Robert Rauschenberg Foundation v. Grutman
198 So. 3d 685, 2016 WL 56456, 2016 Fla. App. LEXIS 181 (2016)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
In Florida, when a trust instrument does not specify trustee compensation, "reasonable" fees under section 736.0708(1) of the Florida Statutes are calculated using the multi-factor test from West Coast Hospital Ass'n v. Florida National Bank of Jacksonville, not the lodestar method used for attorney's fees.
Facts:
- Artist Robert Rauschenberg devised his residuary estate to the Robert Rauschenberg Revocable Trust.
- The trust's sole remainder beneficiary was The Robert Rauschenberg Foundation.
- Bennet Grutman, Bill Goldston, and Darryl Pottorf served as the Trustees for the trust.
- The trust instrument did not contain a provision specifying how the Trustees' fees should be calculated.
- During the Trustees' management period following Rauschenberg's death, the value of the Trust's assets increased from approximately $605 million to over $2.1 billion.
- A dispute arose between the Trustees and the Foundation over the proper methodology for calculating the Trustees' compensation for their services.
Procedural Posture:
- The Trustees and The Robert Rauschenberg Foundation disputed the amount of trustee fees in a Florida trial court.
- The Trustees petitioned for fees based on the West Coast factors, requesting between $51 million and $55 million.
- The Foundation argued the Trustees were only entitled to $375,000 based on the lodestar method.
- The trial court applied the West Coast factors and awarded the Trustees $24,600,000.
- The Robert Rauschenberg Foundation, as appellant, appealed the trial court's order to the District Court of Appeal of Florida, Second District.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does Florida law require courts to use the lodestar method, which calculates fees based on reasonable hours and hourly rates, to determine "reasonable compensation" for trustees when a trust instrument is silent on the issue?
Opinions:
Majority - Silberman, Judge.
No. Florida law does not require the use of the lodestar method for calculating trustee fees; instead, courts must apply the multi-factor reasonableness test established in West Coast. The court reasoned that while the lodestar method from Florida Patient’s Compensation Fund v. Rowe applies to attorney's fees, the legislative history of the relevant trustee fee statute, section 736.0708(1), explicitly references the West Coast factors. Senate Staff Analyses for the statute cite West Coast as the guide for determining reasonable compensation, demonstrating a clear legislative intent to adopt that standard for trustees. There is no evidence the legislature intended to apply the lodestar method, thus distinguishing the standard for trustee compensation from that for attorney compensation set in Rowe and In re Estate of Platt.
Analysis:
This decision solidifies a clear distinction in Florida law between the methodologies for calculating fees for attorneys and for trustees. It clarifies that despite the shared statutory term "reasonable compensation," the lodestar method is not a universal standard. The court's reliance on legislative history emphasizes that specific statutory context and intent are paramount, preventing the automatic extension of the lodestar method from the attorney's fee context to trust administration. This provides clear guidance for trustees and beneficiaries, ensuring fee calculations are based on a broad set of factors reflecting the trustee's overall performance, risk, and success, rather than being limited to hours worked.
