Statler v. Dodson

• Decision Date: 13 December 1995
• Docket Number: No. 22544,22544
• Court: West Virginia Supreme Court
• Parties: Linda M. STATLER, Guardian of Destiny Lynn Ware, Petitioner Below, Appellee, v. Vel Anne DODSON, Executrix of Estate of Richard A. Ware, Respondent Below, Appellee. Michael L. Scales, Appellant.

Page 497

466 S.E.2d 497

195 W.Va. 646

Linda M. STATLER, Guardian of Destiny Lynn Ware, Petitioner Below, Appellee, v. Vel Anne DODSON, Executrix of Estate of Richard A. Ware,

Respondent Below, Appellee.

Michael L. Scales, Appellant.

No. 22544.

Supreme Court of Appeals of

West Virginia.

Submitted Sept. 13, 1995.

Decided Dec. 13, 1995.

[195 W.Va. 647] Syllabus by the Court

1. Although at common law a contract by an infant for legal services not for necessaries could not be implied, we find that contracts for legal services between infants and their lawyers will be implied and therefore, enforceable: provided, (1) the employment of a lawyer on behalf of the infant was reasonably necessary; (2) the contract was fair and reasonable at the time it was entered; and, (3) the contract is fair in relation to the amount of legal services needed and performed.

2. "Where an attorney has been discharged, without fault on his part, from further services in a suit just begun by him under a contract for payment contingent upon successful prosecution of the suit, his measure of damages is not the contingent fee agreed upon, but the value of his services rendered; and in the absence of evidence of the reasonable value of such services, no recovery can be had." Syllabus, Clayton v. Martin, 108 W.Va. 571, 151 S.E. 855 (1930).

3. "Where attorney's fees are sought against a third party, the test of what should be considered a reasonable fee is determined not solely by the fee arrangement between the attorney and his client. The reasonableness of attorney's fees is generally based on broader factors such as: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." Syllabus Point 4, Aetna Cas. & Sur. Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).

Linda M. Statler, Pro Se Cindy L. Scales, Martinsburg, for Appellant.

Braun A. Hamstead, Nancy A. Dalby, Hamstead & Associates, L.C., Charles Town, for Ms. Dodson.

RECHT, Justice:

Michael L. Scales, a former counsel of record for Destiny Lynn Ware, an infant, seeks attorney's fees for the services he performed on her behalf. Mr. Scales appeals a decision of the Circuit Court of Jefferson County denying his attorney's fees based on findings that the action was adversarial to the estate of Richard A. Ware, and that no implied contract existed between Mr. Scales and Miss Ware, the pretermitted child of Richard A. Ware. Because we find that Mr. Scales may be entitled to attorney's fees, payable on behalf of Miss Ware by her guardian, Linda M. Statler, we remand this case for a determination of, first, whether Mr. Scales' employment on behalf of Miss Ware was reasonably necessary and, second, if said employment is found reasonably necessary, whether the amount of legal fees requested by Mr. Scales is a "reasonable fee" under the factors outlined in Rule 1.5 (1990) of the Rules of Professional Conduct and in Syl. pt. 4, Aetna Cas. & Sur. Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).

I. FACTS AND BACKGROUND

When Richard A. Ware died on March 9, 1990, his fiancee, Ms. Statler, was expecting their child, Destiny Lynn Ware, who was born on November 14, 1990. The decedent's will appointed Vel Ann Dodson, one of his then living children, Executrix of his estate. At first, the estate denied the decedent's paternity of the unborn child. On April 6, 1990, Ms. Statler engaged Mr. Scales to represent her interests and the interests of her unborn child "individually and a next friend of Baby Ware." ¹ Ms. Statler agreed that Mr. Scales would receive one-third of the amount recovered on behalf of her child if Mr. Scales asserted and proved that her child was the pretermitted child of Mr. Ware under W.Va.Code 41-4-1 (1972). ²

Mr. Scales arranged for blood testing which showed that the infant was the natural child of the decedent ³ and, as such is a pretermitted child. Mr. Scales, on behalf of Miss Ware, petitioned the circuit court for the infant's share of the decedent's estate. He also filed an answer and counter claim in another civil action and advanced some of the costs of the litigation. According to a letter received by this Court on November 3, 1995 from Ms. Statler, Ms. Statler, after a meeting with the decedent's family during which the family acknowledged that Miss Ware was the decedent's daughter, informed Mr. Scales of the agreement and requested that he not proceed with the litigation. The record is not clear about when this meeting between Ms. Statler and Mr. Scales occurred. Ms. Statler maintains that after this meeting Mr. Scales continued with the litigation. According Mr. Scales requested attorney's fees of $12,377.86 based on his 24 hours of actual services rendered at $110 per hour or, in the alternative $9,737.86 based on the one-third contingency fee of the March 18, 1991 distribution. ⁴ Mr. Scales also requests to be reimbursed $301 for the costs he advanced.

[195 W.Va. 649] to Ms. Statler, on March 9, 1992, Ms. Statler wrote to Mr. Scales dismissing him, and shortly thereafter, entered into an agreement with the estate whereby her child, Miss Ware, would receive a distribution from the estate. The estate, by letter dated March 18, 1991, had accepted Miss Ware but the letter left blank the amount of distribution. The distribution was in the amount of $26,121.57, with interest thereon at the legal rate from November 1990 for a total of $28,121.57.

After Ms. Statler advised Mr. Scales that he was discharged and she would "negotiate her own settlement," Mr. Scales withdrew as counsel of record and filed a motion in circuit court requesting attorney's fees. In his May 26, 1992 motion to the circuit court, Mr. Scales argued that payment of these fees was required under the contingency fee agreement. The circuit court denied the attorney's fee motion based on its findings that the unborn child could not enter into a contract by next friend, that no services were performed at the instance of the infant or her legal guardian and that Mr. Scales' services had not benefited the estate. Mr. Scales appealed to this Court. On appeal, although the estate takes no position relative to the payment of attorney's fees out of Miss Ware's portion of the estate, the estate argues that because Mr. Scales' services accrued no benefit to the estate, the requested fees should not be charged to the estate. During oral argument, Ms. Statler maintained that although she did not oppose the payment of some fee to Mr. Scales, she thought that the amount requested was unreasonable, given the service provided specifically after she requested that the litigation be delayed. Ms. Statler indicated that she was willing to pay about $2,400 in attorney's fees.

II. RECOVERY FROM THE ESTATE

Ms. Dodson, the executrix of the decedent's estate, argues that any fees awarded in this case should not be chargeable to the estate because this action was adversarial to the estate. We have traditionally held that when an action is adversarial to the estate, the attorneys' fees generated on behalf of that adversarial action are not chargeable to the estate. Syl. pt. 3, Security Nat. Bank & Trust Co. v. Willim, 153 W.Va. 299, 168 S.E.2d 555 (1969), states:

The services of an attorney cannot be rewarded by fees paid out of an estate where such attorney has represented litigants who sought to recover funds from an estate in a purely adversary capacity.

Accord Farrar v. Young, 159 W.Va. 853, 863, 230 S.E.2d 261, 267 (1976); Syl. pt. 6, Wheeling Dollar Savings & Trust Co. v. Leedy, 158 W.Va. 926, 216 S.E.2d 560 (1975). In Security National, we approved the payment of attorneys' fees when the litigation benefited the estate, but when "the litigation merely involve[d] a dispute between the parties in adversary proceedings," no attorneys' fees for clients adverse to the estate were payable from the estate. There were two phases of litigation in Security National; the first stage involved litigation which resulted in the determination that an adopted daughter of the testatrix's granddaughter took nothing under the will. Attorneys' fees were awarded because "that litigation promoted the interests of the parties who finally prevailed." Security Nat. Bank & Trust Co. v. Willim, 153 W.Va. at 306, 168 S.E.2d at 559. During the second stage, the litigation resulted from the unsuccessful attempts of the estates of a niece and a nephew of the testatrix to take under the will. We denied attorneys' fees in the second phase because although in the first phase the interests of the estates of the In Syl., Beuter v. Beuter, 122 W.Va. 103, 7 S.E.2d 505 (1940), we stated:

[195 W.Va. 650] niece and the nephew were "inimical to those of" the estate, "they became adversaries" in the second phase. Security Nat. Bank & Trust Co. v. Willim, 153 W.Va. at 305, 168 S.E.2d at 559.

In the absence of a valid contract of employment, an allowance of fees to an attorney, payable out of the estate of a decedent, can only be justified upon a showing of services beneficial to the estate, or necessary to its settlement, as distinguished from services performed for a client presenting a claim against the estate.

Beuter denied the payment of the attorneys' fees from the estate to a lawyer who brought suit on behalf of the decedent's former wife claiming a part of his estate. We denied the payment of the attorneys' fees of the former wife because "the claims as to the marital...