In an appeal from a trial court’s decision to reduce the counsel fees sought by a litigant, the appellate division ruled that counsel fees, awarded to both proponent and contestant in a will dispute at the discretion of the trial court, are disturbed on appeal “only on the rarest of occasions.” In re Estate of Riordan, Docket No. A-5286-12T1 (App. Div., May 13, 2015)

Agnes Riordan (“decedent”), who died in 2012, was survived by five adult sons. In her will, the decedent devised her residuary estate to her five sons in equal shares.

While administering the estate, the executor discovered 17 U.S. savings bonds as well as handwritten notes by the decedent indicating that the bonds were left to her grandchildren. When the executor notified the sons about the bonds and their mother’s handwritten note, three of the sons asked that the bonds be distributed to the grandchildren, while the other two demanded they pass under the residuary clause in the decedent’s will to all five sons.

Confronted with this divergence of opinion among the beneficiaries, the executor filed a verified complaint seeking instructions from the court. Two of the decedent’s sons, John Riordan and Thomas Riordan, filed answers demanding the bonds pass through the residuary estate. Decedent’s grandchildren filed an answer requesting that the bonds pass to them. After the parties engaged in limited discovery, the court ruled that the bonds were to pass under the residuary clause in the decedent’s will to her five sons.

Counsel for John Riordan and for the grandchildren filed court applications seeking awards of counsel fees to be paid from the estate. The fees sought by John Riordan’s counsel totaled $5355 based on a $350 hourly rate and sought $110 in costs. No one objected to the application or the amount sought. After considering the submissions, the court awarded fees in the amount of $3170, based on an hourly rate of $200 per hour.

John Riordan’s counsel filed a motion for reconsideration. Again, no one opposed the motion. John Riordan’s counsel argued that the court improperly applied its own policy considerations, those of “discouraging or deterring” fee-shifting cases, in determining the award. Counsel also noted that the Chancery judge had been awarding a $200 hourly fee in similar estate litigation and probate matters for more than 12 years, and the hourly rate had not kept pace with inflation.

After considering these arguments, the court denied the reconsideration motion. The court explained that the fee reduction was not the result of its own policy considerations. Rather, the court gave five reasons for the fee reduction: (1) the rate is considered to be on the high end of what is reasonable in the Ocean County area; (2) the court did not find that the matter was overly complex; (3) John Riordan’s attorneys’ services were already being performed by the executor, an attorney who had “equal, if not greater, experience” than John Riordan’s counsel; (4) the amount in dispute was limited to the value of the bonds, which was $89,000; and, (5) John Riordan’s counsel did not provide the court with a copy of an agreement with his client establishing an hourly rate, as required.

John Riordan appealed, challenging the amount of the counsel fees awarded by the Chancery judge. The Appellate Division affirmed.

The Appellate Division noted first that the rules in New Jersey allow for an award of counsel fees in probate actions at the discretion of the trial court, that a trial court will normally allow counsel fees to both proponent and contestant in a will dispute, and that counsel fees awarded by a trial court are disturbed on appeal “only on the rarest of occasions.” The appeals court further noted that

[A] reasonable hourly rate is to be calculated according to the prevailing market rates in the relevant community. Thus, the court should assess the experience and skill of the prevailing party’s attorneys and compare their rates to the rates prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation. … [A] trial court may [then] delete excessive hours from its calculation. A court [may also] reduce the … fee if the level of success achieved in the litigation is limited as compared to the relief sought.

The Appellate Division agreed that a trial judge’s award of counsel fees should not be based on a judge’s personal policy considerations. However, the appeals court concluded that personal policy considerations did not motivate the judge in this case as the judge identified the specific factors that led to his decision. Thus, the appeals court affirmed, finding no abuse of discretion in the trial judge’s decision to limit the hourly rate and reduce the attorneys fee awarded to John Riordan’s counsel.

The Riordan case is annexed here – In re Estate of Riordan, Docket No. A-5286-12T1 (App. Div. May 13, 2015)

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