In re Estate of Hunter ( 2023 )

[Cite as In re Estate of Hunter, 2023-Ohio-1197.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
In the Matter of the Estate of :
Dessie M. Hunter, No. 22AP-430
: (Prob. No. 611140)
[John Neil Lindsey, : (REGULAR CALENDAR)
Appellant]. :
D E C I S I O N
Rendered on April 11, 2023
On brief: John Neil Lindsey, pro se.
APPEAL from the Franklin County Court of Common Pleas,
Probate Division
LUPER SCHUSTER, J.
{¶ 1} Appellant, John Neil Lindsey, appeals from a judgment of the Franklin
County Court of Common Pleas, Probate Division, approving in part, and denying in part,
Lindsey’s attorney fees request. For the following reasons, we affirm.
I. Facts and Procedural History
{¶ 2} On April 28, 2021, Dessie M. Hunter (“decedent”) died intestate, and her son,
George Hunter, was appointed administrator of her estate in July 2021. George retained
Lindsey as legal counsel to assist in the administration of the estate. In May 2021, the state
of Ohio asserted a Medicaid estate recovery claim of $156,476.12 against decedent’s estate.
This claim was later waived in full.
{¶ 3} Decedent died with a fee simple interest in real estate appraised at
$91,700.00. With the consent of all decedent’s heirs, in February 2022, this property was
sold. George subsequently filed the following documents in the probate court: the final
fiduciary’s account, receipts and disbursements (with the settlement statement for the sale
No. 22AP-430 2
of the property attached), consent of each heir to the fiduciary’s account and the receipts
and disbursements, and consent of each heir to payment of the attorney fees of $18,180.00
(with Lindsey’s billing statement included). The property settlement statement included a
seller’s debt of $23,471.41, which was identified as a charge for “Attorney Fee (Medicaid
Neg.) to John Neil Lindsey.” (Settlement Statement at 2.) The probate court set the matter
for a hearing on attorney fees and the final and distributive account.
{¶ 4} Lindsey and the estate’s administrator, George, appeared at the hearing. The
probate court asked Lindsey why the attorney fees were relatively high in the
administration of the estate, and Lindsey explained that the sale of decedent’s property
required an unusual amount of time because multiple deals fell through shortly before
closing. Lindsey also indicated that the charged contingent fee was based on his efforts in
negotiating the state of Ohio’s full waiver of the Medicaid estate recovery claim. He
acknowledged, however, that he did not obtain probate court approval before entering the
contingent fee agreement with the fiduciary concerning the Medicaid estate recovery claim.
George stated he was very pleased with Lindsey’s legal work relating to decedent’s estate.
Approximately two weeks after the hearing, the probate court filed an entry approving and
settling the estate accounts. A few weeks later, the probate court approved the requested
attorney fees in part. The court approved the $18,180.00 in attorney fees that Lindsey
billed to the estate based on his time spent on the matter, but it disallowed Lindsey’s
requested $23,471.41 contingent fee based on the state’s waiver of the Medicaid estate
recovery claim.
{¶ 5} Lindsey timely appeals.
II. Assignment of Error
{¶ 6} Lindsey presents the following sole assignment of error for our review:
The Trial Court abused its discretion by denying the attorney
fee under the contingent fee agreement in full as it failed to
apply fully the reasonableness factors of Professional Rule of
Conduct 1.5(a).
III. Discussion
{¶ 7} In his sole assignment of error, Lindsey alleges the probate court abused its
discretion in disallowing his attorney fees request that was based on the contingent fee
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agreement. He contends the probate court erred in failing to properly consider and apply
Prof.Cond.R. 1.5(a) as to that request. This assignment of error is not well-taken.
{¶ 8} The amount of an attorney fees award is a matter within the trial court’s
sound discretion. Bittner v. Tri-Cty. Toyota, Inc., 58 Ohio St.3d 143, 146 (1991). An
appellate court will not reverse a determination of attorney fees unless the appellant
demonstrates an abuse of discretion and that “ ‘the amount of fees determined is so high or
so low as to shock the conscience.’ ” Id., quoting Brooks v. Hurst Buick-Pontiac-Olds-GMC,
Inc., 23 Ohio App.3d 85, 91 (12th Dist.1985). An abuse of discretion connotes a decision
that was unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio
St.3d 217, 219 (1983).
{¶ 9} “Reasonable attorney fees paid by the executor or administrator of an estate
are allowed as part of the expenses of administration and the probate court is authorized to
fix the amount of such fees.” In re Estate of Klie, 10th Dist. No. 16AP-77, 2017-Ohio-487,
¶ 21. R.C. 2113.36 states: “If an attorney has been employed in the administration of the
estate, reasonable attorney fees paid by the executor or administrator shall be allowed as a
part of the expenses of administration. The court may at any time during administration
fix the amount of those fees and, on application of the executor or administrator or the
attorney, shall fix the amount of the fees.” Thus, a probate court only may award reasonable
fees to attorneys who are employed in the administration of an estate.
{¶ 10} The attorney seeking fees bears the burden of proving the reasonableness of
the fees. In re Estate of Born, 10th Dist. No. 06AP-1119, 2007-Ohio-5006, ¶ 18. In
determining the reasonableness of attorney fees, the probate court must consider the facts
and circumstances of each case. Id. at ¶ 19. Ohio Sup.R. 71(A) provides that attorney fees
in all matters shall be governed by Prof.Cond.R. 1.5, which states:
The factors to be considered in determining the reasonableness
of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the
questions involved, and the skill requisite to perform the legal
service properly;
(2) the likelihood, if apparent to the client, that the acceptance
of the particular employment will preclude other employment
by the lawyer;
No. 22AP-430 4
(3) the fee customarily charged in the locality for similar legal
services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the
circumstances;
(6) the nature and length of the professional relationship with
the client;
(7) the experience, reputation, and ability of the lawyer or
lawyers performing the services;
(8) whether the fee is fixed or contingent.
{¶ 11} Here, the fee at issue was a contingent fee. Except in certain matters, an
attorney “fee may be contingent on the outcome of the matter for which the service is
rendered.” Prof.Cond.R. 1.5(c). “[T]he obvious but critical characteristic of a contingent
fee arrangement [is] the presence of risk.” In re Sulzer Hip Prosthesis & Knee Prosthesis
Liab. Litigation, 290 F.Supp.2d 840, 850 (N.D.Ohio 2003). A “contingent-fee lawyer bears
the risk of receiving no pay if the client loses and is entitled to compensation for bearing
that risk.” Restatement of the Law 3d, Governing Lawyers, Section 35, Comment c (2000).
Consequently, “the reasonableness of an attorney’s contingent fee depends directly on
whether (or to what extent) real risk is present.” Sulzer Hip Prosthesis at 850. That is,
“ ‘[n]ot every contingent fee is justifiable by appeal to the lawyer’s assumption of the risk of
nonrecovery. There are situations in which the lawyer knows in advance that the
contingency factor is negligible, or in which the lawyer’s effort bear[s] virtually no
relationship to the size of the recovery, resulting in pure windfall.’ ” Id. at 851, quoting 1
Hazard & Hodes, The Law of Lawyering, Section 8.6, at 8.16 (3d Ed.2000).
{¶ 12} A contingent fee agreement between an attorney and an estate administrator
or executor generally must be preapproved by a probate court. Pursuant to Sup.R. 71(I),
“[p]rior to a fiduciary entering into a contingent fee contract with an attorney for services,
an application for authority to enter into the fee contract shall be filed with the court, unless
otherwise ordered by local court rule. The contingent fee on the amount obtained shall be
subject to approval by the court.” Consistent with Sup.R. 71(I), Loc.R. 71.8 of the Franklin
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County Probate Court states that “[a]ll fiduciaries shall make written application to the
Court for authority to enter into a contingent fee contract.” Such an application must
include “a case plan, time projection, and estimated costs, as available,” and is reviewed by
the court for either preliminary approval or disapproval. Loc.R. 71.8. A preliminary
approval is “subject to final review at the conclusion of the matter that is the subject of the
contingent fee contract.” Loc.R. 71.8.
{¶ 13} In this matter, Lindsey requested the probate court’s approval of $23,471.41
as a contingency fee for his work relating to negotiating a waiver for a Medicaid estate
recovery claim. After decedent’s death, the state asserted a Medicaid estate recovery claim
of nearly $160,000.00 against her estate. On December 23, 2021, George agreed to pay
Lindsey 20 percent of the amount reduced or waived of the Medicaid estate recovery claim
against decedent’s estate resulting from Lindsey’s services. At the attorney fees hearing
before the probate court, Lindsey indicated he was able to obtain a full waiver of that claim
against decedent’s estate. Based on that waiver and the terms of the legal services
agreement concerning the Medicaid estate recovery claim, he sought a fee of $31,295.22,
less a discretionary reduction of 5 percent, or $23,471.41. The probate court denied
Lindsey’s contingent fee request for two reasons: “The contingent fee was not approved by
the court prior to entering into a contingent fee agreement and Attorney Lindsey did not
meet his burden of proof to show that amount was justified by the amount of time spent on
the reduction of the Medicaid Estate Recovery Claim.” (June 22, 2022 Jgmt. Entry at 3.)
{¶ 14} Both of these reasons are supported by law and the record. Despite the
preapproval requirement set forth in Sup.R. 71(I) and Loc.R. 71.8, Lindsey concedes he and
George did not obtain court approval before entering the contingent fee agreement. The
“failure to comply with Sup.R. 71(I) is ample authority for a probate court to reject a
contingent fee contract which has not received prior court approval and find that such a
contract is not enforceable.” In re Stine, 3d Dist. No. 5-06-11, 2006-Ohio-6687, ¶ 16. Thus,
the non-compliance of Lindsey and the fiduciary with Sup.R. 71(I) and Loc.R. 71.8 provided
a reasonable basis for the probate court to disallow the payment of the requested contingent
fee.
{¶ 15} Additionally, the probate court’s finding, that Lindsey did not meet his
burden of demonstrating that the $23,471.41 fee was justified by the amount of time spent
No. 22AP-430 6
on the reduction of the Medicaid estate recovery claim, is supported by the record. In effect,
the probate court found that Lindsey did not show his request was reasonable. Lindsey
argues that the probate court, in reaching this determination, did not consider factors
favoring his position, such as his time communicating with several attorneys regarding the
claim waiver, his experience and expertise in the subject matter, the customary fees charged
in the locality, the results obtained, and his 5 percent reduction of the fee after successfully
obtaining the waiver. We are unpersuaded.
{¶ 16} Lindsey’s argument is flawed because it does not address the absence of
evidence showing what he did, and how much time he spent, obtaining the waiver on his
client’s behalf, separate from, and in addition to, what is indicated on the invoice entries
for his hourly charged work. Nor did he demonstrate that there remained real risk to the
estate, at the time the contingent fee agreement was entered, that the state’s Medicaid
estate recovery claim would not be withdrawn or waived once the relevant information was
provided to the state. At the attorney fees hearing, Lindsey stated he had communications
with outside counsel from the Ohio Attorney General’s Office and a Senior Assistant Ohio
Attorney General concerning the Medicaid estate recovery claim. Lindsey also generally
referenced negotiating the Medicaid estate recovery claim waiver. But he did not
differentiate between time spent assisting in the administration of the estate and
negotiating a waiver of the Medicaid estate recovery claim. Nor did he detail the
circumstances of negotiating the waiver. In fact, Lindsey’s itemized invoice for services
provided in the administration of the estate, for which he was fully compensated, includes
multiple references to “Medicaid waiver,” and a charge for a January 5, 2022 consultation
with counsel for the Ohio Attorney General’s Office regarding “[c]onflict of interest and
sense of impropriety.” (Lindsey’s Time & Expenses Invoice at 3.) Furthermore, the invoice
also includes a charge relating to a December 23, 2021 e-mail from George “[c]onfirming
waiver eligibility,” which was the same date that Lindsey and George executed the
contingent fee agreement. (Lindsey’s Time & Expenses Invoice at 3.) Despite evidence of
this confirmation, Lindsey did not indicate, at the attorney fees hearing, that real risk to the
estate concerning the claim remained when the contingent fee agreement was entered.
{¶ 17} Therefore, even assuming Lindsey’s experience, the customary fees charged
in the locality, the results obtained, and his voluntary reduction of the fee, favored Lindsey’s
No. 22AP-430 7
position, the absence of evidence indicating real risk to the client when the agreement was
entered and specifically what Lindsey did to “negotiate” and secure the waiver (the
contingent event) in addition to, and separate from, hourly billed time, supported a finding
that the contingent fee was not reasonable. Based on these circumstances, we find the
probate court did not abuse its discretion in concluding that Lindsey did not meet his
burden of demonstrating his entitlement to the requested contingent fee.
{¶ 18} Because the probate court did not err in denying Lindsey’s request for the
approval of the contingent fee, we overrule his sole assignment of error.
IV. Disposition
{¶ 19} Having overruled Lindsey’s sole assignment of error, we affirm the judgment
of the Franklin County Court of Common Pleas, Probate Division.
Judgment affirmed.
BEATTY BLUNT, P.J., and MENTEL, J., concur.