In re Estate of Bitoy

• Decision Date: 30 September 2009
• Docket Number: No. 1-07-3258.,1-07-3258.
• Citation: 334 Ill.Dec. 477,917 N.E.2d 74
• Parties: In re ESTATE OF Earl Eugene BITOY, Deceased Rollin J. Soskin and Associates, Ltd., Petitioner-Appellant, v. Rudolph Bitoy, Adm'r, Respondent-Appellee.
• Court: United States Appellate Court of Illinois

917 N.E.2d 74

334 Ill.Dec. 477

In re ESTATE OF Earl Eugene BITOY, Deceased

Rollin J. Soskin and Associates, Ltd., Petitioner-Appellant, v. Rudolph Bitoy, Adm'r, Respondent-Appellee.

No. 1-07-3258.

Appellate Court of Illinois, First District, First Division.

September 30, 2009.

Thomas C. Crooks, Chicago, IL, Rollin J. Soskin, Rollin J. Soskin & Associates, Ltd., Lincolnshire, IL, for Appellant.

Frank R. Cohen, Michael J. Devine, Karen Kavanagh Mack, Lee R. Farbman, Deutsch, Levy & Engel, Chartered, Chicago, IL, for Appellee.

Presiding Justice HALL delivered the opinion of the court:

The petitioner, attorney Rollin J. Soskin (the petitioner), filed a petition in the circuit court of Cook County seeking attorney fees and related costs for work performed on behalf of the respondent, Rudolph Bitoy (Rudolph), the administrator of the estate of Earl Eugene Bitoy (the decedent). The circuit court awarded some but not all of the attorney fees and costs requested.

The petitioner appeals, raising the following issues: (1) whether the decision in Kaiser v. MEPC American Properties, 164 Ill.App.3d 978, 518 N.E.2d 424 (1987), applies to a petition seeking attorney fees and costs in a probate proceeding; (2) whether a fee agreement is relevant to the determination of a reasonable attorney fee in a probate proceeding; (3) whether the petitioner was entitled to fees for time spent in defending against spurious pleadings filed by the co-administrator; (4) whether the award of attorney fees and costs was disproportionate to the work performed so as to constitute an abuse of discretion; (5) whether the petitioner was entitled to fees for the time spent in objecting to other fee petitions; and (6) whether the probate court's findings were against the manifest weight of the evidence.

I. BACKGROUND

A. Probate Proceedings

On November 4, 2004, the probate court appointed Rudolph, Alvero Bitoy (Alvero), and Edward Bitoy (Edward), brothers of the decedent, to serve as co-administrators of his estate. The court's order further provided that, if due to their personal differences the co-administrators could not work together, they would be removed, and the court would appoint another administrator.

On April 12, 2005, citing the inability of the co-administrators to cooperate, Alvero filed a petition to have Rudolph and Edward removed as co-administrators and to have a special administrator appointed. Following a mediation conference with Circuit Court Judge Arthur C. Perivolidis, the co-administrators were ordered to act by majority rule.¹ On July 25, 2005, Alvero's petition to remove the co-administrators was denied. On August 19, 2005, Alvero filed a second petition to have Rudolph and Edward removed as co-administrators. On October 5, 2005, Edward and Rudolph brought an emergency petition to remove Alvero as a co-administrator, based on his unilateral actions as to certain real estate and bank accounts in the estate. On January 11, 2006, following a hearing, the probate court removed Alvero as a co-administrator. After Edward resigned as co-administrator, the court ordered Rudolph to continue as sole administrator of the estate.

B. Complexity of the Estate

The decedent died on August 22, 2004, leaving no will. There were 21 estate beneficiaries. The decedent had been an Illinois lottery winner and had created the "BIG Partnership" into which the lottery winnings were paid. At the time of his death, there remained 8 installments of $866,000 each to be paid. In a January 2005 memorandum, the petitioner outlined the income and estate tax ramifications depending on whether lump sum payments or installment payments were chosen as the distribution method. There was also an issue concerning the adjustment of the partnership interests in the BIG Partnership. The tax issues were further complicated by the fact that neither the decedent nor the BIG Partnership had filed tax returns for a number of years. Finally, there were complications involved with the disposition of the decedent's real estate holdings.

C. Fee Petition Proceedings

On February 9, 2006, the petitioner filed a petition seeking attorney fees and costs for the period from November 10, 2004 to January 20, 2006 (the first fee petition). According to the petition, he had expended 1,055.6 hours in his representation of the estate and one or more of the administrators. Based on an hourly rate of $238.80 per hour, he sought $252,084.75 in fees and $3,838.09 in costs for a total of $255,922.84. Attached to the petition were copies of the invoices sent to Rudolph. Objections to the fee petition were filed by Alvero and several of the beneficiaries of the estate.

In its order of April 28, 2006, the probate court observed that the fee petition did not fully comply with the requirements of Kaiser v. MEPC American Properties, Inc., 164 Ill.App.3d 978, 115 Ill.Dec. 899, 518 N.E.2d 424 (1987). Although Kaiser was not a probate case, the court determined that it applied to fee petitions in a probate estate. The court noted that some 70 entries in the first fee petition were designated as reviewing or organizing files, which was "entirely non-descriptive." The court had even more difficulty with the entries in which individual time was aggregated to arrive at the time billed for a specific date. The court also noted that a number of the services rendered resulted from difficulties amongst the representatives of the estate. As to the costs requested, the court noted that certain costs billed were considered normal overhead expenses under Kaiser. The court awarded $177,000 in fees and $1,225.16 in costs to the petitioner.

On May 24, 2006, the petitioner filed a motion to reconsider the probate court's April 28, 2006, ruling on fees and costs. While the petitioner maintained that Kaiser was not the correct standard to be applied in probate fee proceedings, he submitted the additional detail and documentation which he asserted brought the fee petition in compliance with the Kaiser requirements. He further maintained that the court had not addressed his request that any fees disallowed for time spent in connection with disputed matters should be charged against Alvero's distributive share. He argued that the fees for time spent in dealing with the difficulties of the estate were proper because Alvero's actions were contrary to the best interests of the estate. On October 31, 2006, the petitioner's motion for reconsideration was granted.

On April 27, 2007, the petitioner filed a second petition seeking attorney fees and costs for the period from January 21, 2006, through March 25, 2007 (the second fee petition). In the second fee petition, he alleged that he had entered into a written retainer agreement with Rudolph, Edward and their wives. The agreement provided for hourly rates of $185 to $350 per hour and for reimbursement of costs advanced or incurred. The petitioner further alleged that he had expended 445 hours of court and noncourt time in representing the estate and one or more of the administrators. He requested fees in the amount of $88,513.75 and costs in the amount of $1,522.78. The petitioner supported his fee request with copies of the invoices submitted to Rudolph and exhibits documenting the cost expenditures.

On September 6, 2007, the probate court held a hearing on the petitioner's first and second petitions for attorney fees and costs. The testimony at the hearing is summarized below.

Rudolph testified that he is the administrator of the estate of Earl Bitoy. He hired the petitioner to be the attorney for the estate and to represent him in his efforts to be named an administrator of the estate. The court sustained the objection to the introduction of the retainer agreement Rudolph had signed. Rudolph had reviewed the invoices received from the petitioner and understood that the amounts charged would be deducted from the amount to be distributed to the beneficiaries of the estate.

Rudolph further testified that he had questioned a double billing on one occasion and had objected to the rate at which the fees were charged. Rudolph acknowledged that he had signed the retainer agreement in which the hourly rates were set forth. He did not object to the first fee petition.

Rudolph further testified that the petitioner had ignored his wishes not to handle the estate's tax matters as Rudolph had a tax attorney to handle those matters. He also informed the petitioner before the estate was opened not to bring in one of the other administrators because there would be problems.

The petitioner testified that he had been a licensed attorney since 1979. In September 2004, he was retained by Rudolph and began representing both Rudolph and Edward in November 2004. After determining that the decedent did not leave a valid will and following several discussions, a joint petition seeking to have Edward and Rudolph appointed as administrators was filed. Other persons filed petitions seeking to be appointed administrators. At the court hearing, an agreement was reached whereby Rudolph, Edward and Alvero were named co-administrators. After it became apparent that the administrators could not reach unanimous decisions, the matter was brought back to court. An order was entered requiring that estate matters would be decided by majority rule with the right to refer the matter back to the court. Because he was representing the majority of the administrators, the petitioner sent out copies of the orders to the beneficiaries to advise them of the status of the estate.

The petitioner testified further that the co-administrator arrangement ultimately did not work because Rudolph, Edward and Alvero were not speaking to one another. Conflicts arose over the hiring of real estate brokers to market the real estate and Alvero's unilateral action in freezing the estate bank accounts. After Alvero was removed as an administrator, Edward resigned, leaving Rudolph as the sole administrator.

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