No. 14201
I N THE SUPREME CCWlT O THE STATE OF MONTANA
F
1978
IJS' THE MA?TER OF THE ESTATE OF
WILLIAM MAGELSSEN, Deceased.
Appeal f r m : D i s k r i c t Court of t h e Thirteenth J u d i c i a l D i s t r i c t ,
Honorable Nat Allen, Judge presiding.
Counsel of Record:
For A p p l l a n t :
Church, Harris, Johnson and W i l l i a m s , Great F a l l s , Mntana
Douglas C. Allen argued, Great F a l l s Mntana
George R. Crotty argued, Great F a l l s , Mntana
For Respondent:
John M. Schiltz argued, Kalispell, Pbntana
suhitted: October 20, 1978
~ecided: JUL3 1979
Filed :
Mr. J u s t i c e D a n i e l J . Shea d e l i v e r e d t h e Opinion o f t h e C o u r t .
P a u l McCann, t h e p e r s o n a l r e p r e s e n t a t i v e o f t h e e s t a t e
o f William Magelssen, d e c e a s e d , a p p e a l s from a n o r d e r o f t h e
Yellowstone County D i s t r i c t C o u r t d e t e r m i n i n g a t t o r n e y f e e s
owed t o t h e law f i r m of Hutton, Sheehy and Cromley.
T h i s c a s e a r o s e when P a u l McCann p e t i t i o n e d t h e D i s -
t r i c t C o u r t , p u r s u a n t t o s e c t i o n 91A-3-722, R.C.M. 1947, now
s e c t i o n 72-3-634 MCA, f o r r e v i e w of compensation owed t o
t h e a t t o r n e y s f o r t h e e s t a t e , Hutton, Sheehy and Cromley.
The D i s t r i c t C o u r t d e t e r m i n e d t h a t t h e o r d i n a r y s e r v i c e s o f
p r o b a t e w e r e 9 5 p e r c e n t completed a t d a t e o f d i s c h a r g e , and
t h a t , a c c o r d i n g t o a c o n t r a c t o f employment between P a u l
McCann and John C. Sheehy, t h e law f i r m a g r e e d t o h a n d l e
t h e o r d i n a r y s e r v i c e s t o t h e e s t a t e f o r a f e e of 3 p e r c e n t
of t h e e s t a t e v a l u a t i o n f o r f e d e r a l e s t a t e t a x p u r p o s e s .
A c c o r d i n g l y , t h e D i s t r i c t C o u r t h e l d t h a t t h e law f i r m was
e n t i t l e d t o 95 p e r c e n t o f 3 p e r c e n t of t h e e s t a t e v a l u e f o r
f e d e r a l estate t a x purposes. P a u l McCann a p p e a l s from t h i s
determination.
The f a c t s g i v i n g r i s e t o t h i s c o n t r o v e r s y a r e a s f o l -
lows. William Magelssen d i e d o n September 1 7 , 1976, l e a v i n g
a n e s t a t e v a l u e d i n e x c e s s of t h r e e and one-half m i l l i o n
dollars. H i s w i l l named J u l i a Magelssen, h i s s i s t e r , and
P a u l McCann a s c o - p e r s o n a l r e p r e s e n t a t i v e s .
The c o - p e r s o n a l r e p r e s e n t a t i v e s engaged John C . Sheehy
and h i s f i r m , H u t t o n , Sheehy and Cromley, t o p r o v i d e l e g a l
s e r v i c e s f o r them a s c o - p e r s o n a l r e p r e s e n t a t i v e s o f t h e
estate. L a t e r , o n October 11, 1976, t h e c o - p e r s o n a l r e p r e -
s e n t a t i v e s had a meeting i n which t h e a t t o r n e y f e e s w e r e
d i s c u s s e d , and as a r e s u l t o f t h i s m e e t i n g , a t t o r n e y Sheehy
w r o t e a l e t t e r c o n f i r m i n g t h e c o n v e r s a t i o n and t h e a g r e e d
upon f e e . The l e t t e r , d a t e d October 1 3 , 1976, r e a d i n p e r -
ti nen t p a r t :
"Also d i s c u s s e d was o u r a t t o r n e y s ' f e e i n con-
n e c t i o n w i t h t h e h a n d l i n g of t h e e s t a t e . P a u l
r e p o r t e d t h a t some h e i r s wanted t o h o l d down
t h e c o s t of administration, p a r t i c u l a r l y t h e
a t t o r n e y s ' f e e s . P a u l a l s o s t a t e d h e c o u l d see
a p o s s i b l e ' c o n f l i c t of i n t e r e s t ' when t h e v a l u -
a t i o n o f t h e e s t a t e f o r i n h e r i t a n c e taxes,oc.curs.
N o n e t h e l e s s I s t a t e d t h a t o u r f i r m would c h a r g e
t h e f u l l 3% o f t h e v a l u e of t h e e s t a t e f o r
f e d e r a l e s t a t e t a x purposes f o r t h e o r d i n a r y
services t o the estate. "
There b e i n g no r e s p o n s e t o t h i s l e t t e r , t h e law f i r m c o n t i n u e d
representing t h e estate with t h e understanding t h a t t h e let-
t e r s t a t e d t h e a g r e e d upon fee.
E i g h t months l a t e r , o n J u n e 1 7 , 1977, McCann s i g n e d t h e
f e d e r a l e s t a t e t a x r e t u r n on which was r e c o r d e d a n amount
f o r a t t o r n e y f e e s , computed a t 3 p e r c e n t of t h e v a l u e of t h e
e s t a t e appraised f o r f e d e r a l e s t a t e t a x purposes.
J u l i a Magelssen, o n e of t h e c o - p e r s o n a l r e p r e s e n t a t i v e s ,
d i e d o n J u n e 16, 1977, l e a v i n g P a u l McCann a s t h e s o l e p e r -
sonal representative. John C. Sheehy and h i s law f i r m
c o n t i n u e d t o r e p r e s e n t t h e e s t a t e o f William Magelssen u n t i l
J u l y 27, 1977, when Sheehy and h i s law f i r m were d i s c h a r g e d
by McCann b e c a u s e of p e r s o n a l d i f f e r e n c e s e x i s t i n g between
McCann and a t t o r n e y Sheehy. After t h e discharge, Paul
McCann p e t i t i o n e d t h e c o u r t p u r s u a n t t o s e c t i o n 91A-3-722,
R.C.M. 1947, now s e c t i o n 72-3-634 MCA, t o review t h e a t t o r -
ney f e e s c h a r g e d by Sheehy and h i s law f i r m . Pursuant t o
t h i s p e t i t i o n t h e c o u r t held an e v i d e n t i a r y hearing.
A t t r i a l , a t t o r n e y Sheehy and h i s p a r t n e r , George
H u t t o n , t e s t i f i e d on t h e work a l r e a d y performed f o r t h e
e s t a t e and t h a t which remained t o b e done. Attorney Hutton
t e s t i f i e d t h a t , i n h i s o p i n i o n , v e r y l i t t l e work remained
t o b e done. A t t o r n e y B j a r n e Johnson, who t e s t i f i e d on be-
h a l f of t h e p e r s o n a l r e p r e s e n t a t i v e , s t a t e d t h a t t h e r e was
a s i g n i f i c a n t amount of work y e t t o b e completed. Needless
t o s a y , t h e r e w a s s i g n i f i c a n t d i s a g r e e m e n t between Sheehy
and Hutton on t h e o n e hand and B j a r n e Johnson on t h e o t h e r
hand, a s t o what c o n s t i t u t e d o r d i n a r y s e r v i c e s and t h e com-
p l e x i t y of t h e work e n t a i l e d .
During t h e c o u r s e of t h e h e a r i n g P a u l McCann moved t o
r e q u i r e a t t o r n e y Sheehy t o t e s t i f y a s t o t h e p r e c i s e number
of h o u r s t h a t h i s f i r m had worked on t h e e s t a t e of William
Magelssen, b u t t h e c o u r t r e f u s e d t o a d m i t t h i s e v i d e n c e and
a l s o r e f u s e d t o a d m i t e v i d e n c e on t h e number of h o u r s needed
t o complete t h e estate. The D i s t r i c t C o u r t took j u d i c i a l
n o t i c e of t h e documents p r e p a r e d and a l r e a d y f i l e d a s p a r t
o f t h e e s t a t e p r o c e e d i n g s and of o t h e r a c t i v i t i e s engaged
i n by t h e a t t o r n e y s on b e h a l f of t h e e s t a t e .
The c o u r t r u l e d t h a t a c o n t r a c t f o r compensation was
c o n t a i n e d i n t h e October 1 3 , 1976 l e t t e r from Sheehy t o
McCann, and t h a t t h i s c o n t r a c t was l a t e r r a t i f i e d by McCann
i n s i g n i n g t h e e s t a t e t a x r e t u r n which s p e c i f i e d t h e same
f e e t o be paid. The c o n t r a c t w a s f o r o r d i n a r y s e r v i c e s a t
a f e e o f 3 p e r c e n t of t h e e s t a t e v a l u e a s s e t f o r f e d e r a l
e s t a t e t a x purposes. The c o u r t d e t e r m i n e d t h a t t h e o r d i n a r y
l e g a l s e r v i c e s f o r t h e e s t a t e were 95 p e r c e n t completed,
and s e t t h e f e e o n t h a t b a s i s . The f e e was computed t o b e
$106,464.42. The c o u r t o r d e r a l s o p r o v i d e d f o r a d j u s t m e n t
of t h i s f e e i n t h e e v e n t t h e f e d e r a l t a x i n g a u t h o r i t i e s
r e v i s e d t h e i r v a l u a t i o n of t h e e s t a t e .
The p e r s o n a l r e p r e s e n t a t i v e makes s e v e r a l a s s i g n m e n t s
of e r r o r . H e contends f i r s t t h a t a v a l i d c o n t r a c t f o r a t -
t o r n e y f e e s d i d n o t e x i s t between t h e p e r s o n a l r e p r e s e n t a -
t i v e s and t h e l a w f i r m , and t h e r e f o r e t h e p r o p e r measure
o f compensation s h o u l d be based on guantum m e r u i t . Secondly,
h e c o n t e n d s t h a t t h e D i s t r i c t C o u r t d i d n o t a p p l y t h e appro-
p r i a t e s t a n d a r d o f r e v i e w under s e c t i o n 91A-3-722, R.C.M.
1947, now s e c t i o n 72-3-634 MCA. Third, he contends t h a t
t h e e v i d e n c e was n o t s u f f i c i e n t t o s u s t a i n t h e judgment o f
t h e D i s t r i c t Court.
The p e r s o n a l r e p r e s e n t a t i v e f i r s t a t t a c k s t h e a l l e g e d
c o n t r a c t between him and t h e a t t o r n e y s o n t h e t h e o r y t h a t a
c o n t r a c t f o r f e e s entered i n t o a f t e r t h e inception of t h e
a t t o r n e y - c l i e n t r e l a t i o n s h i p i s void. The p r e v a i l i n g r u l e
i s t h a t a t t o r n e y f e e c o n t r a c t s made a f t e r t h e e s t a b l i s h m e n t
of t h e f i d u c i a r y a t t o r n e y - c l i e n t r e l a t i o n s h i p are valid i f
t h e y are " f a i r and e q u i t a b l e . " See Annot., 1 3 A.L.R.3d 701,
710. F a i r n e s s i s d e t e r m i n e d by t a k i n g a c c o u n t of s u c h rele-
v a n t f a c t o r s a s good f a i t h and f u l l - d i s c l o s u r e i n t h e execu-
t i o n of t h e c o n t r a c t , t h e amount of t h e f e e and t h e c l i e n t ' s
m a t u r i t y , i n t e l l i g e n c e , and u n d e r s t s n d i n g , of t h e t r a n s a c -
tion. Annot., 1 3 A.L.R.3d 701, 711; D a n i e l s v . Paddock
( 1 9 6 5 ) , 145 Mont. 207, 2 2 2 , 399 P.2d 740, 7 4 7 ; Coleman v .
S i s s o n ( 1 9 2 4 ) , 71 Mont. 435, 443, 230 P. 582, 584. The b u r -
den o f e s t a b l i s h i n g f a i r n e s s i s o n t h e a t t o r n e y . Daniels
v . Paddock, s u p r a ; 7 Am.Jur.2d A t t o r n e y s - -
a t Law, S267.
The r e c o r d c o n t a i n s s u b s t a n t i a l e v i d e n c e i n s u p p o r t
of t h e f a i r n e s s o f t h e a g r e e d f e e . The t e r m s of t h e a t -
t o r n e y ' s employment were made u n e q u i v o c a l l y c l e a r i n t h e
October 1 3 , 1976 l e t t e r . The p e r s o n a l r e p r e s e n t a t i v e s
acknowledged r e c e i p t of t h e l e t t e r a n d , a t t r i a l , p e r s o n a l
r e p r e s e n t a t i v e McCann t e s t i f i e d t h a t he u n d e r s t o o d t h e mean-
ing of the letter. The r e p r e s e n t a t i v e s d i d n o t o b j e c t t o
t h e s p e c i f i e d f e e a r r a n g e m e n t f o r a t l e a s t s e v e n more months,
d u r i n g which t i m e t h e a t t o r n e y s c o n t i n u e d t o perform l e g a l
services for the estate. Moreover, a t a l a t e r t i m e , p e r -
s o n a l r e p r e s e n t a t i v e McCann s i g n e d t h e f e d e r a l e s t a t e t a x
r e t u r n on which t h e 3 p e r c e n t f e e was c l e a r l y s t a t e d . Nor
d o e s t h e e v i d e n c e i n d i c a t e t h a t McCann w a s i n e x p e r i e n c e d i n
t h e ways of t h e world.
P e r s o n a l r e p r e s e n t a t i v e McCann w a s a n e x t r a o r d i n a r i l y
w e l l - e d u c a t e d and e x p e r i e n c e d man. He t e s t i f i e d t h a t h e i s
t h e o f f i c e r of a major c o r p o r a t i o n , a c e r t i f i e d p u b l i c ac-
c o u n t a n t and i s l i c e n s e d t o p r a c t i c e l a w i n two s t a t e s ,
I l l i n o i s and North Dakota. H e entered i n t o the contract
w i t h h i s e y e s open and w i t h f u l l awareness o f t h e i m p l i c a -
tions. W e a g r e e w i t h t h e c o n c l u s i o n of t h e D i s t r i c t C o u r t
t h a t he r a t i f i e d t h e f e e agreement. S e c t i o n 13-325, R.C.M.
1947, now s e c t i o n 28-2-503(2) MCA; Annot., 1 3 A.L.R.3d 701,
745.
Next, t h e p e r s o n a l r e p r e s e n t a t i v e a r g u e s t h a t s e c t i o n
91A-3-722, R.C.M. 1947, now s e c t i o n 72-3-634 MCA, which
p r o v i d e s f o r j u d i c i a l r e v i e w of a t t o r n e y fees, i m p a r t s a n
" o v e r r i d i n g c o n s i d e r a t i o n of r e a s o n a b l e n e s s " t h a t e f f e c t i v e l y
i n v a l i d a t e s t h e t e r m s of any c o n t r a c t f o r p r o b a t e - r e l a t e d
services. This s e c t i o n provides:
" P r o c e e d i n g s f o r r e v i e w of employment of a g e n t s
and cornpensat= ofsGa1 represent~ives
and employees of e s t a t e -- c o u r t - - t d i s p u t e d
t o se
f e e . Upon t h e f i l i n g of a motion f o r s e t t l e m e n t
of f e e s by t h e c o u r t f i l e d by a n i n t e r e s t e d p e r -
son, t h e p e r s o n a l r e p r e s e n t a t i v e o r t h e p e r s o n
employed by t h e p e r s o n a l r e p r e s e n t a t i v e and a f -
t e r n o t i c e t o a l l i n t e r e s t e d p e r s o n s , t h e pro-
p r i e t y of employment of any p e r s o n by a p e r s o n a l
r e p r e s e n t a t i v e i n c l u d i n g any a t t o r n e y , a u d i t o r ,
investment advisor o r o t h e r s p e c i a l i z e d agent
o r a s s i s t a n t , t h e r e a s o n a b l e n e s s of t h e compen-
s a t i o n of any p e r s o n s o employed, o r t h e r e a -
s o n a b l e n e s s o f t h e compensation d e t e r m i n e d by
t h e p e r s o n a l r e p r e s e n t a t i v e f o r h i s own s e r v i c e s ,
s h a l l be reviewed and d e t e r m i n e d by t h e c o u r t .
I n any d i s p u t e c o n c e r n i n g f e e s , t h e c o u r t s h a l l
s e t t h e f e e . Any p e r s o n who h a s r e c e i v e d e x c e s -
s i v e compensation from an e s t a t e f o r s e r v i c e s
r e n d e r e d may be o r d e r e d t o make a p p r o p r i a t e r e -
funds."
The provision does not restrict the personal repre-
sentative's capacity or freedom to contract, except that he
may not contract for excessive fees. Nor can this section
be read in isolation from other provisions of the probate
code. Section 91A-3-713(21), R.C.M. 1947, now section 72-3-
613(21) MCA, specifically authorizes the personal representa-
tive to employ, and therefore to contract for, the services
of an attorney. Section 91A-3-720, R.C.M. 1947, now section
72-3-633 MCA, entitled "Compensation of Attorney" merely
places a ceiling on the amount of compensation payable to an
attorney for ordinary services. These provisions establish
the boundaries of the personal representative's authority
to contract for the services of an attorney. The fee in-
volved in the instant case fits within these limits. Accord-
ingly, the fee contract was valid under the applicable provisions
of the Montana Uniform Probate Code.
Personal representative McCann next argues that attor-
ney fees based on a fixed percentage of the estate value
are against public policy because the attorney will inflate
the value of the estate in order to increase his fee. This
Court's duty is to construe the law as it is written. Sec-
tion 93-401-15, R.C.M. 1947, now section 1-2-101 MCA. If
no ambiguity exists in a statute, the letter of the law will
not be disregarded under the pretext of pursuing its spirit.
Vaughn & Ragsdale v. State Board of Equalization (1939),
109 Mont. 52, 60, 96 P.2d 420, 424. The statutory provision
governing compensation of attorneys in estate matters is
section 91A-3-702, R.C.M. 1947, now section 72-3-633 MCA.
In pertinent part it states that "if the services of an at-
torney are engaged by the personal representative, the
compensation of such attorney shall not exceed one and one
half (1 1 / 2 ) t i m e s t h e compensation a l l o w a b l e t o t h e p e r s o n a l
representative." The p e r s o n a l r e p r e s e n t a t i v e i s a l l o w e d a
" r e a s o n a b l e compensation" n o t t o exceed 3 p e r c e n t of t h e
f i r s t $40,000 o f t h e r e p o r t e d e s t a t e v a l u e and 2 p e r c e n t of
t h e v a l u e o v e r $40,000. S e c t i o n 91A-3-719, R.C.M. 1947, now
s e c t i o n 72-3-631 MCA. W e f i n d no p u b l i c p o l i c y i n t h e s e
a p p l i c a b l e s t a t u t e s t h a t would i n v a l i d a t e a f e e c l e a r l y
coming w i t h i n t h e i r t e r m s .
W e n e x t d i s c u s s t h e q u e s t i o n o f whether t h e D i s t r i c t
C o u r t ' s r e v i e w of t h e a t t o r n e y f e e s p u r s u a n t t o s e c t i o n 91A-
3-722 was p r o p e r . The p e r s o n a l r e p r e s e n t a t i v e c o n t e n d s t h a t
by i n v o c a t i o n o f t h i s s t a t u t e t h e D i s t r i c t C o u r t i s r e q u i r e d
t o f i x a reasonable a t t o r n e y ' s f e e without reference t o t h e
t e r m s of a n e x i s t i n g c o n t r a c t . But w e s e e no r e a s o n t o
t o t a l l y i g n o r e t h e t e r m s of a c o n t r a c t between a n a t t o r n e y
and t h e p e r s o n a l r e p r e s e n t a t i v e .
The f o l l o w i n g e d i t o r i a l comment a p p e a r s under s e c t i o n
" I n view of t h e broad j u r i s d i c t i o n c o n f e r r e d on
t h e p r o b a t e c o u r t by s e c t i o n [91A-3-1053 , de-
s c r i p t i o n of t h e s p e c i a l p r o c e e d i n g a u t h o r i z e d
by t h i s s e c t i o n m i g h t be u n n e c e s s a r y . But, t h e
c o d e ' s t h e o r y t h a t p e r s o n a l r e p r e s e n t a t i v e s may
f i x t h e i r own f e e s - t h o s e o f e s t a t e a t t o r n e y s
and
m a r k s a n i m p o r t a n t d e p a r t u r e from much e x i s t i n g
p r a c t i c e under which f e e s a r e d e t e r m i n e d by t h e
c o u r t i n t h e f i r s t i n s t a n c e . Hence, i t seemed
w i s e t o emphasize t h a t any i n t e r e s t e d p e r s o n c a n
g e t j u d i c i a l r e v i e w of f e e s i f he d e s i r e s i t .
A l s o , i f e x c e s s i v e f e e s have been p a i d , t h i s
s e c t i o n p r o v i d e s a q u i c k and e f f i c i e n t remedy."
T h i s comment f o c u s e s o u r a t t e n t i o n of t h e p r o v i s i o n ' s p r i n c i -
pal utility. I t provides i n t e r e s t e d persons with j u d i c i a l
r e v i e w t o g u a r d a g a i n s t e x c e s s i v e f e e s s e t by a p e r s o n a l
r e p r e s e n t a t i v e i n t h e e x e r c i s e of h i s newly c o n f e r r e d d i s c r e -
tion. I t i s a s p e c i a l , f o r m a l p r o c e e d i n g i n which i n t e r e s t e d
p e r s o n s o b t a i n a q u i c k and e f f e c t i v e remedy a g a i n s t e x c e s s i v e
compensation. Upon t h e f i l i n g of a p e t i t i o n under s e c t i o n
91A-3-722, t h e D i s t r i c t C o u r t must d e t e r m i n e i f t h e compensa-
t i o n p a i d i s e x c e s s i v e i n l i g h t of a l l t h e c i r c u m s t a n c e s .
I n s o d o i n g , t h e c o u r t i s n o t s e t t i n g t h e f e e , it i s review-
i n g t h e f e e arrangement. N a t u r a l l y , t h e f a c t o r s b e a r i n g on
r e a s o n a b l e n e s s of court-awarded a t t o r n e y f e e s must b e t a k e n
i n t o account i n determining i f a p a r t i c u l a r f e e i s e i t h e r
excessive o r reasonable. But under t h e p r o b a t e code, i t i s
t h e p e r s o n a l r e p r e s e n t a t i v e , n o t t h e c o u r t , who sets t h e f e e
i n the first instance.
I n e x p l a i n i n g t h e n a t i o n a l p r o v i s i o n , Uniform P r o b a t e
Code s e c t i o n 3-721, which i s v i r t u a l l y i d e n t i c a l t o s e c t i o n
91A-3-722, t h e Uniform P r o b a t e Code P r a c t i c e Manual s t a t e s :
"The Code's t r a n s f e r of t h e s e m a t t e r s t o t h e
personal representative i n the f i r s t instance,
w i t h p r o v i s i o n f o r r e v i e w i n t h e c a s e of d i s -
p u t e s h o u l d t e n d t o promote p r i o r agreement
between t h o s e i n t e r e s t e d i n e s t a t e s , o n t h e o n e
hand, and t h o s e a s s i s t i n g i n a d m i n i s t r a t i o n s ,
on t h e o t h e r . I f more f e e a g r e e m e n t s r e s u l t ,
d i s p u t e s and c o m p l a i n t s a b o u t f e e s w i l l be
f e w e r , whether t h e amounts i n v o l v e d remain
t h e same, o r a r e i n c r e a s e d o r d e c r e a s e d . "
Wellman, Uniform P r o b a t e Code P r a c t i c e Manual,
2d Ed. I Val- 1, p. 322.
I t i s c l e a r t h a t a c o u r t , when r e v i e w i n g a fee agreement
under a s u b s t a n t i a l l y performed c o n t r a c t , c a n n o t b l i n d i t s e l f
t o t h e t e r m s o f t h e c o n t r a c t and make i t s own d e t e r m i n a t i o n
o f what i s r e a s o n a b l e .
I n t h e p r e s e n t case, t h e D i s t r i c t Court determined t h a t
s e c t i o n 91A-3-713(21) (which empowers t h e p e r s o n a l r e p r e s e n t a -
t i v e t o employ a n a t t o r n e y ) and s e c t i o n 91A-3-722 (which
a l l o w s t h e c o u r t t o r e v i e w t h e employment o f a t t o r n e y s and
t h e i r f e e s ) , must b e c o n s t r u e d t o g e t h e r s o as t o g i v e e f f e c t
t o e a c h p r o v i s i o n and make them c o m p a t i b l e w i t h e a c h o t h e r .
District
Applying t h i s s t a n d a r d , t h e / C o u r t found t h e amount o f t h e
f e e t o b e r e a s o n a b l e o n i t s f a c e as i t w a s w i t h i n t h e l i m i t s
of compensation p r o v i d e d f o r i n s e c t i o n s 91A-3-719, R.C.M.
1947, now s e c t i o n 72-3-631 MCA, and s e c t i o n 91A-3-720,
R.C.M. 1947, now s e c t i o n 72-3-633 MCA. A f t e r determining
t h a t t h e s e r v i c e s w e r e s u b s t a n t i a l l y performed, t h e c o u r t
concluded t h a t i t s t a s k w a s t o a p p o r t i o n t h e a g r e e d com-
pensation according t o t h e percentage of ordinary s e r v i c e s
completed by t h e a t t o r n e y s a s of t h e d a t e of t h e i r d i s c h a r g e .
On t h e o t h e r hand, t h e p e r s o n a l r e p r e s e n t a t i v e con-
tends t h a t once an a t t o r n e y i s discharged, he can only be
compensated on t h e b a s i s of quantum m e r u i t , whereby r e c o v e r y
i s l i m i t e d e x c l u s i v e l y t o t h e r e a s o n a b l e v a l u e of s e r v i c e s
r e n d e r e d on a n h o u r l y b a s i s . Again, he would have t h e c o u r t
t o t a l l y d i s r e g a r d t h e s u b s t a n t i a l l y performed c o n t r a c t be-
tween t h e p e r s o n a l r e p r e s e n t a t i v e and a t t o r n e y . W e note
moreover t h a t s e c t i o n 91A-3-722 sets f o r t h no such measure
of compensation.
A s indicated previously, the personal representative
c a n c o n t r a c t f o r a n a t t o r n e y ' s s e r v i c e s ( s e c t i o n 91A-3-
7 1 3 ( 2 1 ) ) and under s e c t i o n 91A-3-808, R.C.M. 1947, now s e c -
t i o n 72-3-612 MCA, t h e e s t a t e i s bound by s u c h c o n t r a c t s .
Though t h e f e e c o n t r a c t i s open t o r e v i e w under s e c t i o n
91A-3-722, R.C.M. 1947, now s e c t i o n 72-3-634 MCA, t h e amount
o f t h e f e e i s n o t a u t o m a t i c a l l y c o n v e r t e d i n t o a quantum
m e r u i t measure of compensation. I n d e e d , quantum m e r u i t
compensation i s n o r m a l l y a p p r o p r i a t e o n l y where a v a l i d
c o n t r a c t does n o t e x i s t . 7 Arn.Jur.2d Attorneys at a,
8232; H a r r i s v. Root ( 1 9 0 3 ) , 28 Mont. 159, 72 P . 429.
W e emphasize t h a t t h i s i s n o t a c a s e of a t t o r n e y f e e s
a s s e s s e d a g a i n s t a n o p p o s i n g p a r t y and awarded by t h e c o u r t
pursuant t o a s t a t u t e . I n such c a s e , t h e c o u r t d e t e r m i n e s
t h e r e a s o n a b l e n e s s of t h e f e e i n t h e f i r s t i n s t a n c e , and
t h i s C o u r t d i s a p p r o v e s r e l i a n c e on c o n t i n g e n c y f e e c o n t r a c t s
i n setting the fee. See e . g . , S t a t e Department o f Highways
v. Schumacher (1979) , Mont. , 590 P.2d 1110, 36
St.Rep. 260, 266; S t a t e Highway Commission v. Marsh ( 1 9 7 8 ) ,
Mont. , 575 P.2d 38, 43, 35 St.Rep. 105, 110. In
t h i s case, however, t h e p e r s o n a l r e p r e s e n t a t i v e r e q u e s t e d
j u d i c i a l r e v i e w and d e t e r m i n a t i o n o f compensation due under
a v a l i d , s u b s t a n t i a l l y performed c o n t r a c t f o r s e r v i c e s . Under
t h e s e c i r c u m s t a n c e s t h e c o u r t must a c t a s b o t h f i n d e r of f a c t
and as a r b i t e r between c o n t r a c t u a l l y bound p a r t i e s . W e do
n o t b e l i e v e t h a t s e c t i o n 91A-3-722 was i n t e n d e d t o p e r m i t
competent, f u l l y informed p e r s o n a l r e p r e s e n t a t i v e s t o disavow
t h e i r otherwise enforceable contracts f o r an a t t o r n e y ' s
services.
C o n s i d e r i n g t h e p r i n c i p a l p u r p o s e of s e c t i o n 91A-3-722
and t h e e x c e p t i o n a l c i r c u m s t a n c e s s u r r o u n d i n g i t s i n v o c a t i o n
i n t h i s c a s e , t h e D i s t r i c t C o u r t d i d n o t err i n r e f u s i n g
quantum -r u i t a s t h e measure of compensation.
m e- The c o u r t ' s
t h r e s h h o l d d e t e r m i n a t i o n of r e a s o n a b l e n e s s , f o l l o w e d by a n
a p p o r t i o n m e n t of t h e a g r e e d f e e t o t h e p e r c e n t a g e o f t h e job
completed, w a s p r o p e r .
Based on t h e s e f a c t o r s , w e see no e r r o r i n t h e e x c l u s i o n
of e v i d e n c e a s t o t h e a t t o r n e y ' s a c t u a l t i m e expended i n pro-
bate. W note i n t h i s regard t h a t t h e t i m e f a c t o r has,
e
g e n e r a l l y s p e a k i n g , p l a y e d a r e l a t i v e l y minor r o l e i n d e t e r -
m i n a t i o n by a c o u r t of r e a s o n a b l e a t t o r n e y f e e s i n p r o b a t e .
S e e Annot., 58 A.L.R.3d 317, 325; 7 Arn.Jur.2d Attorneys -
at
- 523%; I n r e E s t a t e of Wood (Ohio App. 1 9 7 7 ) , 379
Law, N . E . 2d
256, 261. I n t h i s case, t h e ~ i s t r i c C o u r t was f u l l y ad-
t
v i s e d a s t o t h e work completed i n r e l a t i o n t o t h e work t h a t
remained t o be done. Although w e c o n s i d e r t i m e a c t u a l l y
s p e n t o n p r o b a t e s e r v i c e s t o be r e l e v a n t t o a d e t e r m i n a t i o n
of r e a s o n a b l e n e s s , w e do n o t f i n d i t s e x c l u s i o n under t h e
f a c t s of t h i s c a s e t o be r e v e r s i b l e e r r o r .
Nor do we f i n d r e v e r s i b l e e r r o r i n t h e D i s t r i c t C o u r t ' s
p r o v i s i o n a l l o w i n g a n a d j u s t m e n t of t h e a t t o r n e y f e e s i n t h e
e v e n t t h e e s t a t e v a l u e i s l a t e r r e v i s e d upward o r downward
by t h e f e d e r a l t a x i n g a u t h o r i t i e s . The a g r e e d upon c o n s i d e r a -
t i o n f o r t h e a t t o r n e y ' s s e r v i c e s was 3 p e r c e n t o f t h e e s t a t e
value f o r f e d e r a l e s t a t e t a x purposes. Fixing the f e e i n
p r o p o r t i o n t o t h a t v a l u e was c o n s i s t e n t w i t h t h e i n t e n t of
the contracting parties.
The l a s t i s s u e r a i s e d by t h e p e r s o n a l r e p r e s e n t a t i v e
i s t h a t t h e e v i d e n c e d i d n o t s u p p o r t a f i n d i n g t h a t t h e con-
t r a c t w a s 95 p e r c e n t completed a t t h e t i m e of t h e a t t o r n e y ' s
discharge. He c o n t e n d s t h e r e i s s u b s t a n t i a l work t h a t re-
mains t o be done. W e note t h a t the attorney contracted t o
perform t h e "ordinary s e r v i c e s " f o r t h e e s t a t e . The e v i d e n c e
a t t r i a l w a s c o n f l i c t i n g a s t o whether t h e work r e m a i n i n g
t o be done w a s o f a n " o r d i n a r y " o r " e x t r a o r d i n a r y " n a t u r e .
I t was t h e c o u r t ' s f a c t u a l d e t e r m i n a t i o n which f i n a l l y set-
t l e d on t h e f i n d i n g of 95 p e r c e n t c o m p l e t i o n . W w i l l not
e
s u b s t i t u t e o u r judgment f o r t h a t of t h e t r i a l c o u r t where
t h e r e w a s s u b s t a n t i a l e v i d e n c e t o s u p p o r t a f i n d i n g of f a c t .
Kosmerl v. Barbour ( 1 9 7 9 ) , Mont. , 589 P.2d 1017,
1019, 36 S t - R e p . 210, 212-13; Gross v . Holzworth ( 1 9 6 8 ) ,
1 5 1 Mont. 179, 185, 440 P.2d 765, 768. The D i s t r i c t C o u r t
h e a r d t e s t i m o n y from b o t h s i d e s and was n o t w i t h o u t i t s own
knowledge on e s t a t e m a t t e r s i n g e n e r a l and t h i s e s t a t e i n
particular.
The judgment of t h e D i s t r i c t C o u r t i s a f f i r m e d .
W e Concur:
Cpief J u s t i c e
/
u&QAm
~ o d/ .~ o e lG. Roth, D i s t r i c t
~u
o.!
ht Judge, s i t t i n g i n f o r
M r . J u s t i c e John C . Sheehy