Estate of Costilla

Filed 10/19/07 Estate of Costilla CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

APPEAL from a judgment of the Superior Court of Fresno County. Debra J. Kazanjian, Judge.

Motschiedler, Michaelides & Wishon, Russell K. Ryan; Quinlan, Kershaw & Fanucchi, Edward L. Fanucchi, for Objector and Appellant.

Gary G. Bagdasarian and C. Michael Carrigan for Petitioner and Respondent.

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This is an appeal from an order granting extraordinary attorney fees in the amount of $25,000 to be paid to the administrators attorney. Respondent Arminda Martinez, the decedents daughter, served as the administrator for the estate of her father, Efrain Costilla. Appellant Teresa Flores Costilla is the decedents surviving spouse, who challenged the request for extraordinary fees and sought payment of the attorney fees she incurred in bringing her challenge. She claimed that she was entitled to fees under the Common Fund Doctrine because her opposition to the request for extraordinary fees provided a monetary benefit to the estate. Flores Costilla was separated from the decedent and had filed for dissolution of the marriage at the time of Costillas death.

The court granted counsels petition for extraordinary fees, with a small reduction, and denied Flores Costillas request for attorney fees. We affirm.

FACTUAL AND PROCEDURAL HISTORIES

Efrain Costilla died intestate on December 20, 2003. He was survived by five adult children in addition to Flores Costilla. Martinez petitioned the probate court for appointment as administrator of the estate. She was appointed on March 16, 2004. Following her appointment, Martinezs attorney, Gary Bagdasarian, assisted Martinez in the administration and distribution of the estate. Counsel filed various pleadings and took an assortment of measures to distribute and close the estate. Counsel oversaw the close of a farming business, the sale of farming equipment and other personal property, and the sale of two pieces of real estate. Flores Costilla held a 25-percent interest in the family farm. During the administration, Flores Costilla formally and informally challenged Martinezs decisions and actions as administrator on more than one occasion and filed two creditors claims against the estate, one for $4,188.50 and the other for $21,793.03. No other beneficiary objected to any of the actions taken or to any decision made by Martinez. Bagdasarian spent significant time attempting to negotiate resolution of the various conflicts without litigation. It took two years to get the estate ready for final distribution.

On July 21, 2006, at the close of the estates administration, counsel filed a final accounting and petition for statutory attorney fees ($7,342), extraordinary attorney fees ($28,905.50), and a final inventory and appraisal. In his request for extraordinary attorney fees, counsel submitted a declaration which included a narrative and billing invoices detailing the work he had performed in order to close the estate. Counsel also identified in attachments to his accounting and in subsequent declarations the work that led to his request for extraordinary fees, including: (1) a farm equipment and crop income dispute; (2) the sale of the Tulare County farm property; (3) the sale of the Parlier house; (4) the sale of personal property, including large-scale farm equipment; and (5) resolution of the creditor claims of Flores Costilla arising from the farm operation. Counsel also declared that he had to resolve many complaints and objections by Flores Costilla, spending time over and above that needed for the general administration of the estate.

Flores Costilla challenged the request for extraordinary fees arguing that counsel had not provided any extraordinary, rare, or unusual services to the estate. She argued that the fees requested were excessive and ordinary and should be limited to the statutory compensation awarded under the Probate Code and the Superior Court of Fresno County, Local Rules, rule 7.18(A)(1). Flores Costilla also requested that her own attorney fees, in the amount of $2,400, for the preparation of the contest and objection, be paid pursuant to the Common Fund Doctrine. Flores Costilla claimed that if the court denied the request for extraordinary fees, her contest was a benefit to the estate.

On October 19, 2006, the court granted counsels petition, allowing $7,342 in statutory fees and $25,000 in extraordinary fees. The only fees disallowed were those charged for reviewing letters dictated by the attorney. The court denied Flores Costillas request for attorney fees.

DISCUSSION

I. Extraordinary fee request

Flores Costilla contends on appeal that the legal services provided to the estate were not extraordinary, rare, or unusual and do not justify an award of extraordinary fees. Extraordinary fees are allowed under Probate Code section 10811,^[1]which reads:

(a) Subject to the provisions of this part, in addition to the compensation provided by Section 10810, the court may allow additional compensation for extraordinary services by the attorney for the personal representative in an amount the court determines is just and reasonable. [] (b) Extraordinary services by the attorney for which the court may allow compensation include services by a paralegal performing the extraordinary services under the direction and supervision of an attorney. The petition for compensation shall set forth the hours spent and services performed by the paralegal. [] (c) An attorney for the personal representative may agree to perform extraordinary service on a contingent fee basis subject to the following conditions: [] (1) The agreement is written and complies with all the requirements of Section 6147 of the Business and Professions Code. [] (2) The agreement is approved by the court following a hearing noticed as provided in Section 10812. [] (3) The court determines that the compensation provided in the agreement is just and reasonable and the agreement is to the advantage of the estate and in the best interests of the persons who are interested in the estate.

Allowance of extraordinary attorney fees is subject to the discretion of the probate court. A determination by a probate court that compensation for extraordinary services is justified will not be interfered with except where there is a clear abuse of discretion. (Estate of Downing (1982) 134 Cal.App.3d 256, 266.) In reviewing a trial courts exercise of discretion, we will reverse only when it is affirmatively shown a prejudicial abuse of discretion has occurred. [Citation.] The test is not whether we would have made a different decision had the matter been submitted to us in the first instance. Rather, the discretion is that of the trial court, and we will only interfere with its ruling if we find that under all the evidence, viewed most favorably in support of the trial courts action, no judge reasonably could have reached the challenged result. (Estate of Billings (1991) 228 Cal.App.3d 426, 430.)

We see no abuse of discretion. Section 10811 allows fees over and above the statutory fees specified when services exceed that needed for the ordinary administration of the estate. The court found that the services for which Bagdasarian requested extraordinary fees justified the award. We agree and reject Flores Costillas assertion that the services were ordinary services covered by the statutory grant of attorney fees.

To close the estate, the farm practices had to be completed for the season, crops had to be harvested, and proceeds had to be distributed to pay for farming costs. The farm and its equipment then had to be sold. According to Bagdasarians declaration, there were disputes about who was responsible for continuing the farming practices, who was required to pay for expenses incurred in bringing in the existing crop, and how proceeds from the crops sale were to be distributed. The personal representative has the power to continue the business of the estate. Extraordinary fees are authorized when the court in its discretion determines they are justified. (Estate of Scherer (1943) 58 Cal.App.2d 133, 144;  10534(b)(1).) Flores Costillas community property claims against the farm, her 25-percent interest in the farm and its crops, and her claims for reimbursement from the estate for farming expenses required resolution of issues not usually found in probate matters. In many ways this case was part family law and part probate law.

Nor are we persuaded by Flores Costillas assertion that the disputes did not result in formal objections or litigation and, therefore, extraordinary fees are not authorized. Work that avoids litigation has long been recognized as providing a benefit to the estate and may be characterized as extraordinary services. (Estate of Harvey (1951) 103 Cal.App.2d 192, 199; Estate of Schuster (1984) 163 Cal.App.3d 337, 342 [for purposes of awarding extraordinary fees, party may be successful even where case is resolved by settlement].)

In addition, the sale of property has long been recognized as an extraordinary service entitled to extraordinary fees. (Cal. Rules of Court, rule 7.703(c)(1); Estate of McSweeney (1954) 123 Cal.App.2d 787, 798 [no dispute that sale of three parcels of real property belonging to estate justifies extraordinary fees for services in addition to attorneys regular fee].) We are not persuaded that legal services requiring only pre-printed forms and the review of escrow instructions are not legal services justifying extraordinary fees. Most lawyers use preprinted forms, and oversight of outside services is routine. Legal training and expertise are nonetheless required.

Flores Costilla also asserts for the first time on appeal that the fee award includes fees for work completed prior to the initiation of probate proceedings. It is true that attorney fees are only recoverable for time spent after the initiation of the probate proceedings. (Hutchinson v. Gertsch (1979) 97 Cal.App.3d 605, 616 [attorney fees to parties involved in contests before probate are not payable out of estate].) Flores Costilla, however, has waived her right to raise this issue on appeal because she did not raise it in the probate court. [Q]uestions not raised in the trial court will not be considered on appeal. (Estate of Raphael (1953) 115 Cal.App.2d 525, 529.)

Every [probate] attorney should be fully and fairly paid for his services, having in mind their nature, their difficulty, the value of the estate, and the responsibility thus cast upon the counselor. (Estate of Byrne (1898) 122 Cal. 260, 266.) The court reviewed all of the extraordinary services that Bagdasarian performed, which were identified in the extensive and detailed declaration filed in support of the request. The Probate Code authorizes the court to allow such amounts as the court may decide are just and reasonable for extraordinary services provided by an attorney to the estate. (Estate of Scherer, supra, 58 Cal.App.2d at p. 143.) We cannot say under these circumstances that the probate court abused its discretion in allowing the extraordinary fees.

II.Procedural issues

Flores Costilla appears to raise a claim that Martinez did not meet the minimal procedural requirements when requesting extraordinary attorney fees. First, we find no evidence that this issue was raised in the probate court. As a result, it appears that Flores Costilla is asserting this issue for the first time on appeal. As we have already mentioned, generally an issue must be raised in the lower court to be argued on appeal or it is waived. (Parker v. City of Fountain Valley (1981) 127 Cal.App.3d 99, 117.) In any event, even if this issue had been preserved on appeal, the declaration submitted by counsel in support of the request for extraordinary fees is more than sufficient to meet the requirements of California Rules of Court, rule 7.703, which requires a showing of the nature and difficulty of the work performed, the results achieved, the benefit of the services to the estate, and the productivity of the time spent. The accounting and declarations submitted by Bagdasarian include a list of all work performed and an explanation of why it was extraordinary, why the services were needed, and an explanation of how the estate benefits. The declaration included detailed billing invoices.

Flores Costilla also contends that the courts decision is based partially on declarations of decedents children that were filed with the court but not served on her. This appears to be another procedural objection that was not raised in the probate court and for which there is no appellate record other than the argument of counsel. We need not address this contention, however, because the declarations contain no relevant information other than to state agreement with the request of extraordinary fees and, therefore, could have added nothing to the courts consideration of whether extraordinary fees were justified under governing law.

III. Common Fund Doctrine

Flores Costilla contends that the probate court should have awarded her attorney fees under the Common Fund Doctrine because her challenge to the extraordinary-fees request resulted in an economic benefit to the estate. First, because we will affirm the probate courts award of extraordinary fees, the only possible benefit to the estate resulting from the challenge filed by Flores Costilla is the amount of the reduction in the fee request of $4,925.50. We conclude that the reduction was not a result of Flores Costillas objection to the extraordinary fee award and in any event is insufficient to justify an award under the Common Fund Doctrine.

Code of Civil Procedure section 1021 states, Except as attorneys fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to their costs, as hereinafter provided. Additionally, Code of Civil Procedure section 1021.5 states, Upon motion, a court may award attorneys fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any. In other words, one who creates this benefit for all participants may require the passive beneficiaries to share in the costs of obtaining the benefits. (Serrano v. Priest (1977) 20 Cal.3d 25, 35.) Application of the Common Fund Doctrine is committed to the sound discretion of the trial court. (Lovett v. Carrasco (1998) 63 Cal.App.4th 48, 56.)

There was no substantial benefit to the estate caused by Flores Costilla. Further, there is no evidence to support a finding that Flores Costillas contest resulted in the reduction of the fee award. The contest challenged Martinezs request for extraordinary compensation as a whole; it did not challenge the payment for time spent reviewing letters dictated by the attorney. This was a very specific reduction based on the probate courts notion of fairness, not on any argument made by Flores Costilla. Any benefit to the estate was only incidental to the contest and not to its result. In addition, we do not believe the small reduction of $4,925.50 in the context of an estate worth approximately $200,000 to be a significant benefit justifying a departure from the general rule that a litigant bear the cost of his or her own legal representation. It was not an abuse of discretion to deny Flores Costillas request for attorney fees.

DISPOSITION

The order granting extraordinary fees to Bagdasarian and denying fees to Flores Costilla is affirmed. Costs are awarded to respondent.

_____________________

Wiseman, Acting P.J.

WE CONCUR:

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Levy, J.

_____________________

Gomes, J.

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^[1]All further references are to the Probate Code, unless otherwise indicated.