In re Succession of Manheim

• Decision Date: 21 April 1999
• Docket Number: No. 98-CA-2051.,No. 98-CA-2052.,98-CA-2051.,98-CA-2052.
• Citation: 734 So.2d 119
• Parties: SUCCESSION OF Abraham G. MANHEIM. v. Liquidation of Manheim Antique Galleries, An In Commendam Partnership.
• Court: Court of Appeal of Louisiana — District of US

734 So.2d 119

SUCCESSION OF Abraham G. MANHEIM. v. Liquidation of Manheim Antique Galleries, An In Commendam Partnership.

No. 98-CA-2051.

No. 98-CA-2052.

Court of Appeal of Louisiana, Fourth Circuit.

April 21, 1999.

Rehearing Denied May 28, 1999.

COPYRIGHT MATERIAL OMITTED

Leon H. Rittenberg, Jr., Beverly Klundt Baudouin, Baldwin & Haspel, L.L.C., New Orleans, and I. Jay Krieger, Krieger, Krieger & Levkowicz, New Orleans, Attorneys for Appellant, Gayle Manheim Cohen.

Alan H. Goodman, Thomas M. Benjamin, Lemle & Kelleher, L.L.P., New Orleans, Attorneys for Appellee, Max Nathan, Jr., Appearing in his Capacity as Testamentary Executor of the Succession of Abraham G. Manheim.

David F. Edwards, R. Patrick Vance, Mark W. Mercante, Jones, Walker, Waechter, Poitevent, Carriere & Denegre, L.L.P., New Orleans, Attorneys for Edward L. Weitz and Bradford H. Weitz, Co-Executors of the Succession of Rose Manheim Hirsch.

M.H. Gertler, Gertler, Gertler, Vincent & Plotkin, L.L.P., New Orleans, Attorney for Appellees, Ida Manheim Zachary and Heather Myden.

Court composed of Judge MOON LANDRIEU, Judge PATRICIA RIVET MURRAY and Judge Pro Tempore JAMES A. GRAY II.

MURRAY, Judge.

These appeals arise from judgments rendered in two consolidated cases, one involving the succession of Abraham G. Manheim, and the other the liquidation of the Manheim Antique Galleries (MAG) partnership. For the following reasons, we affirm the judgment homologating the amended fourth tableau of distribution in appeal No. 98-CA-2051, and reverse the judgment maintaining an exception of prematurity in appeal No. 98-CA-2052.

FACTUAL BACKGROUND:

To properly analyze the issues in these consolidated cases, a detailed factual history is necessary. Before his death on February 11, 1995, Abraham G. Manheim was a general partner in the MAG partnership, a partnership in commendam. At the time of its inception, Abe's¹ sister, Rose Manheim Hirsch, and his brother, Jacob (Jack) Manheim, were also general partners. The partners in commendam were the general partners' children and grandchildren, with some of the partnerships in commendam being in the form of trusts. In 1986, the partnership redeemed Jack's general partnership interest and his children's in commendam partnership interests. In 1993, Abe purchased the in commendam interests of Rose's grandchildren's trusts. At that point, and at the time of his death, Abe owned 47.93 percent of the partnership and Rose owned 33.32 percent. The partners in commendam were Abe's three daughters and one granddaughter. Two of the daughters, Gayle Manheim Cohen and Joan Manheim Cloud, each owned a 6.26 percent interest. Ida Manheim Zachary, owned a 4.69 percent interest, and the granddaughter, Heather Zachary Myden, owned a 1.56 percent interest. Rose died on September 16, 1993, leaving Abe as the sole general partner.

Shortly before his death in 1995, Abe executed a codicil to his will bequeathing his general partnership interest in trust, naming his daughter, Ida, and his grandson, Jonathan Cohen, as co-trustees. He named his three daughters, Gayle, Joan and Ida, as beneficiaries of the trust. The codicil also provided that if the co-trustees could not agree, Abe's widow, Audrey, would act as a tie-breaker.

Abe's succession was opened on or about February 16, 1995, at which time Max Nathan was appointed testamentary executor of Abe's will. Early in the administration of the succession, Gayle raised objections to several provisions of her father's will and to Mr. Nathan's administration of the succession. She challenged the settlement of her father's widow's marital portion, and the payment of fees to the executor and his attorney.² After objecting to the amount of Audrey's marital portion, Gayle then moved to have Audrey removed as the "tie-breaker trustee," should the co-trustees of the partnership trust not agree.³

In August of 1997, Gayle filed a separate lawsuit seeking to have the MAG partnership liquidated. She claimed that the partnership terminated upon the death of her father, the sole remaining general partner, because the partners in commendam, had not agreed, in writing within ninety days of his death, to continue the partnership.

Mr. Nathan and Ida each filed exceptions to the liquidation petition. Mr. Nathan excepted on the grounds that Gayle was using a summary proceeding without authority, and that she had no cause of action to seek a writ of quo warranto against him. Ida claimed that Gayle's action was premature and that she had no cause of action for the entire suit.

The trial court sustained Mr. Nathan's exception as to the writ of quo warranto and unauthorized use of summary proceeding, and overruled Ida's exception of no cause of action as to the entire suit. It stayed the action pending the close of Abe's succession.⁴

Gayle moved for a new trial on the grounds that the liquidation should be by way of summary proceeding, and that it should not be stayed pending the conclusion of the succession proceedings. The trial court denied the motion for new trial, and Gayle applied for a supervisory writ. This Court granted Gayle's writ application in part, finding that the trial court erred in not granting Gayle leave to amend her petition, and in issuing the stay order.⁵

In January of 1998, Mr. Nathan filed a fourth tableau of distribution in which he sought to pay the fees billed by Lemle & Kelleher (Lemle) for representing him in his capacity as executor of Abe's estate. In February of 1998, he amended the fourth tableau of distribution to correct the dates and amount of the Lemle bill.

Gayle opposed the homologation of both tableaus. She then sought discovery of Lemle's attorney time sheets, and all correspondence and memoranda between Mr. Nathan's attorneys and Ida and/or Joan, and/or their counsel. Mr. Nathan moved to quash the subpoena duces tecum. The motion was denied, but the court noted that all documents produced were not to be disclosed to anyone outside the litigation. The court also recognized the joint defense privilege and ordered Mr. Nathan to prepare a log listing all documents not produced. Gayle's writ application to this court was denied.

Gayle filed an amended petition for liquidation of the MAG partnership in January of 1998. Mr. Nathan, Ida and Joan each filed exceptions of prematurity, no cause of action and no right of action.

On April 23, 1998, judgment was entered dismissing Gayle's petition for liquidation as premature, overruling Mr. Nathan's exception of no cause of action, and sustaining the exceptions of no cause of action filed by Ida and Joan. On May 12, 1998, the trial court rendered judgment homologating the amended fourth tableau of distribution and authorizing Mr. Nathan to pay the fees billed by Lemle. Gayle has appealed both judgments.

DISCUSSION:

I. No. 98-CA-2051: Homologation of the Amended Tableau of Distribution

A. Gayle's Appeal

In her appeal of the judgment homologating the amended fourth tableau of distribution, Gayle assigns three errors by the trial court: 1) the court erred in homologating the tableau because the record does not support the fees billed by Lemle; 2) the court erred in refusing to require Mr. Nathan to produce certain communications based upon the joint defense; and 3) the court erred in refusing to admit certain documents on the basis that they pertained to offers of compromise.

The trial court erred in homologating the tableau of distribution and awarding fees and costs to Lemle in the amount of $173,962.83.

Our review of the trial court's decision homologating the tableau of distribution is subject to the manifest error rule, and must be affirmed if the record as a whole reveals that there is a reasonable factual basis for the decision. Maranto v. Goodyear Tire & Rubber Co., 94-2603, 94-2615, p. 7 (La.2/20/95), 650 So.2d 757, 762.

Louisiana Code of Civil Procedure art. 3244 provides that "[t]he inclusion of the claim of a creditor of the succession in the succession representative's ... tableau of distribution creates a prima facie presumption of the validity of the claim; and the burden of proving the invalidity thereof shall be upon the person opposing it." See also, Succession of Dorand, 94-1627 (La.App. 4 Cir. 7/26/95), 659 So.2d 523. It, therefore, was Gayle's burden to prove that the fees that Lemle charged the succession were unreasonable.

Gayle contends that the Lemle fees were not reasonable either because they were excessive or because the services rendered did not benefit the succession. Although Gayle makes several specific allegations in support of this contention, we are not persuaded.

First, Gayle argues that Lemle's bill for work performed in connection with the liquidation litigation is excessive because it merely delayed that proceeding. Gayle initially filed her petition to liquidate the MAG partnership as a summary proceeding. When the trial court maintained the exception to the use of a summary proceeding, she filed the petition as an ordinary proceeding. Lemle, on behalf of the succession, excepted to the suit, and the court dismissed it as premature. There was nothing improper in the legal tactics employed by Lemle on behalf of the succession, and we cannot say that the trial court was manifestly erroneous in rejecting this argument.

Gayle also argues that Lemle's bill is excessive because it has charged the succession for time expended in trying to recover its previously charged legal fees. As attorneys for the executor, Lemle was required to defend Gayle's challenge to the executor's proposed tableau. That the only item on the particular tableau was Lemle's fees is irrelevant. As the trial court recognized, it would be illogical to require the succession to hire another firm to defend the tableau simply because the only item on the tableau was Lemle's fees.

Gayle also complains that the amount of time charged with regard to discovery was unreasonable considering that this Court...