Opinion ID: 1282277
Heading Depth: 1
Heading Rank: 2

Heading: Statutory Basis for Attorney Fees

Text: The court found that some of Joanne's attorney fees should be paid by the estate because it was clear the estate would not have been properly administered without Joanne's intervention. James and Clemens contend that the court abused its discretion by awarding the fees. The court did not specify the authority to award attorney fees. Although Rule 54, NDRCivP, and Title 32, NDCC, do not require that the court cite to statutes, rules, or case law when entering orders or judgments, it is helpful to the appellate process if it does so. Hieb v. Jelinek, 497 N.W.2d 88 (N.D.1993). Therefore, in order to determine the propriety of an award of attorney fees, we must first determine the statutory basis for the award. [2] In probate proceedings, fees may be allowed pursuant to section 30.1-18-20, NDCC, [3] which reads: 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. Relying on this statute, we have held that a personal representative is entitled to compensation from the estate for reasonable attorney fees incurred in defending or prosecuting a proceeding in good faith. In re Estate of Flaherty, 484 N.W.2d 515 (N.D.1992); In re Estate of O'Connell, 476 N.W.2d 8 (N.D.1991). In considering the award of attorney fees, the county court stated in its Memorandum Decision and Order, The Court will consider requiring that some part of those fees be paid by the estate, since without such intervention, it is clear the estate would not have been properly administered. In interpreting an award of attorney fees under this statute, we have held that attorney fees may be awarded in some circumstances if the action benefited the estate, Flaherty, supra; In re Estate of Honerud, 326 N.W.2d 95 (N.D.1982). We therefore assume that the court used this statute as a basis for the award of attorney fees. The question before us, then, is whether an attorney who is employed by a beneficiary of a will can recover attorney fees from the estate pursuant to section 30.1-18-20, NDCC. Very few North Dakota cases have specifically dealt with whether attorney fees are recoverable by someone other than attorneys for the personal representative. Those which have, generally allow attorney fees based upon sections 28-26-01, 28-26-10, & 28-26-30, NDCC. Supra, f.n. 3. Although Joanne would have us construe section 30.1-18-20, NDCC, and the general power of a court, to allow attorney fees for both personal representatives and beneficiaries, we decline to apply such a broad reading. In deciding whether to award attorney fees out of a decedent's estate, we generally determine whether the personal representative acted in good faith either in propounding the will to probate or defending it. Honerud, supra. Moreover, we have focused on whether a litigant's actions benefited the estate or whether the action was brought or defended in order to benefit only one person or a group of persons. Id. If a personal representative's actions do not benefit the entire estate but instead are done to merely benefit himself personally, then his fees are generally disallowed. Id., Liebelt v. Saby, 279 N.W.2d 881 (N.D.1979); In re Estate of Zonas, 42 Ohio St.3d 8, 536 N.E.2d 642 (1989). Because an attorney employed by a beneficiary usually seeks to benefit only his or her client and not the entire estate, regardless of their professed motives or resulting outcome, attorney fees are disallowed. We choose to distinguish between recovery of attorney fees by a beneficiary as opposed to recovery by a personal representative, primarily because the duties, responsibilities, and interests of these two groups are inherently different. A personal representative's interest in a will contest should be to preserve and protect the property of the estate. NDCC § 30.1-18-03; Cudworth, supra . Although the personal representatives may defend the will, there are no requirements to do so and the burden may be cast onto the beneficiaries. A personal representative, acting as a fiduciary, represents the entire estate and has the duty to distribute the estate property, but should not enter into controversies among rival contestants. Id.; Zonas, supra. On the other hand, the interest of beneficiaries in a will contest is necessarily a personal one. Id. The outcome to such a contest has a personal and direct effect on them alonenot the entire estate. Therefore, since a beneficiary's interest in a will contest is to protect a personal interest and not to benefit the estate, attorney fees are not allowed. We determine that section 30.1-18-20, NDCC, applies only when the personal representative or other fiduciary to the estate retains counsel which is necessary for the benefit of the entire estate. Thus, we have frequently disallowed attorney fee awards on behalf of personal representatives when it was determined that the legal services were performed primarily for the personal interest of the personal representative and not for the benefit of the estate as a whole. Honerud, supra. Other courts have used a similar analysis in this same issue by distinguishing the roles of personal representatives and beneficiaries in holding that statutes similar to section 30.1-18-20, NDCC, do not allow for a fee award to beneficiaries of a will. See Zonas, supra; Proudfit v. Coons, 137 Colo. 353, 325 P.2d 273 (1958). There is no statutory basis for an award of attorney fees in this case.