Opinion
No. 06-1281.
Filed August 7, 2007.
Guilford County No. 90 E 1895.
Appeals by Virginia L. Simpson, Carter J. Martin, Elizabeth B. Johnson, Karen Carter Martin, Virginia Livingston, Elizabeth Broderick Johnson, and Nexsen Pruet Adams Kleemeier, from order entered 29 March 2006 by Judge Michael E. Helms in Guilford County Superior Court. Heard in the Court of Appeals 12 April 2007.
Barron Berry, L.L.P., by Vance Barron, Jr., for petitioner-appellant Nexsen Pruet Adams Kleemeier, P.L.L.C. Stam, Fordham Danchi, P.A., by Paul Stam for respondent-appellant Virginia L. Livingston. Robertson Medlin, PLLC, by W. Eric Medlin for respondent-appellant Virginia L. Simpson. Wyatt Early Harris Wheeler LLP, by William E. Wheeler for respondent-appellee Walter L. Hannah.
When an heir to an estate initially disputes counsel fees awarded by the clerk of court, but subsequently stops the dispute, induces the law firm to continue its representation, and approximately nine years later challenges the orders awarding counsel fees, the doctrine of laches is properly applied to deny the heir's challenge. When neither the clerk nor the trial court's ruling was adverse to an appellant, this Court does not reach the appellant's assignment of error. N.C. Gen. Stat. 28A-15-1(c) provides that executors may institute a special proceeding to sell the real property of a decedent to satisfy claims for payments of counsel fees and costs of administration, and the debts of creditors are subordinate to the costs of administration of the estate. The notice requirements of N.C. Gen. Stat. § 28A-17-4 are not applicable to heirs having only a contingent remainder interest in property. Where the trial court held that findings of fact made by the clerk of court were supported by the evidence, its review is limited to whether the findings support the conclusions of law. In such a situation, the trial court may not make additional findings to support a different result. An award of counsel fees pursuant to N.C. Gen. Stat. § 28A-23-4 and commissions pursuant to N.C. Gen. Stat. § 28A-23-3(a) is in the sound discretion of the clerk of court.
Facts:
John Van Lindley ("decedent") died in Guilford County on 20 October 1990. A codicil to decedent's last will and testament, dated 23 June 1978, named decedent's son, John Van Lindley, Jr. ("John Lindley") and his attorney, Walter L. Hannah ("Hannah") co-executors of his estate. John Lindley and Hannah were qualified as executors on 25 October 1990. Hannah was then a senior partner in the law firm, Adams Kleemeier Hagan Hannah and Fouts, L.L.P., which later became Nexsen Pruet Adams Kleemeier, P.L.L.C. (both hereinafter, "Adams Kleemeier"). On 8 October 1991, Hannah and John Lindley ("co-executors") petitioned the court for payment of $140,000.00 counsel fees and $1,486.17 expenses. On that same day, an order was entered approving the payment of the fees and expenses. On 12 March 1992, executors petitioned the court for payment of an additional $220,000.00 counsel fees and $3,115.28 expenses, and an order was entered on that same day approving the payment of the fees and expenses. On 22 December 1992, executors again petitioned the court for payment of $99,811.41 counsel fees and $2,273.74 expenses. On 8 January 1993, an order was entered approving the payment of the fees and expenses. The total counsel fees allowed in these orders was $459,811.41, together with $6,875.19 in expenses.
Decedent was survived by his two children, Virginia L. Livingston ("Livingston") and John Lindley. Virginia L. Simpson ("Simpson"), Carter J. Martin, Elizabeth B. Johnson, Karen Carter Martin, and Elizabeth Broderick Johnson are grandchildren of decedent, who would be income beneficiaries of a testamentary trust created by decedent in his will, provided that they survive Livingston and John Lindley.
On 29 May 2002, over nine years after the entry of the last order approving counsel fees, Hannah, in his capacity of as co-executor of decedent's estate, petitioned the court for an additional payment of counsel fees and expenses for services rendered since 30 September 1992.
The requested amount was $211,087.51 for counsel fees and $12,776.57 for expenses. Subsequently, Hannah tendered a voluntary reduction in the amount of counsel fees sought to $175,000.00. The last day of service performed with respect to this petition was 18 April 1997. The co-executor, John Lindley, did not sign the petition.
On 2 August 2002, Livingston filed an objection to the May 2002 petition. On 19 September 2003, Livingston filed a restated and amended supplemental objection to the petition, and also requested modification of the 1991, 1992 and 1993 orders, alleging the fees awarded were "grossly excessive[.]" On 18 January 2005, Livingston filed a further supplemental objection, requesting that the estate be credited with $43,961.20 on the amount of unpaid counsel fees. Adams Kleemeier had received $43,961.20 on 2 July 1992 from the proceeds of the sale of a tract of land located at Roaring Gap, titled to Lindley Nurseries, Inc. The $43,961.20 was payment on an outstanding bill for counsel fees owed to Adams Kleemeier by Lindley Nurseries, Inc.
In an order entered 16 March 2005, the Clerk of Superior Court of Guilford County concluded that Livingston's request for modification of the 8 October 1991, 12 March 1992, and 8 January 1993 orders was untimely as a matter of law, and that Livingston was equitably estopped from seeking modification. The clerk also concluded that N.C. Gen. Stat. § 1-52(1) (2005) was not applicable to Hannah's 29 May 2002 petition for counsel fees; therefore, the petition was not barred by the three year statute of limitations.
On 8 April 2005, the clerk entered an order authorizing the co-executors to file a special proceeding to sell real property to pay the expenses of administration of the estate, including counsel fees.
On 2 June 2005, the clerk entered an order denying approval for the additional $175,000 in counsel fees and costs. On the same day, the clerk entered an order denying Livingston's request that the estate be credited $43,961.20 by virtue of the payment by Lindley Nurseries, Inc., to Adams Kleemeier. Livingston appealed to the superior court the order entered 16 March 2005, 8 April 2005, and the two orders entered 2 June 2005. Decedent's grandchildren, Simpson, Carter J. Martin and Elizabeth B. Johnson, also appealed the same orders. Adams Kleemeier appealed the order entered 2 June 2005, which denied approval of the additional $175,000 in attorneys fees.
On 9 March 2006, the superior court heard arguments regarding the appeals from orders entered by the clerk of court.
In an order entered 29 March 2006, the superior court modified and affirmed the three orders entered on 16 March 2005, 8 April 2005 and 2 June 2005. However, the court reversed and remanded the clerk's order, entered 2 June 2005, denying Livingston's request that the estate be credited $43,961.20 on payments of counsel fees. The superior court ordered that the estate be "credited with the sum of $43,961.20."
From this order, Adams Kleemeier and certain of the heirs of decedent's estate appeal.
Appellants Virginia Livingston and Virginia Simpson I: Laches
Appellants Livingston and Simpson first contend that the trial court erred in applying the doctrine of laches or equitable estoppel to appellants' motions to reconsider orders entered 1991, 1992 and 1993. We disagree.
N.C. Gen. Stat. § 28A-2-1 provides that "[t]he clerk of superior court of each county, ex officio judge of probate, shall have jurisdiction of the administration, settlement, and distribution of estates of decedents[.]" This Court has stated that "the Clerk is given exclusive original jurisdiction of the administration, settlement and distribution of estates except in cases where the Clerk is disqualified to act." In re Snipes, 45 N.C. App. 79, 81, 262 S.E.2d 292 (1980), 294; see also N.C. Gen. Stat. § 28A-2-1; In re Estate of Adamee, 291 N.C. 386, 230 S.E.2d 541 (1976). N.C. Gen. Stat. § 1-301.3(b) states that, "[i]n matters covered by this section, the clerk shall determine all issues of fact and law[,] [and] . . . enter an order or judgment, as appropriate, containing findings of fact and conclusions of law supporting the order or judgment."
On appeal to the Superior Court of an order of the clerk in matters of probate, the judge sits as an appellate court. In re Estate of Pate, 119 N.C. App. 400, 402, 459 S.E.2d 1, 2 (1995) (citing In re Estate of Swinson, 62 N.C. App. 412, 303 S.E.2d 361 (1983)). The role of a superior court judge on appeal of estate matters from the Clerk of Superior Court is set forth in N.C. Gen. Stat. § 1-301.3(d):
(d) Duty of Judge on Appeal. — Upon appeal, the judge of the superior court shall review the order or judgment of the clerk for the purpose of determining only the following:
(1) Whether the findings of fact are supported by the evidence.
(2) Whether the conclusions of law are supported by the findings of facts.
(3) Whether the order or judgment is consistent with the conclusions of law and applicable law.
Id. "The superior court, however, only reviews those
`findings of fact which the appellant has properly challenged by specific exceptions.'" In re Whitaker, ___
N.C. App. ___, ___, 633 S.E.2d 849, 854 (2006) (quotation
omitted) (emphasis in original).
In the instant case, the Clerk of Superior Court denied Livingston's motion to modify the 18 October 1991, 12 March 1992 and 18 January 1993 orders based on N.C. Gen. Stat. § 1-272 and equitable estoppel. The clerk ruled that no appeal was taken from the 18 October 1991, 12 March 1992 and 18 January 1993 orders approving counsel fees and expenses within ten days of entry of the orders or at any time.
N.C. Gen. Stat. § 1-272 was repealed by the General Assembly in 1999, see 1999 N.C. Sess. Laws ch. 216., 2, and the current governing statute is N.C. Gen. Stat § 1-301.3(d). 1999 N.C. Sess. Laws ch. 216, 1.
The trial court reversed the clerk's ruling that N.C. Gen. Stat. 1-272 barred Livingston's motions to modify orders. However, the trial court affirmed the clerk's conclusion that Livingston's request for modification was untimely, but changed the theory upon which Livingston's motion was denied from equitable estoppel to laches. The court stated:
I conclude that the Clerk was in error in applying the provisions of G.S. § 1-272. However, I conclude that the Clerk made an equitable finding when it dismissed the Petition to modify the 1991, 1992, and 1993 orders because of the doctrine which the Clerk labeled equitable estoppel but might also be called laches. Too much time has passed and Virginia L. Livingston did not complain or move to remove the Co-Executor or do anything else on that point until 2002 when she filed her Objection and restated it in 2003 and 2004. I conclude that 9 years is too much time to have lapsed to upset a prior order of the Clerk allowing attorney fees, most of which were paid a decade earlier.
We agree that equitable estoppel was not applicable to the facts of this case. "Equitable estoppel arises when a party "`by acts, representations, admissions, or by silence . . . induces another to believe that certain facts exist, and such other person rightfully relies and acts upon that belief to his or her detriment.'" A State ex rel. Easley v. Rich Food Servs., Inc., 139 N.C. App. 691, 702, 535 S.E.2d 84, 91 (2000) (quoting Lewis v. Jones, 132 N.C. App. 368, 372, 512 S.E.2d 87, 90 (1999)). The essential elements of estoppel are as follows:
(1) conduct on the part of the party sought to be estopped which amounts to a false representation or concealment of material facts; (2) the intention that such conduct will be acted on by the other party; and (3) knowledge, actual or constructive, of the real facts. The party asserting the defense must have (1) a lack of knowledge and the means of knowledge as to the real facts in question; and (2) relied upon the conduct of the party sought to be estopped to his prejudice.
Id. at 703, 535 S.E.2d at 92. The clerk's findings of fact support the conclusion of law that Adams Kleemeier relied on the actions of Cope Livingston, Virginia Livingston's son and agent, and changed its own position based upon these actions. However, the clerk did not find that Livingston made a "false representation" or "conceal[ed] material facts[,]" nor did the clerk find that Adams Kleemeier had "a lack of knowledge . . . as to the real facts in question." Id. To the contrary, Adams Kleemeier knew of Livingston's dissatisfaction with the amount of attorneys fees charged to the estate. Livingston and her son did not conceal this fact or make a false representation; rather, they confronted Adams Kleemeier concerning the matter. The findings made by the clerk clearly show that the theory of equitable estoppel is inapplicable as a matter of law.
We now consider whether the doctrine of laches found by the trial court is applicable. The doctrine of laches requires a showing "(1) that petitioner negligently failed to assert an enforceable right within a reasonable period of time, and (2) that the propounder of the doctrine was prejudiced by the delay in bringing the action." Sunbelt Rentals, Inc. v. Head Engquist Equip., L.L.C., 174 N.C. App. 49, 63, 620 S.E.2d 222, 232 (2005) (citing Costin v. Shell, 53 N.C. App. 117, 120, 280 S.E.2d 42, 44 (1981)). "[T]he mere passage or lapse of time is insufficient to support a finding of laches; for the doctrine of laches to be sustained, the delay must be shown to be unreasonable and must have worked to the disadvantage, injury or prejudice of the person seeking to invoke it." Taylor v. Raleigh, 290 N.C. 608, 622-23, 227 S.E.2d 576, 584-85 (1976).
The clerk made the following findings of fact:
4. Mrs. Livingston's son, Cope Livingston, was acting as her agent in matters relating to the Estate[.]
5. Through her agent, Cope Livingston, Mrs. Livingston objected to Adams Kleemeier's fees in November and December, 1993, and when told by representatives of the firm that its lawyers could not keep working on behalf of the Estate without the hope and expectation of eventual payment and would seek to withdraw as attorneys for the Estate, she actively induced and encouraged Adams Kleemeier to keep working on behalf of the Estate.
6. After entry of the 1991-1993 Orders, Adams Kleemeier continued to provide services and to advance expenses on behalf of the Estate in reliance upon Livingston's express and implied consent that the firm's services were necessary to assist the co-executors in the performance of their duties.
By holding that laches barred the objection of Virginia Livingston, the trial court approved these findings of fact.
After careful review of the record, we conclude that these findings were supported by the evidence presented at the hearing before the clerk as required by N.C. Gen. Stat. § 1-301.3(d)(1). These findings show that Livingston, through her representative, Cope Livingston, initially complained about counsel fees, but subsequently approved Adams Kleemeier's continued representation of the estate, urging Adams Kleemeier to continue efforts to stave off foreclosure of certain plots of the estate's property and to negotiate a settlement with the North Carolina Department of Transportation with regard to a condemnation proceeding. Adams Kleemeier was thus induced to continue providing services to the estate, almost one year subsequent to the entry of the 8 January 1993 order awarding counsel fees. Nine years later, Livingston challenged, for the first time before the clerk of court, the legitimacy of the 1991, 1992 and 1993 orders. We conclude that the trial court did not err in its conclusion that this "delay" was "unreasonable" and "worked to the disadvantage, injury or prejudice of the person seeking to invoke it[,]" as required to establish laches by Taylor, 290 N.C. at 622-23, 227 S.E.2d at 584. We affirm the ruling of the trial court on this assignment of error.
II: Counsel fees
In their next argument, Livingston and Simpson argue that the trial court erred by failing to dismiss the 2002 petition for $175,000 in additional counsel fees as a matter of law, based upon the three year statute of limitations provided by N.C. Gen. Stat. § 1-52(1), and the failure of one co-executor to sign or support the petition. Because neither the clerk nor the trial court's ruling was adverse to appellants Livingston and Simpson, we do not reach this question.
An appellant may appeal only an adverse ruling. In re Miles, 262 N.C. 647, 138 S.E.2d 487 (1964); In re B.D., 174 N.C. App. 234, 239-40, 620 S.E.2d 913, 917 (2005) (stating that "[o]nly a `party aggrieved' may appeal from an order or judgment of the trial division."). Neither the ruling of the clerk nor the trial court's affirmation of the ruling was adverse to Appellants Livingston or Simpson. Rather, the clerk of court denied approval of the additional $175,000 attorneys fees for Adams Kleemeier. This ruling was in appellants' favor. Therefore, we do not reach the questions of whether N.C. Gen. Stat. § 1-52(1) or whether the failure of one co-executor to sign or support the petition barred the petition for additional counsel fees.
III: The Special Proceeding allowing Sale of Real Property
Livingston next argues that the trial court erred by affirming the clerk's ruling that the co-executors could institute a special proceeding to satisfy claims for debts, which included counsel fees, through the sale of real property. We disagree.
Chapter 28A of the North Carolina General Statutes provides the structure for the administration of decedents' estates. N.C. Gen. Stat. § 28A-17-1 allows, pursuant to authority contained in N.C. Gen. Stat. 28A-15-1, real property owned by a decedent to be sold by the "personal representative" to pay "debts and other claims against the decedent's estate." N.C. Gen. Stat. § 28A-15-1(a) and (c) provide that:
(a) All of the real and personal property, both legal and equitable, of a decedent shall be assets available for the discharge of debts and other claims against his estate in the absence of a statute expressly excluding any such property. Provided that before real property is selected the personal representative must determine that such selection is in the best interest of the administration of the estate. . . .
(c) If it shall be determined by the personal representative that it is in the best interest of the administration of the estate to sell, lease, or mortgage any real estate or interest therein to obtain money for the payment of debts and other claims against the decedent's estate, the personal representative shall institute a special proceeding before the clerk of superior court for such purpose pursuant to Article 17 of this Chapter, except that no such proceeding shall be required for a sale made pursuant to authority given by will. A general provision granting authority to the personal representative to sell the testator's real property, or incorporation by reference of the provisions of G.S. 32-27(2) shall be sufficient to eliminate the necessity for a proceeding under Article 17. If a special proceeding has been instituted by the personal representative pursuant to G.S. 28A-13-3(c), the personal representative may petition for sale, lease, or mortgage of any real property as a part of that proceeding and is not required to institute a separate special proceeding.
Moreover, the authority of the personal representative to pay his own compensation is provided pursuant to N.C. Gen. Stat. § 28A-13-3, which states, in pertinent part, the following:
(a) . . . [A] personal representative has the power to perform in a reasonable and prudent manner every act which a reasonable and prudent man would perform incident to the collection, preservation, liquidation or distribution of a decedent's estate so as to accomplish the desired result of settling and distributing the decedent's estate in a safe, orderly, accurate and expeditious manner as provided by law, including but not limited to the powers specified in the following subdivisions:
(1) . . . [T]o take possession, custody or control of the real property of the decedent if he determines such possession, custody or control is in the best interest of the administration of the estate. Prior to exercising such power over real property the procedure as set out in subsection G.S. 28A-13-3(c) shall be followed. . . .
(16) To pay . . . his own compensation, and other expenses incident to the collection, care, administration and protection of the assets of the estate in his possession, custody or control.
(emphasis added)
As stated in N.C. Gen. Stat. § 28A-13-3, the personal representative must follow the provisions of N.C. Gen. Stat. § 28A-13-3(c), prior to exercising control of real property, which require that:
(c) Prior to the personal representative exercising possession, custody or control over real property of the estate he shall petition the clerk of court to obtain an order authorizing such possession, custody or control. The petition shall include:
(1) A description of the real property which is the subject of the petition;
(2) The names, ages, and addresses, if known, of the devisees and heirs of the decedent;
(3) A statement by the personal representative that he has determined that such possession, custody or control is in the best interest of the administration of the estate.
Id.; see also Montgomery v. Hinton, 45 N.C. App. 271, 274, 262 S.E.2d 697, 699 (1980).
Moreover, N.C. Gen. Stat. § 28A-19-6 distinguishes between "costs and expenses of administration" and "claims against the estate of a decedent[,]" stating that "[a]fter payment of costs and expenses of administration, the claims against the estate of a decedent must be paid[.]" The Court in Painter-Jamieson v. Painter, 163 N.C. App. 527, 531, 594 S.E.2d 217, 220 (2004), interpreted this provision to mean that all creditors are subordinate to the costs and administration of the estate. N.C. Gen. Stat. § 28A-19-6.
With regard to counsel fees, N.C. Gen. Stat. § 28A-23-4 provides that:
The clerk of superior court, in his discretion, is authorized and empowered to allow counsel fees to an attorney serving as a personal representative, collector or public administrator (in addition to the commissions allowed him as such representative, collector or public administrator) where such attorney in behalf of the estate he represents renders professional services, as an attorney, which are beyond the ordinary routine of administration and of a type which would reasonably justify the retention of legal counsel by any such representative, collector or public administrator not himself licensed to practice law.
In the instant case, the clerk of court declared, and the superior court affirmed, that the co-executors could institute a special proceeding under N.C. Gen. Stat. § 28A-15-1(c), to sell real property of the decedent to satisfy claims for payments of counsel fees and costs of administration. Here, $150,000 of counsel fees, ordered in 1991, 1992 and 1993, remained unpaid by the estate, and Adams Kleemeier sought to sell property in order to pay the unpaid portions. The foregoing statutes support the clerk and trial court's legal conclusion that Hannah, as the estate's personal representative and attorney was authorized to petition for a special proceeding to sell real property "for the discharge of debts and other claims against his estate in the absence of a statute expressly excluding any such property[,]" including "his own compensation[.]" See N.C. Gen. Stat. § 28A-15-1(a); N.C. Gen. Stat. § 28A-13-3(a)(16). This conclusion is supported by this Court's holding that the debts of creditors are subordinate to the costs and administration of the estate. Painter-Jamieson, 163 N.C. App. at 531, 594 S.E.2d at 220.
This assignment of error is overruled.
IV: Notice
In her next argument, Simpson contends that the trial court erred in failing to strike the order allowing the executors to institute a special proceeding when Simpson did not receive notice of the hearing before the clerk. We disagree.
"[A] judgment rendered by a court against a citizen affecting [the citizen's] vested rights in an action or proceeding to which he is not a party is absolutely void and may be treated as a nullity whenever it is brought to the attention of the Court." Card v. Finch, 142 N.C. 129, 132, 54 S.E. 1009, 1010 (1906) (emphasis added).
N.C. Gen. Stat. § 28A-17-4 provides that "[n]o order to sell real property shall be granted until the heirs and devisees of the decedent have been made parties to the proceeding by service of summons in the manner required by law." See also Swindell v. Lewis, 82 N.C. App. 423, 346 S.E.2d 237 (1986). The proceeding to sell real property is an adversary one, requiring that the heirs be made parties, and if an heir is not joined, the order of sale is void as to him. Swindell, 82 N.C. App. at 426, 346 S.E.2d at 239 (1986); see also In re Estate of Daniel, 225 N.C. 18, 33 S.E.2d 126 (1945). If an heir were not entitled to notice, the heir would be left without practical remedy. Swindell, 82 N.C. App. at 426, 346 S.E.2d at 239. The heir should, as a matter of common justice, have an opportunity to show why the real property in which they have a vested interest should not be sold. Id.
Article Seven of the Last Will and Testament of decedent stated:
Upon the death of my wife, Virginia H. Lindley, my daughter, Virginia Van Lindley and my son, John Van Lindley, Jr., the trust hereinfore created, and designated as Share B . . . shall be terminated and the principle (sic), together with all accumulated income, shall be distributed to my then living grandchildren, per capita, share and share alike.
Because of the survivorship requirement, Simpson's interest was contingent and could not vest before the death of the income beneficiaries of the testamentary trust, Livingston and John Lindley. See Hollowell v. Hollowell, 333 N.C. 706, 715, 430 S.E.2d 235, 242 (1993) (stating that "[a] remainder interest is contingent when it is `either subject to a condition precedent . . . or owned by unascertainable persons, or both.'"). Even though Simpson, did not receive notice of the proceeding to sell the estate's real property pursuant to N.C. Gen. Stat. § 28A-15-1(c), notice to her was not required because her contingent remainder had not yet vested, and she had no other vested interest in the property. N.C. Gen. Stat. § 28A-17-4 does not require that the holders of contingent remainders of an estate be given notice of a proceeding brought pursuant to N.C. Gen. Stat. 28A-15-1(c). See Swindell, 82 N.C. App. at 426, 346 S.E.2d at 239 (applying the logic of In re Estate of Daniel and Card v. Finch to the notice requirement of N.C. Gen. Stat. § 28A-17-4); In re Estate of Daniel, 225 N.C. 18, 33 S.E.2d 126; Card v. Finch, 142 N.C. at 132, 54 S.E. at 1010 (1906) (explicitly stating that a judgment rendered without notice to a citizen is void if it affects the citizen's vested rights).
The trial court did not err by failing to strike the order allowing the executors to institute a special proceeding. This assignment of error is without merit.
Appellant Adams Kleemeier I: Credit of $43,961.20
In its first argument, Adams Kleemeier contends that the trial court erred by reversing the clerk's order and allowing a credit of $43,961.20 to the estate for the amount owed to Adams Kleemeier for counsel fees. We agree.
The clerk of court denied Livingston's request that the estate be allowed a credit of $43,961.20 on payment of its attorneys fees, making the following findings of fact:
2. The amount of $43,961.20 which was paid to Adams Kleemeier on July 2, 1992, out of the proceeds of the sale of real property at Roaring Gap owned by Lindley Nurseries, Inc., was payment for an outstanding balance due from Lindley Nurseries, Inc., to Adams Kleemeier for attorneys' fees and expenses for services to the corporation. The payment to Adams Kleemeier was made with the consent of the executors of the Estate and the officers and directors of Lindley Nurseries, Inc.
3. Adams Kleemeier received the payment of $43,961.20 for work done for Lindley Nurseries, Inc., and not for the Estate. (Emphasis added)
The clerk of court concluded as a matter of law that the estate was not entitled to a credit for the payment in reduction of the counsel fees owed by the estate.
The trial court concluded that the clerk's findings were supported by sufficient evidence, but reversed the clerk's legal conclusion for the following reason:
The facts that the Clerk did find are supported by the evidence. The Clerk failed to find, despite Virginia L. Livingston's specific request to do so, whether the beneficial ownership of the land (out of which sale the payment was made) was in the deceased, John Van Lindley. Since the Clerk failed to make a finding, and pursuant to G.S. 1-303.3(d) I find, based on the overwhelming evidence of record before me, including statements by the Executor and his counsel and submittals to the IRS and to this Clerk under oath, that this Roaring Gap house and lot was beneficially owned by the decedent. If the Clerk had made a finding on that point of beneficial ownership in accordance with the overwhelming evidence, then the conclusion would have been inescapable that the Estate should be credited with that July 2, 2002 payment of $43,961.20 to Adams Kleemeier. Therefore this Court concludes that the credit for that payment made on July 2, 1992 should be credited to the estate against attorney fees ordered by the Clerk.
Adams Kleemeier contends that the superior court judge exceeded its authority under N.C. Gen. Stat. § 1-301.3(d), by making new findings of fact.
The language of N.C. Gen. Stat. § 1-301.3(d) is clear and unambiguous. Where previously, the case of In re Estate of Pate, 119 N.C. App. 400, 403, 459 S.E.2d 1, 2 (1995), allowed the trialcourt, after a whole record review, to "either affirm, reverse, or modify" the findings of fact made by the clerk of court, the enactment of N.C. Gen. Stat. § 1-301.3 created a more limited review in cases in which there are no issues as to the admissibility or exclusion of evidence. In such cases, N.C. Gen. Stat. § 1-301.3 requires that the "the judge of the superior court shall review the order or judgment of the clerk for the purpose of determining only the following: (1) Whether the findings of fact are supported by the evidence[;] (2) Whether the conclusions of law are supported by the findings of facts[;] (3) Whether the order or judgment is consistent with the conclusions of law and applicable law." Id. (emphasis added) The specific absence of any statutory language allowing for the trial court's modification of the clerk's findings of fact in cases in which the court does not receive additional evidence forecloses its ability to do so.
N.C. Gen. Stat. § 1-301.3(d) states that "[i]t is not necessary for a party to object to the admission or exclusion of evidence before the clerk in order to preserve the right to assign error on appeal to its admission or exclusion[.]" The trial court is authorized to "receive additional evidence on the evidentiary issue in question" if the record is insufficient, and therefore, make additional findings.
Here, the Clerk of Superior Court entered a finding of fact which stated that the "real property [was] owned by Lindley Nurseries, Inc." The clerk also entered a finding which stated that $43,961.20 was "payment for an outstanding balance due from Lindley Nurseries, Inc., to Adams Kleemeier for attorneys' fees and expenses for services to the corporation." These findings support the clerk's conclusion that the estate was not entitled to a credit for the payment in reduction of the counsel fees owed by the estate. Pursuant to N.C. Gen. Stat. 1-301.3(d), the trial court could only make additional findings or modify existing findings where there was an issue as to the admissibility or exclusion of evidence. This is not applicable to this case. The trial court did not receive additional evidence, but reviewed the whole record, determining that the evidence supported the clerk's findings. However, the court also found that the evidence was sufficient to support an ultimate finding that the clerk of court did not make; that John Van Lindley was the beneficial owner of the real estate in question. Based on the trial court's additional finding of fact, the court reached the opposite conclusion of law than the clerk, and allowed the estate a credit of $43,961.20. This was error.
See Woodard v. Mordecai, 234 N.C. 463, 470, 67 S.E.2d 639, 644 (1951) (stating that "[U]ltimate facts are the final facts required to establish the plaintiff's cause of action or the defendant's defense; and evidentiary facts are those subsidiary facts required to prove the ultimate facts").
By finding that the clerk's findings of fact were supported by the evidence, the trial court's review was limited to whether the findings supported the conclusions. T he trial court's decision to reweigh the evidence and create an additional, ultimate finding of fact, was both contrary to the trial court's authority pursuant to N.C. Gen. Stat. 1-301.3(d), and ignored our long-standing principle and rule that an appellate court, or a trial court engaged in the appellate review of an order of the clerk of court, may neither reweigh the evidence, nor disregard findings of fact when supported by competent evidence, even if the evidence would also support a contrary result. Hearne v. Sherman, 350 N.C. 612, 620, 516 S.E.2d 864, 868 (1999); see also Joyner v. Adams, 87 N.C. App. 570, 574, 361 S.E.2d 902, 904 (1987) (stating that "[i]t is not the province of [this appellate] court to reweigh the evidence").
We conclude that the trial court erred by reweighing the evidence and making an ultimate finding of fact that the property in question was beneficially owned by the decedent. We reverse this portion of the trial court's order.
VI: The 2002 Petition for $175,000 in Additional Counsel Fees
In its next argument, Adams Kleemeier argues that the trial court erred by affirming the clerk's order denying approval of additional $175,000 in counsel fees and costs. We disagree.
N.C. Gen. Stat. § 28A-23-3(a), mandates that the amount of commissions allowed to personal representatives is in the discretion of the clerk of court:
Personal representatives, collectors or public administrators shall be entitled to commissions to be fixed in the discretion of the clerk of superior court not to exceed five percent (5%) upon the amounts of receipts, including the value of all personal property when received, and upon the expenditures made in accordance with law. In determining the maximum commissions allowable under this subsection, the clerk of superior court may take into consideration fees paid by the estate for professional services performed in the ordinary course of administering the estate, including services performed by attorneys and accountants. However, the clerk is not required to reduce the maximum commissions allowed by the aggregate fees paid to professionals on a dollar-for-dollar basis.
Id. (emphasis added). In order to determine the amount of a personal representative's commission, the clerk "shall consider the time, responsibility, trouble and skill involved in the management of the estate." N.C. Gen. Stat. 28A-23-3(b).
Moreover, N.C. Gen. Stat. § 28A-23-4 mandates that the amount of counsel fees allowed to an attorney serving as a personal representative is in the clerk's discretion:
The clerk of superior court, in his discretion, is
authorized and empowered to allow counsel fees to an attorney serving as a personal representative, collector or public administrator (in addition to the commissions allowed him as such representative, collector or public administrator) where such attorney in behalf of the estate he represents renders professional services, as an attorney, which are beyond the ordinary routine of administration and of a type which would reasonably justify the retention of legal counsel by any such representative, collector or public administrator not himself licensed to practice law.
Id. (emphasis added).
The clerk of court made the following findings of fact:
5. Pursuant to the ex parte petitions of Walter L. Hannah and Adams Kleemeier, the Court has previously approved, by Orders dated October 8, 1991, March 12, 1992 and January 8, 1993, respectively the payment by the Co-Executors to Adams Kleemeier of a total of $459,811.00 as fees and $6,875 as expenses of the Estate. . . .
7. The Petition (for $175,000.00) and the earlier fee petitions submitted with respect to Adams Kleemeier request that fees be approved at least to some extent in lieu of Co-Executor's commissions to Walter L.
Hannah.
8. The Petition, and the earlier fee petition submitted with respect to Adams Kleemeier include various time spent performing legal services for the Estate and/or business entities connected with the estate, time spent by Walter L. Hannah in the administration of the Estate, and time of the other members of Adams Kleemeier in preparing the accounts and carrying out other duties of the personal representatives.
9. Virginia Livingston has not disputed whether the time shown on the invoices submitted with the Petition were actually expended by other members of the firm of Adams Kleemeier, whether the expenses were actually incurred and paid, or whether the hourly rates used to compute Adams Kleemeier's requested fee are reasonably attorney's fees in the Greensboro area.
The clerk appropriately concluded that pursuant to N.C. Gen. Stat. § 28A-23-3 and 4, the approval of counsel fees and commissions was in the discretion of the clerk and that the services performed and the size of the estate are factors that may be considered by the court in its discretionary determination of fees.
The trial court stated the following with regard to the clerk's order:
All of the findings of the Clerk on this point are supported by the evidence, and the Clerk properly exercised his sound discretion, after considering in great detail the services performed, the size of the estate, which are factors to be considered by the Clerk in his discretionary determination that no more fees should be allowed under G.S. 28A-23-3 and 4[.]
The court further stated that "this Court finds and concludes that the $459,811.41 in attorney fees and $6,875.19 in costs which have previously been approved are more than sufficient, taking into account the various factors to be considered by the Clerk[.]" The court concluded that the clerk properly exercised his discretion.
Appellant Adams Kleemeier contends that the clerk of court erred procedurally, by failing to make a finding of fact as to whether services provided by the law firm were "beyond the ordinary routine of administration and of a type which would reasonably justify the retention of legal counsel[,]" as required by N.C. Gen. Stat. 28A-23-4. Appellant cites Matthews v. Watkins, 91 N.C. App. 640, 667, 373 S.E.2d 133, 148 (1988), as authority for the proposition in its brief that N.C. Gen. Stat. § 28A-23-4 requires the clerk to make this specific finding of fact "as to whether the attorney executor . . . has provided `professional services, as an attorney, which are beyond the ordinary routine of administration[.]'" However, appellant's argument is not supported by law. Matthews, 91 N.C. App. at 667, 373 S.E.2d at 148, sets out the test set forth in N.C. Gen. Stat. § 28A-23-4:
To meet the first part of the test, then, an attorney executor must specifically show to the clerk that the services rendered to the estate as an attorney were beyond the ordinary routine of administration. Secondly, the attorney executor must specifically show that a non-attorney executor would have been reasonably justified in retaining counsel to handle the specific work.
Only when this two-pronged statutory test has been met, may the clerk of court approve the payment of legal fees to an attorney executor. (Emphasis added)
Id. Although, the clerk certainly must differentiate between commissions awarded pursuant to N.C. Gen. Stat. 28A-23-3(b) and counsel fees awarded pursuant to N.C. Gen. Stat. § 28A-23-4, we find no support in the law for the proposition that the clerk must make a specific finding such as argued by appellant Adams Kleemeier. The finding that "the attorney executor . . . has provided `professional services, as an attorney, which are beyond the ordinary routine of administration[,]" is implicit in the clerk's assessment that "Adams Kleemeier . . . perform[ed] legal services for the Estate and . . . Walter L. Hannah [spent time] in the administration of the Estate[.]" Moreover, appellant admits in its brief that "the Estate was a complicated legal mess[,]" and Adams Kleemeier attorney, Davis, submitted an affidavit, which stated that the estate was in a "fiscal and legal crisis."
The award of counsel fees pursuant to N.C. Gen. Stat. § 28A-23-4 and commissions pursuant to N.C. Gen. Stat. § 28A-23-3(a) is in the sound discretion of the clerk of court. We conclude that he did not abuse his discretion.
VII: 1991, 1992 and 1993 Orders
Appellant Adams Kleemeier next contends that the trial court erred by overruling the clerk's decision that N.C. Gen. Stat. § 1-272 barred Livingston's motions to modify the orders entered 1991, 1992 and 1993.
An appellant may appeal only an adverse ruling. Miles, 262 N.C. 647, 138 S.E.2d 487; B.D., 174 N.C. App. at 239-40, 620 S.E.2d at 917. Neither the ruling of the clerk nor the trial court's affirmation of the ruling was adverse to appellant Adams Kleemeier. Rather, the ruling that laches barred Livingston's motion for modification of the 1991, 1992 and 1993 petitions for attorneys fees and commissions was in appellant Adams Kleemeier's favor. Therefore, we do not reach the question of whether the trial court erred by overruling the clerk's decision that N.C. Gen. Stat. § 1-272 barred Livingston's motions to modify the 1991, 1992 and 1993 orders.
The remaining heirs who gave notice of appeal from the trial court's order did not make any assignments or error, nor did they file briefs with this court. The appeals of Carter J. Martin, Elizabeth B. a Johnson, Karen Carter Martin, and Elizabeth Broderick Johnson are dismissed. N.C. R. App. P. 13(c).
AFFIRMED IN PART; REMANDED IN PART.
Judges BRYANT concurs.
Judge LEVINSON concurred prior to 7 July 2007.
Report per Rule 30(e).