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IN THE MATTER OF ESTATEOFDAWSON, 51778-3-I (Wash.App. 11-1-2004)
In the Matter of the Estate of: GLENDALEEN DAWSON, Deceased. DAN L.
LARSON, Personal Representative for the Estate of Glendaleen Dawson,
Appellant, v. MIMI BURWELL, Respondent.
No. 51778-3-I
The Court of Appeals of Washington, Division One.
Filed: November 1, 2004
UNPUBLISHED OPINION
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]
Appeal from SuperiorCourtofKingCounty. Docket No: 01-4-03029-6.
Judgment or order under review. Date filed: 01/06/2003.
Counsel for Appellant(s), Dan L. Larson, Attorney at Law, 2245
32nd Ave W, PO Box 99061, Seattle, WA98199-0061.
Counsel for Respondent/Cross-Appellant, Anne Loucks Branstad, Loucks
Law Firm, 1601 5th Ave Ste 2200, Seattle, WA98101-1651.
APPELWICK, J.
Dan Larson (Larson) drafted Glendaleen Dawson's last will. Larson was
also named as executor and personal representative of Dawson's estate.
Mimi Burwell (Burwell) was the sole residual beneficiary of Dawson's
estate. Larson managed the distribution of Dawson's estate following
Dawson's death, charging the estate $68,989 in attorney and personal
representative fees. Burwell objected to Larson's accounting and fee
request, claiming that Larson charged legal rates for personal
representative work, and that his hours were excessive. A court
commissioner reduced Larson's fee request to $12,000, and a trial court
judge affirmed the commissioner's order on motion for revision. Larson
appeals. Burwell cross-appeals the trial court's denial of her request for
attorney fees and costs and its denial of her request for disgorgement of
Larson's fees. We affirm.
FACTS
Beginning in 1977, Glendaleen Dawson engaged attorneys in Dan Larson's
law office, first Vaughn Evans and in later years, Lawson himself, to
prepare versions of her will. Larson prepared Dawson's last will and
codicil in 1999.
After Dawson's death Larson was appointed personal representative for
her estate. He filed a declaration of completion of probate on August
15, 2002. Dawson's estate consisted of five assets:
(1) her residence, which eventually sold for
approximately $254,000;
(2) an account containing stocks and some cash at
Paine Webber totaling about $528,000;
(3) Bank accounts at Washington Federal Savings
Association totaling about $359,000;
(4) Personal property worth about $2,500;
(5) Life insurance and tax refunds worth about
$20,000.
Larson's declaration for completing work on the estate included
the following statement of fees:
Personal representative & Attorney (combined) $ 68,989
Appraiser $ 440
Accountant $ 3,895
Filing, recording and publishing $ 222
The $68,989 reflects Larson's charges to the estate for over 340 hours
in attorney hours, at $180 per hour, and for over 56 personal
representative hours, at $90 per hour.
As Dawson's personal representative, Larson assisted the real estate
agent with the sale of Dawson's residence. He also disposed of Dawson's
more liquid assets, `transfer[ring] over $500,000 of securities from
[Dawson's] accounts to the estate accounts and then to the devisees with
virtually no investment loss other than commissions.' Larson also
disposed of the estate's liabilities, located specific devisees, and took
care of distributing assets for Dawson's life insurance beneficiaries.
Finally, Larson hired Ken Weyant, (Weyant) an accountant, although not a
CPA, to prepare estate tax forms for Dawson's estate.
Burwell and her husband were Dawson's long-time neighbors and lived
near Larson's law office. As Dawson's sole residuary beneficiary, Burwell
received $488,790 from Dawson's estate. On September 12, 2002, Burwell
filed an objection to Larson's fee request, asserting that the personal
representative fees, attorney fees, accounting fees, and appraiser fees
were unreasonable. She also objected that Larson's accounting was
incomplete.
In findings and conclusions, a court commissioner found that Dawson's
estate was simple and uncomplicated, `with no unusual problems or
assets.' The commissioner also found that although Larson's hourly rate
of $180 was reasonable, Larson had improperly charged Dawson's estate at
`his attorney rate for ordinary and routine matters normally performed by
staff', and `for matters normally performed by the personal
representative.' The commissioner also found that Lawson had `expended
unnecessary and unreasonable amounts of time in the execution of his
duties as personal representative and attorney' for Dawson's estate.
Finally, the commissioner found that Weyant, not Larson, `was the
preparer of the various tax returns' on Dawson's behalf. The commissioner
concluded that Larson had breached his fiduciary duty to Burwell, as the
estate's beneficiary, `when he spent excessive and unnecessary amounts of
time on the estate . . . when he charged attorney rates for staff and
personal representative duties, and when he charged unreasonable attorneys
fees and unreasonable personal representative fees to [the e]state[.]'
Larson filed a motion for revision of the commissioner's order,
alleging that the commissioner had not used a reasonable standard, had
failed to consider `the detailed time statements' he submitted to support
his request; had made no findings to support a conclusion that some of
Larson's hours were unnecessary, arbitrarily concluded that $12,000 was a
reasonable fee, and failed to specify what work should have been
performed by staff at staff rates instead of at attorney rates. Larson
requested that the court approve his fee request of $68,989.00 in full.
The trial court denied Larson's motion for revision.
Burwell filed a motion for clarification, in essence, requesting
attorney fees, which the trial court also denied.
Larson appeals the trial court's denial for revision. Burwell
cross-appeals the trial court's order denying disgorgement of Larson's
fees and her order denying Burwell fees and costs.
ANALYSIS
I. Standard of Review
`A trial court's award of fees in probate matters is reviewed under an
abuse of discretion standard.' In re Estate of Mathwig,
68 Wn. App. 472, 476, 843 P.2d 1112 (1993). This court reviews a
commissioner's findings for substantial evidence where, as here, the
commissioner heard testimony. In re Estate of Larson, 36 Wn. App. 196,
200-01, 674 P.2d 669 (1983)
II. Trial Court's Review of Court Commissioner's Decision
Larson argues that the superior court erred when it failed to enter its
own findings of fact and conclusions of law into the record when it
reviewed the commissioner's decision.
The trial court reviewed the same materials as the commissioner had
reviewed and heard oral argument, but did not produce findings and
conclusions.
On a motion to revise a commissioner's ruling, the superior court
conducts a de novo review based on the record and the commissioner's
findings and conclusions. In re Marriage of Moody, 137 Wn.2d 979, 992-93,
976 P.2d 1240 (1999). The superior court's decision to accept or revise
the commissioner's decision then becomes the decision of the court. State
v. Wicker, 105 Wn. App. 428, 433, 20 P.3d 1007 (2001). RCW 2.24.050
provides that the findings and orders of a court commissioner not
successfully revised become the orders and findings of the superior
court. A trial court's adoption of a court commissioner's orders and
judgment may be either by expressed or implied rationale. In re
Dependency of B.S.S., 56 Wn. App. 169, 170, 782 P.2d 1100 (1989),
review denied, 114 Wn.2d 1018, 791 P.2d 536 (1990). Here, the trial court
impliedly adopted the commissioner's orders and judgment pursuant to
statute when it did not revise the commissioner's order. The trial court
therefore did not err in failing to enter its own written findings and
conclusions.
III. Calculation of Attorney and Personal Representative Fees
Larson asserts that there is insufficient evidence to support the trial
court's determination that $12,000 was a reasonable fee for his work on
Dawson's estate. We disagree.
A. Estate Tax Returns
Larson asserts that there was insufficient evidence to support the
trial court's finding that Weyant prepared Dawson's estate tax returns.
Larson submitted records to the trial court showing that he spent 56.2
hours preparing estate tax returns and amended returns for Dawson's
estate. The record does not show how many hours Weyant logged preparing
Dawson's estate tax returns, but in his accounting, Larson submitted a
request for $3,895 for Weyant's work on Dawson's account.
The commissioner ordered that Weyant's accounting fee of $3,895 be
paid, and `took that into account in reducing Mr. Larson's fees
accordingly, because I did consider the accountant as being the person
that did the primary work on this case, on the 706.' Larson argues that
Weyant was not an attorney, CPA or enrolled agent, and therefore not
qualified by the Internal Revenue Service to sign the Federal Estate Tax
Return, IRS Form 706 (Form 706). He reasons that therefore, the court
erred in denying his request for 56.2 hours of work to prepare Dawson's
Form 706. Both Larson and Weyant signed the estate's Form 706, Larson as
the estate's executor and Weyant as preparer.
We do not subscribe to Larson's argument that he should be awarded fees
for the preparation of the estate's Form 706 merely because Weyant was
not authorized under the IRS's regulations to sign the Form 706 as
executor. The evidence is sufficient to support the trial court's finding
that Weyant prepared Dawson's Form 706. The trial court did not err in
finding that Weyant prepared Dawson's estate tax returns.
B. Failure to Follow the Lodestar Method
Larson also contends that the trial court erred when it failed
to follow the lodestar method of reasonable fee calculations. The
trial court found that Larson:
7. [I]mproperly charged the Estate of Glendaleen
Dawson his attorney rate for ordinary and routine
matters normally performed by staff;
8. [I]mproperly charged the Estate of Glendaleen
Dawson his attorney rate for matters normally
performed by the personal representative; and
9. [E]xpended unnecessary and unreasonable amounts of
time in the execution of his duties as personal
representative and attorney for the Estate of
Glendaleen Dawson.
In determining the amount of Larson's award, the commissioner stated: I
am unable, really, because of the way the statements are provided, . . .
to actually figure out line item by line item which of the fees should be
disallowed. I am instead looking at the expert witnesses on this matter
and also what I have seen is customary on this calendar. I am going to
reduce his fees, total fees, to — for P.R. and attorney work — to $12,000
in this case.
The trial court based its conclusion upon Larson's billing records and
the testimony of attorney experts. Larson's records show that on numerous
instances he charged attorney rates for non-attorney work. For example,
he charged attorney rates for 2.8 hours of file sorting and
administrative work, 2.7 hours to talk with Burwell about Dawson's death
certificate, contacting the funeral home, and other activities not
requiring legal expertise and knowledge to execute.
Three expert attorney witnesses testified that the estate could have
been settled for $4,500, $6,000, and $8,500, respectively. James
Minorchio (Minorchio), one attorney expert, stated that it was
`inconceivable that any lawyer could spend [340 hours] even if the lawyer
had never done a probate before.' John Ederer (Ederer), an attorney whose
practice includes probate work, noted that Larson charged for court
appearances when filings would have sufficed on at least eight occasions;
could have filed inventories and tax returns by mail instead of in
person; and charged for travel time to over twenty meetings with Weyant,
the accountant. Ederer stated that Larson's hours, `even recognizing that
he was serving both as attorney for the estate and as executor' were
unreasonable. He estimated that work on Dawson's estate should not have
exceeded 25 billable hours. Charles Mullavey, another attorney expert,
opined that it was unnecessary for Larson to have made numerous personal
visits to the bank, and court appearances, in order to settle Dawson's
estate.
Larson maintains that the trial court overlooked the testimony by his
attorney expert, Mark Roberts (Roberts). Roberts testified that Larson's
fee request was in accord with the AmericanCollege of Trusts and Estates
Counsel (ACTEC)'s published commentaries on the model rules of
professional conduct (MRPC).[fn1] Roberts specifically cited ACTEC
commentary on MRPC 1.5 and MRPC 1.2. The ACTEC commentary on MRPC 1.5
expressly provides that `most states allow a lawyer who serves as a
fiduciary and as the lawyer for the fiduciary to be compensated for work
done in both capacities.' The ACTEC commentary on MRPC 1.2 states that as
a general matter `the client and the lawyer, working together, are
relatively free to define the scope and objectives of the
representation.' Roberts opined that the ACTEC commentary on MRPC 1.2 and
1.5 supported a conclusion that Larson's fee request not be disturbed
because Dawson stated in her will that judgments of the executor
regarding fees `shall not be disturbed or set aside by any court except
upon clear, cogent, and convincing evidence of fraud,' and because Larson
had provided Dawson an estimate of $65,000 for probate of her estate, a
sum close to his actual request.
The trial court did, in fact, consider Roberts' testimony, but found
that Roberts thought that such fees that [Larson] billed could
theoretically not be unreasonable. Unfortunately, it was not based on a
— it was based on what a probate could cost, not on what this probate
actually cost, and he was very careful to be clear that he had not
exhaustively looked at the fees, and he did not really deal with any of
the disputed issues[.] . . . So, it really — that report did not help me
very much.
We defer to the trial court's views regarding the credibility of
witnesses and the weight to be given to competing inferences from
circumstantial evidence. SeeState v. Walton, 64 Wn. App. 410,
415-16, 824 P.2d 533 (1992). We thus do not disturb the trial court's
assessment of Roberts' testimony.
We note, moreover, that the reasonableness of a fee is a question of
fact. Dawson's acceptance of Larson's advance estimate of $65,000 for
probate of her estate does not foreclose review of his actual fee for
reasonableness; disclosure is merely one factor in determining
reasonableness of fees. Nor does a clause in Dawson's will instructing
that fees not be disturbed barring evidence of fraud operate to eliminate
review of fees for reasonableness.
The law is clear that `an attorney is not entitled to compensation at
legal rates for services which could have been performed by staff.'
Mathwig, 68 Wn. App. at 476. Larson was not entitled to compensation at
attorney rates for non-attorney work; nor was he entitled to compensation
for unreasonable expenditures of time on attorney matters. The record
supports the commissioner's finding that Larson billed at attorney hour
rates for work that did not require the exercise of legal skill and
judgment, and that Larson's attorney hours were excessive.
Larson also asserts that the trial court erred in reducing his
attorney, executor, and accounting fees to $12,000 `without specifying
any excessive hours or fees charged' by him. Larson argues that the court
should have adopted the general lodestar method of determining fees set
forth in Mahler v. Szucs, 135 Wn.2d 398, 957 P.2d 632 (1998).
In Mahler, the court stated that `courts should be guided in
calculating fee awards by the lodestar method in determining an award of
attorney fees as costs.' Mahler, 135 Wn.2d at 433. Under the lodestar
method, the court first determines whether counsel expended a reasonable
number of hours. Mahler, 135 Wn.2d at 434. The court also determines the
reasonableness of the hourly rate of counsel. Mahler, 135 Wn.2d at 434.
The court calculates the lodestar fee by multiplying the reasonable
hourly rate by the reasonable number of hours counsel expends. Mahler,
135 Wn.2d at 434. In `rare instances,' the court has the discretion to
adjust the fee upward or downward. Mahler, 135 Wn.2d at 434. Larson, as
`the party seeking fees, bears the burden of proving the reasonableness
of the fees.' Mahler, 135 Wn.2d at 434.
Larson challenges the court's failure to employ the lodestar method.
However, it was Larson's aggregation of various activities into single
time entries that made it impractical, if not impossible, for the trial
court to precisely calculate the number of hours he expended. Because of
Larson's record-keeping practices, the court was positioned only to make
an educated estimate of the number of hours Larson reasonably expended in
probating Dawson's estate. Larson may not rely upon Mahler to claim on
appeal that the court failed to do what he made impossible. We find no
abuse of discretion by the trial court in the calculation of Larson's
fee.
IV. Denial of Attorney Fees and Costs to Sole Beneficiary
Burwell asserts on cross-appeal that the trial court erroneously denied
her attorney fees and costs to which she was entitled.
In her oral decision, the commissioner stated:
I am going to reduce [Larson's] fees, total fees, to
— for [personal representative] and attorney work —
to $12,000 in this case.
And I took into account the [personal
representative's] [sic] request for attorney's fees. I
have denied her request for attorney's fees but have
taken that into account, her expense in doing that —
I'm sorry — not the P.R.; the beneficiary['s request]
for attorney's fees, taken that request into account
here.
(Emphasis added.) The trial court's language, `I have denied her
request', is an unequivocal statement that the trial court denied
Burwell's fee request. We therefore must address whether the trial
court's denial was an abuse of discretion.
RCW 11.76.070 governs the award of fees in probate proceedings,
and provides:
If, in any probate or guardianship proceeding, any
personal representative shall fail or neglect to
report to the court concerning his trust and any
beneficiary or other interested party shall be
reasonably required to employ legal counsel to
institute legal proceedings to compel an accounting,
or if an erroneous account or report shall be
rendered by any personal representative and any
beneficiary of said trust or other interested party