Hanna v. Steensen

California Court of Appeal Jan 31, 1955 No. Civ. No. 20360Published

Before: Shinn

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Holding. The court held that attorneys' fees for services rendered to life beneficiaries in opposing a trustee's petition to sell trust assets are not compensable from the trust estate when the trial court finds that those services did not result in the preservation of trust assets or a benefit to the trust.

Issues

Whether the trial court erred in finding that the services of the beneficiaries' attorney did not result in the preservation of or benefit to the trust estate.
Whether the rule allowing compensation from a fund for services that protect or increase that fund applies when the attorney's efforts were not the cause of the benefit.

Disposition. affirmed

Quotations verified verbatim against the opinion

“all the services rendered by Mr. Perkins relative to the trusts and the assets thereof were performed solely on behalf of and at the instance of the beneficiaries”

“the findings we have discussed, and which we hold were justified by the evidence, dispose of all of the contentions of the appellants.”

SHINN, P. J. By decree of distribution under the will of Eika V. Witting, deceased, two trusts were established which provided for the payment of income to life beneficiaries and disposed of the remainders. J. Howard Steensen was appointed trustee of each trust. Among the assets were 350 shares of stock of Jergins Oil Company in one trust and 200 shares in the other. No provision for sale of stocks was made in the decree of distribution. In March 1942, the trustee petitioned the court (Judge Paonessa presiding) for instructions relative to the sale of securities and reinvestment of the funds (Prob. Code, § 1120). It was alleged in the petition: “That as to the Jergins Oil Company stock, the fact that it is closely held, not saleable on the open market, and operated without the usual quarterly statements, required of stocks sold on the exchanges, might make its sale difficult in times of stress and its price fluctuation hard to follow.” At the time of the hearing, Johanna Steensen Wilken by her attorney, Dean Perkins of Cameron & Perkins, resisted the petition by answer which denied the allegations with respect to the Jergens Oil Company stock and certain other stock of Southern California Edison Company, and prayed that the petition for sale of those stocks be denied. Mr. Perkins was employed by Johanna Steensen Wilken and presented the opposition on her behalf. He was not employed by and did not represent the trustee. By an order which recited “. . . it appearing to the Court that it is not for the best interests of the Trust Estates that any sale of securities be made at this time,” the trustee was given power to sell the securities if the court gave approval upon a hearing after notice to the beneficiaries of the time and place of any hearing for the sale thereof.

The Jergins Oil Company stock was appraised at $40 per share, or a total of $22,000. In April 1951, the stock of both trusts was sold for a total of $246,092, or about $450 per [523]share. April 3, 1953, Thomas A. Hanna and Johanna Steensen Wilken, life beneficiaries, filed a petition seeking an award of $12,500 to be paid proportionately by the two trusts for the services of Mr. Perkins rendered in 1942 in presenting objections to the sale of the oil company stock. It was alleged in the petition that Mr. Perkins had consulted with various authorities and had come to the conclusion that the stock was underpriced at $40 per share, that it would be unwise to sell the same, that in his investigations and. research he had devoted more than 90 hours and that he was active and instrumental in consummating sales in 1951 for a total of $246,092. The trustee filed an answer denying generally the allegations of the petition although it was not denied that Mr. Perkins through his firm filed an answer to the petition of the trustee for sale of the stock in 1942. Los Angeles Orthopaedic Foundation and The Children’s Home Society of California, as residuary legatees and beneficiaries as to the remainder, appeared in opposition to the petition for the compensation of Mr. Perkins.

Hanna v. Steensen

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