Estate of ESTHER ROYCE TRYNIN, Deceased.
RICHARD W. ECKARDT et al., Petitioners and Appellants,
v.
MARCIA D'ESOPO et al., as Co-administrators, etc., Objectors and Respondents.
Supreme Court of California.
*870 COUNSEL
Richard W. Eckhardt, in pro. per., Eckardt & Ruonala, Kenneth R. Ruonala, Pachter, Gold & Schaeffer, Pachter & Schaeffer, Arnold H. Gold, Judith A. Enright and Robert E. Young for Petitioners and Appellants.
Hufstedler, Miller, Kaus & Beardsley, Joseph L. Wyatt, Jr., Dennis M. Perluss, Lisa A. Christian, Darling, Hall & Rae, Matthew S. Rae, Jr., and Richard L. Stack as Amici Curiae on behalf on Petitioners and Appellants.
Marcia D'Esopo, in pro. per., for Objectors and Respondents.
*871 OPINION
KAUFMAN, J.
Probate Code section 910 provides that attorneys for executors and administrators of a decedent's estate 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 also, Prob. Code, § 469 [attorney fees for extraordinary services to special administrator]; all further statutory references are to the Probate Code unless otherwise indicated.) The issue presented in this case is whether the fees so allowed include compensation for time reasonably spent to establish and defend the attorney's own fee claim, or what is sometimes referred to as "fees on fees" or "fees for fees." We conclude that section 910 authorizes courts in probate proceedings to award such compensation and that a contrary rule would ultimately be deleterious to decedents' estates and heirs because attorneys would be reluctant to perform services necessary to the proper administration of decedents' estates if the compensation awarded for their services could be effectively diluted or dissipated by the expense of defending against unjustified objections to their fee claims.
I
Marcia D'Esopo and Sonia Meyerhof were appointed co-administrators of the estate of their elder sister, Esther Royce Trynin, who died intestate in February 1981. The co-administrators, sole heirs of the decedent, retained the law firm of Pachter, Gold & Schaffer (hereafter Pachter) as probate counsel. The estate's value in August 1981, as stated in an inventory submitted at that time, was $409,000.
Pachter defended the co-administrators in a separate civil action (hereafter the Hook litigation) brought against them by Trevor Hook, after rejection of his creditor's claim against the estate, seeking recovery of $738,000 or half of the estate. In July 1983, a jury returned a verdict awarding Hook $125,000 plus costs. The co-administrators appealed from the judgment entered on this verdict and, in September 1983, retained Richard W. Eckardt to represent them on the appeal. Pachter continued to serve as probate counsel.
In May 1985, the judgment in favor of Hook was reversed by the Court of Appeal on the ground of jury misconduct. In June 1985, the court in the probate case awarded fees to Eckardt for extraordinary services performed to date. In October 1985, Eckardt's motion to be relieved as attorney of record in the Hook litigation was granted on the basis of the co-administrators' noncooperation and nonpayment of fees.
*872 In January 1986, the co-administrators reengaged Eckardt to represent them in the retrial of the Hook litigation. Eckardt succeeded in settling the Hook litigation on the eve of retrial for $125,000, with the parties bearing their own respective costs. In March 1986, both Eckardt and Pachter petitioned for costs and fees for extraordinary services in defending the Hook litigation. Their petitions were consolidated for hearing. In April 1986, Pachter substituted out as probate counsel. As a result of appreciation in estate assets and the accumulation of rental income, the value of the estate at this time was approximately $593,000.
The co-administrators responded to the fee claims of Eckardt and Pachter by hiring an attorney to contest the claims. The co-administrators made no settlement offer to either petitioner; rather, they took the position that no further amount was owing and, indeed, that petitioners had been overpaid. Hearing on the consolidated claims for costs and fees required seven half-day sessions over a ten-week period and resulted in an order awarding Pachter $49,981 for its services and Eckardt an additional $5,364 for services performed subsequent to the previous award.
In May 1987, both Eckardt and Pachter filed additional petitions for allowance of fees for extraordinary services. These petitions sought compensation for time spent by Eckardt and Pachter in establishing and defending their previous fee claims. The court declined to receive or consider any evidence concerning these claims and denied them on the ground it lacked authority "to award compensation for services which benefit only the attorneys for the estate and do not enhance the size of the estate available for distribution to the beneficiaries thereof...." Both petitioners appealed from the orders denying their respective petitions.[1]
The Court of Appeal affirmed, agreeing with the trial court that section 910 does not authorize compensation for an attorney's time reasonably spent to establish and defend a fee claim.
II
Before addressing the specific question of attorney fees for fee-related services under section 910, it will be helpful to review general principles of state law governing compensation for attorney services in probate matters.
*873 (1a) The rules governing compensation for attorney services for decedents' estates "do not arise from contract but are founded upon statutory enactment." (Estate of Johnston (1956)
An attorney who has rendered services to an estate's representative may obtain compensation by petitioning the superior court sitting in probate for an order requiring the representative to make payment to the attorney out of the estate. (§ 911.) (2) Because an attorney who has performed probate work is a person interested in the estate, the fee petition need not be presented by the representative but may be presented directly by the attorney, who may also appeal from an adverse ruling. (Estate of Merrill (1946)
For conducting "the ordinary probate proceedings," an attorney is compensated in the same amount allowed as a commission to the estate representative (§ 910), which is determined as a percentage of the estate's value (§ 901). Fees for extraordinary services, on the other hand, are not determined by a fixed formula but instead require the exercise of judicial discretion to determine what amount is "just and reasonable" (§ 910). (Estate of Fraysher (1956)
(3) As this court has stated, "Every [probate] attorney should be fully and fairly paid for his [or her] services, having in mind their nature, their difficulty, the value of the estate, and the responsibility thus cast upon the *874 counselor." (Estate of Byrne (1898)
Although benefit to the estate is one of the factors to be weighed by the court in fixing compensation (Estate of Stokley (1980)
(4a) With these principles of probate law in mind, we turn to the issue presented by this case, which is whether the attorney's right to full and fair compensation for probate work necessarily encompasses a right to compensation for fee-related services.
(5) Where the right to counsel fees is based on statute, recovery for fee-related services has been consistently allowed. In Bruckman v. Parliament Escrow Corp. (1987)
In Serrano v. Unruh (1982)
We rejected an argument that fee-related litigation does not meet the three requirements of Code of Civil Procedure section 1021.5 (see fn. 3, ante), reasoning that the requirements need only be satisfied in the "action" as a whole, rather than in each separate proceeding making up the action. (Serrano v. Unruh, supra,
Similarly, fee-litigation fees have been held recoverable under the litigation expense provision of Code of Civil Procedure section 1268.610 (see *876 also, Code Civ. Proc., § 1235.140, subd. (b)); in eminent domain proceedings (City of Oakland v. Oakland Raiders (1988)
In all these statutory fee cases, however, the statute authorized recovery of the successful litigant's attorney fees from the opposing party. These statutes are, in other words, specific exceptions to the American rule that parties to litigation are responsible for paying their own attorneys. (See Code Civ. Proc., § 1021; Gray v. Don Miller & Associates, Inc. (1984)
(6) As we noted in Serrano v. Unruh, supra,
For purposes of the issue at hand, therefore, the present case cannot be conveniently categorized with either the statutory fee-shifting cases or the common-fund and common-benefit cases. (4b) Rather, this case is representative of a third category in which an attorney fee is statutorily authorized and subject to court approval but not payable by a litigation opponent. Reported decisions concerning fee awards for fee-related services in cases meeting this description are few, but what authority there is generally supports the conclusion that compensation should be awarded for such services.[4]
Although no previous case has considered the right to attorney fees for fee-related services under section 910, it has been held, in a related area, that a testamentary trustee is entitled to compensation for defending a challenge to the reasonableness of its own fee application. (Estate of Griffith (1950)
Also instructive is In re Nucorp Energy, Inc. (9th Cir.1985)
The reviewing court noted that the governing provision (11 U.S.C. § 330(a)(1)) "authorized the court to award [counsel] `reasonable compensation for actual, necessary services' rendered to a bankruptcy estate," with the amount to be "`based on the time, the nature, the extent, and the value of the services and the cost of comparable services' in non-bankruptcy cases." (In re Nucorp Energy, Inc., supra,
On the first point, the court concluded that preparation and presentation of the fee application constituted "actual, necessary services" because preparation of a detailed fee application was statutorily required and because the detailed billing information thus provided was "of importance to all parties, as well as to the court." (In re Nucorp Energy, Inc., supra,
Attorney fees in bankruptcy matters provide a close analogy to attorney fees for probate services as in both cases the fee is set by the court pursuant to statutory authorization and paid out of an estate. (7) We agree with the Nucorp court that the most compelling argument for permitting recovery of fee-related fees is that 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 bankruptcy or decedents' estates. As we explained in Serrano v. Unruh, supra,
One final point deserves mention. It has sometimes been argued, as a reason for denying fees for fee-related services, that permitting such awards will result in the "Kafkaesque judicial nightmare" of an "infinite regression of [fees] litigation" in which each request for fee-related fees is contested and results in yet another request for fee-related fees. (Cinciarelli v. Reagan (D.C. Cir.1984)
*880 III
We conclude, accordingly, that extraordinary services compensable under section 910 include work reasonably performed by the attorney to establish and defend the fee claim. This does not mean, however, that an additional award of fees for fee-related services is invariably required. Where the trial court reasonably concludes that the amounts previously awarded the attorney for both ordinary and extraordinary services are adequate, given the value of the estate and the nature of its assets, to fully compensate the attorney for all services, including fee-related services, denial of a request for fee-related fees would not be an abuse of discretion. (Cf. Estate of Walker, supra,
(4c) In the present case, the trial court declined to receive or consider any evidence in support of the petitions, concluding that it had no authority to allow compensation for fee litigation. As we have seen, this conclusion is in error. Because the trial court did not hold a hearing on the petitions, we are not in a position to assess the merits of the parties' various claims and make no attempt to do so. We conclude only that the allegations of the petitions, if true, are sufficient to permit the trial court, in the exercise of sound discretion and after consideration of the various factors relevant to the fee determination (see Estate of Walker, supra,
The judgment of the Court of Appeal is reversed and the Court of Appeal is directed to reverse the order of the trial court with directions to conduct a hearing on appellants' fee petitions in accordance with the views expressed in this opinion.
Lucas, C.J., Mosk, J., Broussard, J., Panelli, J., Eagleson, J., and Kennard, J., concurred.
NOTES
Notes
[1] The factual statements in this opinion are based on the allegations of Eckardt and Pachter's fee petitions. For purposes of this appeal we assume these allegations are true (cf. J'Aire Corp. v. Gregory (1979)
[2] "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs." (Id., subd. (a), first par.)
[3] "Upon motion, a court may award attorney's fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any. With respect to actions involving public entities, this section applies to allowances against, but not in favor of, public entities, and no claim shall be required to be filed therefor." (Ibid.)
[4] The Washington Supreme Court has reached a contrary conclusion, i.e., "that an attorney in probate is not entitled to additional fees for attorneys and experts in proving the reasonableness of his fee in the final report." (Matter of Estate of Larson (1985)
