Court Opinion

ID: 9788386
Source: CourtListenerOpinion
Date Created: 2023-08-31 00:48:08.083429+00
Date Added: 2024-06-11T07:37:09.919126
License: Public Domain

BRYNER, Justice,
with whom FABE, Chief Justice, joins, dissenting.
In our original ruling in this appeal, we affirmed the denial of Enders's application for attorney's fees, unanimously concluding that the superior court adequately addressed the issue of Enders's bad faith. With scearcely a glance at our original reasoning and without explaining its change of heart, today's opinion on rehearing turns about-face and vacates the superior court's attorney's fee ruling; it now concludes that the superior court's findings on bad faith were insuffi-client. Our first opinion reached a sound, *18well-reasoned conclusion, and it speaks for itself as my view of a correct resolution of this case.1 But the court's new reasoning does not support today's opinion and thus requires additional comment.
The opinion on rehearing begins by noting that "the superior court denied Enders's claim on the grounds that her 'conduct fails to meet the requirement that a personal representative must act to benefit the estate."" 2 Construing the superior court's remark to mean that the court applied a benefit-to-the-estate-requirement to Enders's request for fees, the opinion holds that AS 18.16.4385 imposes no such requirement and that the statute allows a nominated personal representative to recover reasonable attorney's fees necessarily incurred in good-faith litigation, regardless of whether it results in actual benefit to the estate.3
Having so decided, the opinion on rehearing holds that the superior court erred in applying a benefit-to-the-estate requirement and in neglecting to make explicit findings on good faith:
The issue of good faith was extensively litigated below, but the superior court did not make specific findings on it. Instead, the court rested its decision to deny fees under AS 18.16.485 on its conclusion that Enders's actions did not benefit the estate. As we have seen, the court's reliance on a benefit-to-the-estate requirement was error.... While the superior court used strongly critical language of Enders in its decision, the court's findings are not explicit on the question of good faith Because the findings erroneously focused on the question whether Enders's actions ben-efitted the estate, we are unable to say that the court would have explicitly found a lack of good faith.[4]
But this holding unfairly accuses the superior court of applying a benefit-to-the-estate requirement and overlooks its unequivocal findings that Enders acted in bad faith. In the early part of its fee decision, the superior court did discuss cases that nominally apply a benefit-to-the-estate requirement in awarding attorney's fees. But the court nowhere suggested that it construed these cases as allowing it to rule that conferral of an actual benefit on the estate was a prerequisite to- or even an important factor bearing on-an award of fees under AS 18.16.485. To the contrary, a careful review of the superior court's ruling shows that the court believed just the opposite.
In beginning its analysis, the superior court cited an early Alaska precedent, In re Underwood's Estate.5 The court in Underwood did not adopt the actual-benefit rule-that is, it did not require a financial gain to the estate or success in litigation as a condition of reimbursing expenses; rather, it more narrowly recognized that reimbursement would be allowed for any necessary work done "in the interest or for the benefit of the estate." 6 Here, the superior court recognized that Underwood stood for this proposition, describing that case as holding that attorney's fees are allowed "if the services are rendered for the benefit of the estate." Thus, in beginning its fee decision in the present case, the superior court unquestionably understood that AS 13.16.485 did not require Enders to prevail on her claim or to have actually advanced the estate's financial interests in order to recover fees. Although the court expressly recognized that Enders's unsuccessful claim "did not bring about an enhancement in value or an increase in the assets of the estate," the court did not stop its analysis there; it looked farther, to the underlying purposes of Enders's action, noting that the relevant inquiry was whether *19Enders's action against the estate was motivated by a desire to discover Kottke's true testamentary intent and to achieve a proper disposition of the estate's property.
The court thus proceeded to describe in depth the extensive cireumstantial evidence revealing Enders's motives for pursuing the action. The court observed, for example, that
Joel W. Kottke took every precaution to ensure that his 1997 will would be probated. He sought independent legal counsel by a competent probate lawyer, he had himself videotaped while announcing his testamentary intentions, and he was not hasty in making his decisions. Joel Kottke took all these steps because he was concerned that Ms. Enders would challenge his 1997 will. When Ms. Enders discovered that Mr. Kottke had changed his 1983 will, she immediately questioned his testamentary capacity. Dr. Webb, Mr. Kottke's oncologist, and John Burke, a representative of the Division of Senior [Slervices looked into Mr. Kottke's testamentary capacity and freedom from undue influence. Both reported that Mr. Kottke was not suffering [from] insane delusions and that he was not the subject of undue influence by Connie Parker. Yet Ms. Enders continued to pursue her claims.
At no stage pre-trial or at trial did Ms. Enders claim that she was acting as personal representative. She makes this claim only after trial.
The facts of the case led the superior court to conclude "that Ms. Enders failed to act in the estate's interest." Hence, in denying Enders's motion for fees, the court did not dwell on the obvious fact that Enders had lost her case or rule that a personal representative's act must benefit the estate. Instead, the court specifically said that a personal representative "must act to benefit the estate."7 The distinction is crucial. The former proposition-that a personal representative "must benefit the estate"-de-seribes the benefit-to-the-estate requirement, which would allow a fee award only when an action's outcome actually benefits the estate. In contrast, the latter proposition-that the personal representative "must act to benefit the estate"-looks to the personal representative's motives for acting; it simply requires a suit to be brought for the purpose of benefiting the estate. In concluding that Enders failed to "act to benefit the estate," then, the superior court simply found that Enders had sued for ulterior motives, and not for the purpose of benefiting the estate. Because the court's findings as to Enders's motivations and purposes did not pin her fee award to a successful outcome, they did not amount to an incorrect application of the benefit-to-the-estate requirement.
This interpretation of the trial court's reasons for denying fees finds strong confirmation in other specific factual findings. The trial court expressly found that "Ms. End-ers'[s] case was a contest for her own personal benefit," that "[the real impetus behind the litigation is the Enders[ ] family['s] personal animosity and disdain for Connie Parker," and that "[tlhis immense distaste for Ms. Parker has propelled Ms. Enders to drain Mr. Kottke's modest estate through litigation."
Although the opinion on rehearing dismisses these statements as nothing more than "strongly critical language," 8 they are certainly more than that: they are express, affirmative findings that Enders's conduct was motivated by her overriding animosity and self-interest and not by a good faith desire to benefit the estate. These findings are supported by substantial evidence, and they are not clearly erroneous. Moreover, the superior court's earlier findings rejecting Emnders's will contest on its merits foreshadow and bolster its later findings concerning Enders's motives for suing; 9 and we have *20previously reviewed and upheld those earlier findings, declaring them "exemplary" and free of error.10
None of these findings touches on the issue of whether Enders's challenge to Kottke's will actually benefited the estate. To the contrary, they all bear solely on Enders's motives for prosecuting her action, thus belying the conclusion that the superior court denied Enders's application because her suit ultimately failed to provide a benefit to the estate. Yet despite the strength of the ree-ord against that conclusion, today's opinion fails to point to any findings supporting its theory that the superior court attached undue importance to Enders's failure to prevail. Indeed, had the superior court believed that AS 18.16.4835 required proof of actual benefit, it could simply have rejected Enders's fee application as a matter of law on the ground that she had failed to prevail, without considering extensive argument on the issue of her good faith or making detailed findings concerning her motives for suing.
I thus see no sound basis to accuse the superior court of erroneously applying a benefit-to-the-estate requirement, and no good reason to doubt that it properly based its denial of fees on its evaluation of Enders's ulterior motives for suing.
The opinion on rehearing separately questions the sufficiency of the superior court's findings concerning bad faith: "Because the findings erroncously focused on the question whether Enders's actions benefitted the estate," the opinion professes, "we are unable to say that the court would have explicitly found a lack of good faith."11 But any doubts based on a supposed lack of "explicit" findings are groundless.12 For despite the superior court's failure to recite the words "bad faith" explicitly, its ruling leaves no uncertainty as to its view on the issue; the ruling incorporates explicit factual findings that mirror the relevant definition of bad-faith litigation.
As the opinion on rehearing acknowledges, AS 13.16.485's good faith requirement reflects the Alaska Probate Code's recognition that a personal representative serves in a fiduciary role.13 Thus, in claiming to act as a nominated personal representative, Enders placed herself under the "special confidence" of this relationship and, "in equity and good conscience, [was] bound to act in good faith and with due regard to the interests of the one imposing the confidence." 14 Under AS 18.16.350(a) Enders owed her fiduciary duty to Kottke's estate; that duty required her to serve the best interests of the estate and of Kottke's successors; and it obliged her to observe the same statutory standards of care that trustees must observe in managing trust assets.15 - Alaska's trust laws require trustees *21to act with loyalty and impartiality.16 Accordingly, Enders had a duty to act "solely in the interest" of Kottke's estate and its beneficiaries and to do so "impartially ..., taking into account any differing interests of the beneficiaries." 17
The court's opinion on rehearing correctly warns that, to meet these obligations as a nominated personal representative in a contest between two competing wills, Enders needed only to act with intent to benefit those successors named in the will that she supported.18 But this altered perspective has little bearing on the basic quality of Enders's duty: no matter what set of beneficiaries she purported to serve, Alaska's definition of good faith required Enders to act out of a genuine concern for Kottke's true will as she honestly perceived it, unambiguously precluding her from suing out of personal interest or for ulterior motives.19
Yet here, the superior court explicitly found that Enders acted for her own self-interest, motivated by her overriding hostility toward Parker. The court denied End-ers's application after explicitly finding
* "Ms. Enders'[s] case was a contest for her own personal benefit";
* "The real impetus behind the litigation is the Enders] familyl's] personal animosity and disdain for Connie Parker"; and
* "This immense distaste for Ms. Parker has propelled Ms. Enders to drain Mr. Kottke's modest estate through litigation|. J" [20]
These are clear, unequivocal, and explicit statements of the superior court's considered view that Enders's action was motivated by
spite and that she prosecuted her claim against Parker for the purpose of draining the estate through litigation-not to secure the estate's benefit for individuals who End-ers believed were Kottke's rightful successors, and not because Enders had any genuine concern for Kottke's true will.21 The superior court's findings leave no doubt concerning its view of this issue.
Because a needless remand for ritualistic incantation of the words "bad faith" will only invite another round of appeal, which, in turn, will almost certainly seal Enders's vie tory in her efforts to drain Kottke's estate, I dissent.

. Because this court's order granting rehearing, from which I dissented, withdrew the original opinion from publication and precluded its citation "for any purpose," see Order Granting Pet. for Reh'g, $-9341/9391 (April 4, 2002), the opinion has now been withdrawn from the bound volumes of the Alaska Reporter. The original opinion nonetheless remains available for historical reference as Westlaw document 28 P.3d 280.

. Op. on Reh'g at 14.

. Op. on Reh'g at 14-16.

. Op. on Reh'g at 16 (internal footnote and paragraphing omitted).

. 6 Alaska 673 (D.Alaska. Terr.1922).

. - Id. at 678.

. Emphasis added.

. Op. on Reh'g at 16.

. See In re Estate of Kottke, 6 P.3d 243, 248-49 (Alaska 2000). In these earlier findings the superior court observed that, although Parker and Kottke "were intimately involved in each other's lives," members of Enders's family "never took to Connie Parker.... The real crux is the alienation of affection in the relationship between Connie Parker and [Enders's] family," who "did not accept Connie Parker{.]" Id. at 248. The superior court described the Enders family as "outspoken in its animosity towards Connie Par*20ker as early as 1993, with the most favorable testimony from the Enders family being that Connie Parker was 'tolerable.'" Id. According to the court, "some of the worst words in the case were spoken by Greg Enders in his testimony, where he described Connie Parker as a 'decrepit old woman.'" Id. at 248-49. By the time Kottke died in 1997, the court found, the situation had evolved into a "feud" that had led to "a failing relationship" between Enders and Kottke. Id. at 249. "[Elven at the time of Joel Kottke's death," the court noted, "there was a dispute as to who was and was not family, rather than an acceptance that Joel Kottke had many families." Id.

. Id. at 245.

. Op. on Reh'g at 16.

. To the extent that the opinion's doubts stem from the superior court's asserted focus on whether Enders's actions benefited the estate, this dissent has addressed the issue by demonstrating that the superior court did not erroneously focus on the benefit-to-the-estate requirement.

. Op. on Reh'g at 16-17.

. Paskvan v. Mesich, 455 P.2d 229, 232 (Alaska 1969).

. AS 13.16.350(a) states:
A personal representative is a fiduciary who shall observe the standards of care applicable to trustees under AS 13.36.225-13.36.290. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of any probated and effective will and AS 13.06-AS 13.36, and as expeditiously and efficiently as is consistent with the best interests of the estate. A personal representative shall use the authority conferred by AS 13.06-AS 13.36, the terms of the will, if any, and any order in proceedings to which the personal representative is party for the best interests of successors to the estate.

. AS 13.36.245 defines the duty of loyalty, stating: "A trustee shall invest and manage the trust assets solely in the interest of the beneficiaries." AS 13.36.250 governs the duty of impartiality: "If a trust has two or more beneficiaries, the trustee shall act impartially in investing and managing the trust assets, taking into account any differing interests of the beneficiaries."

. AS 13.36.245; AS 13.36.250.

. Op. on Reh'g at 16-17.

. As the commentary to the Uniform Probate Code makes clear, "Litigation prosecuted by a personal representative for the primary purpose of enhancing his prospects for compensation would not be in good faith." Uni. Prosate Cope § 3-720 cmt., 8 U.L.A. 184 (1998). See, e.g., Oliver v. City of Larimore, 540 N.W.2d 630, 634 (N.D.1995).

. Emphasis added.

. As noted above, the superior court's findings are amply supported by the record, as well as by the superior court's dispositive findings on the merits of the will contest.