Matter of Moro
Annotate this CaseDecided on January 24, 2006
Sur Ct, Nassau County
In the Matter of the Estate of Josephine Moro, Deceased.
322409
Lawrence Mahon, Esq. (Guardian Ad Litem)
Mahon, Mahon, Kerins & O'Brien, LLC
254 Nassau Boulevard
Garden City South, NY 11530
Maria DeMarco Begley, Esq. (Attorney for the Executrix)
Franchina & Giordano, P.C.
1100 Franklin Avenue, Suite 205
Garden City, NY 11530
John B. Riordan, J.
Submitted for decision is the accounting of Marie Laurita as the executor of the estate of Josephine Moro. The issues for resolution include: judicial settlement of her account, approval of attorney fees, the approval of commissions, $5,305.00 of which has been paid in advance without court approval, and the allowance of an unpaid claim of $804.42.
Josephine Moro died testate on December 17, 2001 a resident of Rockville Centre, Nassau County, New York. Her Will was admitted to probate by this court and letters testamentary issued to her daughter Marie Laurita on March 8, 2002. She was survived by her post-deceased husband, William Moro, three daughters and a son. She divided her residuary estate into six equal shares bequeathing shares to her husband, to her daughters, Marie Laurita, Teresa Marino and Yolanda Moro, to her son Thomas Moro and to her granddaughter Elizabeth Laurita, an infant for whom a guardian ad litem has been appointed. Jurisdiction has been obtained over all the parties and the guardian ad litem for the infant has filed his report. Teresa Marino, on her own behalf and as the executor of her father's estate, and Thomas Moro have consented to the relief requested. Yolanda Moro was served with citation and defaulted.
With respect to counsel fees, the account seeks approval of legal fees for the executor in the sum of $15,921.00, $3,687.00 of which have been paid. The gross estate including income is $375,636.53. The fee requested therefore represents approximately 4.23% of the estate. Counsel was originally retained while William Moro was alive on a percentage of 3% of the gross estate for an uncontested estate administration. A formal accounting was not part of the original retainer. Estate administration was complicated by the death of William Moro shortly after the decedent. No separate charges are submitted for accounting fees, tax preparation and the formal accounting proceeding. The guardian ad litem finds the total legal fee to be fair and reasonable after his review of the entire estate files and has no objection to the total fee requested. As indicated there has been no objection to these fees or the account by any of the interested parties.
The court bears the ultimate responsibility for approving legal fees that are charged to an estate and has the discretion to determine what constitutes reasonable compensation for legal services rendered in the court of the administration of estate (Matter of Stortecky v Mazzone, 85 NY2d 518 [1995]; Matter of Vitole, 215 AD2d [1995], Matter of Phelan, 173 AD2d 621 [1991]). This remains true even in the event that the parties have consented to the requested fee (Matter of Stortecky v Mazzone, 85 NY2d 518, 525 [1995]; Matter of Phelan, 173 AD2d 621, 622 [1991]. While there is no hard and fast rule to calculate reasonable compensation to an attorney in every case, the Surrogate is required to exercise his or her authority "with reason, proper [*2]discretion and not arbitrarily" (Matter of Brehm, 37 AD2d95, 97 [1971]; see Matter of Wilhelm, 88 AD2d 6, 11-12 [1982]).
In evaluating the cost of legal services, the court may consider a number of factors. These include:
1.the time spent (Matter of Kelly, 187 AD2d 718 [1992]);
2.the complexity of the questions involved (Matter of Coughlin, 221 AD2d 676 [1995]);
3.the nature of the services provided (Matter of Von Hofe, 145 AD2d 424 [1988]);
4.the amount and complexity of litigation required (Matter of Sabatino, 66 AD2d 937 [1978]);
5.the amounts involved and the benefit resulting for the execution of such services (Matter of Shalman, 68 AD2d 940 [1979]);
6.the lawyer's experience and reputation (Matter of Brehm, 37 AD2d [1971]); and
7.the customary fee charged by the Bar for similar services (Matter of Freeman, 34 NY2d[1974]; Matter of Potts, 123 Misc 346 [1924], affd 213 App Div 59 [1925], affd 241 NY 593 [1925].
In discharging this duty to review fees, the court cannot apply a selected few factors which might be more favorable to one position or another but must strike a balance by considering all of the elements set forth in Matter of Potts (213 App Div 59 [1925], affd 241 NY 593 [1925], as re-enunciated in Matter of Freeman (34 NY2d 1[1974]) (see Matter of Berkman, 93 Misc 2d 423 [1978]). Also, the legal fee must bear a reasonable relationship to the size of the estate or to the interest of the ward of the guardian ad litem (Matter of McCranor, 176 AD2d 1026 [1991]; Matter of Kaufmann, 26 AD2d 818 [1966], affd 23 NY2d 700 [1968]; Martin v Phipps, 21 AD2d 646 [1964], affd 16 NY2d 594 [1965], Matter of Ault, 164 Misc 2d 272 [1995]). Moreover, it is well-settled that time spent is, in fact, the least important factor considered by a court if fixing reasonable compensation (see Matter of Snell, 17 AD2d 490, 494 [1962]; Matter of Potts, 213 App Div 59, 62 [1925], affd 241 NY 593 [1925]; Matter of Kentana, 170 Misc 663 [1939]).
These factors apply equally to an attorney retained by a fiduciary or to the court-appointed guardian ad litem (Matter of Graham, 238 AD2d 682; Matter of Burk, 6 AD2d 429 [1958]; Matter of Ault, 164 Misc 2d 272 [1995], Matter of Berkman, 93 Misc 2d [1978]; Matter of Reisman, NYLJ, May 18, 2000, at 34). Moreover, the nature of the role played by the guardian ad litem is an additional consideration in determining his or her fee (Matter of Ziegler, 184, AD2d 201 [1992]). Normally, the fee of a guardian ad litem is an administration expense of an [*3]estate and is paid from estate assets.
A sizeable estate permits adequate compensation, but nothing beyond that (Matter of Martin v Phipps, 21 AD2d 646 [1964], affd 16 NY2d 594 [1965]; Matter of Yancey, NYLJ, Feb. 18, 1993, at 28, col 1; Matter of Reede, NYLJ, Oct. 28, 1991, at 37, col 2). A large estate does not, by itself, justify a large fee (Matter of Young, 52 Misc 2d 398 [1966]). Moreover, the size of the estate can operate as a limitation on the fees payable (Matter of McCranor, 176 AD2d 1026 [1991]; Matter of Kaufmann, 26 AD2d818 [1966]; affd 23 NY2d 700 [1968]; without constituting an adverse reflection on the services provided.
The burden with respect to establishing the reasonable value of legal services performed rests on the attorney performing those services (Matter of Potts, 123 Misc 346 [1924]; affd 213 App Div 59 [1925], affd 241 NY 593 [1925]; see Matter of Spatt, 32 NY2d 778 [1973]).
In this case the court has reviewed the affidavit of services of the executor's counsel and finds that the original retainer was fair and reasonable and finds that the additional fees of counsel for meeting with attorneys for some of the beneficiaries and the guardian ad litem and preparation of the account to be proper. Accordingly the fee of $15,921 as requested is approved. Moreover the fee of the guardian ad litem is fixed in the sum of $2,518.75 as requested.
The guardian ad litem has raised the issue of the taking of advance commissions by the executor without court approval. On June 11, 2002 the executor took commissions in the sum of $5,305. Thomas Moro and Teresa Marino, individually and as executor of her father William Moro's estate, have subsequently filed specific consents to the advance payment of commissions. The guardian ad litem has taken the position that if all the other legatees can be shown to have consented to the advance payment of this partial commission, he would raise no objection on behalf of his ward. Counsel to the executor has submitted a letter to the court indicating that Yolanda Moro consented verbally in June of 2002 to her sister, the executor, taking these advance commissions when William Moro was alive and distribution of decedent's half of the family home would not occur until his death. At some time after the advance payment of commissions, Yolanda Moro and Maria Laurita had a disagreement regarding the care of their father in the house and thus Yolanda Moro will not now consent to the accounting or the advance commissions. Nevertheless, the executor's counsel asks that the court not impose a surcharge on the executor due to these circumstances.
Commissions are not ordinarily payable until the entry of a decree settling a fiduciary's account (SPCA 2307 [1]; 2308 [1] and 2309 [1]; Matter of Worthington 141 NY 9 [1894]; Beard v Beard, 140 NY 260, 264 [1893]; Matter of Stable 130 Misc 2d 725 [1985]; 7 Warren's Heaton on Surrogate's Court Practice §103.06). Taking a commission prior to the settlement of an account without securing court approval pursuant to SCPA 2310 or SCPA 2311 exposes the fiduciary to the danger of being surcharged (Matter of Hildreth, 274 App Div 611 [1949], affd 301 NY 705 [1950]; Matter of Crippen, 32 Misc 2d 1019 [1961]; Turano, McKinney's Practice Commentaries to SCPA 2310 at 487-488). Usually the court allows the commissions but surcharges the fiduciary the amount of interest the estate lost because of payment, most commonly the statutory interest rate under CPLR 5004, from the date the unauthorized commissions were taken until the entry of the decree settling the account (Matter of Dubin, 166 Misc 2d 971, 972 [1995]; Matter of Mattes, 12 Misc 2d 502 [1958]; Matter of McKee, 147 Misc 889 [1933]; Matter of Bosch, 201 Misc 890 [1952]; Matter of Arkinson, NYLJ Sept. 6, 2002 at [*4]25, col 1 [Surrogate Court Westchester Co.]; Matter of Dickman, NYLJ Aug. 8, 2000 at 28, col 3 [Surrogate Court Nassau Co.]; see generally, 7 Warren's Heaton on Surrogate's Court Practice §103.06 at footnote 5).
There is some division between the Surrogate's on the issue of whether there must be an interest surcharge on the advance payment of commissions even where all of the beneficiaries consent to approval of the advance in a nunc pro tunc order (Matter of Penn, NYLJ Jan. 13, 1999 at 31; Matter of Arkinson, NYLJ Sept. 6, 2002 at 25 col 1 where Surrogate Scarpino took the position that while "commission are allowable...the executor must pay interest at the legal rate from time of taking"; Matter of Conroy, NYLJ Apr, 18, 2001 at 23 holding that SCPA does not provide for nunc pro tunc approval of advanced commissions; contrast Matter of Schmitt, 65 Misc 2d 1021; Matter of Kronovet, NYLJ Feb. 9, 2004 at 22 col 5; Turano and Radigan, NY Estate Administration §15:05 "If no one objects, the court may waive such interest").
An intermediate position has been taken by then Surrogate Prudenti who has held that a fiduciary's violation of SCPA 2310 and 2311 cannot be condoned and will ordinarily result in surcharge for the unauthorized payment at the legal rate of interest in order to protect the rule and deter advances without court orders, but such advances can be excused in certain extraordinary
circumstances (Matter of Gesswein, NYLJ May 28, 1998 at 31, col 4; Matter of Heuser, NYLJ Mar. 27, 1998 at 33, col 4).
This court has generally taken the position the taking of advance commissions without prior court approval is grounds for "automatic surcharge at the statutory rate of interest of 9%" (see e.g. Matter of Kiminas, Decision No. 981, January 13, 2006).
Considering all the circumstances in this case and the above principles, the court surcharges the executor 9% statutory interest on the amount paid of $5,305.00 from the date taken of June 11, 2002 until the date of the decree. The surcharge shall be charged against the balance of the commissions due the executor.
The account is otherwise acceptable and approved as filed.
Settle a decree on notice with an affidavit bringing the account down to date reflecting interest income earned.
Dated: January 24, 2006
John B. Riordan
Judge of the
Surrogate's Court
[*5]
The appearance of counsel is as follows:
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