- Here’s an interesting case I recently read about.
- The case involved an executor who did a lousy job being the executor of an estate. The beneficiaries sued to recover their legal fees and court costs in seeking his removal.
- They lost. Here’s why.
Background of the Case
Plaintiffs sued the executor of the estate because they were dissatisfied with his handling of the estate. In the complaint, the plaintiffs claimed the executor unduly delayed administration of the estate. Two days later, a judge entered an order compelling the executor to produce a formal accounting of the estate. The executor represented he would provide the accounting by a date certain, but he failed to do so.
In response, the probate judge conducted a testimonial hearing concerning finalization of the estate. As a result of that hearing, the judge signed a second order to the executor to settle the estate within thirty days, issue a release, and “refunding bond and checks” to all beneficiaries. The Executor failed to comply with this order also.
For a third time, the probate judge compelled the executor to provide a final estate accounting within 30 days and yet again, the executor did not comply with the judge’s order.
Eventually, plaintiffs did obtain a court order removing the estate’s executor. After the executor’s removal, plaintiffs petitioned the probate court for attorneys’ fees necessitated in removing the executor. The probate judge denied the fee request, finding no authority to award fees absent a will contest or professional negligence action.
Plaintiffs sought to recoup approximately $49,000 in attorneys’ fees based on the executor’s lack of action and missteps resulting in financial harm to the estate. The executor opposed the motion because plaintiffs’ action was neither a will contest nor a legal malpractice lawsuit that would entitle plaintiffs to a fee award. He also explained that plaintiffs suffered no damages because any costs associated with delays in the administration of the estate were offset by the increased value of decedent’s stocks, the payment of dividends from those stocks, and the $30,000 litigation settlement related to the sale of decedent’s home.
The judge held plaintiffs’ “litigation . . . would not fall within any of the recognized exceptions to shift the responsibilities of paying attorney fees.”
On appeal, plaintiffs argued the probate judge abused his discretion in denying plaintiffs’ application for attorneys’ fees following their success in removing him as executor of decedent’s estate. The Appellate Court disagreed. The court reasoned “fee determinations by trial courts will be disturbed only on the rarest of occasions, and then only because of a clear abuse of discretion.” The award of counsel fees is at the discretion of the trial court and is accorded substantial deference.
Under NJ court rules, probate actions allow for an award of counsel fees “if probate is refused” or “[i]f probate is granted, and it appears that the contestant had reasonable cause for contesting the validity of the will codicil . . . .” R. 4:42-9(a)(3). In this case, the court concluded that Rule 4:42-9(a)(3) was inapplicable because the matter did not involve a refusal of an action for probate or a challenge to the “validity of the will or codicil.” Plaintiffs never challenged the probating of decedent’s will or codicil. Instead, plaintiffs filed actions to ensure decedent’s will and codicil were probated and the estate finalized so they would receive their share of the inheritance.
To avoid having the court deny their fee request, plaintiffs asserted that the executor’s mediocre (lousy) job in administering the estate, and his eventual removal as the estate’s executor, justified an award of attorneys’ fees.
The court said no because plaintiffs did not demonstrate any intentional misconduct on the part of the executor. The executor did not steal funds, deal in bad faith, or breach any fiduciary duty. Thus, the fee shifting provisions were non-existent here.
To discuss your NJ probate and estate administration matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Probate and Estate Administration Attorney