Larry v. Martinez

[241]Opinion

GILBERT, J. The administrator of an estate operates a business owned by the decedent. Here we hold that the administrator’s fees are calculated upon the net receipts, not the gross receipts of the business.

Philip A. Larry, administrator of the estate of Maria Luisa Sanchez, deceased, appeals an order of the probate court settling the third and final account and allowing compensation for ordinary and extraordinary services. We affirm.

Facts

Maria Luisa Sanchez died on May 22, 1985, in Ventura County. At the time of her death, Mrs. Sanchez owned La Perla Market, a liquor store, and La Perla Tortillaria, a restaurant. Mrs. Sanchez’s four adult children survived her. Prior to her death, the children had commenced litigation among themselves concerning the two businesses.

On October 24, 1986, the probate court appointed Philip A. Larry as administrator of the estate, to act without court supervision under the Independent Administration of Estates Act. Larry operated the liquor store and restaurant without much financial success. Given the disagreements among the heirs, Larry’s caretaking task proved daunting. In settling an early accounting, the probate judge stated that Larry was “somewhat too much of a ‘nice guy’ in dealing with decedent’s family.” On April 18, 1988, the court authorized Larry to discontinue operating the businesses.

Soon after, the City of Oxnard condemned the real property upon which these businesses were situated through eminent domain. The probate court approved the compensation awards offered by the Oxnard Redevelopment Agency.

In a third and final accounting, Larry and his attorneys requested fees for their ordinary services to the estate, calculated in part upon the gross income of the liquor store and restaurant. The heirs resisted this request and contended that fees for ordinary services should be calculated upon the net income of the businesses (gross receipts minus operating expenses). The probate court, relying upon Estate of Reinhertz (1947) 82 Cal.App.2d 156, 163-164 [185 P.2d 156], agreed with the heirs. Because the businesses did not earn any profits during Larry’s administration, he earned approximately $12,000 less in ordinary fees. His attorneys likewise received approximately $12,000 less in fees.