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In re Estate of Lopez

Court of Appeal of California
Sep 4, 2008
No. B200549 (Cal. Ct. App. Sep. 4, 2008)

Opinion

B200549

9-4-2008

Estate of PAT Z. LOPEZ, Deceased. THOMAS B. McCULLOUGH, JR. Plaintiff and Respondent, v. ZURAMA EVELYN LOPEZ, Defendant and Appellant.

Law Offices of Robert S. Scuderi and Robert S. Scuderi, for Defendant and Appellant. Law Offices of Thomas B. McCullough, Jr. and Lauriann Wright, for Plaintiff and Respondent.

Not to be Published


This appeal is from an order of the probate court awarding extraordinary fees to the attorney for the personal representative of the estate of Pat Lopez (decedent).

Until several years before her death, decedent operated the El Sombrero Nightclub out of a building she owned at 4712 Lankershim Boulevard in North Hollywood (the real property). Decedent died intestate on August 5, 2002, leaving an estate of about $1 million. The beneficiaries were her three surviving siblings and three minor children represented by appellant Zurama Evelyn Lopez, their guardian ad litem.

A. The Appraisals and Accountings

James Morgan, who was appointed administrator of the estate on November 4, 2002, filed a partial inventory and appraisal on December 23, 2003, and a final inventory and appraisal on January 7, 2004. According to those documents, the estate had a total value of $1,124,728.44.

Morgan filed a "First and Final Account" on May 20, 2004.

On March 4, 2005, the probate court suspended Morgans powers of administration. On May 6, 2005, it revoked Morgans administrative authority and ordered him to pay sanctions in the amount of $1,238.00. Jeffrey Siegel was later appointed to succeed Morgan as administrator of the estate.

After Morgan was removed as administrator, the probate court ordered him to file an accounting covering the period of decedents death through May 6, 2005. Morgan filed the court ordered accounting on November 10, 2005 (the 2005 accounting). Siegel filed objections to the 2005 accounting. Appellant joined in Siegels objections.

While litigation over the adequacy of Morgans accountings was pending, the heirs stipulated to distribution of the estate: 82 percent to appellant as guardian ad litem for the children and 18 percent to the decedents siblings. On February 17, 2006, the probate court approved the settlement agreement.

B. The Trial

Morgan was represented at the August 25, 2006, trial on approval of the accountings by the Law Offices of Thomas B. McCullough, Jr. (McCullough). The probate court declined to approve the 2005 accounting and ordered Morgan to file a revised accounting. It also directed appellants attorney to list the items for which appellant believed Morgan should be surcharged.

Also on this date, over appellants objection, the probate court awarded the following extraordinary fees to Morgans former attorneys: $45,017 to Edwards and $21,391.42 to Vaughn.

C. Surcharges

Morgan timely filed a "Revised First and Final Account" on September 25, 2006. On October 10, 2006, appellant filed the list of surcharges. Appellant requested that Morgan be surcharged: $50,000.00 (the appraised value of the nightclub furniture, the disposition of which was inadequately explained in the accountings); $7,393.05 (costs associated with investigating "stolen cars" which do not appear on the inventories); $1,600.00 (costs associated with renting office space for the administrator); $2,000.00 (costs associated with reappraising the real property). Morgan opposed the request for surcharge.

On November 17, 2006, the probate court approved the revised final accounting. Although it declined to surcharge Morgan $50,000 for the furniture, it did surcharge him $10,993.05 comprised of: $7,393.05 (costs of investigation reports); $1,600.00 (office rental); and $2,000.00 (appraisal).

D. The Extraordinary Fees Petition

On January 19, 2007, McCullough filed a petition for extraordinary attorneys fees in the amount of $14,772.30 plus costs in the amount of $461.02 (a total of $15,233.32) for 62.9 hours of services performed between August 10, 2006 and December 28, 2006. According to the petition, McCullough substituted in for Morgans prior counsel on the day of trial, prepared and filed the court ordered revised final accounting, prepared and filed the supplement to the revised final accounting, filed objections to appellants list of surcharges, represented Morgan at the hearing on the surcharges, and filed objections to the proposed statement of decision. Appellant objected to the petition — not on the grounds that the amount of fees were unjust or unreasonable — but on the sole grounds that the accounting contest was not without reasonable cause and in bad faith within the meaning of Probate Code section 11003, subdivision (a). The successor administrator joined in the objections. In his reply, McCullough argued that Probate Code section 10811, not section 11003, governed the issue of attorneys fees in this case.

All future undesignated statutory references are to the Probate Code.

At the hearing on the petition, counsel for appellant maintained that fees were not appropriate under section 11003. The probate court granted the petition observing: "Im going to approve the fees as prayed. [¶] . . . Everybody earned them." Accordingly, McCullough was awarded fees in the amount of $14,772.30 plus costs in the amount of $461.02.

Appellant filed a timely notice of appeal.

DISCUSSION

Appellants sole contention on appeal is that the trial court erred in awarding attorneys fees to Morgans trial counsel. She argues that McCullough failed to show that the accounting contest was without reasonable cause and in bad faith — the grounds for a fee award under section 11003. The flaw in appellants argument is that she fails to recognize the distinction between section 10811, which governs an award of attorneys fees for extraordinary services, and section 11003, which governs an award of fees for a contest brought or defended without reasonable cause and in bad faith. It is the former statute which applies here.

Section 10810 governs the compensation of the attorney for the personal representative for conducting ordinary proceedings. Such compensation, which is awarded out of estate assets, is based on a percentage of the dollar value of the estate. (Miller v. Campbell, Warburton, Fitzsimmons, Smith, Medel & Pastore (2008) 162 Cal.App.4th 1331, 1339 (Miller) ["A probate court must order compensation out of estate assets for routine probate services rendered by [the personal representatives] attorney."].)

In addition to compensation for ordinary proceedings, section 10811 gives the probate court discretion to allow additional compensation from estate assets "for extraordinary services by the attorney for the personal representative in an amount the court determines is just and reasonable." (§ 10811, subd. (a); Miller, supra, 162 Cal.App.4th at p. 1339.) This is known as an "extraordinary fee." (Estate of Gilkison (1998) 65 Cal.App.4th 1443, 1446, fn. 1 (Gilkison).) Examples of extraordinary services for which an attorney may be entitled to extraordinary fees are set forth in California Rules of Court, rule 7.703. Two such services are defense of the personal representatives account and litigation in support of an attorneys request for extraordinary compensation. (See e.g. Miller, supra, at p. 1339 [attorney fees incurred to defend the personal representative in his representative capacity are properly considered an expense of administration, payable only out of the estate and are not a personal charge against the personal representative]; In re Beirachs Estate (1966) 240 Cal.App.2d 864, 868 [award of attorneys fees incurred in defending accounting was proper]; see also Estate of Trynin (1989) 49 Cal.3d 868 [attorney fees incurred in defending an attorneys fee claim are chargeable against the estate].)

In exercising its discretion to award extraordinary fees, the probate 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 . . . ." [Citation.]" (Estate of Stevenson (2006) 141 Cal.App.4th 1074, 1091 (Stevenson), original italics deleted; see also 14 Witkin, Summary of Cal. Law (9th ed. 1990) Wills and Probate, § 538, p. 617.) Absent a showing that the probate court abused its discretion, its grant or denial of extraordinary fees will not be disturbed on appeal. (Gilkison, supra, 65 Cal.App.4th at pp. 1448-1449; see also Estate of Beach (1975) 15 Cal.3d 623, 645 [award of extraordinary fees "must be upheld unless they appear so clearly out of proportion to the services performed as to be an abuse of discretion"].)

Here, McCullough sought fees for the services it provided to Morgan to defend the accounting and against the petition for surcharges. These are extraordinary services within the meaning of section 10811; as such, the probate court had discretion to award extraordinary fees to the attorney providing these services. Appellant has not shown any abuse of that discretion.

Appellants reliance on section 11003 for a different result is misplaced. This is because, whereas sections 10810 and 10811 govern the award of attorneys fees from estate assets, section 11003 governs the personal liability of the contestant or personal representative for the costs of litigating an accounting contest without reasonable cause and in bad faith. Here, the attorneys fees award was not against appellant personally, but against the estate. Accordingly, it is governed by section 10811, not section 11003.

Section 11003 provides: "(a) If the court determines that the contest was without reasonable cause and in bad faith, the court may award against the contestant the compensation and costs of the personal representative and other expenses and costs of litigation, including attorneys fees, incurred to defend the account. The amount awarded is a charge against any interest of the contestant in the estate and the contestant is personally liable for any amount that remains unsatisfied. [¶] (b) 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 attorneys fees, incurred to contest the account. The amount awarded is a charge against the compensation or other interest of the personal representative in the estate and the personal representative is liable personally and on the bond, if any, for any amount that remains unsatisfied."

DISPOSITION

The judgment is affirmed. Respondent shall recover his costs on appeal.

We concur:

COOPER, P. J.

BIGELOW, J.


Summaries of

In re Estate of Lopez

Court of Appeal of California
Sep 4, 2008
No. B200549 (Cal. Ct. App. Sep. 4, 2008)
Case details for

In re Estate of Lopez

Case Details

Full title:Estate of PAT Z. LOPEZ, Deceased. THOMAS B. McCULLOUGH, JR. Plaintiff and…

Court:Court of Appeal of California

Date published: Sep 4, 2008

Citations

No. B200549 (Cal. Ct. App. Sep. 4, 2008)