Florida Appellate Court: Award Of Interim Attorneys Fees For Services To Estate Must Be Supported By Evidence

When can interim attorney fees and costs be awarded in a Florida probate estate?  In Babun v. Stok Kon Braverman, Florida’s Third District Court of Appeal determined that an interim award of attorney’s fees for services to an estate can be awarded before the final resolution of any litigation, as long as substantial competent evidence supports the award.

The Facts Of Babun v. Stok Kon + Braverman

Sara is the daughter of Cristina and Jose.  After Jose’s death, Sara petitioned to be appointed as personal representative of Jose’s estate and co-trustee of Jose’s Third Amended and Restated Trust (“Trust”).  Cristina objected.  Sara was appointed as personal representative.  A neutral trustee was appointed.  Cristina filed an adversary proceeding against the Trust.

While the Florida adversary proceeding was pending, Cristina’s counsel filed a petition for interim fees for their work thus far in the pending estate and trust cases. They requested a total of $624,751, which represented fees in both the trust litigation, the estate, and costs.

Sara objected to the fee demand, citing the pending adversary claims against the Trust.  Additionally, Sara had petitioned earlier in the year to determine Cristina’s capacity, including her ability to hire counsel.

The Florida probate court held an evidentiary hearing on the interim fee petition.  Cristina’s attorneys argued that they had conferred a substantial benefit on the Estate and Trust and were entitled to interim fees.  Sara argued that the application for fees was premature because the statutory law required a prevailing party.  Because there was no determination on the merits, there was no basis for an award of interim attorney’s fees and costs.  Sara also argued that appellees had conferred no benefit to the estate.

Appellees testified as to the work they did to benefit the estate and trust – securing the appointment of an independent trustee, securing living expenses, and discovering fraudulent transactions.  Billing records were introduced, but no testimony was presented.  Attorney Stok conceded that in connection with the three cases in which he represented Cristina, there had been no judgments yet rendered in her favor. There was no testimony about customary fee rates, who did what, reasonable time expended, and on what tasks, etc. There was no testimony regarding costs incurred during the estate or trust litigation. The independent trustee testified that he had reviewed Appellees’ timesheets and noted they did not break down the fees sought by each litigation or for the topics of discovery, disqualification of counsel, elective share, or any other issue.

The trial court also determined that Cristina lacked capacity to retain Appellees.  The court determined that Cristina was incapacitated, lacked the ability to contract, and appointed a guardian.

Interim Fees Ok

Despite the lack of evidence and Cristina’s lack of capacity to retain counsel, and despite Appellees’ representation of Cristina and not the Estate itself, the trial court held this was not an absolute bar to a claim for legal fees if it was demonstrated that the legal services worked a benefit to the Estate and the Trust. The trial court noted that the litigation was ongoing, and the fee application was for interim legal fees, and rejected Sara’s argument that there was a prohibition on consideration of interim fees.

Services Must Serve Larger Purpose of Upholding Testator’s Intent

The court concluded that 1) Appellees must identify with particularity those time and expense items associated with the disqualification (of Sara’s counsel) issue and eliminate those items from Appellees’ bill; 2) because litigation was ongoing, Appellees’ request for compensation was premature and would be “held in abeyance” until it could be demonstrated how the work benefitted the Estate; and 3) benefits to Cristina were, to some degree, a consequence of Appellees’ representation. However, before the court could ascertain such compensable activity, Appellees would need to resubmit their fee petition “identifying with specificity those services provided to Cristina that also served the larger purpose of vivifying Jose Babun’s intent as testator and settlor[.]”

The Court also determined that because Appellees’ legal work led to the appointment of co-trustee Philip Shechter, whose work benefitted the Estate, Appellees’ time expended to secure the appointment of the co-trustee and assist him in discharging his duties should be compensated. The court required the Appellees to submit a new fee application specifically identifying the time associated with those efforts. The Appellees did submit a new fee petition, to which Sara objected, alleging the new fee application did not remedy the problems of the first fee application. Without conducting a hearing, the court granted the Appellees’ amended application minus the amount objected to by Cristina’s counsel.

On appeal, Sara argued that neither the order granting fees nor the final judgment made any findings concerning the reasonable number of hours expended by each attorney or any findings regarding the reasonable hourly rates awarded for each lawyer. We agree and reverse.

Attorney’s Fees For Services To the Estate – Interim Award Must Be Supported By Evidence

Florida law provides that in all probate proceedings, any attorney who has rendered services to the estate may be awarded reasonable compensation from the estate or trust. § 733.106(3), Fla. Stat. (2021). Read the Complete Guide to Attorney’s Fees In Florida Probate.

Florida’s Third District Court of Appeal stated:

There is sufficient evidence in the record to support the lower court’s conclusion that Cristina benefitted from the Appellees’ representation. The record on appeal, however, indicates that the lower court made no findings of fact or conclusions of law concerning the reasonableness of the hours or hourly rates necessary to support the award to Appellees of its fees and costs. An award of attorney’s fees without making adequate findings justifying the amount of the award is reversible error. Fla. Patient’s Comp. Fund v. Rowe, 472 So. 2d 1145, 1151 (Fla. 1985) (holding reversal is required when the trial court fails to make specific findings of fact as to the reasonable number of hours expended, the normal hourly rate, and the appropriateness of increasing or decreasing the lodestar). “The trial court must set forth ‘specific findings’ as to its determination of the number of hours, the hourly rate, and any reduction or enhancement factors.” Universal Prop. & Cas. Ins. Co. v. Deshpande, 314 So. 3d 416, 419 (Fla. 3d DCA 2020) (citing Joyce v. Federated Nat’l Ins. Co., 228 So. 3d 1122, 1126 (Fla. 2017)). This is true even in the instance where a party does not provide an appellate court with an adequate record or a transcript of proceedings. See Ivanovich v. Valladarez, 190 So. 3d 1144, 1148 (Fla. 2d DCA 2016) (“The lack of findings supporting the award of attorney’s fees is reversible error despite the [appellant’s] failure to provide an adequate record of the hearing.”); R.M.F. v. D.C., 55 So. 3d 684 (Fla. 2d DCA 2011) (same); Macarty v. Macarty, 29 So. 3d 434 (Fla. 2d DCA 2010).

No Specific Findings = No Interim Attorney Fees From Florida Estate

Although the Florida Third District determined that an interim fees award was permitted for the work done in the estate and trust, a judgment awarding fees that contained no specific findings as to the reasonableness of the hours or hourly rates was reversible error.  Here, the Florida trial court did not even conduct a hearing resulting in the order awarding a substantial amount of fees.  The court stated:

Although the record on appeal contains the Appellees’ list of tasks, hours, and charges, those records are not organized in the manner ordered by the trial court, and coupled with the fact that the trial court did not make the required findings, we conclude that the record lacks competent substantial evidence necessary to support an award of fees and costs at this time. Diwakar v. Montecito Palm Beach Condo. Ass’n, 143 So. 3d 958, 960 (Fla. 4th DCA 2014) (“Competent evidence includes invoices, records[,] and other information detailing the services provided as well as the testimony from the attorney in support of the fee.”); Brake v. Murphy, 736 So. 2d 745, 747 (Fla. 3d DCA 1999); Clark v. Squire, Sanders & Dempsey, 495 So. 2d 264 (Fla. 3d DCA 1986). Because neither the record nor the order provides the specific findings as required by Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985), we reverse and remand for a new hearing on attorney’s fees, in which the trial judge must set forth the findings as required by Rowe. Reversed and remanded.

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