T&E Litigation Newsletter - 5/18/12

May 18, 2012Advisories
In Murphy v. Prescott, 81 Mass. App. Ct. 1131 (Apr. 27, 2012), a decision issued pursuant to Rule 1:28, the Appeals Court addressed objections to the reasonableness of legal fees incurred in connection with the administration of an estate.
The decedent died intestate in 2005.  His estate was valued at more than $3 million and was comprised of many (over 400) stocks and bonds, retirement accounts, savings accounts and checking accounts.  The administrator hired an accountant and a lawyer to assist him in marshalling the assets and settling the estate.  Marshalling the assets proved difficult because the decedent kept no records.  In the end, the administrator paid himself a fee of $20,000, paid $10,500 to the accountant, and paid $86,000 to the lawyer, who had entered into a fee agreement with the administrator under which the lawyer was to charge an hourly rate of $350.
A number of heirs objected to the account on which these fees were disclosed.  A trial ensued, the focus of which was the reasonableness of the $86,000 in legal fees.  In particular, the objectors argued that the lawyer failed to maintain contemporaneous records of his time.  The probate court overruled the objections and allowed the account, concluding that the legal fees were reasonable in light of the complexity of the estate.  In so concluding, the probate court noted that the total of the legal fees was less than 3% of the value of the estate.
The Appeals Court affirmed, explaining that although it would not have been unreasonable to reduce the lawyer’s fees where he did not maintain contemporaneous time records, such a reduction is not required.  The lawyer had testified at trial  about the extensiveness of his work, and the probate court’s crediting that testimony was not an abuse of discretion.  
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