Brown v. Brown

45 Cal. App. 4th 117, 96 Daily Journal DAR 5311, 52 Cal. Rptr. 2d 755, 96 Cal. Daily Op. Serv. 3308, 1996 Cal. App. LEXIS 424

• Court: California Court of Appeal
• Decided: May 7, 1996
• Docket: No. D022487
• Status: Published

Opinions

Opinion

BENKE, J.

This is an appeal from a probate court order denying attorney compensation in a conservatorship.

We hold that under Probate Code¹ section 2645, subdivision (b), an attorney who is related to a conservator must show that his representation, as opposed to the representation otherwise available, was to the advantage, benefit and best interest of the conservatee. The appellant in this case made no such showing and accordingly he may not recover fees incurred following the effective date of section 2645, subdivision (b).

Factual History

Carol S. Brown (Carol Brown)² was originally appointed to act as the temporary conservator of the person and estate of Lillian R. Bryant on March 12, 1993. Sometime later Carol Brown retained her husband, objector and appellant Brown (Brown), to perform legal services for her in her capacity as conservator. On April 23, 1993, the probate court approved a general conservatorship of Bryant and appointed Carol Brown conservator.

In early 1994 the probate court expressed to Brown its concern that under section 2645, subdivision (b), which became effective on January 1, 1994, Brown could no longer recover fees incurred in representing his wife as conservator.

On June 30, 1994, Carol Brown filed an accounting and petition for approval of her fees and her husband’s fees. After a hearing, the probate court approved payment of the conservator’s fees but not the attorney fees requested on behalf of Brown. The court continued the matter to permit Brown to file a brief regarding section 2645, subdivision (b).

In the brief he submitted to the probate court Brown argued section 2645 merely required he show the services he rendered benefited the conservatee. He further argued the services he rendered had in fact benefited the conservatee. However Brown made no showing that his services, as opposed to the services available from other attorneys, were of any special advantage or benefit to the conservatee. Upon consideration of Brown’s brief the probate court refused to approve payment of fees to Brown insofar as the fees were for services rendered after the effective date of section 2645, January 1, 1994.³

Brown filed a timely notice of appeal.

Discussion

Section 2645 provides in part: “(a) No attorney who is a guardian or conservator shall receive any compensation from the guardianship or conservatorship estate for legal services performed for the guardian or conservator unless the court specifically approves the right to the compensation and finds that it is to the advantage, benefit, and best interests of the ward or conservatee.

“(b) No parent, child, sibling, or spouse of a person who is a guardian or conservator, and no law partnership or corporation whose partner, shareholder, or employee is serving as a guardian or conservator shall receive any compensation for legal services performed for the guardian or conservator unless the court specifically approves the right to the compensation and finds that it is to the advantage, benefit, and best interests of the ward or conservatee.”

On appeal Brown argues that when legal services have been provided by a conservator, someone related to the conservator or someone who is a law partner or employee of the conservator, payment for those services is permissible under section 2645 so long as the conservatee benefited from the services. We disagree.

“Pursuant to established principles, our first task in construing a statute is to ascertain the intent of the Legislature so as to effectuate the purpose of the law. In determining such intent, a court must look first to the words of the statute themselves, giving to the language its usual, ordinary import and according significance, if possible, to every word, phrase and sentence in pursuance of the legislative purpose. A construction making some words surplusage is to be avoided. The words of the statute must be construed in context, keeping in mind the statutory purpose, and statutes or statutory sections relating to the same subject must be harmonized, both internally and with each other, to the extent possible. [Citations.] Where uncertainty exists consideration should be given to the consequences that will flow from a particular interpretation. [Citation.] Both the legislative history of the statute and the wider historical circumstances of its enactment may be considered in ascertaining the legislative intent. [Citations.]” (DynaMed, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal.3d 1379, 1386-1387 [241 Cal.Rptr. 67, 743 P.2d 1323].) “ ‘Rules of statutory construction require courts to construe a statute to promote its purpose, render it reasonable, and avoid absurd consequences.’ ” (Ford v. Gouin (1992) 3 Cal.4th 339, 348 [11 Cal.Rptr.2d 30, 834 P.2d 724].)

Section 2645 was a part of Assembly Bill No. 21 (1993-1994 Reg. Sess.) enacted by the Legislature in 1993. Assembly Bill No. 21 represented an extension of the Legislature’s continuing effort to combat “financial abuse” of elderly and dependent persons. (See Assem. Com. on Judiciary, hearings on Assem. Bill No. 21 (1993).)⁴ Specifically, Assembly Bill No. 21 was initiated in response to activities of a probate attorney engaged in a series of questionable activities. (Ibid.) His activities were the subject of media attention and included having himself named as conservator of a client and subsequently authorizing payment of large sums of money to his law partners for legal services. (Ibid.) “The overriding intent of AB 21 is to clearly and unambiguously prohibit the most patently offensive actions of [the attorney] while not unreasonably encumbering the practice of probate law.” (Id. at p. 4.)

In addition to enactment of section 2645, Assembly Bill No. 21 amended section 10804. As amended section 10804 provides that an attorney may not receive compensation as both a personal representative and as an estate attorney, notwithstanding any provision in decedent’s will, “unless the court specifically approves the right to the compensation in advance and finds that the arrangement is to the advantage, benefit, and best interests of the decedent’s estate.” (§ 10804, italics added.)

Contrary to Brown’s argument on appeal, the language and history of the statute make it clear the Legislature intended that two separate and distinct criteria be met before compensation under either subdivision (a) or subdivision (b) of section 2645 may be awarded. Under both subdivisions the court must specifically approve the “right to the compensation.” If, as Brown suggests, the Legislature intended that courts assure themselves only that the conservatee received valuable services, no further language was needed. Indeed, if the Legislature had intended that proof of the right to compensation be the only requirement for compensation, it did not need to enact section 2645. Prior to enactment of section 2645 an attorney acting as a conservator could recover fees for legal services he rendered on behalf of a conservatorship estate if the probate court found the conservatorship estate realized a benefit from the legal services. (See Conservatorship of Gray (1970) 12 Cal.App.3d 513, 521 [90 Cal.Rptr. 776].)

However, in addition to requiring a finding as to the right to fees, the Legislature added the phrase, “and finds that it is to the advantage, benefit, and best interests of the ward or conservatee.” This second phrase must be given some significance in both subdivision (a) and subdivision (b) of section 2645. “ ‘Words of a statute must be given such interpretation as will promote rather than defeat the general purpose and policy of the law.’ ” 0County of Alameda v. Clifford (1960) 187 Cal.App.2d 714, 722 [10 Cal.Rptr. 144].) By finding that the second phrase requires proof that the services rendered by counsel provided some benefit that would not otherwise be available to the conservatorship estate, the phrase and the statute itself are given a meaning which clearly aids in effectuating the overall purpose of preventing actual self-dealing or the appearance of impropriety.

Our construction of section 2645 is supported by consideration of the amendment to section 10804 which was also part of Assembly Bill No. 21. As we have noted, “[significance, if possible, should be attributed to every word, phrase, sentence and part of an act in pursuance of the legislative purpose, as ‘the various parts of a statutory enactment must be harmonized by considering the particular clause or section in the context of the statutory framework as a whole.’ [Citation.]” (DeYoung v. City of San Diego (1983) 147 Cal.App.3d 11, 18 [194 Cal.Rptr. 722].) The fact section 2645 and the amendments to section 10804 were enacted at the same time, by the same bill and the fact both provisions govern attorneys who act in dual capacities, require that the two provisions be interpreted coherently. (147 Cal.App.3d 18.) The need for a coherent and consistent interpretation of these provisions is underscored by the fact that in any number of instances the attorney for the conservatorship will eventually become the attorney for the later decedent’s estate. Imposing one lower standard at the conservatorship stage and then imposing a different higher standard when a decedent’s estate becomes necessary, would make very little sense in terms of protecting conservatees and estates, assuring fair compensation to counsel, or limiting unnecessary burdens on probate courts. Thus, the express reference in amended section 10804 to the benefit provided by the “arrangement” adds substantial support to our conclusion that in order to recover attorney fees, an attorney who is a conservator or related to a conservator must show, in addition to a right to fees, that his representation, as opposed to representation otherwise available, benefited the conservatorship estate.⁵ Here Brown did not attempt to make any such showing. Thus, the trial court properly denied his application for payment of fees for services rendered after the effective date of section 2645, January 1, 1994.

Disposition

Order affirmed

Huffman, J., concurred.

1 All statutory references are to the Probate Code unless otherwise specified.

2 CaroI S. Brown has not taken any part in this appeal. Rather, the interests of the conservatee have been asserted by guardian ad litem Neil Trop.

3 It is undisputed that Brown’s services and the fees requested were within local guidelines. Moreover, there is no indication of any wrongdoing on the part of the attorney or the conservator.

4 Statements made during the legislative process and reflected in the records of the legislative hearings are useful in determining legislative intent; letters written by legislators reflecting their personal opinions are not. (California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692, 699-700 [170 Cal.Rptr. 817, 621 P.2d 856].) Thus we rely on the record of the legislative hearings on Assembly Bill No. 21 and reject the letters from authors of Assembly Bill No. 21 offered by Brown and written after enactment of section 2645.

5 As passed by the Assembly, Assembly Bill No. 21 used the same language in both sections 2645 and 10804 to describe the findings necessary before compensation could be paid to attorneys playing dual roles in a conservatorship or estate. The Assembly version of section 2645, like the final version of section 10804, permitted payment of compensation “unless the court specifically authorizes the compensation in advance and finds that the arrangement is to the advantage, benefit, and best interests of the ward or conservatee.” (Legis. Counsel’s Dig., Assem Bill No. 21 (1993-1994 Reg. Sess.).) In the Senate, section 2645, subdivisions (a) and (b), were amended by replacing the phrase “in advance and finds that the arrangement is to the advantage” in each subdivision with the phrase “and finds it is to the advantage.” (Ibid.) At the time this change to section 2645, subdivisions (a) and (b), was made the Senate also added subdivision (d) to section 2645, which permits the probate court to approve the fees either at the time a conservator is appointed, at the time a plan for the conservator’s estate is apporved, an account is settled, or a separate petition is approved. (Ibid.) No similar changes were made to section 10804.

Contrary to our colleague’s interpretation, the Senate’s deletion of the requirement for advance approval of dual roles in section 2645 and its retention in section 10804 did not represent any conscious effort by the Legislature to provide conservatees with less protection from unscrupulous attorneys than the estates of decedents. In this regard the Assembly analysis describing the amendments made in the Senate is instructive. According to the Assembly analysis: “The Senate amendments: [*]D 1) Delete the provisions of the bill forbidding an attorney from drafting a trust instrument in which he or she is named trustee. [*¡1] 2) Create a presumption that an attorney who drafts a trust instrument in which he or she is named the sole trustee shall be removed as trustee. [IQ 3) Restrict greatly the capacity of a self-appointed trustee to waive (in the instrument he or she drafts) the obligation to make accountings to the beneficiaries. [H 4) Make a series of technical changes." (Sen. Amend, to Assem. Bill No. 21 (1993-1994) July 8, 1993, italics added.) Because the alteration of section 2645 in the Senate is not otherwise described in the Assembly’s analysis, logic would suggest it was one of the technical changes made by the Senate.

One need only examine the already existing and closely related provisions of section 2640 to appreciate the need for a technical change to section 2645 with respect to the issue of advance approval of attorney compensation. At the time Assembly Bill No. 21 was being considered, section 2640, subdivision (c), had itself been recently amended to provide in pertinent part: “The compensation allowed to the guardian or the conservator of the person, the guardian or conservator of the estate, and to the attorney may, in the discretion of the court, include compensation for services rendered before the date of the order appointing the guardian or conservator.” (See Stats. 1992, ch. 572, § 8, italics added.) Unlike the circumstances which give rise to the need for establishment of a decedent’s estate, establishing the circumstances which support imposition of a conservatorhsip may involve a great deal of prepetition effort by a prospective conservator and his counsel; thus the utility of permitting the conservator and his counsel to recover fees incurred before appointment of a conservator is self-evident. However by requiring advance approval of dual compensation in conservator-ship cases, the Assembly version of section 2645 would have effectively eliminated the ability of dual capacity attorneys to recover fees incurred before entry of an order appointing a conservator. Hence the need for a technical change by way of the Senate amendments replacing advance approval of arrangements, which in the case of conservatorships will no doubt already exist, with approval of fees after they are incurred but subject to the same substantive standard.

In sum then, rather than suggesting any difference in the substantive standards to be applied in compensating counsel for conservatees and counsel for decedents estates, the history of Assembly Bill No. 21 confirms that at all times the Legislature intended that, insofar as it is practical, counsel who are engaged in representing conservatorships and estates be subjected to the same level of scrutiny.