Opinion
A145255
09-14-2018
Estate of GISTEEN ANDERSON, Deceased. JERROLL RAY HUNT, Petitioner and Respondent, v. EUGENE SCHNEIDER, Claimant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RP14715794)
Appellant Eugene Schneider was the attorney for Addie Thompson, administrator of the estate of Gisteen Anderson, in a probate proceeding filed in 1992. After Schneider withdrew as counsel for Thompson, the trial court dismissed the probate petition. Seven years later, a different personal representative filed a new petition in probate court seeking to administer the same estate. When Schneider learned of the new proceeding, he objected to the final accounting, asserting entitlement to a portion of the statutory compensation as attorney for the prior personal representative. At the hearing on final distribution of the assets of the estate, the trial court determined Schneider lacked standing to pursue a claim for fees based on the dismissal of the first probate proceeding. We conclude the trial court erred, and reverse.
I. BACKGROUND
Gisteen Anderson died intestate in January 1992. The following month, Addie Thompson, represented by attorney Eugene Schneider, petitioned for appointment as administrator of Anderson's estate. The court appointed Thompson administrator. A bond was filed and letters of administration issued in September 1992. After that, however, it appears the case stalled. Apart from the rejection of a claim for $1,633 from Sears, Roebuck & Co. in 1995, there is no record of activity in the register of actions for approximately 15 years, between October 1992 and September 2007.
In September 2007, Schneider filed a motion to be relieved as counsel which was granted two months later. On the same day his motion to withdraw was granted, Schneider filed a draft final account and petition for distribution that included a proposed allowance of compensation for Schneider in the amount of $3,570 and costs in the amount of $1,079.75. The draft accounting was not signed by Thompson. Three days later, Schneider filed a request for special notice under Probate Code section 1250 requesting notice on all matters for which special notice may be requested.
Schneider filed the draft so the court would have "the information the court would need for [a] final distribution order should the court determine to proceed in the absence of action by the personal representative."
All further statutory references are to the Probate Code unless otherwise indicated.
The next month, the trial court held a hearing, apparently on an order to show cause issued by the court. The minutes from the hearing state Thompson failed to appear to show cause why sanctions should not be imposed for failure to file a petition for final distribution. The court suspended the letters of administration and dismissed the probate petition.
Seven years later, in 2014, a new probate proceeding was initiated to settle Anderson's estate. Anderson's grandson, Jerroll Ray Hunt, was appointed administrator. Hunt was represented by attorney William Taylor. When Schneider learned of the new probate proceeding, he filed an objection to Hunt's petition for distribution, compensation, and reimbursement of expenses. In his objection, Schneider asserted he was a "creditor" and entitled to compensation, and reimbursement of expenses incurred in representing Thompson as the former personal representative in the prior probate proceeding. Schneider also objected that Hunt had notice of the prior proceedings but failed to provide Schneider with notice of the new proceeding.
Taylor filed a response to Schneider's objections, noting Schneider was not a "creditor" as defined by the Probate Code and was never an attorney for the current personal representative (Hunt) and, thus, was not entitled to any portion of the statutory fees. Taylor allowed Schneider may have been entitled to fees at one point on a quantum meruit theory of recovery for his efforts in assisting Thompson, but argued Schneider was barred from recovering such fees by the applicable statutes of limitations.
At a hearing on the petition for final distribution on March 10, 2015, the trial court told Schneider it did not believe he had standing based on the dismissal of the prior probate proceeding and that he must seek recovery from the prior personal representative. Noting it would be a "different situation" if the prior case had not been dismissed, the court acknowledged the dismissal was "unusual" and said "frankly, I think it was shocking that it was dismissed given that there was an estate that needed to be administered." "[B]e that as it may," the court continued, "because the case was dismissed, I think that . . . we go forward with Mr. Taylor's case anew." After hearing argument from the parties, the trial court asked Taylor if he would consider a request for costs and continued the hearing for Schneider to provide Taylor a declaration of costs incurred in the prior proceeding. Shortly thereafter, Schneider filed a petition for writ of mandate, prohibition, supersedeas or other appropriate relief, contending the trial court erred in denying him standing to appear in the new probate case and seeking to prevent the court from signing the final order of distribution. The writ was summarily denied.
The writ proceeding also challenged the trial court's denial of Schneider's peremptory challenge pursuant to Code of Civil Procedure section 170.6. Schneider does not raise any issues related to his peremptory challenge in this appeal.
On March 25, 2015, the trial court held a further hearing on the petition for final distribution and Schneider's objections. The court stated "it did not consider Schneider to have standing, that the prior probate had been a separate proceeding and any rights Schneider had in that matter did not give Schneider any rights in the pending estate to ordinary or other fees." The court approved the final account and petition for final distribution order, awarding costs to Schneider in the amount of $1,635 for his work representing Thompson in the prior case. William Taylor was awarded $4,300 as the statutory fee for ordinary services as attorney for the personal representative of the estate.
II. DISCUSSION
Schneider contends because he served as the attorney for the personal representative in the prior proceeding, he is an "interested person" entitled to compensation from the estate for his fees. (See § 48 [defining " 'interested person' " to include "any . . . person having a property right in or claim against . . . the estate of a decedent which may be affected by the proceeding"]; § 10810 [statutory compensation to attorney for conducting ordinary services].) Schneider also argues (1) as an interested person, he was entitled to notice of the new probate proceeding by Hunt under section 12252, subdivision (b) and California Rules of Court, rule 7.704(b); (2) Hunt had actual notice of the prior probate proceeding and therefore knowledge of Schneider's standing; and (3) because probate is a singular proceeding for the administration of an estate from the time probate is first initiated to the time assets are finally distributed, the trial court erred in dismissing the first probate proceeding (or, at a minimum, should have "consolidated" the second probate proceeding with the first).
"A probate court must order compensation out of estate assets for routine probate services rendered by an executor's attorney." (Miller v. Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore (2008) 162 Cal.App.4th 1331, 1339, citing §§ 10800, 10810.) "Attorneys' fees that are properly considered an expense of administration, whether routine or extraordinary, are payable only out of the estate and are not a personal charge against the executor. The attorneys' sole remedy must be obtained from the probate court." (Miller, at p. 1339.)
" 'The rules governing compensation for attorney services for decedents' estates "do not arise from contract but are founded upon statutory enactment." [Citation.] The pertinent statutory provisions govern both the amount recoverable and the procedure for recovery.' " (Estate of Wong (2012) 207 Cal.App.4th 366, 375 (Wong).)
"If there are two or more attorneys for the personal representative, the attorney's compensation shall be apportioned among the attorneys by the court according to the services actually rendered by each attorney or as agreed to by the attorneys." (§ 10814.) As explained in California Rules of Court, rule 7.704 (rule 7.704): "There is only one statutory commission for ordinary services by the personal representative of the estate and one statutory attorney fee for ordinary legal services to the personal representative, regardless of the number of personal representatives or attorneys performing the services. The court may apportion statutory commissions and fees among multiple, successive, and concurrent personal representatives or attorneys. The apportionment must be based on the agreement of the multiple personal representatives or attorneys or, if there is no agreement, according to the services actually rendered by each of them." (Rule 7.704(a).)
Based on these authorities, Schneider, as attorney for a former personal representative of Anderson's estate, was entitled to assert a claim to a portion of the statutory attorney fee for ordinary legal services for services he actually provided. The plain language of section 10814 and rule 7.704 indicates there is only one statutory personal representative commission and one attorney fee for the estate, and the commission and fee may be apportioned among "multiple, successive, and concurrent personal representatives or attorneys," regardless of their number. Because Schneider represented a former personal representative in the administration of Anderson's estate, he could seek a portion of the one fee available for such services.
Hunt faults Schneider for not seeking fees earlier, contending his "cause of action" for fees accrued at the latest in 2007, when he ceased representing Thompson. Because he did not commence an action for payment on a quantum meruit theory or any other basis within the applicable statutes of limitations, Hunt asserts Schneider's claim is now barred.
First, Schneider's claim for attorney fees is based on statutory entitlement, not quantum meruit. (See Wong, supra, 207 Cal.App.4th at p. 375 [rules governing attorney compensation arise from statute, not contract law].) Second, Hunt does not cite any legal authority that Schneider was required to submit his fees claim in 2007 when he withdrew as counsel for Thompson. Indeed, "no attorney fee may be paid prior to final distribution of the estate absent a special court order, and all payment of attorney fees requires prior court approval." (Id. at p. 376, citing §§ 10810, 10830-10831; Cal. Rules of Court, rule 7.701.) There was no order for final distribution in 2007, or any time thereafter until March 2015. Nor is there anything in the statutory language to suggest a trial court's sua sponte dismissal of a probate proceeding, which did not settle the estate or result in a final order for distribution of estate assets, is a bar to an attorney's right to assert entitlement to a portion of the one statutory fee claim available for the estate.
We, like the trial court at the March 10, 2015 hearing, are mystified by the decision of the earlier trial court to dismiss the pending probate matter in 2007 after Schneider withdrew and Thompson failed to appear. Under section 8522, subdivision (a), "If a vacancy occurs in the office of a personal representative and there are no other personal representatives, the court shall appoint a successor personal representative." (Italics added.) Had the trial court appointed a successor personal representative, the estate could have been settled in the prior proceeding and the confusion arising from this unusual set of circumstances likely could have been avoided.
The language of rule 7.704 further supports our conclusion Schneider may assert a claim for fees. It states: "If there has been a change of personal representative or a substitution of attorneys for the personal representative, notice of hearing of any interim or final petition seeking or waiving an award of statutory compensation must be given to all prior representatives or attorneys unless: [¶] (1) A waiver of notice executed by all prior personal representatives or attorneys is on file or is filed with the petition; [¶] (2) A written, signed agreement on the allocation of statutory commissions or fees between the present personal representative or attorney and all prior personal representatives or attorney is on file or is included in or filed with the petition; or [¶] (3) The court's file and the petition demonstrate that the commissions or fees of the prior personal representatives or attorneys have been previously provided for and allowed by the court." (Rule 7.704(b), italics added.) Hunt insists rule 7.704 does not apply in this case because it refers to a "change of personal representative" and a "substitution of attorneys," neither of which occurred here. It seems obvious, however, that a change of personal representative did occur, as both Thompson and Hunt were court-appointed personal representatives for the same estate. Rule 7.704(b) does not indicate the change of personal representative must occur in the same probate proceeding. Because none of the exceptions listed in rule 7.704(b) were met, Schneider was entitled to notice of the hearing on the final petition seeking statutory compensation.
Hunt's other contentions are likewise unavailing. Hunt notes Schneider did not file a petition for allocation of fees under section 10953, which is available when a personal representative absconds, but there is no evidence in the record Thompson absconded. Hunt also repeatedly claims Schneider is pursuing the poverty-stricken heirs for the little money they received from Anderson's estate, but the funds Schneider seeks will come from the statutory attorney fee allocated to Taylor in the amount of $4,300, not from the heirs.
Because we conclude Schneider was entitled to have the trial court consider his claim to a portion of the statutory fee for ordinary services, we find it unnecessary to reach Schneider's remaining arguments.
We emphasize we do not determine whether Schneider is actually entitled to any portion of the statutory attorney fee, or how much he is entitled to obtain if so. We conclude only that the trial court's decision that Schneider lacks standing to assert a claim based on dismissal of the prior probate proceeding was error. As noted above, when there is more than one attorney for the personal representative, the court must apportion the statutory fee either as agreed upon by the attorneys or as appropriate based on services actually performed by the attorneys. The trial court shall determine, in its sound discretion, what services Schneider provided to Thompson, what services were rendered by Taylor to Hunt, and what portion, if any, of the statutory fee Schneider is entitled to as a result. (See Estate of Heller (1992) 7 Cal.App.4th 862, 864 [probate court's apportionment of statutory fees will be upheld absent manifest abuse of discretion].)
Schneider also asks us to order the trial court to award attorney fees for the time and effort spent to perfect this appeal. We decline to do so. " 'Although this court has the power to fix attorney fees on appeal, the better practice is to have the trial court determine such fees.' " (Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1267; see Estate of Trynin (1989) 49 Cal.3d 868, 871, 880 [declining to consider merits of request for "fees on fees" award and remanding for trial court to determine entitlement to fees].)
Hunt's motion to dismiss and for sanctions based on the filing of a frivolous appeal is denied for the reasons stated in this opinion.
III. DISPOSITION
The matter is remanded to the trial court for a hearing on Schneider's entitlement to a portion of the statutory fee as attorney for a prior personal representative. Schneider is entitled to costs on appeal.
/s/_________
Margulies, J. We concur: /s/_________
Humes, P.J. /s/_________
Banke, J.