In re Estate of Clarence Weatherbee. Estate of Weatherbee

• Decision Date: 29 May 2014
• Docket Number: Docket No. Han–13–331.
• Citation: 93 A.3d 248,2014 ME 73
• Parties: ESTATE OF Clarence WEATHERBEE. Estate of Helen Weatherbee.
• Court: Maine Supreme Court

93 A.3d 248

2014 ME 73

ESTATE OF Clarence WEATHERBEE.

Estate of Helen Weatherbee.

Docket No. Han–13–331.

Supreme Judicial Court of Maine.

Argued: Feb. 12, 2014.

Decided: May 29, 2014.

Frank T. McGuire, Esq. (orally), and Tracy J. Roberts, Esq., Rudman Winchell, Bangor, for appellant Peggy McPike.

Charles E. Gilbert, III, Esq. (orally), and Julie D. Farr, Esq., Gilbert & Greif, P.A., Bangor, for appellee Michael Weatherbee.

Panel: SAUFLEY, C.J., and ALEXANDER, LEVY,^*SILVER, GORMAN, and JABAR, JJ.^**

SAUFLEY, C.J.

[¶ 1] Peggy McPike, daughter of Helen and Clarence Weatherbee, appeals from a judgment of the Hancock County Probate Court ( Patterson, J.) directing that her brother, Michael Weatherbee, be compensated out of their parents' estates for $95,855 in attorney fees and expenses.¹ Michael incurred these fees in a Superior Court action that he brought against McPike, which resulted in a judgment in favor of their parents' estates in the amount of $92,400 in restitution, plus interest and costs. McPike argues that the claim seeking attorney fees from the estates is precluded because it could have been, but was not, pursued in the Superior Court; that the claim is barred because it was untimely filed; and that the Probate Court erred or abused its discretion in applying the common fund doctrine to require that attorney fees be paid by the estates. We vacate the judgment because we conclude that the common fund doctrine is inapplicable and there is no other basis for allowing attorney fees.

I. BACKGROUND

[¶ 2] The following background facts are taken from the Superior Court judgment (Penobscot County, Anderson, J.) entered in litigation brought by Michael Weatherbee to recover money misappropriated by his only sibling, Peggy McPike, while she was handling her parents' money for their care. In early 2001, McPike began handling her mother's accounts. With Michael's consent, McPike was exercising power of attorney for Helen, who was suffering from dementia. Between April 2001 and the end of 2002, McPike withdrew $92,400 in cash from her parents' accounts for her own personal use.

[¶ 3] Clarence died on June 22, 2003, and Michael petitioned for formal adjudication of intestacy in May 2005. In 2007, the Probate Court appointed a disinterested attorney as personal representative of Clarence's estate.

[¶ 4] In December 2007, Michael commenced an action against McPike in the Superior Court seeking equitable relief and to avoid transfers to McPike from her parents' accounts. With leave of the Superior Court, Michael, individually and as co-guardian of Helen, filed an amended complaint that alleged the following claims: count one sought a true and just accounting of Helen's assets; count two sought to avoid transfers based on undue influence, see33 M.R.S. §§ 1021–1023 (2013); count three alleged McPike's abuse of a confidential relationship; count four sought restitution for Clarence's estate to recover misappropriated funds; count five sought a constructive trust for Clarence's estate; count six sought damages for Michael due to McPike's tortious interference with the reasonable expectation of a legacy; and count seven sought the recovery of funds obtained from Clarence's estate through undue influence, see id. Clarence's estate was named as a defendant. The personal representative entered an appearance as counsel for Clarence's estate as a defendant in the action.

[¶ 5] Helen died intestate on July 16, 2008. In October 2008, the Probate Court granted a stay of all pending claims in probate concerning McPike's alleged improper transfers, pending the outcome of the Superior Court action. The personal representative of Clarence's estate was appointed as personal representative of Helen's estate, and through the personal representative, Helen's estate was joined by consent as a plaintiff in the Superior Court action. The personal representative never entered an appearance as counsel for Helen's estate, and Michael's attorney never entered an appearance on behalf of either estate.

[¶ 6] The Superior Court proceedings culminated in a five-day trial after which the court entered its judgment. The court considered both estates to have been constructively joined as plaintiffs through the personal representative. Specifically, Helen's estate was joined as a plaintiff on counts one, two, and three of the amended complaint, and Clarence's estate—although initially named as a defendant—was considered to have been joined as a plaintiff with regard to counts four through seven.²

[¶ 7] The court construed count one, the claim for an accounting of Helen's assets, as an unjust enrichment claim and found for Helen's estate. The court also found for Helen's estate on count three based on a finding that McPike had abused a confidential relationship through undue influence. The court found for Clarence's estates on counts four and five, treating them as unjust enrichment claims. As to all of these counts, the court dismissed Michael as a plaintiff for lack of standing. The court found for Michael individually on count six based on a finding that McPike had tortiously interfered with Michael's reasonable expectation of a legacy. The court found for McPike on all other counts. Michael requested that damages not be paid to him individually and instead only requested restitution to the estates.

[¶ 8] The court awarded the judgment as restitution to the estates, consistent with Michael's request. Specifically, the court ordered McPike to pay a total of $92,400 in restitution—$53,950 to Helen's estate and $38,450 to Clarence's estate. The court ordered that the judgment could be effectuated by deeming the estates to hold more than they actually do—Helen's estate holding an additional $53,950 and Clarence's holding an additional $38,450—and then deeming McPike to have already received those amounts in distribution. Thus, depending on the amount ultimately determined to be in each parent's estate, McPike might not be required to make any actual payment to her brother or to the estates. The judgment was entered on March 23, 2012. Neither party challenged the relief granted, and no appeal has been taken from the Superior Court's judgment. McPike consented to employing the method of payment that would augment the estates and deem her to have already received $92,400 out of the estates.

[¶ 9] Michael then presented his attorney fees from the Superior Court litigation to the personal representative and requested payment from the estates. On June 28, 2012, the personal representative filed a petition in the Probate Court with regard to both Clarence's and Helen's estates seeking instructions regarding the payment of Michael's attorney fees. An itemization of $95,855 in claimed attorney fees was filed in the Probate Court on July 17, 2012.

[¶ 10] Although McPike challenged both the legal basis for allowing the fees and the factual basis for the extensive fees themselves, the Probate Court held only a nonevidentiary hearing. The court entered a judgment after that hearing directing the personal representative to pay Michael's attorney fees and expenses out of the estates in the requested amount of $95,855. The court concluded that the Superior Court litigation had ended on March 22, 2012, when the judgment was signed, and that an itemized list of fees had been submitted to the Probate Court on July 17, 2012—within the four-month limitation period of 18–A M.R.S. § 3–803(b)(1) (2013). It further concluded that the claim was not precluded by the doctrine of claim preclusion. Although the court concluded that the Probate Code did not authorize the payment of the attorney fees, it ultimately determined that the fees were payable from the estates pursuant to the equitable common fund doctrine, which can allow the recovery of attorney fees out of a common fund recovered for the benefit of more than one party. See Doucette v. Pathways, Inc., 2000 ME 164, ¶ 7, 759 A.2d 718.

[¶ 11] In both Helen's and Clarence's probate matters, McPike filed timely notices of appeal, and we ordered that the two appeals be consolidated.

II. DISCUSSION

A. Claim Preclusion

[¶ 12] McPike contends that the attorney fee claim is precluded under the doctrine of claim preclusion because the same parties were parties to the Superior Court litigation, which arose out of the same set of facts, and the claim for attorney fees could have been presented in that action. “Claim preclusion bars the relitigation of claims if: (1) the same parties or their privies are involved in both actions; (2) a valid final judgment was entered in the prior action; and (3) the matters presented for decision in the second action were, or might have been, litigated in the first action.” Wilmington Trust Co. v. Sullivan–Thorne, 2013 ME 94, ¶ 7, 81 A.3d 371 (quotation marks omitted).

[¶ 13] Here, the claim for attorney fees could not have been brought in the Superior Court because (1) no abuse of the litigation process has been asserted that would justify the application of the common law exception to the American Rule that authorizes an award of attorney fees as sanctions, see Cimenian v. Lumb, 2008 ME 107, ¶ 11, 951 A.2d 817, and (2) any other basis for approving the fees would arise either directly from probate law, see18–A M.R.S. §§ 1–601, 3–720, 3–721 (2013), or from some other equitable doctrine that could be considered if those probate statutes did not provide a legal basis for an award. Michael brought his complaint in the Superior Court and included tort claims that sought damages owed to him personally, not only damages owed to the estate. See4 M.R.S. § 252 (2013); Voisine v. Tomlinson, 2008 ME 133, ¶¶ 11, 12, 955 A.2d 748; cf. In re Hiller, 2014 ME 2, ¶ 23, 86 A.3d 9 (holding that the Probate Court had subject matter jurisdiction over a claim for breach of fiduciary duty in which it was asserted that assets had been taken from the estate). With those tort claims decided, the Superior Court...