Fourth District Opinion Suggests Attorney Fee Petitions Are Subject to De Novo Review: An examination of Section 733.106 fee petitions and Duncombe v. Adderly, –So.2d–, 2008 WL 4489234, 33 Fla.L. Weekly D2367a (4th DCA October 8, 2008).
The Law
The Florida Probate Code provides, at Fla.Stat. §733.106(3), that “any attorney who has rendered services to an estate may be awarded reasonable compensation from the estate.” Thus, an attorney who has rendered services to an estate may apply for an award of attorney’s fees. The petition for fees is then reviewed by the probate court, and after hearing, either approved, denied, or modified by the probate court.
A New Standard of Review
Florida courts had previously decided that the probate law authorizes a probate judge in his or her sound discretion to award reasonable and necessary costs and attorney’s fees to an unsuccessful proponent of a will, provided the latter acted in good faith and that his or her conduct was free from fraud. Watts v. Newport, 288 So.2d 104 (1948). Further, Florida law has historically allowed a probate court discretion to award attorney’s fees to be paid from the estate, even if taken on a contingent fee basis, so long as they benefited the estate. See, In re Whitehead’s Estate, 287 So.2d 9 (1973).
Apparently, the Fourth District Court of Appeals believes that a probate judge’s decision as to whether or not an attorney’s services have “benefited” an estate is not a discretionary decision, but rather is a matter of statutory interpretation, which can be reviewed de novo. On October 8, 2008, the Fourth District released its opinion in Duncombe v. Swilley, –So.2d. –, 2008 WL 4489234, 33 Fla.L.Weekly D2367a, wherein a Palm Beach County Probate Judge’s denial of a petition for attorney’s fees for services to an estate was reversed.
The decedent was survived by four children (Tcherina, Phyllis, Anthony, and Yvonne). Phyllis, Anthony, and Yvonne petitioned for Phyllis or her attorney to become the administrator of the estate. Tcherina objected and petitioned to court to appoint a disinterested third party. The probate court held a hearing on the competing petitions for administration; it was stipulated that, from 1995 until her death in 2003, the decedent suffered from Alzheimer’s. During this period Phyllis, Anthony, and Yvonne procured transfers of the decedent’s real estate to themselves. It was Tcherina’s position that these transfers were improper, that the estate would have to challenge those transfers, and that Phyllis, who was one of the transferees, had a conflict of interest, as did her lawyer. Tcherina also opposed probate of a handwritten one-page will executed in 1995, which named Phyllis as the administrator of the estate.
The court did not admit the will to probate and denied the petition to appoint Phyllis or her attorney as administrator. The court granted Tcherina’s petition to appoint a third party because there was a potential conflict of interest between Phyllis and the estate.
No paycheck today
Tcherina then sought attorney’s fees incurred during the proceedings under section 733.106(3), which provides “any attorney who has rendered services to an estate may be awarded reasonable compensation from the estate.” The probate court denied the petition because “there has been no increase in value to the estate, nor has it been demonstrated that the petitioner carried out the intent of the testator.”
On appeal, Phyllis and her attorney argued that the Court must affirm the probate court’s decision below because no abuse of discretion had been demonstrated. However, the Fourth District Court of Appeals broke new ground and announced that decisions regarding whether there has been a “benefit to the estate” is a matter of statutory interpretation that can be reviewed de novo.
Reviewing the record, the Fourth District Court of Appeals noted that based on the undisputed facts of the case, neither Phyllis, a transferee of some of the property, nor her lawyer, could have served as personal representative if an interested party objected. The Fourth District held that “benefit” to an estate includes services of an attorney that prevents the appointment of a personal representative named in a will, as well as services of an attorney that result in the removal of a representative.
What Does This Mean Going Forward?
This opinion highlights the expansion of the law in the area of attorney fees in probate litigation. The law in Florida used to hold that an attorney could only collect fees from the estate where the services were necessary for or beneficial to the probate estate, and fees were always disallowed where the services tended to break down, subtract from, or dissipate the estate. For example, in Dew v. Nerreter, 664 So.2d 1179 (Fla 5th DCA 1995), it was held that an unsuccessful will contestant could not be awarded attorney’s fees out of the estate, regardless of whether the contestant’s undue influence claim was brought in good faith or was reasonable, where the contest did not benefit the estate by bringing about an enhancement in value or an increase in the value of the estate, nor did it effectuate the testamentary intention set forth in the will. Now, under the new expansion of the meaning of “benefit,” so long as it can be demonstrated that the efforts of an attorney in some way effectuated the testamentary intent of the decedent, fees can be allowed. And now, with the new de novo standard of review at the appellate level, and initially unsuccessful fee petition in the probate court can get another bite at the apple!