Seeman v. Gumbiner

841 P.2d 403, 16 Brief Times Rptr. 1653, 1992 Colo. App. LEXIS 394, 1992 WL 301786
CourtColorado Court of Appeals
DecidedOctober 22, 1992
DocketNo. 91CA0192
StatusPublished
Cited by4 cases

This text of 841 P.2d 403 (Seeman v. Gumbiner) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Seeman v. Gumbiner, 841 P.2d 403, 16 Brief Times Rptr. 1653, 1992 Colo. App. LEXIS 394, 1992 WL 301786 (Colo. Ct. App. 1992).

Opinion

Opinion by

Judge METZGER.

Sharon Ann Seeman and George Seeman III (Seemans) appeal the fees awarded by the probate court to Edgar George Gum-biner, co-trustee of the Julius F. Seeman Life Insurance Trust and Edward Jersin, attorney for the trust. We affirm.

The Seemans are co-trustees and sole beneficiaries of the insurance trust. Gum-biner was co-trustee of the trust and personal representative and sole beneficiary of decedent’s estate. Jersin was attorney for the trust and attorney for the estate. A lawsuit alleging improper appropriation of funds from the trust to the estate was pending. Gumbiner and Jersin filed an application for fees for services rendered to the trust. The Seemans objected to allowance of any compensation, alleging that Gumbiner and Jersin had breached their [405]*405fiduciary duty and had a conflict of interest.

After a hearing, the probate court examined each fee application, entry by entry, to determine its propriety. The court allowed compensation for services rendered for the sole benefit of the trust and denied any fees connected with any ancillary litigation.

I.

The Seemans first contend the probate court erred in failing to make specific findings concerning Gumbiner’s and Jersin’s conflicts of interest. They argue that these alleged conflicts were sufficient to mandate the denial of any compensation to Gumbiner and Jersin for any services provided. We disagree.

A.

A trustee’s conflict of interest does not necessarily mandate an automatic denial of all compensation. In Heller v. First National Bank, 657 P.2d 992 (Colo.App.1982), this court held that, when a trustee is guilty of a breach of trust, it is within the discretion of the trial court to reduce or deny compensation. See also Cagnolatti v. Guinn, 140 Cal.App.3d 42, 189 Cal.Rptr. 151 (1988) (if the trust agreement is silent as to fees, the amount of compensation for trustee’s services rests in the sound discretion of the trial court).

Here, the probate court exercised its discretion and significantly reduced the fees sought by Gumbiner. Although the court did not make specific findings concerning the conflict of interest issue, such a determination is implicit in its ruling.

The court awarded compensation only for “work reasonably related to furthering the interest of the trust” and which “benefitted the trust beneficiaries.” This was the proper test. In re Estate of Painter, 671 P.2d 1331 (Colo.App.1983). By eliminating compensation for any services performed that related to estate matters, the probate court, in effect, denied fees to Gumbiner that involved a conflict of interest. See Financial Management Task Force, Inc. v. Altberger, 807 P.2d 1230 (Colo.App.1990).

B.

The Seemans further contend that Jersin, the trust’s attorney, had a conflict of interest and violated a number of disciplinary rules. Thus, they argue that Jersin should be denied all compensation for his services rendered to the trust. We disagree.

Initially, it must be noted the Seemans are not bringing an action for legal malpractice but have only asked that Jersin’s fees be denied because of a conflict of interest.

We disagree with their reliance on In re King Resources, Co., 20 B.R. 191 (D.Colo.1982). In King, the court held that an appearance of impropriety in representing two clients with a conflict of interest may justify a denial of attorney compensation. However, the facts of that case make it clear that a conflict of interest is only one of many factors to be considered in determining the award of fees; it does not mandate a denial of all compensation. See also Lurz v. Panek, 172 Ill.App.3d 915, 123 Ill. Dec. 200, 527 N.E.2d 663 (1988).

As with Gumbiner’s fee request, the court painstakingly evaluated each of Jer-sin’s fee requests and eliminated compensation for any services which did not benefit the trust or its beneficiaries, the Seemans. Accordingly, any finding that a conflict of interest existed would not have necessitated a denial of all compensation.

The probate court’s findings reflect the basis on which it made its award. Hence, they are sufficient and there was no error in the lack of specific findings. See Financial Management Task Force, Inc. v. Altberger, supra.

II.

The Seemans next contend the evidence was insufficient to support the probate court’s calculation of fees and that the court acted arbitrarily in allowing or disallowing charges. Again, we disagree.

[406]*406The determination of the reasonableness of an award of attorney fees is a question of fact for the trial court, and it will not be disturbed on review unless it is patently erroneous and unsupported by the evidence. People in Interest of M.S.H., 656 P.2d 1294 (Colo.1983). A court’s finding based upon a choice between two plausible views of the weight of the evidence or upon a choice of conflicting inferences from the evidence is “not clearly erroneous.” Thiele v. State, 30 Colo.App. 491, 495 P.2d 558 (1972).

Fees awarded in connection with an estate must necessarily be related to services rendered to benefit the estate. In re Estate of Painter, supra.

Here, the probate court determined that Gumbiner and Jersin had rendered valuable services to the trust. They were responsible for marshalling trust assets and handling tax matters, tasks made more difficult because of the decedent’s manipulations of the trust assets. They also prepared an inventory of the trust assets and two interim accountings.

We conclude the court did not act arbitrarily. The record demonstrates that the probate court carefully considered each item in Jersin’s affidavit for attorney fees and that it excised charges that were connected in any way with the probate estate or with the defense of the claims brought by the beneficiaries. This attentive review of Jersin’s charges reduced the requested fees of $25,612.10 to an award of $14,-868.35.

Likewise, the court reviewed each item in the billing statement submitted by Gumbiner and his assistant, Manz. Our review of the propriety of each charge is hampered because copies of these billing statements were not provided in the record on appeal. Without this documentation, we must assume that the probate court’s determination of each charge was appropriate and was supported by the evidence. Alessi v. Hogue, 689 P.2d 649 (Colo.App.1984). We note, however, that the court reduced the fees billed by Manz from $3,666.25 to $521, thus indicating that many entries were rejected as inappropriate.

The probate court’s award of compensation for work reasonably related to furthering the interest of the trust is not without support in the record, and we will not disturb it on review. Page v. Clark,

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841 P.2d 403, 16 Brief Times Rptr. 1653, 1992 Colo. App. LEXIS 394, 1992 WL 301786, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seeman-v-gumbiner-coloctapp-1992.