Dianne McGrath v. Keith Gallant et al. (2012)

MEMORANDUM OF DECISION

This case represents an appeal from two decrees issued by the Probate Court for the District of West Hartford on March 9, 2010.   The plaintiff claims to be aggrieved by those decrees and files this appeal pursuant to Connecticut General Statute section 45a–186.

The plaintiff is an heir-at-law and the daughter of the decedent, William P. McGrath (McGrath).   She is a beneficiary under a will and a trust of her father's.   The defendant, Keith Bradoc Gallant (Gallant), is an attorney in the law firm of Day Pitney, LLP. He is the executor of the will and the trustee under the provisions of the trust instrument.

By way of background, the origin of this case is that William P. McGrath had been the subject of a conservatorship which had been imposed upon him by his two sons.   He was able to reverse that conservatorship when his daughter hired Gallant for that purpose.   The conservatorship was in some ways a watermark of the conflict which existed between the adult children of McGrath.   Following Gallant's success in his representation of Mr. McGrath, he was hired by McGrath to make changes to his existing will and to create the aforementioned trust.   The changes affected the distribution contemplated by the old will in that the three children would no longer be receiving equal shares.   Instead, the daughter would receive a proportionately greater share than either of the sons.

Given the backdrop of strife which existed between his children, McGrath anticipated that further animosity would result.   He attempted to forestall disagreement with an “in terrorem” clause.   He also decided that it would be appropriate under the circumstances to have an attorney serve as the executor of his will and as trustee for the trust.   He asked Gallant to serve in those roles and an agreement was made to that effect.

McGrath would be proven correct, even in death.   As he had anticipated, the siblings fought incessantly, and indeed are still doing so.

At the time Mr. McGrath died, there were two principal components to his estate.   One was liquid assets, mostly in the form of securities, and the other was a parcel of real property with a home in the Bahamas.   The original trust accounting shows a value of slightly less than $850,000 ¹ for the liquid assets and a value of $800,000 for the Bahamian property.

The plaintiff's claim is essentially that the fees charged by the defendants are excessive in that they comprise a disproportionate amount of the overall estate.   The plaintiff claims that the appropriate fee for handling an estate of this size would be less than $100,000.   By contrast, they point out that the fees to date total approximately $211,000.

If there is such a thing as a case which has universal acceptance with respect to a single issue, it would be the case of Hayward v. Plant, 98 Conn. 374, 119 A. 341 (1923), as to the issue of fiduciary and counsel fees in probate cases.   This case, more than any other, is cited as authority because its logic is straightforward and irrefutable.   The Hayward case dictates that fees must be reasonable and should be considered in the context of “․ the size of the estate, the responsibilities involved, the character of the work required, the special problems and difficulties met in doing the work, the results achieved, the knowledge, skill, and judgment required of and used by the executors, the manner and promptitude in which the estate has been settled, and the time and service required, and any other circumstances which may appear in the case and are relevant and material to this determination.”  Id. at 384–85.

In the presentation of evidence, the plaintiff does not dispute the time records submitted or that the work listed was performed.   The dispute is as to whether the work was necessary in that it could have been avoided by Gallant taking more decisive actions with respect to the administration of the trust and the estate.

A review of the invoices submitted and approved by the probate court shows that an extensive amount of time was spent by Gallant in dealing with issues raised by the beneficiaries.   A partial list of the issues dealt with by Gallant includes the plaintiff's request for an advance of funds and/or a loan from the trust;  the choosing of a listing agent for the Bahamian real estate;  the lowering of the sales price of the Bahamian real estate;  the presentation of a Bahamian will which would have resulted in a will contest in the Bahamas;  access by the beneficiaries to the Bahamian property;  a will contest threatened by McGrath's sons in Connecticut;  and the alleged removal of personal property from Mr. McGrath's residence.   According to his testimony, Gallant's approach to dealing with these issues was that consensus among the beneficiaries was ultimately beneficial to the trust.   His view was that even though reaching consensus was both difficult and time-consuming, the alternative, which may have included litigation both in the Bahamas and in Connecticut, would ultimately be more costly.   In his opinion, the disputes he resolved could have consumed almost all of the assets of the estate.   The plaintiff, through experts and in her own opinion, is critical of Gallant's constant efforts to obtain consensus among the beneficiaries.

While the review of Gallant's actions must necessarily be taken in hindsight, there are some allegations which are subject to proof.   For instance, Gallant was able to avoid the filing of a will contest in the state of Connecticut and ultimately avoid a will contest in the Bahamas.   There is no dispute that these actions were threatened.   Further, there is no dispute that the plaintiff's brothers were represented by counsel and that they put both the plaintiff and Gallant on notice of their intention to take action.   Neither is their dispute that at the time of his death another will existed in the Bahamas which was consistent with the will changed at McGrath's request by Gallant.   Gallant's testimony, which is uncontradicted, is that these will contests would have consumed the estate and trust in their entirety.   Further, Gallant's testimony with respect to the listing and handling of the issues surrounding the Bahamian property is credible and bolstered by the fact of his experience in other estates which have held real estate in the Bahamas.   While one might opine that more decisive action would have been appropriate in terms of some issues such as lowering the price of the Bahamas property or advancing or lending funds to the plaintiff, those issues cannot be considered in isolation.   It was Gallant's responsibility to mind the overall picture, and in doing so it would have been appropriate to consider the litigious and quarrelsome nature of the parties involved.   He was ultimately in a better position than anyone else to know that.

It is also significant and compelling that Gallant himself told the beneficiaries that their constant quarreling was resulting in fees that were diminishing the estate.   He did so directly and unequivocally.

In many instances, Gallant served as an intermediary between the beneficiaries and more importantly, protected the assets of the trust from being dissipated by unnecessary litigation and the siblings' pursuit of animosity toward each other.   In each case, Gallant's actions were in response to a direct action or the threat of action initiated by one of the beneficiaries.   In each case, Gallant acted in a manner which, in his opinion, protected the estate, the trust, and its beneficiaries.

If the court were to grant the plaintiff's request, the fees for service to this estate and trust would be capped at $100,000.   In order to finish the work, Gallant would essentially be obligated to work for free for the remainder of his duties.   In the alternative, he would be forced to resign and the court would presumably appoint a successor to Gallant who, under the circumstances, could not be one of the beneficiaries and would have to be paid.   Ironically, it is a logical inference that it was precisely these reasons that led Mr. McGrath to choose Gallant in the first place.

At the plaintiff's urging, the court has considered the opinion in In re Estate of Bernadine Ordner and Estate of William Ordner, Stratford Probate Court, July 11, 2008, (Kurmay, J.), 22 Quinnipiac Probate Law Journal 104 (2009).   While the case is instructive, it does not purport to substitute or amend any of the standards articulated in Hayward.   In addition, many, if not most, of the fees which the court is addressing in the Ordner case are incurred in the context of counsel's defending the executor of the estate from claims of malfeasance or misfeasance.   Counsel in this case is acting as the trustee.   The substitution of the fiduciary, easily accomplished in Ordner, would not yield a similar solution in this case because of the simple reason that it would not end the disputes between the beneficiaries.   Finally, the court is loathe to apply a simple mathematical solution to a complex matter such as this.

The court has reviewed the evidence and arguments in their entirety.   When applying the standards set forth in Hayward v. Plant, the court finds that the fees charged by the defendants are reasonable under the unusual circumstances presented here.   They are approved as submitted.   Accordingly, judgment shall enter for the defendant with respect to the plaintiff's complaint.

Robaina, J.

FOOTNOTES

FN1. The exact figure listed in the inventory submitted to the West Hartford Probate Court is $836,597.64..  FN1. The exact figure listed in the inventory submitted to the West Hartford Probate Court is $836,597.64.

Robaina, Antonio C., J.