Holmes v. McClendon

76 S.W.3d 836, 349 Ark. 162, 2002 Ark. LEXIS 346
CourtSupreme Court of Arkansas
DecidedJune 6, 2002
Docket01-1303
StatusPublished
Cited by4 cases

This text of 76 S.W.3d 836 (Holmes v. McClendon) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holmes v. McClendon, 76 S.W.3d 836, 349 Ark. 162, 2002 Ark. LEXIS 346 (Ark. 2002).

Opinion

DONALD L. CORBIN, Justice.

This appeal involves an alleged conflict of interest resulting from one attorney’s representation of competing interests in a wrongful-death action. On August 21, 1999, Appellee Charlie McClendon Jr. was severely injured in a head-on collision that also took the lives of his wife, Brenda Lee Holmes McClendon, and his minor daughter, Kayla McClendon. Charlie was appointed as personal representative and administrator of his wife’s and daughter’s estates by the St. Francis County Probate Court. Charlie hired attorney B. Michael Easley to represent him, individually, in a personal-injury suit against the tortfeasors and to represent the beneficiaries of his wife’s and daughter’s estates in wrongful-death actions. Easley’s proposed contingency fee was subsequently approved by the probate court.

Easley was successful in procuring a total settlement of $1,100,000 from the tortfeasors and insurance carriers. Of the settlement, Charlie received $440,000 for his personal-injury claim. Brenda’s estate received an equal amount, $440,000, for her wrongful death, and Kayla’s estate received $220,000. Charlie was the sole beneficiary of his daughter’s estate; thus, he received the entire settlement, minus attorney’s fees. There were four additional beneficiaries of his wife’s estate, namely Brenda’s parents, Appellants Sonny and Murry Holmes, and Brenda’s sisters, LaNan Holmes Kennedy and Lou Holmes Blaylock. The setdement awarded to Brenda’s estate was eventually distributed by the St. Francis County Circuit Court, which presided over the wrongful-death action, one-half to Charlie and one-half to the Holmeses.1 Easley was awarded a fee from the total settlement by the probate court. The Holmeses objected to Easley receiving any fee from their portion of the setdement. They argued that Easley had not adequately represented their interests as beqeficiaries of Brenda’s estate, and that a conflict of interest had arisen as a result of Easley’s representation. The probate court found that there was no conflict of interest; however, the court reduced the percentage of Easley’s fee due from the Holmeses’ portion by twenty-five percent.

On appeal, the Holmeses argue that the probate court erred in finding that there was no conflict of interest and in ordering them to pay a portion of their settlement proceeds to Easley for his attorney’s fee. Charlie raises one point on cross-appeal, that the probate court erred in reducing the Holmeses’ portion of Easley’s fee by twenty-five percent. This appeal was certified to us pursuant to Ark. Sup. Ct. R. 1-2(a) (5), as it presents an issue regarding the practice of law. We review probate proceedings de novo, but we will not reverse the decision of the probate court unless it is clearly erroneous. See Mayberry v. Flowers, 347 Ark. 476, 65 S.W.3d 418 (2002); Dillard v. Nix, 345 Ark. 215, 45 S.W.3d 359 (2001). When reviewing the proceedings, we give due regard to the opportunity and superior position of the probate judge to determine the credibility of the witnesses. Id. We find no error and affirm.

Conflict of Interest

For reversal, the Holmeses argue that the probate court erred in awarding Easley attorney’s fees from their portion of the recovery for Brenda’s wrongful death. They claim that he is not entitled to any fee because he was representing conflicting interests. They allege two distinct conflicts. First they claim that a conflict arose during the procurement of the settlement, due to Easley’s simultaneous representation of Charlie, individually, and as personal representative of both Brenda’s and Kayla’s estates. They argue that because there was a finite amount of money available to pay all three claims, each dollar that Charlie received for his personal claim and as the sole beneficiary of Kayla’s estate would necessarily diminish the amount available for distribution to the other beneficiaries of Brenda’s estate. Second, they assert that a conflict arose during the distribution of the proceeds awarded to Brenda’s estate. They argue that Easley was not adequately representing the interests of all the beneficiaries.

Charlie argues that both conflict-of-interest arguments are unfounded. He contends that the arguments are merely an attempt by the Holmeses to relieve themselves of having to pay Easley’s fee on top of the contingency fee that they agreed to pay their separate attorney, Fletcher Long Jr. He points to the fact that from the outset of the probate case, the Holmeses have contended that they should be allowed to retain their own independent counsel to procure a separate settlement of the wrongful-death suit, and that they should only be responsible for paying their attorney’s fee. He further contends that no conflict, legal or factual, arose until after the settlement had been procured and distribution was begun. We agree.

Arkansas Code Annotated § 16-62-102(b) (Supp. 2001) provides that every wrongful-death action shall be brought by and in the name of the personal representative of the deceased person; if there is no personal representative, then the action shall be brought by the heirs at law of the deceased person. It is the duty of the personal representative, not the beneficiaries, to choose counsel to pursue a wrongful-death claim. Brewer v. Lacefield, 301 Ark. 358, 784 S.W.2d 156 (1990). The beneficiaries are free to select their own counsel to see that their interests are protected; however, they must bear this expense in addition to any fee awarded to counsel chosen by the personal representative. Id. In fact, the probate court lacks jurisdiction to award any attorney’s fees for services rendered to an individual beneficiary. Id. There are, however, alternative ways to protect the interest of the beneficiaries, without requiring them to pay for separate counsel:

Should the personal representative or chosen counsel fail to provide adequate representation, application can be made to the probate court to either not approve or disallow the contracts entered into by the representative. In fact, a representative can even be removed if the court finds him or her unsuitable. Ark. Code Ann. § 28-48-105 (1987).

Id. at 363, 784 S.W.2d at 159 (emphasis added).

It is inevitable that potential conflicts of interest frequently will arise between beneficiaries in wrongful-death actions. See Standridge v. Standridge, 304 Ark. 364, 803 S.W.2d 496 (1991). This court has previously observed:

In view of the statutory priorities for selection of personal representative, it is likely that the personal representative will be a beneficiary who may have to share a limited recovery with others. Although counsel is hired by the personal representative, the wrongful death action is brought, in effect, on behalf of the beneficiaries. Clearly counsel owes a duty to present the claim of each beneficiary fairly and should not attempt to get a more favorable distribution for one at the expense of another.

Id. at 373, 803 S.W.2d at 501.

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Bluebook (online)
76 S.W.3d 836, 349 Ark. 162, 2002 Ark. LEXIS 346, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holmes-v-mcclendon-ark-2002.