YOUNG WOOLDRIDGE PAULDEN SELF FARR GRIFFIN v. THOMAS

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Court of Appeal, Fifth District, California.

YOUNG, WOOLDRIDGE, PAULDEN, SELF, FARR & GRIFFIN, Plaintiff and Respondent, v. J. Richard THOMAS, as Conservator, etc., Defendant and Appellant.

No. F010477.

Decided: May 18, 1989

D. Reid, Bakersfield, for defendant and appellant. Young, Wooldridge, Paulden, Self, Farr & Griffin and Larry R. Cox, Bakersfield, for plaintiff and respondent.

OPINION

The present cause involves the propriety of an award of attorney's fees to the law firm of Young, Wooldridge, Paulden, Self, Farr & Griffin (respondent) arising out of its representation of the conservatee, Olivia D. Mull.

On May 7, 1986, pursuant to a voluntary petition for estate conservatorship, appellant was appointed temporary conservator of Mrs. Mull's estate and on June 9, 1986, was appointed general conservator of Mrs. Mull's estate.   Pursuant to the order, appellant was given the “power to contract for the conservatorship” and the “power to employ attorneys․”  Pursuant to Probate Code section 2421,1 appellant was instructed to pay the conservatee $250 per week as a reasonable allowance for her personal use.

On May 15, 1987, appellant filed a petition seeking instructions, approval and authority regarding diamond jewelry the conservatee wished to purchase, and instructions regarding a gift of $1,000 the conservatee wished to make to a local church.   The petition also sought authority to provide qualified live-in assistance for the conservatee.   Hearing on the matter was noticed for June 8, 1987.   Appellant also filed an application for a temporary order approving the live-in assistance pending hearing on the petition.   On May 15, 1987, the probate commissioner entered a temporary order denying the petition with respect to the purchase of the jewelry and the charitable contribution without prejudice to renewing such request at or after the conservator's first annual accounting.   The temporary order granted the petition with respect to live-in assistance for the conservatee.   By its express terms, the temporary order was effective only until hearing on the matter, noticed for June 8, 1987.

On May 28, 1987, respondent, on behalf of the conservatee, filed a request for special notice.   In addition to providing other services, respondent filed the following actions on behalf of the conservatee:  (1) petition for removal of conservator;  (2) petition for appointment of successor conservator of the estate;  and (3) a request for rescission of the order instituting the live-in assistance.   On June 5, 1987, a citation was issued requesting the conservator to appear on July 1, 1987, to show cause why he should not be removed as conservator.

On June 25, 1987, after a hearing, the probate commissioner entered his order granting the request to terminate the conservator's authority to hire a live-in housekeeper.   The order provides in relevant part:

“IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the Court's prior order dated May 17, 1987 granting J. RICHARD THOMAS the authority to hire a 24 hour a day housekeeper is hereby rescinded effective 27 May 1987.

“IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the law firm of YOUNG, WOOLDRIDGE, PAULDEN, SELF, FARR & GRIFFIN represents OLIVIA D. MULL, individually.”

On August 7, 1987, the conservator filed his first year's account which was amended on August 24, 1987.   On October 16, 1987, the probate commissioner approved the first account, but reduced the conservator's request for fees and denied without prejudice the request for approval of attorney's fees paid to the conservator's attorney.

On October 23, 1987, respondent, on behalf of the conservatee, filed a petition seeking an order to increase the conservatee's weekly allowance, to require her conservator to make a one-time gift of $1,000 to her church, and to provide her with credit cards at various department stores.

A settlement conference was held in November 1987.   By stipulation the parties agreed that:  the $1,000 contribution to the church would be made, the conservator would open charge accounts at various department stores with a monthly limit of $1,000, the conservatee's weekly allowance would be increased to $500 per week, and that appellant would continue in his position as conservator with the action to remove him and appoint a successor dismissed with prejudice.

On February 27, 1988, respondent filed its petition for payment of attorney's fees in the amount of $15,374.   Respondent also sought costs in the amount of $917.85.   The basis for the fee request was its work in petitioning for the removal of the live-in assistant, petitioning for the removal of appellant as conservator, petitioning for an increase in the conservatee's weekly allowance, petitioning for creation of charge accounts for the conservatee and the payment of the charitable contribution to the conservatee's church.   Respondent also claimed expenses in objecting to the accounting of the conservator.

Appellant objected to the petition, arguing the conservatee had no authority to hire the firm and further arguing that the billing “shows that nearly 61% of the services and costs they claim date from before the “Order After Hearing” which Self et al. prepared and the Commissioner signed June 25, 1987.”

On May 20, 1988, the probate commissioner entered his order granting the petition for payment of attorney fees.   The order provides:

“IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the court finds that the right to retain an attorney either at the commencement or during a conservatorship is a power that is reserved to a prospective conservatee.   The creation of a conservatorship is not a legal determination of incompetence and therefore Mrs. Mull's retention of YOUNG, WOOLDRIDGE, PAULDEN, SELF, FARR & GRIFFIN, is valid.   Their fees of course are subject to review by the court and the conservator.   See Probate Code Sections 1871 and 1828.   Therefore, the court approves fees in the amount of $15,374.00 with costs of $917.85 to the law firm of YOUNG, WOOLDRIDGE, PAULDEN, SELF, FARR & GRIFFIN.   Accordingly, the conservator, J. RICHARD THOMAS, is ordered to pay the amounts of $15,374.00 and $917.85 to the law firm of YOUNG, WOOLDRIDGE, PAULDEN, SELF, FARR & GRIFFIN, forthwith.”

DISCUSSION

 Appellant argues the commissioner erred in awarding attorney's fees to respondent.   He correctly notes the conclusion that a conservatee retains the right to hire an attorney and obligate the conservatorship estate for payments of fees conflicts with the statutory scheme governing the legal capacity of a conservatee.

Section 1872, subdivision (a), provides:

“Except as otherwise provided in this article, the appointment of a conservator of the estate is an adjudication that the conservatee lacks the legal capacity to enter into or make any transaction that binds or obligates the conservatorship estate.”

Section 1870 defines transaction and provides:

“As used in this article, unless the context otherwise requires, ‘transaction’ includes, but is not limited to, making a contract, sale, transfer, or conveyance, incurring a debt or encumbering property, making a gift, delegating a power, and waiving a right.”

Section 1871 sets forth the rights retained by the conservatee as follows:

“Nothing in this article shall be construed to deny a conservatee any of the following:

“(a) The right to control an allowance provided under Section 2421.

“(b) The right to control wages or salary to the extent provided in Section 2601.

“(c) The right to make a will.

“(d) The right to enter into transactions to the extent reasonable to provide the necessaries of life to the conservatee and the spouse and minor children of the conservatee.”

Under section 1873, the capacity of the conservatee may be broadened to allow a conservatee to enter certain financial transactions.   Provisions broadening the conservatee's capacity to enter financial transactions may be made

“either in the initial order appointing the conservator of the estate (Prob C § 1873(a)), or in an order upon petition made after the initial appointment (Prob C § 1874)․   The broadening of the conservatee's powers does not narrow the powers of the conservator.   In other words, a finding or order under Prob C § 1873 or § 1874 establishes ‘concurrent’ powers in the conservatee and the conservator.   The conservator must perform the contracts or obligations which the conservatee has been granted capacity to undertake, and, to do so, the conservator will have to decide whether the transaction sought to be enforced falls under the Prob C § 1873 or § 1874 order.   If in doubt, the conservator will want to seek a court determination and instructions under Prob C § 2403.”  (Johnstone & Zillgitt, Cal. Conservatorships (Cont.Ed.Bar 1968) p. 241.)

In Board of Regents v. Davis (1975) 14 Cal.3d 33, 120 Cal.Rptr. 407, 533 P.2d 1047, the court held establishment of an estate conservatorship did not result in the conservatee losing the ability to enter a contract that might bind the estate.   However, Davis was decided prior to the Legislature's enactment of section 1872 in 1979.   Section 1872 was part of a broad legislative enactment substantially revising the Probate Code.  (Stats.1979, ch. 726.)   As previously noted, section 1872 expressly states:  “[T]he appointment of a conservator of the estate is an adjudication that the conservatee lacks the capacity to enter into or make any transaction that binds or obligates the conservatorship estate.”   Moreover, the Assembly Legislative Committee comment to section 1872 states in relevant part:

“Section 1872 is new.   See also Civil Code § 40.   Section 1872 continues the rule under prior law that appointment of a guardian for an adult constituted an adjudication of incapacity under Section 40 of the Civil Code and made void any contract entered into by the ward after such determination.   Hellman Commercial Trust & Sav. Bank v. Alden, 206 Cal. 592, 604–05, 275 P. 794, 799–800 (1929).   For a discussion of the effect on legal capacity of the appointment of a conservator under prior law, see Board of Regents State Univs. v. Davis, 14 Cal.3d 33, 533 P.2d 1047, 120 Cal.Rptr. 407 (1975).   Section 1872 governs any type of transaction including, but not limited to, debts, gifts, sales, encumbrances, conveyances, delegations of powers, and waivers of rights.   See Section 1870 (defining ‘transaction’).   Making a will is not covered by Section 1872.   See Section 1871(c).   As to contracts and debts incurred for necessaries, see Section 1871(d).   As to the capacity of a conservatee with respect to community property, see Section 3012.”  (Legis. Committee Com.—Assem., West's Ann.Prob.Code (1981 ed.) § 1872, p. 193.)

Civil Code section 40 was also amended in 1979 to conform to section 1872 and now provides:

“Subject to Section 1871 of the Probate Code, and subject to Part 1 (commencing with Section 5000) of Division 5 of the Welfare and Institutions Code, after his incapacity has been judicially determined a person of unsound mind can make no conveyance or other contract, nor delegate any power or waive any right, until his restoration to capacity.   Subject to Sections 1873 to 1876, inclusive, of the Probate Code, the establishment of a conservatorship under Division 4 (commencing with Section 1400) of the Probate Code is a judicial determination of the incapacity of the conservatee for the purposes of this section.”  (Stats.1979, c. 730, p. 2465, § 4, operative Jan. 1, 1981.)

We determine the court erred in concluding the conservatee reserved the right to retain counsel and bind the conservatorship estate for the fees;  this conclusion is directly contradictory to section 1872.

In the present case, neither party argues there was any reservation by the conservatee of independent specific authority to bind the conservatorship estate for attorney's fees.   Both parties agree any payment of attorney's fees must be as a result of statutory authorization.   As is usually the case, however, there the agreement ends.

Appellant argues the attorney's fees ordered herein are not allowable under the Probate Code and must be disallowed.   Respondent contends the fees are allowable under three different theories:  (1) they are permitted pursuant to sections 1470 through 1472;  (2) the attorney's fees were engendered to provide for a necessity of life pursuant to section 2430, subdivision (a)(2);  and (3) under section 2430, subdivision (a)(4)(iii), a trustee must pay the fees for an attorney of a conservatee subject to court approval.

Section 1470 provides in relevant part:

“(a) The court may appoint private legal counsel for a ward, a proposed ward, a conservatee, or a proposed conservatee in any proceeding under this division if the court determines such person is not otherwise represented by legal counsel and that the appointment would be helpful to the resolution of the matter or is necessary to protect the person's interests.

“(b) If a person is furnished legal counsel under this section, the court shall, upon conclusion of the matter, fix a reasonable sum for compensation and expenses of counsel.

“(c) The court shall order the sum fixed under subdivision (b) to be paid:

“(1) If the person for whom legal counsel is appointed is an adult, from the estate of such person.”

Section 1471 provides in relevant part:

“(a) If a conservatee, proposed conservatee, or person alleged to lack legal capacity is unable to retain legal counsel and requests the appointment of counsel to assist in the particular matter, whether or not such person lacks or appears to lack legal capacity, the court shall, at or before the time of the hearing, appoint the public defender or private counsel to represent the interest of such person in the following proceedings under this division:

“․

“(3) A proceeding to remove the conservator.”

Section 1472 provides in pertinent part:

“(a) If a person is furnished legal counsel under Section 1471:

“(1) The court shall, upon conclusion of the matter, fix a reasonable sum for compensation and expenses of counsel and shall make a determination of the person's ability to pay all or a portion of such sum.

“(2) If the court determines that the person has the ability to pay all or a portion of such sum, the court shall order the conservator of the estate or, if none, the person to pay in such installments and in such manner as the court determines to be reasonable and compatible with the person's financial ability.”

 Respondent argues the fees are allowable because it was appointed by the court under section 1470 as attorney to represent Mrs. Mull.   In support of this argument, respondent contends the court's order of June 25, 1988, constituted an appointment under section 1470.   The order provides in relevant part:

“IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the law firm of YOUNG, WOOLDRIDGE, PAULDEN, SELF, FARR & GRIFFIN represents OLIVIA D. MULL, individually.”

Appellant argues the order was not intended as an appointment under section 1470.   In support he notes:

“The same Probate Commissioner who signed the June 25, 1987 order in which Self et al described themselves as representing Mrs. Mull ‘individually’ ․ did not interpret that order as the court's appointment of them as Mrs. Mull's attorneys, when it came to charging the estate for fees.”

He further argues that “at no point in any proceeding known to [him] did Self et al seek judicial appointment as attorney for Mrs. Mull․”

“Section 1470 clearly affords the court discretion to appoint private legal counsel to represent the conservatee ․, and to enter an order that legal counsel receive a reasonable sum for compensation from the conservatee's estate.”  (Brown v. Superior Court (1981) 119 Cal.App.3d 189, 192, 173 Cal.Rptr. 803, emphasis in original.)

The order of June 25 is pivotal in resolving the issue of attorney's fees.   Unfortunately, we cannot determine whether the order was merely a recognition that the law firm had been hired to represent Mrs. Mull or whether it was intended to constitute an appointment under section 1470.   The distinction is critical.   If the June 25 order was intended as an appointment under section 1470, the estate is obligated for reasonable attorney's fees and expenses.   If the order was not an appointment, the estate would not be obligated for the payments of fees.   We note the record does not disclose a specific application for appointment under sections 1470–1471.   Neither does it disclose any explanation of the purpose or extent of services to be rendered or fees to be charged.   Pursuant to section 1470, an appointment should be made only after application and review by the court of the necessity for and extent of services to be provided.

In the present case, it is unclear whether the order resulted from an application and a determination that “such person [was] not otherwise represented by legal counsel and that the appointment would be helpful to the resolution of the matter or [was] necessary to protect the person's interests.”  (§ 1470, subd. (a).)  Although generally there would be a formal application for appointment, we cannot discount the possibility that the court here construed the proposed order as an application for appointment under section 1470 and by signing the order intended an appointment.

However, on the present record we cannot ascertain the basis of the trial court's order of June 25, and because we have determined the basis given in the court's final order awarding attorney's fees was erroneous, resolution of the issue will depend on the trial court's intention in issuing the June 25 order.   This must be determined on remand.

 Assuming Self et al. were appointed pursuant to sections 1470 through 1472, it is necessary to explain the limits of the court's power.   Initially, we note appellant's contention that the majority (appellant contends over 60 percent) of the legal work billed was performed prior to June 25.   Appellant contends that even assuming the June 25 order was pursuant to sections 1470 through 1472, services provided prior to issuance of the order do not fall within the sweep of those statutes.   We agree.

Statutes must be read in a manner consistent with “the usual, ordinary import of the language employed in framing them.”  (West Covina Hospital v. Superior Court (1986) 41 Cal.3d 846, 850, 226 Cal.Rptr. 132, 718 P.2d 119.)   The statute refers to payment when a “person is furnished legal counsel under this section.”   This can only be interpreted to mean the services referred to were performed under the section.   That which was performed prior to the appointment cannot be “under this section.”

The purpose of a conservatorship is to protect persons who are unable to make reasonable financial decisions about their resources.   The courts have a “vital interest in the administration of estates falling under their jurisdiction․”  (Conservatorship of Du Nah (1980) 106 Cal.App.3d 517, 523, 165 Cal.Rptr. 170.)   Accordingly, the court should be vigilant and forestall wasteful practices and/or litigation that might or will dissipate the estate.   To this end, the court must exercise some control both of the nature of the services contemplated as well as the amount to be charged.   We, therefore, determine that expenses incurred prior to the effective date of a sections 1470 through 1471 order are not reimbursable pursuant to those sections.

 This line must be drawn to protect the conservatee.   We do not imply the services provided prior to the effective date of a section 1470 order are, or were, ill-advised or unnecessary in the instant case.   We simply conclude that when one deals with a conservatee the protections afforded by statute cannot be ignored.   That those protections might inure to the detriment of attorneys who provide services absent appointment under section 1470 does not move us.   The statute is clear, as are the consequences.   We conclude, therefore, that only fees incurred subsequent to a sections 1470 through 1471 order may be paid pursuant to those sections.   Further, the provision authorizing the court to “fix a reasonable sum for compensation and expenses of counsel” requires the court to evaluate the necessity of all services provided, the degree to which the conservatee will benefit or has benefited, and the reasonable cost of comparable legal services.

 Respondent argues that pursuant to section 2430, subdivision (a)(2), the attorney's fees constitute expenditures for the “necessaries of life” and thus are required to be paid by the conservator.   Respondent further contends payment of fees is authorized pursuant to subdivision (a)(4)(iii).   Section 2430 provides in pertinent part:

“(a) Subject to subdivisions (b) and (c), the guardian or conservator shall pay the following from any principal and income of the estate:

“․

“(2) The debts incurred by the ward or conservatee during the guardianship or conservatorship to provide the necessaries of life to the ward or conservatee, and to the spouse and minor children of the ward or conservatee, to the extent the debt is reasonable.   The guardian or conservator may deduct the amount of any payments for such debts from any allowance otherwise payable to the ward or conservatee.

“․

“(4) The reasonable expenses incurred in the collection, care, and administration of the estate, but court authorization is required for payment of compensation to any of the following:

“․

“(iii) An attorney for the ward or conservatee.

“․

“(c) The guardian or conservator may petition the court under Section 2403 for instructions when there is doubt whether a debt should be paid under this section.”

“The term ‘necessaries' as applied to the requisites of life is a relative term.   It is not confined to what is absolutely essential to support life, but when used in the broad sense encompasses many of the conveniences of a refined society.”  (Ratzlaff v. Portillo (1971) 14 Cal.App.3d 1013, 1015, 92 Cal.Rptr. 722.)   We note section 2430 refers to “necessaries of life” as opposed to “common necessaries of life.”   The latter term is substantially more restrictive and, in the conventional legal use, refers to things “ordinarily required for the sustenance of all men.”  (Ibid., emphasis in original.)   Although respondent's argument might appeal to certain members of the legal profession, we reject the argument as contrary to general rules of statutory construction.

“A basic rule of statutory construction is that a special statute dealing expressly with a particular subject controls over a more general statute covering the same subject matter.”  (People v. Superior Court (Ruiz) 187 Cal.App.3d 686, 692, 234 Cal.Rptr. 214.)   Respondent's contention would bypass the specific mandates of sections 1470 through 1471 by allowing a statute only arguably applicable to prevail over a statute specifically applicable.   We do not construe section 2430 as providing an alternative to sections 1470 through 1471.   Rather, we conclude section 2430 must be read in light of sections 1470 through 1471 to effectuate those provisions.   We therefore conclude respondent's argument with respect to the applicability of section 2430 is unpersuasive.

 Respondent requests we impose sanctions on appellant for taking a frivolous appeal.   In support, respondent merely cites Code of Civil Procedure section 907 and argues “[t]he facts cited are either not in the record or not relevant.   The case law cited is not on point and has been overruled by statutory changes.”

In re Marriage of Flaherty (1982) 31 Cal.3d 637, 183 Cal.Rptr. 508, 646 P.2d 179 sets forth two general standards for evaluation of such claims.   First, the “subjective standard looks to the motives of the appellant and his or her counsel.”  (Id. at p. 649, 183 Cal.Rptr. 508, 646 P.2d 179.)   Second, “[t]he objective standard looks at the merits of the appeal from a reasonable person's perspective.”  (Ibid.)

In the present case, appellant raises a meritorious challenge to the lower court's ruling that a conservatee retains the right to hire an attorney and thereby bind the estate for payment of the attorney's fees.   Accordingly, respondent's request for sanctions is denied.

The case is reversed and remanded to allow the trial court to express its intent in issuing the order of June 25, 1987.   If the order was intended as an appointment under section 1470, the court must then conduct further proceedings consistent with this opinion to determine the reasonableness of the costs and fees.   If the order was not intended as an appointment under section 1470, fees and costs shall be denied.   Costs on appeal to appellant.

FOOTNOTES

1.   All statutory references are to the Probate Code unless otherwise indicated.

ARDAIZ, Associate Justice.

HAMLIN, Acting P.J., and GEO. A. BROWN, J.,* concur.

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