Darren C (hereinafter the "Decedent") died a resident of Saratoga County on November xx, 20xx at thirty-nine (39) years of age. The decedent had two (2) infant children who are his distributees herein, MC and OC. Letters of Administration were issued to decedent's brother, Dana C, on April x, 20xx, without objection.

On March 31, 2023, the Administrator filed a Petition for Judicial Settlement of his Account along with an Accounting dated March 20, 2023. On May 26, 2023, the Administrator filed an Amended Petition for Judicial Settlement of his Account along with an Amended Accounting dated May 8, 2023. On June 21, 2023, the Administrator filed the most recent Amended Petition for Judicial Settlement of his Account along with another Amended Accounting also dated May 8, 2023, which in part seeks attorneys' fees in the amount of $22,008 with an additional $9,000 in unbilled and prospective legal fees which the firm anticipated billing, for an aggregate amount of $31,008 ^[FN1] . This Amended Accounting states, "This is a final [*2]account" (emphasis in original).

On June 28, 2023, counsel for Petitioner submitted an Amended Affirmation Re: Fees for Legal Services in reference to the Amended Petition for Judicial Settlement of his Account, which asserts in part, "This includes all services rendered and to be rendered up to and including the settlement of the decree distribution."

Also on June 28, 2023, the Court appointed Elisabeth B. Mahoney, Esq., as Guardian ad litem to protect the interests of the infant distributees, MC and OC. Thereafter, on October 3, 2023 Attorney Mahoney filed an Guardian ad litem report dated September 14, 2023 which recommended a revised Accounting and requested answers to certain questions in relation to the Accounting ^[FN2] .

On October 18, 2023, the Administrator filed an affidavit to "supplement the Amended Accounting and to address the questions raised" by the GAL report. In relevant part, the affirmation reflects changes subsequent to the November 25, 2022 date of the Amended Accounting, including $8,352 in additional income and $26,999 in additional legal fees.

Thereafter, Attorney Mahoney filed a Guardian ad litem Supplemental Report dated November 2, 2023. This Supplemental Report, in relevant part, objected to any tax penalties being paid from estate assets, objected to the revised attorney fees sought by Hodgson Russ, LLP and requested the Court fix reasonable fees for both Hodgson Russ, LLP and herself.

Hodgson Russ, LLP responded by letter dated December 6, 2023, in which Attorney Zahler set forth his position justifying the attorney fees as billed to the estate as well as arguments relative to any tax penalties being more than offset by the fiduciary waiving his statutory commission. The Hodgson Russ, LLP invoice through October 31, 2023 which was submitted with the December 6, 2023 letter reflects $58,599.50 in attorney fees and $2,495.49 in disbursements for a total of $61,094.99.

The Court previously fixed the fee for Guardian ad litem by Order dated November 6, 2023 in the amount of $3,950.00, which payment thereof was acknowledged by the Guardian ad litem on January 11, 2024.

The Court held a conference on this matter on December 7, 2023 at which Attorney Zahler again advocated the positions set out in his December 6, 2023 letter and waived the need for a formal hearing. The matter now comes before the Court for decision and final decree.

In reviewing the Amended Accounting dated May 8, 2023 and filed June 21, 2023 along with the Affidavit Supplementing Account dated October 17, 2023, the Court is unable to issue a final decree in this matter or determine what amount of funds and property are on hand with the fiduciary.

At the outset, the Amended Account states under the summary at page 2 that a balance of $240,274 remains consisting of $146,689 in cash and $93,585 in other property as of November 25, 2022. The Affidavit Supplementing the Account is in direct opposition to this and states at paragraph 12 that there is a balance of $268,955 on hand as of November 25, 2022 ^[FN3] . Paragraph [*3]12 further states that as of September 30, 2023 the current value of the Estate account is $256,162 which is comprised of $127,909 in a money market account and $128,253 invested in stocks and bonds. These figures substantially deviate from those stated in the Amended Account.

In Schedule A, two Edward Jones Accounts are listed with dates of acquisition ^[FN4] of 9/20/2017 (xxx-xxxxx-1-3 and xxx-xxxxx-1-8). These are assigned inventory values of $19,227 and $2,756 respectively. Stocks and Bonds are also listed with these same account numbers with an inventory value of $215,214 as of 9/20/2017.These same accounts are then listed in Schedule A-1 in presumably a combined fashion showing proceeds from liquidation of certain stocks and bonds on 9/20/2017 of $121,629 and an inventory value of $121,629 with an increase of $0.00. On Schedule B the same stock and bond accounts are listed as Revalued to Market for Distribution at an inventory value of $215,214 and a market value of $214,568 with no date listed. How can the stocks and bonds have been partially liquidated on 9/20/2017 and then fully revalued to the market at their full inventory value? Were they revalued prior to or on 9/20/2017 at $214,568 and then partially liquidated for $121,629, leaving $92,939 which should be shown on the summary, instead of the $93,585 figure?^[FN5] . This would seem to be so, but it cannot be conclusively determined from the documents submitted.

In Schedule G, the inventory value of securities shows an Edward Jones Money Market Account (xxx-xxxx-1-0) with an inventory value of $93,585. The Court presumes that the remainder of the stocks and bonds were also liquidated into this money market account, however that does not coincide with the date of acquisition of this asset of 9/13/2017. There is also listed the same account as having a cash value of $146,689 at inventory and currently valued at the same.

The Administrator's Affidavit at paragraphs 12 and 13 states that the current value (as of September 30, 2023) of the Estate account is $256,162 which is comprised of $127,909 in a money market account and $128,253 invested in stocks and bonds with additional income of $8,352 earned since November 25, 2022.

The Court is unable to reconcile these figures with Schedule G of the Accounting as submitted which shows a market value of the Edward Jones money market account at $146,689 and the stock and mutual fund account at $122,266 for a total market value of $268,955 which one would assume should properly be reflected on the summary instead of $240,274? The answer cannot be determined based on the documents submitted.

Based on the span of time in between the filing of these documents and the discrepancies therein the Court is left with three potential figures as to the current assets of the estate available for payment of remaining administration expenses and distribution to the decedent's children. First, the asserted summary figure of $240,274 in the Amended Accounting. Second, the summary figure of $240,274 as modified by the Affidavit showing $256,162 available from an original balance of $268,955, which if true, reflects an unaccounted for loss of $12,793, and [*4]third, the amount on hand per Schedule G as of the date of the Amended Accounting ($268,955)^[FN6] which should properly be in addition to the $8,352 asserted by the Administrator as earned per the affidavit, leaving perhaps $277,307.

The decedent's comic bookstore ^[FN7] was sold to a third-party for $65,000.00 pursuant to an unsigned purchase agreement apparently negotiated by the decedent's ex-wife, Kristi C without extensive attorney or Administrator involvement. Per Schedule J of the Amended Account $12,500 was collected on this sale prior to collection efforts being abandoned. Per Schedule E $2,250 of these proceeds were improperly distributed to each of the minors without a court order to Kristi C, who, according to the report of the Guardian ad litem, deposited such sums in the minors' custodial accounts and then, again, without a court order, used the funds to pay some of their expenses. The remaining $8,000.00 is entirely unaccounted for other than a reference in Schedule B of the market value of the store being $12,250, a difference of $250.00, which is also unaccounted for. Further discrepancies with this amount are reflected in the Administrator's Affidavit where he states at paragraph 19 that the "[e]state received additional payments of $7,750 ^[FN8] as result of those sales".

The Administrator's Affidavit states at paragraph 17 that taxes are due in the amount of $6,095 Federal and $2,004 to New York State and "are in the process of being paid". It is not [*5]clear from the Affidavit if these have been paid, and if so, from what source. Without having the benefit of the tax returns to review, the Court would also note based on the previously filed inventory of assets that it is likely no income taxes would be attributable to the Estate had the assets been liquidated into an estate account in 2017.

The income attributable to the estate is minor in light of the expenses. In reviewing Schedule A-2, the Estate has realized $28,060 in income on its investments for the period 7/20/2017 to 11/21/2022 with an additional stated income amount of $8,352 for the period of 11/21/2022 to 9/30/2023 for total income of $36,412. Meanwhile in between July 20, 2017 and present date the estate has apparently incurred $8,099.00 in tax liabilities, an estimated $6,000.00 in tax penalties and $38,226.00 ^[FN9] in legal fees to aimlessly shepherd this albatross through the instant Administration, all resulting in a constructive denial to the infant (and now one adult) distributees their funds.

The Court should not have to decipher an accounting to the degree undertaken herein. For the reasons set forth above, the Court agrees with the determination of the Guardian ad litem that a comprehensive updated revised final accounting must be submitted correcting the deficiencies noted by her as-well-as those set forth herein.

Hodgson Russ, LLC seeks $58,599.50 ^[FN10] in legal fees and $2,495.49 in disbursements for their representation of the Estate.

The Surrogate's Court bears the ultimate responsibility of deciding what constitutes reasonable legal compensation, and this determination rests within the sound discretion of the Surrogate's Court (see Matter of Rose BB., 35 AD3d 1044, 1045-1046 [3d Dept 2006] [internal quotation marks and citation omitted]; see also Matter of Massey, 73 AD3d 1179, 1179-1180 [2d Dept 2010]). This is so regardless of the existence of a retainer agreement or whether the other parties have consented to the amount of fees requested (see Matter of Phelan, 173 AD2d 621, 621 [2d Dept 1991]; see also Matter of Rose BB., 35 AD3d at 1046; Matter of Cook, 41 AD2d 907, 907 [1st Dept 1973], affd 33 NY2d 919 [1973]).

"No hard and fast rule exists by which it can be determined what is reasonable compensation for an attorney in any given case" (Matter of Stellis, 216 AD2d 473, 474 [2d Dept 1995]). Relevant factors to consider in determining an appropriate fee award include, among other things, "the time required, the difficulties involved, the nature of the services provided, the amount involved, the professional standing and ability of counsel, and the results obtained" (Matter of Drossos, 26 AD3d 602, 603 [3d Dept 2006]; see Matter of Freeman, 34 NY2d 1, 9 [1974]; Matter of Potts, 213 App Div 59, 62 [4th Dept 1925], affd 241 NY 593 [1925]; see also Pekofsky v Estate of Cohen, 259 AD2d 702, 702-703 [2d Dept 1999]).

The proponent seeking a fee award bears the burden of proving that the services and fees were necessary, fair, and reasonable (Matter of Passuello, 184 AD2d 108, 111 [3d Dept 1992]). Further, an attorney may not recover legal fees from an estate for duties performed which are executorial, clerical, and/or ministerial in nature (e.g., those capable of being performed by a layperson) (see e.g. Matter of Passuello, 184 AD2d at 109-112; Matter of Phelan, 173 AD2d at 622-623; Matter of Jones, 168 AD2d 448, 449 [2d Dept 1990]; Matter of Lester, 172 App Div 509, 518-519 [3d Dept 1916]; Matter of Efstathiou, 41 Misc 3d 1219[A] [Sur Ct, Nassau County 2013]).

When juxtaposing the legal fees sought in the October 18, 2023 Affidavit Supplementing the Final Account with the asserted gross estate valuation of $426,734, the attorney fees now sought by Hodgson Russ, LLP represent more than thirteen and seven-tenths percent (13.7%) of the gross value of the estate.

While courts often approve fees ranging up to five percent (5%) of the estate for the first $50,000.00 and smaller percentages on higher amounts, neither percentages nor hourly rates are conclusive, but they serve as a guide to determine if the amount sought is reasonable. See generally, Turano & Radigan, New York Estate Administration §13.3 (LexisNexis Matthew Bender). An attorney should be efficient, and the Court may factor in the percentage of the estate the attorney's fee represents when it determines reasonableness, see Matter of Schwartz, N.Y.L.J., October 17, 2017, at 22, col. 5 (Surrogate's Court, New York County).

It also appears that while Hodgson Russ, LLP did assist with corporate matters related to the limited liability company and the business matters surrounding the decedent's comic bookstore, the bulk of the work appears to have been primarily handled by Kristi C, and did not even result in an enforceable agreement being executed by the buyer ^[FN11] . In any event, the buyer defaulted in 2019 after having only paid $4,500 towards the purchase price contained in the unsigned agreement. Although not reflected in the Amended Accounting, another $7,750 was apparently collected without attorney involvement in 2022 from liquidating assets of the store. A review of the billing appears to include numerous instances of ministerial work spent on this matter as-well-as work on matters outside of the estate, including work on a supplemental needs trust. As an example of billings for ministerial matters, on 1/21/22, 1/28/22 and 2/2/22, three billing entries totaling .5 hours were charged for "analyzing checks received from the NYS Comptroller" and conferring with other employees regarding the same. Attorney fees for tasks of this nature should not be chargeable to an estate.

A Decree and Letters of Administration were issued April x, 20xx in this matter and the first Petition for Judicial Settlement of Account was filed on March 31, 2023. The Court calculates the estate having been opened for 5 years, xx months and xx days prior to first seeking Judicial Settlement. A review of the billing submitted by Hodgson Russ, LLP has time entries relating to legal services rendered to close the estate as far back as November of 2017 and further entries in in 2018 and 2019, yet the Petition for Judicial Settlement of Account was not [*6]filed until March 31, 2023 with a "final accounting" through November of 2022, all while the Estate incurred tax liabilities, penalties, and hourly legal fees.

The court agrees with the Guardian ad litem report, and the record before it is devoid of any reasonable explanation for the delay.^[FN12] This estate has remained open for almost seven (7) years, and with the exception of the $4,500 improperly distributed ^[FN13] from the sale of the defunct business, no distributions to the infant distributees, one of whom has now reached the age of eighteen (18) have been made.

The Court also calculates that from June 27, 2023 (after the filing of the third amended Petition for Judicial Settlement) through October 20, 2023, Hodgson Russ billed the estate $13,919. As pointed out by the Guardian ad litem report, many of these entries appear to be related to correcting multiple issues with the three amended accountings and various Petitions for Judicial Settlement, including unnecessarily analyzing years of financial statements, and numerous time entries of both attorney and non-attorney staff conferring with each other on these issues. Although, Hodgson Russ, LLP is a respected statewide firm with multiple attorneys and non-attorney staff working on the file over the years, the fact that three Accountings and Amended Accountings, with supplemental affidavits thereafter, have now been filed with this Court and yet the Court is still unable to determine the value of the estate assets, the request for legal fees submitted based upon the results achieved cannot be justified as fair and reasonable in its totality.

A Surrogate may also exercise his or her discretion by declining to fix fees in advance of the completion of the estate's administration In Re: Garrigan, N.Y.L.J., Mar. 12, 2013, at 26, col. 2 [Sur. Ct. Richmond County]. If the attorney has been paid an amount in excess of the fair value of his services, as determined by the court, the court may direct the attorney to refund the excess, In Re: Bobeck, 196 AD2d 496 [2nd Dept 1993].

At this juncture, a determination of the propriety of attorney fees is properly reviewed as part of the final accounting. As the estate is not fully administered, the Court declines at this time to set an award of legal fees and disbursements. Counsel is directed to revise their billing records to include the missing page and should consider a review of the time entries contained therein for time spent on ministerial, administrative, and efforts which were duplicative in nature or did not result in a tangible benefit to the estate. The Court will review and reevaluate the legal fee request upon submission of a final affidavit of counsel and billing history to be provided along with the Amended Accounting directed to be submitted herein.

As the Court is vested with the authority to refund fees paid and as it appears the Administrator perhaps paid for a portion of legal services and disbursements with personal funds, counsel should also submit invoices which have been "paid" for review. The payment of legal fees and their source should also be set forth in the accounting as an administration expense. As the assets of the estate cannot be reasonably determined under the accountings [*7]submitted, until a final decree of this Court issues, the Administrator shall not make and counsel shall not receive attorney fee payments from the Administrator.

The final guardian ad litem report and recommendation also objected to the interest and penalties for the late filing of the estate tax returns being paid out of the estate; rather that these expenses should be surcharged to the Administrator. By his letter dated December 6, 2023, counsel for the Administrator addresses this issue by pointing out that the Administrator was waiving his statutory commission in the amount of $16,573.09, which more than offsets the less than $6,000 potential interest and tax penalties.^[FN14]

Although it would appear to the Court based upon the accountings and affidavits that the business, financial and investment decisions undertaken by the Administrator were potentially unsound, the Court agrees with counsel's analysis. Generally, in the case of a surcharge, a representative has been permitted to withdraw his unilateral renunciation of commissions in order to take them and apply them against the surcharge. In re Keeler, 49 NYS2d 592; see also, In re Estate of Wood, 148 Misc 2d 870, 563 N.Y.S.2d 621 (NY Sur. Ct. 1990).

Notwithstanding the foregoing, the Court reserves decision until the resolution of the taxation issues and submission of the revised final accounting and proposed decree as to whether or not to impose a surcharge and if so, in what amount.

It is therefore,

ORDERED, ADJUDGED, AND DECREED based upon all of the foregoing, the Court hereby orders that until a final decree of this Court issues, the Administrator shall not make and counsel shall not receive attorney fee payments from the Administrator; and it is further

ORDERED, ADJUDGED, AND DECREED that the Administrator shall make an interim distribution of $75,000.00 each to both MC and OC, and that each be payable to "MC" and to "Kristi C, as Guardian of the Property of OC, an infant", respectively and that such payments be made within 20 days of the entry of this Order with the funds of OC being held by Kristi C subject to deposit into an account with joint control by her and the Clerk of this Court, and proof of such deposit and account to be provided to this Court within 20 days of such deposit; and it is further

ORDERED, ADJUDGED, AND DECREED that a current final Amended Accounting addressing all of the issues discussed herein and including a final resolution of the question of the outstanding and unknown tax penalties along with a proposed Final Decree settling the Amended Account ^[FN15] , and an Affidavit of Attorney Fees with the supporting documentation discussed in this decision shall be prepared and filed with the Court on or before April 1, 2024 and that no further distributions, other than those allowed hereunder shall be made by the Administrator without a further order of this Court.