Matter of Sadlo
Annotate this CaseDecided on September 25, 2009
Sur Ct, Dutchess County
In the Matter of the Application of Timothy J. Sadlo, as Executor of the Estate of Frank J. Sadlo, Jr., Deceased.
2009-97727/A
ANNA W. KIRSCHNER, ESQ.
Attorney for Estate
49 West Market Street
Red Hook, New York 12571
James D. Pagones, J.
This petition by Timothy J. Sadlo, the executor, pursuant to SCPA §2110(2), for a decree (1) determining the compensation to be paid to Kelly Flood-Myers, Esq. ("Flood-Myers"), former counsel for the estate; (2) directing Flood-Myers to turn over and deliver the complete estate file to current estate counsel, Anna W. Kirschner ("Kirschner"), and (3) directing Flood-Myers to turn over and deliver to Kirschner all assets and documents belonging to the estate, is resolved as follows.
The decedent died testate on February 1, 2009. His will, dated May 31, 2007, was admitted to probate by decree, dated February 23, 2009. Petitioner serves as the executor of the estate.
The petitioner retained attorney Flood-Myers' services on or about February 2, 2009. The petitioner resides in the State of New Mexico. On March 3, 2009, the petitioner executed a durable general power of attorney naming Flood-Myers attorney-in-fact to act on his behalf. The power of attorney provides in relevant part:
"This Durable Power of Attorney shall not be affected by my subsequent disability or incompetence.
This Power of Attorney is specifically intended to give my attorney-in-fact all the powers provided to me as Executor of the Estate of Frank J. Sadlo and to act on my behalf with respect to said Estate."
On June 29, 2009, approximately six (6) months after retaining Flood-Myers, the petitioner signed a consent to change attorney so as to retain the services of Anna W. Kirschner, Esq. He simultaneously executed a revocation of the power of attorney the same day.
This proceeding presents a potpourri of issues. They include the executor delegating authority to his attorney under a power of attorney; attorney Flood-Myers' decision to charge a fee based upon a fixed percentage of the gross estate; the attorney's noncompliance with Rule [*2]1215.1; the attorney billing the estate at an hourly rate plus disbursements for mailing and copying; the executor's disagreement with Flood-Myers' fee request; and the demanded turn-over of the estate file and any assets in Flood-Myers' possession.
"Powers of attorney are most often used by a beneficiary or other interested person who is out of the [state] or otherwise unavailable to appear but wants to participate in the proceedings." (Turano and Radigan, New York Estate Administration, 2009 Edition, §13.08 at 465-467.)
"[The] duty of a fiduciary is personal and cannot be divested by delegation." (41 NY Jur 2d. Decedents' Estates §1479, at 84-85). An executor is not authorized to give a power of attorney to an attorney representing the estate granting plenary powers to that attorney to act on his behalf. (In re Will of Jones, 1 Misc 3d 688, 689 [Sur. Ct., Broome County, 2003].)
In addition to the patent impermissibility of the executor signing a power of attorney authorizing attorney Flood-Myers to act in his place as the estate representative, the executor and Flood-Myers failed to comply with the filing and recording requirements relating to powers of attorney set forth in the Uniform Rules for the Surrogate's Court §207.48. The rule permits the Surrogate to prescribe the form, content and manner of execution and conditions attached to the recording of the instruments, as well as to inquire into and determine the validity of it. (EPTL §13-2.3[b][1] & [2]; New York Estate Administration, supra, §13.08 at 467.)
Flood-Myers is ineligible to seek compensation for her actions under the power of attorney pursuant to SCPA §2112 since its issuance was void ab initio.
The record indicates that attorney Flood-Myers failed to provide the executor a written letter of engagement in conformity with 22 NYCRR §1215.1. This rule became effective March 4, 2002 as part of a Joint Order of the Appellate Divisions. It applies to all non-matrimonial clients where the fee to be charged is expected to exceed $3,000.00. (§1215.2) Instead, attorney Flood-Myers indicated that she would charge a flat rate of six percent (6%) based upon the value of all assets comprising the estate (Petition, Ex. A). The attorney has submitted an invoice for services plus disbursements (Petition, Ex. C). The attorney bills at a rate of $275.00 per hour and itemizes forty (40) hours of services through July 16, 2009. Disbursements for overnight mail delivery charges and photocopying totaling $176.75 are included. The total bill is $11,176.75, with the sum of $5,839.00 for previous payments credited, leaving a balance due of $5,377.75. Attorney Flood-Myers requests an additional fee of $2,750.00 for responding to this petition, or in the alternative, an additional fee of $5,500.00 relating to communications services not included in the initial bill, plus $630.00 for duplicating the estate file prior to turning it over to the estate's current attorney (Affirmation in Opposition, Wherefore clause). No where does attorney Flood-Myers provide an explanation of her noncompliance with the rule pertaining to a letter of engagement.
The record indicates that the petitioner was well aware that he would be charged and expected to pay for legal fees associated with the estate. It is the amount which is in contention. The Court's file in this estate reveals that no value was placed upon the decedent's personal property and real property when the probate petition was filed. The value of the gross testamentary estate is listed as zero.
The Surrogate bears the ultimate responsibility for deciding what constitutes a reasonable attorney's fee. (Matter of Stortecky v. Mazzone, 85 NY2d 518 [1995]; In re Szkambara, 53 AD3d 502 [2d Dept. 2008].) [*3]
SCPA §2110 authorizes this court to fix and determine the compensation of an attorney for services rendered to a fiduciary. In the event that an attorney has already received an amount which is determined to be in excess of the fair value of her services, the court may direct a refund of the excess. (SCPA §2110[3]; New York Estate Administration, supra, §13.02[e] at 443.)
In evaluating what constitutes a reasonable attorney's fee, the Court has considered the time and labor expended, the difficulty of the questions involved and the necessary skill to handle the problems thus presented, the attorney's experience, ability and reputation, the amount involved, the customary fee charged for such services, and the results obtained. (In re Freeman's Estate, 34 NY2d 1, 9 [1974].)
The following facts established by the record in this proceeding were taken into consideration. Attorney Flood-Myers failed to comply with 22 NYCRR §1215.1. Even though the attorney indicated to the executor that a fee based upon a fixed percentage rate would be charged, nevertheless, the estate was billed at an hourly rate. Attorney Flood-Myers' services were of short duration. Those services were related to the probate of the decedent's will. The probate petition is silent as to the value of the gross testamentary estate. The attorney performed executorial services under a power of attorney. Those activities are contrary to established law. They are not subject to recovery as part of a requested fee. They are chargeable against the executor's commissions. (Matter of Phelan, 173 AD2d 621, 622-623 [2d Dept. 1991].)
Attorney Flood-Myers may recover only in quantum meruit to the extent that the fair and reasonable value of legal services can be established absent a written letter of engagement in conformity with the cited rule. (Seth Rubenstein, P.C. v. Ganea, 41 AD3d 54 [2d Dept. 2007].)
The Court has reviewed the invoice for legal services plus disbursements (Petition, Ex. C). The services performed on February 15 (0.5 hrs), March 6 (8.5 hrs), May 11 (6.5 hrs) June 13-16 (0.5 hrs) and July 16, 2009 (11.5 hrs) are disallowed, as they are either executorial in nature or lack specificity. Also disallowed is attorney Flood-Myers' request for additional fees for responding to this petition in defense of the fee, and for services not previously billed. (Matter of Locke, 21 AD2d 958 [3d Dept. 1964]; Matter of Marshak, NYLJ, 04/30/96, at 26, col 6 [Sur Ct, NY County]; Matter of Kelly, NYLJ, 04/24/01, at 25, col 1 [Sur Ct, Nassau County].)
The itemized disbursements in the aggregate amount of $176.75, for overnight mail and photocopies, are disallowed. These expenses constitute office overhead. The attorney is expected to absorb them in the performance of her service. (Matter of Butler, NYLJ, 11/20/1998, at 35, col 1 [Sur Ct, Westchester County]; Matter of Diamond, NYLJ, 07/14/1993, at 30, col 1 [Sur Ct, Westchester County], aff'd 219 AD2d 717, 718 [2d Dept. 1995]; 7 Warren's Heaton on Surrogate's Court Practice, Seventh Edition, §93.07[8].)
The attorney fee request totals $11,176.75. It incorrectly states that 40 hours of legal services were expended. The correct mathematical computation is 39.5 hours. The sum of $7,562.50, plus disbursements of $176.75, are disallowed. The court approves the amount of $3,300.00. The estate has previously either paid or received credit in the amount of $5,839.00. The court approves the sum of $350.00 for Flood-Myers' time and effort to copy the estate file prior to transferring it. Attorney Flood-Myers is directed to refund to the estate $2,189.00 and turn over the complete estate file, along with any estate assets and documents in her possession, to attorney Anna W. Kirschner within ten (10) days of service of the decree to be signed based [*4]upon this decision.
On this application, the Court considered in the interests of judicial economy the acknowledged (not verified, see SCPA §303) petition, with seven (7) exhibits, affidavit in support, affirmation in support with four (4) exhibits, affirmation in opposition with one (1) exhibit, and reply affirmation. The court did not consider the sur-reply or the sur-sur-reply. Neither the SCPA nor CPLR provide for such submissions.
Attorney Kirschner is directed to submit a decree consistent with the foregoing with notice of settlement within ten (10) days from the date of this decision.
The foregoing constitutes the decision of the Court.
Dated:Poughkeepsie, New York
September 25, 2009
Enter
Hon. James D. Pagones, S.C.J.
TO:
KELLY FLOOD-MYERS, ESQ.
Former Attorney for Estate
17 St. John Street
Red Hook, New York 12571
092109 decision
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