Norton v. Norton
| Docket Number | BCD-CIV-2021-020 |
| Decision Date | 18 January 2023 |
| Parties | ANN NORTON and MARK NORTON, Plaintiffs, v. JOHN NORTON, JR. and JOHN NORTON, JR., Personal Representative of the Estate of John Norton, Sr., Defendants JOHN NORTON, JR and NANCY C. NORTON, Plaintiffs, v. ANN NORTON, Defendant |
| Court | Maine Superior Court |
Before the Court are two Motions for Interim Award of Attorneys Fees, Costs and Expenses brought by Plaintiffs Ann Norton (Ann) and Mark Norton (Mark). In addition, John Norton, Jr. (John Jr.) Personal Representative of the Estate of John Norton, Sr. filed a Request for Confirmation of Attorneys Fees and Expert Witness Costs of the Estate. On June 24, 2022 the Court issued Findings and Order for Entry of Judgment and on September 29, 2022 granted in part a Motion to Clarify brought by Ann Norton. In its Order of June 24, 2022, the Court set a deadline for the parties to file motions for fees and costs but the filings before the Court were not complete until October 11, 2022. In addition, the Court conducted a teleconference with counsel on January 4, 2023 to discuss and ensure that this matter can move to final judgment soon after the issuance of this Combined Order and as consistent with the Stipulated Scheduling Order dated August 4, 2022.
Ann Norton is currently represented by Attorney John Lambert. Mark Norton is represented by Attorney Tudor Goldsmith. John Norton, Jr. as Personal Representative for the Estate of John Norton, Sr. is represented by Attorney Tim Norton, and Attorney Richard Olson represents John Norton, Jr. and Nancy Norton individually.[1]
The Court has reviewed the filings of the parties including the Affidavits and Exhibits, and issues the following order on the Motions.[2]
The parties point to a number of sources of authority for the Court to consider in ruling on these motions. John Jr.'s Request for Confirmation of Attorneys Fees and Expert Witness Costs of the Estate relies upon 18-C M.R.S. Section 3-720 for his request that the Court find he defended this estate litigation in good faith, and order that all his counsel fees and costs be paid from the Estate. 18-C M.R.S. Sections 1-601 and 3-712 are the focus of Ann and Mark's arguments.
In Estate of Sheltra, 2020 ME 108, the Law Court recently noted that Section 1-601 constitutes "a departure from the American Rule that parties to litigation generally must pay their own attorney fees." ¶ 23 238 A.3d 234 (citing Linscott v. Foy, 1998 ME 206 ¶ 16, 716 A.2d 1017) (discussing 18-A M.R.S. § 1-601, relocated and amended at 18-C M.R.S. § 1-601). The statute authorizes courts to award counsel fees in contested cases "to be paid to either or both parties out of the estate in controversy, as justice requires." The Law Court further noted that this section does not authorize courts to surcharge opposing litigants. Estate of Sheltra, 2020 ME 108, ¶ 25, 238 A.3d 234 (citing Estate of McCormick, 2001 ME 24, ¶¶ 18-25 765 A.2d 552). It also stated that "the primary concern of a court in determining whether 1-601 warrants an award of attorney fees is whether the litigation has been beneficial to the estate....." Id. ¶ 23 (quoting Estate v. Ricci, 2003 ME 84, ¶ 32, 827 A.2d 817).
As noted, Ann and Mark brought their motions on Sections 1-601 and 3-712, but they primarily rely upon Section 3-712 is support of their request that John Jr. be ordered to pay for their fees and costs from his personal, and not Estate funds. John Jr. individually and on behalf of the Estate, argues that the requirements of Section 3-712 have not been met based upon the Court's post-trial findings. In addition, he argues that the Estate did not benefit from the litigation, and that any arguments made by Ann and Mark regarding fees must be confined to what amount, if any, of their counsel fees and costs should be paid from the Estate.
The motions also require the Court to decide if any fees or costs can or should be awarded to Ann Norton if incurred before the date (October 14, 2019) that the Settlement Agreement, to which she was a party, was filed in the Cumberland County Probate Court. That Agreement became a Decree of the Probate Court dated October 17, 2019. Paragraph 6 of that Decree provides as follows: [3] The Court will address this issue first.
In her Motion for Interim Award of Attorneys Fees, Costs and Expenses Ann Norton asks the Court to award her fees and costs incurred from "all legal proceedings associated with the Estate of John Norton, Sr. through July 31, 2022. The 181-page itemized bill filed with the Court contains charges beginning October 25, 2018. Her argument, however, does not assert any legal reason that the Settlement Agreement might not be valid or binding upon her. The Court will therefore not award any fees and costs for Ann Norton that were incurred prior to the date of the Settlement Agreement.[4]
John Jr. is correct that the Probate Code provides that a personal representative who defends estate litigation "in good faith, whether successful or not, is entitled to receive from the estate necessary expenses and disbursements, including reasonable attorney's fees incurred." 18-C M.R.S. § 3-720. The reasonableness of fees for any person hired by the personal representative, including his or her own counsel, is determined by a number of factors set out in Section 3-721, including: "the time and labor required; the novelty and difficulty of the questions involved and the skill requisite to perform the service properly; the likelihood, if apparent to the personal representative, that the acceptance of the particular employment will preclude the person employed from other employment; the fee customarily charged in the locality for similar services; the amount involved and the results obtained; the time limitations imposed by the personal representative or by the circumstances; and the experience, reputation and ability of the person performing the services." § 3-721(2)(A-F.)
The Court also agrees with John Jr. that this statute is different in kind from a "fee-shifting" or "award" of fees otherwise permissible under Maine law.[5] However, given the nature of the findings made by the Court after trial regarding John Jr.'s failure to expeditiously settle the Estate, as well as the longstanding nature of his conflicted positions, the Court's job is not as simple as determining the reasonableness of the fees sought by John Jr.'s estate counsel and the reasonableness of the costs incurred.
The Law Court held in In re Estate of Stowell, that "proceedings that are not conducted to benefit the estate do not entitle a fiduciary to attorney's fees, and the same is true of litigation that results from the fiduciary's misconduct." 595 A.2d 1022, 1027 (Me. 1991) (internal citations omitted) (citing Appeal of Champlin, 133 Me. 287, 292, 177 A. 191 (1935); Bogle v. Bogle, 51 N.M. 474, 188 P.2d 181, 183 (1947)). The Law Court in Stowell affirmed the Probate Court's denial of supplemental fees "[b]ecause the costs incurred in defending his accounts resulted, at least in part, from [the personal representative's] breaches of fiduciary duty..." Id. (emphasis added). Therefore, before it can decide John Jr.'s request to confirm attorneys fees and expert witness costs, the Court must determine whether the nature of John Jr.'s breaches of duty found after trial justifies application of a "surcharge" against him. In addition, the Court believes that it should conduct an analysis of Section 3-712 before deciding whether Ann and Mark can also obtain an order that part or all of their fees be awarded under Section 1-601.
18-C M.R.S. § 3-712 provides in pertinent part: "If the exercise of power concerning the estate is improper, the personal representative is liable to interested persons for damage or loss resulting from breach of the personal representative's fiduciary duty to the same extent as a trustee of an express trust.."
The parties interpret this statute differently as applied to the facts of the case. John Jr. claims that this "surcharge" is not appropriate "when fees sought are the result of merely formalistic breaches of duty or that are the result of good faith actions taken by the personal representative," citing Estate of Tessier, 468 A.2d 590, 596 (Me. 1983). He further claims that the Court did not make findings of bad faith or inexcusable conduct by him. See Estate of Voignier 609 A.2d 704, 708 (Me. 1992). Ann points to two cases in particular, Estate of Whitlock, 615 A.2d 1173 (Me. 1992) and Estate of Stowell, 595 A.2d 1022 (Me. 1991). In Stowell, the Law Court ordered fees and costs to be surcharged against a personal representative ("PR") individually. The PR had made ten personal loans to himself, including for payment of personal expenses, and borrowed over $200,000 for payments to a company without notice or authority to do so. The loans were eventually paid back by the PR. The Law Court concluded however that these transactions constituted "substantial conflicts of interest" and overturned a Probate Court Order which accepted a Referee's Report finding to the contrary. 595 A.2d at 1025.
While this Court did not, as John Jr. states, use the term "bad faith" in describing his conduct in its trial findings, he understates what the Court did find. Ann, for her part, continues to make arguments previously rejected by the Court as...
To continue reading
Request your trial