Court Opinion

ID: 9586988
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:17:05.418251+00
Date Added: 2024-06-11T17:32:58.330816
License: Public Domain

GRABER, P. J.,
concurring in part and dissenting in part.
I concur in the majority’s opinion except as to McMenamin’s fees, with respect to which the majority substitutes indignation for analysis. The majority states the correct test for considering a potential conflict of interest and a breach of fiduciary duty, such as those that existed here. I disagree, however, with its application of that test. I would modify the fee to $12,000 and, therefore, dissent in part.
Even though our review of the probate judgment is generally de novo, Jacobs v. Jacobs, 82 Or App 333, 336, 728 P2d 89 (1986), we should modify the attorney fee award only if the trial court abused its discretion in making it. Smith v. U. S. National Bank, 47 Or App 967, 977, 615 P2d 1119 (1980), *131rev den 290 Or 302 (1981). The majority concludes that fees should be denied altogether, because McMenamin “intentionally” violated DR 5-105, the time spent by the attorneys was excessive in view of the size and complexity of the estate, the attorneys did work that the personal representative should have done, they duplicated their efforts, they failed to litigate the Laurelhurst Apartments dispute in a cost effective manner, and they billed KAO and other clients for the same hours. Those conclusions suffer from two defects.
First, at least in part, they are unsupported by the record. For example, the majority states that “the evidence establishes that the firm spent a large amount of attorney time on account of the Laurelhurst Apartments, despite its knowledge that they were a detriment, rather than an asset, to the estate.” 97 Or App at 127. The evidence does show that the attorneys spent much time on the Laurelhurst litigation, but it does not show that, when that time was spent, the attorneys knew that it was a worthless cause. In fact, much of the time was spent, albeit unsuccessfully, on trying to salvage some value from the apartments, which would have been to KAO’s benefit.
Similarly, the majority concludes that it was inappropriate to compensate McMenamin for performing “nonlegal work for the personal representative, such as maintaining the estate’s checkbook, making bank deposits, visiting an apartment house, negotiating to sell [the decedent’s] boat and motor vehicles, and searching the decedent’s files for tax information.” 97 Or App at 127. The majority approves of the personal representative’s delegation of those tasks to the attorney, see 97 Or App at 128 n 8, but at the same time it disapproves of paying the attorney to perform the delegated tasks. The properly delegated tasks should be compensated. If, as the majority says, it does not deny fees on the basis of improper delegation, then it is baffling why that factor is included in the list of “harms” that justify the denial of fees.
The majority also writes that “KAO’s loss * * * included losses from excessive personal representative fees and, indirectly, Nepom’s fees for defending against KAO’s objections.” Apparently, the majority assumes that an attorney who did not have a potential conflict of interest would have achieved a lower representative’s fee and would have *132eliminated the need for KAO’s objections (and, therefore, Nepom’s fee for defending against them). Those suppositions are entirely too speculative to support the denial of all fees to McMenamin. Moreover, even assuming that the entire Nepom fee and the entire personal representative’s fee should be deducted, the fee award to McMenamin would be about $10,000.
The second flaw in the majority’s reasoning is more fundamental. It is true that many of McMenamin’s billing practices in this case were far from exemplary. However, the trial court ruled on those arguments in awarding only about two-thirds of the fee requested. The court did not abuse its discretion with respect to those issues.1
The only thing that the trial court failed to consider in exercising its discretion was McMenamin’s alleged conflict of interest, because the court concluded that there was no actual or potential conflict. As does the majority, I disagree. Nonetheless, in my view, our task is to consider de novo the effect only of McMenamin’s breach of fiduciary duty on his fee request because, as to other objections, the trial court did not abuse its discretion. The court considered the arguments about overcharging in a different context, but it considered them nonetheless and eliminated offending portions of the fee request.
KAO selected the McMenamin firm. It continued to use that firm after learning of the potential conflict of interest. Had McMenamin taken the one extra step of obtaining the approval of KAO’s board for the dual representation, there would be no basis to reduce the fee award further. KAO does not assert that it suffered or could have suffered any damage (apart from the fee award itself) as a result of the conflict. Its own expert testified that the services that an “ideal” attorney should have rendered had a reasonable value of $10,000 to $12,000. That is, had the personal representative hired a different attorney, KAO admits that a fee of up to $12,000 would be reasonable for the services actually rendered, even in the light of all the factors upon which the majority now relies to *133deny fees altogether. The majority gives KAO a windfall to that extent.
KAO’s real complaint seems to be its disappointment over the value of the Laurelhurst Apartments, for which it had great but unjustified expectations. That disappointment is not an appropriate basis to deny fees. In order to assure that KAO suffers no financial harm from the breach of fiduciary duty, I would reduce the fee award to the McMenamin firm from $25,000 to $12,000.

 KAO also argues that the McMenamin firm could not bill for time spent by legal assistants and clerks, relying on ORS 116.183(1). However, “customary fees in the community for similar services” include fees for legal assistants and clerks. The trial court properly could include such amounts.