Lead Opinion
This appeal, filed on behalf of Lorraine McKitrick, an incapacitated adult (“the Ward”),
The record reveals that on January 4, 2013, prior to a determination that she was incapacitated, McKitrick retained counsel to represent her in “Cobb County Probate case #12-1853.” It is undisputed that on February 20,2013, however, the probate court appointed McKitrick’s son, Thomas Richardson, to serve as her conservator, and her daughter, Mary Mellom, to serve as her guardian.
On April 29,2013, the probate court held a hearing on the matter during which the “question of counsel’s authority to serve as counsel for the Ward” was also raised.
1. Conservator’s conflict of interest.
The Ward complains that her conservator, because of his conflict of interest, “should either step down or divest himself of the ownership of the assets of the Ward’s estate.” She complains that the conservator refused to “spend any of the corpus of the Estate on the items that the Ward desires,” and “has been dilatory in paying necessary items.” The conservator responds that the evidence presented at the hearing on this matter reveals that his judgment is not clouded, that he has sought authority for all necessary expenditures as well as items and services requested by the Ward, and that the evidence showed nothing other than that he has been carefully conserving the Ward’s assets and paying for her care. The probate court ruled that although the conservator had a conflict of interest as a result of his potential death benefit in the Ward’s accounts, there was no showing that the conflict had resulted in harm to the Ward.
OCGA § 29-5-24 (b) provides:
The conservator must disclose promptly any conflict of interest between the conservator and the ward when it arises or becomes known to the conservator. The conservator must seek the court’s determination as to whether the conflict is insubstantial or whether it is in the best interest of the ward for the conservator to continue to serve and not forfeit any property right. If the court finds that the conflict of interest is substantial or contrary to the best interest of the ward, the conservator may either resign or forfeit the property interest that is the source of the conflict.
2. Attorney fees.
The Ward complains that the probate court erred in setting an hourly rate at which her hired counsel could bill for his services.
(a) The parties contemplated an hourly rate.
The dissent argues that application of the rules of contract construction leads to the conclusion that the Ward and her attorney intended a flat rate when they entered into the Fee Agreement and Contract for Representation. But the parties do not challenge on appeal the probate court’s ruling that the fee agreement “expressly contemplate[s] an hourly rate for services.” Nonetheless, given our de novo standard of review, see Reichman v. Southern Ear, Nose & Throat Surgeons,
The Fee Agreement and Contract for Representation provides in pertinent part:
Fee
The Client agrees to pay the Firm a retainer of $2,700.00 to try and cover the case through its completion. The Firm will provide the Client with periodic billing statements detailing the work performed during the billing period, the number of hours and fractions thereof expended in performing the work, the nature and amount of the expenses incurred during the billing period, the amount transferred out of the*705 escrow account in payment of the services performed, expenses incurred during the billing period, and the amount remaining in the escrow account.
The probate court remarked that she was “temptfed]... to limit the fees to a flat rate.” She acknowledged that the agreement between the Ward and her counsel “is obviously vague as to the billing rates to be charged,” but held that it “expressly contemplate [d] an hourly rate for services.” We agree.
“The construction which will uphold a contract in whole and in every part is to be preferred, and the whole contract should be looked to in arriving at the construction of any part.” OCGA § 13-2-2 (4). “[Cjontracts must be construed in their entirety and in a manner that permits all of the terms contained therein to be consistent with one another.” Schwartz v. Schwartz,
To hold that this provision contemplated a flat fee renders meaningless the provisions regarding the escrow account. Had the Ward and her counsel intended a flat fee, then there would have been no reason to require the billing statements to detail “the amount transferred out of the escrow account in payment of the services performed,... [and] the amount remaining in the escrow account.” A flat fee is a lump sum; if the parties had contemplated a flat fee, then once the fee had been earned and paid from the escrow account, no amount would remain in that account.
On the other hand, if the Ward and her counsel intended that counsel would be paid at an hourly rate, the provision makes complete sense and every term has meaning: as counsel “performed [work] during the billing period,” he would keep track of “the number of hours and fractions thereof expended in performing the work,” and then “transfer [ ] out of the escrow account [, which contained the $2,700 retainer, the amounts] in payment of the services performed,” while keeping the Ward informed of “the amount remaining in the escrow account.” This construction upholds the intent of the Ward and the attorney, and therefore is the construction that must be enforced. See OCGA § 13-2-3 (“The cardinal rule of construction is to ascertain the intention of the parties. If that intention is clear and it contravenes no rule of law and sufficient words are used to arrive at the intention, it shall be enforced irrespective of all technical or arbitrary rules of construction.”).
must be construed against the party drawing and executing them, nevertheless, a contract should not be torn apart and construed in pieces. Instead, the court should look to the entire instrument and so construe it as to reconcile its different parts and reject construction which leads to contradiction, in order to ascertain the true intention of the parties, which is the real purpose of judicial construction of contracts.
Snipes v. Marcene P. Powell & Assocs.,
(b) Hourly rate.
Once the probate court concluded that the fee agreement contemplated an hourly rate for services, she ordered that “the hourly rate [would] be established as that of a court appointed attorney in the Cobb Circuit Defender’s Office at a rate of $45 for out of court service and $60 for courtroom service.” The Ward argues that the probate court erred in setting the hourly rate. She concedes that “her attorneys mistakenly omitted the rate at which the firm would bill its hourly work,” agrees that the probate court correctly ruled that there exists an ambiguity regarding the hourly rate, but asserts that such ambiguity was explained by evidence — a billing statement — presented at the April 29, 2013, hearing. The conservator disputes that any billing statements were tendered as evidence at that hearing. And, as detailed above, the Ward has failed to include a transcript of that hearing in the record on appeal.
Regardless of whether the billing statements were tendered at the April 29, 2013, hearing, however, the probate court’s order makes clear that she did not consider billing statements when she ordered that the hourly rate would be “that of a court appointed attorney in the Cobb Circuit Defender’s office at a rate of $45 for out of court service and $60 for courtroom service.” In fact, the probate court gives
The fee agreement is ambiguous in that it fails to specify the hourly rate component of the contractual consideration that the parties intended the Ward would pay for her attorney’s services. See Capital Color Printing v. Ahern,
Judgment affirmed in part and vacated in part, and case remanded.
Notes
See OCGA § 29-5-20 (a) (5) (“In every conservatorship the ward has the right to: . . . Individually, or through the ward’s representative or legal counsel, bring an action relating to the conservatorship, including the right to file a petition alleging that the ward is being unjustly denied a right or privilege granted by Chapter 4 of this title and this chapter and the right to bring an action to modify or terminate the conservatorship pursuant to the provisions of Code Sections 29-5-71 and 29-5-72[.]”).
It appears that the probate court also appointed a guardian ad litem for the Ward.
A transcript of this hearing was not included in the record here on appeal.
While this enumeration concerns the Ward’s counsel’s fees, it indirectly relates to the conservatorship. As noted by the probate court, “the conservator . .. needs direction in how to assess and pay” the fees charged by the Ward’s counsel.
Concurrence in Part
concurring in part and dissenting in part.
I concur fully in Division 1. But because I would hold that the agreement must be construed to provide only for a flat fee and not an hourly rate, I respectfully dissent to Division 2. As cited by the majority, the agreement between the Ward and her counsel provides as follows:
Fee
The Client agrees to pay the Firm a retainer of $2,700.00 to try and cover the case through its completion. The Firm will provide the Client with periodic billing statements detailing the work performed during the billing period, the number of hours and fractions thereof expended in performing the*708 work, the nature and amount of the expenses incurred during the billing period, the amount transferred out of the escrow account in payment of the services performed, expenses incurred during the billing period, and the amount remaining in the escrow account.5
The agreement contained neither a provision expressly stating that the client would pay the firm by the hour, nor any provision governing fees if the retainer were to be exhausted by hourly charges.
The Ward’s argument here turns upon the construction of the agreement, which “involves a question of law for the court to resolve based on the intent of the parties as reflected in the agreement.” Reichman v. Southern Ear, Nose & Throat Surgeons,
While the probate court concluded that the agreement “expressly contemplate [d] an hourly rate for services,” the plain language of the agreement itself is not so clear. The “Fee” section of the agreement provides for a retainer fee of $2,700, and that counsel will present the Ward with periodic billing statements of the work performed, number of hours expended, the amount of expenses incurred, the amount transferred out of escrow, and the amount remaining in escrow. This section could be interpreted as providing for a retainer fee and contemplating payment for the number of hours expended in performing the work, i.e., an hourly rate. On the other hand, it could be interpreted to provide that the Ward would pay counsel $2,700 and that counsel would provide the Ward with billing statements to show the work performed for that amount, which was paid “to try and cover the case through its completion.”
The agreement is unclear as to whether the parties even agreed that the Ward would pay counsel an hourly rate. The fee provision is therefore ambiguous as it is open to more than one interpretation.
In looking to the rules of contract construction set forth in OCGA § 13-2-2 to resolve the ambiguity, and pursuant to OCGA § 13-2-2 (5) specifically, as the preceding rules provide us no resolution, “as judicially interpreted, where the construction of a contract is doubtful, the construction that goes most strongly against the drafter of the agreement is to be preferred.” Reichman, supra,
For this reason, I respectfully dissent.
I am authorized to state that Presiding Judge Doyle and Judge Branch join in this dissent.
The agreement also contains a merger clause: “This agreement constitutes the entire agreement between the Firm and the Client with respect to this matter and cannot be changed except by written agreement.”
It is also unclear as to whether the counsel’s retainer fee “to try and cover the case through its completion,” means that counsel would “try,” i.e., litigate, and “cover,” i.e., handle or supervise the case for a stated fee, or that counsel would “try,” i.e., attempt or make an effort, “to cover the case through its completion.”
Although the Ward argues that extrinsic evidence shows the hourly rate, the issue here is not the rate itself, but whether the parties agreed to an hourly rate. In any case, “parol evidence cannot add to, take from, or vary a written contract, and it cannot be used to explain an ambiguous agreement if the rules of contract construction resolve the ambiguity.” Pruitt Corp., supra,