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In the Matter of the Estates of v. Kerry Bailey

August 9, 2012

IN THE MATTER OF THE ESTATES OF CAROL BAILEY AND FRANCIS ANDREW BAILEY, DECEASED. F. KIM BAILEY, PERSONAL REPRESENTATIVE OF THE ESTATES OF CAROL BAILEY AND FRANCIS ANDREW BAILEY, PLAINTIFF-APPELLANT,
v.
KERRY BAILEY, KYLE BAILEY, AND TAMARA BAILEY SIPE, DEFENDANTS-RESPONDENTS.



Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Bonneville County. Hon. Jon J. Shindurling, District Judge. Hon. L. Mark Riddoch, Magistrate Judge.

The opinion of the court was delivered by: Horton, Justice.

2012 Opinion No. 116

Stephen Kenyon, Clerk

This appeal arises out of a dispute regarding the requirements for determining whether a claimed amount of attorney fees is reasonable. After extended litigation to settle his parents' estate, Kim Bailey (Bailey), the estate's personal representative, asked the magistrate court for an award of attorney fees from estate funds, pursuant to Idaho Code § 15-3-720. The magistrate court found that Bailey was entitled to reasonable fees to be determined under I.R.C.P. 54(e)(3) and ordered Bailey to provide an accounting of his attorney fees, including the time his attorney spent providing legal services. Bailey's attorney notified the court that he was unable to comply with the order, explaining that he did not keep time records because the attorney-client contract expressly stated that the fee would not be based upon an hourly rate, but upon the attorney's opinion of the reasonable worth of his services. The beneficiaries of the estate (the Beneficiaries) challenged the sufficiency of the accounting. The magistrate court denied Bailey's request for fees and concluded that without time records it could not determine a reasonable fee amount in compliance with I.R.C.P. 54(e)(3)(A). The district court upheld the denial of fees, and Bailey timely appealed. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

The district court set forth the factual background to this litigation in its order on appeal:

Carol Bailey died on April 11, 1998. Decedent Francis A. Bailey died on September 22, 2006. Survivors and heirs of the couple were their children, F. Kim Bailey, Kerry L. Bailey, Kyle J. Bailey and Tamara Lee Bailey Sipe.

Prior to Francis Bailey's death, Kim Bailey resided in the Estate's home with Francis Bailey. Following the death of Francis Bailey, Kim Bailey filed a petition for informal probate of the Estate and was appointed as the personal representative. Pursuant to the wills of the decedents, the children were to share equally in the Estate with the exception of some specific [bequests] of some personal property. While there was some dispute among the heirs on how to liquidate the real property, the parties eventually entered into an agreement in April, 2008, whereby Kim purchased the property for $129,000.

The other children continued to claim that Kim owed the Estate for the fair rental value of the real property for the time Kim lived on the property following Francis Bailey's death. A trial on the disputed issues was held in April 2008 and the magistrate entered its order in July 2008. Kim appealed that order to the district court, which, in a January 2009 order, remanded the case to the magistrate court to determine the proper rental value. The parties have continued to wrangle over various issues in the courts since that time.

Bailey retained an attorney to represent him in matters relating to the probate of the estate. The agreement between Bailey and his attorney provided that the attorney's fee would be based upon the attorney's belief as to the reasonable value of the services and "not based upon an hourly basis." Bailey filed a final accounting and petition for distribution in which he sought, pursuant to Idaho Code § 15-3-720, to recover attorney fees he had incurred. In June 2009, the Beneficiaries petitioned the trial court for an accounting, "specifically separating attorney fees incurred representing [Bailey] personally in the claims and actions filed by petitioners from the attorney fees incurred by the estate in handling the estate matters." The magistrate court ordered Bailey to file "a memorandum of fees and costs reflecting the work provided" to Bailey. In response, Bailey's attorney filed a memorandum of costs that contained an itemized list of the tasks he performed and listed his fee as a lump sum based upon the fee agreement. The Beneficiaries objected to the memorandum of costs based upon, among other things, the lack of a record of the time Bailey's attorney spent providing the services.

Upon its review of the Beneficiaries' objection, the magistrate court found that the memorandum of costs did not comply with I.R.C.P. 54(e)(3) and ordered Bailey to resubmit the memorandum of costs to comply with the Rule and to "specifically outline the basis for the claimed fees and [provide] specific information regarding the value of the particular services provided." Bailey notified the court that he was unable to comply with the order because his attorney did not keep time records and moved for reconsideration of the order to resubmit the memorandum of costs. The magistrate court found that without time records of the attorney's work, it could not determine a reasonable fee amount in compliance with I.R.C.P. 54(e)(3)(A) and denied both Bailey's motion and his request for the estate to pay the attorney's fee. On appeal, the district court affirmed the magistrate court's denial of fees. Bailey appeals and asks this Court to remand with instructions for the trial court to determine reasonable attorney fees based upon the submitted information.

II. STANDARD OF REVIEW

When this Court reviews the decision of a district court sitting in its capacity as an appellate court, the standard of review is as follows:

The Supreme Court reviews the trial court (magistrate) record to determine whether there is substantial and competent evidence to support the magistrate's findings of fact and whether the magistrate's conclusions of law follow from those findings. If those findings are so supported and the conclusions follow therefrom and if the district court affirmed ...


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