NO. 96-074 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

IN RE THE ESTATE OF MARY K. DAMM, 

h/Q!! ,:? i Vj!Q!j 

Deceased. 

APPEAL FROM: District Court of the Seventy Judicial District, 

In and for the County of Richland, 

The Honorable Richard G. Phillips, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

George T. Radovich, Radovich Law Firm, 

Billings, Montana (for Edwin K. Damm) 

Fred E. Whisenand, McIntee & Whisenand, 

Williston, North Dakota (for Leona Howard) 

For Respondent: 

Mike Weber, Cresap, Weber & Irigoin, 

Sidney, Montana (for Alice Synek) 

Filed: 

Submitted on Briefs: September 5, 1996 

Decided: November 21, 1996 
Justice Charles E. Erdmann delivered the opinion of the Court. 

Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 

1995 Internal Operating Rules, the following decision shall not be 

cited as precedent and shall be published by its filing as a public 

document with the Clerk of the Supreme Court and by a report of its 

result to State Reporter Publishing Company and West Publishing 

Company. 

Edwin Damm and Leona Howard appeal from an order issued by the 

Seventh Judicial District Court, Richland County, approving the 

final accounting of the estate of Mary K. Damm with respect to its 

award of personal representative fees and attorney fees. We 

affirm. 

The issues on appeal are as follows: 

1. Did the District Court err in setting the amount of 

compensation to the personal representative? 

2. Did the District Court err in approving the fee agreement 

between the personal representative and the attorney for the 

estate? 

FACTS 

Mary K. Damm died testate on April 7, 1993. Mary's last will 

and testament provided that the residue of her estate be divided in 

equal shares to her three children, Alice Synek, Edwin Damm, and 

Leona Howard. The assets of the residuary estate consisted of 

Mary's residence in Sidney, mineral property located in Richland 

County, one bond, and numerous bank accounts and certificates of 

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deposit. Mary also held bank accounts and certificates of deposit 

in joint ownership with Alice, Edwin, and Leona. Mary nominated 

Alice to be the personal representative of the estate and the 

District Court appointed Alice to act in that capacity. 

In November 1993, Alice filed her final account, petition for 

determination of testacy, determination of heirs, and for 

settlement and distribution of the estate. On December 14, 1993, 

the District Court conducted a hearing on the matter. At that 

hearing, Edwin's attorney stated that he had filed a separate 

complaint against Alice regarding the treatment of certain joint 

tenancy acc0unts.l Edwin's attorney also objected to the amount 

of personal representative fees and attorney fees included in the 

final accounting and argued that closing the estate at that time 

would be premature. The court agreed to continue the hearing so 

that Alice and the attorney for the estate could file affidavits in 

support of their time spent working on the affairs of the estate. 

On December 18, 1995, Alice filed her second final account, 

petition for determination of testacy, determination of heirs, and 

for settlement and distribution of the estate. Alice sought 

$14,283 in personal representative fees, and $21,394 in attorney 

fees. Edwin and Leona both filed objections to the final 

accounting and on January 9, 1996, the District Court conducted a 

1 The companion suit against Alice involved whether or not 

some of the jointly held bank accounts and certificates of deposit 

should be included in the estate. The litigation was eventually 

settled in 1995 and resulted in a significant delay in the final 

accounting of the estate. 

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hearing on the matter. On February 7, 1996, the court issued its 

order approving the final account as adjusted. In that order, the 

court awarded Alice $5,280 in personal representative fees and 

approved the fee agreement between Alice and the attorneys for the 

estate. This appeal followed. 

ISSUE 1 

Did the District Court err in setting the amount of 

compensation to the personal representative? 

In her affidavit filed with the court, Alice indicated she had 

spent 314.25 hours performing her duties as personal 

representative. The $14,283 total fee award she sought in the 

final accounting of the estate resulted in a compensation rate of 

over $45 per hour. The District Court reduced the number of hours 

to 264 and the hourly rate to $20, resulting in a total fee award 

in the amount of $5,280. 

Edwin and Leona argue on appeal that Alice inflated her fee in 

order to "have her vengeance on the other heirs for the poor or 

unequal treatment she feels she received at the hands of her mother 

during her lifetime." They contend that Alice was motivated by her 

own self-interest and submitted false time records and a false 

affidavit to the court. Edwin and Leona argue that Alice should 

not be compensated for her time in resisting the separate civil 

lawsuit and they claim that the maximum number of hours Alice could 

have expended on the affairs of the estate was 221.75. They claim 

that $8 per hour is a reasonable rate of compensation since that 

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was the highest hourly rate Alice ever received during the course 

of her regular employment. Thus, Edwin and Leona maintain that, at 

best, a fair and equitable fee should be $1,774. 

Section 72-3-634(Z), MCA, provides that in any dispute 

concerning fees, the court shall set the fee. We have previously 

held that the review of fees paid or taken by a personal 

representative is left to the sound discretion of the district 

court. Flikkema v. Kimm (1992), 255 Mont. 34, 42, 839 P.2d 1293, 

1298. The court's determination will not be overturned absent a 

showing of an abuse of discretion. Flikkema, 839 P.2d at 1298-99 

(citing Estate of Stone (1989), 236 Mont. 1, 768 P.2d 334). The 

test for abuse of discretion is whether the trial court acted 

arbitrarily without employment of conscientious judgment or 

exceeded the bounds of reason resulting in substantial injustice. 

Gaustad v. City of Columbus (1995), 272 Mont. 486, 901 P.2d 565. 

In the present case, the District Court determined that even 

though Alice's accounting for her hours varied from the original 

time sheets to the affidavits supplied to the court, it would give 

her the benefit of the doubt. The court determined that the hours 

spent in preparation of the separate civil litigation should not be 

paid from the estate funds and that 'I [alfter reviewing the other 

hours contained in the time sheets," Alice should be compensated 

for 264 hours of work. In addition, the District Court held that 

the filing, deposition, and jury costs associated with the separate 
stated that the personal representative is free to contract with 

employees of the estate as long as the fees for such services are 

not excessive. The court stated that an excessive fee is one that 

goes beyond the ceiling established by § 72-3-633, MCA, and held 

that the "statutory language puts an outside limit on what can be 

contracted for." 

Edwin and Leona argue that an attorney should be compensated 

only for those services which were beneficial to the estate. They 

claim that Alice and her attorney attempted to keep certain joint 

accounts out of the estate and that the separate litigation which 

resulted was not beneficial to the estate. Edwin and Leona argue 

that the attorney fees should be limited to the attorney's hourly 

rate multiplied by the amount of time actually spent on handling 

estate matters. Here, they claim that, at most, the attorney fees 

should be $3,468, based on 40.8 hours of work at $85 per hour. 

Alice argues that when the fee for an attorney is questioned, 

the court does not set the fee, but rather, reviews the fee 

arrangement. She claims that the personal representative, not the 

court, sets the attorney fees in the first instance and that the 

estate is bound by that agreement. Alice argues that even though 

the fee contract is open for review, the amount of the fee is not 

automatically converted into a quantummeruit measure of compensation 

whereby recovery is limited exclusively to the reasonable value of 

services rendered on an hourly basis. She cites to In re Estate of 

Magelssen (1979), 182 Mont. 372, 380, 597 P.2d 90, 95, where this 
Court stated that quantummevuit compensation is normally appropriate 

only where a valid contract does not exist. 

Section 72-3-633, MCA, provides that if the services of an 

attorney are engaged by the personal representative, the 

compensation of the attorney shall not exceed one and one-half 

times the compensation allowable to the personal representative. 

Juxtaposed against that statutory requirement, however, is the 

situation where the terms of the attorney fee agreement exceed the 

statutory ceiling. In that regard, the District Court cited to 

Maselssen, 597 P.2d at 95, where we stated: 

It is clear that a court, when reviewing a fee agreement 

under a substantially performed contract, cannot blind 

itself to the terms of the contract and make its own 

determination of what is reasonable. 

In Maselssen, we also stated that: 

We do not believe that section 91A-3-722 [the predecessor 

to § 72-3-634, MCA, which allows the court to review the 

employment of attorneys and their fees1 was intended to 

permit competent, fullyinformedpersonalrepresentatives 

to disavow their otherwise enforceable contracts for an 

attorney's services. 

Maselssen, 597 P.2d at 95. Thus, the statutory maximum should not 

necessarily prevent an award of attorney fees which exceed the 

ceiling in a situation where the personal representative and 

attorney have contracted for a higher fee and the contract has been 

substantially performed. We therefore conclude that in this case 

the District Court did not abuse its discretion when it determined 

that the fee agreement between Alice and the attorney must be 

approved. 

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Nevertheless, the court did not award a specific amount of 

attorney fees. We must therefore turn to the attorney/client fee 

agreement in order to determine the amount of attorney fees which 

should be paid by the estate in this case. According to the 

attorney's affidavit filed with the court, he and Alice "entered 

into an oral agreement wherein Alice Synek agreed to pay [the 

attorney] the maximum fee allowed by Section 72-3-663, MCA [sic]." 

It is clear that the fee agreement set the attorney fees at the 

statutory maximum. 

In Issue 1 we held that the District Court did not abuse its 

discretion when it awarded Alice $5,280 in personal representative 

fees. Thus, the statutory maximum for attorney fees is $7,920 and 

the final accounting of the estate should reflect that amount. 

Affirmed. 

Justice 

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