Opinion ID: 1960024
Heading Depth: 1
Heading Rank: 3

Heading: attorney/personal representative fees

Text: [¶ 18] Title 18-A M.R.S.A. § 1-601 (1998) provides, in pertinent part, that [i]n contested cases in the original or appellate court of probate, costs may be allowed to either party, including . . . attorney's fees, to be paid to either or both parties, out of the estate in controversy, as justice requires. In determining whether the Probate Court has exceeded the authorization of [section 601], this Court employs an error of law standard of review. Estate of Wright, 637 A.2d 106, 109 (Me.1994) (citing Estate of Stowell, 595 A.2d 1022, 1026 (Me.1991)). We defer to the Probate Court's findings of fact unless such findings are clearly erroneous. See Estate of Plummer, 666 A.2d 116, 118 (Me. 1995). [¶ 19] Despite Bowdoin's contentions, section 601 does not authorize a surcharge for attorney fees incurred by a personal representative in contesting a holographic will. Rather, section 601 allows a party to recover fees from the estate in controversy, as justice requires. Although Bowdoin may seek recovery of her fees from the estate, the statute does not authorize the surcharge of fees against opposing litigants. [¶ 20] In the absence of a statute or some exception recognized at common law, the American Rule provides that parties to litigation pay their own attorney fees. See Linscott v. Foy, 1998 ME 206, ¶ 17, 716 A.2d 1017, 1021; Colquhoun v. Webber, 684 A.2d 405, 413 (Me.1996) (stating that the American Rule provides that absent a statutory provision or contractual agreement litigants bear their own attorney fees and litigation costs). Bowdoin contends that because Lukas was a fiduciary of the estate, and because Lukas acted in bad faith toward the estate while a fiduciary, equitable principles permit Bowdoin to recover her attorney and personal representative fees directly from Lukas. See Estate of Whitlock, 615 A.2d 1173, 1178-79 (Me.1992) (affirming a surcharge for attorney fees and costs against a personal representative where trial court determined that he had abused his fiduciary powers and failed to represent the estate in good faith). Lukas responds that he cannot be surcharged as a fiduciary because he was not a fiduciary when he offered the will for probate. Thus, Lukas contends that 18-A M.R.S.A. § 5-249(d) (1998) does not apply because his conservatorship terminated at McCormick's death. [8] See Estate of Mouckerezi, 468 A.2d 993, 995 n. 1 (Me.1983) (noting in dicta that a conservator's obligations to prosecute or defend actions, claims or proceedings . . . for the protection of estate assets terminates at the death of the protected person). [¶ 21] Despite Lukas's assertions, the court properly concluded that Lukas remained a fiduciary of the estate during the holographic will contest. Lukas acknowledges that he owed money to the estate for his conservatorship overcharges. On McCormick's death, Lukas had a statutory obligation to retain the estate for delivery to the personal representative. See 18-A M.R.S.A. § 5-425(e) (1998). Lukas has not delivered the estate to Bowdoin because the overcharge still rests in an escrow account. In addition, Lukas had a duty to file an inventory and accounting within 90 days of his appointment as guardian and conservator. Lukas, however, was tardy in filing the inventory and accounting by more than eight years, and litigation on those issues is pending. Because Lukas owes the estate money as a result of his conservatorship, and because his conservatorship duties have not been fully resolved, we conclude that the court's finding that Lukas remained a fiduciary of the estate during the will contest was not clearly erroneous. [¶ 22] Lukas next contends that even if he remained a fiduciary of the estate, he was not acting in his fiduciary capacity when filing and offering the holographic will. In this case, Lukas occupied the dual role of conservator and beneficiary. Each role has distinct rights and obligations with regard to Lukas's conduct toward the estate. Whether a fiduciary breaches his fiduciary duty when he engages in conduct appropriate in his nonfiduciary role arises in other contexts. For instance, the issue arises when an individual occupies the dual role of shareholder and officer of a corporation. Whereas a shareholder may act to maximize the value of his shares, an officer owes a duty of care and loyalty to the corporation and its shareholders. See 13-A M.R.S.A. § 716 (Supp.2000) (duty of corporate directors and officers). These two interests may not always converge, and the law, in contemplation of divergence, recognizes that situations may arise when although the officer role requires an unfettered, unmitigated duty of loyalty, the shareholder role simultaneously permits the individual to act in his or her own self-serving interest. See Northeast Harbor Golf Club, Inc. v. Harris, 1999 ME 38, ¶ 25, 725 A.2d 1018, 1025 (discussing corporation's burden in establishing a conflict of interest in a transaction where the corporation's president purchased real estate abutting the corporation's property). [9] Applying this principle to the present matter suggests that Lukas was not precluded from filing and offering the holographic will because he occupied the role of conservator. Rather, as beneficiary, Lukas had a natural interest in having the will probated, and Bowdoin has not established that the will was filed and offered by Lukas in his role as conservator. Accordingly, we conclude that Lukas filed and offered the will in his capacity as beneficiary, and that such filing and offering does not offend any fiduciary obligations he owed as conservator. [¶ 23] Finally, Lukas contends that even if he was a fiduciary of the estate and was acting in his fiduciary capacity when filing and offering the will, his conduct in filing the holographic will in court and offering it for probate was neither a breach of any fiduciary duty he owed the estate nor did it constitute bad faith for purposes of the bad faith fiduciary exception to the American Rule. Cf. Estate of Whitlock, 615 A.2d at 1178-79. Although the Probate Court made no finding that Lukas's offer and petition to probate the will was a breach of his fiduciary duties to the estate, the court did find that Lukas demonstrated bad faith by filing and offering the will for probate with the knowledge that McCormick lacked testamentary capacity. In addition, the court made several subsidiary findings to support its determination that Lukas exhibited bad faith. For instance, the court determined that Lukas protracted the fee dispute and noted that Bowdoin was forced to file a motion to compel discovery. The record establishes, however, that Lukas responded in a timely fashion to Bowdoin's voluminous discovery requests, only a fraction of which related specifically to the probating of the will. Moreover, the evidence establishes that the fees trial extended over a five day period because Bowdoin, with the court's approval, elicited testimony regarding both Lukas's conduct as conservator and the inventory of the estate. Such testimony was not relevant to Lukas's filing or offering the will. Nevertheless, the court relied on that evidence as the principal means of establishing Lukas's bad faith. Pursuant to the court's own separation order, that evidence was distinct from the narrow issue on which the fee award was actually sought; that is, Lukas's conduct in filing and probating the will. [¶ 24] Bowdoin also contends that Lukas's bad faith was evidenced by his failure to disclose, when the will was filed, the doctors' letters addressing McCormick's testamentary capacity. However, Lukas had no obligation to disclose that evidence until Bowdoin contested the will. Moreover, the fact that Lukas filed the holographic will at the insistence of counsel, and the fact that he voluntarily abandoned the petition on the advice of counsel, mitigate any finding of bad faith. Viewed in the aggregate, we cannot conclude that the evidence supports a finding of bad faith. [¶ 25] For all the reasons discussed above, we conclude that the Probate Court erred in allowing Bowdoin to recover fees incurred as a result of the will contest, and therefore we vacate that award. [10]
[¶ 26] Lukas contends that the court abused its discretion in denying his motion for attorney fees incurred during the will contest. In denying the motion, the court stated that Lukas's actions in offering the holographic will for formal probate were dilatory and calculated to protect himself, rather than to benefit the estate. In Estate of Voignier, 609 A.2d 704 (Me.1992), we clarified the section 601 phrase as justice requires by concluding that an award of fees is warranted when the litigation in question benefitted the estate. Id. at 708. The policy rationale for allowing recovery of fees and costs pursuant to this standard is to discourage speculative claims or nuisance actions. See Estate of Wright, 637 A.2d at 110. [¶ 27] In this case, Lukas was aware that when the holographic will was drafted, McCormick's testamentary capacity was highly questionable. Nevertheless, he allowed McCormick to draft the will, petitioned for formal probate of the will, and then voluntarily abandoned that petition when he realized its validity would not withstand scrutiny. Because Lukas was aware that the validity of the will was speculative, the court did not abuse its discretion in denying Lukas's request for fees. See id. at 109-10. [11]