Court Opinion

ID: 2719871
Source: CourtListenerOpinion
Date Created: 2014-08-21 18:01:47.451814+00
Date Added: 2024-06-11T15:36:39.503343
License: Public Domain

Filed 8/21/14 Arthur v. Davies CA2/6
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.111.5.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                    DIVISION SIX

In re Elmer Snyder Family Trust.                                              2d Civil No. B249810
                                                                           (Super. Ct. No. PR100166)
JANET ARTHUR ,                                                              (San Luis Obispo County)

     Petitioner and Appellant,

v.

DIANE E. DAVIES etc.,

     Objector and Respondent.

                   This appeal involves a trust management dispute in which a brother and
sister spent nearly $300,000 in attorney fees and costs to compel trust accountings.
Janet Arthur (Janet), trustee of the Elmer W. Snyder Family Trust, appeals from an order
awarding $178,850.15 attorney fees to her brother/trustee Richard Snyder (Richard), and
a second order denying Janet's request for $30,260 trustee's fees and $29,873.38 paralegal
fees. The orders were made following a 13-day trial on two probate petitions for
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instructions (Prob. Code, § 17200). We affirm.

1
 Unless otherwise stated, all statutory references are to the Probate Code. We refer to
Janet, Richard, and other family members by their first names for the convenience of the
reader.
                               Facts and Procedural History
              On April 29, 1993, Elmer W. Snyder and Lois P. Snyder created the Elmer
W. Snyder Family Trust, naming their children - Janet, Richard, and their brothers
Ronald Snyder, Douglas Snyder, and Jeffrey Snyder – as remainder beneficiaries. The
trust provided that on the death of the first spouse, the trust assets would be divided into
an exemption trust and a survivor's trust. Janet was named the successor trustee of the
exemption trust and trustee of two special needs sub-trusts for Jeffrey Snyder who was
disabled. After Elmer died in 1993, Lois amended the survivor's trust to name Richard
and Janet as successor co-trustees.
              When Lois died in 2009, Janet distributed $602,094 from the exemption
trust, leaving a balance of $195,000. The survivor's trust had $1,436,911 in assets
consisting of a Simi Valley residence, a Canoga Park residence, a house and rental in
Atascadero, and cash.
              In 2011, Janet petitioned for instructions to sell the Simi Valley and Canoga
Park properties. The trial court ordered Janet to sell the Simi Valley property and
Richard the Canoga Park Property. Janet obtained a buyer for the Simi Valley property
which sold on October 18, 2011.
                              Cross-Petitions for Accounting
              Janet filed a new petition to sell the Canoga Park property and to compel
Richard to provide an accounting. Richard and his brothers (Ronald and Douglas) filed a
cross-petition to remove Janet as co-trustee alleging, among other things, breach of
fiduciary duty. Following a three-week trial, the trial court removed Richard as co-
trustee of the survivor's trust, leaving Janet as the sole trustee. Diane E. Davies was
appointed as the successor trustee of Jeffrey's special needs subtrust. The trial court
ordered the Canoga Park property sold, ordered Janet and Richard to file separate
accountings, and surcharged Janet and Richard for expenditures that did not benefit the
trust.
              After the Canoga Park property was sold, Richard and Janet filed separate
trust accountings from June 2009 through July 1, 2012. With respect to Richard's

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accounting, the trial court found that some of the fees and costs did not benefit the trust
and surcharged Richard. The court approved the trust payment of $178,850.15 for
Richard's attorney fees.
              Janet's accounting listed attorney fees and withdrawals for trustee's fees but
did not describe what services were provided. Diane Davies, the successor trustee to the
special needs subtrust, filed objections and demanded that Janet produce invoices
verifying the trustee and attorney services. Janet's exemption trust accounting reported
the payment of $29,760 trustee's fees, the bulk of which Janet paid herself on June 4,
2012. The accounting failed to list what services were provided and stated that
$71,199.86 attorney fees had been paid but no invoices were attached. On December 20,
2012, Janet produced attorney fee invoices reflecting the payment of $20,873.38 to
paralegal Rod Pound. No invoices were produced to explain the nature of the paralegal
services.
              Prior to the hearing on the final accounting, the trial court requested
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invoices for all attorney fees and trustee fees. Janet was warned that without the
invoices, "the court would be unable to proceed with ordering or confirming payment
from the Trust."
              On May 3, 2013, the trial court made its final orders on the accountings.
Janet requested $73,279.94 attorney fees but was awarded $43,406.56. The $29,873.38
difference was for undocumented paralegal fees. The order stated that the trial court was
"deny[ing] approval of all paralegal fees for failure to provide invoices. There will be no
allowance of any extra fees for filing these missing documents at a later date." The trial

2
 Janet was asked to provide a line item response to Davies' (successor trustee to the
special needs subtrust) objections the accounting. The objections were 19 pages long.
The trial court noted other problems with the accounting: the exemption trust accounting
was "missing" from the court file and petitions; Janet was asked to explain why bank
service charges and NSF charges were made against trust accounts; and Janet was asked
why $1,125.92 in miscellaneous charges were charged to the survivor's trust for birthday
presents, schooling and unknown items for Janet's children.

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court disapproved $30,260 for trustee's fees because there were no invoices or time sheets
describing the services provided.
                                    Richard's Attorney fees
              Janet argues that the trial court erred in approving Richard's attorney fees
which totaled $178,850.15 after deductions and surcharges. We review for abuse of
discretion. (Kasperbauer v. Fairfield (2009) 171 Cal.App.4th 229, 234.) A trustee is
entitled to repayment for expenditures that are properly incurred in the administration of
the trust and that benefit the trust. (§ 15684; Conservation of Lefkowitz (1996) 50
Cal.App.4th 1310, 1314.) "[I]f the litigation is specifically for the benefit of the trustee,
the trustee must bear his or her own costs incurred, and is not entitled to reimbursement
from the trust. [Citation.]" (Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1461.)
              Janet complains that Richard's award for attorney fees ($178,850.15) is four
times the amount approved for Janet ($43,406.56). Citing Donahue v. Donahue (2010)
182 Cal.App.4th 259 (Donahue), Janet argues that the trial court failed to analyze how
the fees benefited the trust. In Donahue, a probate court approved a request for $5
million attorney fees incurred by a former trustee in defense of charges of self-dealing
and conflict of interest. (Id., at p. 262.) The trustee's legal team included eight attorneys
from three major law firms who engaged in a "spare-no-expense strategy." (Id., at
p. 273.) The trial court approved the attorney fee request but made no findings that the
fees were reasonably incurred and benefited the trust. The Court of Appeal reversed on
the ground that "[a] trial court may not rubberstamp a request for attorney fees, but must
determine the number of hours reasonably expended . . . . 'The evidence should allow the
court to consider whether the case was overstaffed, how much time the attorneys spent on
particular claims, and whether the hours were reasonably expended.' [Citations.]" (Id., at
p. 271.)
              Unlike Donahue, Richard's attorney's fees are well documented by itemized
invoices that explain how the services benefited the trust. In Donahue, there was double
billing and $5 million in attorney fees for a 14-day trial. Richard's attorney fees
($178,850.15) was for representation of Richard and his brothers at a 13-day trial that

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involved a three-year trust dispute. The trial court found: "Miss Sullivan [Richard's
attorney] had the harder chore on her hands both administratively and in the course of the
trial. You have to remember that each of the brothers were clients. In my thinking that is
a more difficult chore. It's going to take more time because you've got a duty to every
one of those clients. [¶] I was also particularly struck by the fact that Richard Snyder . . .
simply didn't have the right aptitude to do the kind of accounting that the court was
calling on him to produce and I think that in itself placed a greater burden on Miss
Sullivan to get things in order. It took her as I recall, it took like three different efforts . .
. to get the preliminary accounts ready for trial."
               Janet argues that Richard's petition for instructions was specious and
retaliatory. Those matters were resolved at trial and not pertinent to the trust accounting.
The trial judge presided over the trial and post-trial hearings and is deemed to be an
expert on the value of legal services in trust matters. (Donahue, supra,, at p. 276.)
Unlike Donahue, the trial court scrutinized the accountings and surcharged Richard and
Janet for fees that did not benefit the trust. Janet makes no showing that fees awarded
Richard are excessive or unreasonable. (Donahue, supra, 182 Cal.App.4th at p. 269.)
                                         Paralegal Fees
               Janet argues that the trial court abused its discretion in denying her request
to be reimbursed for $29,873.38 paralegal fees. The paralegal, Ron Pound, was an
independent contractor and submitted invoices to Janet's attorney, who forwarded the
invoices to Janet for payment.
               It is settled that extraordinary fees may include services performed by a
paralegal under the direction and supervision of the attorney. (Prob. Code, § 10811,
subd. (b); Ross & Cohen, Cal. Practice Guide (The Rutter Group 2013) Probate,
[¶] 16:327, p. 16-98.) To be reimbursed for paralegal fees, the fee request must describe
the paralegal's qualifications and describe the services performed and hours spent. (Cal.
Rules of Court, rule 7.703(e)(2) & (3).) "Further, the request must state why it was
appropriate to use the paralegal's services in the case; and demonstrate that the total
amount requested for the combined services of the attorney and the paralegal does not

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exceed the amount that would have been appropriate had the services been performed
without the paralegal's assistance. [Citation.]" (Ross & Cohen, Cal. Practice Guide,
supra, Probate, ¶ 16:327.2. p. 16-99.)
              Janet produced no invoices or time sheets for the paralegal fees. The only
accounting entries were lump sum payments to Ron Pound. The successor trustee
(respondent Diane Davies) objected as did Richard. "[W]here the items are properly
objected to, they are put in issue, and the burden of proof is upon the party claiming them
as costs. [Citation.]" (Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 624.) The trial court
reasonably concluded that Janet did not meet her burden of showing the paralegal fees
were chargeable to the trust. (See e.g., Ellis v. Toshiba America Information Systems,
Inc. (2013) 218 Cal.App.4th 853, 883.)
              Janet claims that her attorney did not realize that the trial court wanted to
review the paralegal's invoices. The December 4, 2012 tentative ruling ("Probate Notes")
only requested attorney invoices. When the trial court asked to see the paralegal
invoices, Janet claimed that Pound was an independent contractor and not required to
provide invoices. The trial court did not err in disapproving the request for the paralegal
fees. (Cal. Rules of Court, rule 7.703.) " '[I]t is imperative to trust litigation that records
support the contentions of the trustee and others that the trust should pay the disputed
compensation and fees.' [Citation.]" (Donahue, supra, 182 Cal.App.4th at p. 268.)
                                 Motion for Reconsideration
              Janet argues that 30 pages of paralegal invoices were attached to her motion
for reconsideration. The trial court denied the motion because it was not based on new or
different facts. (Code Civ. Proc., § 1008, subd. (a); Blue Mountain Development Co. v.
Carville (1982) 132 Cal.App.3d 1005, 1012-1013.) "'[T]he party seeking reconsideration
must provide not only new evidence but also a satisfactory explanation for the failure to
produce that evidence at an earlier time. In short, the moving party's burden is the same
as that of a party seeking new trial on the ground of newly discovered evidence . . . . '
[Citations.]" (Baldwin v. Home Savings of America (1997) 59 Cal.App.4th 1192, 1198.)

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              At the hearing on the motion for reconsideration, the trial court stated: "I
was quite surprised when I wasn't getting what I was asking for back in December,
You've offered no excuse for that, whatever, put the hearing over twice, to give [Janet] an
opportunity to give me whatever it was that was going to support her fees and [P]ounds
fees, and you didn't come forward with it in a timely way. [¶] And now you're asking me
to forget all that, and give you another shot at it. Well, I'm not going to do it." No abuse
of discretion occurred.
                                   $30,260 Trustee's Fees
              Janet next argues that the trial court erred in not approving, as trustee's fees,
the $30,260 that Janet paid to herself. The court denied the request because no invoices
or time sheets were provided.. Janet concedes that she did not keep time sheets but
claims the fees are reasonable based on the duties assumed and results obtained. Had
Janet not acted, the trust would not have sold the Simi Valley and Canoga Park properties
and Richard would not have filed an accounting.
              Prior to the December 6, 2012 hearing, the trial court directed Janet to
"provide a detailed service invoice for the trustee fee[s] paid . . . ." No invoices were
produced. At a December 20, 2012 hearing, Janet claimed the invoice was attached to
her response but no invoices were submitted or filed..
              When the motion for reconsideration was argued six months later, Janet
claimed that her trustee fees were less than the fees that would be customarily charged by
a corporate trustee. The trial court found that regardless of "whether the fee is based
upon an hourly rate or a percentage interest [of the trust assets], the Court required
invoices of Ms. Arthur's services so that it could assess whether the services of the trustee
were of benefit to the trust thereby justifying a charge to the trust for those services. It
was incumbent upon the Trustee to provide that information and none [has] ever been
provided."
              Janet's claim for trustee fees and paralegal fees flaunted the rules for trust
accountings. (Cal. Rules of Court, rule 7.703) "Probate courts have a special
responsibility to ensure that fee awards are reasonable, given their supervisory

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responsibilities over trusts." (Donahue, supra, 182 Cal.App.4th at p. 269.) Janet makes
no showing that the trial court abused its discretion or that the order denying trustee's fees
and paralegal fees resulted in a miscarriage of justice. (Estate of Gilkison (1998) 65
Cal.App.4th 1443, 1450.)
              The judgment (order awarding Richard $178,850.15 attorney fees and
order denying Janet's request for $30,260 trustee's fees and $29,873.38 paralegal fees) is
affirmed. Respondent, Diane Davies, is awarded costs on appeal.

              NOT TO BE PUBLISHED.

                                                         YEGAN, J.

We concur:

              GILBERT, P.J.

              PERREN, J.

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                   Jac A. Crawford, Judge

         Superior Court County of San Luis Obispo

            ______________________________

Christian E. Iversen, for Appellant.

Dabney Finch, for Respondent Davies.

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