Ethel Camacho Living Trust Dated Mar. 3 v. Calkovsky (In re Estate of Camacho)

• Decision Date: 31 July 2017
• Docket Number: NO. CAAP-13-0003397,CAAP-13-0003397
• Citation: 400 P.3d 605
• Parties: In the MATTER OF the ESTATE OF Ethel CAMACHO, Deceased. In the Matter of the Ethel Camacho Living Trust dated March 3, 2008. Nephi Daniel Ioane Camacho, Petitioner-Appellee, v. Beverly J. Calkovsky, Respondent- Appellant.
• Court: Hawaii Court of Appeals

400 P.3d 605

In the MATTER OF the ESTATE OF Ethel CAMACHO, Deceased.

In the Matter of the Ethel Camacho Living Trust dated March 3, 2008.

Nephi Daniel Ioane Camacho, Petitioner-Appellee,

v.Beverly J. Calkovsky, Respondent- Appellant.

NO. CAAP-13-0003397

Intermediate Court of Appeals of Hawai'i.

JULY 31, 2017

As Amended November 9, 2017

On the briefs:

Peter Van Name Esser, Honolulu, Ted H.S. Hong, Hilo, and Darwin L.D. Ching, Honolulu, for Respondent-Appellant.

Carroll S. Taylor (Taylor, Leong & Chee) and Michael D. Rudy and Cheryl R. Ng (MacDonald Rudy Byrns O'Neill & Yamauchi), Honolulu, for Petitioner-Appellee.

NAKAMURA, CHIEF JUDGE, AND REIFURTH AND GINOZA, JJ.

OPINION OF THE COURT BY NAKAMURA, CHIEF JUDGE

Prior to her death in 2008, Ethel Camacho (Ethel) executed wills in 1998, 2000, and 2004. The 1998 will left Ethel's entire estate to her two grandsons, Nephi Daniel Ioane Camacho (Nephi) and Moses Antonio Ioane Camacho (Moses), and nominated Nephi as the personal representative, after Ethel's son, the original sole beneficiary of the will, predeceased her in 1999. The 2000 and 2004 wills left Ethel's entire estate to her daughter, Beverly Calkovsky (Beverly), and nominated Beverly as the personal representative. After Ethel's death, Nephi and Beverly engaged in a will contest, with Nephi contending that the 1998 will was Ethel's last validly executed will and Beverly contending that either the 2000 will or the 2004 will was the last validly executed will. After a trial, the jury found that the 2000 will was Ethel's last validly executed will.

Nephi had retained lawyers who represented him on a contingency fee basis, and because Nephi was unsuccessful in his will contest, he apparently was not obligated to pay any attorneys' fees to his lawyers. However, it appears that Nephi was obligated to pay for litigation costs. Nephi filed a motion for attorneys' fees and costs pursuant Hawai'i Revised Statutes (HRS) § 560:3-720 (2006), which provides:

If any personal representative or person nominated as personal representative defends or prosecutes any proceeding in good faith, whether successful or not that person is entitled to receive from the estate that person's necessary expenses and disbursements including reasonable attorneys' fees incurred.

Nephi requested a total of $345,736.78 in attorneys' fees (including general excise tax) and $42,754.09 in costs to be paid by Ethel's estate, which was valued at approximately $1.5 million at the time of her death. The Circuit Court of the First Circuit (Circuit Court)¹ granted Nephi's entire request for attorneys' fees and costs, and it ordered Ethel's estate to pay Nephi's lawyers a total of $388,490.87 in legal fees, general excise tax, and costs.

Beverly appeals from the "First Amended Final Judgment" (Amended Judgment), which entered judgment in favor of Nephi in the amount of $388,490.87 for attorneys' fees and costs. The principal question presented by this appeal is whether under HRS § 560:3-720, Nephi was entitled to recover attorneys' fees from Ethel's estate where Nephi was not obligated to pay his attorneys any legal fees because of their contingency fee agreement. As explained below, we conclude that the answer to this question is "no." We therefore vacate the Amended Judgment to the extent that it entered judgment in favor of Nephi and against Ethel's estate for attorneys' fees.

It appears that Nephi was obligated to pay for costs he incurred. We conclude that under HRS § 560:3-720, Nephi was entitled to an award of his necessary costs. However, the record is insufficient for us to determine whether all the costs requested by Nephi were necessary, and we remand the case for further proceedings on this issue.

BACKGROUND

I.

At the outset, we note that Respondent-Appellant Beverly did not include the trial transcripts as part of the record on appeal. This Background Section is therefore based on information contained in the pleadings filed by the parties and the non-trial transcripts included in the record.

II.

Prior to her death in 2008, Ethel owned and lived on real property located on 8th Avenue in Honolulu (the Property). The Property contained three dwellings, had a property tax assessment value of $1,463,800 in 2008, and was the primary asset of Ethel's estate.

Beginning in 1998, Nephi and his family lived in one of the dwellings on the Property. On November 2, 1998, Ethel executed a "Last Will and Testament of Ethel Camacho" (1998 Will). The 1998 Will nominated Ethel's son, John F. Camacho, Jr. (John), as personal representative and bequeathed Ethel's entire estate to John. The 1998 Will also provided that if John predeceased Ethel, Nephi would be nominated as personal representative, and Ethel's estate would pass equally to Nephi and Moses. The 1998 Will provided no bequest to Ethel's daughter, Beverly, and it stated, "I have intentionally not provided for my other child, Beverly Joyce Calkovsky, as she has been adequately been [sic] provided for during my lifetime." John passed away in 1999, and therefore, under the 1998 Will, Nephi became the person nominated as personal representative, and Nephi and Moses became the devisees of Ethel's estate.

In 2000, Nephi and his family moved from the Property. Beverly and Nephi disagree over the reason for Nephi's moving. Beverly asserts that Ethel had a falling out with Nephi and his wife and that Ethel asked them to leave. Nephi asserts that after signing the 1998 Will, Ethel began exhibiting increasing signs of dementia in 1999 and early 2000, including the delusion that Nephi and his wife were attempting to poison Ethel, which prompted Nephi and his family to leave the Property in 2000.

In February 2000, Ethel tore up the 1998 Will and signed a notarized affidavit prepared by her lawyer, Lester Oshiro, stating that she intended to die intestate.

On July 13, 2000, Ethel executed a "Last Will and Testament of Ethel Camacho" (2000 Will), which revoked all prior wills. The 2000 Will nominated Beverly as personal representative and bequeathed Ethel's entire estate to Beverly. On April 1, 2004, Ethel executed a "Last Will and Testament of Ethel Camacho" (2004 Will), which revoked all prior wills. The 2004 Will, like the 2000 Will, nominated Beverly as personal representative and bequeathed Ethel's entire estate to Beverly.

On March 3, 2008, Beverly, using a power of attorney granted by Ethel in 2004, created a revocable living trust for Ethel (Ethel's Trust), and transferred the Property into Ethel's Trust. Ethel's Trust named Beverly as Trustee and provided that upon Ethel's death, the trust estate would be distributed to Beverly. Ethel passed away on March 13, 2008.

III.

Shortly after Ethel's death, Nephi filed an "Application for Informal Probate of Will and for Informal Appointment of Personal Representative" (Informal Probate Application). Nephi based his claim for priority of appointment as personal representative on his nomination in Ethel's 1998 Will and his status as a devisee under that will and an heir of Ethel. In the Informal Probate Application, Nephi stated that "[t]o the best of [his] knowledge," the 1998 Will was validly executed and that "[a]fter exercise of reasonable diligence," he believed the 1998 Will was Ethel's last will and had not been revoked. On April 11, 2008, the Probate Court Registrar informally appointed Nephi as personal representative of Ethel's estate. Nephi sent notice of his application and appointment as personal representative to Beverly.

After receiving this notice, Beverly filed objections to Nephi's application and appointment, citing Ethel's 2004 Will, which Beverly asserted had "superseded" the 1998 Will. Beverly also cited Ethel's Trust.

IV.

Beverly subsequently filed a petition to set aside and terminate Nephi's appointment as personal representative and to have the case transferred from informal probate to formal probate. Nephi and Moses filed a response to Beverly's petition. Their response alleged, among other things, that "Nephi Camacho observed in year 2000 that Ethel had developed profound symptoms of dementia which included paranoia, confusion, delusional thought which included the belief that neighbors were trying to kill her" and that "[d]uring the year 2000, Nephi was told by various health care providers for Ethel that she was suffering from progressive dementia." Nephi and Moses also alleged that Ethel lacked testamentary capacity when she executed the 2004 Will; that Beverly exercised undue influence to cause Ethel to execute the 2004 Will; that Ethel was mistaken as to the content and meaning of the 2004 Will; and that Ethel lacked the capacity to contract and grant Beverly a power of attorney. Nephi and Moses requested that the case be transferred to formal probate; that a jury trial be held to resolve contested matters; that Ethel's 1998 Will be admitted to probate; and that Ethel's 2004 Will, the power of attorney granted to Beverly, Ethel's Trust, and the transfer of the Property into Ethel's Trust be declared null and void.²

The Circuit Court found that Beverly's petition constituted a contested matter and transferred it from the regular probate calendar to the civil trials calendar. The case was set for a jury trial. Prior to trial, Moses was dismissed as a party from the case.

Beverly's petition and her opposition to Nephi's appointment as personal representative had been based on Ethel's 2004 Will. However, before the initially scheduled trial date, Beverly disclosed that Ethel had executed the 2000 Will. It was also disclosed that prior to executing the 2000 Will, Ethel had torn up the 1998 Will and signed an affidavit on February 7, 2000, stating that she intended to die intestate.

V.

Nephi sought to prove at trial that Ethel's 1998 Will was valid, but that Ethel's subsequent February 7, 2000, affidavit, her 2000 Will, and her 2004 Will were all invalid because. Ethel lacked testamentary capacity when she executed them.³ The jury found that the 2004 Will was invalid,...