National Wildlife Federation v. Foster

ALPERT, Judge. Hazel V. Reynolds, a domiciliary of Montgomery County, died on May 2, 1987, leaving an estate worth more than a ⁴⁸⁷ million dollars. The estate included, inter alia, four improved real properties in Washington, D.C. In her last will and testament Ms. Reynolds named as personal representative, Charles W. Foster (Personal Representative). She authorized and directed the Personal Representative to sell all of her properties in Washington “as soon as may be practicable after my death upon such terms and at such prices as my Personal Representative, in the exercise of his sole and absolute discretion, may deem fair and prudent.” After receiving letters of administration from the Register of Wills for Montgomery County, the Personal Representative filed the appropriate documents in the Superior Court of the District of Columbia.

The Personal Representative also enlisted a real estate appraiser, J. Morgan Little, whose name appeared on a list of qualified real estate appraisers maintained by the Register of Wills for the District of Columbia. Little’s date-of-death appraisals of the four properties were as follows: Property Address Appraised Value 831 Ingraham Street, N.W. $ 60,000.00 3532 T Street, N.W. 140,000.00 3602 T Street, N.W. 125,000.00 3629 S Street, N.W. 145,000.00 TOTAL $470,000.00 With assistance from Shirley’s Realty Company as to 831 Ingraham Street, N.W., and Millicent Chatel Associates, Inc. (Millicent Chatel) as to the other three properties (the subject properties), the Personal Representative negotiated contracts to sell the properties for the following prices: Property Address Sales Price 831 Ingraham Street, N.W. $ 62,500.00 3532 T Street, N.W. 159.600.00 3602 T Street, N.W. 158.500.00 3629 S Street, N.W. 162.500.00 TOTAL $543,100.00 ⁴⁸⁸ After the payment of real estate commissions and, presumably, other costs, the net proceeds from the sales of the properties were as follows: Property Address Net Proceeds 831 Ingraham Street, N.W. $ 61,662.22 3532 T Street, N.W. 149,558.82 3602 T Street, N.W. 146,546.54 3629 S Street, N.W. 150,994.34 TOTAL $508,761.92 After the sale of the properties, the Register of Wills for Montgomery County apparently approved the Personal Representative’s First and Final Account. The Personal Representative then distributed the specific bequests and devises designated in Ms. Reynolds’s will. Finally, the Personal Representative disbursed $350,000 to the National Wildlife Federation (NWF) as residuary legatee, retaining approximately $55,000, apparently pending receipt of a federal estate tax closing letter from the Internal Revenue Service.

The First and Final Account, however, indicated a payment to NWF of $404,210.63. After receiving the Personal Representative’s account, NWF concluded that the sales prices of the houses had been too low and, through counsel, it attempted to convince the Personal Representative to file a claim against Millicent Chatel for breach of its contractual and fiduciary duties to the estate. To support its position that the subject properties had been under-appraised and under-sold, NWF apparently provided the Personal Representative with data about six 1987 sales of properties that it asserted were comparable to the subject properties. According to the Personal Representative, he determined that the six properties were “significantly larger and in substantially better condition than the subject properties.” The Personal Representative then told NWF that he would not take action against Millicent Chatel.

The Personal Representative received the estate tax closing letter in late August 1988. Before receiving the letter, ⁴⁸⁹ however, he apparently learned that NWF was contemplating filing suit against him, for failing to obtain the highest prices for the subject properties, unless he agreed to institute litigation against Millicent Chatel. Rather than disbursing to NWF the approximately $55,000 he had retained after the sale of the Washington properties, the Personal Representative held onto the money to cover legal fees and expenses he might incur if NWF filed an action against him. He also engaged a Bethesda law firm to represent him.

On April 24, 1989, NWF filed a complaint against the Personal Representative and Millicent Chatel in the Superi- or Court of the District of Columbia. In the complaint, NWF alleged that the Personal Representative breached his fiduciary duty by (1) failing to take action against Millicent Chatel; (2) acquiescing in Millicent Chatel’s breaches of fiduciary duty; (3) failing to verify personally the market values of the properties and leaving the sales prices blank to be filled in by Millicent Chatel; (4) failing to offer a particular one of the three subject properties for sale to the public, rather than to a Millicent Chatel employee; and (5) withholding the remaining $55,000. NWF also alleged that the Personal Representative had been negligent and breached the standard of care he owed to the estate by acquiescing in Millicent Chatel’s breaches of contract and of fiduciary duty. The Personal Representative filed an answer and a counterclaim, in which he alleged that NWF sued him in bad faith.

The Superior Court apparently granted NWF’s motion to dismiss the counterclaim. The Personal Representative filed a Petition to Reopen the Estate in the Circuit Court for Montgomery County, sitting as the Orphans’ Court, on June 2, 1989. In the petition he sought four forms of relief: (1) the reopening of the estate; (2) permission to restate his First and Final Account and to file periodic subsequent accounts showing the liti ⁴⁹⁰ gation expenses incurred in defending the claim against him; (3) permission to pay himself $1,532.60 that he had already paid his defense counsel for services rendered before NWF filed its complaint (pre-litigation fees and expenses); and (4) permission to pay $3,434.95 in initial legal fees and expenses incurred after NWF filed the complaint (litigation fees and expenses). Along with the Petition to Reopen the Estate, the Personal Representative filed copies of NWF’s complaint, the Personal Representative’s answer and counterclaim, and the billing statements the Personal Representative had received from defense counsel for the pre-litigation and litigation fees and expenses.

Judge Paul H. Weinstein granted the Personal Representative’s petition in full on June 21, 1989. Because the Personal Representative sought attorneys’ fees, however, NWF was entitled to 20 days from the date of the June 2 petition in which to request a hearing pursuant to Md. Est. & Trusts Code Ann. § 7-502. On June 22, NWF filed a timely request for such a hearing. When it discovered that Judge Weinstein had mistakenly issued the premature order granting the Personal Representative’s petition, NWF filed a Motion to Reconsider Order Authorizing Payment of Attorneys’ Fees.

The motion’s introductory language stated that NWF “moves that this Court reconsider and rescind its order dated June 21, 1989, insofar as that order authorizes the Personal Representative to reimburse himself from the estate’s funds for certain attorneys’ fees that he has incurred.” (Emphasis added.) In conclusion, NWF requested that the court “reconsider its order of June 21, 1989, granting the Personal Representative’s request to use estate assets to pay his attorneys’ fees, rescind that order, and grant NWF a hearing on the merits of that request for attorneys’ fees.” (Emphasis added.) ⁴⁹¹ Along with its motion to reconsider, NWF filed an order, drafted by its counsel, which read as follows: Upon consideration of the Motion of National Wildlife Federation to reconsider this Court’s order of June 21, 1989, granting the Personal Representative leave to reimburse himself for attorneys’ fees from funds of the estate, it is, this _ day of -, 1989, hereby ordered that National Wildlife Federation’s Motion to Reconsider is granted, and that this Court’s order of June 21, 1989 be, and hereby is, rescinded insofar as it permits the Personal Representative to reimburse himself for attorneys’ fees, and that a hearing on the Personal Representative’s request for attorney’s fees is hereby scheduled for_, 1989. (Emphasis added.) Judge Weinstein signed the order on June 28 exactly as counsel for NWF drafted it. Someone, apparently Judge Weinstein, also wrote on the June 21 order the following: “Order vacated regarding fees. 6/28/89.” At the requested hearing before the orphans’ court, held on September 20, 1989, Judge Irma R. Raker heard arguments from counsel for both parties. Counsel for the Personal Representative argued that because the June 28 order used the word “reimburse,” it reopened only the issue of his request for payment of pre-litigation fees, which the Personal Representative had already paid to his defense counsel out of personal funds.

According to defense counsel, the actual litigation fees and expenses, incurred after NWF filed suit in April 1989, were not at issue because the Personal Representative had not yet made payment on them and thus could not be “reimbursed” for them. Counsel for NWF countered that he had simply drafted the phrase “insofar as it permits the Personal Representative to reimburse himself for attorneys’ fees” inelegantly. The following colloquy ensued: Mr. Dunbar [Counsel for NWF]: [M]y request, and the intent of my motion for reconsideration, which I think was granted, at least in effect, was to put the entire ⁴⁹² attorneys fees request, whether prior reimbursement or post-litigation payment, in issue. The issue is the same, the legal issue is the same with regard— THE COURT: I don’t read Judge Weinstein’s order that way.

You may not like how you drafted it, but he signed your order, and it is limited to a hearing on the personal attorneys — request for attorneys fees. He only rescinded it insofar as it permits the PR to reimburse himself for attorneys fees. MR. DUNBAR: Your Honor, I would just submit, very briefly, that my client should not be prejudiced by my sloppiness, if that is what it was, in drafting the order; that the idea, the reason the order was vacated was— THE COURT: I am dealing with Judge Weinstein’s order that you gave him, that he signed.

That is all I am dealing with. MR. DUNBAR: In that case, Your Honor, I would like to move now that we reconsider, as well, the portion of Judge Weinstein’s order vacating the $3400. THE COURT: I am not going to do that, because I am not going to vacate Judge Weinstein’s order.

At the conclusion of the hearing, Judge Raker granted the Personal Representative’s request for payment of his pre-litigation fees from the estate’s assets. The judge also refused to consider NWF’s request that she order the Personal Representative to distribute the remaining $55,000 to NWF, saying, “I don’t think that is before me.” The next day, September 21, Judge Raker signed a written order granting the Personal Representative leave to “reimburse” himself the $1,532.60 he had paid defense counsel for pre-litigation legal fees and expenses. Fourteen days later, on October 5, NWF filed a Notice of Appeal, which stated: Please enter an appeal to the Court of Special Appeals from the Order dated September 21, 1989 by the Circuit Court of Montgomery County, sitting as the Orphan’s ⁴⁹³ Court (Raker, J.), authorizing the personal representative to reimburse himself $1,532.50 for attorney’s fees allegedly incurred by him and permitting the personal representative to restate an account so as to reflect the above-mentioned reimbursement; and from the Court’s refusal, in open court, to reconsider the Order of the Circuit Court for Montgomery County, sitting as the Orphan’s Court (Weinstein, J.), dated June 21, 1989, insofar as that Order permits the Personal Representative to pay from the estate $3,434.95 in attorneys’ fees allegedly incurred by him, and to restate his account to reflect that payment; and from the Court’s refusal, in open court, to consider or act upon the request of the National Wildlife Federation for an Order requiring distribution of the estate’s assets to it, as the sole beneficiary____ The Personal Representative moved to strike the notice of appeal, pursuant to Md.Rule 8-203(a)(l), on the grounds that the 30-day period for noting an appeal to Judge Weinstein’s June 21 order, as modified by that judge’s June 28 order, had expired. The Personal Representative also argued that none of the three orders — June 21, June 28, or September 21 — was an appealable interlocutory order.

NWF filed an opposition to the motion to strike the notice of appeal, requesting a hearing on the Personal Representative’s motion to strike and requesting that Judge Weinstein be specially assigned to the motion “because the motion to strike involves the interpretation of orders entered by him.” On November 24, without explanation or a hearing, Judge Paul McGuckian granted the Personal Representative’s motion to strike NWF’s notice of appeal. NWF then filed a notice of appeal from Judge McGuckian’s order on December 19. On appeal, NWF presents three arguments: I. NWF’s appeal is properly before this court, and the Orphans’ Court erred in striking NWF’s [first] notice of appeal.

II

Mr. Foster did not and could not establish that his attorneys’ fees were incurred in good faith and with ⁴⁹⁴ just cause, and the court’s approval of those fees was improper.

III

Mr. Foster should be required to distribute the remainder of the estate to NWF. I. Appealability Apparently, the Personal Representative does not dispute that Judge McGuckian’s November 24 order striking NWF’s first notice of appeal was appealable. The question, then, is whether that order was correctly issued. In other words, was NWF’s October 5 notice of appeal an appeal from an appealable order or orders?

To answer this question, we first address the Personal Representative’s argument that the October, 5 notice of appeal was defective because it appealed from Judge Weinstein’s June 21 and June 28 orders and thus was untimely under Md.Rule 8-203(a)(l). We disagree. NWF could not have appealed from the June orders even if it had wanted to because the June 28 order, which its attorney drafted verbatim, was a wholly favorable judgment. An appeal from such a judgment is impermissible.

Paolino v. McCormick & Co., 314 Md. 575, 579 , 552 A.2d 868 (1989). Moreover, NWF’s mentioning of the June orders in the October 5 notice of appeal did not amount to an “appeal” from those orders. NWF simply appealed from Judge Raker’s refusal, in open court on September 20, to reconsider portions of the June 21 order. The appeal, therefore, was from Judge Raker’s decision, made only fifteen days, before the October 5 notice of appeal, and not from Judge Weinstein’s two orders.

The Personal Representative’s other argument in support of Judge McGuckian’s striking of the October 5 notice of appeal is that the September