FOR PUBLICATION
ATTORNEYS FOR APPELLANTS: ATTORNEYS FOR APPELLEE:
RONALD E. ELBERGER THOMAS A. WITHROW
GEORGE T. PATTON, JR. C. DANIEL YATES
Bose McKinney & Evans LLP B. KEITH SHAKE
Indianapolis, Indiana Henderson, Daily, Withrow & DeVoe
Indianapolis, Indiana
MARVIN J. FRANK
ROBERT M. HAMLETT
Frank & Kraft, A Professional Corporation
Indianapolis, Indiana
IN THE COURT OF APPEALS OF INDIANA
IN THE MATTER OF THE SUPERVISED )
ESTATE OF LAWRENCE W. INLOW, Deceased )
_________________________________________ )
)
INLOW CHILDREN, )
)
Appellants, )
)
vs. ) No. 29A05-9907-CV-319
)
)
THE PERSONAL REPRESENTATIVE OF THE )
ESTATE OF LAWRENCE W. INLOW, )
)
Appellee. )
APPEAL FROM THE HAMILTON SUPERIOR COURT NO. 2
The Honorable Jerry M. Barr, Judge
Cause No. 29D02-9705-ES-60
OPINION – FOR PUBLICATION
III. whether the trial court erred in awarding Henderson Daily attorney fees because it
had no written fee agreement with the estate.
On January 21, 1999, Kindig supplemented his petition with attachments “disclosing the tasks
and time incurred, by lawyer or legal assistant, by day, in connection with
work performed on the Inlow Estate beginning May 21, 1997 through and including
November 30, 1998.”
On January 25, 1999, the Inlow children filed a brief opposing Kindig’s petition,
in which they asserted that
the total fees, based on Henderson Daily’s
highest specialty hourly rate for services
rendered from the inception of the Estate through November 30, 1998, only amount
to Five Hundred Nineteen Thousand Four Hundred Ninety One Dollars ($519,491.00) – less
than one-third the outrageous, unconscionable and unreasonable fee requested. Otherwise stated, Henderson
Daily, to the detriment of the decedent’s heirs, is seeking not only a
premium hourly rate for routine and customary services but a significant triple multiplier
thereof which is both unwarranted and unreasonable.
Pursuant to Indiana Trial Rule 52,
See footnote
the Inlow children also requested the court
to enter findings of fact and conclusions of law in its ruling on
Kindig’s petition. After two days of hearings, the trial court approved an
interim payment of $750,000 in attorney fees to Henderson Daily on January 29,
1999. After several additional hearings, the trial court issued its findings of
fact, conclusions of law, and judgment on Kindig’s petition on June 18, 1999.
The trial court’s judgment reads in relevant part as follows:
26. In addition to the matters discussed herein, Counsel researched numerous other
legal issues and took numerous actions to further the interests of the heirs
of the Estate. Counsel provided appropriate and continual attention to Estate matters
and did so by committing its firm’s resources to the preclusion of other
work and the development of new firm clients.
27. Counsel for the Personal Representative accepted employment herein notwithstanding the responsibilities
and risks inherent in representing an estate of this size and complexity, as
reflected in the complexity of the issues presented in this administration. The
law firm as [
sic] counsel for the Personal Representative in spite of the
litigious and sometimes acrimonious nature of the Estate proceedings. The responsibilities and
risks were present for Counsel and their law firm even without any evidence
of errors or omissions on its part in the conduct of the administration
of the Estate and in legal representation of the Personal Representative.
28. The Court took judicial notice of the proceedings that have occurred
before it in this case and is cognizant of the nature and significance
thereof. The Personal Representative’s Counsel and their firm have thoroughly and appropriately
represented their client in all proceedings and filings before this Court. Their
efforts have reflected a high level of skill, ability, competency and thorough preparation.
29. The Estate administration has proved to be extraordinarily adversarial in nature,
due in part to the disharmony among Mr. Inlow’s heirs. This situation
and its attendant results have required Counsel to expend considerable time and resources
preparing for and attending contested hearings on a multitude of subjects.
30. The size of the Estate has also contributed to its complexity
and its extraordinary nature, and has required Counsel to consider a variety of
complex legal issues and to utilize the services of tax, investment and accounting
professionals on a daily basis. The Personal Representative and Counsel have strategically
and successfully assembled a team of professionals to prudently address all tax and
investment issues as they arise.
31. Because of the circumstances of Mr. Inlow’s death, Counsel have also
been required to research and investigate a potential wrongful death claim on behalf
of the Estate. The multi-jurisdictional implications of the potential claim and the
legal theories and anticipated defenses required Counsel to engage in substantial research and
to consult with attorneys of other jurisdictions.
32. As a result of the complexity of the issues, the acrimony
and disharmony among the heirs and Personal Representative(s) and the substantial amount of
contested proceedings which have already occurred in this Estate, the law firm and
its attorneys have assumed significant personal and professional responsibilities and risks in accepting
their role as counsel for the Personal Representative of the Estate.
33. As a result of the significant time spent in administering the
Estate, the law firm and counsel for the Personal Representative have foregone other
opportunities to devote immediate and substantial attention to other client matters, as well
as to the development of new business and clients.
34. Having represented that he and his counsel have completed more than
eighty percent (80%) of the tasks to be addressed in this Estate by
June 30, 1998, Mr. Kindig filed his Petition seeking an interim award of
attorney’s fees for services performed in the sum of $1,520,000.00, and a total
attorney fee award of $1,900,000.00 for all work to comp[l]ete this Estate, assuming
no “unanticipated difficulties or circumstance[s],” although such are unspecified in the Petition.
Although [Hamilton County] Local Probate Rule 11.6 requires that all petitions for attorney’s
fees set forth “all services performed in detail as well as the amount
of the fee requested and how it has been calculated,” Mr. Kindig, upon
filing his Petition, failed or neglected to show how the fee request was
calculated.
35. Four (4) days before the hearing on the Petition commenced, Mr.
Kindig as Personal Representative and his Counsel, belatedly filed a “Supplement to Petition
for Allowance of Attorneys’ Fees and Authority to Make Partial Payment,” submitting therewith
its time and task reports from the time period from May 21, 1997,
through November 30, 1998. Counsels’ time and task reports for December, 1998,
and January and February, 1999, however, were not supplied until March, 1999, during
the last three days of the hearing. Applying the specialty hourly rates
for work performed by the law firm’s partners, and the flat rates charged
for most of their associates and for all of the firm’s non-attorney staff
to the hours performed by each such person in the firm who worked
on this estate from May 21, 1997, through the end of February, 1999,
discloses that the total fee for services rendered, on an hours worked times
hourly rate basis is $705,247.50, without any consideration being given to the application
of the criteria as set forth in Rule 1.5(a) of the
Rules of
Professional Conduct, applicable case law and this Court’s own guidelines.…
38. The hourly rates reflected in Counsel’s time and task reports for
the time spent by the law firm’s personnel rendering services to the Estate
are the highest specialty rates charged by that law firm and include not
only the attorneys who are either partners or associates, but also other staff
categories such as paralegals, legal assistants, and summer associates, the latter of whom
are assigned a flat rate by the law firm.…
45. Mr. Kindig never entered into a written agreement with his Counsel,
or their law firm, concerning a reasonable fee for their legal services as
attorneys for the Personal Representative.
46. The time and task reports of Counsel reflect an unusually large
number of hours being devoted to the Petition for Fees which was the
subject of this Hearing. Work on the Petition commenced on December 1,
1997, but began in earnest in June, 1998, and continued through the completion
of the Hearing. Approximately 900 total hours [were] expended concerning the Fee
Petition. The expert testimony was divided as to whether counsel should charge
for the preparation of a Fee Petition; however, such a large number of
hours seems clearly excessive, even where the amount of attorney fees was likely
to be contested.…
48. Although counsel for the Inlow Children assert numerous examples of double-billing,
plus billing for work contracted to other counsel, accounts, and other third-parties, this
Court cannot conclude that the numerous conferences and reviews and meetings go beyond
normal prudence in an estate of this size and enter the arena of
“duplicate billing.”
49. This Court’s Attorney Fee Guidelines, nor does case law, nor does
Rule 1.5 of the
Rules of Professional Conduct limit attorney fees to an
hourly calculation.…
An attorney performing services for the estate at the instance of the personal
representative shall have such compensation therefor[] out of the estate as the court
shall deem just and reasonable.…
4. Additionally, this Court has adopted its own guidelines for determining the
amount of a just and reasonable fee.
See Maximum Fee Guidelines for
Supervised Estates (“Guidelines”), prepared by the Probate Committee of the Indiana Judicial Conference
and as modified and adopted by this Court in Hamilton County Local Probate
Rule 11.6.
5. The Guidelines provide that attorney fees for the performance of gross
estate services (excepting extraordinary services) for a gross estate of greater than $1,000,000.00
should not exceed one percent (1%) of the value of the estate.…
8. In the case of estates requiring extraordinary services, the Guidelines provide
for an award of an extraordinary fee request. Extraordinary services include:
sale of personal property, sale of real property, partial distribution, will contest actions,
contesting claims, adjusting tax matters, contested hearings, petitions for instructions, heirship determinations, generating
additional income for the estate, etc.…
9. This Court’s fee guidelines clearly express the Court’s intention that the
schedule is a
maximum fee schedule. Moreover, the guidelines clearly state that
“attorneys are urged to discuss their fee and that of the personal representative
at the time they are retained…,” a discussion which both the Personal Representative
and Counsel acknowledge did not take place.…
11. This Court has previously expressed its concerns with respect to fee
requests submitted by attorneys representing Jason L. Inlow during the time Mr. Inlow
served pursuant to the Court’s appointment as Co-Personal Representative. Those concerns fell
into three principal categories: (1) the hourly rates charged or sought to
be charged by certain attorneys; (2) the likelihood that inter-attorney conferences represented or
might represent a form of duplication of effort and/or double billing; and (3)
the amount of time expended and sought to be charged for the sole
purpose of supporting counsel’s request for fees and preparation for hearings in connection
with their fee requests. As it pertains to the current hearing, the
Court is also concerned whether it is able to determine, in reviewing the
time and task reports of Counsel and their law firm, what parts of
conferences and which items being researched or addressed or attended in fact was
a duplication.
12. The Court notes that no issue has been raised, nor any
challenge made, with respect to the specialty hourly rates charged for by the
Personal Representative’s attorneys or to the flat hourly rates of their law firm’s
employees. Indeed, the interested parties have acknowledged that those rates including the
so-called specialty rates are fair and reasonable.
13. Based on the size of the Estate, the complexity of the
issues involved in its administration, the responsibilities and risks inherent in administering an
estate of this size and complexity, the adversarial and acrimonious nature of the
Estate administration, and the expenditures of time and resources by the Counsel, this
Court determines that an interim fee of $750,000.00 is just and reasonable and
appropriately reflects the time and work involved in the administration of the Estate
through February, 1999.
14. The interim fee is appropriate despite the fact that it exceeds
the number of hours already incurred by its attorneys in administering the Estate,
since Counsel have been confronted with complex and difficult issues in a litigious
and acrimonious atmosphere.
15. Under other circumstances, a higher fee for services to date might
be appropriate (See this Court’s Guidelines); however, other fees have been paid to
other experts for services that might otherwise have been paid to the Personal
Representative’s Counsel and substantial fees have already been paid to Co-Personal Representative’s Counsel
for legal services rendered to the Estate.
16. The Court is concerned by the amount of time expended by
the Personal Representative’s Counsel in support of its fee request and believes it
is excessive. The Court cannot say precisely how much time was in
fact expended on the fee request. The Court noted in its previous
order that [Jason’s counsel] had expended 42 hours “with the sole purpose of
supporting their request for fees and in preparation for hearings in connection with
their fee requests.” Such hours cannot be used to award a multiple
of the hourly rate. However, after deleting the excessive hours expended for
the Fee petition, but taking into account the other findings of the Court,
this Court remains convinced that the $750,000.00 interim fee is appropriate.
On July 6, 1999, the Inlow children initiated this appeal by filing a
praecipe for the record of proceedings.
See footnote
On December 16, 1999, Kindig moved
to dismiss the appeal as untimely, asserting that the trial court’s January 29,
1999, order awarding $750,000 in attorney fees was an appealable interlocutory order under
Indiana Appellate Rule 4(B)
See footnote
and was thus a mandatory appeal. Rejecting Kindig’s
interpretation of Indiana Appellate Rule 4(B) under Trojnar v. Trojnar, 698 N.E.2d 301
(Ind. 1998), this court denied his motion to dismiss “on the basis that
the administration of a decedent’s estate is a single proceeding and accordingly, alleged
error in the awarding of attorney’s fees in the administration of an estate
need not be appealed as a final judgment unless the trial court has
made the determination and direction expressly required by Trial Rule 54(B).” See
Matter of Estate of Newman, 174 Ind. App. 537, 544-46, 369 N.E.2d 427,
431-32 (1977).
Sans v. Monticello Ins. Co., 718 N.E.2d 814, 818-19 (Ind. Ct. App. 1999)
(citations omitted), trans. denied.
Special findings must contain all facts necessary to recovery by a party and
the ultimate facts from which the court has determined the legal rights of
the parties. The purpose of special findings is to provide parties and
reviewing courts with the theory upon which the court’s determination was made, thereby
preserving the right of review for error. A court on review must
determine whether the specific findings are adequate to support the trial court’s decision.
The findings are adequate if they disclose a valid basis under the
issues to support the result reached in the judgment.
Matter of Estate of Kroslack, 570 N.E.2d 117, 121 (Ind. Ct. App. 1991)
(citations omitted). “However, we may reverse a trial court’s judgment only
if its findings constitute prejudicial error. A finding of fact is not
prejudicial to a party unless it directly supports a conclusion of law adverse
to him.” Riehle v. Moore, 601 N.E.2d 365, 369 (Ind. Ct. App.
1992) (citations omitted), trans. denied.
Ind. Professional Conduct Rule 1.5.
This case presents an issue of first impression in Indiana: whether preparing
and defending the reasonableness of a fee petition qualify as “services for the
estate” under section 29-1-10-13.
Generally, in construing a statute we will only interpret
a statute that is ambiguous. Ballard v. State, 715 N.E.2d 1276, 1279-80
(Ind. Ct. App. 1999). This court may not interpret the meaning of
a statute that is clear and unambiguous on its face. Moshenek v.
Anderson, 718 N.E.2d 811, 813 (Ind. Ct. App. 1999). “A statute is
ambiguous when it is susceptible to more than one interpretation.” Ballard, 715
N.E.2d at 1280. When a statute is ambiguous, we are “compelled to
ascertain and execute legislative intent and to interpret the statute in such a
manner as to prevent absurdity and difficulty and prefer public convenience.” Indiana
State Teachers Ass’n v. Board of Sch. Comm’rs., 693 N.E.2d 972, 974 (Ind.
Ct. App. 1998). In our interpretation, we must be mindful of the
purpose of the statute and the effect of such an interpretation. Id.
Further, in interpreting the statute, we will read the statute as a
whole, attempting to give effect to all provisions so that no section is
held meaningless if it can be reconciled with the rest of the statute.
Citizens Action Coalition of Indiana, Inc. v. Indiana Statewide Ass’n of Rural
Elec. Coops., Inc., 693 N.E.2d 1324, 1327 (Ind. Ct. App. 1998). The
legislature’s definition of a word binds us; however, “when the legislature has not
defined a word, we give the word its common and ordinary meaning.”
Id. “Further, we presume that our legislature intended its language to be
applied in a logical manner consistent with the statute’s underlying policy and goals.”
Id.
Few states have addressed the question before us. However, there is case
law supporting both sides. The Inlow children contend that “services for the
estate” as used in Indiana Code Section 29-1-10-13 does not include preparing and
defending the reasonableness of a fee petition, citing Estate of Larson, 694 P.2d
1051 (Wash. 1985) and In re Sloan Estate, 538 N.W.2d 47 (Mich. Ct.
App. 1995).
In
Larson, several heirs objected to the personal representative’s final report and petition
for distribution because they considered the requested attorney fees of $23,145 to be
excessive. After a hearing, the commissioner found the attorney fees to be
reasonable and awarded additional fees and costs incurred by the attorneys in defending
the original request. The objectors sought review of the commissioner’s decision, and
the superior court judge approved both the original request and the commissioner’s assessment,
and also allowed additional fees and costs to the attorneys for resisting the
motion for review. The Washington Court of Appeals affirmed the trial court’s
ruling. The Washington Supreme Court then reviewed both the reasonableness of the
original fee and the propriety of assessing additional fees against the estate to
prove the reasonableness of the challenged fees.
The
Larson court noted that part of the attorneys’ time spent preparing to
meet the original objections was included in the original fee request. The
commissioner awarded an additional $10,000 in attorney fees for time spent preparing to
meet the objections and for trial on the reasonableness of the original fee
request. The court set aside the $10,000 award, holding that “attorneys in
probate are not entitled to an additional fee out of the estate in
proving the reasonableness of their fees.” Id. at 1053. The court
agreed with the objectors that such an award “violates public policy by penalizing
victimized parties from legitimately challenging attorney fee requests in probate proceedings.” Id.
at 1059. The court reasoned that “[i]n defending a challenge to a
requested attorney fee in a final report in probate, the attorney is a
real party in interest,” and thus, the time spent and fees incurred in
defending the objections served only the attorneys’ interests and was of no benefit
to the estate. Id. “Indeed, under the trial court ruling, the
value of the estate was reduced in direct proportion to the amount the
court increased the attorney fee.” Id. See also In re Estate
of Halas, 512 N.E.2d 1276, 1285 (Ill. App. Ct. 1987) (“Time spent preparing
or litigating the fee petition does not benefit the estate and will not
be allowed.”) (citing Larson).
See footnote
In Sloan, the Michigan Court of Appeals considered whether the state’s probate statutes
allowed for “payment from an estate of attorney fees and costs incurred in
establishing and defending a petition for attorney fees,” an issue of first impression
in Michigan. 538 N.W.2d at 48. The relevant Michigan probate statutes
provided that “a fiduciary of an estate may employ counsel to perform necessary
legal services in behalf of the estate,” Mich. Comp. Laws § 700.543 (emphasis
added), and that “[a]n attorney is entitled to receive reasonable compensation for services
rendered to an estate, in an amount approved by the judge .…”
MCR § 8.303 (emphasis added). Michigan appellate courts had consistently held, both
before and after the enactment of section 543, that “legal services rendered in
behalf of an estate are compensable where the services confer a benefit on
the estate by either increasing or preserving the estate’s assets,” Sloan, 538 N.W.2d
at 49, and the court noted that the attorneys had failed to establish
that their fee-related services were beneficial to the estate. Thus, the court
held that section 543 “does not include compensation for the ordinary fees and
costs arising out of the need to establish and defend a petition for
attorney fees.” Id. at 50. The court reasoned that, because “fees
for fees” claims are brought on behalf of the attorney seeking the fees,
they do not increase or preserve the estate’s assets. Instead, “the ordinary
fees and costs incurred in establishing and defending a fee petition are inherent
in the normal course of doing business as an attorney, and the estate
may not be diminished to pay those fees and costs.” Id. at
49. The Sloan court also noted the public policy reasons for such
a rule: “routine allowance of such claims might inhibit a beneficiary or
other interested person from raising valid objections to fee petitions out of concern
that the estate’s assets will be diminished.” Id. at 50.
Conversely, claiming that “fees for fees” should be considered a part of the
“just and reasonable compensation” allowed probate attorneys under section 29-1-10-13, Kindig cites
In
re Estate of Trynin, 782 P.2d 232 (Cal. 1989). California Probate Code
Section 910 provides that attorneys for personal representatives “shall be allowed fees from
the estate for conducting the ordinary probate proceedings and ‘such further amount as
the court may deem just and reasonable for extraordinary services.’”
See footnote
Id. at
232. The California Supreme Court addressed whether the fees allowed under that
section include compensation for time reasonably spent to establish and defend the attorney’s
own fee claim, and concluded that it did authorize courts to award such
compensation. Id. at 233. In California, an attorney is compensated by
a percentage of the estate’s value for conducting the “ordinary probate proceedings.”
Fees for “extraordinary services,” however, are determined in the exercise of judicial discretion
by what amount is “just and reasonable” for those services.
See footnote
The California
courts have not focused exclusively on the benefit to the estate from the
services rendered in fixing compensation, but look also to whether the attorneys were
“‘acting in consonance with the fiduciary duties imposed upon them.’” Id. at 235
(quoting Ludwig v. Superior Court, 19 P.2d 984 (Cal. 1933)).
The
Trynin court noted the unique character of fee claims in estate proceedings:
although the fee award is statutorily authorized, as in many other cases,
it is unlike those other cases in that the probate statute does not
shift the fee from the successful litigant to the opposing party. Id.
at 236. The court most closely analogized probate fee claims to bankruptcy
fee claims: in both cases, the fee is set by the court
and paid out of an estate. Id. at 238. In bankruptcy,
“fees for fees” are allowed as “actual, necessary expenses,” 11 U.S.C. § 330(a)(1),
because fees are statutorily authorized, and preparation of a fee petition is statutorily
required. Considering all this, the court held that although “fee litigation confers
no immediate or direct benefit on the estate, it becomes a necessary incident
to the attorney’s work for the estate, and so compensable, when unjustified challenges
are raised to a fee claim.” Trynin, 782 P.2d at 238.
Thus, section 910 was held to include work reasonably performed by an attorney
to establish and defend a fee claim. The court noted its own
public policy reason for the rule: “a contrary rule would effectively deny
full and fair compensation to attorneys and thereby discourage qualified and competent counsel
from undertaking to perform extraordinary services for … decedents’ estates.” Id.
See footnote
Having thus laid out the respective arguments and supporting authority, we turn our
attention to the instant case. Although both the trial court and the
parties focus on the propriety of charging fees for preparing a fee petition,
rather than for defending its reasonableness, these issues may be considered two sides
of the same coin. We first address whether an attorney may recover
fees for preparing a fee petition under section 29-1-10-13. To be paid,
an attorney must first tell a client what he owes. Requiring a
client to pay an additional amount for being told what he owes in
the first instance is neither good business nor good law. The preparation
of a fee petition, as of any billing statement, is clearly a service
performed for the attorney seeking to be paid, rather than a service performed
for the estate. Thus, time spent preparing the fee petition is a
routine cost of doing business that must be factored into an attorney’s hourly
rate, as is universally done with non-probate clients, and cannot be considered a
separate expense to be subsidized by the estate as part of the compensation
awarded pursuant to section 29-1-10-13.
Kindig warns against the dangers of “diluting” the value of a fee award
by disallowing “fees for fees” and asserts that Henderson Daily “expended extraordinary time
and resources in properly administering the Estate” and “engaged in a thorough review
of time and task reports which were presented to the trial court in
support of Henderson Daily’s fee petition.” We acknowledge that the administration of
an especially complex estate may require an attorney to devote more time than
is usually necessary to preparing a fee petition, but the necessity for expending
such time and effort will usually be apparent at the outset of the
representation and should be reflected in any fee agreement into which the parties
enter. Moreover, a conscientious attorney with the expertise to administer such an
estate will also be experienced at efficiently tracking and billing for time spent
performing various services for the estate. If due diligence is exercised in
keeping track of time as it is spent, hundreds of hours should not
be required to prepare even a lengthy fee petition. In fact, the
burden of preparing a fee petition for sizable estates may even be lessened
where, as here, probate attorneys “farm out” many of the complicated tax, securities,
and accounting issues to outside experts and simply receive a bill for their
services.
We likewise conclude that section 29-1-10-13 prohibits a probate attorney from seeking fees
from the estate or a party for defending the reasonableness of a fee
petition. Again, such a “service” is a routine cost of doing business
and must be factored into an attorney’s hourly rate. In the case
of a meritorious challenge to a fee petition, defending its reasonableness cannot seriously
be considered a service “for the estate,” especially if the challenge results in
a reduction of the proposed fee. We recognize, however, that acrimony and
litigiousness occasionally rear their ugly heads during estate administration and that probate attorneys
may have to defend their fee petitions against baseless challenges brought by contentious
heirs or legatees. An attorney may recover fees in such cases under
Indiana Code Section 34-52-1-1(b) if the court finds that the complaining party
(1) brought the action or defense on a claim or defense that
is frivolous, unreasonable, or groundless;
(2) continued to litigate the action or defense after the party’s claim
or defense clearly became frivolous, unreasonable, or groundless; or
(3) litigated the action in bad faith.
See footnote
Kindig fears that prohibiting “fees for fees” will discourage “competent attorneys … from
providing services necessary to the proper administration of the estate”; on the contrary,
we are confident that competent attorneys who wish to avoid meritorious fee petition
challenges will prudently enter into written fee agreements
See footnote
with personal representatives and scrupulously
document the nature and duration of the services they perform for their respective
estates.
In sum, we hold that Indiana Code Section 29-1-10-13 prohibits the recovery of
attorney fees from the estate or a party for preparing or defending the
reasonableness of a probate fee petition.
See footnote
We therefore reverse and remand with
instructions to deny Henderson Daily’s request for fees derived from preparing and defending
its interim fee petition. Subtracting these charges may prove a herculean task
due to Henderson Daily’s failure to specify and the trial court’s inability to
precisely determine the hours and rates billed for preparing and defending the petition.
See footnote
We address the issue of fee determination in greater detail below.
However, the number of attorneys employed is not a determination [sic] factor in
fixing the fee to be allowed. Indeed, where more than one attorney
is unnecessarily employed by the representative, no more can be allowed for such
attorneys’ services than would amount to reasonable compensation if only one were employed,
and in such case the single reasonable compensation allowed must be divided among
the several attorneys rendering services.
34 C.J.S. Executors and Administrators § 262 (1998) (footnotes omitted).
Kindig observes that the trial court found it “[could] not conclude that the
numerous conferences and reviews and meetings go beyond normal prudence in an estate
of this size and enter the arena of ‘double billing.’” However, he
fails to mention that the trial court also concluded that it was “concerned
whether it [was] able to determine, in reviewing the time and task reports
of Counsel and their law firm, what parts of conferences and which items
being researched or addressed or attended in fact was a duplication.”
We are troubled that the trial court was able, in the Inlow children’s
words, to “itemize and mathematically quantify the reduction” for double billing by Jason’s
counsel, but was unable even to determine whether Henderson Daily had done so.
The trial court’s conclusion number 11 is simply not supported by its
finding number 48, which is hardly surprising given the conflicting testimony adduced at
the hearing and the vagueness of Henderson Daily’s time and task reports.
Although we recognize that the participation of more than one attorney is reasonable
in certain instances, and that determination of attorney fees is a matter of
trial court discretion, we conclude that remand is proper where the trial court
acknowledges that the fee petition itself does not permit a reasoned determination of
whether there was unnecessary duplication of effort leading to double billing. To
assist its determination on remand, the trial court may order Henderson Daily to
show cause why it cannot submit more detailed time and task reports, or
it may hold additional hearings on this particular issue. Should the trial
court find any instances of unnecessary duplication of effort, it must deduct such
charges from Henderson Daily’s fee award.
(2) to subtract any charges related to preparing the fee petition or defending its
reasonableness;
(3) to subtract any charges for unnecessary duplication of effort in providing services for
the estate;
(4) to determine a just and reasonable fee for Henderson Daily’s services pursuant to
Indiana Code Section 29-1-10-13 and consistent with the criteria and precedent discussed above;
(5) to issue findings of fact and conclusions of law sufficiently detailed to disclose
the basis for its judgment;
(6) should the resulting fee be less than $750,000, to order Henderson Daily to
refund the balance to the estate plus an annual interest rate of eight
percent (8%) pursuant to Indiana Code Section 24-4.6-1-101; or
(7) should the resulting fee be more than $750,000, to order the estate to
pay the balance to Henderson Daily plus an annual interest rate of eight
percent (8%).
Reversed and remanded.
DARDEN, J., and ROBB, J. concur.