cover more than ½ the costs.”
Attorney cites no authority requiring probate attorneys to obtain a profit on every case they handle. Estate of Buchman (1955) 138 Cal.App.2d 228 explained: “The personal representative and his attorney are entitled to statutory fees as a matter of right, and the fact that the estate is a simple one and the fees larger than would be adequate compensation for the work involved, does not affect the right to the full statutory compensation. Conversely, if the estate is more complicated and requires more work, effort and skill than is required in the simple estate, that does not change the nature of the services from ordinary to extraordinary. Those undertaking the duties of offices of this character take the bitter with the sweet.” (Id. at p. 235.) Without questioning that attorney put in the hours he claims, the trial court may have justifiably questioned the need for all the hours (Estate of Briggs (1964) 230 Cal.App.2d 592, 595; Estate of Gopcevic (1964) 228 Cal.App.2d 280, 282) in the context of a modest estate (Estate of Stevenson, supra, 141 Cal.App.4th 1074, 1091) and whether each of the services qualified as extraordinary (Estate of Buchman, supra, 138 Cal.App.2d at pp. 235-236).
Attorney asserts that payment of attorney fees is among the estate debts of the highest priority under section 11420. Estate of Stevenson, supra, 141 Cal.App.4th 1074 rejected the same argument. “Under section 11420, administrative expenses, which include attorney fees, must be paid before the estate pays general creditors like the lenders.” (Id. at p. 1090.) “But section 11420 controls only the priority of payment, that is, the order in which various types of expenses are to be paid, not the amount. The statute dictates who gets paid first, second, and on down the line. It does not govern how much anyone is to be paid or how any particular amount is to be calculated. Rather, the trial court first determines the amount of attorney fees by applying criteria specified elsewhere . . . .” (Ibid.; italics in original.)
Section 11420 provides: “(a) Debts shall be paid in the following order of priority among classes of debts, except that debts owed to the United States or to this state that have preference under the laws of the United States or of this state shall be given the preference required by such laws:
Attorney also argues that the trial court failed to make the findings required by section 12205, which provides in pertinent part: “(a) The court may reduce the compensation of the personal representative or the attorney for the personal representative by an amount the court determines to be appropriate if the court makes all of the following determinations:
“(1) The time taken for administration of the estate exceeds the time required by this chapter or prescribed by the court.
“(2) The time taken was within the control of the personal representative or attorney whose compensation is being reduced.
“(3) The delay was not in the best interest of the estate or interested persons.
“(b) An order under this section reducing compensation may be made regardless of whether the compensation otherwise allowable under Part 7 (commencing with Section 10800) would be reasonable compensation for the services rendered by the personal representative or attorney.”
This statute, of course, has nothing to do with the award of extraordinary compensation. Since extraordinary compensation is discretionary, unless the court has already awarded it, there is no established amount subject to reduction and no need for an order reducing compensation.
In any event, attorney missed the opportunity to obtain findings. At the hearing on the motion, the following colloquy occurred.
“THE COURT: Okay. I have a related question. Do I need to make a finding of fact and conclusion of law in regards to this kind of a motion?
“[ATTORNEY]: Well, Your Honor, no one has requested a statement of decision. We don’t do findings of fact and conclusions of law anymore. We do a statement of decision. Generally the court is empowered to do one on their own if they want, I believe.
“THE COURT: Normally I ask all sides to prepare a proposed one if they wish. I would invite you to do the same if you wish.
“[ATTORNEY]: Okay.”
This noncommittal acknowledgement of the court’s invitation is a far cry from a request by attorney for a statement of decision “prior to the submission of the matter for decision.” (Code Civ. Proc., § 632.) His failure to request a statement of decision forfeits this contention on appeal. (Estate of Heller (1992) 7 Cal.App.4th 862, 868.) We decline attorney’s invitation to disagree with Heller.
Disposition
The order awarding extraordinary compensation is affirmed. Attorney’s request for fees for prosecuting this appeal is denied.
WE CONCUR: PREMO, J., ELIA, J.
On June 12, 2006, we granted appellant’s request to take judicial notice of two declarations filed in connection with the first set of appeals. The parties have not asked this court by separate motion to take judicial notice of the records of our prior opinions (Cal. Rules of Court, rule 8.252), but appellant did ask the San Benito County Superior Court to take judicial notice of “the proceedings” in six of its cases and three related appeals. We are entitled to take judicial notice of anything noticed by the trial court. (Evid. Code, § 459, subd. (a).)
Section 10810 states in relevant part: “(a) Subject to the provisions of this part, for ordinary services the attorney for the personal representative shall receive compensation based on the value of the estate accounted for by the personal representative, as follows:
“(1) Four percent on the first one hundred thousand dollars ($100,000).
“(2) Three percent on the next one hundred thousand dollars ($100,000).
“(3) Two percent on the next eight hundred thousand dollars ($800,000).
“[¶] . . . [¶]
“(b) For the purposes of this section, the value of the estate accounted for by the personal representative is the total amount of the appraisal of property in the inventory, plus gains over the appraisal value on sales, plus receipts, less losses from the appraisal value on sales, without reference to encumbrances or other obligations on estate property.”
Attorney has calculated the value of his ordinary services based on a total estate value of $444,352.45.
“(c) Examples of extraordinary services by attorney
“The following is a nonexclusive list of activities for which extraordinary compensation may be awarded to the attorney for the personal representative:
“(1) Legal services in connection with the sale of property held in the estate;
“(2) Services to secure a loan to pay estate debts;
“(3) Litigation undertaken to benefit the estate or to protect its interests;
“(4) Defense of the personal representative’s account;
“(5) Defense of a will contested after its admission to probate;
“(6) Successful defense of a will contested before its admission to probate;
“(7) Successful defense of a personal representative in a removal proceeding;
“(8) Extraordinary efforts to locate estate assets;
“(9) Litigation in support of attorney’s request for extraordinary compensation, where prior compensation awards are not adequate compensation under all the circumstances;
“(10) Coordination of ancillary administration; and
“(11) Accounting for a deceased, incapacitated, or absconded personal representative under Probate Code section 10953.”
“(1) Show the nature and difficulty of the tasks performed;
“(2) Show the results achieved;
“(3) Show the benefit of the services to the estate;
“(4) Specify the amount requested for each category of service performed;
“(5) State the hourly rate of each person who performed services and the hours spent by each of them;
“(6) Describe the services rendered in sufficient detail to demonstrate the productivity of the time spent; and
“(7) State the estimated amount of statutory compensation to be paid by the estate, if the petition is not part of a final account or report.”
Attorney’s math is wrong. Moreover, we do not understand why he is speculating about his costs, which we calculate to total $13,786.66 based on his itemization.
“(1) Expenses of administration. With respect to obligations secured by mortgage, deed of trust, or other lien, including, but not limited to, a judgment lien, only those expenses of administration incurred that are reasonably related to the administration of that property by which obligations are secured shall be given priority over these obligations.
“(2) Obligations secured by a mortgage, deed of trust, or other lien, including, but not limited to, a judgment lien, in the order of their priority, so far as they may be paid out of the proceeds of the property subject to the lien. If the proceeds are insufficient, the part of the obligation remaining unsatisfied shall be classed with general debts.
“(3) Funeral expenses.
“(4) Expenses of last illness.
“(5) Family allowance.
“(6) Wage claims.
“(7) General debts, including judgments not secured by a lien and all other debts not included in a prior class.
“(b) Except as otherwise provided by statute, the debts of each class are without preference or priority one over another. No debt of any class may be paid until all those of prior classes are paid in full. If property in the estate is insufficient to pay all debts of any class in full, each debt in that class shall be paid a proportionate share.”