Bailey v. Rahe

Jim Hannah, Justice,

dissenting. I must respectfully dissent. The Chrisco factors are not applicable in determining attorney’s fees in a guardianship case because the Chrisco factors fail to take into account the very purpose of a guardianship, which is the protection of the ward. As a consequence of this error by the maj ority, the modest estate of the nearly eighty-year-old widow Bernita Logan will be used first, to pay for attorney’s fees that were incurred because of unjustified actions of the guardian that were not undertaken for the benefit of Ms. Logan, second to pay for the hearing that is the subject of this appeal, and now to pay for yet another hearing. The only persons who will benefit from the present proceedings are the guardian and her attorney.'

The Chrisco factors are patently inapplicable in a guardianship proceeding. Ms. Logan’s estate should be used to pay for her welfare, including the nursing care she is receiving and will likely need for the remainder of her life. Under the guardianship statutes, the focus of a decision on attorney’s fees is whether the work done was a necessary legal service for the benefit of the ward. The sole purpose of a guardianship is to protect the ward of the guardianship. By failing to recognize the purpose of a guardianship proceeding, the majority is thwarting the intent of guardianship law and allowing the value of Ms. Logan’s estate to be inappropriately reduced. The statutorily-declared goal of guardianship law was clearly stated by the trial judge and correctly applied.

The oft-repeated rule is that attorney’s fees are not allowed except where expressly provided for by statute. Chrisco v. Sun Indus., 304 Ark. 227, 800 S.W.2d 717 (1990). The majority cites Chrisco, supra, and Phi Kappa Tau Corp. v. Wengert, 350 Ark. 335, 86 S.W.3d 856 (2002), where fees were allowed under Ark. Code Ann. § 16-22-308 (Repl. 1999), based on contract disputes. The majority also cites South Beach Beverage Co. v. Harris Brands, Inc. , 355 Ark. 347, 138 S.W.3d 102 (2003), where fees were allowed under Ark. Code Ann. § 4-72-208 (Repl. 2001) when a franchisee was injured by unlawful conduct in the context of the sale or transfer of franchises. In South Beach Beverage, supra, the court relied on Lake View Sch. Dist. No. 25 v. Huckabee, 351 Ark. 31, 91 S.W.3d 472 (2002), wherein this court stated that eight factors could be gleaned from Chrisco, supra, to determine proper attorney’s fees.

The genesis of the majority’s error lies in Lake View, supra. While in my concurrence in Lake View, supra, I stated that I concurred that attorney’s fees had to be granted, I so stated because in Lake View Sch. Dist. No. 25 v. Huckabee, 340 Ark. 481, 10 S.W.3d 892 (2000) (hereinafter referred to as Lake View II), this court declared that fees would be granted. I disagree with the analysis in Lake View II. The analysis on attorney’s fees was in error in Lake View II and an improper departure from our longstanding law on attorney’s fees. In the absence of statutory authority, attorney’s fees are not available. See Chrisco, supra; Harper v. Wheatley Implement Co., Inc., 278 Ark. 27, 643 S.W.2d 537 (1982); Romer v. Leyner, 224 Ark. 884, 277 S.W.2d 66 (1955). The Lake View II decision implied that the Chrisco factors are generally applicable to all cases in an attempt to justify a grant of fees in a case where fees should have been denied based on precedent and public policy.

Attorney’s fees are statutorily allowed in guardianship cases under Ark. Code Ann. § 28-65-319 (1987), which provides that a guardian may employ legal counsel, but that “the court shall fix the attorney’s fee. . .1 Nothing in this code section mentions the Chrisco factors, but instead the statute refers to “necessary legal services.” The trial judge asked the correct question: “How much money did she save by spending $10,000.00?” The trial judge was deciding whether necessary legal services were provided for the benefit of Ms. Logan. It is readily apparent that from the transcript the trial judge was complying with the attorney’s fees provisions for guardianships under the probate code.

The cases cited by the majority involve plaintiffs and defendants seeking to have their dispute reduced to a judgment. In the cited cases, there was a winner and a loser. A guardianship proceeding is not such a case. At issue in a guardianship is the welfare of the ward. A guardianship proceeding is “used only as necessary to promote and protect the well-being of the person and his property. . . .” Ark. Code Ann. § 28-65-105 (1987). The sole purpose of a guardianship is to further the well-being of the ward. Omohundro v. Erhart, 228 Ark. 910, 311 S.W.2d 309 (1958). A guardian acts as a fiduciary. Prudential Ins. Co. v. Frazier, 323 Ark. 311, 914 S.W.2d 296 (1996); Omohundro, supra.

Exclusive jurisdiction of guardianships lies in probate court. Dent v. Wright, 322 Ark. 256, 909 S.W.2d 302 (1995). This is so because of the unique circumstances involved in guardianships. An award of attorney’s fees in a guardianship case obviously impacts the value of the estate which reduces the funds available to provide necessary services to the ward. The money at issue in this case will either be used to pay for a widow’s care in a nursing home or to pay an attorney. The trial judge understood her duty and correctly decided that all the fees incurred were not necessary for Ms. Logan’s welfare. This is evidenced by her comments:

I can’t let the lawyers milk the estate in this case. The Ward can’t speak for herself and all of this might not be in her best interest, but we’re not going to keep spending her money on attorneys’ fees.
I read over the file, and the special judge had some reservations about your client being the guardian and these precautions were put in place.
You filed your motion for attorneys’ fees, and I determined that a hearing needed to be set. When I saw the amount that you were requesting, I had to have a hearing on that.
When you’re asking for $10,000, nobody is authorizing a guardian to go out and hire a lawyer to run up a $10,000.00 bill.
This file is too thick to be a 2001 case. There’s too much going on in here, and the Ward’s money is going to all be gone. You’re going to run through it fighting. She needs to be taken care of, that’s paramount.
Because what I am considering doing is bringing in an attorney ad litem in this case and instructing the ad litem as a go-between between the two of you, and were not going to run up fees like this because guess who’s going to pay the fees? It doesn’t make any sense for the Ward to spend $10,000 to take care of what? How much money did she save by spending $10,000? We are not going to mn up fees in this case.

(Emphasis added.)

These core concerns expressed by the trial judge and set out in the statutes are not even mentioned in the Chrisco factors or by the majority. The Chrisco factors are:

1. Experience and ability of counsel;
2. Time and labor required to perform the legal service properly;
3. The amount involved in the case and the results obtained;
4. The novelty and difficulty of the issues involved;
5. The fee customarily charged in the locality for similar services;
6. Whether the fee is fixed or contingent;
7. The time limitation imposed on the client in the circumstances;
8. The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.

South Beach Beverage Co., supra. When this case is returned to the trial court, the judge must consider whether the fee is fixed or contingent, whether there were time limitations, and whether the employment precluded other employment. How are these factors relevant to the issues in a guardianship? At the same time, under the majority’s decision, the trial court need not even address the requirements set out in Ark. Code Ann. § 28-65-319. The issue before the trial court was and should be whether the attorney’s fees were necessary for the ward’s benefit, not whether the attorney’s fees benefit the guardian. In other words, just as the trial court did in this case, attorney’s fees may be granted where the work done was necessary for the welfare of the ward, but not where the work done was for the benefit of the guardian or the guardian’s attorney. Thus, it is apparent that the Chrisco factors may not be thoughtlessly applied to a guardianship proceeding.

Further, I dissent because the majority not only misapplies the Chrisco factors in a guardianship proceeding in this case, but also because the majority sets out a new rule that trial courts and counsel ought to note. The standard of review of a decision on attorney’s fees is no longer abuse of discretion. According to the majority opinion, where an attorney complains that the fees granted were too low, and a trial judge failed to specifically state on the record that the Chrisco factors were considered in determining attorney’s fees, the decision of the trial judge will be summarily reversed. The trial court must now consider the Chrisco factors on its own motion and will be reversed if it fails to do so, even if neither party asked the court to rule on the issue. This is new law indeed. This new rule is a pretty good deal for attorneys seeking fees, but it is a pretty bad deal for incapacitated persons the law ought to protect.

The majority might also wish to note that there were valid reasons for the trial court’s concerns about whether Ms. Logan was being protected. There had been a previous dispute in which guardian Bailey returned the following estate property in exchange for a release:

1. $115,459.57 in cash;
2. Titles to two cars;
3. Tax documents;
4. Deed to the house;
5. Jewelry receipts;
6. Birth certificates and a marriage license;
7. Wills; and
8. Funeral home papers.

Even though it is evident that the trial court was clearly protecting Ms. Logan and her estate so that she could be cared for, the majority nonetheless states:

Although we reviewed the trial court’s remarks regarding its decision to reduce Caldwell’s fees to be paid by the estate, we are unable to discern exactly on what basis it did so.

It is crystal clear to me that the trial court was looking out for Ms. Logan in trying to determine whether the fees billed by Caldwell were for necessary legal services under the guardianship statutes. The majority ignores this and states that although it recognizes the trial court’s remarks, “[cjlearly, the trial court did not consider or allude to the Chrisco factors set out above and followed in the recent cases of South Beach, supra, and Wengert, supra.” The majority then states that “[bjecause the trial court failed to consider the Chrisco factors when awarding the attorney’s fees in this case, we reverse and remand for the trial court to make such an analysis.” I find nothing in this case that shows that the trial court did or did not consider the Chrisco factors. Therefore the majority’s decision is based on speculation.

It also appears that the majority is not comfortable with the state of the record. However, for some reason, the majority blames the trial court instead of the litigant. Bailey complains multiple times in her brief that the trial court failed to make specific findings. The assertion by a litigant that a trial court failed to make specific findings should send up a red flag to an appellate court. There are two possible reasons that Bailey did not obtain a sufficient record, neither of which entitle her to review by this court.

First, if Bailey failed to develop the record, she cannot complain on appeal that the judge erred. Knowlton v. Ward, 318 Ark. 867, 889 S.W.2d 721 (1994). Second, if Bailey failed to obtain a ruling, she is not entitled to review. Bell v. Bershears, 351 Ark. 260, 92 S.W.3d 32 (2002).

Where a record and abstract fail to show why the trial court acted as it did, the issue will not be reached by this court. Holcombe v. Marts, 352 Ark. 201, 99 S.W.3d 401 (2003). This has always been the rule until now. Without a record of some form, the court cannot conduct a meaningful review of Bailey’s argument. Id. This court has repeatedly stated that it is the appellant’s burden to produce a record sufficient to support his or her arguments on appeal. Miller v. State, 328 Ark. 121, 942 S.W.2d 825 (1997); King v. Younts, Chief of Police, 278 Ark. 91, 643 S.W.2d 542 (1982); Armbrust Constr. Co. v. Henry, 263 Ark. 98, 562 S.W.2d 598 (1978). There is no evidence that Bailey sought more specific findings from the trial court. There is no motion for further findings or explanation by the trial court or a motion under Ark. R. Civ. P. 52 (2002). Even had such a motion been brought there would have to be a ruling before this court could review it. The fault, if any, for the state of the record lies with Bailey. It is a mystery to me why this court is allowing appellate review in this case when so often this court simply affirms on a record where a party failed to obtain a sufficient ruling to allow meaningful review. However, as I already noted, I believe the record is more Than sufficient to affirm the trial court’s decision. I find no abuse of discretion. This case should be affirmed.

The majority cites the guardianship case of Jones v. Barnett, 236 Ark. 117, 365 S.W.2d 241 (1963), for the proposition that the requirements set out in Jones were similar to the Chrisco factors. However, there is a substantial difference between the factors set out in Chrisco and what this court required in Jones. This court in Jones quoted Ark. Stat. Ann. § 57-641 (1962), which provided for payment of services lawfully rendered “to the ward or his estate.” Jones, 236 Ark. at 121; Ark. Stat. Ann. § 57-641. Further, in Jones this court noted that an important factor to consider was the ability of the estate to pay the fees. In Jones, this court required that the fees granted benefit the ward. In the case before us, the trial court was correctly determining whether the work rendered benefitted Ms. Logan. The trial court specifically asked what benefits Ms. Logan received from the services provided.The focus in a guardianship case must be first and foremost on whether the work benefitted the ward. If the services rendered do not benefit the ward, tiren the trial court need not even reach the issues raised by the factors gleaned from Chrisco.