Estate of Sheryll A. Minetti

Case Number

22PR00539

Case Type

Hearing Date / Time

Tue, 11/19/2024 - 09:00

Nature of Proceedings

Petition for Final Distribution

Tentative Ruling

Probate Notes:

After review of the Petition for Final Distribution, Supplement to the Petition (filed Nov. 4, 2024), and accompanying documents, it is recommended the Court grant final distribution to the heirs, and deny the full request of Mullen and Henzel for extraordinary fees, reducing the extra ordinary fee award to $3,421.

Despite the extensive notes pointing to specific entries in the billing statements, the Supplement filed on November 4, 2024, did not do enough of the same to allay the concerns posted in the previous probate notes.

Despite the argument offered in the supplement, attorneys for Petitioner gave little more than lip service to their request that the court approve the distribution of $37,419.52 from an estate that is valued at $466,306.08, and only has $ 170,757.48 in remaining cash to disburse.  Regardless of what size the overall estate was outside of probate, Counsel’s request to disburse over 21 percent of the available balance of the estate in fees and costs is a factor this Court is well within its discretion to consider, which includes the following:

1. Whether the amount of statutory compensation is sufficient to cover the ordinary services performed and the extraordinary services claimed (In re Buchman's Estate (1955) 138 Cal.App.2d 228, 235. See also Rule 7.703, subd. (a); Estate of Getty (1983) 143 Cal.App.3d 455 [discussing in dicta that massive statutory compensation can be sufficient to cover unexpected intricacies in estate administration]; and Estate of Hilton (1996) 44 Cal.App.4th 890, 912-13 [citing In re Walker's Estate (1963) 221 Cal.App.2d 792, 795 for the proposition that probate courts can disallow all extraordinary fees claims if they find statutory compensation sufficient]), keeping in mind the legislature’s policy of subsidizing fees in more complicated estates with those easily earned in less complicated estate (Estate of Hilton, supra, 44 Cal.App.4th at p. 916 [“The Legislature merely determined, in substance, that any undercompensation involved in handling small estates would be equitably adjusted in the long run by overcompensation in handling larger estates.”]);
2. The size of the estate (Estate of Hilton, supra, 44 Cal.App.4th at p. 918);
3. The work performed by the attorney (Estate of Fulton (1937) 23 Cal.App.2d 563, 567);
4. The kind and character of the assets in the estate (In re Walker's Estate, supra, 221 Cal.App.2d at p. 795);
5. The effort involved in the care and preservation of estate property (Ibid.);
6. Facts that bear upon the labor and effort of the executor, administrator and attorney in the routine administration of the estate (Ibid.);
7. Whether the work performed was beneficial to the estate (In re Buchman's Estate (1955) 138 Cal.App.2d 228, 235);
8. Whether the work performed was necessary (Ibid.); and
9. The character of the services rendered (Ibid. [“was it performed in carrying out the ordinary duties of the personal representative, or was it in fact extraordinary.”])

If the court determines “the sum allowed by law appears to be a reasonable compensation, even though the attorney may have performed some extraordinary services, it is within the sound discretion of the trial court to disallow claims for extra compensation, and, unless it appears that there has been an abuse of discretion, an appellate court is not at liberty to disturb the conclusion of the trial court.”  (In re Fulton's Estate, supra, 23 Cal.App.2d at p. 567.)

Statutory fees in this estate are already calculated at $12,378.52, a figure that is already inflated in comparison to the amount available for distribution, because the Decedent’s family appears to desire to keep the real property in the estate, instead of selling it.  While it is admirable that attorneys for Petitioner may have saved the estate from liability, that claim is not laid out for the court to consider, other than cursory reference to potential liability.  The Court cannot determine if all the claimed hours were necessary, if the nature and factual realities of the claim are only alluded to in general and not laid out in precision for the court to analyze.

Again, statutory fees are presumed adequate compensation in all estates, meaning counsel bears the burden of overcoming that presumption:

The Legislature, after expending enormous energy on attorney's fees in probate proceedings, pointedly examining and reexamining the issue in various contexts, has determined the present statutory system of compensating lawyers is both cost effective and fair. Presumably, the public's interest is served where those bereaved are insulated from negotiating over a lawyer's fee during the traumatic post-death period.

(Estate of Effron (1981) 117 Cal.App.3d 915, 925–26 [emphasis added].)

Unless counsel overcomes that presumption with evidence showing legal fees were incurred for extraordinary services that required legal expertise (In re Fulcher's Estate (1965) 234 Cal.App.2d 710, 718.[ “the burden of proving the necessity for the services is on the representative claiming extraordinary fees for himself and his attorney.”]), extraordinary fees will be denied. (Ibid. [“The general rule is that the probate court has a large discretion in the allowance of fees for extraordinary services rendered on behalf of the estate.”].))

In this case, the supplement filed by counsel for Petitioner does enough to merit at least some extraordinary fees for the work performed during the special administration efforts to “save” and “identify” the real property in the estate.  However, the following readily identifiable reasons are why the Court should reduce the extraordinary fee request significantly:

• The descriptions provided in Counsel’s billing statements show that very little actual extraordinary work was performed.  Counsel’s billing statements reveal the 75.5 total hours labeled as ‘extraordinary’ are for mostly standard work performed in the typical day-to-day administration of estates.  In fact, a high percentage of the billing entries are for communication with the client, or third parties related to the general gathering of information during the initial stages of administration that leads to legal work being performed.

Aside from seeking Special Administration so the sale of real property did not fall through, none of the billing entries appear to be distinguishable from normal legal work expected to be done in an estate this size, even after great efforts in the supplement were taken to explain that work.  (i.e.: title searches, communicating with other attorneys, preparing pleadings and inventories for filing with the court, communication with client, creditors, and government entities, paying bills (including taxes), communicating with real estate agents and reviewing documents for the sale of a real property, obtaining publication, etc.) 

As noted before, the only tasks that should be considered out of the normal course of work performed by an attorney helping a client administer an estate, were the hours devoted to special administration and saving the sale of real property.  Many of the tasks performed are not even readily discernable as legal in nature (i.e. they did not objectively require the skill/training of a lawyer).

• Billing entries reflect padding on their face, which the supplement did not resolve.  The prime examples of this are 1) billing entries reflecting unbelievable time spent on simple tasks, and 2) a billing entry on November 2, 2022, for a phone conference with the Probate Research Attorney writing this recommendation…which should NEVER appear in a billing statement for reasons so blatantly obvious that a Local Rule forbids it. (Local Rule 1732(b)6.)  Thus, this issue speaks for itself, and is indicative of at least a fundamental misunderstanding of what can be billed for as extraordinary fees.

As for the first issue, there were multiple examples of billing entries for leaving voice mails or reading emails. In one example, .2 hours (12 minutes) was billed for leaving a voice mail on April 5, 2023, for a total of $72.00. Not only is it highly unbelievable that someone talked to a machine for 12 minutes, but it is extremely improbably this was “legal work” the CRC specifies as qualifying for extraordinary fees, since legal work would more likely be written for reference.  The supplement made only general statements addressing this issue, and did not offer any specific examples of legal work being performed on specific dates entered on the statements.

Further problematic is that many of the entries begin with “review” and contain email, voicemail, probate notes, mailings, etc.  The supplement did nothing to address the previous note that “review of someone else’s legal work is not your own legal work.” It is information useful to the composition of your own legal work.

This exact situation was taken plainly into account by our Legislature when drafting the statutory fee structure:

Efficiency and economy are present in the use of judicial time which would otherwise be spent verifying fees and trying cases over questions of time, need, and reasonableness of the hourly rate charged. Theoretically, the present system also works in favor of smaller estates, for percentage fees are a financial incentive to lawyers to develop expertise and efficiency in the handling of those estates on a profitable basis, at lower fees than would otherwise be charged, thereby promoting greater access to competent legal services in such matters.

(Estate of Effron (1981) 117 Cal.App.3d 915, 925–26.)

• Supplement fails to identify amount of “legal” work necessary that was not duplicative of real estate broker’s efforts in sale of property.  The supplement goes to great lengths to mischaracterize the previous notes that focused on double efforts of a real estate broker and the attorneys to sell the real property.  The strawman argument created by the supplement’s mischaracterizing of the previous notes is not persuasive.

Selling real property may qualify for extraordinary fees under CRC, Rule 7.703(c)(1), but only if there are “legal services” provided that are not being provided by another.  The fact stated by the previous notes was that paying a real estate broker to sell real property creates a presumption that any legal work done during the sale of that property is duplicative and unnecessary, unless it is objectively extraordinary in nature.  As previously noted, our Legislature took several equities into consideration when enacting the statutory fee schedule, including the sale of real property being normally associated with estate administration.

As previously noted, counsel here failed to identify circumstances during the sale of the estate real property that required the estate to incur “legal services” not normally needed during the sale and escrow process and provided in part by a real estate broker.  The supplement does show some extraordinary effort was required to navigate the identification of Decedent’s ownership interest in the property, but that is the extent of the extraordinary services that should be awarded.  

As pointed out in the previous notes, the high value of real estate in this state already generates a statutory fee award that is usually sufficient to compensate the personal representative and the attorney, regardless of whether the real property is sold.  The policy behind statutory fee awards includes strong consideration of the complication of larger estates than that of smaller estates.  (In re Buchman's Estate (1955) 138 Cal.App.2d 228, 235. See also Estate of Getty (1983) 143 Cal.App.3d 455 [discussing in dicta that larger statutory compensation can be sufficient to cover unexpected intricacies in estate administration]; and Estate of Hilton (1996) 44 Cal.App.4th 890, 912-16 [citing In re Walker's Estate (1963) 221 Cal.App.2d 792, 795] for the proposition that probate courts can disallow all extraordinary fees claims if they find statutory compensation sufficient, keeping in mind the legislature’s policy of subsidizing fees in more complicated estates with those easily earned in less complicated estate [“The Legislature merely determined, in substance, that any undercompensation involved in handling small estates would be equitably adjusted in the long run by overcompensation in handling larger estates.”].)

However, the Supplement was persuasive in justifying some extraordinary fees during the special administration efforts.  Thus, it is recommended the Court award $3,421 in extraordinary fees.

For the reasons stated above, anything above $3,421 in extraordinary fees requested in this case are not just or reasonable.

“[T]he court may allow additional compensation for extraordinary services by the attorney for the personal representative in an amount the court determines is just and reasonable.”  (Prob. Code, § 10811 [emphasis added].)