Following two days of trial in a probate litigation among the decedent’s children, the parties notified the trial court that it had settled the case. They placed the settlement terms on the record. Those terms included a provision that the parties’ legal fees would be paid by the Estate “following the submission of certifications of services.” The attorneys advised the court that, under the settlement, legal fees would be fixed by the court after reviewing the attorneys’ certifications, but the court rejected that procedure because “it meant the matter was not settled.” Upon further discussion, counsel advised the court that the attorneys would come to an agreement regarding legal fees before submitting them to the court. However, this provision was not included in the parties’ consent judgment.

Thereafter, the parties failed to agree on the amount of the legal fees. One of the sons filed a motion challenging the others’ legal fee request. During oral argument of the motion, the court stated that it “did not have time for this” and that it was “not supposed to be having hearings on counsel fees.” The court ordered the disputed legal fees to be paid, without addressing the merits of the motion. The son who had challenged the legal fees filed an appeal.

On appeal, the Appellate Division recognized that appeals courts “will not disturb the trial court’s award of counsel fees except on the rarest occasions, and then only because of a clear abuse of discretion.” However, an abuse of discretion is evident where a decision is made “without a rational explanation:”

We conclude the trial court’s fee award was the result of an abuse of the court’s discretion as it was made without consideration of the issues before the court or a decision explaining the court’s reasons for disregarding [the] challenge [to the fees requested] and awarding the full amount requested.

Although the parties had agreed to resolve any disputes concerning counsel fees, they failed to do so; accordingly, it was the court’s obligation to resolve the fee dispute. Moreover, the consent judgment had contemplated the court’s consideration of fee applications pursuant to R. 4:42-9, which requires the court to consider the reasonableness of the fees sought.

The Appellate Division remanded the case back to the trial court, with the following directive:

The court must issue reasons for its decision, stating clearly its factual findings and correlating them with relevant legal conclusions, so that the parties and this court are informed of the rationale underlying the trial court’s conclusions.

A copy of In the Matter of the Estate of Hauke can be found here – In the Matter of the Estate of Hauke

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