Matter of Hopkins
2007 NY Slip Op 52191(U) [17 Misc 3d 1129(A)]
Decided on October 31, 2007
Sur Ct, Wyoming County
Published by New York State Law Reporting Bureau
pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be
published in the printed Official Reports.
Matter of Hopkins
Decided on October 31, 2007
Sur Ct, Wyoming County
In the Matter of the Estate of Emmons A. Hopkins. Petition for Judicial Settlement of Account of Executor and Applications for Compensation of Attorneys.
Barbara Duncan, executor, By Brooks & Brooks - Kameron Brooks, Little Valley, NY
Judith Noble, Trustee and Objectant, by Hiscock & Barclay- Tara Kamble, Buffalo, NY
Michael F. Griffith, J.
The decedent died a resident of and domiciled in Wyoming County. His Last Will and
Testament dated October 9, 1998 was admitted to probate on April 19, 1999. By Decision and
Order filed June 7, 2002 the court revoked the Letters Testamentary issued to Ronald Duncan.
Pursuant to a stipulation of settlement a Decree was entered on November 21, 2002 appointing
Barbara Duncan successor executor and Judith Noble successor trustee under the Will. By
Decision and Order dated March 21, 2003 the court determined various applications for approval
of compensation for the attorney representing the parties in this estate.
Pending before the court at this time is a Petition for Judicial Settlement of the Account of Barbara Duncan, the successor executor, as well as applications for court approval of compensation of the attorneys pursuant to SCPA § 2110. The original petition for judicial settlement and verified account were filed with the court on February 9, 2006. Objections to that account were filed on November 28, 2006. As a result of extensive pre-trial proceedings an Amended Account was filed on January 30, 2007. Objections were filed to the Amended Account on June 19, 2007. Applications for compensation of attorney pursuant to NY SCPA §2210 have been filed by the attorney for the executor and by the attorney for the objectant.
There being no factual disputes, by agreement of counsel the matters have been submitted upon the Amended Account, Amended Objections, and affidavits of the attorneys with attached time and billing records for determination without a hearing.
The difficult history of this estate is reflected in the prior Decisions of the Court. The Amended Account lists a gross value (principal plus income) for the estate of $445,023.00. This court has previously approved payment of counsel fees and [*2]disbursements to Brooks and Brooks in the sum $27, 370 and to Hiscock and Barclay in the sum of $19,773 ($15,468 + $4,125). The total of all counsel fees and disbursements previously approved is $47,143.
The Amended Objections relate solely to issues of commissions and attorney's fees.
1. Commissions - The trustee objects to the payment of receiving commissions to the successor executor, alleging that the assets had been "received" by the estate prior to her appointment. This objection is denied. As a general rule, a successor fiduciary is entitled to commissions upon the entire estate left unadministered by the predecessor fiduciary. (8 Warren's Heaton, Surrogate's Courts, Section 103.02 at 103-50 [7th ed]).
The court notes that the assets listed on Schedule A which resulted in the bulk of the commissions claimed were the decedent's interests in 2 parcels of real property. One parcel (the decedent's residence) was sold and the other (a mortgage held by decedent) was foreclosed and the property sold during the tenure of the successor executor.
Objection 1(b) is sustained. The loan referred to as the "Martynowicz" note in the amount of $7,754.54 was "written off" as uncollectible by the estate and has been claimed as a credit on Schedule B. As the estate never received any value this amount should have been deducted from the total claimed as received on Schedule A. (See 7 Warren's Heaton, Surrogate's Courts, § 96.20 at 96-92 [7th ed]). No receiving commissions are allowable and the commissions claimed due are reduced accordingly.
2. Attorney's fees - As noted earlier, this court has previously approved payment of attorney's fees to counsel in the sum of $47,143.00, which amount is in excess of ten percent of the value of the estate. Detailed Objections to specific dates of services were filed.
The Objections to the fees requested center around the attorney's time and billing records in 4 categories. The court notes, however, that focusing upon the time and billing records distorts the importance of the "time spent" among the factors to be considered in evaluating attorney compensation, since time spent is considered just the starting point and the least important factor (7 Warren's Heaton, Surrogates' Courts, § 106.03  at 46 [7th ed]; Turano & Radigan, New York Estate Administration,§13.03 at 446 [2005 ed]).
1. Unclear / mixed time and billing records for attorneys and legal assistants - This objection stems from the fact that on the time records the attorney and staff time spent on the same date is aggregated into a total time and fee calculation. While it would have been preferable (and simplified the issue for the court) to have the entries separated, the court has reviewed, in detail, each entry objected to and finds that all time spent was for the benefit of the estate. To the extent that there is a duplication of [*3]services among staff or co-counsel that factor will be considered by the court in setting the overall fee. Objection 2 (c) is denied. (See Matter of Goldstein, 134 Misc 2d 57 [Sur. Ct. Queens Co. 1986]; 8 Warrens' Heaton Surrogate's Courts, §106.02 [a][7th ed]).
2. Executorial duties - Objection is made to time charged for services provided which are
alleged to be "executorial" or administrative in nature, such as bookkeeping, banking, etc. The
court has reviewed the affidavit of services in detail. As noted above, compensation is not
allowed for services which are administrative or "executorial" in nature (See Estate of
Passuello, 184 AD2d 108 [3d Dept 1992]; Estate of Phelan, 173 AD2d 621 [2d Dept 1991];
7 Warren's Heaton, Surrogates' Courts, §106.03 S[7th ed]; Turano & Radigan, New
York Estate Administration, § 13.07 at 474 [2005 ed]).
To allow fees for time spent for such services would result in a double award, since such services are covered by the commissions on the assets administered (see Estate of Passuello, 184 AD2d at 112). Given the limited number of assets to be administered, considerable time was spent by both counsel and support staff in the marshalling and administration of those assets. The objection is sustained in part.
3. Separate charges for services to executor (Tax preparation and real estate closing) - As shown on the amended Account, the attorney has separately charged and already been paid for some services to the executor, including: tax preparation($1,840); and a real estate closing ($1,650). The closing of the sale of the second parcel (obtained from the mortgage foreclosure was handled by another attorney and paid as an administration expense in the amount of $595).
A. Tax return preparation - The law is well-settled that, absent unusual complexity, the preparation and filing of fiduciary and estate tax returns are among the duties expected of the attorney for the fiduciary and no additional compensation for an accountant will be permitted without a corresponding reduction in attorney's fees (See Matter of Schoonheim,158 AD2d 183 [1st Dept 1990]). In this case, no outside accountant was hired, but the attorney has already charged and collected fees for the preparation and filing of the annual fiduciary returns in the amount of $1,840. This appears to have been done on a "flat fee" basis and there did not appear to be any overlap with the time claimed by the attorney. There was, however, overlap in tax matters with time spent by the legal assistants involved with the case. The Objection is sustained in part.
B. Real Estate Closing - Similarly, the attorney charged and collected a separate fee for representing the executor for the closing of the sale of the decedent's residence. [*4]Clearly, the sale of the real property by the executor was a transaction by the fiduciary and any fees charged for services rendered by the attorney are subject to approval by the court. The fee charged was $1,650 on a sale price of $115,000. The Objection is sustained in part. The court finds that a reasonable and customary fee for such a transaction in this area to be $1,100.00.
4. Services incidental to administration of assets:
A. Objection is made to time spent incidental to the foreclosure of a mortgage held by the decedent. The default upon the mortgage occurred during the tenure of the first executor. Outside counsel was retained by Brooks & Brooks and paid as an administration expense. The objection is sustained in part. While some time spent by the estate attorney to coordinate with and assist the foreclosure attorney was necessary for the benefit of the estate there does appear to have been some duplication of services. The unavoidable duplication of services that may result from this circumstance will be considered by the court in setting the overall fees. See 8 Warren's Heaton Surrogates' Courts, §106.02 (3)[a], at 106-28 [7th ed]); In re Goldstein, 134 Misc 2d 57 (Sur Ct Queens Co. 1986).
B. Objection is made to time spent in pursuit of a criminal prosecution of the initial attorney for the first executor. As stated in the affidavit of attorney K. Brooks, however, pursuit of criminal sanctions against the attorney was a condition of the Lawyer's Client Security Fund for reimbursement of the misappropriated funds. The objection is denied.
C. Objections 2(g) and (h) are denied. Both entries are negligible in time and amount ($82.50 total) and appear incidental to the administration of the estate. To the extent that they result in an unavoidable duplication of services that factor will be considered by the court in setting the overall fee.
D. Objection 2 (I) is sustained. Time spent in preparation of the attorney's affidavit of
services is for the benefit of the attorney and not for the benefit of the estate. (See Estate of
McCranor, 176 AD2d 1026 [3d Dept 1991]; Matter of Terry, NYLJ, March 12, 1985, pg.
12 col. 1 [Bronx Co. 1986]).
The fees sought by Brooks & Brooks for services since the prior fee award are $19,898.75. The fees sought by Hiscock & Barclay for services since the prior award are $6,836.40.
There is no hard-and fast rule by which to determine the reasonable compensation of an attorney in any, particular case (Estate of Vitole, 215 AD2d 765 [2nd Dep, 1995]; Estate of Bobeck, 196 AD2d 496 (2d Dep, 1993]).
As recited in the previous decisions in this matter, the basic principles involved are that [*5]the court will only award fees for services that: 1. Are necessary to the estate, and
2. Reasonable in amount
( 8 Warren's Heaton, Surrogate's Courts, §106.02 [7th ed]).
In assessing the reasonableness of fees, the criteria described in In Re Freeman, 40 AD2d 397 (4th Dept 1973) and In Re Potts, 213 AD 59 (4th Dept 1925) are commonly utilized. These include:
1. The size or value of the estate. As shown on the Amended Account, the gross value of the
assets accounted for (principal + income) is $445,023. The assets of the decedent consisted
primarily of: an investment account; personal residence; motor vehicle; mortgage on real
property; notes held on personal loans made by the decedent, and stock and partnership interests
of nominal value. The successor executor administered and has accounted only for the personal
residence, the mortgage, the note and the stock and partnership interests.
As noted previously, in many situations the size of the estate works as a limitation on the full value of the services rendered by the attorney. Matter of Kaufmann, 26 AD2d 818 (1st Dept. 1966). In situations where complex or unusual problems are encountered, however, fees which consume a substantial percentage of the estate may be allowed. (See Cooper vs. Jones, 78 AD2d 423 [4th Dept 1981] and Estate of Schmidt, 134 AD2d 432 [2nd Dept 1987] and discussion below).
2. The professional standing, reputation and experience of the attorneys - As noted in the prior decisions, both counsel have achieved high standing as estate practitioners in this area. Hiscock & Barclay is a firm with a large and reputable estate practice. Mr. Brooks and the firm of Brooks & Brooks are among the more experienced practitioners in the area of trusts and estates in Cattaraugus County. The hourly rates requested by both Mr. Brooks ($200 per hour attorney / $75 per hour legal assistant) and Ms. Kamble ($170 per hour) are within the range of fees sought by attorneys of similar experience and standing in this region.
3. Complexity and Difficulty of Issues Involved - The initial proceedings in this estate were hotly contested and litigated, culminating in the court's Decisions dated June 6, 2002, March 21, 2003 and August 4, 2003. The proceedings since then have related primarily to the administration of the assets. Unfortunately, several of the assets (personal notes, stock and partnership interests) turned out to be of little or no value and may not have been worth the efforts to administer them. While problematic, these issues are not uncommon and were not complex.
4. Results achieved - As noted above, several assets were of little or no value [*6]and were abandoned or "written off". The mortgage held by
decedent went into default necessitating a foreclosure action, with the property taken back and
later sold by the estate after considerable effort and expense. The Account shows a total of
$3,963 in fees and disbursements paid to outside counsel for the foreclosure and eviction
proceedings relating to this asset. The partnership property was sold for $200, the stock was
written off as worthless as was the "Martynowicz" loan. It appears that substantial time and effort
was spent for nominal returns. While the executor and her attorney attempted to make the best of
a difficult situation, the value of the assets and the difficulty in administering some of them
serves as a key, limiting factor in this case.
(See Matter of Kaufmann, 26 AD2d 818 [1st Dept 1966])
5. Time Spent - It is generally noted that while time spent is the starting point and an
important factor, the other factors described above may be of greater importance. (8 Warren's
Heaton, Surrogates' Courts, section 106.03  at 106-40 [7th ed]; Turano & Radigan, New York
Estate Administration, § 13.03 at 447 [2005 ed]). In this case, both attorneys have
submitted detailed time and billing records to
substantiate their time and efforts as well as other charges by their office.
With regard to the application of Mr. Brooks, the total fee requested is $19898.75 including disbursements in the amount of $13.25. Upon review of the account, however, it is apparent that the total compensation sought to be approved is substantially greater due to the payments already made to Brooks & Brooks. These other payments (none of which have been subject to court approval until now) include:
$5,000 paid by the executor in October, 2005, plus $1,840 paid for preparation of annual, fiduciary income tax returns, plus $1,650 paid for the closing of the sale of decedent's residence.
Including these additional amounts previously paid to Brooks & Brooks but not yet approved by the court results in the sum of $28,388.75 in compensation to the attorney for which approval is now requested. An additional $595 was paid to outside counsel for the closing of the sale of the foreclosed premises as well as the fees paid for the mortgage foreclosure described previously.
Approval of the requested compensation would result in total fees / payments to Brooks & Brooks of $55,758.75. The court has previously approved fees to Hiscock & Barclay in the amount of $19,773.75. The amount sought by Hiscock & Barclay in their current application is $6,836.40. From the standpoint of the application of Hiscock & Barclay, the court notes that fees can be awarded only to the extent the services rendered were beneficial to the estate. (8 Warren's Heaton §106.04, [7th ed.]).
As shown on the amended account, the commissionable assets administered by the successor executor are valued at less than $150,000. At present there is $63,575.61 +/- remaining on hand for final distribution.
Approval of the fees as requested in the applications ($19,898 + $6,836) would result in [*7]the distribution of 42% of the balance remaining to the attorneys. Such a result would be unreasonable, even if justified by time and billing records. (See Estate of Bobeck, 196 AD2d 496 (2d Dep 1993]).
The court has reviewed the time and billing records in detail. The unfortunate fact confronted by the court and counsel is that the assets of the estate cannot sustain an award of counsel fees to the extent requested.
Despite the "yeoman's efforts" of Mr. Brooks and his staff, the bulk of the value of the estate to be distributed came from just 2 assets covered in this Account: the residence and the mortgage. Despite the well-placed Objections to the original Account, the amount available for distribution to the trustee remained about the same (excluding the commissions and fees issue) under the Amended Account. Given these facts, the court believes that counsel for the executor and counsel for the objectant, by focusing upon the time and billing records, have misperceived and overemphasized the importance of "time spent" in determining reasonable fees in this matter.
The affidavit and time records submitted by Mr. Brooks identify, itemize and value the services provided by the attorney, various legal assistants, and, apparently, some secretarial time. Total attorney time of 84.7 hours is billed at $200/hour. Total legal assistant time of 90.7 hours is billed at $50/hour and then $75/hour. Secretarial time was billed at $50/hour.
Upon consideration of the factors described and the Objections sustained, the court finds that 20.7 hours of attorney time were expended upon matters that were executorial in nature, duplicated services provided by other counsel or were expended upon assets that were of no value to the estate. Similarly, the court finds that 30.7 hours of legal assistant time were expended upon matters that were executorial in nature, duplicated services provided by other counsel, were expended upon assets that were of no value to the estate or duplicated services provided by other staff in the office.
The court identified secretarial charges submitted in the total of $121.50. As stated in a prior Decision in this matter, the Court finds that such charges are more in the nature of overhead expenses which are or should be included in the hourly rate of the attorney and the requested charges are disallowed. (See Matter of Robert Herlinger, NYLJ April 28, 1994, p.28 [Sur Ct NY Co., 1994]).
Given the value of the estate accounted for, the results obtained, the routine, non-litigation (although problematic) nature of the services required and the standing of counsel, the court finds that hourly rates of $175 for Mr. Brooks and $60 for legal assistant time are appropriate in this case. Application of these rates results in attorney's fees in the amount of $11,200 (64 hours @175/hour) and legal assistant fees in the amount of $3,600 (60 hours @ $60/hour) for a total of $14,800. (see Estate of [*8]McCranor, 176 AD2d 1026 [3d Dep., 1991]; Matter of Kaufmann, 26 AD2d 818 [1st Dep., 1966]; Estate of Bobeck, 196 AD2d 496 (2d Dep, 1993]).
In addition, the compensation for tax preparation in the sum of $1,840 previously paid is approved, as is the sum of $1,100 for the closing of the sale of decedent's residence resulting in total compensation to Brooks & Brooks in the sum of $17,740. Credit against this amount is allowed to the estate in the sum of $8,490 ($5,000 +$1,840 + $1,650 previously paid on account), resulting in a balance due the attorney in the sum of $9,250 plus the disbursements of $13.25.
The fee requested by Hiscock & Barclay is $6,604 which includes time by attorney John Haslinger (1 hour at $200/hr) and Tara Kamble (9.4 hours at $155/hour and 29.1 hours at $170 / hour. The Objectant is the trustee of the trust established under the Will and has no personal, financial interest in the estate proceeds. Upon review of the records submitted, the Court finds that 18.2 hours of attorney time were expended upon matters that were executorial in nature, duplicated services provided by other counsel, were not for the benefit of the estate or were expended upon assets that were of no value to the estate.
Compensation from the estate for those services is, therefore, disallowed. (see Estate of McCranor, id; Matter of Kaufmann, id.; Estate of Passuello, 184 AD2d 108 [3d Dept 1992]; Estate of Phelan, 173 AD2d 621 [2d Dept 1991]).
Given the value of the estate accounted for, the results obtained, the routine, non-litigation (although problematic) nature of the services required and the standing of counsel, the court finds that an hourly rate of $160 for Hiscock & Barclay is appropriate. Application of this rate to the time approved results in attorney's fees to Hiscock & Barclay in the amount of $3,408. Application is also made for disbursements in the sum of $232.40 but no itemization is provided. The court notes that a fee of $75 was paid for the filing of the Objections, which amount is approved as a disbursement.
To the extent that the remaining charges are not for items such as telephone, copying, UPS overnight delivery, facsimile, etc., Hiscock & Barclay may submit supplemental proof of their type and necessity for consideration by the court within 15 days. (See Matter of Robert Herlinger, NYLJ April 28, 1994, p.28 [Sur Ct NY Co., 1994]).
Accordingly, the Court allows payment of counsel fees in the total amount of $3,483.00 in fees and disbursements to be paid to Hiscock & Barclay from the proceeds of the estate. The court notes that this results in total counsel fees paid to Brooks & Brooks and Hiscock & Barclay in the sum of $68,366, not including fees paid to outside counsel for the foreclosure proceedings and real estate closing on the defaulted mortgage. [*9]
The executor is directed to bring the account up to date by affidavit reflecting the reduced commissions and fees awarded pursuant to this Decision and Order. If no further proof of disbursements is submitted by Hiscock & Barclay to the court and Mr. Brooks within the 15 days provided, counsel for the executor shall prepare and submit a proposed Decree within 45 days.
Dated: October 31, 2007
Michael F. Griffith, Surrogate