In the Matter of Estates of Bockwoldt, No. 7-765/07-0531 (Iowa App. 12/28/2007)
| Decision Date | 28 December 2007 |
| Docket Number | No. 7-765/07-0531,7-765/07-0531 |
| Parties | IN THE MATTER OF THE ESTATES OF LOREN S. BOCKWOLDT, Deceased, and TAMMY R. BOCKWOLDT, Deceased, DALE RICHARD WILLOWS, Conservator for Brandie Renee Bockwoldt, the minor child of the Decedents, and Co-Executor for the Estates of Loren and Tammy Bockwoldt. |
| Court | Iowa Court of Appeals |
Appeal from the Iowa District Court for Muscatine County, Patrick J. Madden, Judge.
The conservator for the minor child of the decedents and co-executor of the decedents' estates appeals the district court's order ruling on various estate administration matters. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Timothy L. Baumann and Christopher Surls of Wm. B. Norton Law Firm, P.C., Lowden, for appellant Dale Richard Willows.
Thomas Reidel of Conway & Reidel, P.C., Muscatine, for appellee Estate of Tammy R. Bockwoldt.
Pete Wessels of Wessels & Stojan, P.C., Rock Island, Illinois, for appellee Estate of Loren S. Bockwoldt.
Eric Knoernschild, Muscatine, for Pete Wessels.
Brock Bockwoldt, Zion, Illinois, pro se.
Eric Syverud, Davenport, for Brandie Renee Bockwoldt.
Heard by Huitink, P.J., Vogel, J., and Robinson, S.J.,* but decided by Huitink, P.J., Vogel and Mahan, JJ., and Robinson, S.J.
Dale Willows, conservator for the minor child of the decedents and co-executor of the decedents' estates, appeals the district court's ruling awarding attorney fees to the attorney for the executors of the estates, requiring any recovery from the wrongful death suit ongoing in Arizona to be distributed according to Iowa law, removing the co-executors of the estates, and failing to remove the attorney for the executors of the estates. We affirm in part, reverse in part, and remand.
Loren and Tammy Bockwoldt, husband and wife, were killed in a car accident in Arizona on March 12, 2005. They left behind a minor child, Brandie Bockwoldt and Loren's adult son, Brock Bockwoldt, who resides in Illinois. Loren and Tammy were both Iowa residents. Brandie is a beneficiary of both estates. Brock is a beneficiary of Loren's estate only.
On April 7, 2005, the court appointed three co-executors to both Loren's and Tammy's estates—(1) Dale Richard Willows, Tammy's brother; (2) Neal Bockwoldt, Loren's brother; and (3) Brock. The co-executors designated attorney Pete Wessels as their attorney in both estates. Willows was also appointed as conservator for Brandie.
Wessels filed a report and inventory in each estate on July 11, 2005. The reports valued Loren's estate at $190,052.41 and Tammy's estate at $70,740.03. No supplemental reports have been filed. However, in Wessel's application for attorney fees filed February 8, 2007, he states the Bockwoldt estates' gross assets total $1,704,429.13. The large increase is attributable to the discovery of numerous life insurance policies on the couple's lives. In addition, in December 2006 each estate received $200,000 from an underinsured insurance policy of the decedents'.
In his application for attorney fees, Wessels requested fees in the amount of $66,404.50 plus $640.50 in expenses for Loren's estate and $5,802.00 plus $86.50 in expenses for Tammy's estate. Willows, in his capacities as both co-executor of the estates and conservator of Brandie, resisted the application for attorney's fees. The district court granted the request for attorney's fees without specifying ordinary and extraordinary fees.
On January 18, 2007, Wessels filed a motion for appointment of corporate executors alleging conflicts among the co-executors. Willows filed a resistance to the motion on February 12, 2007. The district court appointed corporate executors to the estates, removing Brock and Willows as co-executors because of "current and potential conflicts of interest." Neal subsequently withdrew as co-executor of the estates.
Further, the district court refused to close the estates due to unfinished estate matters and the possibility of a recovery from the ongoing wrongful death suit in Arizona. The district court ruled that, for the time being, any recovery be divided equally between the estates. At the hearing regarding whether to close the estates, the parties offered few legal arguments regarding the division of the wrongful death proceeds. The attorneys were unable to inform the court whether the suit was brought in the names of the children or the estates. The court's ruling left the door open for further argument on the issue if and when a recovery was made.
On February 26, 2007, Willows filed a motion asking the court to reconsider its ruling. Willows attached the online printout from the Arizona courts public access website which lists Brock and "restricted" as the plaintiffs in the suit. Willows asserts that Brandie's name is listed as restricted because she is a minor. The document does not list the estates as parties. In addition, the motion cited both Iowa and Arizona law in making its argument that the wrongful death proceeds should be distributed according to Arizona law. The court denied his motion the same day. Willows appeals. The estates (appellees) respond.
A district court's allowance of attorney fees, removal of fiduciaries, and direction for distribution of funds are all tried in equity. Iowa Code § 633.33 (2007); In re Estate of Wulf, 526 N.W.2d 154, 155 (Iowa 1994); In re Estate of Jones, 492 N.W.2d 723, 725 (Iowa Ct. App. 1992). Our review is therefore de novo. Iowa R. App. P. 6.4. We also make a de novo review of the district court's removal of the co-executors to determine if there was an abuse of discretion. Schildberg v. Schildberg, 461 N.W.2d 186, 190 (Iowa 1990); In re Estate of Lovell, 344 N.W.2d 576, 579 (Iowa Ct. App. 1983).
Willows argues the district court improperly shifted the burden of proving Wessels's attorney fees away from Wessels and onto the objecting parties. Additionally, he argues the district court was required to make findings regarding which fees were ordinary and which fees were extraordinary pursuant to Iowa Code sections 633.198 and 633.199.
Sections 633.197 and 633.198 allow reasonable attorney fees, not to exceed two percent of the gross assets of the estate plus $120.00, for the personal representative's attorney to be taxed as costs of administration of the estate. Estate of Randeris v. Randeris, 523 N.W.2d 600, 606 (Iowa Ct. App. 1994). This amount is a ceiling, or maximum, amount that can be paid to an attorney for any ordinary expenses of administering an estate. In re Estate of Bolton, 403 N.W.2d 40, 46 (Iowa Ct. App. 1987). In addition, the district court may allow the payment of necessary and extraordinary expenses. Iowa Code § 633.199.
Iowa Rule of Probate Procedure 7.2(3) governs the procedure for requesting extraordinary fees:
When an allowance for extraordinary expenses or services is sought pursuant to Iowa Code section 633.199, the request shall include a written statement showing the necessity for such expenses or services, the responsibilities assumed, and the amount of extra time or expense involved. In appropriate cases, the statement shall also explain the importance of the matter to the estate and describe the results obtained. The request may be made in the final report or by separate application. It shall be set for hearing upon reasonable notice, specifying the amounts claimed, unless waivers of notice indentifying the amounts claimed are filed by all interested persons. The applicant shall have the burden of proving such allowance should be made.
The compensation of the personal representative's attorney largely rests in the discretion of the district court. See Glynn v. Cascade St. Bank, 227 Iowa 932, 939, 289 N.W. 722, 725 (1940). The district court must assure the allowance is supported by sufficient evidence to support the fees claimed and not excessive. See id. at 940, 289 N.W. at 726. In addition to the size of the estate, the district court, in determining the reasonableness of claimed fees, must consider the time necessarily spent by the attorney, the nature and extent of the service, the amount involved, the difficulty of handling and the importance of the issues, the responsibility and liability assumed by the attorney, the results obtained, and the experience of the attorney. Bolton, 403 N.W.2d at 43-44.
Wessels followed the correct procedure described in rule 7.2(3). He filed a written statement with the court detailing the issues for which he incurred extraordinary expenses. The extraordinary issues Wessels claimed to have dealt with included: (1) litigation as to the guardianship of Brandie; (2) ownership of farmland interest and farm-related business interests; (3) disagreement among co-executors; (4) issues as to whether Loren had a valid last will and testament; (5) various income tax issues, complicated by the lack of records and no continuity in income tax preparers in recent years; (6) obtaining necessary information on nine insurance policies in Loren's estate and six insurance policies in Tammy's estate; and (7) the division of assets between the two estates. Attached to the statement was Wessels's billing statement for the two estates. It consisted of more than fifty pages, each entry describing the work performed.
However, at the hearing the district court did not require Wessels to go forward to prove his fees before asking the other parties if they objected. Rule 7.2(3) requires that this burden be placed on the applicant. It is not clear the district court required that here. Further, the district court made no specific findings as to which fees were ordinary and which were extraordinary. We therefore remand this issue to the district court for a hearing requiring the applicant to meet his burden and for specific findings regarding the reasonableness of ordinary fees and extraordinary fees granted.
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