Division One Notes the Difference Between "Ordinary" and "Extraordinary" Compensation From An Estate.
In a case that apparently has generated roundelays of appeals, the First District, Division One did a nice job of distinguishing "ordinary" and "extraordinary" compensation from the probate estate. The Court of Appeal, in Estate of Daley, Case No. A120213 (1st Dist., Div. 1 Sept. 16, 2008) (unpublished), affirmed attorney’s fees of counsel for the administrator in preparing both a court-ordered statement of decision and counsel’s second fee petition (totaling around $5,000).
A personal representative and its attorney may obtain "ordinary" (statutory) compensation for typical services to collect, care for, maintain, and preserve estate property. Ordinary statutory compensation is usually approved in accordance with a compensation schedule set forth in the Probate Code. (See, e.g., Prob. Code, §§ 10800, 10810.) Compensation for ordinary services is mandatory.
In contrast, "extraordinary" compensation is authorized for exceptional or nonroutine services, if they are "just and reasonable" in nature. (Prob. Code, §§ 10801(a), 10811(a); Cal. Rules of Court, rule 7.703.) Generally, executor’s attorney’s fees are considered "extraordinary," and are paid from the estate as an expense of administration. "Extraordinary" compensation is allowed in the discretion of the probate court. (Estate of Stokley, 108 Cal.App.3d 461, 473 (1980).)
Because the court ordered preparation of the statement of decision, the time spent was well justified. With respect to "fees on fees" for preparing the attorney’s second fee petition, the appellate court scoffed at the objector/appellant’s suggestion that fees incurred in defending fee petitions will inevitably result in "the Kafkaesque judicial nightmare of an infinite regression of fee litigation." Quoting from Estate of Trynin, 49 Cal.3d 868, 879 (1989), the appellate panel reiterated: "Experience in statutory fee-shifting contexts suggests that this perceived problem is largely theoretical and seldom arises in practice. In any event, we are confident that trial courts, in the exercise of the broad discretion granted them in ruling on fee applications, have the means to resolve this problem should it arise." It was less of a problem in the case at hand, because the amount at issue was only $1,254 in "fees on fees."