Estate of Castruccio v. Castruccio

Decision Date29 July 2020
Docket NumberNo. 1023,1023
PartiesESTATE OF PETER CASTRUCCIO, ET AL. v. SADIE M. CASTRUCCIO
CourtCourt of Special Appeals of Maryland

ESTATE ADMINISTRATIONSPECIAL ADMINISTRATOR'S POWER TO HIRE COUNSEL WITHOUT COURT APPROVAL

A special administrator of an estate may engage counsel to prosecute and defend litigation on behalf of the estate without court approval under the power to "collect, manage and preserve property" granted by section 6-403 of the Estates and Trusts Article.

ATTORNEYS' FEESESTIMATION OF FUTURE FEES IN FEE PETITION

When a fiduciary of a decedent's estate cannot make a reasonable, good faith estimate of the likely future fees, the fiduciary is not required to make such an estimate in a petition for attorneys' fees under Md. Rule 6-416.

ATTORNEYS' FEESCOMPENSATION FOR PARTICPATION IN A WILL CONSTRUCTION ACTION

Fiduciaries of an estate who defend against challenges to their reasonable, good faith construction of the will are acting to benefit the estate by effectuating the testator's intent and are entitled to attorneys' fees for their participation in the action.

ATTORNEYS' FEESDETERMINATION OF REASONABLE FEELODESTAR METHOD

The lodestar method of calculating attorneys' fees does not apply to the determination of reasonable attorneys' fees for a fiduciary of an estate. Courts should consider the amount of requested fees in relation to the size of the estate when a fiduciary is seeking to shift the costs of the litigation to the estate.

ATTORNEYS' FEESDETERMINATION OF REASONABLE FEE"LOCALITY" FACTOR

Under Md. Rule 19-301.5, a court may not confine the limits of a reasonable hourly rate to fees "customarily charged in the locality" in cases where qualified local counsel was not readily available. Court should consider whether local counsel was willing to take the case, whether local counsel with necessary expertise was available, and whether the complexity of the case warranted the rates charged by the attorneys when reviewing the locality's conventional rates.

ATTORNEYS' FEESDENIAL OF HOURS BILLEDOPPORTUNITY TO BE HEARD

A court must give the party petitioning for attorneys' fees an opportunity to address the court's concerns with the requested fees before reducing the hours billed by the petitioner's attorneys. Attorneys for the petitioners are not required to provide explicit details for each hour billed in their petition, and a court must provide a concise but clear explanation for its decision to award all of part of the requested fee to provide an appropriate basis for meaningful appellate review.

ATTORNEYS' FEESDENIAL OF HOURS BILLEDFEES FOR UNSUCCESSFUL PRE-TRIAL MOTIONS

A court cannot deny requested attorneys' fees incurred in connection with pretrial motions filed by the attorneys solely because those motions were not granted. Rather, the court should conduct a nuanced inquiry into the reasonableness of the arguments that were advanced in those motions and the extent, if any, to which they may have benefitted the estate.

ATTORNEYS' FEESDETERMINATION OF REASONABLE FEERELEVANT FACTORS BESIDES THOSE SET FORTH IN RULE 1.5

Maryland courts are permitted to consider relevant factors besides those set forth in Md. Rule 19-301.5 when calculating a reasonable fee award for an estate's attorneys. Courts may also consider: (1) the actions of the beneficiaries in relation to the length or complexity of the litigation; (2) whether the beneficiaries approved of or instigated the litigation; and (3) whether the fiduciary of the estate had an opportunity to reach a reasonable settlement with the opposing party.

EVIDENCEADMISSIBILITY OF STATEMENT MADE IN MEDIATION

In general, all statements made in a court-ordered mediation are effectively inadmissible under the Maryland Mediation Confidentiality Act, even if they are offered for some purpose other than proving the "validity, invalidity, or amount of a civil claim in dispute" under Md. Rule 5-408.

Circuit Court for Anne Arundel County

Case No. C-02-CV-16-000278

REPORTED

Graeff, Nazarian, Arthur, JJ.

Opinion by Arthur, J.

*Judge Timothy E. Meredith did not participate in the Court's decision to designate this opinion for publication pursuant to Maryland Rule 8-605.1.

This case marks yet another appeal to this Court concerning the administration of the estate of Dr. Peter Adalbert Castruccio.1

While defending against a series of lawsuits initiated by Dr. Castruccio's widow, the fiduciary of the estate submitted an interim petition for attorneys' fees and expenses to the Orphans' Court for Anne Arundel County. He requested that the fees be paid out of the estate's assets.

Mrs. Castruccio objected to the petition, principally on the ground that the fiduciary had not obtained the orphans' court's approval to retain one of the firms that represented him. Darlene Barclay, the principal beneficiary of the estate, objected on the ground that the fees should be charged against Mrs. Castruccio's share of the estate because she had allegedly acted in bad faith during the litigation. The orphans' court denied the exceptions, and Ms. Barclay and Mrs. Castruccio filed de novo appeals to the Circuit Court for Anne Arundel County.

After a six-day trial, the circuit court permitted the attorneys' fees and expenses to be paid out of the estate's assets. The court took issue, however, with the lawyers' hourly rates and with the number of hours billed by counsel for the estate. The court significantly reduced the hourly rates of most of the estate's attorneys and cut nearly athird of the billed hours. The court also denied Ms. Barclay's request to apportion the fees to Mrs. Castruccio's share of the estate.

All three parties appealed the circuit court's ruling. Mrs. Castruccio challenges the court's decision to permit the attorneys' fees to be paid from the estate. The fiduciary of the estate and his attorneys contest the court's reduction of the proposed attorneys' fees. Ms. Barclay contends that the court should have found that Mrs. Castruccio acted in bad faith and, therefore, shifted the attorneys' fees to Mrs. Castruccio's share of the estate.

We affirm the circuit court's denial of Ms. Barclay's and Mrs. Castruccio's exceptions to the fee petition. We vacate the award of attorneys' fees, however, and remand the case for the court to determine an award that is consistent with this opinion.2

FACTUAL AND PROCEDURAL BACKGROUND

Dr. Peter Castruccio died on February 19, 2013, and was survived by his wife of 62 years, Sadie Castruccio. The Register of Wills of Anne Arundel County admitted Dr. Castruccio's will and codicil to administrative probate on February 26, 2013, and appointed his long-time personal lawyer, John Greiber Jr., as the personal representative of the estate under the terms of the will. The inventory value of Dr. Castruccio's estate was $6,628,972.95.

After making a few cash gifts, Dr. Castruccio's will stated that Mrs. Castrucciowould receive the entire residuary estate if she survived him and had made and executed a will before his death. In a separate section, however, the will stated that if Mrs. Castruccio did "not have a valid Will filed with the Register of Wills in Anne Arundel County dated prior thereto these [sic]," the residuary estate would go to Darlene Barclay, Dr. Castruccio's longtime assistant.

On March 4, 2013, Mr. Greiber, the personal representative, hired Robert H.B. Cawood of the Annapolis firm of Cawood and Cawood LLC to serve as counsel to the estate. Within days thereafter, Mrs. Castruccio would initiate the first of several legal proceedings concerning Dr. Castruccio's will and the administration of estate: a petition to caveat the will.

In response to that proceeding and the likelihood of additional proceedings, Mr. Greiber promptly engaged Shale D. Stiller, Brett Ingerman, and Melissa L. Mackiewicz, attorneys at the Baltimore office of the international law firm DLA Piper LLP (US) ("DLA"), to serve as lead litigation counsel. As part of the engagement, DLA agreed to discount its standard hourly rates by 18.55 percent and not to increase the rates during the pendency of the engagement.

I. The Many Actions in the Administration of the Estate of Peter Castruccio

During the years immediately following Dr. Castruccio's death, Mrs. Castruccio initiated lawsuits to contest the validity of the will, Mr. Greiber's interpretation of the will, and the administration of the estate. She also initiated another lawsuit that was designed to extract millions of dollars in assets from the estate, so that they would pass to her outside of probate. In addition, she refused to comply with a court order, whichprompted the estate to initiate contempt proceedings against her. These various legal proceedings led to a multitude of hearings, appeals, motions for summary judgment, a four-day trial, and extensive discovery.

A. The Caveat Action

On March 12, 2013, Mr. Cawood informed Mrs. Castruccio that, under the terms of the will, she would receive the residuum of her late husband's estate only if she had had a "valid Will filed with the Register of Wills in Anne Arundel County dated prior thereto these," as the will stipulated. Mrs. Castruccio had not filed (or deposited) a will with the register of wills.3

On March 27, 2013, Mrs. Castruccio filed a petition to caveat in the Orphans' Court for Anne Arundel County, in which she sought to invalidate the will and obtain a declaration that Dr. Castruccio had died intestate. Mrs. Castruccio would receive the entire net estate if her late husband had died intestate. See Md. Code (1974, 2017 Repl. Vol., 2020 Supp.), § 3-102(f) of the Estates and Trusts Article ("ET").4

During the litigation of the caveat action, the orphans' court transmitted a number of factual issues to the Circuit Court for Anne Arundel County for determination. See ET § 2-105(b). After extensive discovery, the circuit court granted the estate's motion for summary judgment on October 7, 2014, and rejected Mrs. Castruccio's challenge to the validity...

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