Opinion
82031.
Decided on January 30, 2007.
STEPHEN E. DIAMOND, ESQ. GELLERT KLEIN, P.C. Attorneys for Successor Administratrix c.t.a.
RITA BRANNEN 75 Washington Street Poughkeepsie, New York 12601 VINCENT L. TEAHAN, ESQ. TEAHAN CONSTANTINO, ESQS. Attorneys for Former Administratrix c.t.a.
KAREN WALMSLEY, 41 Front Street, Suite A, P.O. Box 1181, Millbrook, New York 12545, KATHARINE WILSON CONROY, ESQ., KENT, HAZZARD, WILSON, CONROY, VERNI and FREEMAN, LLP, Attorneys for Former Executrix.
BARBARA MACKIN, 111 Church Street, White Plains, New York 10601JAMES F. PASSIKOFF PASSIKOFF, HEENEY SCOTT, CPAs 21 Davis Avenue, Poughkeepsie, New York 12601, LISA BARBIERI, ESQ., Assistant Attorney General Attorney for Ultimate Charitable Beneficiaries, New York, New York 10271.
On September 19, 2006 Rita Brannen filed a petition for a judicial settlement of her account as successor administratrix c.t.a. The Attorney General of the State of New York, appearing on behalf of the ultimate charitable beneficiaries pursuant to EPTL Article 8, has filed objections to the accounting. Specifically, the attorney general objects to the exclusion from the accounting of transactions from the date of death to December 31, 2002. Additionally, the attorney general objects to any and all legal fees already paid to or requested by Kent, Hazzard, Jaeger, Greer, Wilson and Fay on the grounds that any services provided are excessive and unreasonable. The attorney general also objects to any and all legal fees already paid to or requested by Teahan Constantino to the extent that those services are duplicative of the services performed by Kent, Hazzard, Jaeger, Greer, Wilson and Fay or are being charged "as the result of the improper, unreasonable or unprofessional acts of Kent, Hazzard, Jaeger, Greer, Wilson and Fay." The attorney general objects to any and all fees already paid to or requested by the accounting firm of Passikoff, Heeney Scott, CPAs to the extent that those services are duplicative to the services performed by Kent, Hazzard, Jaeger, Greer, Wilson and Fay or are being charged as the result of the improper acts of that firm.
The decedent died on July 16, 1991. Rita Brannen was appointed as successor administratrix c.t.a. on January 17, 2003. By order dated January 17, 2003, this court directed the former administratrix c.t.a., Karen Walmsley, to file a judicial accounting which she did on March 24, 2003. That accounting covered the period from July 16, 1991 to December 31, 2002. Rita Brannen was not the fiduciary during the period referenced in the instant objections and had no obligation to account. Therefore, it is ordered that the objection by the attorney general to the exclusion of the period from July 16, 1991 through December 31, 2002 in the subject account is denied.
LEGAL FEES
SCPA § 2110 authorizes this court to fix and determine the compensation of an attorney for services rendered to a fiduciary. In the event that an attorney has already been paid an amount above what is determined to be a fair value, the court may direct a refund of the excess. It is well settled that the surrogate is in a superior position to judge factors such as the time, effort and skills required in a particular proceeding and the surrogate bears the ultimate responsibility of deciding what constitutes a reasonable attorney's fee. (citations omitted.)( Matter of Labua, 276 AD2d 630, 631 [2nd Dept. 2000].)
KENT, HAZZARD, JAEGER, GREER, WILSON and FAY
The law firm of Kent, Hazzard, Jaeger, Greer, Wilson and Fay was retained by Barbara Mackin in August, 1991 to represent her as executrix of the Estate of Emily Markuson. All of the legal work was performed by the named partner Mizell Wilson, Jr. at the rate of $250.00 per hour. On December 18, 1991, the firm billed the Estate of Emily Markuson for 120.5 hours of Mr. Wilson's time, plus $1,805.00 in disbursements and travel expenses. On June 9, 1992, the firm billed the estate for 89 hours of attorney Wilson's time. The firm presented its final bill to the estate in November, 1992 representing 59 hours of attorney Wilson's legal services. Each of the presented bills was paid by the estate and the firm received the total sum of $86,122.00, which includes $3,048.70 of disbursements and expenses. Mr. Wilson continued to represent the executrix until his death in 1995. The executrix died in 1997. In response to the objections herein, Katharine Wilson Conroy, a member of Kent, Hazzard, Wilson, Conroy, Verni and Freeman, has submitted an affidavit in support of the fees paid to the firm. Attorney Conroy avers that the firm has only adopted a computerized time record system "in recent years" and that a review of the firm's file maintained by attorney Wilson revealed no time sheets or other itemized time records for his legal services to the estate. Attorney Conroy has provided a comprehensive narrative of the general legal services performed by Mr. Wilson on behalf of the estate derived by reconstructing the services upon a review of the firm's file. An analysis of the descriptive narrative of services reveals that attorney Wilson performed substantial executorial services in addition to rendering legal services for the estate. The court recognizes that the executrix was serving without commission at the time. Nonetheless, it is well established that the court may reduce a requested legal fee where it appears that executorial services were performed by an attorney and included as part of a legal fee. ( Matter of Phelan, 173 AD2d 621, 622 [2nd Dept. 1991].) As Ms. Conroy notes, the hourly rate of $250.00 charged in 1991 was based upon attorney Wilson's extensive legal experience, skill and reputation at the time. At the time that the services were being rendered and the hourly rate charged, $250.00 per hour was well above the amount usually charged by attorneys in this geographic area. While attorney Wilson's hourly rate was above the amount usually charged by attorneys of equivalent skill and experience in this geographic area, I find that the rate was appropriate for attorney Wilson's geographic practice area and was justified based on all known circumstances. Attorney Conroy argues that this was a very complex estate and that the total fees collected by her firm were substantially below the $110,000.00 "approved" by the Internal Revenue Service on audit. However, the surrogate is always in the best position to assess the factors essential to fix an attorney's fee such as the reasonable value of the time, effort and skill required and actually expended and this authority rests with the surrogate regardless of the terms of a retainer agreement or any other outside determination. ( Matter of Gluck, 279 AD2d 575, 576 [2nd Dept. 2001].) As our Appellate Division, Second Department has previously noted:
"this court has approved the reduction of a requested fee where it appears that executorial services were performed by an attorney and included as part of the fee submitted (citation omitted). We have also repeatedly emphasized the significance of contemporaneously maintained time records as a component of an attorney's affirmation of legal services, and have given little weight to after the fact' estimations of time expended (citation omitted). Here, the appellant's affirmation contains a series of largely generalized descriptions of the legal services rendered and contains no contemporaneously recorded time charges for the work alleged to have been performed. The Surrogate was not obligated to accept appellant [attorney's] assertion that he had spent 1,000 hours working on this case at face value, especially in view of the fact that there existed no written day-to-day record of the time spent.' (citation omitted)." ( Matter of Phelan, supra at 622.)
The lack of contemporaneous time records substantially
weakens Kent, Hazzard's claim for legal services. The court is also compelled to recognize that from the time that the named partner died in 1995, the law firm ceased to perform any services on behalf of the estate and essentially abandoned their responsibility as attorney of record for the next five years until successor counsel assumed control of the file.
It is evident that attorney Wilson performed legal services which were necessary and valuable to the estate and its beneficiaries. The court disagrees with counsel's assessment that this was a complex proceeding. There certainly are numerous beneficiaries which made otherwise simple tasks (service of citation, etc.) cumbersome. However, there were no complex legal issues and there were no litigated matters necessary in order to administer this estate. I find that the number of hours expended by attorney Wilson were not reasonable and were excessive. I find further that many of the services billed included executorial functions which were improperly billed at a premium legal hourly rate. Under all of the circumstances presented, I find that the reasonable value of all compensable services rendered by attorney Wilson to the estate is equal to $41,000.00. Therefore, it is ordered that the law firm of Kent, Hazzard, Wilson, Conroy, Verni and Freeman, LLP shall reimburse the sum of $42,073.00 to the Estate of Emily Markuson within sixty days of the date of the decree to be entered hereon and the estate shall have judgment therefore.
TEAHAN CONSTANTINO
The law firm of Teahan Constantino represented Karen Walmsley, who succeeded the original executrix, Barbara Mackin. Karen Walmsley was appointed administratrix c.t.a. on September 20, 2000. After less than a year in that capacity, Karen Walmsley, in or about June, 2001, directed Teahan Constantino to do no further work and Ms. Walmsley submitted a petition for her resignation as administratrix c.t.a. Thereafter, the Dutchess County Commissioner of Finance, Rita Brannen, was appointed as successor administratrix c.t.a. The law firm of Teahan Constantino has submitted itemized time records evidencing the services that they rendered on behalf of the estate. Those services continued beyond Karen Walmsley's petition for resignation until approximately one month after the appointment of Rita Brannen.
Initially, the court notes that many of the services rendered by counsel for the firm were unnecessarily duplicative. By way of example, and not limitation, in most circumstances where an attorney or paralegal discussed any aspect of this matter with a colleague, both individuals billed for the full amount of time spent in the discussion. Additionally, counsel billed for the same legal services which were also being performed, and billed, by a paralegal. Moreover, some of the time charged for particular services appears excessive considering that the attorneys performing the work at Teahan Constantino are highly skilled and experienced legal counsel. The time records reflect that many of the legal services were routine matters upon which the attorneys appear to have spent an inordinate amount of time in research, review and "preparation."
The attorneys billed $240.00 an hour on average for their time spent on this file which I find is reasonable based on the experience and skill of the attorneys involved. Counsel billed two paralegals at the rate of $92.82 and $90.00 per hour respectively. Counsel have not submitted the qualifications of the paralegals or any justification for billing their services at the rate charged. Some of the services billed appear to be secretarial in nature and should not be billed separately as paralegal services at the rates charged. Secretarial services are part of an attorney's office overhead factored into the hourly rate charged by counsel. The court does not disparage the efforts of the paralegals or question that actual paralegal services may be billed when legal work is performed by a non-attorney in lieu of an attorney's efforts. (SCPA § 2110)
By way of example of the court's findings, and not limitation, the court specifically reviewed the legal services charged to the estate relative to the petition for successor administration submitted in September, 2000. An attorney and paralegal spent in excess of thirty hours researching, drafting, filing, and serving the petition for appointment of Karen Walmsley as successor administratrix c.t.a. That amount of time is unduly excessive considering the straightforward petition submitted herein and serves to exemplify the lack of reasonableness of the balance of the services billed. It cannot be denied that during the representation of Karen Walmsley, the law firm of Teahan Constantino moved a stagnated proceeding forward and that the firm diligently and effectively fulfilled their responsibility as legal counsel. Nonetheless, the overall reasonableness of their fees is the issue before the court and I find that the fees as billed are unreasonable and that many of the services performed were duplicative and excessive. I find that the reasonable value of the services performed by the law firm of Teahan Constantino on behalf of the estate equals $10,000.00.
PASSIKOFF, HEENEY SCOTT, CPAs
The court has reviewed the affidavit of services by James Passikoff, partner in the accounting firm, Passikoff, Heeney Scott, CPAs. Mr. Passikoff has provided an itemized breakdown of accounting services provided to the estate at the request of the estate's legal counsel. I find that the services rendered were reasonable and necessary under the circumstances and benefitted the estate and its beneficiaries. Therefore, I find that the accounting firm of Passikoff, Heeney Scott, CPAs is entitled to recover from the estate accounting fees in the amount of $6,233.00.
GELLERT KLEIN, P.C.
The instant objections do not oppose fees due and owing to the law firm of Gellert Klein, P.C. rendered on behalf of the estate since the appointment of Rita Brannen as the successor administratrix c.t.a. The court is in receipt of an affirmation of legal services for attorney Stephen E. Diamond.
The court has reviewed the services rendered by the law firm of Gellert Klein, P.C. on behalf of the estate and find those services to be reasonable and necessary under all of the circumstances presented. Additionally, the court finds that the hourly rate billed for the services is reasonable for attorneys in this area of the experience and skill level of the attorneys performing the services for the estate. Therefore, it is ordered that the law firm of Gellert Klein, P.C. shall be entitled to receive attorney's fees in the amount of $10,000.00 plus disbursements in the amount of $322.00.
The objections to the accounting are sustained to the extent set forth herein. In all other regards, the objections are denied. It is further ordered that the petition by Rita Brannen to settle her account as successor administratrix c.t.a. is granted subject to the payment of fiduciary commissions in the sum of $4,046.45; the payment of legal fees to the law firm of Gellert Klein, P.C.; the payment of accounting fees to Passikoff, Heeney Scott, CPAs; and, the distribution of the balance of estate assets equally among the residuary beneficiaries. Attorney Stephen E. Diamond is directed to submit a decree on notice based upon the foregoing within ten (10) days of service of a copy of this decision.
The foregoing constitutes the decision of the Court.