In re Estate of Johnson, 98-CA-00027-SCT.

• Citation: 735 So.2d 231
• Decision Date: 25 March 1999
• Docket Number: No. 98-CA-00027-SCT.,98-CA-00027-SCT.
• Parties: In the Matter of the ESTATE OF Nancy A. JOHNSON, Deceased. Bob Rich, as Co-Conservator of Pauline Rich. v. Lloyd L. Moore, Ralph Sexton, and Danny Lindsey.
• Court: Mississippi Supreme Court

735 So.2d 231

In the Matter of the ESTATE OF Nancy A. JOHNSON, Deceased.

Bob Rich, as Co-Conservator of Pauline Rich. v. Lloyd L. Moore, Ralph Sexton, and Danny Lindsey.

No. 98-CA-00027-SCT.

Supreme Court of Mississippi.

March 25, 1999.

Rehearing Denied May 13, 1999.

Duncan L. Lott, Booneville, Attorney for Appellant.

Lloyd L. Moore, Belmont, Attorney for Appellees.

EN BANC.

SULLIVAN, Presiding Justice, for the Court:

STATEMENT OF THE CASE

¶ 1. This is an appeal from the "Opinion and Judgment" rendered by Honorable John C. Ross, Jr., Chancellor of the Chancery Court of Tishomingo County, Mississippi, involving the Estate of Nancy A. Johnson, deceased. The gross estate of Ms. Johnson was determined by the court to be $3,101,804.34, and the beneficiaries of her estate were five heirs at law.

¶ 2. On September 18, 1997, Ralph Sexton (hereinafter "Sexton"), the administrator of Ms. Johnson's estate, through his attorney, Lloyd Moore (hereinafter "Moore"), filed an Accounting and Petition to Confirm Sale of Property, Personalty, and Coins and for Partial Disbursement of Assets. Contained in this petition was a request for administrator's fee, attorney's fee and accountant's fee.

¶ 3. Bob Rich, co-conservator of Pauline Rich, one of the heirs at law, objected to these fees. On the 17th of October, 1997, this case was set for a hearing. Four of the five heirs at law either executed "Joinder and Waiver of Process and Entry of Appearance" forms or chose to attend the hearing.

¶ 4. After receiving testimony and evidence at the hearing, the chancellor took the motion under advisement and entered his two-page Opinion and Judgment of the Court on October 27, 1997, denying the objections of Rich and allowing Sexton an administrator's fee of $108,563.15, Moore an attorney's fee of $108,563.15 and accounting fees to Danny Lindsey of $30,000. Aggrieved by the trial court's decision, Rich perfected this appeal raising the following issue:

I. WHETHER THE CHANCELLOR ERRED IN HIS AWARD OF ADMINISTRATOR'S, ATTORNEY'S AND ACCOUNTANT'S FEES?

Rich requests that this Court set aside the chancellor's award and assess a reasonable administrator's, attorney's and accountant's fees based upon the proof presented to the court below.

STATEMENT OF THE FACTS

¶ 5. Nancy A. Johnson died intestate on October 18, 1996, and Letters of Administration were issued to Sexton as Administrator on November 13, 1996. A Notice to Creditors was filed on November 13, 1996, and the usual claims were made against the estate from its inception in November of 1996 until this petition was heard in October of 1997. Moore was employed as attorney for the estate by Sexton and handled those duties from the inception. Danny Lindsey, C.P.A., was employed as the accountant by Sexton. Lindsey had prepared Ms. Johnson's income tax returns in the past and had knowledge of her finances. Also, Lindsey had prepared the income tax returns of Ms. Johnson's father and mother and their estate tax returns.

¶ 6. Sexton, Moore, and Lindsey were charged with the responsibilities and duties of administering a $3,101,804.34 gross estate with the goal of preserving as much of the estate's assets as possible for distribution to the five heirs at law.

¶ 7. Approximately twelve (12) months from the time Temporary Letters of Administration were issued, Sexton, by and through Moore, filed an Accounting and Petition to Confirm Sale of Realty, Personalty, and Coins and for a Partial Disbursements of Assets.

¶ 8. The petition listed the five (5) heirs at law, and copies were included of letters sent to each stating that the hearing would be held on the 3rd of October, 1997; that Notice to Creditors had been published according to law; that all known creditors were given notice to probate their claims; that the gross estate was subject to federal and state estate taxes; no final closing letters had been received from the IRS or the Mississippi Tax Commission; that the personal property of the estate was sold at public auction for a net amount of $68,966.14; the residence was sold for $61,500; that the coin collection was sold for $535.38; and of which Sexton asked the chancery court to ratify and confirm as fair and equitable.

¶ 9. The petition further requested that the court allow a distribution from the estate of 6,000 shares of Abbott Laboratories common stock and $20,000 to each of the five heirs at law. Attached to the petition was a detailed accounting of the receipts and disbursements that accounted for all the assets received into the estate and for all expenditures made on behalf of the estate. Also contained in the petition was a request for administrator's, attorney's and accountant's fees totaling $247,126.30.

¶ 10. Executing Joinder and Waiver of Process and Entry of Appearance forms were Abe Johnson, Linda Searcy as conservator for the person of Pauline Rich and co-conservator for the Estate of Pauline Rich, Wesley Neil Johnson, and John W. Sartain. Thus, they entered their appearance, waived any and all process and joined in the petition which requested that the accounting and sale of assets be confirmed and there be a partial disbursement of estate assets.

¶ 11. On October 1, 1997, only two days before the hearing, Rich obtained a continuance stating that he and his attorney would be out of state and unable to attend. The hearing was reset for October 17, 1997, with each heir at law being notified of the new date.

¶ 12. At the hearing, stipulated facts, testimony, evidence and exhibits were presented to the chancellor. Sexton oversaw the detailed inventory of the personal property located at Ms. Johnson's residence. He also collected the mail, separated the bills to deliver to the attorney, and did all of the banking. His position as administrator required Sexton to leave work during the day to handle estate affairs which included: meeting with the attorney and CPA; settling insurance claims, inventorying the lock box; assisting in the funeral arrangements for Ms. Johnson and; paying numerous bills of the estate. Furthermore, Sexton took part in the appraisal and sale of a coin collection, sale of the residence and the auction of the personal property of Ms. Johnson. Sexton was involved with the tax issues of the estate and their payment and the selling of stock belonging to Ms. Johnson in order to bring liquid assets into the estate and to pay taxes. When asked about compensation as administrator, Sexton testified that he considered a fee of three and one-half percent of the gross estate as being a fair fee.

¶ 13. To support his testimony, Sexton submitted a detailed time sheet reflecting at least eighty-eight hours served as the administrator of the estate. The time sheet was admitted into evidence, but does not reflect the time served as administrator since October, 1997.

¶ 14. Charlene Fancher, Office Manager for Attorney Moore, had been involved in the administration of Ms. Johnson's estate since the beginning. She prepared letters to creditors, assisted in filing and paying all duly probated claims, executed releases against the estate, made deposits for monies received for the estate, reconciled monthly bank statements, corresponded with the heirs, helped prepare the coin inventory and savings bond inventory, and showed Ms. Johnson's home to prospective buyers. Fancher and Moore's office were actively involved in transferring Ms. Johnson's stock to the estate and heirs at law, with the actual transfers being made through licensed and qualified brokers. Fancher made no personal claim against the estate, but submitted a time sheet to show the number of hours she expended on estate matters as an employee of Moore. These time sheets were admitted into evidence showing approximately 45 hours expended by her on estate matters.

¶ 15. Lindsey handled the estate tax form and sought a fee of $30,000 for his work. Lindsey estimated that he had worked approximately 105 hours on preparing the estate tax returns. Lindsey stated that he prepared the final 1996 personal income tax returns, the estate tax returns, the 1996 fiduciary tax returns, and was gathering information to include on the 1997 fiduciary tax returns. Lindsey further testified that he would be filing the 1997 fiduciary tax returns and that if the estate was not completely closed by December 31, 1998, he would be filing fiduciary tax returns for 1998. ¶ 16. Lindsey noted that it would probably be tax advantageous to allow estate income to pass directly to individual heirs at law, with a possible savings to the estate of $50,000. Furthermore, Lindsey testified that he saved the estate approximately $223,000 in taxes. The tax savings were due to a credit that Ms. Johnson's estate was allowed to claim for the estate taxes that had been paid on her father's previous return. The testimony of Lindsey reflected time spent as of the hearing date, but does not reflect the time spent as the accountant since October of 1997.

¶ 17. Harold S. Jackson, an attorney who had practiced in Tishomingo County since August of 1971 and had handled several estates, heard the testimony and proof presented to the chancery court, looked over the file, and believed the court file reflected a lot of work and time had been invested in the administration of the estate. Jackson testified that a standard and customary fee for an attorney in Tishomingo County was $85 to $135 per hour, and he further agreed a fee for handling an estate should be based upon the complexity of the matter handled, the attorney's experience, time expended, difficulty of work, skill required, responsibility, amount of estate, and promptness of service. Jackson further noted that it was his understanding that no statutory minimum or maximum fee existed and that the amount awarded as fees was solely in the discretion of the court. Jackson stated that given the amount of complexity, the work and the duties performed as evidenced by the entries in ...