March 8, 2010
IN THE MATTER OF THE PROBATE OF THE ALLEGED WILL OF GABRIELA SIPKO, DECEASED
On appeal from the Superior Court of New Jersey, Chancery Division, Civil Part, Bergen County, Docket No. P-505-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 26, 2010
Before Judges Carchman and Parrillo.
Plaintiff, the Estate of Gabriela Sipko, appeals from a final order awarding $113,358.40 in attorneys' fees and costs to defendant, Robert Sipko*fn1 , one of decedent's sons. The fees were awarded following a hearing, and Judge Koblitz determined that a codicil to decedent Gabriela Sipko's Last Will and Testament effectively disinheriting defendant, was fatally defective. On appeal plaintiffs George Sipko, Robert's father, and Rastislav Sipko, Robert's brother, assert that counsel fees were erroneously awarded, and even if properly awarded, were excessive and unreasonable. We affirm.
We briefly set forth the facts adduced at trial. On March 13, 2006, Gabriela Sipko (Gabriela or decedent) executed her Last Will and Testament in the presence of her husband, George, one of her son's, Rastislav, and a notary public, David Sikorjak. At the same time, decedent also executed the Gabriela Sipko 2005 Family Trust (the Trust), which was also notarized by Sikorjak.
Gabriela's will distributed certain personal items to specific individuals, disposing of the remainder of her tangible personal property to George. The residuary estate was left to the trustees of the Trust, Gabriela and George; and in the event both were unable to serve as trustees, Robert and Rastislav would be appointed successor co-trustees. George, Rastislav and Robert were also appointed executors of the will. Gabriela instructed that the Trust was to pay for the maintenance, health and reasonable comfort of George during his lifetime, and upon his death, the balance would be divided equally between Robert and Rastislav.
Some months later, on August 17, 2006, Gabriela executed a codicil to her will which "permanently exclude[d] . . . Robert Sipko from any and all claims to [her] estate including trust account." The codicil was witnessed by George only, and notarized by Sikorjak.
Gabriela died on March 23, 2007.
On December 24, 2007, George filed a verified complaint for the probate of a lost will as well as the codicil, in which he acknowledged that the August 17, 2006 codicil had only one witness, and thereby requested the court "to count the notary as being the second witness." Thereafter, on February 14, 2008, Robert filed an answer conceding the validity of the will but objecting to the probate of the codicil, claiming it was invalid as it did not meet statutory requirements, was barred by reason of unclean hands and was the product of undue influence.
During pretrial discovery, Sikorjak confirmed that he did not serve as a witness to the execution of the codicil. Stating that he was never asked by Gabriela to be a witness, Sikorjak declared his sole role was to notarize George and Gabriela's signatures.
On the morning of the first day of trial, defendant made a motion in limine to exclude the probate of the codicil. The trial judge, however, proceeded to trial, focusing on the validity of the codicil. After hearing the testimony of George, Rastislav and Robert regarding the probate of the codicil, the judge found that Sikorjak had acted solely in his capacity as a notary public and did not serve as a second witness to the codicil. She found that the codicil failed to comply with N.J.S.A. 3B:3-2 (requiring two witnesses to the execution of a will) and granted Robert's motion for a directed verdict.
Subsequently, Robert moved for counsel fees pursuant to Rule 4:42-9(a)(3). He sought $141,698.75 in counsel fees, submitting a detailed description of work and time dedicated to the matter, as well as attorney certifications in support of the application. The judge awarded defendant $113,358.40 in attorneys' fees and costs.
Judge Koblitz reduced the fees requested by twenty percent to reflect "the extra attorney at trial, the slippage that may have occurred from [the corporate matter*fn2 ] into [the case at hand involving the codicil], and the overpreparation that might have occurred[.]"
This appeal followed.
The Estate contends that awarding Robert attorneys' fees was both an incorrect application of the relevant law and was inconsistent with the evidence on the record. Specifically, the Estate asserts that the Estate had reasonable cause to pursue the probate of the codicil. As such, the estate "should not be punished for seeking to vindicate the decedent's wishes[,]" and therefore this court should vacate the award.
Robert counters that fees were properly awarded. He asserts that the trial judge did not abuse her discretion in finding that the Estate could have dismissed the probate of the codicil but chose to consider the issue after a plenary hearing, that the Estate was financially in a better position to pay, and Robert was the prevailing party in the underlying matter.
Although New Jersey follows the American rule which generally disfavors the shifting of attorneys' fees, a prevailing party can recover fees in limited circumstances if they are expressly provided for by statute, court rule, or contract. Litton Indus. v. IMO Indus., 200 N.J. 372, 401 (2009). Rule 4:42-9(a)(3) recognizes the appropriateness of an award of counsel fees in a probate action. The rule states in relevant part:
if probate is refused, the court may make an allowance to be paid out of the estate of the decedent. If the probate is granted, and it shall appear that the contestant had reasonable cause for contesting the validity of the will or codicil, the court may make an allowance to the proponent and the contestant, to be paid out of the estate. [Id. (emphasis added).]
The decision to award attorneys' fees and the quantum of the award, rests within the discretion of the trial judge, and we must review the award under the abuse of discretion standard. IMO Probate of Alleged Will of Hughes, 244 N.J. Super. 322, 328 (1990) (citing In re Reisdorf, 80 N.J. 319, 326-27 (1979)); Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001).
Further, factual findings of the trial judge "are considered binding on appeal when supported by adequate, substantial and credible evidence." Brunson v. Affinity Fed. Credit Union, 199 N.J. 381, 397 (2009) (quoting Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974)). As such, the "appellate function is a limited one" factual findings should not be disturbed unless "they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice[.]" Mountain Hill v. Twp. Comm. of Twp. of Middletown, 403 N.J. Super. 146, 193 (App. Div. 2008). However, a trial judge's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference and are reviewed by this court de novo. Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 379 (1995).
As a threshold matter, the Estate's assertion that Judge Koblitz misinterpreted relevant law is without merit. Support for an award is clearly permitted by Rule 4:42-9(a)(3). The Estate correctly observes that the law does not allow for the automatic award of attorneys' fees for a prevailing party, but that is hardly the case here.
The Estate further argues that Judge Koblitz engaged in misapplication of the law by not crediting the Estate's argument that it was operating under the reasonable belief that the codicil "substantially complied" with the applicable statute. It asserts that its "claims were reasonable and legitimate and were pursued solely because it was the true intent of decedent to disinherit [defendant]" as there was ample evidence presented at trial, which established that Gabriela had an intent to disinherit Robert. While that may be so, and the proffer of the codicil may have been done in good faith, that does not dispose of the underlying issue as to whether Robert is entitled to fees for opposing, here successfully, the probate of the codicil. In rendering her decision, Judge Koblitz was persuaded that "this is a case that absolutely did not have to be brought and really should not have been brought, and the individual who clearly stated that, in fact was the father, Mr. Sipko[.]" She went on to observe that the emotion involved in this family and what happened to disrupt this family was very extreme, and so in my view the father pursued this action, not for any financial reason, but because of the dysfunction in the family." "[T]he important part for this discussion is that the [Estate] pursued this for non-financial reasons. . . . So it's not fair now that this young man should have to pay counsel fees, given that, first of all, he has to endure a trial where he's fighting to move that his father didn't intend to disinherit him "So there is no question in my mind that the [Estate] should pay counsel fees for [Robert], and that [Robert] should not have to pay counsel fees for the [Estate].
We reject the Estate's claims that these statements tainted Judge Koblitz's judgment in awarding fees. Her observations as to the motivation for the litigation were proper commentary on what emerged from the proofs. They do not diminish or compromise Robert's underlying entitlement to counsel fees.
The judge addressed and dismissed each of the Estate's assertions proffered in support of its asserted "reasonable" belief that the codicil could be admitted into probate. While we would be less critical of the Estate's motives for seeking probate of the codicil, especially where a legitimate question could be raised as to its validity, we must credit the judge's observations and "feel" for the case. She saw and heard the witnesses, and her findings reflected her appreciation of the issues before her.
She made additional findings justifying the fee award, such as the relative financial situations of the parties. "[George] has enough money to pursue litigation. . . . However, [Robert], who was victorious in this litigation, no longer or doesn't have that kind of money, because he has been shut out, or he's no longer apart [sic] of the family business."
And finally, most significantly, Robert was the prevailing party in the underlying matter. As the Supreme Court has noted "[i]n determining the reasonableness of a counsel fee award, the threshold issue 'is whether the party seeking the fee prevailed in the litigation.'" Packard-Bamberger, supra, 167 N.J. at 444 (quoting North Bergen Rex Transp., Inc, v. Trailer Leasing Co., 158 N.J. 561, 570 (1999)). We find no error in the award of fees.
The Estate further argues that the fees were excessive to the point of being "exorbitant." Rule 4:42-9(b) requires that in an action for counsel fees in probate actions, all applications must "be supported by an affidavit of services addressing the factors enumerated by RPC 1.5(a)." Further, "[t]he affidavit shall also include a recitation of other factors pertinent in the evaluation of the services rendered, the amount of the allowance applied for, and an itemization of disbursements for which reimbursement is sought." R. 4:42-9(b).
Rule of Professional Conduct 1.5(a) "commands that '[a] lawyer's fee shall be reasonable' in all cases, not just fee-shifting cases," and requires courts to consider:
(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. [RPC 1.5(a).]
In calculating the dollar amount, courts use the lodestar method of calculation in many settings, including probate actions. Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 21 (2004); Packard-Bamberger, supra, 167 N.J. at 445 (citing In re Estate of Reisen, 313 N.J. Super. 623 (Ch. Div. 1998)). The lodestar calculation is defined as the number of hours reasonably expended by the attorney, multiplied by a reasonable hourly rate. Furst, supra, 182 N.J. at 21.
In addition, courts should consider other relevant factors when determining the quantum of the fee. Packard-Bamberger, supra, 167 N.J. at 445. For example, the trial court should consider "the interest to be vindicated in the context of the statutory objectives, as well as any circumstances incidental to the litigation that directly or indirectly affected the extent of counsel's efforts." Szczepanski v. Newcomb Med. Ctr., Inc., 141 N.J. 346, 366-67 (1995). Furthermore, "[i]f the trial court concludes that the hours expended by counsel 'exceed those that competent counsel would have expended to achieve a comparable result, a trial court may exercise its discretion to exclude excessive hours from the lodestar calculation.'" Packard-Bamberger, supra, 167 N.J. at 446 (quoting Rendine v. Pantzer, 141 N.J. 292, 336 (1995)).
Our Supreme Court has noted that "fee determinations by trial courts will be disturbed only on the rarest of occasions, and then only because of a clear abuse of discretion." Id. at 444. The decision to award attorneys' fees at all, and the amount awarded are accorded great deference.
During the hearing on Robert's motion for attorneys' fees, the Estate asserted that the requested for amount was inflated as it included work done on the corporate matter, the issues were relatively simple, and much of the work was duplicative as several attorneys were simultaneously working on identical matters.
The Estate maintains that its attorney billed it for the corporate matter and the probate issues separately, while Robert's attorney did not segregate billing, and instead "culled out what they thought was attributable to" the case at hand. Judge Koblitz noted this, stating that "defense counsel . . . divided the bill by the percentage of pages which was as good a way of any to do it, but not very precise, and I take note of [the Estate's] exception that perhaps Robert's counsel did not clearly differentiate billing between the two cases, and that there might have been some slippage from [the corporate matter] case and the [probate matter] case."
In response to the Estate's argument that Robert's counsel fees were high relative to the simplicity of the legal issues involved and defendant had more than one attorney doing duplicate work, Judge Koblitz perceptively noted that
Defense counsel's counsel fees were high in part because there were other aspects to the case, and one aspect was undue influence, and the son, the defendant here, was trying to prove that his father, and maybe his brother as well, but certainly his father unduly influenced his mother to disinherit him. So that required a lot of attention of counsel who could not rest on the assurance that they would win a directed verdict based on the fact that the codicil was only signed by one witness.
In any event, so I understand that significant counsel fees were properly incurred on this matter alone, forgetting and putting aside the other matter which was much more complicated which involved the family business, and the lengthy trial which took place before Judge Contillo. That being said, defense counsel had three attorneys at trial, two of which were billed. Plaintiff had one very capable lawyer, and I think it is not reasonable for plaintiff personally to have to pay for that additional lawyer that defendant had.
Also, to the extent that defense counsel's research was more thorough than it had to be, and I discount that on the basis as well. It's hard to argue with a successful strategy and say that they prepared too hard.
As we previously noted, Judge Koblitz discounted the bill by twenty percent. The judge considered all of the evidence and articulated her reasons to support the quantum of the award. We perceive of no abuse of discretion or basis for our intervention.