March 23, 1964.
July 31, 1964.
Attorneys — Counsel fees — $82,150 — Excessiveness — Orphans' Court — Discretion — Appellate review.
In this appeal in which it appeared that special counsel for the guardian of an incompetent recovered $325,000 in the settlement of an action of trespass based upon fraud perpetrated upon the incompetent in purchasing securities from her; and following a full hearing the orphans' court approved an additional counsel fee of $50,000, making a total fee of $82,150, it was Held that (1) the orphans' court omitted consideration of the amount of net recovery or benefit accruing to the incompetent from the settlement, and (2) considering this factor the maximum reasonable fee was $70,000; and the decree was modified by reducing the additional fee to $37,850.
Mr. Chief Justice BELL and Mr. Justice ROBERTS concurred in the result.
Mr. Justice JONES filed a dissenting opinion.
Before BELL, C. J., MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.
Appeal, No. 77, March T., 1964, from decree of Orphans' Court of Allegheny County, No. 2750 of 1955, in re estate of Cora Hubbard Williams, an alleged incompetent. Decree modified and, as modified, affirmed; reargument refused September 25, 1964.
Petition for leave to pay counsel fee. Before BOYLE, P. J.
Orders entered directing payment of fees, exceptions dismissed and final decree entered. Incompetent, by her personal counsel, appealed.
Paul Ginsburg, for appellant.
Thomas N. Griggs, with him Donald C. Bush, John Stewart, Jr., Robert W. Duggan, and Griggs, Moreland, Blair Douglass, for appellees.
The substantial question before this Court is whether the orphans' court award of fees to special counsel was excessive and therefore constituted an abuse of discretion.
The guardians of an adjudicated incompetent retained special counsel to institute an action against certain persons for fraud in connection with the purchase by those persons from the incompetent of certain securities owned by her. Special counsel brought suit in 1958, and, after substantial efforts on their part, a settlement was reached in 1962 in the amount of $325,000. Thereafter, the guardians filed a petition for leave to pay special counsel $50,000 for their services, in addition to the $32,150 in fees already paid them. Following a full hearing, the orphans' court ordered the payment of the additional $50,000. After exceptions to this determination were filed by the incompetent's personal counsel, the orphans' court affirmed the award of the additional fee bringing the total fees awarded to special counsel to $82,150. The incompetent, by her personal counsel, appealed.
Our review of the lower court's adjudication indicates that it omitted consideration of an extremely important factor necessary to the proper determination of the value of the services performed by an attorney, namely, the amount of net recovery or benefit accruing to the party represented. Neither the record nor the lower court's opinion contain any calculation indicating the extent to which the incompetent's estate was benefited as a result of this litigation. On the basis of the facts contained in the record, we have made a rough calculation of the net recovery accruing to the estate by applying to the gross recovery the impact of federal income taxes, costs and the enumerated expenses. Had the lower court made such a calculation it could not have reasonably allowed a total fee to special counsel in excess of $70,000. Hence, we modify the decree by reducing the amount of the additional fee awarded to special counsel by the court below to $37,850 and as so modified the decree is affirmed.
Decree modified and as modified affirmed. Costs to be paid by appellees.
Mr. Chief Justice BELL and Mr. Justice ROBERTS concur in the result.
I dissent. I believe that the matter of the allowance of counsel fees was within the discretion of the court below, and I find no abuse of discretion in the case at bar.