Berggren v. Cottini, 011321 AKSC, S-17458

Docket NºS-17458
Party NameOLENA BERGGREN and THE ESTATE OF JOHN BERGGREN, Appellants, v. MARC COTTINI, Appellee.
AttorneyMario L. Bird, Law Office of Mario L. Bird, Anchorage, for Appellant. Susan Orlansky, Reeves Amodio LLC, Anchorage, for Appellee.
Judge PanelBefore: Bolger, Chief Justice, Winfree, Maassen, Carney, and Borghesan, Justices.
Case DateJanuary 13, 2021
CourtSupreme Court of Alaska

OLENA BERGGREN and THE ESTATE OF JOHN BERGGREN, Appellants,

v.

MARC COTTINI, Appellee.

No. S-17458

Supreme Court of Alaska

January 13, 2021

UNPUBLISHED See Alaska Appellate Rule 214(d)

Appeal from the Superior Court of the State of Alaska No. 3AN-13-01828 PR, Third Judicial District, Anchorage, Yvonne Lamoureux, Judge.

Mario L. Bird, Law Office of Mario L. Bird, Anchorage, for Appellant.

Susan Orlansky, Reeves Amodio LLC, Anchorage, for Appellee.

Before: Bolger, Chief Justice, Winfree, Maassen, Carney, and Borghesan, Justices.

MEMORANDUM OPINION AND JUDGMENT [*]

I. INTRODUCTION

This is the second appeal arising out of a dispute between a principal and his agent. In the first appeal, we reversed the superior court's ruling that a guardianship statute precluded the agent from recovering attorney's fees incurred in defending his accounting. We remanded the case for the court to determine whether the agent was entitled to attorney's fees under principles of agency law. On remand, the superior court awarded the agent $I48, 2541 in attorney's fees. The principal appeals that decision. Finding no error, we affirm.

II. FACTS AND PROCEEDINGS

A. Events Leading To First Appeal

In 2013, after John Berggren suffered an incapacitating traumatic brain injury, Marc Cottini became his legal agent pursuant to a 2007 power of attorney and advanced health care directive. Soon thereafter Berggren's wife, Olena, filed a guardianship petition; Cottini, as Berggren's agent, opposed the petition. During the ensuing litigation, Berggren regained competency and Cottini's agency ended after approximately eight months.2

Cottini later produced an accounting of his actions and expenditures as Berggren's agent and requested the court approve $71, 684 in fees and costs. Berggren3objected to Cottini's accounting and filed counterclaims alleging breach of fiduciary duty and objecting to specific requested fees and costs. Cottini hired two attorneys to assist him in litigating these claims.

The parties eventually settled the claims regarding Cottini's fees and costs. Berggren agreed to dismiss the counterclaims with prejudice, withdrew all objections, and agreed to pay most of what Cottini had initially requested. But the parties reserved all issues regarding Cottini's attorney's fees for a decision by the superior court.

Soon after the settlement agreement was signed, Cottini moved for an attorney's fee award of $148, 254. The court denied Cottini's motion, finding that AS 13.26.291(d) governed fee-shifting in guardianship cases and that Cottini was not entitled to attorney's fees under that statute.

Cottini appealed. We reversed, holding that it was "entirely coincidental that Cottini's request arose within the context of a guardianship proceeding" and concluding that "AS 13.26.291 does not provide the applicable rule of decision in this dispute."4 We held that under common law agency principles, "unless the parties agree otherwise, the principal has a duty to indemnify the agent for expenditures that were beneficial to the principal."5

We remanded the matter for a determination of whether Cottini was entitled to attorney's fees incurred in successfully defending his accounting.6 Based upon our approach m Marshall v. First National Bank Alaska, 7 we identified eight factors to guide the superior court's analysis: (1) "the statutory form power of attorney"; (2) "other relevant documents"; (3) "the common law of agency"; (4) "the total amount of the attorney's fees"; (5) "the amount of the assets managed relative to the amount of the attorney's fees"; (6) "the merits of the parties' arguments in the underlying dispute"; (7) "the extent to which the defense was based on the best interests of the principal in accordance with the power of attorney document and relevant Alaska Statutes"; and (8) "the duration, extent, and expense of the agent's defense."8 We also authorized the superior court to consider "other factors the parties or the court may identify on remand."9

B. Proceedings On Remand

On remand Cottini renewed his request for an award of $148, 254 in attorney's fees, and Berggren again opposed. After reviewing the parties' briefing, the superior court concluded that there was a factual dispute regarding the fifth factor-the amount of assets managed - and scheduled an evidentiary hearing.

Cottini presented witnesses and testified that his "conservative estimate" of Berggren's assets while Cottini served as agent was $14, 412, 474. Cottini also testified that he managed financial transactions totaling over two million dollars. He described the work he did as Berggren's agent during the eight months of Berggren's incapacitation as "more than a full-time job."

Olena Berggren testified that her husband repeatedly stated he did not want Cottini to exercise the power of attorney. She claimed it had not been necessary for Cottini to manage a number of properties and accounts on behalf of Berggren because the assets were either jointly owned by Olena, had other managing partners, or did not require such management.

In rebuttal Cottini testified that Berggren never communicated that he did not want Cottini to act as his agent. Cottini stated that at one point he spoke to Berggren about finances and Berggren became agitated; Berggren's doctors then directed Cottini not to talk to Berggren about finances.

C. The Superior Court's Order

The superior court issued a detailed order listing each of the Marshall factors, concluding that each factor supported an award of attorney's fees, and awarding Cottini the requested $ 148, 254 in attorney's fees. The court "decline[d] to examine each action taken by Cottini as Berggren's agent" because "the time ha[d] passed for Berggren to challenge Cottini's actions as agent." It quoted our statement that because "all of Berggren's objections to Cottini's accounting were withdrawn, Berggren's counterclaims were dismissed with prejudice, and Berggren ultimately agreed to pay almost all of the agency fees and expenditures Cottini requested . . . [Berggren] cannot now argue that Cottini has not successfully defended his accounting."[10]

The court made a number of factual findings regarding the scope and length of Cottini's agency. The court found that the power of attorney "conferred extensive powers, authorities, and obligations on Cottini to act in Berggren's stead"; Cottini's agency began "upon the date of [Berggren's] disability"; and the "breakdown in the relationship between the parties" did not mean Cottini's actions had contravened his obligations as Berggren's agent.

Turning to the litigation over Cottini's actions as agent, the court first found that "Cottini incurred attorney's fees in defending his accounting and agent fees" and the defense "was based on the best interests of the principal." After recognizing that the parties had settled on the eve of trial, the court found that "they did not avoid the costs of preparing for trial" and that the case was not "a simple substantiation issue" as Olena claimed, due to "the wide-ranging scope of the Berggrens' objections." Finally, the court found that "[t]he duration, extent, and expense of Cottini's defense was necessary and reasonable."

The court explicitly credited Cottini's testimony and made a number of findings based on his testimony. The court first found that "Berggren did not ask Cottini to relinquish his powers." It then found that in his capacity as agent, Cottini managed Berggren's assets, including those owned jointly by Olena; that a "conservative estimate of the assets [he] managed" was $14, 412, 474; that he managed financial transactions totaling over two million dollars; and that due to the complicated nature of Berggren's affairs, "serving as Berggren's agent was more than a full-time job."

III. DISCUSSION

"We review a trial court's factual findings for clear error. Factual findings are clearly erroneous if a review of the entire record leaves us with a definite and firm conviction that a mistake has been made."11 "The trial court's factual findings enjoy particular deference when...

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