Craig v. Gabbert, Jr., L. Glenn Worley And M. Kimberly Stagg Of

Citation: Not availableDocket: E1998-00825-COA-R3-CV

Court: Court of Appeals of Tennessee; February 28, 2000; Tennessee; State Appellate Court

Original Court Document: View Document

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An appeal was filed regarding the Chancery Court's decision to award attorneys' fees from the Estate of Mary Timmons Austin to the law firm representing beneficiary Elizabeth T. Austin. The key issue raised by beneficiary-appellant Robert C. Austin, Jr. was whether the trial court erred in this award. Mary Timmons Austin passed away on August 17, 1989, leaving her assets to her husband, Robert Austin, Sr., who was named executor, and Elizabeth Austin as the alternate executor. After Robert Sr. died in 1990, Elizabeth was appointed executrix in 1991 despite opposition from her siblings, Robert Jr. and Christy Austin.

The siblings disputed the distribution of Rolich stock in the estate, with Robert Jr. and Christy requesting an in-kind distribution, while Elizabeth advocated for a sale of the stock and division of proceeds. The trial court initially sided with Robert Jr. and Christy, but this decision was reversed by the Tennessee Supreme Court, which mandated the sale of the stock.

Additionally, before resigning as executrix, Elizabeth filed a complaint against Rolich Corporation for selling Unaka stock to the estate's shareholders below market value, claiming this action harmed the estate's interests. The appointed Administrator C.T.A. declined to pursue the case, leading Elizabeth to continue the litigation independently.

The lower court's dismissal of the action was reversed by this Court, affirming that Lisa could pursue the lawsuit as the Estate's personal representative. On April 30, 1998, Thomas A. Scott, Administrator C.T.A. of the Estate, filed a petition to approve attorneys’ fees and expenses related to litigation concerning distribution in kind and rollover issues, asserting that these fees benefited the Estate and were essential for its administration. Both Rolich Corporation and Robert Jr. objected to the approval of these fees. On November 5, 1998, the Chancery Court awarded $91,965.64 in attorneys' fees and expenses to Harwell, Howard, Hyne, Gabbert Manner, P.C., determining that their services were necessary and beneficial to the Estate.

Robert Jr. contended that a 1996 agreement signed by Lisa precluded her from recovering fees, suggesting that this matter should be addressed in mediation of a separate lawsuit filed by Rolich Corporation. The Chancellor ruled that the attorneys’ fees issue would not be part of the mediation, leaving the agreement's interpretation for that separate case. The Court concurred with the Chancellor's decision.

Robert Jr. further argued that the attorneys’ services did not benefit the Estate, noting that fees for outside attorneys may be covered only if their services inure to the Estate's benefit. The trial court has broad discretion in awarding such fees, which will not be overturned unless there is an abuse of discretion. The Court found that the distribution in kind litigation indeed benefited the Estate by increasing the value of the stock sale and that the rollover suit was necessary to protect the Estate's interests in Rolich Corporation. Both suits were deemed beneficial to the Estate, although the necessity and propriety of the fees remained disputed.

Robert Jr. contends that attorney’s fees charged to an estate must be demonstrated as necessary and proper, while also being reasonable; however, the parties in this case agree on the reasonableness of the fees. Lisa argues that when a party other than the executor seeks attorney's fees, the sole criterion is whether the services benefited the estate. The court finds it unnecessary to adjudicate the differing views presented by the parties, concluding that if an attorney's efforts have enhanced the estate's value, those services are inherently necessary. Consequently, the Chancery Court's judgment is affirmed, and the matter is remanded for cost collection, with the appeal costs assigned to Robert Austin, Jr. and his surety.