Enders v. Parker

66 P.3d 11, 2003 Alas. LEXIS 22, 2003 WL 1448237

• Court: Alaska Supreme Court
• Decided: March 21, 2003
• Docket: S-9341, S-9391
• Status: Published

Opinions

OPINION ON REHEARING

CARPENETI, Justice.

I. INTRODUCTION ¹

Iris Enders unsuccessfully challenged the admission into probate of Joel Kottke's 1997 will, which named his companion Connie Parker as personal representative, on the grounds of undue influence and insane delusions. We previously upheld the superior court's rejection of that challenge.

Iris Enders now appeals the superior court's denial of her AS 18.16.485 claim for costs and attorney's fees arising out of her unsuccessful prosecution of the will contest. Connie Parker cross-appeals the superior court's refusal to award her attorney's fees and costs under Alaska Civil Rules 82(b) and 79(b). Because AS 18.16.4835 does not require that a personal representative or nominated personal representative's actions benefit the estate before the personal representative can recover expenses, we vacate the superior court's denial of Enders's AS 13.16.4835 claim. Because the superior court did not make specific findings as to whether Enders prosecuted the will contest in good faith, we remand this case for specific findings on this issue. Because the attorney's fees and costs provisions of Civil Rules 82(b) and 79(b) are inapplicable to probate proceedings, we affirm the superior court's denial of Parker's motion seeking attorney's fees and costs under these rules.

II. FACTS AND PROCEEDINGS

A. Facts

Joel Kottke executed a will in 1983, nominating his stepdaughter Iris Enders as sue-cessor to his wife Martha as personal representative and leaving fifty percent of his estate to his siblings and fifty percent to Martha's children. After Martha's death in 1991, Kottke entered into a relationship with Connie Parker. Parker lived with Kottke and cared for him when he was diagnosed with cancer.

In June 1997, four months before his death, Kottke executed a new will disinheriting his siblings and stepchildren in favor of Parker.² The 1997 will nominated Connie Parker as Kottke's personal representative. After Kottke's death in October 1997, Parker obtained appointment as special administrator and sought to probate the 1997 will. Enders and Joel's brother Ralph Kottke then filed a petition to set aside the 1997 will based on the theories of undue influence and insane delusions.

After a seven-day evidentiary hearing in July 1998, Superior Court Judge Sen K. Tan upheld the 1997 will and appointed Parker as Kottke's personal representative. Enders and Ralph Kottke appealed to this court. We affirmed the superior court's thoughtful and thorough decision.³

B. Proceedings

Several weeks after the evidentiary hearing, Enders served Parker with a claim for administrative expenses incurred in the litigation of the will contest pursuant to AS 13.16.485. Enders's claim itemized expenses of $82,987.07; a later supplement itemized further expenses of $14,837.71. Parker did not formally respond to this claim.

On September 21, 1998 Enders filed a petition for allowance of her AS 18.16.485 claim with the superior court. Parker opposed the petition and also moved for costs and attorney's fees under Civil Rules 79 and 82. The superior court denied Enders's petition on the grounds that her claim did not benefit Kottke's estate. The court also denied Parker's motion, ruling that it would not award fees and costs under the civil rules because there is a specific statutory scheme for awarding costs and fees for will contests.

Enders appeals the denial of her petition. Parker cross-appeals the denial of her motion for costs and attorney's fees.

III. STANDARD OF REVIEW

Enders challenges the superior court's interpretation of AS 13.16.485; Parker challenges the superior court's interpretation of Civil Rules 79 and 82. We review a trial court's interpretation of statutes and court rules under the independent judgment standard.⁴ When construing the meaning of a statute under this standard, we "look to 'the meaning of the language, the legislative history, and the purpose of the statute'" ⁵ and "adopt the rule of law that is most persuasive in light of precedent, reason, and policy." ⁶

IV. DISCUSSION

A. Alaska Statute 13.16.4385 Governs Recovery from the Estate of Expenses Incurred in Estate Litigation; It Does Not Impose a Requirement that the Litigation Benefit the Estate.

1. Alaska Statute 13.16485 does not contain a benefit-to-the-estate requirement.

After considering "whether the actions of the personal representative benefitted the estate," the superior court denied Enders's claim on the grounds that her "conduct fails to meet the requirement that a personal representative must act to benefit the estate." But AS 18.16.485 contains no benefit-to-the-estate requirement.

We have not yet interpreted AS 13.16.435. When interpreting a statute, we look to its language "construed in light of the purpose of its enactment." ⁷ If the language of the statute is unambiguous and expresses the legislature's intent, and if no ambiguity is revealed by its legislative history, we will not modify or extend the statute by judicial construction.⁸ "Where a statute's meaning appears clear and unambiguous, ... the party asserting a different meaning bears a correspondingly heavy burden of demonstrating contrary legislative intent." ⁹

The language of AS 13.16.4835 is unambiguous.¹⁰ It states that a personal representative or nominated personal representative who has prosecuted or defended a probate action in good faith is entitled to recover all necessary expenses and disbursements, regardless of whether he or she prevailed in the action. Nothing in the text of the statute suggests that a court has the discretion to determine whether a personal representative's actions benefitted the estate before awarding a personal representative his or her administrative expenses.

Our examination of the legislative intent and policies behind the statute and the Uniform Probate Code ¹¹ (UPC) yields nothing that meets the burden of demonstrating contrary legislative intent. - Alaska Statute 13.16.4835 is taken directly from the UPC, which Alaska adopted in 1972.¹² Alaska Statute 18.06.010(a) states that the provisions comprising the Alaska UPC "shall be liberally construed and applied to promote their underlying purposes and policies." Alaska Statute 13.06.010(b) sets out five such purposes and policies.¹³ Two purposes support the conclusion that no benefit-to-the-estate requirement should be found;¹⁴ only one even arguably supports the opposite conclusion.¹⁵ Thus, Parker has not met her heavy burden of demonstrating a legislative intent that is contrary to the clear and unambiguous words of the statute.

In conclusion, the text of AS 18.16.485 contains no benefit-to-the-estate requirement. The legislature's expressed policies and purposes in enacting the statute do not suggest such a requirement. Accordingly, we hold that AS 18.16.485 does not require a personal representative or a nominated personal representative to show that a will contest has benefitted the estate before he or she may recover expenses under the statute.

We have seen that AS 18.16.485 does not require a benefit-to-the-estate analysis. We turn now to what the statute does require. It imposes only three requirements for the recovery from the estate of expenses incurred in estate litigation:

If any personal representative or person nominated as personal representative defends or prosecutes any proceeding in good faith, whether successful or not, that person is entitled to receive from the estate necessary expenses and disbursements including reasonable attorney fees incurred.

Thus, in order for the claimant to recover, (1) he or she must be a personal representative or nominated as a personal representative; (2) he or she must have brought or defended the proceeding in good faith; and (8) expenses must be "necessary" and attorney's fees "reasonable." ¹⁶ It is immaterial whether the party seeking the expenses prevailed in the action; if the requirements are met, the party is entitled to receive reimbursement from the estate for expenses incurred in the litigation, including attorney's fees.¹⁷

2. Enders is a nominated personal representative for the purposes of AS 13.16.435.

Alaska Statute 18.16.4850 explicitly provides that a nominated personal representative can recover expenses. Enders was nominated as a personal representative under Kottke's 1988 will; therefore, she is eligible to receive administrative expenses from Kottke's estate under the statute.¹⁸

3. - The superior court made insufficient findings as to whether Enders brought the will contest in good faith.

Because Enders meets the nominated personal representative requirement in AS 13.16.4835, she can recover her necessary and reasonable expenses if she brought the will contest in good faith,. The issue of good faith was extensively litigated below, but the superior court did not make specific findings on it. Instead, the court rested its decision to deny fees under AS 18.16.485 on its conclusion that Enders's actions did not benefit the estate.¹⁹ As we have seen, the court's reliance on a benefit-to-the-estate requirement was error. We turn now to the sufficiency of the court's findings on good faith.

Enders argues that she must recover unless the superior court makes an explicit finding that she acted in bad faith, and that it did not do so. While the superior court used strongly critical language of Enders in its decision,²⁰ the court's findings are not explicit on the question of good faith. Because the findings erroneously focused on the question whether Enders's actions benefitted the estate, we are unable to say that the court would have explicitly found a lack of good faith. We must remand to the superior court for findings, sufficiently specific or detailed to allow for meaningful appellate review,²¹ on the question whether Enders acted in good faith.²² To aid the court in this task, we note the following.

Although "good faith" is not defined in the probate statutes, the statutory obligations of the personal representative shed light on the meaning of that term. A personal representative is a fiduciary who is statutorily obligated to "observe the standards of care applicable to trustees ... [and who] is under a duty to settle and distribute the estate ... as expeditiously and efficiently as is consistent with the best interests of the estate." ²³ "[A] fiduciary relationship exists when one imposes a special confidence in another, so that the latter, in equity and good conscience, is bound to act in good faith and with due regard to the interests of the one imposing the confidence."²⁴ The fiduciary duty is "the highest standard of duty implied by law." ²⁵ And it is statutorily recognized as an obligation of the personal representative of the estate of a decedent.²⁶ Alaska Statute 18.16.350(a) requires that a personal representative use her authority "for the best interests of successors to the estate." In the context of two competing wills with different personal representatives, it is to be expected that the "successors" will not be identical. Each personal representative thus must act for the best interests of the successors named in the will which each personal representative is respectively seeking to uphold. We hold that "good faith" under AS 13.16.4835 incorporates the statutory requirement that a personal representative act with the intent to benefit successors named in the instrument the personal representative seeks to uphold, but does not incorporate a requirement that the acts of the personal representative actually benefit the estate.²⁷ In making its findings concerning good faith, the superior court should consider whether End-ers had reasonably arguable grounds to challenge the 1997 will. Presence of such grounds would imply good faith on her part; absence of such grounds would imply a lack of good faith.

B. Rule 82(b) Attorney's Fees and Rule 79 Costs

On cross-appeal, Parker contends that she is entitled to an award of Civil Rule 82(b)(2) attorney's fees and Rule 79(b) costs against Enders because she was the prevailing party in the will contest. We disagree.

Civil Rule 82 provides for an award of attorney's fees to the prevailing party "[elx-cept as otherwise provided by law." ²⁸ Here, the legislature has expressly provided otherwise by law. It has provided that a designated personal representative can recover "necessary expenses and disbursements including reasonable - attorney - fees - incurred." ²⁹ Therefore, Civil Rule 82 does not apply in this case. If a specific statutory scheme for attorney's fees exists, Civil Rule 82 does not apply.³⁰ And since the statute also clearly covers costs incurred in the litigation, Civil Rule 79 likewise does not apply.

Because AS 18.16.4385 sets out a specific statutory scheme for awarding attorney's fees, Parker is not entitled to an award of attorney's fees and costs under Civil Rules 82(b) and 79(b).

v. CONCLUSION

Because AS 18.16.485 does not contain a requirement that a nominated personal representative's actions benefit the estate before the nominated personal representative can recover expenses from the estate, we VACATE the superior court's denial of Enders's AS 18.16.485 claim. We REMAND this case for specific findings as to whether Enders prosecuted the will contest in good faith and a redetermination of the AS 18.16.4835 claim.

Parker's cross-appeal is meritless; therefore, we AFFIRM the superior court's denial of Parker's motion for attorney's fees and costs under Civil Rules 82(b) and 79(b).

BRYNER, Justice, with whom FABE, Chief Justice, joins, dissenting.

1 . This opinion replaces the opinion issued on August 10, 2001.

2 . The 1997 will left Parker an interest in Kottke's Anchorage property, left Enders an interest in Kottke's property in Kenai, and left Parker the residuary estate under a trust system that was effectively a life estate.

3 . In re Estate of Kottke, 6 P.3d 243, 247 (Alaska 2000).

4 . Fancyboy v. Alaska Village Elec. Coop., Inc., 984 P.2d 1128, 1132 (Alaska 1999) (stating that we apply our independent judgment to interpretation of statutes); see also Compton v. Chatanika Gold Camp Props., 988 P.2d 598, 601 (Alaska 1999).

5 . Fancyboy, 984 P.2d at 1132 (quoting Muller v. B.P. Exploration (Alaska), Inc., 923 P.2d 783, 787 (Alaska 1996)).

6 . - Id. (citing Guin v. Ha, 591 P.2d 1281, 1284 n. 6 (Alaska 1979)).

7 . Yahara v. Constr. & Rigging, Inc., 851 P.2d 69, 72 (Alaska 1993) (quoting J & L Diversified Enters., Inc. v. Municipality of Anchorage, 736 P.2d 349, 351 (Alaska 1987)).

8 . Id. (citing Alaska Pub. Employees Ass'n v. City of Fairbanks, 753 P.2d 725, 727 (Alaska 1988) (quoting State, Dep't of Natural Res. v. City of Haines, 627 P.2d 1047, 1049 (Alaska 1981))).

9 . University of Alaska v. Tumeo, 933 P.2d 1147, 1152 (Alaska 1997).

10 . AS 13.16.435 provides:

Expenses in estate litigation. If any personal representative or person nominated as personal representative defends or prosecutes any proceeding in good faith, whether successful or not, that person is entitled to receive from the estate necessary expenses and disbursements including reasonable attorney fees incurred.

11 . Unif. Probate Code § 3-720 (amended 1993), 8 U.L.A. 184 (1998).

12 . Ch. 78, § 1, SLA 1972. The statutes comprising the Uniform Probate Code in Alaska are AS 13.06 through 13.36. See AS 13.06.005.

13 . AS 13.06.010(b) provides:

The underlying purposes and policies of AS 13.06-AS 13.36 are to

(1) simplify and clarify the law concerning the affairs of decedents, missing persons, protected persons, minors, and incapacitated persons;

(2) discover and make effective the intent of a decedent in distribution of the decedent's property;

(3) promote a speedy and efficient system for liquidating the estate of the decedent and making distribution to the decedent's successors;

(4) facilitate use and enforcement of certain trusts; and

(5) make uniform the law among the various jurisdictions.

Because purposes (1) and (4) are not relevant to our analysis, we do not discuss them here.

14 . Subsection (2) ("discover and make effective the intent of a decedent] supports this conclusion because a good faith will contest can be effective in the discovery of a decedent's intent. See Watts v. Newport, 151 Fla. 209, 9 So.2d 417, 421 (1942) (finding sufficient justification in having "both the proponent and the heirs ... represented by able and industrious attorneys acting in good faith and earnestly representing their respective sides of the controversy in their capacity [as] attorneys for their respective clients and also as honorable officers of the court, to the end that the question of the validity of the purported will be thoroughly tried out and determined").

Subsection (5) ["make uniform the law among the various jurisdictions'] likewise supports the conclusion because AS 13.16.435 is a verbatim adoption of section 3-720 of the UPC and because case law from other UPC jurisdictions with identical or nearly identical statutes overwhelmingly supports the notion that AS 13.16.435 does not contain a benefit requirement. See, e.g., In re Estate of Killen, 188 Ariz. 569, 937 P.2d 1375, 1380-81 (Ariz.App.1996); In re Estate of Holmes, 821 P.2d 300, 304 (Colo.App.1991); Estate of Rosen, 520 A.2d 700, 701 (Me.1987); In re Estate of Evenson, 505 N.W.2d 90, 92 (Minn.App.1993); In re Estate of Watkins, 243 Neb. 583, 501 N.W.2d 292, 296 (1993); In re Estate of Frietze, 126 N.M. 16, 966 P.2d 183, 187 (N.M.App.1998). Nearly all of these states adhere to a literal reading of section 3-720, imposing only the requirements found in it-that the claimant be either a personal representative or a nominated personal representative, that he or she have prosecuted the action in good faith, and that charges be reasonable and necessary. See, e.g., Holmes, 821 P.2d at 304 (citation omitted); Evenson, 505 N.W.2d at 92; Watkins, 501 N.W.2d at 296; Frietze, 966 P.2d at 187. But see Estate of Bri-deau, 458 A.2d 745, 747 (Me.1983) (stating that under Maine statute, party who unsuccessfully contests will on basis of undue influence cannot recover attorney's fees from estate).

15 . Subsection (3) ["promote a speedy and efficient system for liquidating the estate ... and making distribution''] arguably may be impeded by a system that allows a challenger to recover costs and fees, thereby encouraging challenges and delaying liquidation and distribution.

16 . AS 13.16.435.

17 . Id.

18 . A personal representative, duly appointed, may contest another will that, if valid, would supersede the one naming him, while enjoying the protection of section 3-720. Unirorm Propate Cope Practice Manvar 321 (2d ed.1977).

19 . At various places in its decision, the superior court appeared to rest its decision to deny fees on its conclusion that Enders's action did not benefit the estate. For example, the court said "... the court must evaluate whether the actions of the personal representative benefitted the estate." At another point it said, "Ms. Enders' claim did not bring about an enhancement in value or an increase in the assets of the estate."

20 . - At no stage pre-trial or at trial did Ms. Enders claim that she was acting as personal representative. She makes this claim only after trial.... The entire tenor of Ms. Enders' case was a contest for her own personal benefit and the benefit of her family, not for the estate.... The real impetus behind the litigation is the Enders[] family's] personal animosity and disdain for Connie Parker, the primary beneficiary of Joel W. Kottke's 1997 will. This immense distaste for Ms. Parker has propelled Ms. Enders to drain Mr. Kottke's modest estate through litigation rather than have Ms. Parker benefit from the estate. Her intervention in the probate of the 1997 [will} has only hindered the disposition of Mr. Kottke's estate in a manner that comported with his testamentary intent.

No. 3AN-97-1124 P (Alaska Super., September 21, 1999).

21 . S.L. v. J.H., 883 P.2d 984, 986 (Alaska 1994) (citing Murray v. Murray, 856 P.2d 463, 466 (Alaska 1993)).

22 . In the event that the superior court finds that Enders acted in good faith, it should proceed to determine whether, pursuant to AS 13.16.435, Enders's claimed expenses and disbursements were "necessary," and whether her incurred attorney's fees were "reasonable." We interpret the statute to allow the court to award only those disbursements that were necessary and only those attorney's fees that were reasonable.

23 . AS 13.16.350(a).

24 . - Paskvan v. Mesich, 455 P.2d 229, 232 (Alaska 1969).

25 . Black's Law Dictionary 625 (6th ed.1990).

²⁶

27 . Supra Part IV.A.3.

28 . Alaska R. Civ. P. 82(a).

²⁹

30 . Cf. Bobich v. Hughes, 965 P.2d 1196, 1200 (Alaska 1998) (stating that statutory attorney's fees provision awarding full fees ordinarily take precedence over Rule 82 provision awarding partial attorney's fees); Whaley v. Alaska Workers' Comp. Bd., 648 P.2d 955, 959 (Alaska 1982) (holding that prevailing employer could not obtain attorney's fees because granting such fees would undermine purposes of Alaska Workers' Compensation Act and limit claimant's ability to seek appellate relief).