In the Matter of the Estate of Mary E. Miller ( 2023 )

IN THE COURT OF APPEALS OF IOWA
No. 22-1499
Filed February 8, 2023
IN THE MATTER OF THE ESTATE OF MARY E. MILLER, Deceased.,
RICHARD J. MILLER, MARY JO MILLER and MARCIA SOLA,
Executors-Appellants.
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Appeal from the Iowa District Court for Dubuque County,
Monica Zrinyi Ackley, Judge.
The co-executors of an estate appeal the denial of their request for
extraordinary fees. REVERSED AND REMANDED.
Joshua P. Weidemann of O'Connor & Thomas, P.C., Dubuque, for
appellants.
Considered by Vaitheswaran, P.J., and Ahlers and Buller, JJ.
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BULLER, Judge.
The co-executors of a Dubuque County estate appeal the district court’s
denial of their request for extraordinary fees. We find the district court abused its
discretion when it refused to hold a hearing when confronted with potentially
serious errors in its order. We therefore reverse and remand.
I. Background Facts and Course of Proceedings
Mary E. Miller died testate in 2021. Mary’s three children and heirs were
named as co-executors. The executors nominated an estate attorney, whose fees
and costs are the subject of this appeal.
The record suggests the estate required extraordinary efforts by the
attorney because the executors generally refused to communicate with each other.
Nearly all communications between and among them had to flow through the
attorney. These communications were made more difficult because only one of
the executors used e-mail. Additional work was also required because one of the
executors bought the decedent’s residence, the executors could not agree on how
to divide the property, and the estate attorney had to complete certain specific
bequests to the decedent’s grandchildren and great-grandchildren.
The maximum ordinary statutory fee for the estate was $10,875.84. The
executors applied for and the court approved payment of the statutory maximum.
The executors further applied for $6500 in extraordinary fees and reimbursement
of a total of $233.88 in advanced costs and expenses. The request was
accompanied by the written consent of the co-executors and beneficiaries. After
some written back and forth, the executors provided additional information through
the attorney, and the district court subsequently denied the request for
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extraordinary fees and denied reimbursement of all costs. The district court issued
an order citing six purported bases for denying the extraordinary fees and
reimbursement, and the executors filed a responsive pleading that sought to
correct the court’s misunderstanding on the issues, along with a request for a
hearing or in-chambers conference.
The district court raised six specific concerns about the fee request, each
of which was addressed by the executors in their subsequent pleading.
Specifically, the district court believed:
1. Some of the correspondence entries were repetitive;
2. The final report was not filed at the time of the fee application;
3. There were billing entries for exhibits, yet no exhibits were admitted on
the EDMS docket;
4. Some tasks could have been performed by a paralegal or secretary;
5. There were billing entries for joint-tenancy property, but the district court
thought the inventory did not include property so held; and
6. The bulk of the estate passed outside of probate.
The executors responded to each and every concern:
1. The allegedly repetitive entries concerned internal correspondence with
support staff;
2. The final report was prepared at the time of the fee request and the
executors so represented under oath;
3. Exhibits were prepared and one was filed of record and so labeled;
4. At least one paralegal worked on the matter and the paralegal’s time
was billed at an appropriately lower rate than the attorney;
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5. The inventory noted accounts held in joint tenancy; and
6. Less than one-fifth of the estate passed outside of probate.
In a one-sentence order, the district court rejected the executors’ attempt to clarify
the issues and denied their request for a hearing or conference. This appeal
follows.
II. Standard of Review
We review probate matters de novo. See Iowa Code § 633.33 (2022); Iowa
R. App. P. 6.907. We review a decision on extraordinary fees for abuse of
discretion. In re Est. of Bockwoldt, 814 N.W.2d 215, 222 (Iowa 2012). We assume
without deciding that the decision of whether to hold a hearing or conference in an
equity proceeding is subject to the district court’s discretion.
III. Discussion
We conclude the district court abused its discretion in denying the request
for a hearing when confronted with potentially serious factual errors in its prior
ruling. See State v. Iowa Dist. Ct., 286 N.W.2d 22, 25 (Iowa 1979) (“[A]n attorney
asking a fee is entitled to a hearing at which he or she may offer evidence to
establish the value of his or her services . . . .”); In re Est. of Schuster, No. 03-
2067, 2004 WL 2579231, at *3 (Iowa Ct. App. Nov. 15, 2004) (“[W]e cannot say
that even with consents an attorney should be precluded from presenting his
evidence to the court if the court is opposed to granting the fee application.”).
Although our review is de novo, and we could arguably decide the merits of the fee
issue in the first instance, we believe the better approach is to remand to the district
court, consistent with our case law. “We reverse the court’s reduction of
extraordinary fees and remand to the district court to allow [the attorney] an
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opportunity for an evidentiary hearing on his request.” Schuster, 2004 WL
2579231, at *3. “We make no determination as to the necessity of the work
performed or the reasonableness of [the] claim,” except to direct that the district
court must address any evidence offered at hearing when ruling on this matter.
See id.REVERSED AND REMANDED.