No. 89-546
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
IN THE MATTER OF THE ESTATE OF
ALISON KIRK STENSON, a/k/a AL
STENSON,
Deceased.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Jeffrey M. Sherlock, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Gregory G. Murphy; Moulton, Bellingham, Longo &
Mather, Billings, Montana
1-
1 -. For Respondent:
C13
-.
.. -1
-J I
W. William Leaphart, Leaphart Law Firm, Helena,
.-I Montana
Submitted on Briefs: April 12, 1990
' / Clerk
Justice Fred J. Weber delivered the Opinion of the Court.
This is an appeal from an order by the District Court, First
Judicial District, Lewis and Clark County, Montana, which ordered
the personal representative of an estate to pay certain attorney
fees. The personal representative appeals. We affirm.
The sole issue presented for our review is whether the
District Court erred in awarding attorney fees pursuant to 5 72-
3-632, MCA.
Alison Stenson died as a result of an accident at a mine owned
by the Pegasus Gold Corporation (Pegasus). On the morning of
November 11, 1986, Alison Stenson was working near the bucket end
of a Caterpillar front end loader. A co-worker informed Alison
Stenson he was going to move the bucket and proceeded to do so.
The co-worker then found that Alison Stenson was caught between the
bucket and the differential. The co-worker released the bucket and
ran for help. Pegusus had an ambulance at the site but it was not
operational. An ambulance was called from Boulder, Montana, but
did not arrive for over an hour after the accident. Alison Stenson
died while being transported by ambulance to the hospital.
Physicians reported that his death was caused by blood loss, and
that if Alison Stenson had received transfusions earlier, his
chances of survival would have been good.
Alison Stenson was thirty years old at the time of the
accident, and unmarried. His father, Roger Stenson, talked to
attorney Robert Woodahl, and the law firm of Luxan and Murf itt, and
on November 19, 1986, signed a contingency fee agreement with Mr.
2
Woodahl and Luxan and Murfitt providing for an attorneys1 fee of
one third of any settlement received from a wrongful death action.
Roger Stenson was appointed personal representative of his sonls
estate in December of 1986. The retained lawyers investigated,
interviewed witnesses, and after research developed a theory of
third party liability. In May 1987, Luxan and Murfitt presented
a settlement brochure to Pegusus1 insurance company on the wrongful
death claim.
In July 1987, Roger Stenson received a questionnaire from the
Social Security Administration concerning a claim that had been
made for benefits. This claim was made by Rebecca Rebel Autumn
Countryman, who claimed to be the minor daughter of the deceased,
Alison Stenson. Mr. and Mrs. Roger Stenson informed the Social
Security Administration and their attorneys that to their knowledge
their son had no children, and that they did not know Rebecca
Countryman.
Although Luxan and Murfitt had presented the settlement
brochure to the insurance company, they suspended further
negotiations because of the issue as to the proper heirs to the
estate. They then initiated an heirship or paternity proceeding.
In September 1987, Luxan and Murfitt advised Roger Stenson by
letter that they would be charging $85 per hour, plus costs, for
their work in regard to the heirship matter. They advised that the
contingency arrangement in regard to the wrongful death action
would remain unchanged.
By the spring of 1988, after an exhaustive investigation on
the part of Luxan and Murfitt, and after a hearing on the matter,
it became clear that Rebecca Countryman was in fact the daughter
of Alison Stenson, and the court entered an order to that effect.
On May 19, 1988, Luxan and Murfitt moved to withdraw as counsel for
Roger Stenson, and on May 24, 1988, that order was granted by the
court. Likewise, on June 1, 1988, Roger Stenson moved to withdraw
as personal representative. That motion was also granted.
On June 24, 1988, Mr. Craig Buehler, an attorney, was
appointed successor personal representative for the estate. Mr.
Buehler proceeded to settle the wrongful death survivorship claim
for a structured settlement of the present value of approximately
$300,000. Mr. Buehler initially received fees of $50,000, $300 per
month until Rebecca becomes twenty-two, with another $50,000 to be
paid when she becomes twenty-two.
Luxan and Murfitt filed a creditor's claim and an attorney
fee lien against the estate for the work they performed on behalf
of the estate. At District Court, Luxan and Murfitt acknowledged
that the contingency arrangement was terminated prior to
settlement. The fees submitted, in the total amount of $36,048,
were based upon an hourly rate and actual costs. Mr. Robert
Woodahl submitted a statement of fees in the amount of $10,763,
which represented 116.5 hours at $85 per hour, plus approximately
$855 in actual costs. The firm of Luxan and Murfitt submitted a
statement of fees in the amount of $25,284, which represented
attorney fees billed at an average hourly rate of $75 per hour.
The statement also included approximately $340 of itemized costs.
As personal representative, Mr. Buehler moved to dissolve the
lien and deny the creditor's claim. Both parties filed cross
motions for summary judgment with supporting memorandum. The
District Court granted summary judgment in favor of Luxan and
Murfitt and Mr. Woodahl on the issue of entitlement. The court
concluded there were no genuine issues of material fact as to
whether the attorneys were entitled to some fees; however, the
court reserved judgment on whether an award of fees should be based
on a portion of statutorily allowable fees. The court also
reserved judgment on the value of the services. The court further
ordered that $50,000, which was set aside from the estate for
attorney fees, be held in trust pending the outcome of the dispute.
On June 15, 1989, the court held a hearing on the remaining
attorney fee issues. At that hearing testimony was taken from Mr.
Woodahl and two attorneys from the Luxan and Murfitt finn. Two
other local attorneys testified in regard to billing practices of
law firms in the area. Additionally, Ms. Countryman, the mother
of Rebecca Countryman, testified.
Following the hearing and further briefing, the court issued
its order awarding Mr. Woodahl and Luxan and Murfitt their total
requested fees and costs in the amount of $36,048. The District
Court concluded that the work by the attorneys was performed on
behalf of Roger Stenson, in his capacity as personal representative
of the estate. The District Court based its order on a finding
that Mr. Stenson had pursued the heirship matter Itin good faith"
as required by 5 72-3-632, MCA, and that both the wrongful death
survivorship action and the heirship proceeding benefitted the
estate. The court concluded that the attorney fees were
recoverable on a quantum meruitbasis, and that attorney fees were
also recoverable pursuant to 5 72-3-632, MCA. The court found the
fees to be reasonable. In its order the court also took note of
the fact that the award does not affect the beneficiary of the
estate; rather the dispute is between attorneys in regard to who
should receive the compensation; that Mr. Buehler has been
handsomely rewarded for his efforts in that he has already received
$50,000 and will receive $300 per month; and that the award will
leave Mr. Buehler with another large fee even after paying the
other attorneys.
On appeal Mr. Buehler contends that under the statutes, the
attorneys are limited to attorney fees one and one half times the
compensation allowable to the personal representative; that there
can be no quantum meruit because there was a contingency fee
agreement; and that the contingency fee agreement cannot control
because the settlement was not completed. We agree with the
conclusion of the District Court that the award of attorney fees
pursuant to 5 72-3-632, MCA, was proper. Section 72-3-632, MCA,
states:
Expenses of personal representative in estate
litigation. If any personal representative or person
nominated as personal representative defends or
prosecutes any proceeding in good faith, whether
successful or not, he is entitled to receive from the
estate his necessary expenses and disbursements,
including reasonable attorneys' fees incurred.
Our standard of review on the issue of fees is stated in Matter of
Estate of Stone (Mont. 1989), 768 P.2d 334, 336, 46 St.Rep. 134,
The review of fees paid or taken by a personal
representative is left to the sound discretion of the
District Court. We will not overturn that decision
absent a showing of abuse of discretion, and the court's
findings of fact will be upheld unless clearly erroneous.
(Citations omitted.)
In Matter of Estate of Stone, the Court stated that 5 72-3-
632, MCA, deals explicitly with litigation expenses incurred by the
personal representative on behalf of the estate and allows for a
reasonable attorney fee for actions maintained in good faith. The
District Court determined that the actions had been prosecuted in
good faith and that the fees were reasonable. After a review of
the record, we conclude that substantial credible evidence supports
those findings.
Mr. Buehler in substance agrees that the legal services on the
wrongful death claim were in good faith. He does contend that Mr.
Stenson did not investigate the heirship issue in good faith,
contending that Mr. Stenson knew that Rebecca Countryman was the
daughter of Alison Stenson and therefore the sole heir of the
estate. While there is a contradiction in the record, there
clearly is substantial evidence from which the court could conclude
that Mr. and Mrs. Stenson had no knowledge that Rebecca Countryman
was their son's daughter. The fact that Mr. Stenson and Luxan and
Murfitt discontinued settlement negotiations on the wrongful death
action in order to investigate the paternity issue is an indication
of good faith. Luxan and Murfitt also filed a claim with Workers'
Compensation on behalf of Rebecca Countryman to prevent her claim
from being time barred. We conclude there is substantial credible
evidence supporting the findings of the District Court that the
proceedings were brought in good faith.
On the issue of the reasonableness of the fee, this Court has
previously stated that "[wlith regard to legal services, a
reasonable fee should be ascertained by considering the time spent,
the nature of the service, and the skill and experience required.I1
Matter of Estate of Stone, 768 P.2d at 336; see also Matter of
Estate of Painter (Colo.App. 1977), 567 P.2d 820, on remand, 671
P.2d 1331 (1983). Additionally, to be reasonable the fees must be
related to services rendered to benefit the estate, rather than to
benefit the personal interest of an administrator or estate
counsel. Matter of Estate of Painter, 671 P.2d at 1334.
At the hearing Patrick Hooks, an attorney in the Helena area,
testified that he had reviewed the files and time sheets of Luxan
and Murfitt and considered their fees to be reasonable and in
accord with fees charged in the same geographical area. He
testified that the wrongful death survivorship action had been
developed upon an t'ingenious18
theory of third party liability which
had proved very successful. He testified that the heirship
proceeding was complicated since the putative father was deceased,
preventing proof of paternity by the usual blood tests. Mr. Hooks
testified that the work done by the attorneys demonstrated a high
level of experience and skill. We conclude that substantial
credible evidence, including detailed records of the work which was
done, supports the reasonableness of the fees.
The District Court also found that the work of Mr. Woodahl and
Luxan and Murfitt benefitted the estate and its rightful heir. Had
the wrongful death survivorship action not been successfully
pursued, it appears that the estate of Alison Stenson would have
consisted of a car and a motorcycle, for a total value of
approximately $3400. The attorneys here formulated a theory
whereby the estate was not limited to workers' compensation
benefits as the exclusive remedy, but was able to realize a
structured settlement of the present value of $300,000.
Additionally, the heirship proceeding, for which the Luxan and
Murfitt firm did extensive investigation, resulted in the
determination of the rightful heir. We conclude that the services
of Mr. Woodahl and the Luxan and Murfitt firm were a substantial
benefit to the estate.
We conclude that the District Court did not err in awarding
attorney fees pursuant to B 72-3-632, MCA. We affirm the award of
attorney fees by the District Court.
We Concur: /7
Justice John C. Sheehy did not participate.