In the Matter of Estate of Peggy Lee Salas

When a decedent's estate does not pass by a testamentary instrument (by failure of transfer, or omission, etc.), that property passes to the decedent's heirs as prescribed in Division 6, part 2 of the Probate Code (Sec.Sec.6401, et seq.). (Prob. Code, Sec. 6400.) A court can only order distribution according to the intent of the testator expressed in a validly executed will (Prob. Code, Sec.Sec.7000, 11605) or according to the law of intestacy (Prob. Code, Sec.6400). Any assignment must meet the requirements of Probate Code section 11604.

Therefore, the proposed distribution that departs from the law of intestacy in this case, can only be ordered by this Court if an assignment is made that is not "grossly unreasonable." If decedent died leaving no spouse, but leaving living issue, each living issue take equal shares "if they are all of the same degree of kinship to the decedent . . ." (Prob. Code, Sec. 6402(a).) Therefore, according to the laws of intestacy, the estate in this case should be distributed 33.3% to each of decedent's 3 children.

If, as a result of colorable claim to the estate, the three heirs have agreed to share in the estate with Decedent's step child via assignment to that step child, the terms of the assignment must be submitted for review, and must include the colorable claim to the estate. The Court can then review the assignment to determine whether the assignment is grossly unreasonable.

Accounting or Waivers. There are not waivers of accounting, and the Accounting provided does not comply with the requirements of Probate Code section 1060 Et seq. Each person entitled to distribution from the estate may waive a final account by 1) filing a written waiver of account (Prob. Code, Sec. 10954, subd. (a)(1)); OR by filing 2) proof of adequate provision for satisfaction in full of the person's interest (Id., subd. (a)(2)). The final account must be submitted, if not waived. (Prob. Code, Sec. 10951.)

The final account must contain all items listed in Probate Code section 1061: (1) The property on hand at the beginning of the period covered by the account, which shall be the value of the property initially received by the fiduciary if this is the first account, and shall be the property on hand at the end of the prior account if this is a subsequent account. (2) The value of any assets received during the period of the accounting which are not assets on hand as of the commencement of the administration of an estate.

The amount of any receipts of income or principal, excluding items listed under paragraphs (1) and (2) or receipts from a trade or business. Net income from a trade or business. Gains on sales. The amount of disbursements, excluding disbursements for a trade or business or distributions. Loss on sales. Net loss from trade or business. Distributions to beneficiaries. Property on hand at the end of the accounting period, stated at its carry value.

Statutory Fee Recalculation. The Statutory Fee in this case is miscalculated as a result of the issues outlined above in the Inventory and Appraisal documents on file. The statutory fee must be recalculated pursuant to the First Amended Inventory and Appraisal - Corrected, that must be filed.

Extraordinary Fees. "[T]he court may allow additional compensation for extraordinary services by the attorney for the personal representative in an amount the court determines is just and reasonable." (Prob. Code, Sec. 10811.) "The general rule is that the probate court has a large discretion in the allowance of fees for extraordinary services rendered on behalf of the estate." (In re Fulcher's Estate (1965) 234 Cal.App.2d 710, 718.) However, "the burden of proving the necessity for the services is on the representative claiming extraordinary fees for himself and his attorney." (Ibid.)

The court must then look to discretionary factors, which includes the following: Whether the amount of statutory compensation is sufficient to cover the ordinary services performed and the extraordinary services claimed (In re Buchman's Estate (1955) 138 Cal.App.2d 228, 235. See also Rule 7.703, subd. (a); Estate of Getty (1983) 143 Cal.App.3d 455 [discussing in dicta that massive statutory compensation can be sufficient to cover unexpected intricacies in estate administration]; and Estate of Hilton (1996) 44 Cal.App.4th 890, 912-13 [citing In re Walker's Estate (1963) 221 Cal.App.2d 792, 795 for the proposition that probate courts can disallow all extraordinary fees claims if they find statutory compensation sufficient]), keeping in mind the legislature's policy of subsidizing fees in more complicated estates with those easily earned in less complicated estate (Estate of Hilton, supra, 44 Cal.App.4th at p. 916 ["The Legislature merely determined, in substance, that any undercompensation involved in handling small estates would be equitably adjusted in the long run by overcompensation in handling larger estates."]); The size of the estate (Estate of Hilton, supra, 44 Cal.App.4th at p. 918); The work performed by the attorney (Estate of Fulton (1937) 23 Cal.App.2d 563, 567); The kind and character of the assets in the estate (In re Walker's Estate, supra, 221 Cal.App.2d at p. 795); The effort involved in the care and preservation of estate property (Ibid.); Facts that bear upon the labor and effort of the executor, administrator and attorney in the routine administration of the estate (Ibid.); Whether the work performed was beneficial to the estate (In re Buchman's Estate (1955) 138 Cal.App.2d 228, 235); Whether the work performed was necessary (Ibid.); and The character of the services rendered (Ibid. ["was it performed in carrying out the ordinary duties of the personal representative, or was it in fact extraordinary."])

If the court determines "the sum allowed by law appears to be a reasonable compensation, even though the attorney may have performed some extraordinary services, it is within the sound discretion of the trial court to disallow claims for extra compensation, and, unless it appears that there has been an abuse of discretion, an appellate court is not at liberty to disturb the conclusion of the trial court. (In re Fulton's Estate, supra, 23 Cal.App.2d at p. 567.) Payment of extraordinary fees is not guaranteed, and the Court has wide discretion to decide whether to allow extra compensation, even when services of an extraordinary nature are rendered. (CRC, Rule 7.703(a).

See also In re Fulcher's Estate (1965) 234 Cal.App.2d 710, 718 ["The general rule is that the probate court has a large discretion in the allowance of fees for extraordinary services rendered on behalf of the estate.") "[T]he burden of proving the necessity for the services is on the representative claiming extraordinary fees for himself and his attorney." (Ibid.)

The sale of real property is an ordinary and usual occurrence in the administration of a decedent's estate, thus does not automatically warrant extraordinary fees. Unless circumstances during the sale of real property require the estate to incur "legal services" not normally needed during the sale and escrow process, the high value of real estate in this state generates a statutory fee award that is usually sufficient to compensate the personal representative and the attorney. This is especially true when a real estate agent is used to effectuate the sale. The standard courts use is " legal services in connection with the sale of property held in the estate." (CRC, Rule 7.703(c)(1).)

For example, the Court may consider that the statutory fee calculated on an estate where the decedent's personal residence that was sold for $1 million (the statutory fee would be $21,150) is reasonable compensation, because no "legal services" were required to effectuate the sale of the property, other than brief contract review and associated tasks, and the policy behind statutory fee awards includes strong consideration of the complication of larger estates than that of smaller estates. (In re Buchman's Estate (1955) 138 Cal.App.2d 228, 235. See also Estate of Getty (1983) 143 Cal.App.3d 455 [discussing in dicta that massive statutory compensation can be sufficient to cover unexpected intricacies in estate administration]; and Estate of Hilton (1996) 44 Cal.App.4th 890, 912-16 [citing In re Walker's Estate (1963) 221 Cal.App.2d 792, 795] for the proposition that probate courts can disallow all extraordinary fees claims if they find statutory compensation sufficient, keeping in mind the legislature's policy of subsidizing fees in more complicated estates with those easily earned in less complicated estate ["The Legislature merely determined, in substance, that any undercompensation involved in handling small estates would be equitably adjusted in the long run by overcompensation in handling larger estates."].)

In this case, Petitioner claims $69,678 in extraordinary fees, on top of the $56,611.54 in statutory fees, for a combined total of $126,298.54. Not only do the extraordinary fees appear to relate primarily to work done on the sale of property, but the fee request does not take into consideration the considerable time it took to bring this estate to a close. The Oder for Probate in this case was issued on October 7, 2022. While this was the product of a stipulation between adversarial parties vying for control of administration, the Petition for Final Distribution admits that the bulk of the contest occurred before the date of appointment.

After that date, there are legitimate actions that qualify as extraordinary, but do not justify nearly $70,000 in fees...especially the real property sales. While the fees incurred to seek unlawful detainer actions are warranted, the fees incurred in merely navigating an otherwise unremarkable sales process are not warranted, and do not explain the delay in bringing this estate to a close nearly four years after administration opened. Therefore, it is recommended the Court reduce the fee request by $42,256, for a total extraordinary fee award of $27,422.

Appearances: The court is open to the public for court business. The court is also conducting hearings via Zoom videoconference. Meeting ID: 161 956 1423 Passcode: 137305

Tentative Ruling: Natalio Pineda Ruiz et al vs City of Santa Maria et al

Tentative Ruling: Natalio Pineda Ruiz et al vs City of Santa Maria et al