NO. 88-277
INTHE SIJPREME COURTOF THE STATE OF MONTANA 1989

INTHEMATTER OF THEESTATE OF ROBERT E. STONE,deceased.

APPEAL FROM: District Courtof the Fifth Judicial District, Inand for the County ofMadison, TheHonorableFrank Davis, Judgepresiding.
COUNSELOF RECORD:
ForAppellant: DavidN. Niklas, Helena,Montana C. Bruce Loble,Hel.ena,Montana
For Respondent:
DavFd

### A. Grauman;Jardine

### and Grauman, Whitehall, Montana

Submitted onBriefs: Dec. 9,1988

3 0 LC If: Decided: January 27, 1989Mr. Justice 

### R. C. McDonough delivered the Opinion of the Court.

This appeal involves a dispute over fees awarded to the personal representative of an estate who was removed for
cause. Petitioners Sherrie Schandelmeier and Sam Wonderly,
successor co-personal representativesof the Estate ofRobert Emerson Stone, appeal from an order of the District Court of the Fifth Judicial District,Madison County. On remand from
a previous appeal to this Court, the District Court was instructed to remove 

### R. Thomas Garrison as personal representative of the Estate and determine the fee due Garrison for his services. The court ordered: 

### (1)Garrison is entitled to $20,000 for services rendered as personal representative and attorney for the Estate, and any amount previously paid to him in excess of that sum must be reimbursed; (2)Garrison is entitled to $3,814 topay for the services of an attorney in resisting his removal aspersonal representative; and (3)Garrison must pay the Estate $15,000
as his contribution to lost interest and tax penalties occasioned by his administration. We reverse and remand. Petitioners present four issues in this appeal: 1. Whether the prior personal representative and attorney for the Robert Emerson Stone Estatewas entitled to combined fees of $20,000, as allowed by the District Court? 2. Whether itwasproper for the District Court to allow payment of $3,814 in Estate funds to the attorney for the former personal representative for his services in the removal litigation? 3. Whether the District Court, after hearing objections to the Accountinq of the prior personal representative, should have made a determination of damages to the Estate

### instead of merely ruling on the proper amount of attorney's feesandpersonal representative's fees? 

### 4. If 

### the ruling on the issue 

### of damageswaswithin the scope of the hearing, whether the amount of damages awarded
was sufficient? The facts of this case were discussed in our prior opinion, Matter of Estate of Stone (Mont. 1986), 727 

### P.2d 508, 43 St.Rep. 

### 1760. They will be 

### reiterated here only where relevant. Our instructions on remand directed the District Court to remove Garrison and determine his fees. Once removed by the court, Garrison submitted his Final Account 

### of all receipts and disbursements during his administrationof the Estate. Petitioners filed an objection to the Final Account, objecting specifically to the fees Garrisonpaid himself aspersonal representativeand attorney for the Estate, and to the fees paid to a law firm Garrison employed todefendhim in the removal suit. Petitioners contended that Garrisonwas not entitled to
a fee,because his administrationwas harmful to the Estate. They also contended that Garrison's decision to resist removalwas notmade in good faith,and hewas thereforenot entitled to pay his attorneysout of Estate funds. Garrison had paid himself a total of $26,515 

### for his services as personal representative and attorney for the Estate. After hearing was had on Petitioners' objections to the Final Account, the District Court reduced that fee to $20,000,and Petitionersappealed. The fees challenged by Petitioners are outlined by sections of the Uniform Probate Code as adopted in Montana. The personal representative's fee is covered in 5 

### 72-3-631, MCA, which sets a maximum based on the size of the estate, and directs that in any case the fee shall he "reasonable."Section 72-3-633, MCA, states that the fee for an attorney engaged by the estate shall not exceed 

### I+ times the compensation allowed the personal representative. Section 72-3-632,MCA, dealsmore explicitlywith litigation expenses incurred by the personal representative on behalf of the estate, and allows for a "reasonable" attorney's fee for actionsmaintained ingood faith. Section 72-3-634, MCA, allows any person with an interest in the estate to petition forreview of feespaid to
apersonal representative,attorney or otherperson rendering services to the estate. The comments to the Uniform Probate Code written by the Code Commission state that one important feature of the UPC is that a personal representative has initial control over fees paid for services 

### to the estate, including his own fee. Formerly, fees were set by the probate court. Because the personal representative would control the "pursestrings" of the estate and essentiallypay himself, the drafters of the UPC Felt it important to allow for reviewof those fees. This Court has not yet had the opportunity to define a standard of review for cases of this type. However,because the UPC is auniform act,we can look todecisions from other jurisdictions utilizing the same statutory scheme. The review of fees paid or taken by a personal representative is left to the sound discretion of the District Court. Wewill not overturn that decision absent a showing of abuse of discretion, and the court's findings of fact will be upheld unless clearly erroneous. Estate of Davis (Me. 1986), 509 A.2d 1175; Matter of Estate of Baird

(Mich.1984), 357N.W.2d 912. Once review of a fee is sought by one with an interest in the estate, the personal representativehas the burden 

### ofproving that the services rendered were necessary, and the fee charged was reasonable. Baird; Matter of Estate of Vertin (N.D. 1986), 381 N.W.2d 199. With regard to legal services, a reasonable fee should be ascertained by considering the time spent, the nature of the service, and the skill and experiencerequired. Matter ofWeaver's Estate

(Mich. App. 1982), 327 N.W.2d 366. A crucial factor for determining the reasonableness of any challenged fee is whether the services renderedwere beneficial to the estate. Matter of Kjorvstad's Estates (N.D. 1980), 287 N.W.2d 465. We agree with the view taken by the courts of the State of Michigan that when a personal representative's negligence causes harm to the estate, he or shemay be deprived of all or part of their fee. Matter of Estate of Thacker (Mich. App. 1984), 358N.W.2d 342. In the present case,petitioner Sherrie Schandelmeier is
one of the devisees under the will, and therefore certainly has an interest in the Estate. Petitioners' objection to the FinalAccount challenged the fees takenby Garrison and those paid to his attorney, thereby requiring a review of those fees under 72-3-634, MCA. The burden was therefore upon Garrison to show that the fees paid to himself and to his attorney were reasonable, and were for the purpose of obtaining necessary services for the Estate. The record indicates thathe failed todo so. Beyond submission of the Final Account, which merely lists the Estate

### 's income and expenditures, Garrison adduced virtually no evidence concerning the reasonableness of the fees. While there is some evidence from the initial removal hearing showing Garrison's work product, he has made no attempt to show the value of those services to the Estate or their relation to the feeshe took. Under cross-examination

### by counsel for Petitioners,Garrison testified that he kept
no time logs of his activities as either personal. representative or attorney for the Estate, and was able to give only a very rough estimate of the time he devoted to these tasks. Garrison's argument for his entitlement to the fees he charged rests on the premise that they were "the standard amounts that are allowed." This is 

### fundamentally incorrect. Sections 72-3-631 and 72-3-633, MCA, provide that fees for personal representatives or attorneys shall 

### - not exceed certain amounts based on the size of the estate. Garrison took not a standard fee, but the maximum fee under each section. Given Garrison's removal for cause and his nearly complete failure to justify his fees when challenged, the record is patently insufficient to support the District Court's award. In ourprevious opinion,we held that Garrison shouldbe removed as personal representative and attorney for the Estate because 

### of shortcomings in the discharge of his duties:
1. 

### Failure to invest excess Estate monies in an 

### interest-bearingaccount.
-l 

# &. Failure to pay any portion of Montana inheritance tax due when Estate monies were available todo so. 3. Failure to file the Estate's inventorv and appraisement for over four years after his appointmentaspersonal representative. 

### 4. Active misleading of a devisee concerning the dispositionof the main Estate asset. The present record also demonstratesa remarkable failureby Garrison to completehiswork properly,and 

### anearly complete failure to do so in a timely fashion. Simple arithmetic indicates that Garrison's failure to invest Estate monies

### resulted in lost interest, and his failure to pay taxes completelyor inpart resulted in the impositionofpenalties and the accrual of interest on unpaid amounts. These failures alone brought calculable harm to the Estate, which calls for reduction or even elimination of Garrison's fee. As to the fees paid to Garrison's attorney, under 5 

### 72-3-632, MCA, such fees are to be reimbursed only if they
were incurred in an 

### action pursued in good faith. The 

### DistrictCourt's ruling on these feeswasbased on Finding of 

### Fact No. 7, 

### which states that Garrison was obligated to resist removal under the decedent's will. We find no such language in the will, and hold this finding to be 

### clearly
erroneous. R.T. Garrison was sufficiently remiss in performinghis duties aspersonal representativeand attorney for the Estate of Robert E. 

### Stone thathe was removed for cause. He failed to present meaningful evidence to justify the fees he paid himselfwhen those fees were challenged. The fees he claimed for the services of an attorney in resisting removal were allowed on the basis of a finding of fact that is clearly
erroneous. On this record, the District Court's award of $20,000was a manifestabuse ofdiscretion. The award of $15,000 to the Estate as "reimbursement" for tax penalties and interestwas also inappropriate. The objection filed by Petitioners sought review of Garrison's fee,but did notmention any liability that might be imposed for his actions. The court did not have issue jurisdiction
on the question of Garrison's liability for his actions, because that issue was not placed before the court in the pleadings. The award of "reimbursement"was therefore error. See, In reMarriage ofDiPasquale (Mont.1986), 716 

### P.2d 223, 43 

### St.Rep. 557.We reverse the decision of the District Court as clearly
erroneous and an abuse of discretion, and remand for retrial of the fee dispute. Reversed and remand.&.

We concur: A



### u

Justice