Wehle v. Bradley

• Decision Date: 14 March 2014
• Docket Number: 1101290
• Parties: Bonnie Wehle et al. v. Thomas H. Bradley III, as co-personal representative of the estate of Robert G. Wehle, deceased, et al.
• Court: Alabama Supreme Court

Bonnie Wehle et al. v. Thomas H. Bradley III, as co-personal representativeof the estate of Robert G. Wehle, deceased, et al.

1101290

SUPREME COURT OF ALABAMA

OCTOBER TERM, 2013-2014

REL: March 14, 2014

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter.

Appeal from Bullock Circuit Court

(CV-2007-000022)

MURDOCK, Justice.

Bonnie Wehle, Penny Martin, and Sharon Ann Wehle ("the daughters") appeal from the Bullock Circuit Court's order on final settlement of the estate of their father, Robert G.Wehle ("the estate"). In this "final order," the circuit court denied the daughters' claims against Thomas H. Bradley III, James H. McGowan, and Grady Hartzog, as the co-personal representatives of the estate ("the personal representatives"); the order also denied the daughters' request that McGowan be removed as a cotrustee of the family trust created under Robert G. Wehle's will. We affirm in part, reverse in part, and remand.

I. Facts and Procedural History

This is the second time this case has come before us. In the previous appeal, Wehle v. Bradley, 49 So. 3d 1203 (Ala. 2010) ("Wehle I"), this Court summarized the facts as follows:

"Robert G. Wehle died on July 12, 2002. His will was admitted to probate, and letters testamentary were issued to Bradley, McGowan, and Hartzog as co-personal representatives of Wehle's estate. [The letters were issued in August 2002.] The will created a marital trust for Wehle's wife, Gatra Wehle, and a family trust for the daughters and Wehle's granddaughter, Debbie Kloppenberg. The personal representatives were named as cotrustees of both the marital trust and the family trust.

"In October 2005, the personal representatives petitioned the probate court for final settlement of the estate. They also filed an accounting of their administration of the estate. The accounting indicated that the personal representatives had paid themselves total compensation of $1,964,367.82, which, they allege, amounts to 5% of the value ofWehle's estate at the time the petition for final settlement was filed. The personal representatives argue that the amount of their fees is consistent with the statutory allowance for such fees. They also argue that Wehle told his attorney that he intended for the personal representatives' fees to be approximately 5% of the value of his estate.

"The daughters filed an objection to the accounting, arguing, among other things, that, pursuant to § 43-2-844(7), Ala. Code 1975, the personal representatives were required to obtain prior court approval before compensating themselves out of the assets of the estate. The daughters also argued that the amount of the compensation exceeded the 'reasonable compensation' allowed by § 43-2-848(a), Ala. Code 1975.

"In March 2007, Gatra Wehle petitioned to have the administration of the estate removed to the circuit court. The petition was granted.

"The personal representatives moved the circuit court for a partial summary judgment on the daughters' objections, arguing (1) that the will authorized the payment of the compensation to the personal representatives without prior court approval, and (2) that the statute of limitations barred the daughters' claim that the fees of the personal representatives were excessive. On July 17, 2009, the circuit court granted the personal representatives' motion for a partial summary judgment, stating:

"'As to the claim that the Personal Representatives paid fees to themselves without obtaining Court approval, the Court finds that the terms of the Will expressly exempt the Personal Representatives from obtaining Court approval before payment of their fees. As to the claim that the fees paid were excessive, it is without factualdispute that [the daughters] had knowledge of the amount of these fees more than two years before they filed their contest of the fees and thus this claim is time barred.'

"On July 24, 2009, the daughters appealed to this Court from the circuit court's judgment pursuant to § 12-22-4, Ala. Code 1975."

49 So. 3d at 1205-07.

In Wehle I, this Court concluded that "[b]ecause the payment of compensation to the personal representatives without prior court approval was not expressly authorized by Robert G. Wehle's will, the circuit court erred in entering its partial summary judgment in favor of the personal representatives." 49 So. 3d at 1209; see also Ala. Code 1975, § 43-2-844(7). This Court reversed the circuit court's judgment and remanded the case on that basis and did not decide the issue whether the daughters' "claim as to the excessiveness of the compensation is barred by the statute of limitations." Id.

On remand, the circuit court held a proceeding at which evidence was presented ore tenus as to the petition for final settlement of the estate. Thereafter, the circuit court entered its final order approving the compensation thepersonal representatives had paid themselves, i.e., $1,964,367.82, as "reasonable compensation" under § 43-2-848(a), Ala. Code 1975. The order denied the daughters' claim that the personal representatives should pay interest on the compensation because they had paid it without prior court approval. Also, in regard to other issues raised by the daughters, the order denied the daughters' petition to remove McGowan as a cotrustee of the family trust, denied the daughters' request to tax costs pertaining to Wehle I against the personal representatives, and awarded attorney fees and costs to the personal representatives in the amount of $383,437.31 as to their defense against the daughters' claims on final settlement.¹ The daughters appeal.

II. Standard of Review

To the extent the circuit court made factual findings based on oral testimony, those factual findings are entitled to deference by this Court under the ore tenus standard ofreview. Under that standard, "'we must accept as true the facts found by the trial court if there is substantial evidence to support the trial court's findings.'" Allsopp v. Bolding, 86 So. 3d 952, 959 (Ala. 2011) (quoting Beasley v. Mellon Fin. Servs. Corp., 569 So. 2d 389, 393 (Ala. 1990)). This standard is based on a recognition of the trial court's unique position of being able to evaluate the credibility of witnesses and to assign weight to their testimony. See, e.g., Justice v. Arab Lumber & Supply, Inc., 533 So. 2d 538, 543 (Ala. 1988). The deference owed a trial court under the ore tenus standard of review, however, does not extend to the trial court's decisions on questions of law. Appellate review of questions of law, as well as whether the trial court has properly applied that law to a given set of facts, is de novo. See, e.g., Ex parte Graham, 702 So. 2d 1215, 1221 (Ala. 1997).

III. Analysis

A. Reasonableness of the Personal Representatives' Fees

Under Alabama law,

"[a] personal representative is entitled to reasonable compensation for services as may appear to the court to be fair considering such factors that may include, but are not limited to, the novelty and difficulty of the administrative process, the skill requisite to perform the service,the likelihood that the acceptance of the particular employment will preclude other employment, the fee customarily charged in the locality for similar services, the amount involved and the results obtained, the requirements imposed by the circumstances and condition of the estate, the nature and length of the professional relationship with the decedent, the experience, reputation, diligence, and ability of the person performing the services, the liability, financial or otherwise, of the personal representative, or the risk and responsibility involved, which shall not exceed two and one-half percent of the value of all property received and under the possession and control of the personal representative and two and one-half percent of all disbursements."

Ala. Code 1975, § 43-2-848(a). Although the allowance of compensation for the personal representative and the amount of that compensation are mixed questions of law and fact, our cases state that decisions as to these issues are largely within the discretion of the trial judge. See Armstrong v. Alabama Nat'l Bank of Montgomery, 404 So. 2d 675, 676 (Ala. 1981). The amount of compensation to be allowed under § 43-2-848(a) "'below or up to the maximum limit prescribed [thereby] is to be determined according to the circumstances of each particular case.'" Armstrong, 404 So. 2d at 676 (quoting Smith v. McNaughton, 378 So. 2d 703, 704-05 (Ala. 1979)). In determining whether the trial court exceeded its discretion as to a compensation award under § 43-2-848(a), we must considerthe amount of the award "in view of all the circumstances" of the administration of the estate. Ruttenberg v. Friedman, 97 So. 3d 114, 122 (Ala. 2012); see also, e.g., Armstrong, 404 So. 2d at 676 (discussing the deference owed a determination of a personal representative's fee made after the trial court heard ore tenus evidence).

Discussing the predecessor statute to § 43-2-848(a), this Court in Armstrong explained that the statute

"'(creat[es])a maximum limit to compensation to be allowed [personal representatives], for the ordinary services performed by them, and what shall be allowed, below or up to this limit, is to be determined according to the circumstances of each particular case. "The court in making the allowance is to look to the loss of time, risk and responsibility, which are demanded .... and which is actually incurred, and to allow ... such a reasonable remuneration as a prudent and just man would, in view of the circumstances, consider a fair compensation, without, however, being governed by business charges usually made for

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