continuing legal educationcontent.sfbar.org/source/basf_pages/pdf/g190514-m.pdf · a. but, see...

THE BAR ASSOCIATION OF SAN FRANCISCOCONTINUING LEGAL EDUCATION

TuesdayNovember 5, 2019MCLE Registration: 11:30 - 12:00 p.m.

Program: 12:00 - 1:15 p.m.

The Probate Litigation Subcommittee of the Estate Planning, Probate and Trust Section presents

Attorney’s Fees and Fee Shifting in Probate Proceedings

Topics

• Local courts increasing willingness to award attorney’s fees to a prevailing party

• The guidelines courts use in awarding attorney’s fees in probate proceedings

• Best practices for fee petitions

Section Co-Chairs: Alicia Gámez, Gámez Law James P. Lamping, Law Office of James P. LampingHoward Slavitt, Coblentz, Patch, Duffy & Bass

Register online: www.sfbar.org/calendar

MCLE: 1 HourTo receive MCLE credit, you must sign in during the designated MCLE registration period. This activity is approved for Minimum Continuing Legal Education credit by the State Bar of California. BASF is a certified provider. Provider #103

LocationBASF Conference Center301 Battery Street, 3rd FloorSan Francisco, CA 94111

Cost$30 BASF Section Members $40 BASF Members $55 OthersFREE for BASF Student MembersAll prices increase $10 on the day of the program.

This is a brown bag luncheon.

BASF Members: Be sure to log in to get your discounts!

Refunds will be given up to 48 hours in advance, less a $10 handling fee.

Event Code: G190514

Special Requests:People with disabilities should contact BASF regarding reasonable accommodations.

CLE Webcast: www.sfbar.org/online-cle

Recorded Available Nov 15

Live

Speakers

Steven P. BracciniPartnerSheppard, Mullin, Richter & Hampton

Kendal FletcherAssociateSheppard, Mullin, Richter & Hampton


Speakers

Steven P. Braccini Partner

Sheppard, Mullin, Richter & Hampton

Kendal Fletcher Associate

Sheppard, Mullin, Richter & Hampton

Tuesday, November 5, 2019

Location: BASF Conf. Center • 301 Battery St., 3rd Floor • San Francisco, CA

Event Code: G190514


Speaker Bios

Steven P. Braccini

Steven P. Braccini is a partner in the Business Trial Practice Group in the firm's Silicon Valley office.

Steve's practice focuses on trust, probate and conservatorship litigation including, but not limited to:

• Will contests • Trust contests • Removal and surcharge actions • Contested conservatorships • Accounting disputes • Financial elder abuse actions • Reformation or modification actions • Tax controversy • Related “civil” claims

Steve also has an appellate practice and has presented numerous seminars and workshops on issues related to trust and estate litigation.

Kendal Fletcher

Kendal Fletcher is an associate in the Business Trial Practice Group in the firm's Silicon Valley office.

Kendal’s practice focuses on private wealth and fiduciary litigation, including but not limited to:

• Will and trust contests • Trustee removal and surcharge actions • Contested conservatorships • Complex accounting disputes • Financial elder abuse actions • Judicial construction and modification of trusts • Related “civil” claims

© Sheppard Mullin Richter & Hampton LLP 2016

Attorney’s Fees and Fee Shifting in

Probate Proceedings

By: Steve Braccini and Kendal Fletcher, of Sheppard, Mullin, Richter & Hampton LLP

© Sheppard Mullin Richter & Hampton LLP 2016

I. Presentation Overview • The guidelines courts use in awarding attorney’s fees in

probate proceedings.

• Best practices for preparing a successful fee petition.

• Local Courts’ increasing willingness to award attorney’s fees to a prevailing party.

II. Guidelines for an Award of Attorney’s Fees in Probate Proceedings

A. The American Rule: Everybody Pays

i. Under the so-called American Rule, parties to litigation are generally responsible for bearing their own attorney’s fees. (Estate of Trynin (1989) 49 Cal.3d 868, 876.)

i. General “exceptions” to the American Rule in Probate.

1. Probate Code sections 10810-11 (compensation of attorney for personal representative); 15684, 16247, 17200, 17211 (Trusts); 2640, 2642 (Conservatorships/Guardianships).

2. Welfare and Institutions Code section 15657.5 (Elder Abuse).

3. 3. Code of Civil Procedure sections 128.5 (bad faith), 128.7 (frivolous filings), and 2033.420 (Requests for Admissions).

4. The Private Attorney General Doctrine.

5. The Common Fund Doctrine.

B. Fees For Services Rendered By The Personal Representative’s Attorney i. Statutory Fees for “Ordinary Services” – Prob. Code § 10810

1. “Ordinary Services” – Ordinary duties of collection, care, and preservation of estate property during the entire administration.

2. Compensation for ordinary services is based on the value of the estate accounted for by the personal representative, with various percentages for incremental values of the estate, plus “a reasonable amount to be determined by the court” for all above $25 million.

3. Awardable as a matter of right, even if the amount does not seem adequate in relation to the actual services rendered. (Estate of Buchman (1955) 138 Cal.App.2d 228, 235.)

ii. Fees for “Extraordinary Services” – Prob. Code § 10811 1. No statute defines “extraordinary services.” However, California Rules of Court, Rule 7.703 contains a

non-exhaustive list of what constitutes extraordinary service: a. Selling, leasing, exchanging, financing, or foreclosing real or personal property;

b. Carrying on decedent’s business if necessary to preserve the estate or under court order;

c. Preparing tax returns; and

d. Handling audits or litigation connected with tax liabilities of the decedent or of the estate.

2. Discretionary, additional compensation for extraordinary services by the attorney for the personal representative is allowed “in an amount the court determines is just and reasonable.” (Prob. Code § 10811(a)).

C. Fees for Services Rendered By the Trustee’s Attorney

i. A trustee has the power to hire persons, including accountants, attorneys, auditors and other agents, to advise or assist the trustee in the performance of administrative duties. (Prob. Code § 16247). The trustee also has the power to pay compensation of the trustee and of employees and agents of the trust, and other expenses incurred in the collection, care, administration, and protection of the trust. (Prob. Code § 16243). For unsupervised trusts that do not contain provisions governing attorney compensation, neither the trust instrument nor court-published rules set compensation guidelines for "ordinary" services; the only applicable guideline is the requirement in Probate Code §16243 that any attorney fees paid by the trustee must be reasonable.

(Fees for Services Rendered By the Trustee’s Attorney Continued . . .)

ii. In the litigation context, while a trustee is entitled to reimbursement for attorney’s fees incurred to defend adverse claims against the trust, the fees must be: (1) reasonable in amount, (2) reasonably necessary to the conduct of the litigation, and (3) reasonable and appropriate for the benefit of the trust. 1. Donahue v. Donahue (2010) 182 Cal.App.4th 259, 263: The Court vacated a fee award of about $5

million in past and ongoing legal fees following the trustee’s successful defense against a beneficiary’s allegations of self-dealing and other breaches of trust. The Court of Appeal explained: “A trial court may not rubber stamp a request for attorney fees, but must determine the number of hours reasonably expended.”

2. Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1464: Trustee’s attorney’s fees could not be paid from the trust because the trustee did not participate in litigation as neutral trustee. Instead, the trustee pursued her own interests and those of her siblings, to the detriment of another beneficiary. In other words, the fees were not reasonable and appropriate for the benefit of the trust.

(Fees for Services Rendered By the Trustee’s Attorney Continued . . .) Whittlesey v. Aiello (2002) 104 Cal.App.4th 1221. “If the trustee acts in good faith, he has the power to employ assistants and to compensate such assistants out of the assets of the trust, even though he may not ultimately succeed in establishing the position taken by him as trustee.” a. But, see Estate of Trynin (1989) 49 Cal.3d 868, 877-878: Even if the attorney’s services did not

benefit the trust estate in the sense of increasing, protecting, or preserving it, attorney’s fees will be still be payable from the trust if attorney was acting with “acting in consonance with the fiduciary duties imposed on them.”

3. Hollaway v. Edwards (1998) 68 Cal.App.4th 94, 99-100: Even though defense against removal

action benefitted trustee personally, it also benefited trust by eliminating charges raising serious questions about whether trustee had an could continue to administer the trust property. It is okay to benefit yourself if you are also benefitting the trust.

iii. Defense Directives: Many trusts contain a provision ordering the trustee to defend against contests at the expense of the trust. Under Doolittle v. Exchange Bank (2015) 241 Cal.App.529, a trustee has the authority to use trust funds to defense against a contest unless the court issues a preliminary injunction enjoining the use of trust funds.

D. Attorney’s Fee Shifting: Getting the Other Side to Pay Your Fees

D. Bad Faith Litigation

i. Prob. Code § 17211(a). “If a beneficiary contests the trustee’s account and the court determines that the contest was without reasonable cause and in bad faith, the court may award against the contestant the compensation and costs of the trustee and other expenses and costs of litigation, including attorney’s fees, incurred to defend the account. The amount awarded shall be a charge against any interest of the beneficiary in the trust. The contestant shall be personally liable for any amount that remains unsatisfied.” a. Rudnick v. Rudnick (2009) 179 Cal.App.4th 1328, 1334: “When a trust beneficiary instigates an

unfounded proceeding against the trust in bad faith, a probate court has the equitable power to charge the reasonable and necessary fees incurred by the trustee in opposing the proceeding against that beneficiary’s share of the trust estate.”

b. Pizarro v. Reynoso (2017) 10 Cal.App.5th 172: Probate Code §17211(a) “allows an award of attorney fees and costs against a beneficiary if the beneficiary brought a contest against the trustee’s account without reasonable cause and in bad faith.”

(Bad Faith Litigation Continued . . .) 2. Code of Civil Procedure § 128.5: “A trial court may order a party, the party’s attorney, or

both, to pay the reasonable expenses, including attorney’s fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.”

a. “Actions or tactics” can include, for example, the filing and service of a complaint,

answer, or other responsive pleading. (Code of Civ. Proc. § 128.5(b)(1)).

b. “ ‘Frivolous’ means totally and completely without merit or for the sole purpose of harassing an opposing party.” (Code of Civ. Proc. § 128.5(b)(2)).

(Bad Faith Litigation Continued . . .)

3. Tee Up Your Fees: Using Requests for Admissions to Obtain Attorney’s Fees for Bad Faith Litigation a. Code of Civil Procedure § 2033.420(a). If a party fails to admit the genuineness

of any document or the truth of any matter when requested to do so under this chapter, and if the party requesting that admission thereafter proves the genuineness of that document or the truth of that matter, the party requesting the admission may move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including reasonable attorney’s fees.

ii. Common-Fund Doctrine

1. Defined: A party who expends attorney’s fees in winning a lawsuit that creates a fund from which others derive benefits may require those passive beneficiaries to bear a fair share of the litigation costs. The amount of the judgment owing to the passive beneficiary may be reduced to compensate the active litigant for his attorney’s fees.

2. The Common Fund Doctrine applies to probate proceedings. (Estate of Stauffer (1959) 53 Cal.2d 124, 132).

(Common-Fund Doctrine Continued . . .) 3. However, the common fund doctrine does not apply where members of the benefitted

group have retained their own, separate counsel to participate in the litigation. (Estate of Korthe (1970) 9 Cal.App.3d 572, 574). In Estate of Korthe, an attorney, Rose, brought a will contest representing certain beneficiaries under a purportedly revoked will. Although the other beneficiaries were independently represented, Rose did the bulk of the work and the probate court awarded Rose $20,000 in attorney’s fees for services preserving a common fund. The Court of Appeal reversed, holding the common fund doctrine was inapplicable when the parties were represented by separate counsel, stating, “We appreciate that the record here indicates—and it is not really disputed—that Mr. Rose did the lion’s share of the work which led to the highly favorable settlement with Barrett. It may therefore seem inequitable that he should get more or less the same fee from his clients as the other counsel presumably will get from theirs. That, however, is a situation in which attorneys find themselves many times and it is up to them to protect themselves by arrangements with other counsel.

4. Generally, the requirements for obtaining a fee award under the Common Fund Doctrine are as follows:

a. An identifiable “fund” was created or preserved. (Serrano v. Priest (1977) 20 Cal.3d 25, 35);

b. The efforts of the participant were essential to the creation of preservation of the fund.

(Estate of Witting (1955) 130 Cal.App.2d 521, 526);

c. Fewer than all the beneficiaries participated in creating or preserving the fund. (Estate of Bullock (1955) 133 Cal.App.2d 542, 547);

d. The participant was not acting as personal representative or trustee. (Estate of Stauffer (1959) 53 Cal.2d 124, 132).

(Common-Fund Doctrine Continued . . .)

iii. Private Attorney-General Doctrine

1. Code of Civil Procedure § 1021.5: Upon motion, a court may award a successful party attorney’s fees in an action which has resulted in the enforcement of an important right affecting the public interest if: a. a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general

public or a large class of persons;

b. the necessity and financial burden of private enforcement are such to make the award appropriate; and

c. Such fees should not in the interest of justice be paid out of the recovery, if any.

2. The Private Attorney-General Doctrine applies to probate proceedings. (Conservatorship of Whitley (2010) 50 Cal.4th 1206).

iv. Fees on Fees

1. “Services that do not directly benefit the estate in the sense of increasing, protecting, or preserving it are nonetheless compensable if the estate’s attorneys or representatives in performing the services were ‘acting in consonance with the fiduciary duties imposed upon them’” (Estate of Trynin (1989) 49 Cal.3d 868, 877-878 [quoting Ludwig v. Sup. Ct. (1933) 217 Cal. 499, 500.])

v. Interim Attorney’s Fees

1. “We think in an ordinary case, where the trust instrument is silent on interim fees, the grant of interim fees should be governed by the following: The court must first assess the probability that the trustee will ultimately be entitled to reimbursement of attorney fees and then balance the relative harms to all interests involved in the litigation, including the interests of the trust beneficiaries. An assessment of the balance of harms requires at least some inquiry into the ability of the trustee or former trustee to repay fees if ultimately determined not to be entitled to the costs of defense.” (People ex rel. Harris v. Shine (2017) 16 Cal.App.5th 524, 539.)

iv. Anti-SLAPP Motions 1. In Key v. Tyler (2019) 34 Cal.App.5th 505, the Court of Appeal found that a

beneficiary’s defense of an invalid amendment to a trust, if made without probable cause, indeed can trigger a no contest clause and result in disinheritance. The Court also confirmed that anti-SLAPP motions can be filed against petitions to enforce no contest clauses. The “prevailing defendant” on the motion to strike “shall be entitled” to recover his or her attorney fees and costs. (Code of Civ. Proc. § 425.16.)

vii. Fees Shifting in Elder Abuse Proceedings

1. Welfare & Institutions Code § 15657.5 a. “Where it is proven by a preponderance of the evidence that a defendant is liable for

financial abuse . . . in addition to compensatory damages and all other remedies otherwise provided by law, the court shall award to the plaintiff reasonable attorney’s fees and costs.”

b. “. . . and where it is proven by clear and convincing evidence that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of the abuse, in addition to reasonable attorney’s fees and costs set forth in subdivision (a), compensatory damages, and all other remedies otherwise provided by law, the limitations imposed by Section 377.34 of the Code of Civil Procedure on the damages recoverable shall not apply.”

(Fees Shifting in Elder Abuse Proceedings Continued . . .)

2. Civil Code section 377.34 limits damages to loss or damage that the decedent sustained or incurred before death (including penalties or punitive or exemplary damages that the decedent would have been entitled to recover had the decedent lived), and also excludes damages for pain, suffering, or disfigurement.

3. Must specifically consider “the value of the abuse-related litigation in terms of the quality of life of the elder or dependent adult, and the results obtained.” (Welf. & Inst. Code § 15657.1(a).)

4. This award of fees is unilateral: “Welfare and Institutions Code section 15657.5, subdivision (a) provides for an award of fees in elder abuse cases only to a prevailing plaintiff. There is no reciprocal fee provision for a prevailing defendant.” (Wood v. Santa Monica Escrow Co. (2009) 176 Cal.App.4th 802, 911.)

viii. Fees Shifting in Conservatorships/Guardianships Proceedings

1. Probate Code section 2640 allows the guardian or conservator of the estate to petition the court for an order allowing compensation to the attorney for the guardian or conservator of the person or estate, for services rendered. a. This section also states that upon the hearing, the court shall make an order allowing

“any compensation requested in the petition the court determines is reasonable . . . .”

2. Probate Code section 2642 also allows an attorney who rendered services to a guardian or conservator of the person or estate to petition the court for an order fixing or allowing compensation for such services rendered to that time.

(Fees Shifting in Conservatorships/Guardianships Proceedings Continued . . .)

3. There are, however, limitations on compensation for fees incurred in unsuccessfully opposing a petition for removal as conservator.

a. Conservatorship of Lefkowitz (1996) 50 Cal.App.4th 1310, 1314-1315. Conservator

entitled to compensation for unsuccessful opposition to petition for removal only if: (1) conservator’s decision to oppose was motivated by good faith belief that petition’s defeat and conservator’s continued service were in the best interests of the conservatee, and (2) that belief was objectively reasonable.

III. Getting Paid: Best Practices for Preparing a Successful Fee Petition

A. Calculating Attorney’s Fees

i. The Lodestar Method 1. In determining the amount of an attorneys’ fee award, California courts have generally

settled on a method based on the objective evaluation of hours reasonably spent multiplied by the prevailing market rate per hour for private attorneys. The courts have given the name “lodestar” to the product of hours reasonably worked multiplied by a reasonable hourly rate. (Horsford v. Board of Trustees of California State Universities (2005) 132 Cal.App.4th 359, 395-397.)

2. A “reasonable” hourly rate is the prevailing rate charged by attorneys of similar skill and experience in the relevant community. (PLCN Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)

B. Best Billing Practices i. Consider avoiding block-billing in any case in which you are likely to be awarded fees; courts are eager

to reduce fees requested where block billing was used.

1. However, in the Ninth Circuit, block-billing is not inappropriate per se when the party seeking fees meets the basic requirements of “listing his hours and identifying the general subject matter of his time expenditures.” (Fischer v. SJP-P.D. Inc. (9th Cir. 2000) 214 F.3d 1115, 1121 [internal quotations omitted]); (see also Hensley v. Eckerhart (1983) 461 U.S. 424, 437 [stating that a district court has discretion in determining the amount of a fee award which is “appropriate in view of the district court’s superior understanding of the litigation and the desirability of avoiding frequent appellate review of what essentially are factual matters”]).

2. 2. In Pecoraro v. Barbaccia, Santa Clara Case No. 2010-1-CV-186621, the Santa Clara Superior Court awarded in excess of $1 Million in attorney’s fees after the defendant lost at trial and “offered” to settle in the amount of $2 Million even though damages were in excess of $20 Million.

(Best Billing Practices Continued . . .)

ii. Consider using the ABA’s “Uniform Task-Based Management System Litigation Code Set” (or “UTBMS” billing). 1. These break down tasks into code sections, such as “L200 - Pre-Trial Pleadings and Motions”

and tasks, such as “L240 – Dispositive Motions” as well as activities, such as “A103 – Draft/revise” and expenses, such as “E112 – Court fees.”

2. A copy of the code set is located at https://www.americanbar.org/groups/litigation/resources/uniform_task_based_management_system/litigation_code_set/

iii. Consider eliminating practices of billing a minimum amount of time (e.g., 0.2, 0.25).

C. Do I Need Court Approval? i. Estates: Always

1. California Rule of Court, Rule 7.700 “The personal representative must neither pay nor

receive, and the attorney for the personal representative must not receive, statutory commissions or fees, or fees for extraordinary services, in advance of the court authorizing their payment.” a. Be sure to obtain a court order before paying attorney’s fees from estate funds.

b. The failure to do so may result in discipline for the attorney. Specifically, the California

Supreme Court has held in at least one opinion that an attorney may be disbarred for receiving compensation for “estate funds” without court approval, even where the fees were not unconscionable. Albertson v. State Bar (1987) 43 Cal.3d 638.

(Do I Need Court Approval Continued . . .)

II. Trusts: No 1. Probate Code § 17209 provides, “The administration of trusts is intended to

proceed expeditiously and free of judicial intervention, subject to the jurisdiction of the court.”

2. Under Probate Code § 16247, a trustee may hire agents, including attorneys. Under Probate Code § 16243, a trustee may pay the “reasonable compensation of the trustee and of employees and agents of the trust . . . .”

3. But beware, attorney’s fees are subject to review by the court via petitions to review an accounting and may ultimately be disallowed by the court.

D. Crafting A Successful Attorney’s Fees Declaration

i. The burden of proof for justifying fees is generally on the attorney and the fiduciary. Estate of Fulcher (1965) 234 Cal.App.2d 710, 718.

ii. Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 632-633, lists additional factors for determining a “reasonable” hourly rate, including consideration of “the skill and experience of the attorneys, the nature of the work performed, the relevant area of expertise, their customary billing rates, and the prevailing rate charged by attorneys of similar skill and experience with comparable legal services in the community.”

iii. Providing billing timesheets is not required. Concepcion v. Amscan Holdings (2014) 223 Cal.App.4th 1309, 1324 (“It is not necessary to provide detailed billing timesheets to support an award of attorney fees under the lodestar method”).

1. Instead, it is sufficient to provide declarations of counsel setting forth the reasonable hourly rate, the

number of hours worked and the tasks performed. (See CRC 7.70.)


iv. California Rule of Court, Rule 7.702 – a petition for extraordinary compensation must include or be accompanied by a statement of facts upon which the petition is based, and must:

a. Show the nature and difficulty of the tasks performed;

b. Show the results achieved;

c. Show the benefit of the services to the estate;

d. Specify the amount requested for each category of service performed;

e. State the hourly rate of each person who performed services and the hours spent by each of them;

f. Describe the services rendered in sufficient detail to demonstrate the productivity of the time spent;

and g. State the estimated amount of statutory compensation to be paid by the estate, if the petition is not

part of a final account or report.

v. Tell a story—be sure to provide a narrative along with your fee request. The Court wants to know what you did, not just your hourly rate and how much time you spent. This is your opportunity to brag about yourself!

E. Use of Paralegals i. “[A]wards of attorney fees for paralegal time have become commonplace in California.” (Gunn v.

Dotson (1994) 23 Cal.App.4th 262, 269.)

ii. In Missouri v. Jenkins (1989) 491 U.S. 274, 285, the Supreme Court noted that “the ‘reasonable attorney’s fee’ provided for by statute should compensate the work of paralegals, as well as that of attorneys.”

iii. Note that CRC Rule 7.703(e) provides that extraordinary legal services may include the services of a paralegal only if the request for extraordinary legal fees for the paralegal’s services meets certain criteria, including: (1) a description of the paralegal’s qualifications (including education, certification, continuing education, and experience); (2) a statement of the hours spent by and hourly rate requested for the paralegal; (3) a description of the services performed; (4) a statement why it was appropriate to use the paralegal’s services in the particular case; and (5) demonstrating that the total amount requested for extraordinary services of the attorney and paralegal does not exceed the amount appropriate if the attorney had performed the services without the paralegal’s assistance.

F. San Francisco County Superior Court Local Rules 14.86 and 14.88 i. San Francisco Local Rules 14.86 and 14.88 allow statutory compensation only in proportion

to the work actually completed, and the last 25% of the statutory compensation generally will not be allowed before final distribution. 1. Fee requests must be supported by a declaration under penalty of perjury of services

performed, time expended, average hourly rate, results accomplished, and benefit.

2. In the event the attorney’s office performed bookkeeping services for a fiduciary, the Court may award the attorney a larger compensation and the fiduciary a lesser compensation.

3. Fees requested for time billed by a paralegal must be supported by the attorney’s declaration regarding the paralegal’s compliance with Bus. & Prof. Code § 6450.

(San Francisco County Superior Court Local Rules 14.86 and 14.88 Continued . . .)

ii. Fees for extraordinary services will be allowed before final distribution only when it appears likely that the estate will remain in probate for an unusually long time, or on a showing that present payment will benefit the beneficiaries or the estate. (S.F. L.R. 14.88(A).) Additionally, requests for compensation for extraordinary services in a decedent’s estate will not be considered unless the caption of the petition and the notice of hearing include a reference to the request. (S.F. L.R. 14.89).

iii. For Trusts, Conservatorships, and Guardianships, the Court prefers to determine the amount of fees at the time an accounting is considered, and absent good cause, requests for fees on account will be considered only in the petition for appointment or as part of a petition for approval of an account.

iv. All petitions must be supported by a description of the services forming the basis of the request, including the surrounding circumstances, the benefit to the entity, and the time spent. Each timesheet must identify the attorney/paralegal providing the service and include the hourly rate for the attorney/paralegal, the time spent on the services described in the entry, and the total fee charged for that entry. (S.F. L.R. 14.89).

IV. Local Courts’ Increasing Willingness to Award Attorney’s Fees: 3 Examples

A. Estate of Alvin Jow, San Mateo County Superior Court Case No. 17PRO00608 [omitted spouse claim]. i. Approximately $300,000 post-trial attorney’s fees award.

ii. Code of Civil Procedure sections 128.5 and 2033.420, as well as Rudnick v. Rudnick, supra.

B. Francis Trust, Santa Clara County Superior Court Case No. PR176711 [Contest based on alleged

forgery]. i. Approximately $900,000 post-trial attorney’s fees award.

ii. Note: On appeal in Sixth District, Case No. H044960 (As of October 3, 2019 fully briefed and

presumably awaiting oral argument.)

C. Estate of Khatri, San Mateo County Superior Court Case No. PRO123880 [Contest based on incapacity]. i. Approximately a $1.4 Million post-trial attorney’s fees award.

ii. Code of Civil Procedure sections 128.5 and 2033.420.

iii. Note: On appeal in First District, Case No. A150546 (Awaiting oral argument).

That’s it – thank you for coming!


By: Steve Braccini and Kendal E. Fletcher, of Sheppard, Mullin, Richter & Hampton LLP

Page ii

TABLE OF CONTENTS

Page

I. Presentation Overview ................................................................................................................... 1

II. Guidelines for an Award of Attorney’s Fees in Probate Proceedings ............................................ 1

A. The American Rule: Everybody Pays ................................................................................... 1

B. Fees For Services Rendered By The Personal Representative’s Attorney .......................... 1

C. Fees for Services Rendered By the Trustee’s Attorney ...................................................... 2

D. Attorney’s Fee Shifting: Getting the Other Side to Pay Your Fees ..................................... 3

III. Getting Paid: Best Practices for Preparing a Successful Fee Petition ............................................. 8

A. Calculating Attorney’s Fees................................................................................................. 8

B. Best Billing Practices ........................................................................................................... 8

C. Do I Need Court Approval? ................................................................................................. 9

D. Crafting A Successful Attorney’s Fees Declaration ........................................................... 10

E. Use of Paralegals ............................................................................................................... 11

F. San Francisco County Superior Court Local Rules 14.86 and 14.88 ................................. 11

IV. Local Courts’ Increasing Willingness to Award Attorney’s Fees: 3 Examples ............................... 12

A. Estate of Alvin Jow, San Mateo County Superior Court Case No. 17PRO00608 [omitted spouse claim]. .................................................................................................... 12

B. Francis Trust, Santa Clara County Superior Court Case No. PR176711 [Contest based on alleged forgery]. ................................................................................................ 12

C. Estate of Khatri Walt Shjeflo, San Mateo County Superior Court Case No. PRO123880 [Contest based on incapacity]....................................................................... 13

Page iii

TABLE OF AUTHORITIES

Page(s)

FEDERAL CASES

Fischer v. SJP-P.D. Inc. (9th Cir. 2000) 214 F.3d 1115 ........................................................................................................................................8

Hensley v. Eckerhart (1983) 461 U.S. 424 ..........................................................................................................................................8

Missouri v. Jenkins (1989) 491 U.S. 274 ........................................................................................................................................11

STATE CASES

Alberton v. State Bar (1987) 43 Cal.3d 638 .........................................................................................................................................9

Estate of Buchman (1955) 138 Cal.App.2d 228 ...............................................................................................................................1

Estate of Bullock (1955) 133 Cal.App.2d 542 ...............................................................................................................................5

Concepcion v. Amscan Holdings (2014) 223 Cal.App.4th 1309 ..........................................................................................................................10

Donahue v. Donahue (2010) 182 Cal.App.4th 259 ..............................................................................................................................2

Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629 ..............................................................................................................................10

Estate of Fulcher (1965) 234 Cal.App.2d 710 .............................................................................................................................10

Gunn v. Dotson (1994) 23 Cal.App.4th 262 ..............................................................................................................................11

Hollaway v. Edwards (1998) 68 Cal.App.4th 94 ..................................................................................................................................3

Horsford v. Board of Trustees of California State Universities (2005) 132 Cal.App.4th 359 ..............................................................................................................................8

Page iv

Key v. Tyler (2019) 34 Cal.App.5th 505 ................................................................................................................................6

Estate of Korthe (1970) 9 Cal.App.3d 572 ...................................................................................................................................5

Conservatorship of Lefkowitz (1996) 50 Cal.App.4th 1310 ..............................................................................................................................8

People ex rel. Harris v. Shine (2017) 16 Cal.App.5th 524 ................................................................................................................................6

Pizarro v. Reynoso (2017) 10 Cal.App.5th 172 ................................................................................................................................4

PLCN Group, Inc. v. Drexler (2000) 22 Cal.4th 1084 ......................................................................................................................................8

Rudnick v. Rudnick (2009) 179 Cal.App.4th 1328 ......................................................................................................................4, 12

Serrano v. Priest (1977) 20 Cal.3d 25 ...........................................................................................................................................5

Estate of Stauffer (1959) 53 Cal.2d 124 .........................................................................................................................................5

Terry v. Conlan (2005) 131 Cal.App.4th 1445 ............................................................................................................................3

Estate of Trynin (1989) 49 Cal.3d 868 .................................................................................................................................1, 3, 6

Under Doolittle v. Exchange Bank (2015) 241 Cal.App.529 ....................................................................................................................................3

Conservatorship of Whitley (2010) 50 Cal.4th 1206 ......................................................................................................................................6

Whittlesey v. Aiello (2002) 104 Cal.App.4th 1221 ............................................................................................................................3

Estate of Witting (1955) 130 Cal.App.2d 521 ...............................................................................................................................5

Wood v. Santa Monica Escrow Co. (2009) 176 Cal.App.4th 802 ..............................................................................................................................7

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DOCKETED CASES

Estate of Alvin Jow San Mateo County Superior Court Case No. 17PRO00608 ................................................................12

Estate of Khatri Walt Shjeflo San Mateo County Superior Court Case No. PRO123880 ..................................................................13

Pecoraro v. Barbaccia Santa Clara Case No. 2010-1-CV-186621 .............................................................................................9

STATE STATUTES & RULES

California Business & Professions Code § 6450...................................................................................................................................................12

California Code of Civil Procedure § 128.5....................................................................................................................................1, 4, 12, 13 § 128.5(b)(1) ..........................................................................................................................................4 § 128.5(b)(2) ..........................................................................................................................................4 § 128.7................................................................................................................................................1, 4 § 377.34..................................................................................................................................................7 § 425.16..................................................................................................................................................6 § 1021.5..................................................................................................................................................5 § 2033.420..............................................................................................................................1, 4, 12, 13 § 2033.420(a) .........................................................................................................................................4

California Probate Code § 2640.................................................................................................................................................1, 7 § 2642.................................................................................................................................................1, 8 § 10810...................................................................................................................................................1 § 10811...............................................................................................................................................1, 2 § 10811(a) ..............................................................................................................................................2 § 15684...................................................................................................................................................1 § 16243.............................................................................................................................................2, 10 § 16247.........................................................................................................................................1, 2, 10 § 17200...................................................................................................................................................1 § 17209.................................................................................................................................................10 § 17211...................................................................................................................................................1 § 17211(a) ..........................................................................................................................................3, 4

California Rules of Court Rule 7.700 ..............................................................................................................................................9 Rule 7.703 ..............................................................................................................................................2 Rule 7.703(e)........................................................................................................................................11

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California Welfare & Institutions Code § 15657.1(a) ...........................................................................................................................................7 § 15657.5............................................................................................................................................1, 7 § 15657.5(a) ...........................................................................................................................................7

OTHER AUTHORITIES

https://www.americanbar.org/groups/litigation/resources/uniform_task_based_management_system/litigation_code_set/ ...............................................................................................................9

San Francisco Local Rules Rule 14.86 ............................................................................................................................................11 Rule 14.88 ............................................................................................................................................11 Rule 14.88(A) ......................................................................................................................................12 Rule 14.89 ............................................................................................................................................12

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I. Presentation Overview

• The guidelines courts use in awarding attorney’s fees in probate proceedings

• Best practices for preparing a successful fee petition

• Local Courts’ increasing willingness to award attorney’s fees to a prevailing party

II. Guidelines for an Award of Attorney’s Fees in Probate Proceedings

A. The American Rule: Everybody Pays

i. Under the so-called American Rule, parties to litigation are generally responsible for bearing their own attorney’s fees. (Estate of Trynin (1989) 49 Cal.3d 868, 876.)

ii. General “exceptions” to the American Rule in Probate.

1. Probate Code sections 10810-11 (compensation of attorney for personal representative); 15684, 16247, 17200, 17211 (Trusts); 2640, 2642 (Conservatorships/Guardianships).

2. Welfare and Institutions Code section 15657.5 (Elder Abuse).

3. Code of Civil Procedure sections 128.5 (bad faith), 128.7 (frivolous filings), and 2033.420 (Requests for Admissions).

4. The Private Attorney General Doctrine.

5. The Common Fund Doctrine.

B. Fees For Services Rendered By The Personal Representative’s Attorney

i. Statutory Fees for “Ordinary Services” – Prob. Code § 10810

1. “Ordinary Services” – Ordinary duties of collection, care, and preservation of estate property during the entire administration.

2. Compensation for ordinary services is based on the value of the estate accounted for by the personal representative, with various percentages for incremental values of the estate, plus “a reasonable amount to be determined by the court” for all above $25 million.

3. Awardable as a matter of right, even if the amount does not seem adequate in relation to the actual services rendered. (Estate of Buchman (1955) 138 Cal.App.2d 228, 235.)

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ii. Fees for “Extraordinary Services” – Prob. Code § 10811

1. No statute defines “extraordinary services.” However, California Rules of Court, Rule 7.703 contains a non-exhaustive list of what constitutes extraordinary service:

a. Selling, leasing, exchanging, financing, or foreclosing real or personal property;

b. Carrying on decedent’s business if necessary to preserve the estate or under court order;

c. Preparing tax returns; and

d. Handling audits or litigation connected with tax liabilities of the decedent or of the estate.

2. Discretionary, additional compensation for extraordinary services by the attorney for the personal representative is allowed “in an amount the court determines is just and reasonable.” (Prob. Code § 10811(a)).

C. Fees for Services Rendered By the Trustee’s Attorney

i. A trustee has the power to hire persons, including accountants, attorneys, auditors and other agents, to advise or assist the trustee in the performance of administrative duties. (Prob. Code § 16247). The trustee also has the power to pay compensation of the trustee and of employees and agents of the trust, and other expenses incurred in the collection, care, administration, and protection of the trust. (Prob. Code § 16243). For unsupervised trusts that do not contain provisions governing attorney compensation, neither the trust instrument nor court-published rules set compensation guidelines for "ordinary" services; the only applicable guideline is the requirement in Probate Code §16243 that any attorney fees paid by the trustee must be reasonable.

ii. In the litigation context, while a trustee is entitled to reimbursement for attorney’s fees incurred to defend adverse claims against the trust, the fees must be: (1) reasonable in amount, (2) reasonably necessary to the conduct of the litigation, and (3) reasonable and appropriate for the benefit of the trust.

1. Donahue v. Donahue (2010) 182 Cal.App.4th 259, 263: The Court vacated a fee award of about $5 million in past and ongoing legal fees following the trustee’s successful defense against a beneficiary’s allegations of self-dealing and other breaches of trust. The Court of Appeal explained: “A trial court may not rubber stamp a request for attorney fees, but must determine the number of hours reasonably expended.”

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2. Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1464: Trustee’s attorney’s fees could not be paid from the trust because the trustee did not participate in litigation as neutral trustee. Instead, the trustee pursued her own interests and those of her siblings, to the detriment of another beneficiary. In other words, the fees were not reasonable and appropriate for the benefit of the trust.

Whittlesey v. Aiello (2002) 104 Cal.App.4th 1221. “If the trustee acts in good faith, he has the power to employ assistants and to compensate such assistants out of the assets of the trust, even though he may not ultimately succeed in establishing the position taken by him as trustee.”

a. But, see Estate of Trynin (1989) 49 Cal.3d 868, 877-878: Even if the attorney’s services did not benefit the trust estate in the sense of increasing, protecting, or preserving it, attorney’s fees will be still be payable from the trust if attorney was acting with “acting win consonance with the fiduciary duties imposed on them.”

3. Hollaway v. Edwards (1998) 68 Cal.App.4th 94, 99-100: Even though defense against removal action benefitted trustee personally, it also benefited trust by eliminating charges raising serious questions about whether trustee had an could continue to administer the trust property. It is okay to benefit yourself if you are also benefitting the trust.

iii. Defense Directives: Many trusts contain a provision ordering the trustee to defend against contests at the expense of the trust. Under Doolittle v. Exchange Bank (2015) 241 Cal.App.529, a trustee has the authority to use trust funds to defense against a contest unless the court issues a preliminary injunction enjoining the use of trust funds.

D. Attorney’s Fee Shifting: Getting the Other Side to Pay Your Fees

i. Bad Faith Litigation

1. Prob. Code § 17211(a). “If a beneficiary contests the trustee’s account and the court determines that the contest was without reasonable cause and in bad faith, the court may award against the contestant the compensation and costs of the trustee and other expenses and costs of litigation, including attorney’s fees, incurred to defend the account. The amount awarded shall be a charge against any interest of the beneficiary in the trust. The contestant shall be personally liable for any amount that remains unsatisfied.”

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a. Rudnick v. Rudnick (2009) 179 Cal.App.4th 1328, 1334: “When a trust beneficiary instigates an unfounded proceeding against the trust in bad faith, a probate court has the equitable power to charge the reasonable and necessary fees incurred by the trustee in opposing the proceeding against that beneficiary’s share of the trust estate”

b. Pizarro v. Reynoso (2017) 10 Cal.App.5th 172: Probate Code §17211(a) “allows an award of attorney fees and costs against a beneficiary if the beneficiary brought a contest against the trustee’s account without reasonable cause and in bad faith”.

2. Code of Civil Procedure §§ 128.5: “A trial court may order a party, the party’s attorney, or both, to pay the reasonable expenses, including attorney’s fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.”

a. “Actions or tactics” can include, for example, the filing and service of a complaint, answer, or other responsive pleading. (Code of Civ. Proc. § 128.5(b)(1)).

b. “ ‘Frivolous’ means totally and completely without merit or for the sole purpose of harassing an opposing party.” (Code of Civ. Proc. § 128.5(b)(2)).

3. Tee Up Your Fees: Using Requests for Admissions to Obtain Attorney’s Fees for Bad Faith Litigation

a. Code of Civil Procedure § 2033.420(a). If a party fails to admit genuineness of any document or truth of any matter, with later proof of genuineness or truth of the matter, party requesting admission can request order requiring payment of reasonable expenses incurred in making that proof, including reasonable attorney’s fees.

ii. Common-Fund Doctrine

1. Defined: A party who expends attorney’s fees in winning a lawsuit that creates a fund from which others derive benefits may require those passive beneficiaries to bear a fair share of the litigation costs. The amount of the judgment owing to the passive beneficiary may be reduced to compensate the active litigant for his attorney’s fees.

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2. The Common Fund Doctrine applies to probate proceedings. (Estate of Stauffer (1959) 53 Cal.2d 124, 132).

3. However, the common fund doctrine does not apply where members of the benefitted group have retained their own, separate counsel to participate in the litigation.” (Estate of Korthe (1970) 9 Cal.App.3d 572, 574). In Estate of Korthe, an attorney, Rose, brought a will contest representing certain beneficiaries under a purportedly revoked will. Although the other beneficiaries were independently represented, Rose did the bulk of the work and the probate court awarded Rose $20,000 in attorney’s fees for services preserving a common fund. The Court of Appeal reversed, holding the common fund doctrine was inapplicable when the parties were represented by separate counsel, stating, “We appreciate that the record here indicates—and it is not really disputed—that Mr. Rose did the lion’s share of the work which led to the highly favorable settlement with Barrett. It may therefore seem inequitable that he should get more or less the same fee from his clients as the other counsel presumably will get from theirs. That, however, is a situation in which attorneys find themselves many times and it is up to them to protect themselves by arrangements with other counsel.” (Id. at 576-577).

4. Generally, the requirements for obtaining a fee award under the Common Fund Doctrine are as follows:

a. An identifiable “fund” was created or preserved. (Serrano v. Priest (1977) 20 Cal.3d 25, 35);

b. The efforts of the participant were essential to the creation of preservation of the fund. (Estate of Witting (1955) 130 Cal.App.2d 521, 526);

c. Fewer than all the beneficiaries participated in creating or preserving the fund. (Estate of Bullock (1955) 133 Cal.App.2d 542, 547);

d. The participant was not acting as personal representative or trustee. (Estate of Stauffer (1959) 53 Cal.2d 124, 132).

iii. Private Attorney-General Doctrine

1. Code of Civil Procedure § 1021.5: Upon motion, a court may award a successful party attorney’s fees in an action which has resulted in the enforcement of an important right affecting the public interest if:

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a. a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons;

b. the necessity and financial burden of private enforcement are such to make the award appropriate; and

c. Such fees should not in the interest of justice be paid out of the recovery, if any.

2. The Private Attorney-General Doctrine applies to probate proceedings. (Conservatorship of Whitley (2010) 50 Cal.4th 1206).

iv. Fees on Fees

1. Estate of Trynin (1989) 49 Cal.3d 868, 877-878 “Services that do not directly benefit the estate in the sense of increasing, protecting, or preserving it are nonetheless compensable if the estate’s attorneys or representatives in performing the services were ‘acting in consonance with the fiduciary duties imposed upon them’” [quoting Ludwig v. Sup. Ct. (1933) 217 Cal. 499, 500].)

v. Interim Attorney’s Fees

1. “We think in an ordinary case, where the trust instrument is silent on interim fees, the grant of interim fees should be governed by the following: The court must first assess the probability that the trustee will ultimately be entitled to reimbursement of attorney fees and then balance the relative harms to all interests involved in the litigation, including the interests of the trust beneficiaries. An assessment of the balance of harms requires at least some inquiry into the ability of the trustee or former trustee to repay fees if ultimately determined not to be entitled to the costs of defense.” (People ex rel. Harris v. Shine (2017) 16 Cal.App.5th 524, 539.)

vi. Anti-SLAPP Motions

1. In Key v. Tyler (2019) 34 Cal.App.5th 505, the Court of Appeal found that a beneficiary’s defense of an invalid amendment to a trust, if made without probable cause, indeed can trigger a no contest clause and result in disinheritance. The Court also confirmed that anti-SLAPP motions can be filed against petitions to enforce no contest clauses. The “prevailing defendant” on the motion to strike “shall be entitled” to recover his or her attorney fees and costs. (Code of Civ. Proc. § 425.16.)

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vii. Fees Shifting in Elder Abuse Proceedings

1. Welfare & Institutions Code § 15657.5

a. “(a) Where it is proven by a preponderance of the evidence that a defendant is liable for financial abuse . . . in addition to compensatory damages and all other remedies otherwise provided by law, the court shall award to the plaintiff reasonable attorney’s fees and costs.”

b. “(b) . . . and where it is proven by clear and convincing evidence that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of the abuse, in addition to reasonable attorney’s fees and costs set forth in subdivision (a), compensatory damages, and all other remedies otherwise provided by law, the limitations imposed by Section 377.34 of the Code of Civil Procedure on the damages recoverable shall not apply.”

2. Civil Code section 377.34 limits damages to loss or damage that the decedent sustained or incurred before death (including penalties or punitive or exemplary damages that the decedent would have been entitled to recover had the decedent lived), and also excludes damages for pain, suffering, or disfigurement.

3. Must specifically consider “the value of the abuse-related litigation in terms of the quality of life of the elder or dependent adult, and the results obtained.” (Welf. & Inst. Code § 15657.1(a).)

4. This award of fees is unilateral: “Welfare and Institutions Code section 15657.5, subdivision (a) provides for an award of fees in elder abuse cases only to a prevailing plaintiff. There is no reciprocal fee provision for a prevailing defendant.” (Wood v. Santa Monica Escrow Co. (2009) 176 Cal.App.4th 802, 911.)

viii. Fees Shifting in Conservatorships/Guardianships Proceedings

1. Probate Code section 2640 allows the guardian or conservator of the estate to petition the court for an order allowing compensation to the attorney for the guardian or conservator of the person or estate, for services rendered.

a. This section also states that upon the hearing, the court shall make an order allowing “any compensation requested in the petition the court determines is reasonable . . . .”

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2. Probate Code section 2642 also allows an attorney who rendered services to a guardian or conservator of the person or estate to petition the court for an order fixing or allowing compensation for such services rendered to that time.

3. There are, however, limitations on compensation for fees incurred in unsuccessfully opposing a petition for removal as conservator.

a. Conservatorship of Lefkowitz (1996) 50 Cal.App.4th 1310, 1314-131. Conservator entitled to compensation for unsuccessful opposition to petition for removal only if: (1) conservator’s decision to oppose was motivated by good faith belief that petition’s defeat and conservator’s continued service were in the best interests of the conservatee, and (2) that belief was objectively reasonable.

III. Getting Paid: Best Practices for Preparing a Successful Fee Petition

A. Calculating Attorney’s Fees

i. The Lodestar Method

1. In determining the amount of an attorneys’ fee award, California courts have generally settled on a method based on the objective evaluation of hours reasonably spent multiplied by the prevailing market rate per hour for private attorneys. The courts have given the name “lodestar” to the product of hours reasonably worked multiplied by a reasonable hourly rate. (Horsford v. Board of Trustees of California State Universities (2005) 132 Cal.App.4th 359, 395-397.)

2. A “reasonable” hourly rate is the prevailing rate charged by attorneys of similar skill and experience in the relevant community. (PLCN Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)

B. Best Billing Practices

i. Consider avoiding block-billing in any case in which you are likely to be awarded fees; courts are eager to reduce fees requested where block billing was used.

1. However, in the Ninth Circuit, block-billing is not inappropriate per se when the party seeking fees meets the basic requirements of “listing his hours and identifying the general subject matter of his time expenditures.” (Fischer v. SJP-P.D. Inc. (9th Cir. 2000) 214 F.3d 1115, 1121 [internal quotations omitted]); (see also Hensley v. Eckerhart (1983) 461 U.S. 424, 437 [stating that a district court has discretion in determining the amount of a fee award which is “appropriate in view of

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the district court’s superior understanding of the litigation and the desirability of avoiding frequent appellate review of what essentially are factual matters”]).

2. In Pecoraro v. Barbaccia, Santa Clara Case No. 2010-1-CV-186621, the Santa Clara Superior Court awarded in excess of $1 Million in attorney’s fees after the defendant lost at trial and “offered” to settle in the amount of $2 Million even though damages were in excess of $20 Million.

ii. Consider using the ABA’s “Uniform Task-Based Management System Litigation Code Set” (or “UTBMS” billing).

1. These break down tasks into code sections, such as “L200 - Pre-Trial Pleadings and Motions” and tasks, such as “L240 – Dispositive Motions” as well as activities, such as “A103 – Draft/revise” and expenses, such as “E112 – Court fees.”

2. A copy of the code set is located at https://www.americanbar.org/groups/litigation/resources/uniform_task_based_management_system/litigation_code_set/

iii. Consider eliminating practices of billing a minimum amount of time (e.g., 0.2, 0.25).

C. Do I Need Court Approval?

i. Estates: Always

1. California Rule of Court, Rule 7.700 “The personal representative must neither pay nor receive, and the attorney for the personal representative must not receive, statutory commissions or fees or fees for extraordinary services in advance of the court authorizing their payment.”

a. Be sure to obtain a court order before paying attorney’s fees from estate funds.

b. The failure to do so may result in discipline for the attorney. Specifically, the California Supreme Court has held in at least one opinion that an attorney may be disbarred for receiving compensation for “estate funds” without court approval, even where the fees were not unconscionable. Alberton v. State Bar (1987) 43 Cal.3d 638.

ii. Trusts: No

https://www.americanbar.org/groups/litigation/resources/uniform_task_based_management_system/litigation_code_set/

https://www.americanbar.org/groups/litigation/resources/uniform_task_based_management_system/litigation_code_set/

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1. Probate Code § 17209 provides, “The administration of trusts is intended to proceed expeditiously and free of judicial intervention, subject to the jurisdiction of the court.”

2. Under Probate Code § 16247, a trustee may hire agents, including attorneys. Under Probate Code § 16243, a trustee may pay the “reasonable compensation of the trustee and of employees and agents of the trust . . . .”

3. But beware, attorney’s fees are subject to review by the court via petitions to review an accounting and may ultimately be disallowed by the court.


i. The burden of proof for justifying fees is generally on the attorney and the fiduciary. Estate of Fulcher (1965) 234 Cal.App.2d 710, 718.

ii. Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 632-633, lists additional factors for determining a “reasonable” hourly rate, including consideration of “the skill and experience of the attorneys, the nature of the work performed, the relevant area of expertise, their customary billing rates, and the prevailing rate charged by attorneys of similar skill and experience with comparable legal services in the community.”

iii. Providing billing timesheets is not required. Concepcion v. Amscan Holdings (2014) 223 Cal.App.4th 1309, 1324 (“It is not necessary to provide detailed billing timesheets to support an award of attorney fees under the lodestar method”).

1. Instead, it is sufficient to provide declarations of counsel setting forth the reasonable hourly rate, the number of hours worked and the tasks performed. (See CRC 7.70.)

iv. CRC 7.702 – a petition for extraordinary compensation must include or be accompanied by a statement of facts upon which the petition is based, and must:

a. Show the nature and difficulty of the tasks performed;

b. Show the results achieved;

c. Show the benefit of the services to the estate;

d. Specify the amount requested for each category of service performed;

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e. State the hourly rate of each person who performed services and the hours spent by each of them;

f. Describe the services rendered in sufficient detail to demonstrate the productivity of the time spent; and

g. State the estimated amount of statutory compensation to be paid by the estate, if the petition is not part of a final account or report.

v. Tell a story—be sure to provide a narrative along with your fee request. The Court wants to know what you did, not just your hourly rate and how much time you spent.

E. Use of Paralegals

i. “[A]wards of attorney fees for paralegal time have become commonplace in California.” (Gunn v. Dotson (1994) 23 Cal.App.4th 262, 269.)

ii. In Missouri v. Jenkins (1989) 491 U.S. 274, 285, the Supreme court noted that “the ‘reasonable attorney’s fee’ provided for by statute should compensate the work of paralegals, as well as that of attorneys.”

iii. Note that CRC Rule 7.703(e) provides that extraordinary legal services may include the services of a paralegal only if the request for extraordinary legal fees for the paralegal’s services meets certain criteria, including: (1) a description of the paralegal’s qualifications (including education, certification, continuing education, and experience); (2) a statement of the hours spent by and hourly rate requested for the paralegal; (3) a description of the services performed; (4) a statement why it was appropriate to use the paralegal’s services in the particular case; and (5) demonstrating that the total amount requested for extraordinary services of the attorney and paralegal does not exceed the amount appropriate if the attorney had performed the services without the paralegal’s assistance.

F. San Francisco County Superior Court Local Rules 14.86 and 14.88

i. San Francisco Local Rules 14.86 and 14.88 allow statutory compensation only in proportion to the work actually completed, and the last 25% of the statutory compensation generally will not be allowed before final distribution.

1. Fee requests must be supported by a declaration under penalty of perjury of services performed, time expended, average hourly rate, results accomplished, and benefit.

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2. In the event the attorney’s office performed bookkeeping services for a fiduciary, the Court may award the attorney a larger compensation and the fiduciary a lesser compensation.

3. Fees requested for time billed by a paralegal must be supported by the attorney’s declaration regarding the paralegal’s compliance with Bus. & Prof. Code § 6450.

ii. Fees for extraordinary services will be allowed before final distribution only when it appears likely that the estate will remain in probate for an unusually long time, or on a showing that present payment will benefit the beneficiaries or the estate. (S.F. L.R. 14.88(A).) Additionally, requests for compensation for extraordinary services in a decedent’s estate will not be considered unless the caption of the petition and the notice of hearing include a reference to the request. (S.F. L.R. 14.89).

iii. For Trusts, Conservatorships, and Guardianships, the Court prefers to determine the amount of fees at the time an accounting is considered, and absent good cause, requests for fees on account will be considered only in the petition for appointment or as part of a petition for approval of an account.

iv. All petitions must be supported by a description of the services forming the basis of the request, including the surrounding circumstances, the benefit to the entity, and the time spent. Each timesheet must identify the attorney/paralegal providing the service and include the hourly rate for the attorney/paralegal, the time spent on the services described in the entry, and the total fee charged for that entry. (S.F. L.R. 14.89).

IV. Local Courts’ Increasing Willingness to Award Attorney’s Fees: 3 Examples

A. Estate of Alvin Jow, San Mateo County Superior Court Case No. 17PRO00608 [omitted spouse claim].

i. Approximately $300,000 post-trial attorney’s fees award.

ii. Code of Civil Procedure sections 128.5 and 2033.420, as well as Rudnick v. Rudnick, supra.

B. Francis Trust, Santa Clara County Superior Court Case No. PR176711 [Contest based on alleged forgery].

i. Approximately $900,000 post-trial attorney’s fees award.

ii. Note: On appeal in Sixth District, Case No. H044960 (As of October 3, 2019 fully briefed and presumably awaiting oral argument.)

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C. Estate of Khatri Walt Shjeflo, San Mateo County Superior Court Case No. PRO123880 [Contest based on incapacity].

i. Approximately a $1.4 Million post-trial attorney’s fees award.

ii. Code of Civil Procedure sections 128.5 and 2033.420.

iii. Note: On appeal in First District, Case No. A150546 (Awaiting oral argument.)

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