In re the Accounting of Public Administrator of Kings County

25 Misc. 3d 236
CourtNew York Surrogate's Court
DecidedJune 10, 2009
StatusPublished
Cited by1 cases

This text of 25 Misc. 3d 236 (In re the Accounting of Public Administrator of Kings County) is published on Counsel Stack Legal Research, covering New York Surrogate's Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Accounting of Public Administrator of Kings County, 25 Misc. 3d 236 (N.Y. Super. Ct. 2009).

Opinion

[237]*237OPINION OF THE COURT

Diana A. Johnson, S.

In this uncontested accounting proceeding, the Public Administrator of Kings County (Public Administrator) seeks judicial settlement of his account, including the fixing of attorneys’ fees. This account consists solely of the proceeds from the settlement of the cause of action arising from the decedent’s wrongful death and conscious pain and suffering. Based upon the record, the proceeds from the settlement in the sum of $225,000 are allocated to the cause of action for the decedent’s wrongful death.

At issue in this proceeding are the attorneys’ fees. Letters of administration were granted to the Public Administrator by a decree of this court dated October 20, 2003. At that time, the Public Administrator was represented by Louis R. Rosenthal.1 Cary Scott Goldinger, Esq. represented the distributees who initially petitioned the court for letters of administration and served as trial counsel to the Public Administrator in the prosecution of the claims for the decedent’s wrongful death and conscious pain and suffering. The matter was settled for the sum of $225,000. Rosenthal was replaced as counsel to the Public Administrator by Steven R. Finkelstein, Esq.2 who has prepared and filed the current pending accounting proceeding.

Goldinger requests counsel fees in the sum of $62,203.14 representing 28.333% of the settlement sum of $225,000 after deduction of his proposed disbursements. He avers that he was originally retained with a contingency fee of 33.333% by the estate, but later agreed to accept 28.333% with 4.999% to be paid to the estate counsel to Public Administrator representing 15% of his agreed upon fee.

In addition, Finkelstein, the estate counsel and attorney of record for the Public Administrator in this accounting proceeding, requests a fee in the sum of $9,441.20 in attorneys’ fees. He calculates this sum by utilizing the percentages specified in the guidelines promulgated by the Administrative Board for the Offices of the Public Administrators. He calculates this sum by taking six percent of the sums held by the Public Administrator after deducting the attorneys’ fees and disbursements requested by trial counsel, Goldinger.

[238]*238Proceeds from a cause of action arising from the decedent’s wrongful death shall be distributed to the decedent’s distributees subject to, inter alia, certain reasonable expenses (see EPTL 5-4.4). These expenses include reasonable attorneys’ fees (Matter of Weinstein, 153 Misc 279 [Sur Ct, Bronx County 1934]; EPTL 5-4.6).

The surrogate has the inherent power to supervise the fees attorneys charge for legal services even though same are agreed upon or are unchallenged by the parties to the proceeding and notwithstanding the existence of a retainer agreement (see Matter of Stortecky v Mazzone, 85 NY2d 518 [1995]). The longstanding practice of this court in this type of matter has been to award one legal fee to all of the attorneys representing the fiduciary of the estate in a compromise proceeding through distribution (see Matter of Heindel, 51 Misc 2d 26 [Sur Ct, Kings County 1966]).

In compromise matters involving compensation for the decedent’s wrongful death and conscious pain and suffering, it has been the court’s custom to allow a fee of up to one third of the settlement amount where all of the parties are adult and competent. Where the distributees are infants or persons under some other type of disability, the court, in its discretion, will often reduce the requested fee to 25% or some other fee less than the one-third sum requested as to the share passing to said distributee as the infant may not be bound by any retainer agreement (see Matter of Muccini, 118 Misc 2d 38 [Sur Ct, Queens County 1983]; Estate of Davis, NYLJ, Sept. 8, 1994, at 24, col 4 [Sur Ct, Kings County]; Estate of DiGirolamo, NYLJ, Mar. 27, 1995, at 29, col 6 [Sur Ct, Bronx County]; Estate of Vargas, NYLJ, July 13, 2005, at 31, col 5 [Sur Ct, Kings County]).

In determining attorneys’ fees in estate matters, the court has customarily allotted or estimated a legal fee of six percent of the decedent’s estate consisting of two percent for the proceeding where the Public Administrator is appointed fiduciary, two percent for the administration of the estate and preparation and filing of estate tax returns and two percent for the accounting. These percentages were also adjusted to take into consideration the size of the estate, as well as various other factors that have been described above. The court notes that while the rule of thumb may be six percent, there is no statute or case law that sets any specific limit on the amount that may be awarded to attorneys, except that the surrogate must be mindful of the size of the estate when fixing attorneys’ fees.

[239]*239Compensation awarded to counsel to the Public Administrator has long been the subject of controversy and criticism for the courts. The New York State Attorney General and State Comptroller issued joint reports in 1987,1988 and 1992 identifying excessive legal fees as one of the problems surrounding the operations of the office of the Public Administrator (New York State Office of Court Administration, Report of the Commission on Fiduciary Appointments [Feb. 2005], http://www.nycourts. gov/reports/fiduciary-2005.pdf). In 1993, the legislature made a number of amendments to the Surrogate’s Court Procedure Act and Estates, Powers and Trusts Law. One of the amendments included establishing factors for the surrogate to consider when awarding fees to counsel to the Public Administrator. While counsel to the Public Administrator is entitled to reasonable compensation paid out of the estate (SCPA 1108 [2] [b]), the statute offers no schedule or guidelines with regard to what constitutes reasonable compensation.

“In fixing the legal fees, the court shall consider the time and labor required, the difficulty of the questions involved, the skill required to handle the problems presented, the lawyer’s experience, ability and reputation, the amount involved and benefit resulting to the estate from the services, the customary fee charged by the bar for similar services, the contingency or certainty of compensation, the results obtained, and the responsibility involved” (SCPA 1108 [2] [c]).

The amendment to the statute did not end the long-standing challenges to criticism to the fees awarded to the Public Administrator’s counsel. The New York State Attorney General continued to challenge the fees requested by counsel to the Public Administrator. In an effort to resolve these challenges, in 1994 and 1998, the New York State Attorney General reached an agreement with the previous Surrogate of Kings County. This agreement provided that no challenge would be made to requested legal fees that did not exceed six percent of an estate’s value (see Matter of Feinberg, 5 NY3d 206 [2005]).

Another amendment to the statute in 1993 provided for the creation of an administrative board to provide guidelines governing the functions and duties of the Public Administrator (see SCPA 1128; New York State Office of Court Administration, Report of the Commission on Fiduciary Appointments [Feb. 2005], http://www.nycourts.gov/reports/fiduciary-2005.pdf). In [240]

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Related

In re the Estate of Haag
55 Misc. 3d 324 (New York Surrogate's Court, 2016)

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Bluebook (online)
25 Misc. 3d 236, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-accounting-of-public-administrator-of-kings-county-nysurct-2009.