IN RE ESTATE OF BREEDEN v. Gelfond, 01CA1545.

• Decision Date: 28 August 2003
• Docket Number: No. 01CA1545.,01CA1545.
• Citation: 87 P.3d 167
• Parties: In the Matter of the ESTATE OF Spicer Humphreys BREEDEN, a/k/a Spicer H. Breeden, a/k/a Spicer Breeden, Deceased Impartial, and Concerning Sydney Stone, as co-personal representative of the Estate of Breeden, Petitioner-Appellant and Cross-Appellee, v. Lawrence P. GELFOND, Respondent-Appellee and Cross-Appellant.
• Court: Colorado Court of Appeals

87 P.3d 167

In the Matter of the ESTATE OF Spicer Humphreys BREEDEN, a/k/a Spicer H. Breeden, a/k/a Spicer Breeden, Deceased Impartial, and Concerning Sydney Stone, as co-personal representative of the Estate of Breeden, Petitioner-Appellant and Cross-Appellee, v. Lawrence P. GELFOND, Respondent-Appellee and Cross-Appellant.

No. 01CA1545.

Colorado Court of Appeals, Div. III.

August 28, 2003.

Rehearing Denied October 9, 2003.

Certiorari Denied March 22, 2004.

Law Office of Larry A. Henning, Larry A. Henning, Denver, Colorado, for Petitioner-Appellant and Cross-Appellee.

Gorsuch Kirgis LLP, Peter R. Nadel, Stephen M. Brainerd, Julie L. Rosen, Denver, Colorado, for Respondent-Appellee and Cross-Appellant.

Opinion by Judge MARQUEZ.

In this consolidated appeal, petitioner, Sydney Stone, appeals from a partial summary judgment, a judgment entered after an evidentiary hearing, and other orders issued by the probate court in favor of respondent, Lawrence P. Gelfond. Respondent cross-appeals the probate court's denial of his request for an award of attorney fees and costs. We affirm in part, reverse in part, and remand for further proceedings.

This action concerns the estate of Spicer Breeden, which has been in probate administration since 1996. Petitioner has previously filed appeals in this estate proceeding. See In re Estate of Breeden, (Colo.App. No. 01CA0571, Mar. 21, 2002)(not published pursuant to C.A.R. 35(f)); In re Estate of Breeden, (Colo.App. No. 01CA1744, Nov. 14, 2002)(not published pursuant to C.A.R. 35(f)); In re Estate of Breeden, (Colo.App. Nos. 01CA1006, 01CA2174 & 02CA0125, July 3, 2003)(not published pursuant to C.A.R. 35(f)).

At petitioner's request, respondent was appointed personal representative of the estate in June 1997. He served in this capacity until petitioner sought to have him replaced. His petition to withdraw was granted effective September 9, 1998. Although respondent had filed a second interim accounting of the estate's assets in August 1998, he filed his final accounting in November 1998.

In April 1999, petitioner filed her surcharge petition against respondent as an interested person. The probate court granted a partial summary judgment denying petitioner's claims regarding improper sales of estate property, failure to pursue an insurance claim, and disposal of estate assets. The remaining issues were resolved during or following an evidentiary hearing.

I. Attorney Fees

We first address respondent's contention on cross-appeal that the probate court erred in holding that a retired personal representative is not entitled to recover legal fees and unreimbursed costs incurred in the successful defense against a surcharge action. In our view, such fees and costs are authorized under the relevant version of § 15-12-720, Colo. Sess. Laws 1973, ch. 451, § 153-3-720 at 1591.

Interpretation of a statute is a question of law, and an appellate court is not bound by the trial court's interpretation. In construing statutory provisions, our obligation is to give full effect to the legislative intent. If the legislative intent is conveyed by the commonly understood and accepted meaning of the statutory language, we look no further. Gorman v. Tucker, 961 P.2d 1126 (Colo.1998).

Section 15-12-720 then provided: "If any personal representative or person nominated as personal representative defends or prosecutes any proceeding in good faith, whether successful or not he is entitled to receive from the estate his necessary expenses and disbursements including reasonable attorneys' fees incurred." This provision appears in substantially the same form in § 15-12-720(1), C.R.S.2002.

Fees collectable under this section must necessarily be related to services rendered to benefit the estate. In re Estate of Painter, 671 P.2d 1331 (Colo.App.1983).

Here, although respondent prevailed on the merits, the probate court found no persuasive Colorado authority allowing it to award attorney fees to a retired fiduciary who successfully defends a surcharge action. Both the probate court's ruling and petitioner's argument on appeal are based on the fact that when the surcharge action was filed, respondent was no longer the personal representative. We do not read the statute so narrowly.

The statute provides that "any" personal representative may be reimbursed and does not distinguish between past or present personal representatives. Further, recovery is allowed for defending or prosecuting "any" proceeding, so long as it is done in good faith. See In re Estate of Phipps, 713 P.2d 412, 414 (Colo.App.1985)

("The section is limited only by the requirements that the personal representative must have defended the proceeding in good faith and that the expenses incurred must have been necessary and reasonable to the administration of the estate.").

Our interpretation is supported by cases from other jurisdictions holding that retired personal representatives, trustees, or other fiduciaries should be allowed to recover legal fees arising out of their fiduciary service. See Morrison v. Watkins, 20 Kan.App.2d 411, 889 P.2d 140 (1995)

(trustee entitled under statute to recover expenses necessarily incurred in successfully defending actions as trustee, even when expenses are incurred after trustee's termination); In re Estate of Stenson, 243 Mont. 17, 792 P.2d 1119 (1990)(fees for work done on behalf of former personal representative were recoverable under similar statute); In re Estate of Flaherty, 484 N.W.2d 515 (N.D.1992)(no error in allowing former personal representative attorney fees for defending will contest).

Relying on In re Estate of Painter, supra; Proudfit v. Coons, 137 Colo. 353, 325 P.2d 273 (1958)

; and In re Estate of Coors, 140 Colo. 343, 344 P.2d 184 (1959), petitioner contends that the "benefit rule" precludes respondent from recovering legal fees and unreimbursed costs incurred in the successful defense against a surcharge action. We disagree.

The benefit rule is a general rule that no allowance may be made out of a decedent's estate for the services of an attorney not employed by the personal representative of the estate, where the services were rendered for the sole benefit of an individual or group of individuals interested in the estate. See In re Estate of Coors, supra; In re Estate of Phipps, supra.

In Painter, supra, a division of this court applied the benefit rule to preclude the estate from paying counsel to represent the administrator of the estate and the estate's attorney. However, the division specifically determined that the issues litigated were not related to estate administration.

In Phipps, supra, the division noted that Tuckerman v. Currier, 54 Colo. 25, 129 P. 210 (1912), held that executors of a will are justified in incurring necessary and legitimate expenses in the defense of their appointments and their course of procedure in good faith when attacked while in office. See also Weidlich v. Comley, 267 F.2d 133, 134 (2d Cir.1959)

("When the trustee's administration of the assets is unjustifiedly assailed it is a part of his duty to defend himself, for in so doing he is realizing the settlor's purpose."); In re Estate of Flaherty, supra (word "benefit" applies to every aspect of estate administration which sound judgment would approve).

Here, respondent was the personal representative of the estate for over a year and was sued for work he performed in that capacity. Further, the probate court's findings indicate that respondent's work benefited the estate. Therefore, we conclude that respondent is entitled to necessary expenses, disbursements, and reasonable attorney fees incurred in defending this action.

II. Recusal

We reject petitioner's contention that the probate judge erred in failing to recuse herself. She asserts the judge became personally involved and evinced bias and enmity toward petitioner. Other divisions of this court in the three prior appeals have resolved this issue against petitioner, and we find no reason to depart from those decisions here.

III. Summary Judgment

We also reject petitioner's claims regarding the partial summary judgment.

Summary judgment is appropriate only when the pleadings and supporting documents demonstrate that no genuine issue exists as to any material fact and that the moving party is entitled to judgment as a matter of law. Vail/Arrowhead, Inc. v. Dist. Court, 954 P.2d 608 (Colo.1998). The moving party has the burden of establishing the lack of a triable factual issue, and all doubts as to the existence of such an issue must be resolved against the moving party. Vectra Bank v. Bank Western, 890 P.2d 259 (Colo. App.1995).

Once the moving party has met its initial burden, the burden shifts to the nonmoving party to establish that there is a triable issue of fact. AviComm, Inc. v. Colo. Pub. Utils. Comm'n, 955 P.2d 1023 (Colo.1998). A genuine issue of fact cannot be raised simply by means of argument by counsel. People in Interest of J.M.A., 803 P.2d 187 (Colo.1990); see Sullivan v. Davis, 172 Colo. 490, 474 P.2d 218 (1970)

.

A. Sale of Estate Assets

We are not persuaded by petitioner's contentions that the probate court should have examined the sale of personal property, including whether the auction was an appropriate venue and method to sell such property, and the sale of the Belcaro property. Relying on § 15-12-703(2), C.R.S.2002, respondent argues that a personal representative shall not be surcharged for acts of administration if the conduct in question was authorized at the time. We agree that § 15-12-703(2) applies, the record indicates respondent was authorized to sell the property, and therefore, summary judgment on these matters was proper.

Moreover, the petition to surcharge asserts that respondent "breached his duties by selling valuable items of tangible personal property belonging to the estate consisting of art work at an auction which was an improper and imprudent venue for the sale of such items."...