Wolfe v. Turner

Singley, J., delivered the opinion of the Court. Three times in the recent past, we have had occasion to consider the fees allowed by orphans’ courts to counsel for executors, Riddleberger v. Goeller, 267 Md. 64 , 296 ⁶⁴⁹ A. 2d 393 (1972) ; Riddleberger v. Goeller, 263 Md. 44 , 282 A. 2d 101 (1971) ; Lusby v. Nethken, 262 Md. 584 , 278 A. 2d 552 (1971). The controlling statute in each of these cases was Maryland Code (1957, 1964 Repl. Vol.) Art. 93, § 10.

What distinguishes this case from those is that here, for the first time, we are considering the problem of the allowance of a fee to counsel for a personal representative in the light of § 7-602 of the new Decedents’ Estates law enacted by Ch. 3, § 1 of the Laws of 1969. The references to that law which appear hereafter are to Code (1957, 1969 Repl. Vol., 1972 Cum. Supp.) Art. 93.

Peter Franklin Wolfe (Mr. Wolfe) died domiciled in Harford County, Maryland on 7 August 1970, survived by his widow, Juanita R. Wolfe (Mrs. Wolfe), and three daughters, Delores Gayle Hahn (Delores) ; Kay Marilyn Read (Kay) and Pamela Florence Harris (Pamela). By a will executed on 2 April 1970, Mr. Wolfe had left his entire estate to his three daughters, and had named Benjamin M. Turner, Jr. (who is a member of the bar as well as a certified public accountant) as his executor. The will was admitted to administrative probate on 14 August. Three days later, Mrs. Wolfe, for whom no provision had been made in the will, renounced.

Four months later, she filed a petition for judicial probate, which was granted. About a year later, she sought to have Turner removed as personal representative alleging that he had failed to file an inventory, state an administration account and make distribution within the times fixed by law. This effort failed. There is ample evidence that the relationship between Mrs. Wolfe and Mr. Turner was not a happy one, possibly a result of the fact that Mrs. Wolfe was separated from her husband at the time of his death, and there was a pending alimony claim at that time.

After the administration had been open for nearly a year and a half, on petition of the personal representative, the orphans’ court entered orders on 11 January ⁶⁵⁰ 1972, allowing a fee of $6,750.00 to Mr. Turner’s counsel and authorizing the stating of an administration account, withholding from distribution of $25,000.00 to be the subject of further accounting. By letter dated 20 January 1972, written by counsel in behalf of Mrs. Wolfe and the three daughters, request was made for a hearing on the allowance of the fee. We think that this letter met the requirement of § 7-502, and as a consequence, the order did not become final, cf. Johnson v. Johnson, 265 Md. 327, 329-30 , 289 A. 2d 318 (1972). On 1 February, there were filed in Mrs. Wolfe’s behalf motions to rescind the order allowing the counsel fee and the order authorizing the retention of assets.

Turner moved to dismiss on the ground that Mrs. Wolfe was not an “interested person” as the term is used in the Decedents’ Estates law. The matter came on for hearing on 1 March, the colloquy being restricted to argument on the motion to dismiss, which the court granted. Mrs. Wolfe, Delores and Kay appealed. In April, for reasons not at all clear to us, the court entered an order granting the hearing on the counsel fee requested by the 20 January letter written in behalf of Mrs. Wolfe and the three daughters, and after hearing testimony, on 2 May 1972, entered an order confirming the allowance of the fee.

Mrs. Wolfe, Delores, Kay and Pamela appealed. 1 Since the April hearing was predicated on a request made before the order of 11 January became final, under § 7-502, the second appeal would lie, Johnson v. Johnson, supra, 265 Md. at 329 , except for the extraordinary circumstances of this case. Mrs. Wolfe and her daughters raise three questions: “(i) Did [she, as the], widow of the testator, who was not provided for in his will, have standing as an ‘interested person’ to challenge the counsel fee and the retention of assets? ⁶⁵¹ (ii) Was the counsel fee of $6,750.00 allowed by the Orphans’ Court excessive? (iii) Did the Orphans’ Court abuse its discretion in permitting the personal representative to retain, in effect, the total net cash assets of $25,000.00?” (i) Code Art. 93, § 1-101 (f) contains a definition providing, in pertinent part, “(f) ‘Interested person’ means (1) a person named as executor in a will, and a person serving as personal representative after judicial or administrative probate; (2) a legatee in being, whether his interest is vested or contingent, until his legacy is paid in full, and (3) an heir even if decedent died testate except that an heir of a testate decedent ceases to be an ‘interested person’ after the register has given notice pursuant to § 2-209 (unless judicial probate is requested thereafter and then after the register has given notice pursuant to § 5-403 (a))----” Turner argues that Mrs. Wolfe, as a surviving widow, could only qualify as an interested person in her capacity as an heir, and that as such her qualification ceased after notice of an application for judicial probate was given under § 5-403 (a). As a consequence, he says that she lost the right given interested persons by § 2-102 to “at any time petition the court to resolve questions concerning the estate or its administration.” We do not see it quite that way.

While a persuasive argument can be made that a renouncing widow for purposes of § 1-101 (f) is no less “a legatee in being” because she takes under the statute of distribution, § 3-102 (1), rather than by the terms of the will, we need not reach this point. On 1 March 1972, prior to the hear ⁶⁵² ing on that day, Delores and Kay joined their mother in challenging the order allowing the fee and the retention of assets. Delores and Kay joined with their mother in the appeal from the order of 1 March, and all three daughters joined Mrs. Wolfe in the appeal from the 2 May order. Mrs. Wolfe’s position is further buttressed by the fact that on 28 December 1970, Delores and Kay had assigned to their mother all right, title and interest in their father’s estate, which leads us to an interesting alternative which we find it unnecessary to resolve: if the assignment is valid, Mrs. Wolfe steps into the shoes of Delores and Kay as a legatee.

If the assignment is invalid, Delores and Kay, having joined their mother in the attack on the orders allowing the fee and authorizing the retention, had the standing necessary to maintain the action in the orphans’ court. As a consequence, even if Mr. Turner is right in his argument that Mrs. Wolfe lacked standing, the joinder of the daughters prevents this contention from being dis-positive of the case. The granting of Turner’s motion to dismiss was clearly erroneous, and the order of 1 March will be vacated. (ii) As a threshold matter, we are virtually satisfied that when the appeal was entered from the order of 1 March 1972 the orphans’ court could conduct no further proceedings as regards the allowance of the counsel fee, Code (1957, 1968 Repl.

Vol.) Art. 5, § 11; Jones v. Jones, 41 Md. 354, 360-61 (1875) ; Bruscup v. Taylor, 26 Md. 410, 414 (1867), and lacked jurisdiction to hold the evidentiary hearing which resulted in the order of 2 May 1972. Nevertheless, in the interest of judicial economy, we shall resolve the question on the record before us, in order to avoid a remand of the case for further proceedings, once the order of 1 March is vacated. ⁶⁵³ It seems to be conceded that the enactment of new Article 93 continued the existing law governing compensation of personal representatives, but introduced a new ingredient as regards counsel fees: the provision contained in § 7-602 (c) that in setting a counsel fee, the commissions allowed personal representatives should be taken into account, so that overall charges for administration shall be neither unfair nor unreasonable, Stiller and Redden, Statutory Reform in the Administration of Estates of Maryland Decedents, Minors and Incompetents, 29 Md. L. Rev. 85 , 113 (1969); and see Riddleberger v. Goeller, supra, 263 Md. at 55-56 . It seems to us that subject to the clear expression of legislative intent found in § 7-602 (c), the principles we discussed in Lusby v. Nethken, supra, 262 Md. at 585 -87 and in American Jewish Joint Distribution Comm. v. Eisenberg, 194 Md. 193, 200 , 70 A. 2d 40 (1949) have all the vitality they had prior to the 1969 revision. In brief, the power of an orphans’ court to allow counsel fees is derived from statute.

The allowance requires the exercise of discretion and judgment. An award will not be disturbed in the absence of proof of abuse of discretion, Gradman v. Brown, 183 Md. 634, 641 , 39 A. 2d 808 (1944), which generally means that the fee allowed is shown to be so unreasonably small or so unreasonably high as to amount to an abuse. The principal elements to be considered in determining reasonableness are the amount involved, the character and extent of the services, the time employed, the importance of the question, the benefit to the estate and the customary charges made for similar services. An application of these standards to the case at hand requires a discussion of certain pertinent facts.

Mr. Wolfe’s gross individual estate amounted to $43,856.47, the bulk of which consisted of his interest in P. F. Wolfe and Associates, Inc., a Subchapter S corporation, for which Turner acted as accountant. Payments and disbursements (of which gross com ⁶⁵⁴ missions allowed Turner as personal representative in the amount of $2,950.38 2 and the challenged counsel fee of $6,750.00 were a part) aggregated $18,776.19, leaving a net distributable estate of $25,080.28, subject, however, to a 1% Maryland inheritance tax. We were told at argument that it was necessary for Turner’s counsel to prepare and file a federal estate tax return because the value of certain real estate owned by the decedent and his wife had to be added to the assets of the probate estate for estate tax purposes, but that no tax was payable because of an unpaid balance of mortgage indebtedness. Turner testified that he had prepared all of the income tax returns, but that he and his counsel had worked on the estate tax return together, because he did “not consider [himself] really a student to [sic] the Federal Estate Return.” He acknowledged that no suits had been brought against the estate other than the challenges launched by Mrs. Wolfe, and that the estate had initiated no litigation.

Turner’s need for counsel stemmed from his admission, “. . . I am not an estate lawyer. This is the first time that I have been an administrator. I do not consider myself competent in this field.” There came a time when Turner and his counsel in turn retained a Baltimore law firm as counsel, which, according to Turner, was consulted on “. . . legal matters and matters of procedure. * * * As to how to handle the tax situations.

What jeopardy we might run into, and how we should basically handle the estate and the maintenance of the corporation. The assumption of its assets and matters relating to our general overall procedures. * * * This case has many ⁶⁵⁵ angles and many facts and we did not want to overlook any possibilities. It was our opinion that we should have some outside help at this particular stage.” Turner said that the Baltimore firm’s fee of $750.00 had been paid by his counsel from the fee of $6,750.00. Turner acknowledges that his counsel had also been paid a fee of $996.00 by P. F. Wolfe and Associates, Inc., for services rendered the Subchapter S corporation during the period of administration.

The basic premise of Turner’s petition for the allowance of a fee to his counsel is "That during the course of administration said