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16-P-308 Appeals Court
W. NANCY BRADY, executrix,1 & another2 vs. CITIZENS UNION
SAVINGS BANK3 & another.4
No. 16-P-308.
Bristol. December 6, 2016. - March 9, 2017.
Present: Green, Agnes, & Desmond, JJ.
Probate Court, Attorney's fees, Trust. Trust, Attorney's fees.
Executor and Administrator, Attorney's fees. Practice,
Civil, Attorney's fees.
Complaint in equity filed in the Bristol Division of the
Probate and Family Court Department on July 13, 2011.
Following review by this court, 88 Mass. App. Ct. 416
(2015), an award of attorney's fees, costs, and compensation for
professional services was entered by Virginia M. Ward, J.
Carol L. Ricker for Dale Eggers.
Edwin F. Landers, Jr., for W. Nancy Brady.
1
Of the estate of Thomas T. Brady.
2
Edwin J. Haznar, Jr., executor of the estate of Edwin J.
Haznar.
3
The complaint names the bank in its capacity as bailee of
the assets of the Wilson O. Smith Trust.
4
Dale Eggers.
2
Ben N. Dunlap for Edwin J. Haznar, Jr.
GREEN, J. On remand following our decision in a previous
appeal in this case, see Brady v. Citizens Union Sav. Bank, 88
Mass. App. Ct. 416 (2015) (Brady I), the Probate and Family
Court judge entered a thorough and detailed written memorandum
of decision, in which she reduced from $457,902.09 to
$350,680.805 the amount the plaintiffs could recover as
reimbursement for fees and costs their decedents incurred in
defense of a lawsuit brought against them by the defendant Dale
Eggers and her daughter. Eggers has again appealed, contending
that (1) the amount of fees is unreasonable in light of the
nature and complexity of the underlying litigation; (2) the
amount of fees represents an unreasonable proportion of the
value of assets held by the Wilson O. Smith Trust (trust); and
(3) the judge failed adequately to consider the availability of
insurance proceeds as an alternative source of reimbursement.
We affirm, addressing Eggers's arguments in turn.6
5
The total consists of (1) $169,986.26 in legal fees
incurred by Thomas T. Brady; (2) $161,230.94 in legal fees
incurred by Edwin J. Haznar; (3) $5,400.00 in compensation for
professional accounting services performed by Edwin J. Haznar;
and (4) $14,063.60 in compensation for professional legal
services performed by Thomas T. Brady.
6
Eggers's separate contention that an award of attorney's
fees to the plaintiffs violates the so-called "American Rule"
ignores the language of the trust instrument explicitly
authorizing reimbursement of the trustees for expenses incurred
3
1. Lodestar method.7 In determining the amount of a
reasonable fee, we consider "the nature of the case and the
issues presented, the time and labor required, the amount of
damages involved, the result obtained, the experience,
reputation and ability of the attorney, the usual price charged
for similar services by other attorneys in the same area, and
the amount of awards in similar cases." Linthicum v.
Archambault, 379 Mass. 381, 388-389 (1979). Determination of a
reasonable fee is in the first instance largely committed to the
sound discretion of the trial judge, who is in the best position
to evaluate the nature of the case, the conduct of the
litigation, the amount of time reasonably required to litigate
it, and the fair value of the attorney's services. See Fontaine
v. Ebtec Corp., 415 Mass. 309, 324 (1993). We review a trial
judge's determination of a reasonable attorney's fee for abuse
of discretion. WHTR Real Estate Ltd. Partnership v. Venture
Distrib., Inc., 63 Mass. App. Ct. 229, 235 (2005).
in performance of their duties as trustees, as well as the fact
that this court's opinion in the previous appeal explicitly
recognized the propriety of an award of attorney's fees,
remanding only for reconsideration of the appropriate amount.
See Brady I, 88 Mass. App. Ct. at 422 & n.11.
7
The "lodestar" method refers to the calculation of a
reasonable attorney's fee by multiplying the number of hours
reasonably spent on the case by a reasonable hourly rate. See
Stratos v. Department of Pub. Welfare, 387 Mass. 312, 322
(1982).
4
We discern no abuse of discretion in the present case. The
judge's written memorandum reflects that she reviewed the hourly
billing details carefully, and she excluded time she viewed as
duplicative or unnecessary.8 Though, as the judge acknowledged,
the underlying litigation ultimately involved no dispute of
material fact, the judge observed that the manner in which
Eggers prosecuted her claims caused the litigation to span four
and one-half years, during which she filed two amended
complaints reflecting evolving claims. Ultimately, the summary
judgment rested on a conclusion that the claims were barred by
the statute of limitations, based on Eggers's knowledge in May,
2003, of the 1994 property transfer that formed the basis of her
December, 2006, complaint against the plaintiffs' decedents.
See Brady I, 88 Mass. App. Ct. at 417. Eggers's knowledge was
demonstrated by a letter she withheld until February 3, 2010,
more than three years after she filed her initial complaint.
The judge also evaluated the hourly rates charged by the various
attorneys involved, and we discern no abuse of discretion in her
determination that the rates are reasonable.
8
The judge excluded time spent, for example, by Haznar's
attorney attending the deposition of Brady, and by Brady's
attorney attending the deposition of Haznar. The judge also
excluded time for which inadequate descriptions appeared on the
billing statements, including instances where descriptions
appear to have been redacted for reasons of attorney-client
privilege.
5
2. Size of the estate. Eggers separately contends that,
even if the hourly rate and time spent are considered reasonable
under the lodestar method, the resulting fee award is excessive
in relation to the size of the trust estate. To be sure, "[a]n
important factor in assessing the reasonableness of fees awarded
in probate cases is the size of the estate." Clymer v. Mayo,
393 Mass. 754, 772 (1985). Accordingly, in assessing a request
for an award of attorney's fees in such cases the judge is to
"take into consideration . . . the amount in controversy, and
. . . prevent the fund from being either entirely or in great
part absorbed by counsel fees," and apply "strictly conservative
principles." Id. at 772-773, quoting from Frost v. Belmont, 6
Allen 152, 165 (1863), and Holyoke Natl. Bank v. Wilson, 350
Mass. 223, 230 (1966). The rationale stems, at least in part,
from a recognition that "[a]n excessive fee award may itself
defeat the decedent's intent by depleting her estate," Clymer,
supra at 773, and that such fees might be paid for the services
of those "who may not have been employed by those whose estates
are thus diminished." Ibid., quoting from Holyoke Natl. Bank,
supra.
The fee award in the present case approximates forty-five
percent of the value of the trust assets, as of the time of the
6
fee request.9 While that is a substantial share, several factors
combine to persuade us that the judge did not abuse her
discretion in concluding that the fee award did not unduly
dissipate the trust. First, the fees were incurred in defense
of litigation initiated by the trust beneficiaries against the
trustees, rather than in ordinary administration of the trust.
Compare Keville v. McKeever, 42 Mass. App. Ct. 140, 156 (1997),
with Clymer v. Mayo, supra. In addition, we note that the
trustees were either appointed by Wilson O. Smith, the trust
settlor (as Brady was), or identified in the trust instrument as
a successor trustee to Smith upon his death or disability (as
Haznar was). Accordingly, both trustees were employed by the
trust settlor for their services as trustees. Contrast Clymer
v. Mayo, supra. Moreover, the trust instrument itself expressly
authorized payment of professional fees in carrying out the
trustees' duties. Finally, if reimbursement for otherwise
reasonable fees incurred in defense of litigation brought by
trust beneficiaries against the trustees were capped at a set
percentage of trust assets, trustees would be without effective
protection against claims brought against them in circumstances
9
The fee petition was filed on July 13, 2011. The only
evidence of the value of the trust appearing in the record
discloses that it had a value of $778,645.84 as of February,
2011. See Brady I, 88 Mass. App. Ct. at 418. In her written
memorandum of decision, the judge found that the award
represented less than fifty percent of the trust assets, and her
finding is not clearly erroneous.
7
in which trust assets are small in comparison to the costs of
defense, and would accordingly (and reasonably) be reluctant to
serve as trustees. Particularly in circumstances such as those
in the present case, where the claims were resolved in the
trustees' favor on undisputed facts, we see no reason why a
particular set percentage of trust assets should serve as an
absolute cap on the amount of a reasonable fee incurred in
defense of litigation. Instead, as we observed in Brady I, a
comparison of the amount of the fee award to the value of trust
assets is but one factor to be weighed by the judge in
evaluating the reasonableness of the fee. See 88 Mass. App. Ct.
at 419.
3. Collateral sources. In Brady I, we explained that the
availability of collateral sources (such as insurance coverage)
for recovery of fees incurred in defense of litigation is not a
bar to recovery of such fees from the trust. See 88 Mass. App.
Ct. at 420-422. Instead, "insurance coverage is yet another
factor the judge should consider on remand in awarding fees and
costs in her discretion as justice and equity may require." Id.
at 420 (quotation omitted). In this appeal, Eggers contends
that the judge abused her discretion in declining to reduce the
fee award to any extent based on the availability of insurance
as a collateral source of recovery. In particular, Eggers cites
as error the judge's explanation that permitting recovery of
8
fees from trust assets without regard to collateral sources
would serve a salutary deterrent effect, analogous to the
deterrent effect cited in support of the collateral source rule
in tort cases. Again, we discern no abuse of discretion.
In her memorandum of decision, the judge expressed her view
that the underlying litigation was "without merit or vexatious
or both," and that "an offset of Eggers'[s] culpability by the
plaintiff[s'] insurance proceeds would seem patently unfair and
inequitable." As Eggers recognizes, the purpose of the
collateral source rule is deterrence of tortious conduct. See
Law v. Griffith, 457 Mass. 349, 355-356 (2010). Though Eggers
protests that she prosecuted her claims against the trustees in
good faith, the judge considered her prosecution of the
litigation to be vexatious. In particular, as the judge
observed, Eggers was aware early in the litigation that her
claims were barred by the statute of limitations, yet did not
disclose until quite far into the litigation the facts that
barred her claim on that ground. In the circumstances, the
judge was within her discretion to view Eggers as "culpable" for
needlessly prolonging the litigation, thereby causing the
trustees to incur significant unnecessary fees in defending it,
and to decline to offset the fees paid from the trust by
proceeds of insurance available to the trustees in order to
9
avoid an inequitable "windfall" to Eggers. See Northern Assocs.
v. Kiley, 57 Mass. App. Ct. 874, 883 (2003).
4. Appellate attorney's fees. Haznar has requested, and
is entitled to appellate attorney's fees and costs. He may
submit a petition for fees and costs, together with supporting
materials, within fourteen days of the date of the rescript of
this decision. Eggers shall have fourteen days thereafter to
respond. See Fabre v. Walton, 441 Mass. 9, 10-11 (2004).10
Amended decree awarding fees
and costs affirmed.
10
Although Brady also prevailed in this appeal, she did not
include a request for appellate attorney's fees and costs in her
brief, and we therefore do not award them. See Beal Bank, SSB
v. Eurich, 448 Mass. 9, 12 (2006).