In re Estate of Schwenker

[Cite as In re Estate of Schwenker, 2019-Ohio-2581.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
In the Matter of: :
The Estate of Charles V. Schwenker:
: No. 18AP-320
(Prob. No. 573773)
:
[William V. Schwenker, Co-Fiduciary (REGULAR CALENDAR)
of the Estate of Charles V. Schwenker, :
Appellant]. :
D E C I S I O N
Rendered on June 27, 2019
On brief: Fisher, Skrobot & Sheraw, LLC, Matthew J.
Kunsman, and David A. Skrobot, for appellant.
On brief: Bailey Cavalieri, LLC, Dan L. Cvetanovich, and
Robert R. Dunn, for appellee. Argued: Robert R. Dunn.
APPEAL from the Franklin County Court of Common Pleas,
Probate Division
DORRIAN, J.
{¶ 1} Appellant, William V. Schwenker, co-fiduciary of the Estate of Charles V.
Schwenker ("decedent"), appeals from an entry of the Franklin County Court of Common
Pleas, Probate Division, approving in part the application for attorney fees submitted by
appellee Bailey Cavalieri, LLC, attorneys for the estate.
{¶ 2} Decedent died intestate in Franklin County on February 17, 2015. His two
adult children, William V. Schwenker and Diana S. Anderson, shared the estate equally.
After a brief period in which the probate court appointed a creditors' agent as
administrator, several versions of the will were located and filed, and the court appointed
decedent's children, William and Diana, as co-executors on October 15, 2015. Discovery
and submission of a later will and codicils followed, but there was ultimately no
controversy over which effective documents would govern distribution.
No. 18AP-320 2
{¶ 3} The co-executors retained Attorney Robert R. Dunn of the law firm Bailey
Cavalieri, LLC, to administer the estate, pursuant to an hourly fee agreement payable
upon closing the estate. Eventually, each co-executor retained personal counsel as well.
On June 1, 2017, the co-executors and Attorney Dunn submitted the first partial accounting
for the estate. On June 27, 2017, Attorney Dunn filed an application for attorney fees and
costs requesting the court approve his application in the amount of $73,995.00 in fees and
$941.96 in costs for services for the period September 2, 2015 through June 20, 2017. The
fee application included the final estimated cost to close the estate.
{¶ 4} William contested the fee application, asserting it was excessive given the
straightforward nature of the estate and the number of non-probate assets. The application
was heard before a magistrate on July 28 and August 15, 2017. The parties, William on one
hand and Attorney Dunn and his firm on the other, presented contrasting expert testimony
regarding the reasonable amount of fees for a comparable estate. The magistrate rendered
a decision on September 15, 2017 approving fee application in the slightly reduced amount
of $73,291.00 and $941.96 in costs. The magistrate found factually that, to the extent that
attorney fees exceeded the expectation of the beneficiaries, the fees were partially the result
of contentious conduct between the co-executors and their difficulty in cooperating to
perform their fiduciary duties.
{¶ 5} William filed objections to the magistrate's decision on September 29, 2017.
On April 3, 2018, the probate court entered judgment overruling William's objections for
the most part, sustaining them in minor respects, and reducing the fee award by $5,000.
{¶ 6} Attorney Dunn requested permission on January 19, 2018 to resign as
counsel for the co-executors. The probate court conditioned the resignation upon the filing
of a final account. When the co-executors refused to sign the final account as presented,
Attorney Dunn requested the court lift this condition, which was granted and Attorney
Dunn's resignation was accepted on April 16, 2018.
{¶ 7} William filed his notice of appeal from the probate court's final judgment on
May 3, 2018. Diana has neither appealed nor appeared before this court. William brings
the following assignment of error:
THE TRIAL COURT ABUSED ITS DISCRETION BY
ADOPTING THE MAGISTRATE'S DECISION APPROVING
THE FEE APPLICATION OF COUNSEL FOR THE ESTATE AS
No. 18AP-320 3
THE FEES APPROVED BY THE TRIAL COURT WERE, AS A
MATTER OF LAW, UNREASONABLE AND AGAINST THE
MANIFEST WEIGHT OF THE EVIDENCE.
{¶ 8} When objections are filed to a magistrate's decision, the trial court must
undertake an independent de novo review of the matters objected to in order "to ascertain
[whether] the magistrate has properly determined the factual issues and appropriately
applied the law." Civ.R. 53(D)(4)(d). See also James v. My Cute Car, LLC, 10th Dist. No.
16AP-603, 2017-Ohio-1291, ¶ 13. "The standard of review on appeal from a trial court
judgment that adopts a magistrate's decision varies with the nature of the issues that were
(1) preserved for review through objections before the trial court and (2) raised on appeal
by assignment of error." In re Guardianship of Schwarzbach, 10th Dist. No. 16AP-670,
2017-Ohio-7299, ¶ 14; Feathers v. Ohio Dept. of Rehab. & Corr., 10th Dist. No. 16AP-588,
2017-Ohio-8179, ¶ 10. The extensive nature of appellant's objections below ensure he has
preserved the pertinent issues for appellate review.
{¶ 9} R.C. 2113.36 confers exclusive original jurisdiction in the probate court to
determine the reasonableness of attorney fees. "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." See also In re Estate of
Haller, 116 Ohio App.3d 866, 870 (1oth Dist.1996). " 'It is well settled that where a court is
empowered to award attorney fees by statute, the amount of such fees is within the sound
discretion of the trial court. Unless the amount of fees determined is so high or so low as
to shock the conscience, an appellate court will not interfere.' " Bittner v. Tri-County
Toyota, Inc., 58 Ohio St.3d 143, 146 (1991), quoting Brooks v. Hurst Buick-Pontiac-Olds-
GMC, Inc., 23 Ohio App.3d 85, 91 (12th Dist.1985).
{¶ 10} The determining factor to consider when a court fixes the amount of attorney
fees in probate proceedings is the reasonable value of legal services provided. In re Hickok:
Toledo Trust Co. v. Hickok, 159 Ohio St. 282, 284 (1953). "Reasonable attorney fees must
be based upon the actual services performed by the attorneys and upon the reasonable
value of those services as determined from the evidence which must substantiate the award
of fees as being reasonable." In re Estate of Love, 1 Ohio App.2d 571, 578 (1oth Dist.1965).
The factors that a court should consider when considering the reasonableness of attorney
No. 18AP-320 4
fees parallel those found in the Rules of Professional Conduct. Specifically, Prof.Cond.R.
1.5 provides as follows:
(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;
(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} Intrinsic in these factors is the proposition that an attorney should not charge
legal fees for non-legal services. Disciplinary Counsel v. Hunter, 106 Ohio St.3d 418, 2005-
Ohio-5411, ¶ 17, 25; Cincinnati Bar Assn. v. Alsfelder, 103 Ohio St.3d 375, 2004-Ohio-5216,
¶ 22, 23.
{¶ 12} The magistrate's decision in this case makes a certain number of factual
findings that are not in dispute, as well as several to which William firmly objected before
the probate court and on appeal. Among the undisputed facts are the magistrate's finding
that the fee application demonstrates a range of fees for a variety of services provided to the
estate, but the bulk of time was billed by a firm paralegal with 252.1 hours at $185 per hour.
"The probate paralegal's services ranged from coordinating the payment of Estate bills with
the co-executors, to drafting documents for Attorney Dunn." (Mag.'s Decision at 9.) In
contrast, Attorney Dunn billed 48.10 hours at $340 per hour. The magistrate concluded
that, at least with respect to the nominal hourly rates charged, the rates were usual and
No. 18AP-320 5
customary for Franklin County probate practice. The magistrate also noted Attorney Dunn
and his firm were located in Columbus, Ohio, while the co-executors were located in
California. The magistrate noted that Attorney Dunn assisted the co-executors with
decedent's non-probate assets which included vehicles and financial accounts.
{¶ 13} Among the contested conclusions of the magistrate, the most significant is
the following: "[t]he co-executors did not get along during the administration of the
Decedent's Estate, as evidenced by Attorney Dunn's extensive testimony, and Exhibits * * *.
The co-executors obstructed the administration of this Estate, and hindered what should
have been the swift disposition of non-probate assets, by failing to cooperate with Attorney
Dunn as evidence[d] by Attorney Dunn's prolonged testimony and Exhibits * * *. No
evidence was presented to contradict Mr. Dunn's characterization of the animosity between
the co-executors." (Mag. Decision at 4.)
{¶ 14} The magistrate did enumerate certain items and expenses that reflected
billing by the paralegal or attorney for matters that were not legal, but ministerial or
administrative. The magistrate allowed these at an administrative rate of $75 per hour,
reflected in a minor adjustment to the overall fee application. Upon objections before the
probate court, the court made a further adjustment based on its conclusion that work
regarding the transfer of real property was unnecessary because this was a transfer-on-
death asset and a timely title search would have avoided some of the fees attributed to this
item. The probate court accordingly reduced the fee application by $5,000. Most
importantly, the probate court adopted the magistrate's conclusion that "Attorney Dunn
was also required to act, in essence, as a mediator between two combative co-executors who
had long-standing childhood issues with each other. William would like this Court to ignore
the fact that he and Diana could not complete even the simplest tasks because they could
not get along with each other. However, the Court will not ignore this fact when that very
behavior indeed caused increased attorneys fees." (Apr. 3, 2018 Decision at 11.)
{¶ 15} Under an abuse of discretion standard, we find the probate court's decision
does not manifest an abuse of discretion in its findings of fact and legal determinations.
The magistrate heard testimony from Attorney Jim Vonau as an expert regarding the
reasonableness of Bailey Cavalieri's fees for the services of Attorney Dunn and a paralegal.
Attorney Vonau testified that the charges were, in fact, lower than he expected based on his
No. 18AP-320 6
opinion of Attorney Dunn's expertise and experience, and compared to similar firms in the
local legal community. Attorney Vonau also opined the time billed for attorney and
paralegal work was supported by the unusual factors in the estate, including the admission
of newly discovered wills and codicils in the course of administration, retention of separate
legal counsel by each co-executor to represent their beneficial interests, and a change of
personal counsel by William during the administration of the estate.
{¶ 16} William presented testimony of his own expert, Attorney David Duren.
Attorney Duren opined that Bailey Cavalieri's fees were "a bit high." (Tr. at 258.) This was
based on sample fee calculations from jurisdictions other than Franklin County. Attorney
Duren did not include the impact of a contentious or adversarial relationship between co-
executors and expressly testified he was unaware of any antagonism in the present case. In
response to direct questioning from the magistrate, Attorney Duren did concede that
unusual circumstances, such as difficult relationships between beneficiaries or fiduciaries,
would result in augmented fees.
{¶ 17} To find an abuse of discretion in this case, we must find more than a mere
error on the part of the probate court. We must find the probate court's decision is contrary
to law, unreasonable, not supported by evidence, or grossly unsound. In re Guardianship
of Schwarzbach, 10th Dist. No. 17AP-247, 2018-Ohio-1712, ¶ 31. In light of the evidence
received before the magistrate and examined by the court on objections, we find no abuse
of discretion on the part of the probate court in overruling the bulk of William's objections
to the magistrate's decision. The probate court did take note of arguments addressing the
state of title to decedent's residence and reduced the fees accordingly. Otherwise, there was
unrebutted testimony regarding conflicts between the co-executors and the reasonableness
of the hourly rates charged. William's expert did not address the special circumstances of
the estate when reviewing the reasonableness of fees and opining on them. The probate
court further found it was reasonable for the estate attorney to undertake work with respect
to non-probate assets, particularly in light of the fact that the co-executors were out of state
and these formalities were to take place in Ohio. The magistrate, and court when ruling on
objections, acknowledged that even with respect to the non-probate assets, such as a 1964
Cadillac automobile owned by decedent with a transfer-on-death title, Attorney Dunn's
efforts to transfer the title met with objections and obstacles from William.
No. 18AP-320 7
{¶ 18} The probate court did decide that state of title to decedent's former principal
residence presented some complications in winding up the estate, and that Bailey
Cavalieri's handling of this asset had resulted in undue expenses warranting a reduction in
the fee application. Decedent, according to Attorney Dunn's testimony, attempted to alter
his title to a transfer-on-death deed on September 1, 2000, but then revoked that deed on
September 28, 2005 and retained the residence in his name until his death. Accordingly,
the co-executors did not object to inclusion of the residence as an estate asset on inventories
and the first partial account. In his objections to the magistrate's decision, William argued
that the 2000 deed was defective and actually conveyed the residence to William and Diana
at that time. Nonetheless, William and Diana had previously signed an application for a
certificate of transfer into the beneficiaries' names pursuant to the will. While Bailey
Cavalieri consistently argued before the probate court on objection and this appeal that
Attorney Dunn handled the disposition of decedent's residence in the only way possible
given the state of the deed, the firm does not seek to disturb the probate court's ultimate
adjustment of $5,000 in fees for this item.
{¶ 19} Finally, William argues on appeal that Bailey Cavalieri improperly engaged
in "block billing" entries when submitting its itemized billing, rather than using line-item
breakdown of billing services. William's own expert did not opine on the propriety of this
billing practice in probate proceedings, whereas Bailey Cavalier's expert, Attorney Vonau,
stated it was customary, and in fact nearly universal in local probate practice.
{¶ 20} A poor relationship between beneficiaries or executors can support an award
of higher attorney fees in a probate case. Haller. The evidence in the present case supports
the probate court's findings of fact and conclusions of law in this respect. In summary, we
find no abuse of discretion on the part of the probate court in overruling the greater part of
William's objections to the magistrate's decision and granting the fee application with some
reductions.
{¶ 21} Accordingly, appellant's sole assignment of error is overruled, and the
judgment of the Franklin County Court of Common Pleas, Probate Division, is affirmed.
Judgment affirmed.
SADLER and LUPER SCHUSTER, JJ., concur.