No. 89-546 IN THE SUPREME COURT OF THE STATE OF MONTANA 1990

IN THE MATTER OF THE ESTATE OF ALISON KIRK STENSON, a/k/a AL STENSON, Deceased.

APPEAL FROM: District Court of the First Judicial District, In and for the County of Lewis and Clark, TheHonorable JeffreyM. Sherlock,Judgepresiding.

COUNSEL OF RECORD: For Appellant: Gregory G. Murphy; Moulton, Bellingham, Longo & Mather, Billings,Montana

1-

. For Respondent: 1- C13 -... - 1 -J I W. William Leaphart, Leaphart Law Firm, Helena, .-I Montana

Submitted on Briefs: April 12, 1990

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### / ClerkJustice Fred J. Weber delivered the Opinion of the Court.
This is an appeal from an order by the District Court, First Judicial District, Lewis and Clark County,Montana, which ordered the personal representative of an estate to pay certain attorney fees. The personal representative appeals. We affirm. The sole issue presented for our review is whether the District Court erred in awarding attorney fees pursuant to 5 72- 3-632, MCA. Alison Stensondied as a resultof an accident at amine owned by the Pegasus Gold Corporation (Pegasus). On the morning of November 11, 1986, Alison Stensonwas working near the bucket end of a Caterpillar front end loader. A co-worker informed Alison Stenson he was going to move the bucket and proceeded to do so. The co-worker then found thatAlison Stensonwas caught between the bucket and thedifferential. The co-workerreleased thebucket and

ran forhelp. Pegusushad an ambulance at the site but itwas not operational. An ambulance was called from Boulder, Montana, but did not arrive for overanhour after theaccident. Alison Stenson died while being transported by ambulance to the hospital. Physicians reported that his death was caused by blood loss, and that if Alison Stenson had received transfusions earlier, his chances of survival would have been good. Alison Stenson was thirty years old at the time of the accident, and unmarried. His father, Roger Stenson, talked to attorneyRobertWoodahl,and the law firm ofLuxan andMurfitt,and

on November 19, 1986, signed a contingency fee agreement with Mr. 2Woodahl and Luxan and Murfitt providing for an attorneys1 fee of one third of any settlementreceived from a wrongful death action. Roger Stenson was appointed personal representative of his sonls estate in December of 1986. The retained lawyers investigated, interviewed witnesses, and after research developed a theory of third party liability. In May 1987, Luxan and Murfitt presented

a settlementbrochure to Pegusus1insurance companyon thewrongful death claim. InJuly 1987, Roger Stensonreceived a questionnaire from the Social Security Administration concerning a claim that had been made for benefits. This claim was made by Rebecca Rebel Autumn Countryman, who claimed to be the minor daughter of the deceased, Alison Stenson. Mr. and Mrs. Roger Stenson informed the Social Security Administrationand theirattorneysthat to theirknowledge their son had no children, and that they did not know Rebecca Countryman. Although Luxan and Murfitt had presented the settlement brochure to the insurance company, they suspended further negotiations because of the issue as to the proper heirs to the estate. They then initiated an heirship or paternity proceeding. In September 1987, Luxan and Murfitt advised Roger Stenson by letter that they would be charging $85 per hour, plus costs, for theirwork in regard to theheirshipmatter. They advised that the contingency arrangement in regard to the wrongful death action would remain unchanged. By the spring of 1988, after an exhaustive investigation onthe part of Luxan and Murfitt, and after a hearing on the matter, it became clear that Rebecca Countryman was in fact the daughter of Alison Stenson, and the court entered an order to that effect. OnMay 19, 1988,Luxan andMurfitt moved towithdraw as counsel for Roger Stenson,and on May 24, 1988, that order was granted by the court. Likewise, on June 1, 1988, Roger Stensonmoved towithdraw

as personal representative. That motion was also granted. On June 24, 1988, Mr. Craig Buehler, an attorney, was appointed successor personal representative for the estate. Mr. Buehler proceeded to settle thewrongful death survivorship claim for a structured settlement of the present value of approximately $300,000. Mr. Buehler initially received fees of $50,000,$300per month until Rebecca becomes twenty-two, with another $50,000tobe paid when she becomes twenty-two. Luxan and Murfitt filed a creditor's claim and an attorney fee lien against the estate for the work they performed on behalf of the estate. At District Court, Luxan and Murfitt acknowledged that the contingency arrangement was terminated prior to settlement. The fees submitted, in the total amount of $36,048,

were based upon an hourly rate and actual costs. Mr. Robert Woodahl submitted a statement of fees in the amount of $10,763, which represented 116.5 hours at $85 per hour, plus approximately $855 in actual costs. The firm of Luxan and Murfitt submitted a statement of fees in the amount of $25,284, which represented attorney fees billed at an average hourly rate of $75 per hour. The statement also included approximately $340 of itemized costs.As personal representative,Mr. Buehlermoved todissolve the lien and deny the creditor's claim. Both parties filed cross motions for summary judgment with supporting memorandum. The District Court granted summary judgment in favor of Luxan and Murfitt and Mr. Woodahl on the issue of entitlement. The court concluded there were no genuine issues of material fact as to whether the attorneys were entitled to some fees; however, the court reserved judgmentonwhether an award of fees should be based
on a portion of statutorily allowable fees. The court also reserved judgment on thevalue of the services. The court further ordered that $50,000, which was set aside from the estate for attorney fees,be held in trustpending the outcome of thedispute. On June 15, 1989, the court held a hearing on the remaining attorney fee issues. At thathearing testimonywas taken fromMr. Woodahl and two attorneys from the Luxan and Murf itt finn. Two other local attorneys testified in regard to billing practices of law firms in the area. Additionally, Ms. Countryman, the mother of Rebecca Countryman, testified. Following the hearing and further briefing, the court issued its order awarding Mr. Woodahl and Luxan and Murfitt their total requested fees and costs in the amount of $36,048. The District Court concluded that the work by the attorneys was performed on behalf ofRogerStenson,inhis capacityaspersonal representative of the estate. The District Court based its order on a finding that Mr. Stenson had pursued the heirship matter Itingood faith"

as required by 

### 5 72-3-632, MCA, and that both the wrongful deathsurvivorship action and the heirship proceeding benefitted the estate. The court concluded that the attorney fees were recoverable on a quantummeruitbasis, and that attorney fees were also recoverable pursuant to 

### 5 72-3-632,MCA. The court found the fees to be reasonable. In its order the court also took note of the fact that the award does not affect the beneficiary of the estate; rather the dispute is between attorneys in regard to who should receive the compensation; that Mr. Buehler has been handsomely rewarded for his efforts in thathehas already received $50,000 and will receive $300 per month; and that the award will leave Mr. Buehler with another large fee even after paying the other attorneys. On appeal Mr. Buehler contends that under the statutes, the attorneys are limited to attorney fees one and one half times the compensation allowable to the personal representative; that there

can be no quantum meruit because there was a contingency fee agreement; and that the contingency fee agreement cannot control because the settlement was not completed. We agree with the conclusion of the District Court that the award of attorney fees pursuant to 5 72-3-632, MCA, was proper. Section 72-3-632,MCA, states: Expenses of personal representative in estate litigation. If any personal representative or person nominated as personal representative defends or prosecutes any proceeding in good faith, whether successful or not, he is entitled to receive from the estate his necessary expenses and disbursements, including reasonable attorneys' fees incurred.

Our standard of review on the issue of fees is stated in Matter ofEstate of Stone (Mont. 1989), 768 P.2d 334, 336, 46 St.Rep. 134,

The review of fees paid or taken by a personal representative is left to the sound discretion of the District Court. We will not overturn that decision absent a showing of abuse of discretion,and the court's findingsof fact willbe upheldunless clearly erroneous. (Citationsomitted.)

In Matter of Estate of Stone, the Court stated that 

### 5 72-3- 632,MCA, dealsexplicitly with litigationexpenses incurredby the personal representative on behalf of the estate and allows for a reasonable attorney fee for actions maintained in good faith. The District Court determined that the actionshad been prosecuted in good faith and that the fees were reasonable. After a review of the record,we concludethat substantialcredible evidence supports those findings. Mr. Buehler in substanceagrees thatthe legal services on the wrongful death claim were in good faith. He does contend thatMr. Stenson did not investigate the heirship issue in good faith, contending that Mr. Stenson knew that Rebecca Countryman was the daughter of Alison Stenson and therefore the sole heir of the estate. While there is a contradiction in the record, there clearly is substantialevidence fromwhich thecourt could conclude thatMr. and Mrs. Stensonhad no knowledge thatRebecca Countryman

was their son's daughter. The fact thatMr. Stenson and Luxan and Murfitt discontinued settlement negotiations on thewrongful death action in orderto investigatethepaternity issue isan indication of good faith. Luxan and Murfitt also filed a claimwith Workers'Compensation on behalf of Rebecca Countryman to prevent her claim frombeing timebarred. We concludethere is substantial credible evidence supporting the findings of the District Court that the proceedingswere brought in good faith. On the issue of the reasonableness of the fee, this Courthas previously stated that "[wlith regard to legal services, a reasonablefeeshouldbe ascertainedby consideringthe time spent, the nature of the service,and the skill and experiencerequired.I1 Matter of Estate of Stone, 768 P.2d at 336; see also Matter of Estate of Painter (Colo.App. 1977), 567 P.2d 820, on remand, 671 P.2d 1331 (1983). Additionally, tobe reasonablethe fees must be related to servicesrendered tobenefit the estate, rather than to benefit the personal interest of an administrator or estate counsel. Matter of Estate of Painter, 671 P.2d at 1334. At thehearing Patrick Hooks, an attorney in theHelena area, testified that he had reviewed the files and time sheets of Luxan and Murfitt and considered their fees to be reasonable and in accord with fees charged in the same geographical area. He testified that the wrongful death survivorship action had been developedupon an t'ingenious18 theoryofthird party liabilitywhich had proved very successful. He testified that the heirship proceedingwas complicated since theputative fatherwas deceased, preventingproof ofpaternity by theusual blood tests. Mr. Hooks testified that thework done by the attorneysdemonstrated a high level of experience and skill. We conclude that substantial credible evidence, including detailedrecordsoftheworkwhich wasdone, supports the reasonableness of the fees. The DistrictCourt also found that thework of Mr. Woodahl and Luxan andMurfitt benefitted theestateand itsrightful heir. Had the wrongful death survivorship action not been successfully pursued, it appears that the estate of Alison Stenson would have consisted of a car and a motorcycle, for a total value of approximately $3400. The attorneys here formulated a theory whereby the estate was not limited to workers' compensation benefits as the exclusive remedy, but was able to realize a structured settlement of the present value of $300,000. Additionally, the heirship proceeding, for which the Luxan and Murfitt firm did extensive investigation, resulted in the determinationof the rightful heir. We conclude that the services of Mr. Woodahl and the Luxan and Murfitt firm were a substantial benefit to the estate. We conclude that the District Court did not err in awarding attorney feespursuant to 

### B 72-3-632,MCA. We affirm the award of attorney fees by the District Court.

We Concur: /7Justice John C. Sheehy did not participate.