Estate of Laas, Matter of
| Decision Date | 14 June 1988 |
| Docket Number | No. 87-3025,87-3025 |
| Citation | 121 Ill.Dec. 782,525 N.E.2d 1089,171 Ill.App.3d 916 |
| Court | United States Appellate Court of Illinois |
| Parties | , 121 Ill.Dec. 782 In the Matter of the ESTATE OF Elinor E. LAAS, Deceased (People of the State of Illinois ex rel. Neil F. Hartigan, Attorney General of Illinois, Respondent-Appellant, v. Charles L. Martin, Walter Baron and Schuyler, Roche & Zwirner, Petitioners-Appellees). |
Neil F. Hartigan, Atty. Gen. (Floyd D. Perkins and Matthew D. Shapiro, of counsel), for respondent-appellant.
Walter R. Baron, Chicago (Daniel M. Schuyler, Carol M. Petersen, Schuyler, Roche & Zwirner, of counsel), for petitioners-appellees.
This is the second appeal involving the Elinor E. Laas Estate in this court. 1 Respondent, the Illinois Attorney General ("attorney general"), appeals from an order granting petitions for executor's and attorneys' fees and expenses payable from decedent's estate. The issue raised in this appeal is whether the circuit court erred in granting the fee petitions without conducting an evidentiary hearing, sought by the State, to determine the reasonableness of the amounts requested.
The facts and circumstances are set forth in greater detail in our earlier opinion. It is sufficient to note for purposes of this appeal that on May 6, 1975, decedent Elinor Laas executed a will, later modified by the execution of a codicil on November 5, 1975. Decedent was adjudicated incompetent on January 28, 1976. She died June 16, 1983.
Charles L. Martin, who served as conservator of decedent's incompetent estate and was appointed executor of the estate upon decedent's death, on January 4, 1984, filed a complaint in the circuit court seeking construction of the will in order to establish a valid charitable remainder unitrust as prescribed by the will. The complaint named as defendants the beneficiaries under the will and codicil. The residuary legatee charities set forth in their answer a counterclaim against Martin as executor, Robert Laas, decedent's son and residuary lifetime income legatee, and the remaining legatees. The counterclaim requested construction of certain ambiguities in the will and further alleged that, if Martin's construction prevailed, the residuary gift to the charities set forth in the will would be lost. Martin and Laas successfully moved the court to dismiss the counterclaim and the charities appealed. This court affirmed the circuit court's order in In re Estate of Laas (1985), 134 Ill.App.3d at 512, 89 Ill.Dec. 440, 480 N.E.2d 1183.
Pursuant to the supplemental proceedings described above, Martin retained the services of the law firm of Schuyler, Roche and Zwirner ("Schuyler") in February 1984, to act as co-counsel to attorney Walter Baron ("Baron") during the course of the litigation. Baron had worked as Martin's attorney "since the inception of the estate."
The law firm of Mayer, Brown and Platt ("Mayer") acted as counsel for the charities during the supplemental proceedings. Robert Laas, in turn, hired attorney James Teborek ("Teborek") to represent his interests in the probate of decedent's estate, including the supplemental proceedings.
Teborek filed with the court, on January 9, 1987, a petition and time sheets itemizing expenses and fees generated by the supplemental proceedings and other tasks associated with the probate of the estate from January 1984 through December 1986. The amount sought from the estate totalled $30,362.50.
Also on January 9, 1987, the charities filed a petition requesting from the estate $30,609.00 for fees and expenses incurred by Mayer in representing the charities from August 1983 through December 1986. Time sheets and the affidavit of Charles Newlin, a partner at Mayer, accompanied the petition.
On the same day, Martin, Schuyler and Baron similarly filed petitions and affidavits with the court, requesting: "at least" $125,000 in executor's fees for Martin; $165,632.27 in fees and expenses for Baron; fees of $170,000 for Schuyler; and an additional $2,629.95 for expenses. Baron and Schuyler also submitted itemized time and expense sheets.
The charities filed responses to the petitions of Teborek, Martin, Baron and Schuyler on January 16, 1987, asserting that the payments requested were excessive and the result of duplicative, wasteful and unnecessary work. The charities asked the court to deny the petitions and conduct an evidentiary hearing to determine the appropriate compensation for each petitioner.
The attorney general also filed responses on January 16, 1987 and January 21, 1987, contesting the fee and expense petitions submitted by the charities, Martin, Schuyler, Baron and Teborek. Challenging compensation requested by Martin as excessive, the attorney general suggested payment for Martin not to exceed $50,000. The attorney general further found the executor's attorneys' time sheets indicated wasteful, duplicative and unjustifiable charges, and recommended a ceiling of $164,400 for fees and expenses for all attorneys representing Martin's interests. As to Teborek, the attorney general maintained the attorney's total services should be valued at no more than $15,000 and that: much of the work billed was duplicative; certain tasks for which Teborek sought compensation were not chargeable to the estate by a legatee attorney; and time expended on certain services and the charges for those services were excessive. The charities' fee petition, in turn, was attacked by the attorney general for: inadequate itemization of work performed; and seeking payment for services not compensable by the estate.
Martin's responses to the charities' and Teborek's petitions were filed on January 20, 1987; questioned whether certain duties performed by each of the petitioners were properly compensable by decedent's estate; and asked that the court determine correct and adequate remuneration for Teborek and Mayer. On February 10, 1987, Teborek filed his response to Martin's, the charities' and attorney general's responses, rebutting their argument and justifying the fees and expenses requested in his petition.
The parties appeared before the court on January 29, 1987 and July 15, 1987 in a continuing effort to resolve disputes concerning the fee petitions and other matters concerning estate administration and subsequently met for status calls. A proposed settlement agreement was drawn. On August 26, 1987, the attorney general asserted that the interests of the people of Illinois and the contingent remaindermen under the will were inadequately protected by the agreement and sought a hearing to determine the reasonableness of the agreed fees and expenses.
The charities responded that the possibility of the vesting of the contingent interests, or charities which would receive trust property should one of the existing charitable remaindermen cease to exist before Robert died, was "very remote." The circuit court agreed, conceding that " * * * if the [attorney general] had a direct interest in [the proceedings], I would most assuredly give [him] a * * * hearing"; however, the court found the attorney general's interest "extremely limited" and "really non-existent." The court further cited its obligation to "terminate and resolve litigation" and avoid incurring additional "time and expense" in the proceedings. Finally, it expressed concern as to what might happen if the IRS statute of limitations were exceeded.
The court entered orders approving the settlement agreement and the specific fee and expense requests contained therein. The attorney general filed a notice of appeal on September 25, 1987, requesting: reversal of the August 26, 1987 order granting Martin's, Schuyler's and Baron's fees; and remandment of the cause with instructions that the court conduct a trial on the merits of those payments.
The attorney general contends the circuit court erred in approving the fees without first conducting an evidentiary hearing to probe the reasonableness of the amounts requested.
The circuit court has broad discretionary powers in awarding executor and attorney fees (In re Estate of Halas (1987), 159 Ill.App.3d 818, 831, 111 Ill.Dec. 639, 512 N.E.2d 1276; In re Estate of Hall (1984), 127 Ill.App.3d 1031, 1035, 82 Ill.Dec. 844, 469 N.E.2d 378); nonetheless, interested parties to a probate proceeding must be given a "meaningful opportunity" to challenge the validity of fees requested for services to decedent's estate, including examination of and an ability to test the reasonableness of the fees. (In re Estates of Rice (1979), 77 Ill.App.3d 641, 654-55, 33 Ill.Dec. 73, 396 N.E.2d 298.) Under the Illinois Probate Act () an "interested party" in relation to any probate proceeding includes one who has or represents a financial interest, property right or fiduciary status at the time of reference which may be affected by the proceedings. Ill.Rev.Stat.1985, ch. 110 1/2, par. 1-2.11.
The attorney general has been recognized judicially as the proper representative of the State, which is itself regarded as the ultimate cestui que trust to any charitable bequest, in all actions concerning the enforcement or administration of a charitable trust. (Newberry v. Blatchford (1882), 106 Ill. 584, 595; Stowell v. Prentiss (1926), 323 Ill. 309, 321, 154 N.E. 120; People ex rel. Hartigan v. National Anti-Drug Coalition (1984), 124 Ill.App.3d 269, 276, 79 Ill.Dec. 786, 464 N.E.2d 690; People ex rel. Scott v. George F. Harding Museum (1978), 58 Ill.App.3d 408, 413, 15 Ill.Dec. 973, 374 N.E.2d 756; Art Institute v. Castle (1956), 9 Ill.App.2d 473, 478, 133 N.E.2d 748; Kolin v. Leitch (1951), 343 Ill.App. 622, 627, 99 N.E.2d 685.) An exception is acknowledged where the trustee of the...
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