Kurowski v. Gorman

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

In the Matter of the Estate of:

ANITA FAYE THOMPSON, Deceased.

SHAWNA KUROWSKI, as Successor Personal Representative
of the Estate of Anita Faye Thompson, Appellant,

v.

ROBERT KELLY GORMAN, as counsel for former Personal
Representative of the Estate of Anita Faye Thompson, Appellee.

No. 1 CA-CV 14-0260
FILED 8-25-2015

Appeal from the Superior Court in Maricopa County
No. PB2010-000652
The Honorable Brian S. Rees, Commissioner
The Honorable Richard Nothwehr, Commissioner

AFFIRMED

COUNSEL

Shawna Kurowski, Glendale
Appellant
Jones, Skelton & Hochuli, PLC, Phoenix
By Justin M. Ackerman, J. Gary Linder
Counsel for Appellee

MEMORANDUM DECISION

Judge Andrew W. Gould delivered the decision of the Court, in which
Presiding Judge Randall M. Howe joined. Judge Peter B. Swann dissented.

G O U L D, Judge:

¶1 Appellant Shawna Kurowski, personal representative for the
Estate of Anita Faye Thompson (the “Estate”), appeals the trial court’s
award of attorneys’ fees to Appellee Robert Kelly Gorman, who served as
counsel for the previous personal representative, June Branch. We affirm
the award for the reasons set forth below.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 Thompson died on January 17, 2010. Thompson’s Last Will
and Testament dated January 7, 2010 (the “Will”) was admitted to probate
without objection. In the Will, Thompson bequeathed $2,000.00 to her
church and directed that the remainder of her estate be distributed to four
named beneficiaries, including Kurowski. Thompson nominated June
Branch to serve as personal representative, and Branch retained Gorman to
represent her in administering the Estate. At that time, the Estate was
comprised of a bank account containing approximately $35,000.00 and
another $3,000.00 in trust.

¶3 The Will did not clearly direct how the remainder was to be
distributed. Gorman sought to resolve this ambiguity by drafting a
settlement agreement under which the four named beneficiaries would
split the remainder equally. According to Gorman, two of the beneficiaries
quickly agreed, but Kurowski and another beneficiary, Brandon Eller, did
not. Gorman claims to have “patiently waited” for Kurowski and Eller, and
further claims that he “offered to amend [the settlement agreement], to
simplify to do anything reasonable that protected all parties,” but that
Kurowski and Eller “outright refused” to cooperate.

¶4 In July 2012, Gorman reported “extreme difficulty with
certain parties,” presumably Kurowski and Eller. Shortly thereafter,

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Kurowski, appearing pro se, petitioned to have Branch removed as personal
representative. Kurowski alleged that Branch and Gorman did not treat all
beneficiaries fairly; she also objected to Gorman’s proposed settlement
agreement. In response, Gorman alleged that Kurowski was largely
responsible for the delays in reaching a resolution.

¶5 At the hearing on Kurowski’s petition, the trial court
expressed concerns about the delays in closing the Estate, and ordered
Gorman to file a proposed distribution plan and petition for attorneys’ fees.
Gorman’s proposed plan called for Thompson’s church to receive $2,000.00
and for each remainder beneficiary to receive $1,000.00. Gorman sought
$33,620.90 in fees and costs, $22,650.00 of which the Estate already had paid
him. Branch then passed away, and Kurowski succeeded her as personal
representative. In that capacity, Kurowski objected to Gorman’s fee
petition, arguing that Gorman should receive only $4,000.00 in total fees.
Gorman then filed a formal claim against the Estate for his unpaid fees.

¶6 Following an evidentiary hearing, the trial court denied
Gorman’s claim for unpaid fees, but did not order Gorman to disgorge any
of the $22,650.00 he already had received. Kurowski timely appealed. We
have jurisdiction under Arizona Revised Statutes (“A.R.S.”) § 12-2101(A)(9)
(West 2015). See In re Estate of McGathy, 226 Ariz. 277, 280, ¶ 17 (2010)
(holding that appellate courts have jurisdiction over “the final disposition
of each formal proceeding instituted in an unsupervised administration”).

DISCUSSION

¶7 We review an award of attorneys’ fees for an abuse of
discretion, examining the record in the light most favorable to upholding
the award. In re Indenture of Trust Dated January 13, 1964, 235 Ariz. 40, 51, ¶
41 (App. 2014).

I. Basis for Fee Award

¶8 A personal representative may retain counsel to advise or
assist in the performance of his administrative duties, A.R.S. § 14-3715(21)
(West 2015), and may recover reasonable attorneys’ fees from the estate if
he “defends or prosecutes any proceeding in good faith, whether successful
or not . . . .” A.R.S. § 14-3720 (West 2015). To determine good faith, the
trial court must objectively review the personal representative’s motives or
purposes in conducting litigation and determine whether he was honest in
his dealings. In re Estate of Gordon, 207 Ariz. 401, 406, ¶ 24 (App. 2004).

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¶9 While the trial court was critical of Gorman’s efforts, it found
that Gorman “honestly did his best and did what he believed to be right,
and did what his client instructed him to do.” The trial court thus found
that Gorman acted in good faith. See In re Estate of Shano, 177 Ariz. 550, 557-
58 (App. 1993) (stating that, if the trial court is not asked to make specific
findings and conclusions, the appellate court will “imply the necessary
findings and conclusions, supported by the record, to sustain the
judgment”).

¶10 Kurowski argues the trial court was required to find “that
[Gorman’s] actions were necessary and provided a benefit to the estate that
was commensurate with the costs compared to the value of the estate . . . .”
While benefit to the estate can tend to establish good faith, it is not an
independent requirement under § 14-3720. Gordon, 207 Ariz. at 406, ¶¶ 25-
26. Moreover, the fact that Gorman’s services diminished the value of the
Estate does not alone suggest that he acted in bad faith. Id. at 406, ¶ 27. In
any event, the trial court specifically inquired into whether Gorman’s
services benefitted the Estate during the hearing on Kurowski’s objection.
We therefore see no reason to overturn the trial court’s finding of good
faith.

II. Reasonableness of Fee Award

¶11 The reasonableness of an attorneys’ fees award is a matter
peculiarly within the trial court’s discretion, and the award will not be
disturbed absent a showing of abuse of that discretion. Harris v. Reserve Life
Ins. Co., 158 Ariz. 380, 384 (App. 1988). To find an abuse of discretion, there
either must be no evidence to support the trial court’s award or the court’s
reasoning must be clearly untenable, legally incorrect, or amount to a denial
of justice. Charles I. Friedman, P.C. v. Microsoft Corp., 213 Ariz. 344, 350, ¶ 17
(App. 2006). It is Kurowski’s burden to show that the trial court abused its
discretion. Guirey, Srnka & Arnold, Architects v. City of Phoenix, 9 Ariz. App.
70, 71 (1969).

¶12 Kurowski argues the trial court abused its discretion by
failing to make express findings in support of its award. Kurowski asserts
that such express findings are required under In re Guardianship of Sleeth,
226 Ariz. 171 (App. 2010). We disagree. The trial court was not obligated
to expressly state the factual bases for its award. In re January 13, 1964 Trust,
235 Ariz. at 52, ¶ 44; see also Hawk v. PC Village Ass’n, Inc., 233 Ariz. 94, 100,
¶ 21 (App. 2013) (“In exercising its discretion to award fees, the court . . .
need not make findings on the record.”).

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¶13 Kurowski also contends that the evidence does not support
the trial court’s award. Specifically, Kurowski argues the trial court should
have denied Gorman’s fee request based on his “lack of success on the
issues” and “the lack of benefit derived by the Estate from [Gorman’s]
efforts.” Sleeth, 226 Ariz. at 175, ¶ 17. We disagree.

¶14 The trial court heard testimony from both Gorman and
Kurowski on these issues, and denied Gorman’s unpaid fees claim based,
at least in part, on Kurowski’s testimony. The trial court, therefore, did
consider these factors. Moreover, because Gorman’s and Kurowski’s
testimony largely conflicts on these issues, “in determining the ultimate
facts we are . . . bound to assume that the court found all the facts necessary
to support its judgment.”1 Leggett v. Wardenburg, 53 Ariz. 105, 107 (1939);
see also Premier Fin. Servs. v. Citibank (Arizona), 185 Ariz. 80, 85 (App. 1995)
(“It is not our prerogative to weigh the evidence and determine the
credibility of witnesses; that role belongs to the trial court.”).

¶15 In considering Gorman’s fee request, the trial court relied
upon Gorman’s detailed billing records. In support of these billings,
Gorman asserted that Kurowski’s “distrust and misunderstanding” caused
him to incur significant fees that otherwise could have been avoided.
Considering all of this evidence, the trial court declined to award Gorman
his full fee request in the amount of $33,620.90, and instead limited the
award to $22,650.00. Under these facts, although it is concerning that the
amount of fees awarded is very large given the size of the Estate, we are
unable to conclude the award was an abuse of the trial court’s broad
discretion.

¶16 Finally, we note that Kurowski failed to make any specific
objections to Gorman’s billing records. Rather, she generally objects to the
reasonableness of these fees on the grounds Gorman preferred certain
beneficiaries over others, and that he deprived the remainder beneficiaries
of a significant portion of their inheritances. However, such broad
objections to the total amount of fees charged do not, by themselves,
establish unreasonableness. In re January 13, 1964 Trust, 235 Ariz. at 53 n.9,
¶ 48; see A. Miner Contracting, Inc. v. Toho-Tolani County Imp. Dist., 233 Ariz.

1Kurowski places great weight on one sentence from the trial court’s order
which states that Gorman’s services were “not done in the best interest of
the estate.” When read in context, however, it is clear that the trial court
was referring to those services comprising Gorman’s unpaid fees claim.

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249, 262, ¶ 43 (App. 2013) (finding no abuse of discretion where the
objecting party “fail[ed] to identify with any particularity what evidence
supports a further reduction in fees beyond the reduction already granted
by the trial court”); Nolan v. Starlight Pines Homeowners Ass’n, 216 Ariz. 482,
491, ¶ 39 (App. 2007) (finding no abuse of discretion where the objecting
party “argued generally that . . . counsel spent excessive time defending the
case and questioned the necessity of various aspects of counsel’s work”).

CONCLUSION

¶17 We affirm the trial court’s fee award. Gorman requests an
award of attorneys’ fees and costs on appeal pursuant to A.R.S. § 14-3720,
but he does not represent the personal representative in this appeal.
Therefore, we deny his request. See In re Estate of Friedman, 217 Ariz. 548,
558, ¶ 40 (App. 2008) (denying an attorney’s request for fees on appeal
under § 14-3720 because the appeal was taken “for [the attorney’s] own
benefit, not for the benefit of the estate”).

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Swann, J. dissenting

S W A N N, Judge, dissenting:

¶18 I respectfully dissent. Gorman sought $33,620.90 in fees
against an estate worth $38,000.00 -- more than 88% of the total value --
without ever taking a concrete step to secure resolution of the dispute that
prevented efficient settlement. Though the trial court properly denied his
claim for the unpaid balance, the $22,650.00 (59% of the estate’s value) that
it allowed him to retain was so strikingly unreasonable that I would reverse
and remand for a hearing on the appropriate fee to award.

¶19 Gorman’s first step in attempting to distribute the estate
assets was entirely reasonable -- he drafted a facially fair settlement
agreement. But when that agreement failed to materialize, Gorman billed
large amounts simply to field communications that were completely
unproductive. He never sought the court’s assistance in securing a
resolution to the dispute, despite the fact that a judicial resolution would
have been both expeditious and inexpensive. By the time Gorman informed
the court of the dispute’s existence, he had already swallowed nearly the
entire value of the estate in legal fees.

¶20 While settlement is very often in the best interests of litigants,
a case like this would not have involved significant litigation costs -- the
court could have decided the allocation of these estate assets for a fraction
of the legal fees Gorman billed, yet it was not asked to so until those assets
had already been dissipated. By rewarding such inefficiencies, the courts
do nothing to dispel the perception held by some that the legal system
operates for its own benefit and not for the benefit of those it is intended to
serve.

¶21 Ariz. R. Prob. P. 33(F) directs the trial court to “‘follow the
statewide fee guidelines set forth in the Arizona code of judicial
administration’ to determine ‘reasonable compensation.’” In re
Conservatorship for Mallet, 233 Ariz. 29, 31, ¶ 9 (App. 2013). These guidelines
identify the following factors:

(1) “[t]he result, specifically whether benefits were derived
from the efforts, and whether probable benefits exceeded
costs[,]” (2) “[w]hether the Professional timely disclosed that
a projected cost was likely to exceed the probable benefit,” (3)
the professional’s skill and expertise, (4) the character of the
work and skill required, (5) the work actually performed and
the time required, (6) the customary fees and usual time

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Swann, J. dissenting

expended for like services, and (7) the risks and
responsibilities associated with the work.

Id. Counsel also has “a duty to undertake a cost-benefit analysis at the
outset and throughout their representation to ensure that they provide
needed services that further the protected person’s best interests and do not
waste funds or engage in excessive or unproductive activities.” Id. at ¶ 10
(citation omitted). Although the trial court has broad discretion in
determining the reasonableness of a fee request, it must exercise that
discretion after consideration of all relevant factors, including the cost-
benefit analysis described above. Id. at 32, ¶ 13.

¶22 Here, while the trial court’s orders plainly state the reason it
properly denied Gorman’s unpaid fees claim, they do not state its reasons
for approving those fees Gorman already had received. The record does
not indicate whether the trial court considered any of the factors set forth
above, or whether Gorman undertook any cost-benefit analysis before
undertaking his services. Indeed, the court expressed its concern, with
which I generally agree, that “[t]here is absolutely no reason why a $35,000
estate should have $22,000 in attorney’s fees.”

¶23 For these reasons, I respectfully dissent.

:ama

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