MATTER OF ESTATE OF MAGELSSEN

Annotate this Case

Download PDF

No. 14201 I N THE SUPREME CCWlT O THE STATE OF MONTANA F 1978 IJS' THE MA?TER OF THE ESTATE O F WILLIAM MAGELSSEN, Deceased. Appeal f r m : D i s k r i c t Court of t h e Thirteenth J u d i c i a l D i s t r i c t , Honorable Nat Allen, Judge presiding. Counsel of Record: For A p p l l a n t : Church, Harris, Johnson and W i l l i a m s , Great F a l l s , Mntana Douglas C. Allen argued, Great F a l l s Mntana George R. Crotty argued, Great F a l l s , Mntana For Respondent: John M. Schiltz argued, Kalispell, Pbntana suhitted: October 20, 1978 ~ecided: Filed : JUL3 1979 Mr. J u s t i c e D a n i e l J . Shea d e l i v e r e d t h e Opinion o f t h e C o u r t . P a u l McCann, t h e p e r s o n a l r e p r e s e n t a t i v e o f t h e e s t a t e o f William Magelssen, d e c e a s e d , a p p e a l s from a n o r d e r o f t h e Yellowstone County D i s t r i c t C o u r t d e t e r m i n i n g a t t o r n e y f e e s owed t o t h e law f i r m of Hutton, Sheehy and Cromley. T h i s c a s e a r o s e when P a u l McCann p e t i t i o n e d t h e D i s t r i c t C o u r t , p u r s u a n t t o s e c t i o n 91A-3-722, s e c t i o n 72-3-634 R.C.M. 1947, now MCA, f o r r e v i e w of compensation owed t o t h e a t t o r n e y s f o r t h e e s t a t e , Hutton, Sheehy and Cromley. The D i s t r i c t C o u r t d e t e r m i n e d t h a t t h e o r d i n a r y s e r v i c e s o f p r o b a t e w e r e 9 5 p e r c e n t completed a t d a t e o f d i s c h a r g e , and t h a t , a c c o r d i n g t o a c o n t r a c t o f employment between P a u l McCann and John C. Sheehy, t h e law f i r m a g r e e d t o h a n d l e t h e o r d i n a r y s e r v i c e s t o t h e e s t a t e f o r a f e e of 3 p e r c e n t of t h e e s t a t e v a l u a t i o n f o r f e d e r a l e s t a t e t a x p u r p o s e s . A c c o r d i n g l y , t h e D i s t r i c t C o u r t h e l d t h a t t h e law f i r m was e n t i t l e d t o 95 p e r c e n t o f 3 p e r c e n t of t h e e s t a t e v a l u e f o r f e d e r a l estate t a x purposes. P a u l McCann a p p e a l s from t h i s determination. The f a c t s g i v i n g r i s e t o t h i s c o n t r o v e r s y a r e a s f o l lows. William Magelssen d i e d o n September 1 7 , 1976, l e a v i n g a n e s t a t e v a l u e d i n e x c e s s of t h r e e and one-half m i l l i o n dollars. H i s w i l l named J u l i a Magelssen, h i s s i s t e r , and P a u l McCann a s c o - p e r s o n a l r e p r e s e n t a t i v e s . The c o - p e r s o n a l r e p r e s e n t a t i v e s engaged John C . Sheehy and h i s f i r m , H u t t o n , Sheehy and Cromley, t o p r o v i d e l e g a l s e r v i c e s f o r them a s c o - p e r s o n a l r e p r e s e n t a t i v e s o f t h e estate. L a t e r , o n October 11, 1976, t h e c o - p e r s o n a l r e p r e - s e n t a t i v e s had a meeting i n which t h e a t t o r n e y f e e s w e r e d i s c u s s e d , and as a r e s u l t o f t h i s m e e t i n g , a t t o r n e y Sheehy w r o t e a l e t t e r c o n f i r m i n g t h e c o n v e r s a t i o n and t h e a g r e e d upon f e e . The l e t t e r , d a t e d October 1 3 , 1976, r e a d i n p e r - ti nen t p a r t : "Also d i s c u s s e d was o u r a t t o r n e y s ' f e e i n conn e c t i o n w i t h t h e h a n d l i n g of t h e e s t a t e . P a u l r e p o r t e d t h a t some h e i r s wanted t o h o l d down t h e c o s t of administration, p a r t i c u l a r l y t h e a t t o r n e y s ' f e e s . P a u l a l s o s t a t e d h e c o u l d see a p o s s i b l e ' c o n f l i c t of i n t e r e s t ' when t h e v a l u a t i o n o f t h e e s t a t e f o r i n h e r i t a n c e taxes,oc.curs. N o n e t h e l e s s I s t a t e d t h a t o u r f i r m would c h a r g e t h e f u l l 3% o f t h e v a l u e of t h e e s t a t e f o r f e d e r a l e s t a t e t a x purposes f o r t h e o r d i n a r y services t o the estate. " There b e i n g no r e s p o n s e t o t h i s l e t t e r , t h e law f i r m c o n t i n u e d representing t h e estate with t h e understanding t h a t t h e let- t e r s t a t e d t h e a g r e e d upon fee. E i g h t months l a t e r , o n J u n e 1 7 , 1977, McCann s i g n e d t h e f e d e r a l e s t a t e t a x r e t u r n on which was r e c o r d e d a n amount f o r a t t o r n e y f e e s , computed a t 3 p e r c e n t of t h e v a l u e of t h e e s t a t e appraised f o r f e d e r a l e s t a t e t a x purposes. J u l i a Magelssen, o n e of t h e c o - p e r s o n a l r e p r e s e n t a t i v e s , d i e d o n J u n e 16, 1977, l e a v i n g P a u l McCann a s t h e s o l e p e r sonal representative. John C. Sheehy and h i s law f i r m c o n t i n u e d t o r e p r e s e n t t h e e s t a t e o f William Magelssen u n t i l J u l y 27, 1977, when Sheehy and h i s law f i r m were d i s c h a r g e d by McCann b e c a u s e of p e r s o n a l d i f f e r e n c e s e x i s t i n g between McCann and a t t o r n e y Sheehy. After t h e discharge, Paul McCann p e t i t i o n e d t h e c o u r t p u r s u a n t t o s e c t i o n 91A-3-722, R.C.M. 1947, now s e c t i o n 72-3-634 MCA, t o review t h e a t t o r - ney f e e s c h a r g e d by Sheehy and h i s law f i r m . Pursuant t o t h i s p e t i t i o n t h e c o u r t held an e v i d e n t i a r y hearing. A t t r i a l , a t t o r n e y Sheehy and h i s p a r t n e r , George H u t t o n , t e s t i f i e d on t h e work a l r e a d y performed f o r t h e e s t a t e and t h a t which remained t o b e done. Attorney Hutton t e s t i f i e d t h a t , i n h i s o p i n i o n , v e r y l i t t l e work remained t o b e done. A t t o r n e y B j a r n e Johnson, who t e s t i f i e d on be- h a l f of t h e p e r s o n a l r e p r e s e n t a t i v e , s t a t e d t h a t t h e r e was a s i g n i f i c a n t amount of work y e t t o b e completed. Needless t o s a y , t h e r e w a s s i g n i f i c a n t d i s a g r e e m e n t between Sheehy and Hutton on t h e o n e hand and B j a r n e Johnson on t h e o t h e r hand, a s t o what c o n s t i t u t e d o r d i n a r y s e r v i c e s and t h e comp l e x i t y of t h e work e n t a i l e d . During t h e c o u r s e of t h e h e a r i n g P a u l McCann moved t o r e q u i r e a t t o r n e y Sheehy t o t e s t i f y a s t o t h e p r e c i s e number of h o u r s t h a t h i s f i r m had worked on t h e e s t a t e of William Magelssen, b u t t h e c o u r t r e f u s e d t o a d m i t t h i s e v i d e n c e and a l s o r e f u s e d t o a d m i t e v i d e n c e on t h e number of h o u r s needed t o complete t h e estate. The D i s t r i c t C o u r t took j u d i c i a l n o t i c e of t h e documents p r e p a r e d and a l r e a d y f i l e d a s p a r t o f t h e e s t a t e p r o c e e d i n g s and of o t h e r a c t i v i t i e s engaged i n by t h e a t t o r n e y s on b e h a l f of t h e e s t a t e . The c o u r t r u l e d t h a t a c o n t r a c t f o r compensation was c o n t a i n e d i n t h e October 1 3 , 1976 l e t t e r from Sheehy t o McCann, and t h a t t h i s c o n t r a c t was l a t e r r a t i f i e d by McCann i n s i g n i n g t h e e s t a t e t a x r e t u r n which s p e c i f i e d t h e same f e e t o be paid. The c o n t r a c t w a s f o r o r d i n a r y s e r v i c e s a t a f e e o f 3 p e r c e n t of t h e e s t a t e v a l u e a s s e t f o r f e d e r a l e s t a t e t a x purposes. The c o u r t d e t e r m i n e d t h a t t h e o r d i n a r y l e g a l s e r v i c e s f o r t h e e s t a t e were 95 p e r c e n t completed, and s e t t h e f e e o n t h a t b a s i s . $106,464.42. The f e e was computed t o b e The c o u r t o r d e r a l s o p r o v i d e d f o r a d j u s t m e n t of t h i s f e e i n t h e e v e n t t h e f e d e r a l t a x i n g a u t h o r i t i e s r e v i s e d t h e i r v a l u a t i o n of t h e e s t a t e . The p e r s o n a l r e p r e s e n t a t i v e makes s e v e r a l a s s i g n m e n t s of e r r o r . H e contends f i r s t t h a t a v a l i d c o n t r a c t f o r a t - t o r n e y f e e s d i d n o t e x i s t between t h e p e r s o n a l r e p r e s e n t a t i v e s and t h e l a w f i r m , and t h e r e f o r e t h e p r o p e r measure o f compensation s h o u l d be based on guantum m e r u i t . Secondly, h e c o n t e n d s t h a t t h e D i s t r i c t C o u r t d i d n o t a p p l y t h e approp r i a t e s t a n d a r d o f r e v i e w under s e c t i o n 91A-3-722, 1947, now s e c t i o n 72-3-634 MCA. R.C.M. Third, he contends t h a t t h e e v i d e n c e was n o t s u f f i c i e n t t o s u s t a i n t h e judgment o f t h e D i s t r i c t Court. The p e r s o n a l r e p r e s e n t a t i v e f i r s t a t t a c k s t h e a l l e g e d c o n t r a c t between him and t h e a t t o r n e y s o n t h e t h e o r y t h a t a c o n t r a c t f o r f e e s entered i n t o a f t e r t h e inception of t h e a t t o r n e y - c l i e n t r e l a t i o n s h i p i s void. The p r e v a i l i n g r u l e i s t h a t a t t o r n e y f e e c o n t r a c t s made a f t e r t h e e s t a b l i s h m e n t of t h e f i d u c i a r y a t t o r n e y - c l i e n t r e l a t i o n s h i p t h e y are " f a i r and e q u i t a b l e . " 710. See Annot., are valid i f 1 3 A.L.R.3d 701, F a i r n e s s i s d e t e r m i n e d by t a k i n g a c c o u n t of s u c h rele- v a n t f a c t o r s a s good f a i t h and f u l l - d i s c l o s u r e i n t h e execut i o n of t h e c o n t r a c t , t h e amount of t h e f e e and t h e c l i e n t ' s m a t u r i t y , i n t e l l i g e n c e , and u n d e r s t s n d i n g , tion. Annot., 1 3 A.L.R.3d of t h e t r a n s a c - 701, 711; D a n i e l s v . Paddock ( 1 9 6 5 ) , 145 Mont. 207, 2 2 2 , 399 P.2d 740, 7 4 7 ; Coleman v . S i s s o n ( 1 9 2 4 ) , 71 Mont. 435, 443, 230 P. 582, 584. den o f e s t a b l i s h i n g f a i r n e s s i s o n t h e a t t o r n e y . The b u r Daniels v . Paddock, s u p r a ; 7 Am.Jur.2d A t t o r n e y s - a t Law, S267. The r e c o r d c o n t a i n s s u b s t a n t i a l e v i d e n c e i n s u p p o r t of t h e f a i r n e s s o f t h e a g r e e d f e e . The t e r m s of t h e a t - t o r n e y ' s employment were made u n e q u i v o c a l l y c l e a r i n t h e October 1 3 , 1976 l e t t e r . The p e r s o n a l r e p r e s e n t a t i v e s acknowledged r e c e i p t of t h e l e t t e r a n d , a t t r i a l , p e r s o n a l r e p r e s e n t a t i v e McCann t e s t i f i e d t h a t he u n d e r s t o o d t h e meaning of the letter. The r e p r e s e n t a t i v e s d i d n o t o b j e c t t o t h e s p e c i f i e d f e e a r r a n g e m e n t f o r a t l e a s t s e v e n more months, d u r i n g which t i m e t h e a t t o r n e y s c o n t i n u e d t o perform l e g a l services for the estate. Moreover, a t a l a t e r t i m e , p e r - s o n a l r e p r e s e n t a t i v e McCann s i g n e d t h e f e d e r a l e s t a t e t a x r e t u r n on which t h e 3 p e r c e n t f e e was c l e a r l y s t a t e d . Nor d o e s t h e e v i d e n c e i n d i c a t e t h a t McCann w a s i n e x p e r i e n c e d i n t h e ways of t h e world. P e r s o n a l r e p r e s e n t a t i v e McCann w a s a n e x t r a o r d i n a r i l y w e l l - e d u c a t e d and e x p e r i e n c e d man. He t e s t i f i e d t h a t h e i s t h e o f f i c e r of a major c o r p o r a t i o n , a c e r t i f i e d p u b l i c acc o u n t a n t and i s l i c e n s e d t o p r a c t i c e l a w i n two s t a t e s , I l l i n o i s and North Dakota. H e entered i n t o the contract w i t h h i s e y e s open and w i t h f u l l awareness o f t h e i m p l i c a tions. W e a g r e e w i t h t h e c o n c l u s i o n of t h e D i s t r i c t C o u r t t h a t he r a t i f i e d t h e f e e agreement. 1947, now s e c t i o n 28-2-503(2) S e c t i o n 13-325, R.C.M. MCA; Annot., 1 3 A.L.R.3d 701, 745. Next, t h e p e r s o n a l r e p r e s e n t a t i v e a r g u e s t h a t s e c t i o n 91A-3-722, R.C.M. 1947, now s e c t i o n 72-3-634 MCA, which p r o v i d e s f o r j u d i c i a l r e v i e w of a t t o r n e y fees, i m p a r t s a n " o v e r r i d i n g c o n s i d e r a t i o n of r e a s o n a b l e n e s s " t h a t e f f e c t i v e l y i n v a l i d a t e s t h e t e r m s of any c o n t r a c t f o r p r o b a t e - r e l a t e d services. This s e c t i o n provides: " P r o c e e d i n g s f o r r e v i e w of employment of a g e n t s and cornpensat= ofsGa1 represent~ives and employees of e s t a t e -- c o u r t - - t d i s p u t e d t o se f e e . Upon t h e f i l i n g of a motion f o r s e t t l e m e n t of f e e s by t h e c o u r t f i l e d by a n i n t e r e s t e d p e r son, t h e p e r s o n a l r e p r e s e n t a t i v e o r t h e p e r s o n employed by t h e p e r s o n a l r e p r e s e n t a t i v e and a f t e r n o t i c e t o a l l i n t e r e s t e d p e r s o n s , t h e prop r i e t y of employment of any p e r s o n by a p e r s o n a l r e p r e s e n t a t i v e i n c l u d i n g any a t t o r n e y , a u d i t o r , investment advisor o r o t h e r s p e c i a l i z e d agent o r a s s i s t a n t , t h e r e a s o n a b l e n e s s of t h e compens a t i o n of any p e r s o n s o employed, o r t h e r e a s o n a b l e n e s s o f t h e compensation d e t e r m i n e d by t h e p e r s o n a l r e p r e s e n t a t i v e f o r h i s own s e r v i c e s , s h a l l be reviewed and d e t e r m i n e d by t h e c o u r t . I n any d i s p u t e c o n c e r n i n g f e e s , t h e c o u r t s h a l l s e t t h e f e e . Any p e r s o n who h a s r e c e i v e d e x c e s s i v e compensation from an e s t a t e f o r s e r v i c e s r e n d e r e d may be o r d e r e d t o make a p p r o p r i a t e r e funds." The provision does not restrict the personal representative's capacity or freedom to contract, except that he may not contract for excessive fees. Nor can this section be read in isolation from other provisions of the probate code. Section 91A-3-713(21), R.C.M. 1947, now section 72-3- 613(21) MCA, specifically authorizes the personal representative to employ, and therefore to contract for, the services of an attorney. Section 91A-3-720, R.C.M. 1947, now section 72-3-633 MCA, entitled "Compensation of Attorney" merely places a ceiling on the amount of compensation payable to an attorney for ordinary services. These provisions establish the boundaries of the personal representative's authority to contract for the services of an attorney. The fee in- volved in the instant case fits within these limits. Accord- ingly, the fee contract was valid under the applicable provisions of the Montana Uniform Probate Code. Personal representative McCann next argues that attorney fees based on a fixed percentage of the estate value are against public policy because the attorney will inflate the value of the estate in order to increase his fee. This Court's duty is to construe the law as it is written. Sec- tion 93-401-15, R.C.M. 1947, now section 1-2-101 MCA. If no ambiguity exists in a statute, the letter of the law will not be disregarded under the pretext of pursuing its spirit. Vaughn & Ragsdale v. State Board of Equalization (1939), 109 Mont. 52, 60, 96 P.2d 420, 424. The statutory provision governing compensation of attorneys in estate matters is section 91A-3-702, R.C.M. 1947, now section 72-3-633 MCA. In pertinent part it states that "if the services of an attorney are engaged by the personal representative, the compensation of such attorney shall not exceed one and one half (1 1 / 2 ) t i m e s t h e compensation a l l o w a b l e t o t h e p e r s o n a l representative." The p e r s o n a l r e p r e s e n t a t i v e i s a l l o w e d a " r e a s o n a b l e compensation" n o t t o exceed 3 p e r c e n t of t h e f i r s t $40,000 o f t h e r e p o r t e d e s t a t e v a l u e and 2 p e r c e n t of t h e v a l u e o v e r $40,000. s e c t i o n 72-3-631 MCA. S e c t i o n 91A-3-719, R.C.M. 1947, now W e f i n d no p u b l i c p o l i c y i n t h e s e a p p l i c a b l e s t a t u t e s t h a t would i n v a l i d a t e a f e e c l e a r l y coming w i t h i n t h e i r t e r m s . W e n e x t d i s c u s s t h e q u e s t i o n o f whether t h e D i s t r i c t C o u r t ' s r e v i e w of t h e a t t o r n e y f e e s p u r s u a n t t o s e c t i o n 91A3-722 was p r o p e r . The p e r s o n a l r e p r e s e n t a t i v e c o n t e n d s t h a t by i n v o c a t i o n o f t h i s s t a t u t e t h e D i s t r i c t C o u r t i s r e q u i r e d t o f i x a reasonable a t t o r n e y ' s f e e without reference t o t h e t e r m s of a n e x i s t i n g c o n t r a c t . But w e s e e no r e a s o n t o t o t a l l y i g n o r e t h e t e r m s of a c o n t r a c t between a n a t t o r n e y and t h e p e r s o n a l r e p r e s e n t a t i v e . The f o l l o w i n g e d i t o r i a l comment a p p e a r s under s e c t i o n " I n view of t h e broad j u r i s d i c t i o n c o n f e r r e d on t h e p r o b a t e c o u r t by s e c t i o n [91A-3-1053 , des c r i p t i o n of t h e s p e c i a l p r o c e e d i n g a u t h o r i z e d by t h i s s e c t i o n m i g h t be u n n e c e s s a r y . But, t h e c o d e ' s t h e o r y t h a t p e r s o n a l r e p r e s e n t a t i v e s may f i x t h e i r own f e e s - t h o s e o f e s t a t e a t t o r n e y s and m a r k s a n i m p o r t a n t d e p a r t u r e from much e x i s t i n g p r a c t i c e under which f e e s a r e d e t e r m i n e d by t h e c o u r t i n t h e f i r s t i n s t a n c e . Hence, i t seemed w i s e t o emphasize t h a t any i n t e r e s t e d p e r s o n c a n g e t j u d i c i a l r e v i e w of f e e s i f he d e s i r e s i t . A l s o , i f e x c e s s i v e f e e s have been p a i d , t h i s s e c t i o n p r o v i d e s a q u i c k and e f f i c i e n t remedy." T h i s comment f o c u s e s o u r a t t e n t i o n of t h e p r o v i s i o n ' s p r i n c i pal utility. I t provides i n t e r e s t e d persons with j u d i c i a l r e v i e w t o g u a r d a g a i n s t e x c e s s i v e f e e s s e t by a p e r s o n a l r e p r e s e n t a t i v e i n t h e e x e r c i s e of h i s newly c o n f e r r e d d i s c r e tion. I t i s a s p e c i a l , f o r m a l p r o c e e d i n g i n which i n t e r e s t e d p e r s o n s o b t a i n a q u i c k and e f f e c t i v e remedy a g a i n s t e x c e s s i v e compensation. 91A-3-722, Upon t h e f i l i n g of a p e t i t i o n under s e c t i o n t h e D i s t r i c t C o u r t must d e t e r m i n e i f t h e compensa- t i o n p a i d i s e x c e s s i v e i n l i g h t of a l l t h e c i r c u m s t a n c e s . I n s o d o i n g , t h e c o u r t i s n o t s e t t i n g t h e f e e , it i s reviewi n g t h e f e e arrangement. N a t u r a l l y , t h e f a c t o r s b e a r i n g on r e a s o n a b l e n e s s of court-awarded a t t o r n e y f e e s must b e t a k e n i n t o account i n determining i f a p a r t i c u l a r f e e i s e i t h e r excessive o r reasonable. But under t h e p r o b a t e code, i t i s t h e p e r s o n a l r e p r e s e n t a t i v e , n o t t h e c o u r t , who sets t h e f e e i n the first instance. I n e x p l a i n i n g t h e n a t i o n a l p r o v i s i o n , Uniform P r o b a t e Code s e c t i o n 3-721, which i s v i r t u a l l y i d e n t i c a l t o s e c t i o n 91A-3-722, t h e Uniform P r o b a t e Code P r a c t i c e Manual s t a t e s : "The Code's t r a n s f e r of t h e s e m a t t e r s t o t h e personal representative i n the f i r s t instance, w i t h p r o v i s i o n f o r r e v i e w i n t h e c a s e of d i s p u t e s h o u l d t e n d t o promote p r i o r agreement between t h o s e i n t e r e s t e d i n e s t a t e s , o n t h e o n e hand, and t h o s e a s s i s t i n g i n a d m i n i s t r a t i o n s , on t h e o t h e r . I f more f e e a g r e e m e n t s r e s u l t , d i s p u t e s and c o m p l a i n t s a b o u t f e e s w i l l be f e w e r , whether t h e amounts i n v o l v e d remain t h e same, o r a r e i n c r e a s e d o r d e c r e a s e d . " Wellman, Uniform P r o b a t e Code P r a c t i c e Manual, 2d Ed. I Val- 1, p. 322. I t i s c l e a r t h a t a c o u r t , when r e v i e w i n g a fee agreement under a s u b s t a n t i a l l y performed c o n t r a c t , c a n n o t b l i n d i t s e l f t o t h e t e r m s o f t h e c o n t r a c t and make i t s own d e t e r m i n a t i o n o f what i s r e a s o n a b l e . I n t h e p r e s e n t case, t h e D i s t r i c t Court determined t h a t s e c t i o n 91A-3-713(21) (which empowers t h e p e r s o n a l r e p r e s e n t a - t i v e t o employ a n a t t o r n e y ) and s e c t i o n 91A-3-722 (which a l l o w s t h e c o u r t t o r e v i e w t h e employment o f a t t o r n e y s and t h e i r f e e s ) , must b e c o n s t r u e d t o g e t h e r s o as t o g i v e e f f e c t t o e a c h p r o v i s i o n and make them c o m p a t i b l e w i t h e a c h o t h e r . District Applying t h i s s t a n d a r d , t h e / C o u r t found t h e amount o f t h e f e e t o b e r e a s o n a b l e o n i t s f a c e as i t w a s w i t h i n t h e l i m i t s of compensation p r o v i d e d f o r i n s e c t i o n s 91A-3-719, R.C.M. 1947, now s e c t i o n 72-3-631 MCA, and s e c t i o n 91A-3-720, R.C.M. 1947, now s e c t i o n 72-3-633 MCA. A f t e r determining t h a t t h e s e r v i c e s w e r e s u b s t a n t i a l l y performed, t h e c o u r t concluded t h a t i t s t a s k w a s t o a p p o r t i o n t h e a g r e e d compensation according t o t h e percentage of ordinary s e r v i c e s completed by t h e a t t o r n e y s a s of t h e d a t e of t h e i r d i s c h a r g e . On t h e o t h e r hand, t h e p e r s o n a l r e p r e s e n t a t i v e contends t h a t once an a t t o r n e y i s discharged, he can only be compensated on t h e b a s i s of quantum m e r u i t , whereby r e c o v e r y i s l i m i t e d e x c l u s i v e l y t o t h e r e a s o n a b l e v a l u e of s e r v i c e s r e n d e r e d on a n h o u r l y b a s i s . Again, he would have t h e c o u r t t o t a l l y d i s r e g a r d t h e s u b s t a n t i a l l y performed c o n t r a c t between t h e p e r s o n a l r e p r e s e n t a t i v e and a t t o r n e y . moreover t h a t s e c t i o n 91A-3-722 W e note sets f o r t h no such measure of compensation. A s indicated previously, the personal representative c a n c o n t r a c t f o r a n a t t o r n e y ' s s e r v i c e s ( s e c t i o n 91A-37 1 3 ( 2 1 ) ) and under s e c t i o n 91A-3-808, t i o n 72-3-612 MCA, R.C.M. 1947, now s e c - t h e e s t a t e i s bound by s u c h c o n t r a c t s . Though t h e f e e c o n t r a c t i s open t o r e v i e w under s e c t i o n 91A-3-722, R.C.M. 1947, now s e c t i o n 72-3-634 MCA, t h e amount o f t h e f e e i s n o t a u t o m a t i c a l l y c o n v e r t e d i n t o a quantum m e r u i t measure of compensation. I n d e e d , quantum m e r u i t compensation i s n o r m a l l y a p p r o p r i a t e o n l y where a v a l i d c o n t r a c t does n o t e x i s t . 7 Arn.Jur.2d Attorneys 8232; H a r r i s v. Root ( 1 9 0 3 ) , 28 Mont. 159, 72 P . at a, 429. W e emphasize t h a t t h i s i s n o t a c a s e of a t t o r n e y f e e s a s s e s s e d a g a i n s t a n o p p o s i n g p a r t y and awarded by t h e c o u r t pursuant t o a s t a t u t e . I n such c a s e , t h e c o u r t d e t e r m i n e s t h e r e a s o n a b l e n e s s of t h e f e e i n t h e f i r s t i n s t a n c e , and t h i s C o u r t d i s a p p r o v e s r e l i a n c e on c o n t i n g e n c y f e e c o n t r a c t s i n setting the fee. See e . g . , v. Schumacher (1979) , St.Rep. 260, Mont. S t a t e Department o f Highways Mont. , 590 P.2d 1110, 36 266; S t a t e Highway Commission v. Marsh ( 1 9 7 8 ) , , 575 P.2d 38, 43, 35 St.Rep. 105, 110. In t h i s case, however, t h e p e r s o n a l r e p r e s e n t a t i v e r e q u e s t e d j u d i c i a l r e v i e w and d e t e r m i n a t i o n o f compensation due under a v a l i d , s u b s t a n t i a l l y performed c o n t r a c t f o r s e r v i c e s . Under t h e s e c i r c u m s t a n c e s t h e c o u r t must a c t a s b o t h f i n d e r of f a c t and as a r b i t e r between c o n t r a c t u a l l y bound p a r t i e s . n o t b e l i e v e t h a t s e c t i o n 91A-3-722 W e do was i n t e n d e d t o p e r m i t competent, f u l l y informed p e r s o n a l r e p r e s e n t a t i v e s t o disavow t h e i r otherwise enforceable contracts f o r an a t t o r n e y ' s services. C o n s i d e r i n g t h e p r i n c i p a l p u r p o s e of s e c t i o n 91A-3-722 and t h e e x c e p t i o n a l c i r c u m s t a n c e s s u r r o u n d i n g i t s i n v o c a t i o n i n t h i s c a s e , t h e D i s t r i c t C o u r t d i d n o t err i n r e f u s i n g quantum -r u i t a s t h e measure of compensation. m e- The c o u r t ' s t h r e s h h o l d d e t e r m i n a t i o n of r e a s o n a b l e n e s s , f o l l o w e d by a n a p p o r t i o n m e n t of t h e a g r e e d f e e t o t h e p e r c e n t a g e o f t h e job completed, w a s p r o p e r . Based on t h e s e f a c t o r s , w e see no e r r o r i n t h e e x c l u s i o n of e v i d e n c e a s t o t h e a t t o r n e y ' s a c t u a l t i m e expended i n probate. W note i n t h i s regard t h a t t h e t i m e f a c t o r has, e g e n e r a l l y s p e a k i n g , p l a y e d a r e l a t i v e l y minor r o l e i n d e t e r m i n a t i o n by a c o u r t of r e a s o n a b l e a t t o r n e y f e e s i n p r o b a t e . S e e Annot., 58 A.L.R.3d 317, 325; 7 Arn.Jur.2d Attorneys at Law, - 523%; I n r e E s t a t e of Wood (Ohio App. 1 9 7 7 ) , 379 256, 261. N . E . 2d I n t h i s case, t h e ~ i s t r i c C o u r t was f u l l y adt v i s e d a s t o t h e work completed i n r e l a t i o n t o t h e work t h a t remained t o be done. Although w e c o n s i d e r t i m e a c t u a l l y s p e n t o n p r o b a t e s e r v i c e s t o be r e l e v a n t t o a d e t e r m i n a t i o n of r e a s o n a b l e n e s s , w e do n o t f i n d i t s e x c l u s i o n under t h e f a c t s of t h i s c a s e t o be r e v e r s i b l e e r r o r . Nor do we f i n d r e v e r s i b l e e r r o r i n t h e D i s t r i c t C o u r t ' s p r o v i s i o n a l l o w i n g a n a d j u s t m e n t of t h e a t t o r n e y f e e s i n t h e e v e n t t h e e s t a t e v a l u e i s l a t e r r e v i s e d upward o r downward by t h e f e d e r a l t a x i n g a u t h o r i t i e s . The a g r e e d upon c o n s i d e r a - t i o n f o r t h e a t t o r n e y ' s s e r v i c e s was 3 p e r c e n t o f t h e e s t a t e value f o r f e d e r a l e s t a t e t a x purposes. Fixing the f e e i n p r o p o r t i o n t o t h a t v a l u e was c o n s i s t e n t w i t h t h e i n t e n t of the contracting parties. The l a s t i s s u e r a i s e d by t h e p e r s o n a l r e p r e s e n t a t i v e i s t h a t t h e e v i d e n c e d i d n o t s u p p o r t a f i n d i n g t h a t t h e cont r a c t w a s 95 p e r c e n t completed a t t h e t i m e of t h e a t t o r n e y ' s discharge. He c o n t e n d s t h e r e i s s u b s t a n t i a l work t h a t re- mains t o be done. W e note t h a t the attorney contracted t o perform t h e "ordinary s e r v i c e s " f o r t h e e s t a t e . The e v i d e n c e a t t r i a l w a s c o n f l i c t i n g a s t o whether t h e work r e m a i n i n g t o be done w a s o f a n " o r d i n a r y " o r " e x t r a o r d i n a r y " n a t u r e . I t was t h e c o u r t ' s f a c t u a l d e t e r m i n a t i o n which f i n a l l y set- t l e d on t h e f i n d i n g of 95 p e r c e n t c o m p l e t i o n . W w i l l not e s u b s t i t u t e o u r judgment f o r t h a t of t h e t r i a l c o u r t where t h e r e w a s s u b s t a n t i a l e v i d e n c e t o s u p p o r t a f i n d i n g of f a c t . Kosmerl v. Barbour ( 1 9 7 9 ) , 1019, 36 S t - R e p . 210, 212-13; Mont. , 589 P.2d 1017, Gross v . Holzworth ( 1 9 6 8 ) , 1 5 1 Mont. 179, 185, 440 P.2d 765, 768. The D i s t r i c t C o u r t h e a r d t e s t i m o n y from b o t h s i d e s and was n o t w i t h o u t i t s own knowledge on e s t a t e m a t t e r s i n g e n e r a l and t h i s e s t a t e i n particular. The judgment of t h e D i s t r i c t C o u r t i s a f f i r m e d . W e Concur: Cpief J u s t i c e / u&QAm ~ o d/ .~ o e lG. Roth, D i s t r i c t ~u o.! h t Judge, s i t t i n g i n f o r M r . J u s t i c e John C . Sheehy

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.