Opinion
No. 37193-6-II.
April 21, 2009.
Appeal from a judgment of the Superior Court for Kitsap County, No. 05-4-00729-9, Craddock D. Verser, J. Pro Tem., entered December 11, 2007.
Affirmed by unpublished opinion per Armstrong, J., concurred in by Penoyar, A.C.J., and Bridgewater, J.
UNPUBLISHED OPINION
Eric Clauson appeals the order requiring him to disgorge $2,524 in attorney fees he received after serving as a guardian ad litem for Lesa Renfro. We affirm.
FACTS
On March 3, 2005, John Renfro filed a petition for dissolution of his marriage to Lesa Renfro. The couple has two children. Lesa was represented in the dissolution by attorney Jennifer Durcan, of Bishop, Cunningham Andrews. In an October hearing, John's attorney mentioned that Lesa might need a guardian. The guardian ad litem who addressed the parenting issues agreed that Lesa needed a guardian and contacted Marsha Caldwell of Kuehn Caldwell Guardian Care and Consulting.
Caldwell contacted attorney John Tracy, who prepared the petition for appointment of a limited guardian for Lesa's estate. The basis for the petition was a concern that due to mental illness, Lesa lacked the capacity to contract. On November 4, 2005, the day the petition was filed, the trial court appointed attorney Eric Clauson to serve as guardian ad litem for Lesa because of his expertise in handling complex cases. The order appointing Clauson did not refer to his hourly rate or to the maximum amount he could charge without additional court review.
When Clauson met Lesa on January 3, 2006, she told him that she opposed the guardianship, wanted a jury trial, and wanted an attorney appointed to represent her. No attorney was appointed, but on January 5, Lesa's attorney in her dissolution case filed a notice of appearance on her behalf in the guardianship proceeding. Clauson filed his guardian ad litem report on January 11. At Clauson's request, Dr. Charles Slater, Lesa's psychologist, also submitted a medical/psychological report concluding that Lesa was good at daily financial decisions but that she needed help to prepare for her financial future. Clauson recommended that a limited guardianship of the estate be established to oversee Lesa's finances because her medical history and the stress of the dissolution proceedings might render her incapable of handling her finances without assistance. He recommended Caldwell for that appointment. Clauson also requested that his fees be paid from Lesa's estate at his hourly rate of $185. He stated that Lesa claimed to have savings of $5,000 and that she would receive part of the equity in the family home and part of her husband's Navy pension. He did not refer to the legal expenses Lesa would incur as a result of the dissolution. Clauson subsequently submitted three declarations showing his time expenditures and requested a total of $4,081.73 in fees.
The Renfros' dissolution trial was held on February 27 and 28, and final orders were entered on March 31, 2006. The court awarded Lesa some personal property and $31,000 as her share in the equity of the family home. She also was awarded spousal maintenance of $700 a month. The court granted primary residential placement of the Renfros' sons to John.
On April 14, the court issued an order appointing Durcan as limited guardian of Lesa's estate, authorizing her to handle Lesa's financial affairs. Clauson signed the order, which stated that Lesa "is incapable of managing her property and is in need of a limited guardianship over her estate." Clerk's Papers (CP) at 41. Lesa also signed the order after Clauson and Durcan told her that she faced the expense of a jury trial if she wanted to challenge the limited guardianship. The order authorized payments up to $260 per month (4 hours at $65 per hour) to Durcan as well as $1,226 in fees to Tracy. It also awarded Clauson $3,459.23 in guardian ad litem fees, which Durcan paid from Lesa's estate.
On July 28, Durcan and her firm filed a petition seeking the appointment of Caldwell as the successor limited guardian. On August 11, the trial court appointed Kuehn Caldwell as limited guardian of Lesa's estate. As of August 21, Lesa had $1,341.45 remaining of the $31,000 the court had awarded her in the dissolution case, and a monthly income of $700 in maintenance payments.
In March 2007, Lesa complained to Adult Protective Services, a division of the Department of Health and Human Services (DSHS), about a nonsufficient funds check issued for her rent and about her lack of access to personal property that Caldwell had placed in storage. An investigator referred the case to the attorney general's office after learning that Caldwell was not paying Lesa's rent and was acting without legal authority due to her failure to post the required bond and have letters of guardianship issued. The investigator also was concerned that Lesa no longer needed the guardianship.
Following hearings on motions filed by Lesa and DSHS, the trial court issued orders suspending the authority of the limited guardian, appointing a protective payee, and appointing a guardian ad litem to determine whether Lesa still needed a guardian. The new guardian ad litem filed a sealed report that recommended vacating the limited guardianship and initiating a proceeding to determine whether any of the fees and costs paid from Lesa's estate should be disgorged. A psychologist opined in another sealed report that Lesa was capable of managing her affairs without the involvement of others if she took her medications, although she would benefit from some financial assistance. The trial court subsequently vacated the limited guardianship and ordered the Bishop, Cunningham, Andrews law firm; Clauson; Tracy; Durcan; and the partners of Kuehn Caldwell Guardian Care and Consulting to appear and show cause why they should not be required to disgorge fees and costs paid to them from Lesa's estate and to address whether the court had personal jurisdiction to enter orders in the limited guardianship.
The question as to jurisdiction arose because Renfro was never served with the petition for guardianship.
Following a hearing on the jurisdictional and disgorgement of fees issues, the trial court issued a memorandum opinion and order on show cause. The court denied the motion to vacate the orders entered in the guardianship for lack of personal jurisdiction over Lesa, reasoning that she had appeared in the case with retained counsel. The court found, however, that the guardianship proceeding was "fraught with conflict and mistakes." CP at 71.
Different judges presided over the guardianship proceeding and the show cause hearing.
Despite the "good faith" of all involved, the Court finds that this guardianship did not benefit Ms. Renfro in any manner, was ill conceived, mismanaged, and was detrimental to her financially. This Court will attempt to apply equitable principles and provide some relief to Ms. Renfro, recognizing that her own bizarre conduct led to the initiation of this action.
CP at 72.
The trial court ordered each attorney involved to disgorge some of the fees received from Lesa's estate. With regard to Clauson, the court observed that the guardian ad litem had approved appointment of a limited guardian who, as Lesa's largest creditor, had an obvious conflict of interest. The court further observed that no limit was placed on Clauson's hourly rate and there was no maximum fee for his services. The court explained:
RCW 11.88.097 requires the Court to approve an hourly rate for guardian ad litem services and a maximum amount to be charged in absence of further Court approval. This statute was not followed in this case. Mr. Clauson billed and was paid at the rate of $185 per hour and was paid a total of $3,459.23 according to the final accounting. . . . In the January 10, 2006 report he indicated that Ms. Renfro only had at most, $5,000 in savings (which was not verified). His report does not address Ms. Renfro's lack of income and how she is supposed to afford his fees, Ms. Durcan's fees, and a limited guardian at $65 an hour.
Mr. Clauson performed his duties "in good faith." The State now argues that his conclusion that Ms. Renfro was at substantial risk of financial harm without a limited guardian was not supported by the evidence. Dr. Slater's report states that Ms. Renfro ". . . is good with day to day activities and money." It is difficult for this Court to determine how Mr. Clauson reached his conclusion that Ms. Renfro needed a limited guardian to protect her from financial loss. Ms. Renfro's bizarre behaviors may indicate that she needed a guardianship of the person to assist her in making informed, rational and intelligent decisions regarding her dissolution, but Dr. Slater concluded she was capable of handling her small income without the assistance and expense of a limited guardian.
CP at 74 (record citations omitted). At $185 an hour, Clauson's award of $3,459.23 compensated him for 18.7 hours of his time. The trial court ruled that Clauson was entitled to be paid at the county rate of $50 an hour for a total of $935, and it ordered him to reimburse Lesa the difference of $2,524.
ANALYSIS I. Abuse of Discretion
In his opening brief, Clauson challenged the trial court's authority to reduce his award of fees. During oral argument, however, he conceded that the trial court acted within its authority and argued only that the trial court abused its discretion in ruling as it did. Accordingly, we address only whether the trial court abused its discretion in applying equitable principles in reducing Clauson's guardian ad litem fees. See In re Guardianship of McKean, 136 Wn. App. 906, 918, 151 P.3d 223 (2007) (trial court's fees and costs award reviewed for abuse of discretion). A trial court abuses its discretion when its decision is manifestly unreasonable, based on untenable grounds, or supported by untenable reasons. State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).
We do not address the additional assignments of error that Clauson raises for the first time in his reply brief. See In re Marriage of Sacco, 114 Wn.2d 1, 5, 784 P.2d 1266 (1990); RAP 10.3(c).
DSHS sought review of Lesa's guardianship under RCW 11.88.120(2), which allows any person to apply for an order modifying or terminating a guardianship. Once the guardianship was terminated, the issue regarding whether Clauson, both guardians, and the attorney who brought the petition should disgorge some of the fees paid from Lesa's estate was properly reserved for a hearing under chapter 11.96A RCW.
DSHS also brought the action under RCW 74.34.067, which entitles a vulnerable adult to the department's protective services, and RCW 11.88.030(2), which allows the attorney general to bring the matter before the court.
RCW 11.96A.080(2) provides that chapter 11.96A RCW applies to disputes arising in connection with estates of incapacitated persons unless otherwise covered by chapters 11.88 and 11.92 RCW. A subsequent provision directly addressing fees and costs provides that a court may order them to be paid
in such amount and in such manner as the court determines to be equitable. In exercising its discretion under this section, the court may consider any and all factors that it deems to be relevant and appropriate, which factors may but need
not include whether the litigation benefits the estate or trust involved.
This statute applies "to matters involving guardians and guardians ad litem and shall not be limited or controlled by the provisions of RCW 11.88.090(10)." RCW 11.96A.150(2). RCW 11.88.090(10) provides that the court shall determine a guardian ad litem's fees and the party to pay the fees. Therefore, it appears that when a dispute over guardian ad litem fees occurs, RCW 11.96A.150(1) grants the trial court discretion to award them in such manner as it deems equitable. See also In re Deming's Guardianship, 192 Wash. 190, 198, 73 P.2d 764 (1937) (equity has general jurisdiction in guardianship proceedings to grant special relief as circumstances require).
In reviewing Lesa's guardianship, the trial court found serious flaws in Clauson's work. The order appointing him placed no limit on his hourly rate or the maximum compensation for his services. See RCW 11.88.097 (court shall specify the hourly rate and maximum amount that the guardian ad litem may charge in order of appointment or at earliest date possible before billing); RCW 11.88.090(3)(b) (within five days of appointment, the guardian ad litem shall file a statement that includes his hourly rate, and a party may object to that appointment on the basis that the hourly rate is unreasonable). Given Clauson's expertise in guardianship matters, he should have ensured that these statutory requirements were satisfied. The original petition was filed in November 2005, but no guardian was appointed until April 2006. See RCW 11.88.090(5)(f)(ix) (contemplating hearing on the petition for guardianship within 60 days of the petition's filing). Had a guardian been appointed earlier, and before the dissolution orders were entered, the county might have paid for Clauson's services. See RCW 11.88.090(10) (guardian ad litem's fee shall be charged to the alleged incapacitated person unless the court finds that such payment would result in substantial hardship, in which case the county is responsible). Although Clauson's report recommended Caldwell's appointment as the limited guardian, he approved Durcan's appointment without filing any supplemental report discussing her appointment. Durcan, who was Lesa's attorney in both the dissolution and guardianship proceedings, had an obvious conflict in serving as the limited guardian in charge of her financial affairs.
In Clauson's report, he stated that Lesa had liquid assets of only $5,000, which he had not verified. He did not know at the time how much she would receive in the dissolution, nor did he know the amount of her resulting legal expenses. His report did not address Lesa's lack of income or how she was supposed to afford his fees, Durcan's fees, and the fees of a limited guardian at $65 an hour. The trial court found it difficult to determine how Clauson concluded that Lesa needed a limited guardian to help her with all financial decisions after her psychologist concluded that she could manage her daily finances, particularly where she had a monthly income of only $700. This decision became more untenable when, after the guardians and attorneys had been paid, she had assets of only $1,341.45.
Clauson argues that the fault lies with the limited guardian who paid his fees from Lesa's estate without the legal authority to do so. But the trial court found that Clauson retained fees to which he was not entitled, and we see no abuse of discretion in that finding. As Clauson recognizes, the trial court was entitled to review all that had occurred in the guardianship proceeding and to modify the fee awards as it deemed equitable. We find no abuse of discretion in the modification of Clauson's fee award.
Affirmed.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
BRIDGEWATER, J. and PENOYAR, A.C.J., concur.