Estate of Coan v. Gaughan

378 S.W.3d 201, 2010 Ark. App. 616, 2010 Ark. App. LEXIS 665
CourtCourt of Appeals of Arkansas
DecidedSeptember 22, 2010
DocketNo. CA 09-704
StatusPublished
Cited by3 cases

This text of 378 S.W.3d 201 (Estate of Coan v. Gaughan) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Estate of Coan v. Gaughan, 378 S.W.3d 201, 2010 Ark. App. 616, 2010 Ark. App. LEXIS 665 (Ark. Ct. App. 2010).

Opinions

ROBERT J. GLADWIN, Judge.

|,The Estate of Helen Virginia Coan, deceased, through its co-administrators Thomas Carmody and Dr. Norman Savers, appeals the order of the Ouachita County Circuit Court awarding attorney’s fees to appellee Michael Gaughan, a former co-administrator of the estate. The estate challenges the award of fees on several fronts. We affirm the circuit court’s order.

This case is one in a series of appeals spawned by litigation over the estates of Helen Virginia Coan and her brother Joseph Coan, Jr.1 The record reflects that Helen and Joseph |2inherited considerable sums of money upon the deaths of their parents. Helen was born with Downs Syndrome, and in 1977, the Probate Court of Ouachita County appointed Joseph as guardian of Helen’s person and estate. Joseph died in 1984. In his will, Joseph established a testamentary trust for Helen’s benefit during her lifetime. Linnie Betts, an employee of the bank where the Coan siblings’ funds were held, succeeded Joseph as Helen’s guardian. Betts also served as co-executor of Joseph’s estate with Gaughan.

Helen died in January 2005. The circuit court appointed Betts and Gaughan as co-administrators of Helen’s estate. In March 2006, the circuit court named Car-mody and Savers as additional co-administrators of the estate. The following June, the circuit court removed Betts as co-administrator of Helen’s estate upon the request of Carmody and Savers. Betts died after her removal.

In November 2006, Carmody and Savers, on behalf of Helen’s estate and her heirs, filed suit against Betts’s estate and others, claiming that Betts had misallocat-ed funds and seeking a construction of Joseph’s will pertaining to the testamentary trust. This lawsuit is referred to by the parties as the “global” litigation. The complaint contained no allegations accusing Gaughan of any wrongdoing, and Gau-ghan, who was both a co-administrator and co-executor of Helen’s and Joseph’s estates, requested that he not be named as a plaintiff in the global lawsuit.

The complaint in the global litigation included a claim against Western Surety Company on the bond it had provided Gau-ghan and Betts as administrators of Helen’s estate. |sIn turn, Western Surety filed a third-party complaint against Gau-ghan, individually, and a cross-claim against Betts’s estate and the administrator of her estate. In this pleading, Western Surety asserted that Gaughan and Betts were personally liable to it for any sums it might be required to pay as a result of the litigation, based on an indemnity clause contained in the application for the bond. Gaughan hired an attorney and filed a separate answer to Western Surety’s third-party complaint. The record also reflects that Gaughan filed a motion in the global lawsuit seeking an interpretation of Joseph’s will that was antithetical to the construction urged by Carmody and Savers in them complaint. The circuit court rejected Carmody and Savers’s construction of the will, and we affirmed that decision in Carmody v. Betts, supra.

On April 27, 2007, Carmody and Savers filed a petition to have Gaughan removed as a co-administrator of Helen’s estate. The petition cited various conflicts of interest on Gaughan’s part. On June 19, 2007, Gaughan filed a motion seeking to withdraw as co-administrator of Helen’s estate. In this petition, Gaughan averred that he was not consulted by Carmody and Savers before they filed the global lawsuit; that he believed that the litigation was without merit; and that he had not otherwise been consulted concerning the management of the estate. Gaughan also sought to be released from all liability that may be asserted against him in his capacity as a co-administrator of Helen’s estate, and he requested the discharge of his bond and surety. Carmody and Savers did not object to Gaughan’s resignation, but they resisted Gaughan’s efforts to be relieved from liability for actions taken as a co-administrator.

14Gaughan filed two accountings for the time he served as a co-administrator of Helen’s estate. The first accounting included the period from Helen’s death until the court removed Betts as an administrator. This accounting overlapped a period of time when Carmody and Savers were also co-administrators of the estate. The second accounting prepared by Gaughan covered the period from Betts’s removal to the date that he filed his motion to withdraw as a co-administrator. Carmody and Betts objected to the accountings, asserting that they were rife with errors.

On October 16, 2007, the circuit court entered an order approving Gaughan’s resignation as a co-administrator of Helen’s estate. The order provided that Gau-ghan’s resignation was effective as of June 19, 2007, and that Gaughan had no further liability or responsibility with regard to the administration of the estate as of that date. The court reserved the other issues raised by Gaughan in his motion to resign, including the approval of the accountings.

On June 11, 2008, Gaughan filed a petition seeking attorney’s fees.2 The fees included charges for services rendered by his attorney in connection with the two accountings, his resignation, his defense of the Western Surety third-party complaint, and a brief that he filed in Carmody v. Betts, supra. The motion was accompanied by detailed time records from |fiGaughan’s attorney, reflecting that counsel spent 153 hours working on these matters at a rate of $170 or $175 per hour.

Carmody and Savers opposed the award of fees to Gaughan. They first argued that the circuit court should deny the motion as a matter of law because Gaughan cited no authority for an award of fees. Also, Carmody and Savers relied on Dunklin v. Ramsay, 328 Ark. 263, 944 S.W.2d 76 (1997), to argue that Gaughan lacked standing as a minority co-administrator to seek reimbursement for attorney’s fees. They also asserted that Arkansas Code Annotated section 28^8-108 (Supp.2009) provided no authority for an award of fees to Gaughan because he was a minority co-administrator whose attorney represented his personal interests that were of no benefit to Helen’s estate.

After conducting a hearing, the circuit court issued a letter opinion deciding the fee motion. First, the circuit court found that Gaughan was entitled to fees for retaining counsel to perform his duties as an administrator, which included the preparation and defense of the accountings. The court also found that Carmody and Savers’s opposition to the accountings resulted in protracted litigation. As authority for the fee award, the circuit court cited “A.C.A. § 28-56-104.” Further, the court awarded attorney’s fees incurred by Gau-ghan in defending the third-party complaint filed against him by Western Surety. In making this award, the circuit court reasoned that retaining counsel was necessary to defend his position as co-administrator with Betts and that the third-party complaint was the direct result of the litigation initiated by Carmody and Savers. In setting the amount of the fee, the circuit court |fifound that the hourly rate charged by Gaughan’s counsel was reasonable and that Gaughan had paid his attorney $28,404.25. However, the court examined counsel’s billing records and disallowed $6,120 in fees, finding that certain charges represented services that were either not related to Gaughan’s duties as co-administrator of Helen’s estate or were related to matters concerning Joseph’s estate.

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Bluebook (online)
378 S.W.3d 201, 2010 Ark. App. 616, 2010 Ark. App. LEXIS 665, Counsel Stack Legal Research, https://law.counselstack.com/opinion/estate-of-coan-v-gaughan-arkctapp-2010.