COA outlines approach to awarding attorney fees in estate challenges

IL  for www.theindianalawyer.com

In a case in which the trial court awarded a woman and her children more than $170,000 in attorney fees even though two of the three claims raised were without just cause or good faith, the Indiana Court of Appeals specified the approach judges should follow when a party seeks attorney fees pursuant to I.C. 29-1-10-14.

Carol Pagano Foster and her children, Angela and Christopher, filed an action contesting the probate of the will of her father, Warren Stibbins. Stibbins had become frustrated with Foster’s inability to manager her finances, so he cut her out of his will and her deceased mother’s trust and instead purchased an annuity that would provide steady income for her. Although they lost the contest, the trial court granted the plaintiffs’ request for reimbursement of attorney fees under I.C. 29-1-10-14. The judge ruled the fraud action and incompetency claims were not brought in good faith, but the undue influence claim was brought with just cause. The judge held that the three claims were so interrelated that fees could not be divided.

The estate appealed the order it pay $171,360.64 in attorney fees to Foster’s attorneys in Scott Alan Stibbins, individually and as Personal Rep. of the Estate of Warren E. Stibbins, and Trustee of the Warren E. Stibbins Revocable Trust, et al. v. Carol (Stibbins) Pagano Foster, et al., 18A02-1410-PL-750.

The COA held that Foster and her children do not qualify as a “deivsee” under the statute because they were not beneficiaries to the two updates made to the will in 2005 and then 2008. The judges declined to extend the line of cases allowing someone who contests a previous will to be considered a devisee because in that case law, the parties challenging the will were devisees under the next will in line to be probated. In this case, Foster and her children were not devisees of the will being challenged or the next will in line. Opening the term devisee up as Foster suggests would create a slippery slope, allowing anyone once named in a will to be entitled to attorney fees if he or she challenged the will in place at the party’s death, Judge John Baker wrote.

“We acknowledge that the trial court was unable to separate the fees for the three claims, which is understandable given the process that was followed in this case. To avoid precisely this issue, we hold that a different process should be followed. First, the claimant seeking fees must prove that some or all of her claims were made in good faith and with just cause. The trial court must then make a preliminary determination as to which of the claims meet this standard. Then, the claimant is required to come forward with evidence showing the amount of attorney fees expended only for the claims that meet the statutory standard. In this way, the trial court and all parties can be assured that the claimant receives attorney fees only for those claims that were brought in good faith and with just cause, and the burden of proof remains on the claimant,” Baker wrote.