Burch & Cracchiolo, P.A. v. First National Bank

670 P.2d 414, 137 Ariz. 309, 1983 Ariz. App. LEXIS 519
CourtCourt of Appeals of Arizona
DecidedMay 19, 1983
DocketNo. 1 CA-CIV 5962
StatusPublished
Cited by3 cases

This text of 670 P.2d 414 (Burch & Cracchiolo, P.A. v. First National Bank) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burch & Cracchiolo, P.A. v. First National Bank, 670 P.2d 414, 137 Ariz. 309, 1983 Ariz. App. LEXIS 519 (Ark. Ct. App. 1983).

Opinion

OPINION

KLEINSCHMIDT, Judge.

This case arises out of the probate of the estate of Goldie C. Brown, who died testate on April 22, 1971. It presents the question of whether the Arizona probate code permits a court to consider an award of attorney’s fees from the assets of the estate in favor of interested parties, other than the personal representative, who retain counsel and through the actions of counsel confer a benefit upon the entire estate. Although the case law of Arizona has consistently held that the probate court has no jurisdiction to allow attorney’s fees to be paid from the assets of the estate to any attorney other than one hired by the personal representative, we hold that a 1973 amendment to the probate code has broadened the jurisdiction of the probate court so that the court does have the power to consider and decide whether or not such payment should be allowed.

[311]*311The facts that give rise to the question are as follows. Virginia Hash, a member of the State Bar of Arizona, was appointed pursuant to the will of Goldie C. Brown as personal representative of the estate. The principal asset of the estate consisted of land of considerable value in Maricopa County. The will bestowed two outright gifts totaling 20 percent of the assets. The remaining 80 percent of the estate was divided into four separate trusts for individuals who were granted life estates. As to each trust the net income was to be paid to the life beneficiaries in convenient installments not less than quarterly.

No accounting was presented by the personal representative until 1975 when a first accounting for the period from Mrs. Brown’s death through May 81, 1974, was filed with the court. Although the Chris-mans, life beneficiaries of one of the trusts, objected to the first accounting no hearing was held on the matter. Despite requests from the life beneficiaries that part of the land be sold so that the partial distributions envisioned by the will could be made, no such sale was forthcoming. There is evidence in the record which supports the conclusion that during the period in question the market for land was depressed, that the personal representative was trying to effect a sale and that she candidly answered the inquiries of beneficiaries regarding the probate proceedings.

In 1976 the Chrismans hired the law firm of Burch & Cracchiolo, P.A. to investigate the matter and in January of 1977 through these attorneys the Chrismans objected to the personal representative’s accounting and petitioned to determine the amount of a creditor’s claim which the personal representative had timely filed on behalf of herself and Hash, Cantor & Tomanek, the law firm of which she was a member. The creditor’s claim in question arose out of litigation in Maricopa County Cause No. C-205809. The efforts of Virginia Hash and her law firm in that action confirmed in the estate a sizeable portion of the land which constituted its principal asset. The creditor’s claim filed by the firm of Hash, Cantor & Tomanek sought “one-third of any amount recovered in excess of $150,-000” in Cause No. C-205809.

In August of 1977 a motion for summary judgment in favor of the beneficiaries of the estate was granted with respect to the creditor’s claim filed by Hash, Cantor and Tomanek, and this judgment was appealed to the court of appeals. While the appeal was pending and following hearings conducted in June and August of 1978, the probate court found that the removal of Virginia Hash as personal representative would be in the best interests of the estate and entered an order to that effect. The First National Bank of Arizona was appointed as successor personal representative. We will hereafter refer to the successor personal representative as “the bank.”

Thereafter, in March of 1980, the creditor’s claim filed by Virginia Hash was settled with a savings to the estate of approximately $2 million. The settlement was approved by the court. Burch & Cracchiolo, P.A. expended in excess of 2,000 hours in their endeavors for the Chrismans and other beneficiaries who had joined in the action and they subsequently filed a claim against the estate on behalf of their clients for attorney’s fees. The probate court granted a motion for judgment on the pleadings in favor of the estate and against Burch & Cracchiolo. This appeal followed.

It has long been the rule in Arizona that attorney’s fees are not payable from the assets of the estate except for lawyers hired by the personal representative. The inception of the rule dates back to the case of In re Balke’s Estate, 68 Ariz. 373, 206 P.2d 732 (1949), which squarely addressed the issue. In Balke the court noted that while there was authority both ways the better rule was that no such payments could be made because to allow payment would make the estate liable for expenses and costs which could not be controlled or measured by an administrator or executor and would invite confusion and waste in the settlement of estates. The court reasoned that § 38— [312]*3121402, A.C.A., (1939) (the predecessor of A.R.S. § 14-37201) which read:

Allowed expenses of administration— Attorney’s Fees — .... He [the executor] shall also be allowed reasonable fees paid or contracted to be paid to attorneys at law for services to him, and an attorney who has rendered such services may apply to the court for an allowance as compensation therefor. Upon the hearing, a reasonable allowance shall be made, and the court shall order the payment thereof out of funds of the estate,

impliedly limits the payment of attorney’s fees to those attorneys who are employed by the executor. In so holding, the supreme court emphasized the principle that the administration of a decedent’s estate is purely statutory and that the procedure outlined in the statutes is controlling.

Balke was reaffirmed by Pintek v. Superior Court, 81 Ariz. 255, 304 P.2d 392 (1956) in which the supreme court noted that since the statutes provided the only authority for payment of attorney’s fees by an executor the probate court was without jurisdiction to authorize fees for counsel hired by anyone other than the executor. In still another case, Great Western Bank and Trust v. Myers, 109 Ariz. 542, 514 P.2d 463 (1973), the court reaffirmed the rule of Balke with the observation that, “Any other system leaves the estate open to multiple claims by all who assert to have benefited the estate.” 109 Ariz. at 544, 514 P.2d at 465.

The appellants, while acknowledging that Balke and its successors were once the law, say that the revision of the Arizona Probate Code that became effective in 1974 renders the prior case law on this point inapplicable. They point out, citing Pintek, that before the extensive amendment of the probate code the probate court was a court of limited jurisdiction with limited power to perform only those acts expressly permitted to it by statute. All of this, they argue, was changed by the adoption of A.R.S. § 14-1103, which reads as follows:

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Related

State v. Harding
670 P.2d 383 (Arizona Supreme Court, 1983)
Matter of Estate of Brown
670 P.2d 414 (Court of Appeals of Arizona, 1983)

Cite This Page — Counsel Stack

Bluebook (online)
670 P.2d 414, 137 Ariz. 309, 1983 Ariz. App. LEXIS 519, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burch-cracchiolo-pa-v-first-national-bank-arizctapp-1983.