[*1]
| Matter of Giles |
| 2007 NY Slip Op 50001(U) [14 Misc 3d 1211(A)] |
| Decided on January 3, 2007 |
| Surrogate's Court, Monroe County |
| Calvaruso, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
Surrogate's Court, Monroe County
In the Matter of the Judicial Settlement of the Account of Thomas Trevett, as Administrator cta of the estate of Viola E. Giles, Deceased.
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2000DT01779/D
Thomas Trevett, Esq., Administrator cta.
John P. Morrell, Esq., for Thomas Trevett, Esq.
Lawrence I. Goldstein, Esq., for Elizabeth Borah and Linda Bess
Reid Whiting, Esq., for Gary Giles
Frank Beretta, Esq., for Pamela Lowell
Thomas Giles, pro se.
Edmund A. Calvaruso, J.
Decedent died on November 11, 2000. She left as her distributees five children: Thomas Giles, Gary Giles, Pamela Lowell, Elizabeth Borah and Linda Bess (the children, the legatees, the distributees). Her will specifically bequeathed several parcels of real estate and then divvied up the residuary among her children, though unequally. The will nominated Gary Giles as executor and he was granted preliminary letters testamentary on November 14, 2000. A contest immediately ensued among the five children over the probate of the will and the appointment of the executor.
Due to anticipation of more litigation after probate, all parties were desirous of having a non-beneficiary, non-family member administer the estate. As part of a settlement agreement on the probate matter, the children agreed to the appointment of Thomas Trevett, a local attorney, as the fiduciary for the estate. Trevett agreed to assume the position but on the condition that he would be compensated for his time on an hourly basis at his normal legal rate of $200 per hour. This was amenable to the children and letters of administration cta were issued to Mr. Trevett on September 25, 2003, nearly three years after the initial probate filing.
Trevett filed his petition for judicial settlement of his account on April 20, 2005. Objections [*2]were filed shortly thereafter by Gary Giles, Elizabeth Borah and Linda Bess and Thomas Giles. For purposes of the trial, the objections were fourfold: (1) the reasonableness of Trevett's charges, (2) the reasonableness of Morrell's legal fee, (3) & (4) Trevett's interpretation that the decedent's pick up truck and Pro Fac stock were "farm personal property" and therefore bequeathed specifically to Gary Giles under Article Sixth of the will.
OPINION
Part of the parties' settlement agreement at probate was that Trevett would not to be compensated under the typical statutory scheme for commissions pursuant to SCPA 2307 but rather through his hourly rate. Because the rate itself ($200/hr) was a part of the agreement, the objections to his fee request are limited to the reasonableness of his time spent. Morrell's fee (not a part of the settlement agreement) will be evaluated based upon the Freeman/Potts standards, which require an overall determination of reasonableness.
1. Trevett's fees
Trevett's requested commissions are $76,689, representing over 380 hours of work provided. The proof at trial showed that Trevett had a practice of contemporaneously recording his time while working on matters (Transcript- pg 49), therefore it was less likely that he would forget to record a time expenditure and less likely to have to estimate the time spent. Therefore, the accuracy of his time records is well supported in the record. Trevett did not charge for time spent on the matter by his secretary or his associate, therefore all billing done in this estate was done by him alone and the cost of other employees in his firm performing work for this estate was absorbed into his hourly rate as overhead. Finally, Trevett's career as an attorney and lengthy experience in estate matters aided him in performing his administrative duties swiftly and precisely, able to handle things directly rather than needing to refer them to the estate attorney (Transcript- pg 45).
It goes without saying that this estate was extensively litigated, full letters alone took nearly three years to achieve. After the granting of full letters, more proceedings were commenced within the estate's administration, extending the time and legal work which was required. The litigation over the judicial settlement of this estate has also been lengthy, with multiple objections from multiple beneficiaries and half a dozen attorneys involved. It is now six years since the commencement of this estate and over three since the granting of letters to Thomas Trevett and the record shows that much Administrator time and legal work was required from beginning to end.
The court will reiterate here that the children agreed to have a non-family member serve as fiduciary precisely because they were aware of the contentious nature of the family dynamic. No corporate fiduciary would serve as fiduciary for this estate (the bulk of its value in real estate and farm property) so the parties were in need of a local person, experienced in estate matters, to [*3]agree to helm an estate which was all but guaranteed to encounter arguments, litigation and much frustration. Mr. Trevett reluctantly agreed to assume this responsibility but only on the childrens' agreement that he could be paid his hourly rate. While the totality of charges still had to fall within the bounds of reasonableness, it is not lost upon the court that much of the time charged was due to handling the fallout from the children's disagreements.
Mr. Trevett's charges fall within the bounds of reasonableness given the totality of the circumstances and are hereby awarded in the amount of $76,689.
2. Attorney's fees
Attorneys' fees are to be evaluated by the Surrogate, who has the responsibility for ensuring that legal fees in estates are within the bounds of reasonableness. Matter of Middagh, 267 AD2d 593 (1999). As copious case law has discussed, the "reasonableness" of an attorney's fee is to be determined by an evaluation of several important factors, often referred to as the Freeman/Potts factors. They are as follows:
time and labor required, the difficulty of the questions involved, and the skill required to handle the problems presented; the lawyer's experience, ability and reputation; the amount involved and benefit resulting to the client from the services; the customary fee charged by the Bar for similar services; the contingency or certainty of compensation; the results obtained; and the responsibility involved. Matter of Freeman, 34 NY2d 1, 9 (1973).
The burden of showing reasonableness of fees is one born by the attorney. Cohen v. Ryan, 34 AD2d 789 (1970). A retainer agreement aids the attorney in establishing the reasonableness of his or her fee, see, Estate of Warhol, 165 Misc 2d 726 (1995), see also, Warren's Heaton on Surrogate's Court, §106.03[2], but is not per se proof of reasonableness. Matter of Middaugh, 267 AD2d 593 (1993). A retainer agreement was present in this case, signed by the preliminary executor and also honored by Trevett once he became the estate's fiduciary.
John Morrell requests a fee of $57,000 in this matter. This amount is significantly higher than what the typical legal fee would be on an estate of this size, but neither, as stated above, was this a typical estate. The years of litigation alone explain a great deal of the increased fee, plus the decedent's assets were primarily her farm and farming property and the discernment of the nature of some of the atypical assets and how assets were titled required extra work on behalf of the estate. The law firm had represented the decedent and her husband for years and was familiar with the unique issues with respect to decedent's farm and associated assets.
However, Morrell's records are not as accurate as Trevett's. The proof shows that he was unable to provide opposing counsel with a detailed list of hourly expenditures throughout the entire estate administration since he experienced computer difficulties during the pendency of the estate. The records he was able to provide to counsel showed larger time charges for conferences [*4]Trevett than Trevett charged. Nor does the size of his fee take into account the fact that Trevett was a well qualified and very active fiduciary and was capable, able and often did take on tasks which many estate attorneys perform as services to their fiduciary clients.
Here, time records take on a larger role in a decision regarding fees, due to the fact that litigation was extensive and required time spent by the attorney which exceeded the amount which otherwise would be expended upon a typical estate of this size. However, when evaluating attorney's fees, time records alone cannot be determinative. See, Estate of Gillette, 139 Misc 2d 188 (1988). This is especially true when the proof shows that the attorney did not provide exact time records, or provided records which revealed discrepancies. As such, the attorney fee here will be reduced by $10,000 to a total of $47,000. This figure is still high when compared solely to the size of the estate, but represents a more reasonable value for the estate given the need for increased legal work to cover the litigation.
3. & 4. Pick up Truck and Pro-Fac Stock
The decedent bequeathed all "farm personal property" directly to her son, Gary Giles, under Article Sixth of her will. Three of the children disputed whether two assets in particular, decedent's 1995 F-250 pick up truck and her Pro-Fac stock retains, were properly considered "farm personal property" by the Administrator. The issue is one of construction, more specifically the resolution of an ambiguity in the will. As such, the question is not "is the truck is farm personal property?", but rather, "did the decedent intend the provision farm personal property' to include her F-250 truck?". Extrinsic evidence was brought in at trial, Warren's Heaton on Surrogate's Courts, §190.02[1][b], to determine an answer to this question.
Both the truck and the car owned by decedent were previously owned by her husband, who predeceased her. Personal property was devised to her by her husband under his will. She filed a disclaimer of this personal property (see exhibit "A" of Petitioner's reply to objections of Gary Giles), but specifically made an exception within the disclaimer for both the car and the truck so that she could continue to own them individually.Proof showed that the decedent generally drove the car, but even though she did not drive the truck, she housed it in the garage with the car and kept it clean and well-maintained, like she did her car. The truck was a source of personal pride for decedent, and was considered "hers" by both her and her children, such that her permission was needed to use it, even when using it for farm purposes. The fact that she treated the truck and the car as a similar type of property in her husband's estate makes the Administrator's disparate classification of them (especially without input from the children, as the record shows) seem out of place. It appears from decedent's actions that she did not consider the pickup truck to be "farm property" and therefore presumably did not intend for it to be considered "farm personal property" under her will. As such, the court believes that the decedent's intent was not to include the truck as farm property under her will, and thus holds that the truck ought to be returned to the estate, to be offered to the children for sale in a sealed bid auction, and if not sold to one of the children, to be sold publicly and the proceeds to be added to [*5]the estate.
With regard to the Pro-Fac stock, the relevant proof revealed that this asset was payable to the landowner, who throughout the time period in question was Viola Giles. The stock itself was from retained earnings and therefore could not be considered an accounts receivable. Nor was it "farm personal property" in the sense that it was a tangible resource used to aid the progress of the farming business. As such, it properly passes under the residuary clause of the estate and was not specifically bequeathed to Gary Giles. The value thereof should be returned to the estate.
Such is the decision and order of the court.
Dated:01/03/07Edmund A. Calvaruso
Hon. Edmund A. Calvaruso, Surrogate