Matter of Efstathiou
Annotate this CaseDecided on September 26, 2013
Sur Ct, Nassau County
In the Matter of Proceeding to Fix Attorney Fees in the Estate of George S. Efstathiou, a/k/a Georgios Efstathiou, Deceased.
352949/F
Victor Mevorah, P.C. (for petitioner)
100 Garden City Plaza, Ste. 400
Garden City, NY 11530
George E. Magriples, Esq. (for respondent)
21-71 Steinway street
Astoria, NY 11105
Edward W. McCarty III, J.
In this miscellaneous proceeding, the petitioner, Eleni Efstathiou, administrator of the above estate, has commenced a proceeding to determine the fees of George E. Magriples, Esq. for legal services rendered to the administrator.
The decedent, George S. Efstathiou a/k/a Georgios Efstathiou, died intestate on August 27, 2008. The decedent's widow, Eleni Efstathiou, was appointed administrator of the decedent's estate. Petitioner retained the services of George E. Magriples, whom she later discharged.
Petitioner states that she was not provided with a retainer agreement; however, she gave counsel a $2,500.00 retainer to assist her in being appointed as administrator and administering her husband's estate. She claims that counsel never provided her with a billing statement or an accounting of his time. Petitioner further claims that, at the time of the closing on the decedent's residence, counsel retained $52,572.73 of the proceeds and failed to provide her with a closing statement. Soon after the closing, petitioner terminated counsel's services and asked him to release the full $52,512.73. Counsel only turned over $12,296.00 to petitioner's current counsel, Victor Mevorah, Esq, and applied the balance to his fee. In addition, petitioner states that final distribution has not been made.
In response, Mr. Magriples filed an answer setting forth the affirmative defenses of (i) failure to state a cause of action, and (ii) estoppel, as well as denying most of the allegations. In addition, counsel served and filed an affirmation of legal services with time records and a retainer agreement dated December 12, 2008 annexed.
The affirmative defenses of failure to state a cause of action and estoppel are without merit as the court has the authority to fix counsel's compensation pursuant to SCPA 2110. As Surrogate Versaci stated in Matter of Garrasi (29 Misc 3d 822, 830 [Sur Ct, Schenectady County, 2010]) the doctrine of equitable estoppel:
"while applicable and in some instances dispositive in an ordinary fee collection action, is not [*2]applicable to a determination by the surrogate of the attorneys' fees to be awarded in an estate proceeding. See SCPA 2110 [1] [which authorizes the court, at any time during the administration of an estate and irrespective of the pendency of a particular proceeding, to fix and determine the compensation of an attorney for services rendered to a fiduciary or to a devisee, legatee, distributee or any person interested]; see also Matter of Stortecky v Mazzone, 85 NY2d 518, 525-526, 650 NE2d 391, 626 NYS2d 733 [1995] where the Court of Appeals held that the Surrogate has the inherent power to supervise the fees attorneys charge for legal services', and has the authority to inquire into the reasonableness of counsel's fee even though agreed upon by the executor and assented to by the beneficiaries' [internal question marks omitted])"
With respect to the issue of attorneys' fees, 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 course of an estate (Matter of Stortecky v Mazzone, 85 NY2d 518 [1995]; Matter of Vitole, 215 AD2d 765 [2d Dept 1995]; Matter of Phelan, 173 AD2d 621, 622 [2d Dept 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 discretion and not arbitrarily" (Matter of Brehm, 37 AD2d 95, 97 [4th Dept 1971]; see Matter of Wilhelm, 88 AD2d 6, 11-12 [4th Dept 1982]).
In evaluating the cost of legal services, the court may consider a number of factors. These include: the time spent (Matter of Kelly, 187 AD2d 718 [2d Dept 1992]); the complexity of the questions involved (Matter of Coughlin, 221 AD2d 676 [3d Dept 1995]); the nature of the services provided (Matter of Von Hofe, 145 AD2d 424 [2d Dept 1988]); the amount of litigation required (Matter of Sabatino, 66 AD2d 937 [3d Dept 1978]); the amounts involved and the benefit resulting from the execution of such services (Matter of Shalman, 68 AD2d 940 [3d Dept 1979]); the lawyer's experience and reputation (Matter of Brehm, 37 AD2d 95 [4th Dept 1971]); and the customary fee charged by the Bar for similar services (Matter of Potts, 123 Misc 346 [Sur Ct, Columbia County 1924], affd 213 App Div 59 [4th Dept 1925], affd 241 NY 593 [1925]; Matter of Freeman, 34 NY2d 1 [1974]). 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, (123 Misc 346 [Sur Ct, Columbia County 1924], affd 213 App Div 59 [4th Dept 1925], affd 241 NY 593 [1925]), and as re-enunciated in Matter of Freeman (34 NY2d 1 [1974]) (see Matter of Berkman, 93 Misc 2d 423 [Sur Ct, Bronx County 1978]). Also, the legal fee must bear a reasonable relationship to the size of the estate (Matter of Kaufmann, 26 AD2d 818 [1st Dept 1966], affd 23 NY2d 700 [1968]; Martin v Phipps, 21 AD2d 646 [1st Dept 1964], affd 16 NY2d 594 [1965]). A sizeable estate permits adequatecompensation, but nothing beyond that (Martin v Phipps, 21 AD2d 646 [1st Dept 1964], affd 16 NY2d 594 [1965]; Matter of Reede, NYLJ,
Oct. 28, 1991, at 37, col 2 [Sur Ct, Nassau County]; Matter of Yancey, NYLJ, Feb. 18, 1993, at 28, col 1 [Sur Ct, Westchester County]). Moreover, the size of the estate can operate as a limitation on the fees payable (Matter of McCranor, 176 AD2d 1026 [3d Dept 1991]; Matter of Kaufmann, 26 AD2d 818 [1st Dept 1966], affd 23 NY2d 700 [1968]), without constituting an [*3]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 [Sur Ct, Columbia County 1924], affd 213 App Div 59 [4th Dept 1925], affd 241 NY 593 [1925]; see e.g. Matter of Spatt, 32 NY2d 778 [1973]). Contemporaneous records of legal time spent on estate matters are important to the court in determining whether the amount of time spent was reasonable for the various tasks performed (Matter of Von Hofe, 145 AD2d 424 [2d Dept 1988]; Matter of Phelan, 173 AD2d 621 [2d Dept 1991]).
According to counsel, he represented the petitioner from December 2008 to November 2009. Counsel spent a total of 133.6 hours at $300.00 per hour for a total fee of $40,080.00, plus disbursements of $2,278.66, for a total of $42,358.66. Counsel states that the matter "was complex and included highly contested issues due to family disputes, requiring judicial interventions, competing petitions for property foreclosures and intensive exchange of legal correspondence." Counsel also asserts that four parties were deposed during the course of these proceedings and that the property in dispute was sold for $90,000.00 more than what was first offered by a family member, largely due to his efforts. Counsel also claims that the sale was "extremely complex" and required great efforts and negotiation, as well as motion practice.
A review of the court file indicates that the decedent's son, Steven E. Alexander, filed a petition for letters of administration c.t.a. and offered a handwritten instrument dated February 27, 2008 for probate. The major asset was the decedent's interest in Nautilus Restaurant, Inc. The parties resolved their differences pursuant to a stipulation of settlement. The value of the estate was listed on the petition as $1,000,000.00.
According to the time records submitted by counsel, he had meetings with the administrator; prepared the petition; reviewed correspondence; reviewed the court file; had communications with opposing counsel; had discussions regarding appraisals, reviewed papers in connection with the foreclosure action; attended court appearances; conducted SCPA 1404 examinations; prepared objections to probate; performed work in connection with sale of the house; and prepared a stipulation of settlement.
There are entries for "mail notice to parties," "duplication of records;" "file reproduction," "deliver boxes of files to Mevorah," all of which are not compensable. Services which are secretarial in nature are part of office overhead. Additionally, on a few occasions counsel charged for travel time, which is not compensable (Matter of Trotman, NYLJ, May 13, 1998, at 29, col 3 [Sur Ct, Nassau County]). Some of the work performed by counsel is executorial in nature and is not compensable (Matter of Jones, 168 AD2d 448 [2d Dept 1990]). Accordingly, the court fixes the fee of counsel in the amount of $36,000.00. Disbursements for ordinary postage ($192.44) and photocopies ($324.20) are disallowed. Disbursements in the total amount of $516.64 are disallowed. Disbursements in the amount of $1,762.02 are approved. Any amounts paid to counsel in excess of $37,762.02 shall be refunded to the estate within 30 days of the decree to be entered herein.
Settle decree.
Dated: September 26, 2013
EDWARD W. McCARTY III [*4]
Judge of the
Surrogate's Court
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