In re:  Estate of Clarence Raymond Paulson, Decedent.

In re:  Estate of Clarence Raymond Paulson, Decedent. A04-2272, Court of Appeals Unpublished, August 2, 2005.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-2272

 

In re:  Estate of

Clarence Raymond Paulson, Decedent

 

Filed August 2, 2005

Affirmed
Klaphake, Judge

 

Fillmore County District Court

File No. P4-02-0628

 

Thomas M. Manion, Jr., Herrick & Manion, 600 Kenilworth Avenue South, P.O. Box 420, Lanesboro, MN  55949 (for appellant Howard Brekke)

 

Matthew J. Opat, 22 SE Second Street, P.O. Box 455, Chatfield, MN  55923 (for respondents Gladys Asleson, et al.)

 

            Considered and decided by Shumaker, Presiding Judge, Klaphake, Judge, and Willis, Judge.

U N P U B L I S H E D   O P I N I O N

KLAPHAKE, Judge

            Appellant Howard Brekke, who served first as the special representative and then as the personal representative of the estate of Clarence Paulson, challenges the district court's decision to reduce or disallow some of the personal representative and attorney fees that Brekke claimed were incurred to manage and settle the estate.  The district court reviewed Brekke's claims for compensation after respondents, who are several of the other heirs of the estate, filed objections to Brekke's final account.[1]

            Because the district court did not clearly err in its findings or otherwise abuse its discretion by considering factors outside the statutes governing the allowance of such fees, we affirm.

D E C I S I O N

            Allowance of personal representative and attorney fees is a matter largely within the discretion of the district court; the reasonable value of such services is a question of fact.  In re Estate of Baumgartner, 274 Minn. 337, 346, 144 N.W.2d 574, 580 (1966).  A district court's finding of reasonableness will not be set aside unless clearly erroneous.  Minn. R. Civ. P. 52.01.  As a reviewing court, we must give due deference to the district court's opportunity to observe witnesses and evaluate their credibility.  Id.; In re Estate of Serbus, 324 N.W.2d 381, 385 (Minn. 1982).

I.

            Brekke challenges the district court's decision to reduce his claimed rate for his services as a special and personal representative from $75 to $20 per hour.  In reaching this decision, the district court noted that Brekke failed to produce evidence to support his claim that that was his usual rate of compensation and that his claimed rate was "much higher than that of professionals involved in the conservatorship business and employees and even elected officials of Fillmore County."  The court considered evidence presented by respondents regarding the hourly wage rates for salaried, elected, and hourly employees of Fillmore County, who performed services similar to those performed by Brekke and who earned between $8 and $32.45 per hour.  The court also considered evidence establishing the $45 per hour charged by Karen Haugerud-Bahl, who specializes in providing estate, guardianship, and conservatorship services in the county.  The court noted that Brekke, a layperson, had no specialized or professional experience and hired an attorney to perform the more complex work related to the administration of the estate.  The district court therefore determined that Brekke's claimed rate of $75 per hour was unreasonable, particularly because that rate was "almost twice as high as that of a professional," and reduced his claimed rate to $20 per hour.

            Brekke first argues that the district court improperly based its decision on factors outside the statutory framework of Minn. Stat. § 524.3-719 (2004).  That statute provides that a "personal representative is entitled to reasonable compensation for services."  Id. at (a).  The statute further states:

In determining what is reasonable compensation, the court shall give consideration to the following factors:

(1) The time and labor required;

(2) The complexity and novelty of problems involved; and

(3) The extent of the responsibilities assumed and the results obtained.

 

Id.at (b).

            Contrary to Brekke's argument, the district court specifically considered these factors.  In particular, the court noted that, while serving as special representative, Brekke was responsible for the care of the decedent's livestock; as personal representative, he deposited checks, paid bills, performed some repairs on the property, and did other work associated with the administration of the estate.  The district court reasoned that none of these tasks was so complex or novel so as to warrant compensating Brekke at the rate of $75 per hour, which the court noted was almost twice as high as that of a professional.

            Brekke next argues that his claimed rate was entirely reasonable, considering that he (1) successfully identified, marshaled, and protected for distribution an estate worth more than $3 million; (2) handled myriad duties, including identification of assets, farm management, investment management, and recordkeeping for tax purposes; and (3) expeditiously and efficiently secured probate of the estate, including the payment of estate taxes.  Although the size of an estate is often a factor to consider when determining reasonable compensation, the $3 million estate here was not complex and consisted almost solely of real estate and cash in local bank accounts.  We therefore conclude that the district court did not abuse its discretion by limiting Brekke's compensation to $20 per hour.

II.

            Brekke argues that the district court abused its discretion when it determined that he should not be paid for work done while he was a special administrator unless those services were specifically related to the care of the farm and livestock.  Brekke argues that the court's decision disregards Minn. Stat. § 524.3-701 (2004), which states that the "powers of a personal representative relate back in time to give acts by the person appointed which are beneficial to the estate occurring prior to appointment the same effect as those occurring thereafter."[2]

            But the district court carefully considered Brekke's itemized list of hours and the services he claimed he provided during his time as special administrator.  The district court granted him compensation for services related to his specified responsibilities during the time he served as special administrator, but disallowed compensation for other services he performed that went beyond caring for the farm and livestock and otherwise preserving the assets until appointment of a personal representative.  We conclude that the district court did not clearly err in its findings or otherwise abuse its discretion by disallowing Brekke's claim for compensation for services that were beyond the scope of his duties as a special administrator.

III.

            Brekke argues that the district court erred when it denied compensation for services that his attorney claimed he would perform in connection with the final accounting and its preparation.  Brekke cites Minn. Stat. § 525.48 (2004), which states that a final account "shall include the total fees charged to date and estimated future fees to be charged."

            The district court disallowed the attorney's claim for compensation for 25 hours spent preparing the final accounting.  The court found that the attorney "has not itemized his charges enough, rather just presenting the Estate with a lump amount of hours, [that the court] feels is too high for the work allegedly performed by the attorney."  Based on our review of the record, we conclude that the district court did not clearly err in its findings or otherwise abuse its discretion in disallowing attorney fees for these hours.

IV.

            Brekke challenges the district court's disallowance of compensation for time spent attempting to sell real property held by the estate.  The district court disallowed compensation for time spent on this activity after November 16, 2003, because the court issued an order on that date directing Brekke to distribute this property "among the heirs per statutory requirements."  Despite requests by respondents to distribute the real estate according to this order, Brekke continued in his attempts to sell the property.  Respondents brought a second petition for distribution, and on April 9, 2004, the district court ordered that Brekke distribute the real estate to the heirs and file the final account within 15 days.

            Brekke insists that because the first order failed to specify a date for distribution or the manner of distribution, it was permissible for him to continue to spend time considering distribution options.  In their statements for services rendered, both Brekke and his attorney claim hours for time spent attempting to sell the property after the November 16, 2003 order.  Because these services were in contravention of the court's order and not beneficial to the estate, we conclude that the district court did not abuse its discretion in denying compensation for these services.

V.

            Brekke argues that the district court erred when it disallowed time spent by his attorney with another heir, Eddie Brekke, discussing a possible charitable memorial for the decedent.  The attorney claimed that he spent 1.3 hours on June 4 and June 17, 2003, with Eddie Brekke discussing whether a memorial cabin could be built in memory of the decedent.  The district court properly disallowed any compensation from the estate for this time, noting that the decedent died intestate and had made no charitable bequests, and that this type of expenditure could not be authorized by the personal representative under Minn. Stat. § 524.3-715 (2004).

            The district court's decisions are affirmed.

            Affirmed.

[1]  Brekke sought more than $50,000 in compensation for his services as a personal representative and more than $50,000 in attorney fees.  After reducing Brekke's rate from $75 to $20 per hour, and further disallowing some of the claimed hours, the district court granted Brekke $7,344 for his services as special and personal representative, and $40,668 for attorney fees.

 

 

[2]  Brekke also cites Minn. Stat. § 524.3-616 (2004), which gives the special administrator the "duty to collect and manage the assets of the estate, preserve them, to account therefore and to deliver them to the general personal representative upon qualification."  This statute, however, specifically applies to a special administrator who is "appointed by the registrar in informal proceedings," not to a special administrator like Brekke, who was appointed by the district court in a formal proceeding.