Opinion ID: 1308212
Heading Depth: 1
Heading Rank: 3

Heading: Events Leading to Judge Waters' Award

Text: At the time Walter Herrmann died of cancer on January 20, 1973, he and his wife Fern Herrmann owned substantial community property, including real estate in California and in Washoe County and Lyon County, Nevada. One real property holding that figures somewhat prominently in this litigation was a valuable ranch of 2,478 acres in Lyon County, which is adjacent to the Carson River, and which enjoys valuable rights to use waters from said stream. Shortly before his death, Walter Herrmann undertook to provide for the disposition of his share of the community properties. To that end, he caused Carson City attorney Carl Martillaro, who had been representing him in matters related to development of the Lyon County ranch, to prepare a last Will for his execution. The Will named Walter Herrmann's son, respondent Ralph Herrmann, as his executor, and it designated the following beneficiaries and disposition of property: (1) To his widow, Fern, Herrmann left a specific bequest of any interest I may have in all household furniture, furnishings and fixtures, jewelry, china, silverware, books, pictures, clothing, and all other items of domestic, household or personal use, and all automobiles which at the time of my death shall be in, about, or used in connection with my home. (2) To his daughters, Mary Louise Franklin, Ruth Fern Estep, and Ethel May Colthern, Herrmann left specific bequests of $20,000.00 each. (3) To his son, respondent Ralph Herrmann, Walter Herrmann left all of the residue of his estate. [2] On March 7, 1973, pursuant to petition of respondent Herrmann, the decedent's Will was duly admitted to probate by the Honorable Richard Waters of the First Judicial District, which then encompassed Lyon County. At the same hearing  Mary Louise Franklin, Ruth Fern Estep, and Ethel May Colthern being non-residents  Judge Waters appointed appellant Flangas as their counsel pursuant to NRS 136.200. Subsequently, on March 20, 1973, Judge Waters appointed appellant Ross as co-counsel to Mr. Flangas. It appears of record that Mr. Flangas and Mr. Ross had special qualifications, known to Judge Waters, which had application to a matter of vital importance to the Estate of Herrmann, to-wit: the subdivision and development of the Lyon County ranch for residential housing purposes. Prior to his death, Walter Herrmann had undertaken extensive preparations for the development of the Lyon County ranch. Inter alia, he had made substantial expenditures to preserve a State grant of water rights by building a dam and placing land under irrigated cultivation. A master plan had been prepared, contemplating that the entire ranch ultimately would be subdivided, embracing an airport, some small lakes suitable to be stocked with game fish, and a golfcourse designed by the firm of Robert Trent Jones, a nationally renowned golfcourse architect. The planned first phase of this project was a subdivision consisting of some 142 lots, on 161 acres of the Lyon County ranch. At the time of his death, however, all of the decedent's plans and expectations were threatened by actions of officials in Lyon County, purporting to impose a moratorium on subdivision development in the area of the Herrmann ranch. Appellant Flangas previously had served as District Attorney in Lyon County, and, therefore, was well acquainted with zoning procedures in that county and also with various public officials who were charged with application of those procedures. Indeed, the record indicates Flangas had drafted at least one of the very ordinances on which contentions of the parties concerning the moratorium were expected to center. Appellant Ross formerly had served as District Attorney of Carson City, and, as such, had become well experienced in zoning procedures and disputes. Since leaving public office, it appears Ross had concentrated his professional and business activities principally in the areas of construction and real estate development. After their appointment, Flangas and Ross participated in the eventual efforts which culminated in approval of the proposed initial subdivision of 161 acres. When negotiations with officials and administrative proceedings ultimately proved unavailing, a mandamus action was instituted in the First Judicial District Court, for Lyon County, to compel the county commissioners to file the subdivision map. It stands uncontroverted that Ross did the legal research for this lawsuit, and assisted in the trial with respondent Herrmann's counsel, Martillaro, while Flangas was also present. It also appears that, following a judgment by Judge Waters favoring the Herrmann Estate, Lyon County initiated an appeal to the Supreme Court of Nevada. Again, it is uncontroverted that counsel for the non-resident heirs aided respondent Herrmann's counsel in defeating the county's appeal. It appears Ross developed the strategy of seeking a hearing to compel a large bond to secure against extreme monetary damages that arguably would result from construction delays. Ultimately, following these further court proceedings before Judge Waters, Lyon County conceded defeat and withdrew its appeal, and the Estate of Herrmann thus gained full approval for the initial subdivision of 161 acres. The record is replete with evidence that the efforts of Flangas and Ross were not limited to participation in this critical zoning litigation. Flangas and Ross were active in resolving other important concerns of the Estate. Although respondent Herrmann now contends that their activities had no value, they made trips to California in regard to the California probate proceedings and tax concerns. Indeed, it even appears that, when respondent Herrmann was preparing to account to Judge Waters for his administration of the Estate, Martillaro was otherwise occupied, and Herrmann therefore collaborated with a Mr. Ken Poole, who was Flangas' professional associate and employee. Apparently, by this time, respondent Herrmann had developed some antipathy toward Ross, even though he acknowledges having traveled to California on Estate business with Ross on more than one occasion, and having discussed Estate business almost daily with him and Martillaro in Carson City, and also in Las Vegas. In any case, Herrmann instructed Martillaro that he did not want his First and Final Account and Petition for Distribution to mention Ross, and, in the final form filed with court, the petition therefore referred only to Mr. Flangas and not to co-counsel Ross. Nonetheless, the petition, which Herrmann verified under oath, referred to the Lyon County mandamus action that Ross had successfully prosecuted with Martillaro, and went on to allege: Peter L. Flangas has performed ordinary services for the absent heirs, and has participated in matters of substantial benefit to the estate, and he is entitled to such compensation as the court finds proper.  (Emphasis added.) The petition evinced a clear understanding that all fees for services performed by counsel for the non-resident heirs should be paid out of the general estate, and not by the non-resident heirs; for it went on to pray for an order: Directing the Executor to pay all outstanding costs of administration, including attorney's fees of Carl F. Martillaro, and Peter L. Flangas. Herrmann also prayed for an order: Directing the Executor to pay the cash legacies of $20,000.00 each to Mary Louise Franklin, Ruth Fern Estep, and Ethel May Coulthern. Thus, it is manifest from Herrmann's verified petition that he and his attorney knew and conceded that counsel for the non-resident heirs had not only performed routine services for the three non-resident heirs, but also extraordinary services for the estate. Further, it is clear that Herrmann and Martillaro knew all fees would be paid from the general estate, which had been benefited, and of which respondent Herrmann was to be the sole distributee. In sum, the petition recognized quite explicitly that the compensation of counsel for the non-resident heirs (1) should be commensurate with their substantial efforts, but (2) should not be paid from the modest specific bequests to the non-resident heirs, to which adequate fees might necessarily be disproportionate and would be largely unrelated. [3] Upon receipt of respondent Herrmann's First and Final Account and Petition for Distribution, Flangas advised his non-resident clients that the executor did not contemplate seeking to have Judge Waters assess any attorneys' fees against their bequests  that he therefore expected their entire bequests would be ordered distributed to them  and the decedent's daughters did not object, did not attend the distribution hearing, and evidently were content. [4] On November 29, 1973, Herrmann and his counsel, Martillaro, appeared in court before Judge Waters in Lyon County, for the purpose of having their aforementioned petition heard and having issues raised thereby resolved. It appears that, either at the outset of or during the hearing, Martillaro submitted to Judge Waters a proposed order, which he had prepared earlier for the Judge's consideration, leaving blanks for the Judge to make entries when he decided how much to award to the executor and the attorneys. In accord with Herrmann's desires, before coming to court Martillaro had revised the proposed order, so that it would refer only to an attorney  rather than to attorneys  for the non-resident heirs. This, evidently, constituted an effort by respondent Herrmann to slight Ross. The court's minutes reflect, however, that both Flangas and Ross appeared in court and were recognized by the court as attorneys for the non-resident heirs. The record establishes that Judge Waters complimented all counsel on their performance. Additionally, the minutes reflect that Judge Waters took judicial notice that the appeal from his ruling in the zoning action had been successfully concluded, as had other litigation, and he expressly declared that the attorneys for the non-resident heirs had performed both ordinary and extraordinary services. Judge Waters quite evidently gave some reflection to the amount of fees earned by Flangas and Ross; for in completing the proposed order submitted to him by respondent Herrmann's counsel, Judge Waters first wrote in the figure of $65,000 and then changed that sum to $70,000. He also added an s to the word attorney in the portion of the proposed order that related to fees for the non-resident heirs' counsel. He initialed these changes, signed the order, and announced his determinations. As articulated through the completed form of the order which had been proposed by Martillaro, Judge Waters ruled: The Executor shall pay from the assets of the Estate, and not as a charge against the non-resident heirs, one fee in the sum of $70,000.00 to the attorneys for the absent heirs, for ordinary and extraordinary services performed for the benefit of the Estate and the absent heirs, plus the sum of $1,500.00 advanced for expenses. (Emphasis added.) [5] No objections whatever were noted by respondent Herrmann or his counsel, Martillaro. It appears that, at the conclusion of the hearing, the formal order as completed and executed by Judge Waters was thereupon delivered to the court clerk, who file-stamped it, and who also file-stamped and returned conformed copies of the final order to respondent Herrmann's counsel. Following the hearing, respondent Herrmann and all counsel left the courthouse and proceeded down the main street of Yerington to a restaurant, where Herrmann for the first time made it known that he was displeased by Judge Waters' order. Within days thereafter, on December 10, 1973, Judge Waters died; a successor was appointed and took office January 2, 1974.