In re Estate of Levinson
41 P. 483, 1895 Cal. LEXIS 873, 108 Cal. 450 (1895)
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Rule of Law:
Attorneys' fees incurred during the administration of an estate are an expense for which the administrator is personally liable and may be reimbursed from the estate with court approval. A probate court cannot order payment directly from the estate to the attorneys.
Facts:
- J. W. Goodwin served as the administrator with the will annexed for the estate of John Levinson.
- On behalf of the estate, Goodwin initiated litigation against William J. and Benjamin Newman, who were former business partners of Levinson.
- To assist in this litigation, Goodwin hired the law firm of Henley & MacSherry and also employed expert accountants to examine the partnership's books.
- One of the legatees (beneficiaries of the will) gave Goodwin $240 to help pay for the expert accountants' services.
- Goodwin also paid Dr. C. F. Buckley $50 for one day of attendance as a witness in a court proceeding related to the estate.
- The legatees became dissatisfied with Goodwin's handling of the litigation, particularly a proposed compromise, and accused him of misconduct.
Procedural Posture:
- J. W. Goodwin, administrator of the Levinson estate, was cited for misconduct by the superior court (trial court).
- In response, Goodwin filed an account of his administration and tendered his resignation.
- Certain legatees of the estate filed exceptions (objections) to Goodwin's accounting.
- The superior court held a hearing and issued an order settling the account, finding the misconduct charges baseless and approving most of Goodwin's claimed expenses, including a direct payment to his attorneys.
- The legatees (appellants) appealed the superior court's order to the Supreme Court of California.
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Issue:
Does a probate court have the authority to order direct payment from an estate to the attorneys hired by the administrator for services rendered, rather than allowing the fees as a reimbursement to the administrator?
Opinions:
Majority - The Court
No. A probate court does not have the authority to order direct payment to attorneys; such fees must be allowed as a reimbursement to the administrator for necessary expenses. The court reasoned that the governing statute, Code of Civil Procedure section 1616, and established case law (e.g., Estate of Ogier) specify that fees for counsel are to be allowed 'to the executor or administrator.' The attorneys' contract is with the administrator, who is personally liable for the fees. The administrator then seeks an allowance from the estate to be reimbursed for that necessary expense. Therefore, the lower court erred by ordering a $500 payment directly to the law firm of Henley & MacSherry. The court also found errors in other allowances, including prematurely awarding commissions before the final settlement, allowing an excessive witness fee ($50 instead of the statutory $2), and failing to reduce the expert fee credit by the $240 the administrator had received from a legatee for that purpose.
Analysis:
This decision reinforces the legal principle that professionals, such as attorneys, who are hired by an estate administrator do not have a direct claim against the estate for their fees. Their contractual relationship is with the administrator personally. This structure protects the estate from direct claims by third parties and centralizes financial control with the court and the administrator. The ruling clarifies that the proper procedure is for the administrator to pay the expense and then seek reimbursement, which the court will grant only if the expense is deemed necessary and reasonable for the estate's management.
