Bailey v. Bailey (In re Estates of Carol Bailey & Francis)

• Decision Date: 09 August 2012
• Docket Number: No. 38760.,38760.
• Citation: 284 P.3d 970,153 Idaho 526
• Court: Idaho Supreme Court
• Parties: In the Matter of the Estates of Carol Bailey and Francis, Andrew Bailey, Deceased. F. Kim BAILEY, Personal representative of the Estates of Carol Bailey and Francis Andrew Bailey, Plaintiff–Appellant, v. Kerry BAILEY, Kyle Bailey, and Tamara Bailey Sipe, Defendants–Respondents.

153 Idaho 526

284 P.3d 970

In the Matter of the Estates of Carol Bailey and Francis, Andrew Bailey, Deceased.

F. Kim BAILEY, Personal representative of the Estates of Carol Bailey and Francis Andrew Bailey, Plaintiff–Appellant,

v.Kerry BAILEY, Kyle Bailey, and Tamara Bailey Sipe, Defendants–Respondents.

No. 38760.

Supreme Court of Idaho, Boise, June 2012 Term.

Aug. 9, 2012.

Denman & Reeves, Idaho Falls, for appellant.

Thomsen Stephens Law Offices, PLLC, Idaho Falls, for respondents.

ON THE BRIEFS

HORTON, Justice.

This appeal arises out of a dispute regarding the requirements for determining whether a claimed amount of attorney fees is reasonable. After extended litigation to settle his parents' estate, Kim Bailey (Bailey), the estate's personal representative, asked the magistrate court for an award of attorney fees from estate funds, pursuant to Idaho Code § 15–3–720. The magistrate court found that Bailey was entitled to reasonable fees to be determined under I.R.C.P. 54(e)(3) and ordered Bailey to provide an accounting of his attorney fees, including the time his attorney spent providing legal services. Bailey's attorney notified the court that he was unable to comply with the order, explaining that he did not keep time records because the attorney-client contract expressly stated that the fee would not be based upon an hourly rate, but upon the attorney's opinion of the reasonable worth of his services. The beneficiaries of the estate (the Beneficiaries) challenged the sufficiency of the accounting. The magistrate court denied Bailey's request for fees and concluded that without time records it could not determine a reasonable fee amount in compliance with I.R.C.P. 54(e)(3)(A). The district court upheld the denial of fees, and Bailey timely appealed. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

The district court set forth the factual background to this litigation in its order on appeal:

Carol Bailey died on April 11, 1998. Decedent Francis A. Bailey died on September 22, 2006. Survivors and heirs of the couple were their children, F. Kim Bailey, Kerry L. Bailey, Kyle J. Bailey and Tamara Lee Bailey Sipe.

Prior to Francis Bailey's death, Kim Bailey resided in the Estate's home with Francis Bailey. Following the death of Francis Bailey, Kim Bailey filed a petition for informal probate of the Estate and was appointed as the personal representative. Pursuant to the wills of the decedents, the children were to share equally in the Estate with the exception of some specific [bequests] of some personal property. While there was some dispute among the heirs on how to liquidate the real property, the parties eventually entered into an agreement in April, 2008, whereby Kim purchased the property for $129,000.

The other children continued to claim that Kim owed the Estate for the fair rental value of the real property for the time Kim lived on the property following Francis Bailey's death. A trial on the disputed issues was held in April 2008 and the magistrate entered its order in July 2008. Kim appealed that order to the district court, which, in a January 2009 order, remanded the case to the magistrate court to determine the proper rental value. The parties have continued to wrangle over various issues in the courts since that time.

Bailey retained an attorney to represent him in matters relating to the probate of the estate. The agreement between Bailey and his attorney provided that the attorney's fee would be based upon the attorney's belief as to the reasonable value of the services and "not based upon an hourly basis." Bailey filed a final accounting and petition for distribution in which he sought, pursuant to Idaho Code § 15–3–720, to recover attorney fees he had incurred. In June 2009, the Beneficiaries petitioned the trial court for an accounting, "specifically separating attorney fees incurred representing [Bailey] personally in the claims and actions filed by petitioners from the attorney fees incurred by the estate in handling the estate matters." The magistrate court ordered Bailey to file "a memorandum of fees and costs reflecting the work provided" to Bailey. In response, Bailey's attorney filed a memorandum of costs that contained an itemized list of the tasks he performed and listed his fee as a lump sum based upon the fee agreement. The Beneficiaries objected to the memorandum of costs based upon, among other things, the lack of a record of the time Bailey's attorney spent providing the services.

Upon its review of the Beneficiaries' objection, the magistrate court found that the memorandum of costs did not comply with I.R.C.P. 54(e)(3) and ordered Bailey to resubmit the memorandum of costs to comply with the Rule and to "specifically outline the basis for the claimed fees and [provide] specific information regarding the value of the particular services provided." Bailey notified the court that he was unable to comply with the order because his attorney did not keep time records and moved for reconsideration of the order to resubmit the memorandum of costs. The magistrate court found that without time records of the attorney's work, it could not determine a reasonable fee amount in compliance with I.R.C.P. 54(e)(3)(A) and denied both Bailey's motion and his request for the estate to pay the attorney's fee. On appeal, the district court affirmed the magistrate court's denial of fees. Bailey appeals and asks this Court to remand with instructions for the trial court to determine reasonable attorney fees based upon the submitted information.

II. STANDARD OF REVIEW

When this Court reviews the decision of a district court sitting in its capacity as an appellate court, the standard of review is as follows:

The Supreme Court reviews the trial court (magistrate) record to determine whether there is substantial and competent evidence to support the magistrate's findings of fact and whether the magistrate's conclusions of law follow from those findings. If those findings are so supported and the conclusions follow therefrom and if the district court affirmed the magistrate's decision, we affirm the district court's decision as a matter of procedure.

Losser v. Bradstreet, 145 Idaho 670, 672, 183 P.3d 758, 760 (2008) (quoting Nicholls v. Blaser, 102 Idaho 559, 561, 633 P.2d 1137, 1139 (1981) ). Thus, we do not review the magistrate court's decisions. Rather, we are "procedurally bound to affirm or reverse the decisions of the district court." State v. Korn, 148 Idaho 413, 415 n. 1, 224 P.3d 480, 482 n. 1 (2009).

We exercise free review over questions regarding the application of procedural rules. Zenner v. Holcomb, 147 Idaho 444, 450, 210 P.3d 552, 558 (2009) (quoting Blaser v. Cameron, 116 Idaho 453, 455, 776 P.2d 462, 464 (Ct.App.1989) ). However, the calculation of a reasonable attorney fee is within the trial court's discretion. Grease Spot, Inc. v. Harnes, 148 Idaho 582, 586, 226 P.3d 524, 528 (2010) (citing I.R.C.P. 54(e)(3) ; Johannsen v. Utterbeck, 146 Idaho 423, 432, 196 P.3d 341, 350 (2008) ). When deciding whether a trial court abused its discretion, the standard is "whether the court perceived the issue as one of discretion, acted within the outer boundaries of its discretion and consistently with the legal standards applicable to the specific choices available to it, and reached its decision by an exercise of reason." Read v. Harvey, 147 Idaho 364, 369, 209 P.3d 661, 666 (2009) (citing Sun Valley Shopping Ctr. v. Idaho Power Co., 119 Idaho 87, 94, 803 P.2d 993, 1000 (1991) ). "The burden is on the party opposing the award to demonstrate that the district court abused its discretion." Johannsen, 146 Idaho at 432, 196 P.3d at 350 (citing E. Idaho Agric. Credit Ass'n v. Neibaur, 133 Idaho 402, 412, 987 P.2d 314, 324 (1999) ).

III. ANALYSIS

As a preliminary matter, we note that the issue of whether the trial court erred in ordering Bailey's attorney to submit time records is included in Bailey's statement of issues on appeal. However, the district court made it clear in its order on appeal that the magistrate court's order requiring Bailey to submit time records was not timely appealed and was therefore not properly before it. The parties did not challenge the district court's ruling on this matter. Therefore, because we only review the district court's decision, the sole issue¹ before this Court is whether the claim for attorney fees was properly denied because the trial court did not have records of the time the attorney spent performing the services for which fees were claimed.

A. The district court properly affirmed the magistrate court's denial of attorney fees.

Bailey argues that in order to determine a reasonable attorney fee under Idaho Code § 15–3–720, the trial court must consider the contract between Bailey and his attorney, as well as any Rule 54(e)(3) factors that are not inconsistent with the contract. Bailey contends that because the contract expressly provides that the attorney's fee is not based upon billable hours, the trial court does not need time records to determine whether the claimed fee is reasonable. The district court determined that the magistrate court properly denied Bailey's request for attorney fees because all of the Rule 54(e)(3) factors are applicable and Bailey did not present any evidence that the fee was reasonable.

1. Rule 54(e) provides the correct measure of reasonable attorney fees.

Idaho Code § 15–3–720 provides that if a "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 attorney's fees incurred." The Idaho Rules of Civil Procedure are applicable to a court's determination of attorney fees awarded under Idaho Code § 15–3–720 :

The provisions of this Rule 54(e) relating to attorney fees shall be applicable to all claims for attorney fees made pursuant to section 12–121, Idaho Code, and to any claim for attorney

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