Estate of Joan Marie Soto

Case Number

24PR00238

Case Type

Hearing Date / Time

Tue, 05/06/2025 - 09:00

Nature of Proceedings

Final Distribution

Tentative Ruling

Probate Notes:

Appearances required. The following errors must be corrected:

Final Inventory and Appraisal – There were three total Inventory and Appraisals filed in this case, and all three documents have errors or should not have been filed for the following reasons:

Decedent, Joan Marie Soto/Reyes, died in 1995.  Pursuant to Probate Code section 8802, the value of the Decedent’s property shall be the “fair market value of the item at the time of the decedent’s death” in 1995.

The first and second Inventory and Appraisals were marked final, without the second being marked in any way to identify it as a subsequently filed document (i.e. amended, corrected, etc.).  This not only creates confusion, but the estate was further confused by the fact that the first two Inventory and Appraisals do not differ in any perceptible way, other than their filing dates.  Contained in both documents is also a procedural defect in the Declaration within the appraisal that the requirements of Revenue and Taxation Code section 480 are not applicable (¶5a), instead of the requirements having been satisfied because Decedent owned real property (¶5b). It is clear Decedent owned real property at the time of her death, because the only inventoried and appraised item on any of the three documents is a parcel of real property.

The third-in-time Inventory and Appraisal is most problematic.  The third I & A is marked as a “Reappraisal for Sale,” but no Court confirmation of the sale was sought by the Personal Representative pursuant to Probate Code section 10308.  As a result of that fact, and the fact that the filing of the third Inventory and Appraisal was accompanied by the filing of two documents that are not appropriate or required in Decedent’s Estate cases (i.e. “Notices of Filing Inventory and Appraisal and How to Object to the Inventory or the Appraised Value of Property” [form GC-042]), it appears the Attorney for the Personal Representative is ignorant of the proper procedure governing administration of the estate, and the third Inventory and Appraisal was erroneously filed, and that erroneously filed document is creating confusion and miscalculation in the final distribution.

Therefore, it is recommended the Court strike the Inventory and Appraisal filed on November 27, 2024 and marked Reappraisal for Sale, and strike the two Notices of Filling Inventory and Appraisal filed on March 14, 2025.  It is also recommended the Court order the Petitioner to amend the Inventory and Appraisal to indicate that Revenue and Taxation Code section 480 has been complied with.

Amended Petition using Local Form SC-6028.  Due to the problems with the Inventory and Appraisal, the petition will need to be amended to include the value of the real property at the date of Decedent’s death.  The subsequent sale of the real property will then be calculated as a gain on sale in the accounting.  Due to other errors in the petition, it is recommended the Court order the petitioner to use Local Form SC-6028 for the amended petition.

Supplement re: Statutory Fee Recalculation.  The Statutory Fee in this case is miscalculated as $15,000, primarily because the attorney for petitioner appears to fundamentally misunderstand how the estate is calculated pursuant to Probate Code section 10800.  According to subdivision (b) of that section:

For the purposes of this section, the value of the estate accounted for by the personal representative is the total amount of the appraisal value of property in the inventory, plus gains over the appraisal value on sales, plus receipts, less losses from the appraisal value on sales, without reference to encumbrances or other obligations on estate property.

Based on that definition of the value of the estate, Petitioner overvalues the estate.  According to the first Inventory and Appraisal (the other two not being necessary or appropriate), the value of the only item of property in Decedent’s estate was $100,000 as of the date of death of the Decedent. It appears the only item in the estate sold for $400,000.  This changes the value of the estate for calculation of statutory fees by giving a $300,000 “gain on sale” increase that affects the total the statutory fees calculation will be based upon.  Thus, the total estate value in this case is $400,000 ($100,000 + $300,000 gain on sale).

The formula for calculation of statutory compensation is set out in Probate Code §10800(a). Compensation is 4 percent on the first $100,000, 3 percent on the next $100,000, 2 percent on the next $800,000, 1 percent on the next $9 million, one-half of 1 percent on the next $15 million, and a reasonable amount to be determined by the court on amounts greater than $25 million.

Therefore, the proper calculation for the statutory fee for an estate value of $400,000 is as follows:

4% on the first $100,000          = $4,000

3% on the next $100,000         = $3,000

2% on the next $200,000         = $4,000

Total statutory compensation: $11,000

Extraordinary Fees.  Extraordinary fees are unjustified in this case. Petitioner claims that 7.1 hours of extraordinary service was spent in this case, but the billing statements submitted at exhibit 11 show that most of the work being billed for by the attorney requesting the extraordinary fees was for work that was either unnecessary (i.e. the mistaken preparation and filing of improper Inventory and Appraisal), or was par-for-the course document review related to the selling of the real property. Petitioner’s attorney claims via Declaration that an unlawful detainer was required, but the billing statements show no preparation of a pleading or prosecution of a UD claim in court. 

Additionally problematic is the rate being charged.  The standard paid in this legal community for excellent probate work (i.e. no flaws in the petition, no procedural mistakes, no attorney-caused delays, etc.) is $400/hr.  Yet petitioner’s attorney claims $475/hr.  It goes without saying that an attorney who filed forms not appropriate for the case type, miscalculates the estate value and statutory fee, etc. is not qualified for the top rate in the legal community.

Payment of extraordinary fees is not guaranteed, and the Court has wide discretion to decide whether to allow extra compensation, even when services of an extraordinary nature are rendered.  (CRC, Rule 7.703(a). See also In re Fulcher's Estate (1965) 234 Cal.App.2d 710, 718 [“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.”)  “[T]he burden of proving the necessity for the services is on the representative claiming extraordinary fees for himself and his attorney.”  (Ibid.)

The sale of real property is an ordinary and usual occurrence in the administration of a decedent’s estate, thus does not automatically warrant extraordinary fees.  Unless circumstances during the sale of real property require the estate to incur “legal services” not normally needed during the sale and escrow process, the high value of real estate in this state generates a statutory fee award that is usually sufficient to compensate the personal representative and the attorney.  This is especially true when a real estate agent is used to effectuate the sale, which is what occurred in this case. The standard courts use is “legal services in connection with the sale of property held in the estate.” (CRC, Rule 7.703(c)(1).)

The Court may consider that the statutory fee calculated on an estate where the decedent's personal residence that was sold for $400,000 is reasonable compensation, because no “legal services” were required to effectuate the sale of the property, other than brief contract review and associated tasks.  This is primarily due to the policy behind statutory fee awards including a 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 massive 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.”].)

THEREFORE, it is recommended the Court deny the request for extraordinary fees.

Proposed Order.  The proposed order contains requests that should not be granted, and are based on erroneous calculations identified above.  The proposed order also does not contain all of the statutory requirements for an Order for Final Distribution.  A new proposed order must be submitted with relief that matches that requested in the petition. (Local Rule 1724(b), subd.(d).)  Petitioners must use Local Form SC-6029.

It is recommended that the matter be continued to a date to be set by the Court at the hearing, unless the party appears and requests a different date, or submits a request for a different continuance date prior to the hearing. (Local Rule 1721(c)(2)(A-B).)  If the matter is continued, documents must be submitted at least 10 days prior to the new hearing date to be considered.

 

Due to staffing limitations, processing times may be delayed. To assist in processing, attorneys and parties should include the next court date in the “Filing Description” field provided by the electronic service provider. That field is also used for further descriptions of the document being e-filed, so be sure to put the calendar date FIRST in the field – BEFORE any further description of the document being e-filed (e.g.: 06/28/16 For XYZ).

Appearances:

The court is open to the public for court business. The court is also conducting hearings via Zoom videoconference.

Meeting ID: 160 543 3416

Passcode: 5053334