In the Matter of the Estate of Loren S. Bockwoldt, Dale Richard Willows, Conservator for Brandie Renee Bockwoldt, Minor Child of the Decedent v. The Estate of Loren S. Bockwoldt , 814 N.W.2d 215 ( 2012 )

IN THE SUPREME COURT OF IOWA
No. 09–1914
Filed April 13, 2012
IN THE MATTER OF THE ESTATE OF
LOREN S. BOCKWOLDT, Deceased.
DALE RICHARD WILLOWS, Conservator
for Brandie Renee Bockwoldt, Minor Child
of the Decedent,
Appellant,
vs.
THE ESTATE OF LOREN S. BOCKWOLDT,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Muscatine County,
James E. Kelley, Judge.
The conservator of a minor beneficiary of the estate of Loren S.
Bockwoldt appeals the award of extraordinary fees and expenses to the
attorney for the estate. DECISION OF COURT OF APPEALS VACATED;
DISTRICT COURT JUDGMENT AFFIRMED IN PART, REVERSED IN
PART, AND CASE REMANDED.
Timothy L. Baumann, William B. Norton, and Christopher L. Surls
of Norton, Baumann & Surls, PLLC, Lowden, for appellant.
Daniel P. Kresowik of Stanley, Lande & Hunter, P.C., Davenport,
for appellee.
2
ZAGER, Justice.
This case comes before us on further review from the court of
appeals. As part of an order approving the final report of the executor of
the estate of Loren S. Bockwoldt, the district court approved
extraordinary attorney fees of $15,845.50 for Pete Wessels and
$17,957.91 in attorney fees for the law firm of Stanley, Lande and
Hunter (SLH), attorneys for the estate. The district court also approved
expenses of $631.79. The district court found that these attorney fees
and expenses were for necessary and extraordinary services to the estate
pursuant to Iowa Code section 633.199 (2005). Dale Richard Willows,
the conservator for the beneficiary of Loren’s estate, objected to the
application. After a hearing and ruling by the district court, Willows
appealed. The court of appeals reversed the district court’s ruling,
holding “attorney fees may not be awarded for litigating an application
for attorney fees under chapter 633.” We granted further review. Upon
our further review, we now vacate the decision of the court of appeals
and affirm the order of the district court in part and reverse in part. We
hold extraordinary attorney fees may be awarded for defending a fee
application in district court and on appeal. However, the case must be
remanded for a hearing to determine the amount of fees to be awarded to
SLH.
I. Factual Background and Prior Proceedings.
The present case requires us to resolve a dispute over a request for
fees for extraordinary services in connection with the estate of Loren S.
Bockwoldt. The extraordinary services at issue in this appeal were
provided to the estate by Wessels and SLH between February 1, 2007,
and June 8, 2009. This application was filed along with the final report
and will be referred to as the 2009 application. The extraordinary
3
services contained in the 2009 application were primarily for the defense
of an application for fees for extraordinary services that Wessels provided
to the estate between March 23, 2005, and January 31, 2007. This first
application will be referred to as the 2007 application. Wessels and Eric
Knoernschild of SLH defended the 2007 application before the district
court, which granted the 2007 application. After Willows appealed,
Wessels and SLH then defended the 2007 application on appeal. After
remand by the court of appeals, Wessels filed a modified version of the
2007 application. After the district court’s decision on remand from the
court of appeals, Willows again appealed the award of extraordinary
attorney fees. Wessels and SLH again defended the modified 2007
application before the court of appeals. These are the extraordinary
services for which Wessels and SLH now seek compensation in the 2009
application.
A. The Background of the 2007 Application. Loren and Tammy
Bockwoldt, husband and wife, died in an automobile accident in Arizona
on March 12, 2005. Loren had two children: an adult son, Brock, and a
minor child, Brandie. Brandie was Tammy’s only child. Brandie was a
beneficiary of Loren and Tammy’s estates, while Brock was only a
beneficiary of Loren’s estate. Tammy’s brother, Willows, was appointed
Brandie’s conservator. Neal Bockwoldt, Loren’s brother, was appointed
as coexecutor of both Loren and Tammy’s estates, along with Willows
and Brock. Wessels was designated as the attorney for both estates, but
later withdrew from representation of Tammy’s estate due to a conflict of
interest.
On February 16, 2007, the district court issued a ruling on several
motions relating to Loren and Tammy’s estates, including the 2007
application. The court awarded Wessels $67,045 in attorney fees from
4
Loren’s estate and $5888.50 in attorney fees from Tammy’s estate. On
Wessels’ motion, the court also removed Brock and Willows as
coexecutors of both estates, citing conflicts of interest. 1 The court
appointed Central State Bank as the executor of Loren’s estate and First
National Bank of Muscatine as the executor of Tammy’s estate. There
were significant assets in Brandie’s conservatorship, so the court
required Willows to post a bond prior to removing any money from the
conservatorship. A wrongful death action was pending in Arizona at the
time, so the district court refused to close the estates. However, since
the ultimate outcome of the litigation was unclear, the district court
ordered that “for the time being” half of the recovery should be placed in
Tammy’s estate and half should be placed in Loren’s estate, noting that
the order might be amended in the future. Willows appealed each of
these rulings, including the award of fees requested in the 2007
application. The estates responded to the appeals.
On appeal, the court of appeals affirmed the district court’s holding
on all issues except the fee award. The court of appeals determined that
the district court awarded fees without properly following code sections
633.197–.199. The court of appeals noted that as part of the 2007
application, Wessels had supplied a detailed, fifty-page statement
itemizing exactly what services he had provided for the estate, as well as
identifying seven “extraordinary issues” that had arisen during the
management of the estate. These extraordinary issues included litigation
as to Brandie’s guardianship, ownership of farmland interests and farm-
related business interests, income tax issues, obtaining information on
fifteen different insurance policies between the two estates, and the
1Neal Bockwoldt subsequently withdrew as a coexecutor of both estates.
5
division of assets between the two estates. 2 However, at the hearing, the
district court did not require Wessels to go forward to prove his fees, nor
did the district court make specific findings as to which of these services
were ordinary and which were extraordinary. As a result, the court of
appeals remanded the 2007 application to the “district court for a
hearing requiring the applicant to meet his burden and for specific
findings regarding the reasonableness of ordinary fees and extraordinary
fees granted.”
On January 30, 2008, in response to the court of appeals ruling,
Wessels filed another application for ordinary and extraordinary fees (the
modified 2007 application). Like the initial 2007 application, the
modified 2007 application sought fees for services provided from March
23, 2005, to February 1, 2007. It included the list of seven matters that
were extraordinary and an itemized list of services provided. 3 Willows
again objected. A hearing on the modified 2007 application commenced
on February 25, 2008. Counsel for Wessels argued it would be “very
difficult” to break out the “real estate, litigation, and taxation issues”
involved in Loren’s estate. The district court agreed and refused to
require Wessels to break out or itemize his bill. However, the hearing
was continued to allow Wessels “an opportunity to amend his proofs”.
According to the itemized billing statement Wessels offered in
support of the modified 2007 application, he had performed services for
2In later pleadings it is acknowledged that this case involves the conservatorship
of Brandie.
3The remanded 2007 application initially sought fees for defending the district
court’s original ruling, and reimbursement for litigation expenses in the form of fees
Wessels paid to SLH in connection with defending that ruling. However, prior to a
hearing on the fee request, Wessels withdrew these portions of the remanded
application leaving the fees earned from March 23, 2005, to February 1, 2007 as the
sole subject of the application filed on January 30, 2008.
6
Loren’s estate which totaled $76,375.50 in fees. This number was based
on the number of hours Wessels worked on the estate multiplied by his
hourly rate and included the hourly rate of Wessels’ legal assistant. The
modified 2007 application noted that, under section 633.197, the
statutory cap on ordinary fees for Loren’s estate was $20,432.89. The
modified 2007 application requested the court award extraordinary fees
of $55,942.61, the difference between the amount Wessels billed to the
estate and the maximum amount allowed as ordinary fees under section
633.197.
At the resumed hearing on April 24, 2008, Willows admitted
Wessels actually performed all the services listed in the itemized bill.
Willows conceded Wessels was entitled to $20,432.89 in ordinary fees,
$640.50 in necessary and extraordinary expenses, and $18,413 in fees
for necessary and extraordinary services. Willows, however, disagreed
that the remaining $37,529.61 in fees were for actual, necessary, and
extraordinary services to Loren’s estate. The district court disagreed with
Willows, stating,
It seems to this Court Willows has a larger obligation after
Wessels specifically and extensively explained the unusual
issues with which he had to come to grips . . . than to allege
only in general terms without reference to specific services,
some of the services Wessels provided were only “ordinary.”
He did not do so.
The district court then awarded Wessels all $76,375.50 in fees for
ordinary and extraordinary services, and Willows appealed.
In its April 8, 2009 ruling, the court of appeals modified the district
court’s award. The court of appeals found the district court had once
again improperly shifted the burden of proof under section 633.199 to
Willows instead of placing it on the party requesting the fees. The court
of appeals “disagree[d] with the district court that Wessels ‘specifically
7
and extensively explained the unusual issues with which he had to come
to grips.’ ” The court also took issue with how the amount of
extraordinary fees was calculated, stating,
Wessels’s interpretation of the relevant code sections was
that so long as he provided some extraordinary services, all
his fees above the section 633.197 cap became
presumptively compensable under section 633.199. This is
not how the code sections operate.
Section 633.198 authorizes payment of reasonable
attorney fees “as full compensation for all ordinary services.”
The fee schedule provided in section 633.197 provides the
maximum any attorney can collect on fees for ordinary
services, regardless of the amount of time spent to perform
such services. However, if an attorney performs “actual
necessary and extraordinary” services, compensation will be
provided under section 633.199. Section 633.199 does not
automatically allow payment of any fees requested by the
attorney that exceed the cap set by section 633.197. Rather,
section 633.199 provides for the payment of extraordinary
fees, fees for non-ordinary services including but not limited
to “services in connection with real estate, tax matters, and
litigated matters.”
The court of appeals concluded that the district court did not make a
finding that the services provided were “extraordinary” and that the
district court did not “have an adequate basis to determine whether
Wessels’ claimed extraordinary fees were ‘just and reasonable.’ ” The
court of appeals modified the ruling, awarding $20,432.89 in ordinary
fees, $640.50 for expenses that Willows conceded were necessary and
extraordinary, and $18,413 in fees for services that Willows had
conceded were extraordinary. An application for further review was
denied by this court on June 5, 2009.
B. The 2009 Application: Wessels and SLH’s Extraordinary
Fees for Defending the 2007 Application on Appeal and Remand. On
August 24, 2009, Central State Bank filed its final report, which included
an application for extraordinary fees (the 2009 application). While the
8
2007 application was for services provided from March 23, 2005, to
February 1, 2007, the 2009 application was for services provided from
February 1, 2007, to June 8, 2009. The 2009 application included an
itemized list of services Wessels provided to the estate, and indicated,
line by line, which services Wessels asserted were extraordinary, as
opposed to ordinary services, and only requested compensation for
extraordinary services. It also included a “Statement of Extraordinary
Fees” which detailed the necessity of the extraordinary services, the
responsibilities assumed, and the importance of the services to the
estate. Wessels’ fees for the extraordinary services contained in the 2009
application totaled $15,845.50. The 2009 application also listed several
“Outside Professional Fees” for SLH, totaling $17,952.91. The 2009
application described these fees as “extraordinary fees in regard solely to
representation relative to litigation and appeal matters.”
Willows resisted the 2009 application. He noted “nearly all” the
services listed in the 2009 application were connected with the defense of
the 2007 application, both on appeal and on remand. He also claimed
SLH functioned as Wessels’ personal attorney, and not the attorney for
the estate, and that the request for fees for extraordinary services
provided by SLH was not supported by adequate documentation.
After a hearing, the district court found that the itemizations
accompanying the 2009 application “show reasonable, ordinary, and
required services that were not ordinary services, and were required by
the appeal filed by [Willows]. Those extraordinary fees total $15,845.50.”
The district court also found “the extraordinary fees of Pete Wessels of
$15,845.50 and the attorney’s fees for [SLH] of $17,957.91 are
reasonable, appropriate and required to protect the executors of the
estate and the estate . . . .” The court rejected Willows’ argument that an
9
executor and the executor’s attorneys cannot receive extraordinary fees
for defending an appeal. Willows appealed, and we transferred the case
to the court of appeals, which found that “attorney fees may not be
awarded for litigating an application for attorney fees under chapter
633.” Accordingly, the court of appeals reversed the award “in its
entirety.” The estate applied for further review, which we granted.
II. Standard of Review.
This dispute requires us to review the district court’s decision to
award Wessels and SLH extraordinary fees in connection with Loren’s
estate. Contests involving the costs of administration are tried in equity.
In re Cory’s Estate, 184 N.W.2d 693, 696–98 (Iowa 1971) (noting that the
decision in Cory’s Estate “nullifies many of our cases decided before
adoption of the probate code holding probate cases were law actions and
the decision of the judge in such action had the force and effect of a
verdict on appeal”). “Attorney fees are included in the definition of costs
of administration.” Id. at 696 (citing Iowa Code § 633.3(8)). Therefore, a
proceeding to determine the award of attorney fees is tried in equity, and
our review is de novo. In re Estate of Wulf, 526 N.W.2d 154, 156 (Iowa
1994) (“It follows that hearings dealing with the costs of administration
are equitable in nature and our review is therefore de novo.”); Bass v.
Bass, 196 N.W.2d 433, 435 (Iowa 1972) (“[A] hearing on the allowance of
attorneys’ fees stands in equity, being thus reviewable de novo.”).
Though our review on an action for the allowance of attorney’s fees
is de novo, we review a district court’s decision that services were
extraordinary under section 633.199 for abuse of discretion. See In re
Estate of Brady, 308 N.W.2d 68, 74–75 (Iowa 1981) (“We do not believe
the trial court abused its discretion in finding Mr. Heiserman’s litigation
services were compensable as extraordinary services under this
10
standard.”); see also Wulf, 526 N.W.2d at 156 (reviewing a district court’s
application of section 633.199 and noting that “[w]e accord the trial court
considerable discretion in taxing executor attorney fees to estates”). “An
abuse of discretion occurs when the district court exercises its discretion
on grounds or for reasons that are clearly untenable, or to an extent
clearly unreasonable.” Quad City Bank & Trust v. Jim Kircher & Assocs.,
P.C., 804 N.W.2d 83, 92 (Iowa 2011); see also State v. Nelson, 791
N.W.2d 414, 419 (Iowa 2010). “ ‘A ground or reason is untenable when it
is not supported by substantial evidence or when it is based on an
erroneous application of the law.’ ” Quad City Bank & Trust, 804 N.W.2d
at 92 (citation omitted).
However, we review de novo a district court’s determinations
regarding the sufficiency of the filing that supports the fees that are
requested for those services. In re Estate of Mabie, 401 N.W.2d 29, 32
(Iowa 1987) (finding, on de novo review, that an attorney had failed to
meet “his burden of proving the necessity for the services for which he
seeks extraordinary fees by the filing of a mere itemization of all services
performed for the estate”). Accordingly, we will review the district court’s
determination that the services Wessels and SLH seek compensation for
in the 2009 application were in fact necessary and extraordinary services
to the estate for an abuse of discretion. See Brady, 308 N.W.2d at 74–
75. We will review de novo the district court’s determination that
Wessels and SLH provided sufficient documentation in the 2009
application to justify the award of fees for those extraordinary services.
Mabie, 401 N.W.2d at 32.
III. Discussion.
The 2009 application requested $15,845.50 in fees for
extraordinary services and expenses for Wessels, reimbursement for
11
actual and necessary extraordinary expenses consisting of $17,952.91 in
legal fees for SLH, as well as $631.79 in expenses, all pursuant to section
633.199. All of the fees requested in the 2009 application were for
extraordinary services. Willows resisted, claiming that the only service
provided was defending the prior applications for fees in the prior
appeals and that section 633.199 does not allow an attorney to receive
fees or reimbursement for defending a fee award. Alternatively, Willows
claims that even if section 633.199 allows fees for defending fee awards,
Wessels failed to adequately prove he was entitled to fees and expenses.
Willows also claims the district court erred in awarding fees beyond the
amount allowed in the court of appeals’ April 8, 2009 ruling. Finally,
Willows claims that SLH was Wessels’ personal attorney, not the attorney
for the estate, and therefore, it is not entitled to payment from the estate.
Alternatively, if SLH was the estate’s attorney, Willows argues the firm
failed to comply with Iowa Rule of Probate Procedure 7.2 and should
therefore not be compensated. 4 We will address each of these arguments
in turn.
4At this point, we note that the court of appeals decision and the parties’ further
review materials make reference to section 633.315 and the “good faith and just cause”
requirement contained therein. That section relates to will contests and has no bearing
on the present dispute. We note that portions of In re Estate of Wulf, 526 N.W.2d 154(Iowa 1994) and In re Estate of Brady, 308 N.W.2d 68 (Iowa 1981) refer to sections
633.315 and 633.199. See Wulf, 526 N.W.2d at 156; Brady, 308 N.W.2d at 71. In
Wulf, we were reviewing a district court’s decision to award attorney fees to an executor
for participating in a will contest. 526 N.W.2d at 156. Likewise, one of the issues in
Brady was whether attorney fees could be awarded under section 633.199 for
participating in a will contest under section 633.315. 308 N.W.2d at 71–72. In both of
those cases, we discussed whether the executor acted with “good faith and just cause.”
Wulf, 526 N.W.2d at 156; Brady, 308 N.W.2d at 71–72. This discussion was necessary
because section 633.315 only allows for attorney fees if the executor “defends or
prosecutes any proceedings in good faith and with just cause.” Section 633.199
requires fees be “just and reasonable” but does not contain a good faith and just cause
requirement, and we reject any implication to the contrary in our past cases.
12
A. The Scope of Section 633.199. This case requires us to
interpret section 633.199 to determine under what circumstances, if any,
the legislature intended defending an application for fees to be a
necessary and extraordinary service to an estate. If the language of the
statute is plain and unambiguous, we need not look to principles of
statutory construction. Estate of Ryan v. Heritage Trails Assocs., Inc.,
745 N.W.2d 724, 730 (Iowa 2008). “If reasonable persons can disagree
on a statute’s meaning, it is ambiguous.” Id. (citation and internal
quotation marks omitted). Section 633.199 reads:
Such further allowances as are just and reasonable
may be made by the court to personal representatives and
their attorneys for actual necessary and extraordinary
expenses or services. Necessary and extraordinary services
shall be construed to also include services in connection
with real estate, tax matters, and litigated matters.
Litigated matters may include defending fee awards, and defending fee
awards may be a “necessary and extraordinary service” to an estate.
However, the statute does not make clear in the plain language exactly
what services are encompassed in “litigated matters.” It is possible
litigated matters was meant to refer only to lawsuits where the estate is a
party and not situations where the estate’s attorney’s fee is at issue. It is
also not apparent from the plain language whether defending a fee that
will ultimately go the estate’s own attorney is a “necessary and
extraordinary service” to the estate. Because reasonable persons could
disagree, the plain language of the statute is ambiguous, and we must
turn to the principles of statutory construction. See Ryan, 745 N.W.2d
at 730.
We have stated our principles of statutory construction as follows:
The purpose of statutory interpretation is to determine the
legislature’s intent. We give words their ordinary and
common meaning by considering the context within which
13
they are used, absent a statutory definition or an established
meaning in the law. We also consider the legislative history
of a statute, including prior enactments, when ascertaining
legislative intent. When we interpret a statute, we assess the
statute in its entirety, not just isolated words or phrases.
We may not extend, enlarge, or otherwise change the
meaning of a statute under the guise of construction.
Doe v. Iowa Dep’t of Human Servs., 786 N.W.2d 853, 858 (Iowa 2010)
(citations omitted).
Attorney fees for representing an estate are governed by statute,
and “statutory authority is necessary for any fee award.” Brady, 308
N.W.2d at 74. Section 633.198 allows an attorney for the personal
representative to receive fees “not in excess of the schedule of fees herein
provided for personal representatives.” Iowa Code § 633.198. Personal
representatives are allowed reasonable fees for “ordinary” services
rendered to the estate, and the maximum allowable fees for ordinary
services depends on the size of the estate. Id. § 633.197. If personal
representatives, or their attorneys, provide “actual necessary and
extraordinary expenses or services” to the estate, the attorney or
personal representative can receive compensation beyond the amount
allowed for in the fixed schedule listed in section 633.197. Id. § 633.199.
Under section 633.199, “necessary and extraordinary services shall be
construed to also include services in connection with real estate, tax
matters, and litigated matters.” Id. 5
5In 2007, the legislature expanded the scope of necessary and extraordinary
services covered by section 633.199. The relevant portion of the statute now reads as
follows:
Necessary and extraordinary services shall be construed to include but
not be limited to services in connection with real estate, tax issues,
disputed matters, nonprobate assets, reopening the estate, location of
unknown and lost heirs and beneficiaries, and management and
disposition of unusual assets.
2007 Iowa Acts ch. 134, § 10. However, the new language applies only to the estates of
decedents dying on or after July 1, 2007, and would therefore not apply to this case.
See id. § 28(2).
14
We note that the legislature chose the word “include” as opposed to
the word “means” when drafting the section at issue. See id. (stating
extraordinary services “includes real estate, tax matters, and litigated
matters” as opposed to stating extraordinary services “means real estate,
tax matters, and litigated matters”). A statute that “declares what it
‘includes’ is more susceptible to extension of meaning by construction
than where the definition declares what a term ‘means.’ ” 2A Norman J.
Singer & J.D. Shambie Singer, Sutherland Statutory Construction § 47:7,
at 305 (7th ed. 2007) [hereinafter Singer]. This statute also contains a
general term (“necessary and extraordinary services”) followed by specific
terms that are examples of the general term (“real estate, tax matters,
and litigated matters”). See Iowa Code § 633.199. Listing a general term
and then supplying specific examples is a “common drafting technique
designed to save the legislature from spelling out in advance every
contingency in which the statute could apply.” 2A Singer, § 47:17, at
370–73. Defining a term in this way “recognizes and gives effect to both
the specific and general words by using the class indicated by the
specific words to extend the scope of the statute with the general words
to include additional terms or objects within the class.” Teamsters Local
Union No. 421 v. City of Dubuque, 706 N.W.2d 709, 715 (Iowa 2005).
Just as the legislature has not defined the precise contours of what
services are necessary and extraordinary under section 633.199, our
cases have also refrained from making a “pronouncement of a precise
test for the governance of this issue.” Wulf, 526 N.W.2d at 156. Instead,
we have mirrored the legislature’s approach and have “defined
extraordinary services as ‘those which “in character and amount [are]
beyond those usually required.” ’ ” Mabie, 401 N.W.2d at 31 (quoting
Brady, 308 N.W.2d at 74) (alternation in original). The determination of
15
whether a service is beyond those usually required is a factual
determination and is left to the district court’s broad discretion. See
Wulf, 526 N.W.2d at 156–57; Brady, 308 N.W.2d at 74–75; Bass, 196
N.W.2d at 435; Glynn v. Cascade State Bank of Cascade, 227 Iowa 932,
939, 289 N.W. 722, 725 (1940).
We see nothing in section 633.199 that indicates the legislature
intended to exclude defending an application for attorney fees from the
definition of necessary and extraordinary services. The actions that are
“necessary” will, of course, vary from case to case. “Extraordinary
services” is also a broad term with a variety of meanings that change
with context. 6 In order to give effect to both the general and specific
words used by the legislature, we will not treat the examples of necessary
and extraordinary services provided in section 633.199 as exhaustive.
See Teamsters Local Union No. 421, 706 N.W.2d at 715. It is possible
that administrative tasks could be considered extraordinary services.
For example, we have found that a district court did not abuse its
discretion when it determined that defending a final report was an
extraordinary service which entitled the attorney to fees. Brady, 308
N.W.2d at 74–75. In that same case, we also held that defending a final
report on appeal was an extraordinary service to the estate. See id. at
75. By citing these examples, we are not stating that defending a final
report in front of the district court or on appeal is always an
6According to the terms of the statute, necessary and extraordinary services
“shall be construed to include services in connection with real estate, tax matters, and
litigated matters.” Iowa Code § 633.199. Responding to a beneficiary’s appeal from a
district court ruling could be considered a “litigated matter.” However, because the
statute does not limit necessary and extraordinary services to the tasks listed in section
633.199, it is not necessary to determine whether defending a ruling that, among other
things, awards attorney fees, is a litigated matter. Our task is to determine whether
Wessels’ actions constitute necessary and extraordinary services, not whether they are
“a litigated matter.”
16
extraordinary service. To the contrary, we have held that it is not
possible to define a precise test of what services are extraordinary as
opposed to ordinary. See Wulf, 526 N.W.2d at 156. We reaffirm that
principle today.
As part of his argument, Willows claims that allowing fees for
defending a fee application is a minority viewpoint that has been properly
rejected by a majority of jurisdictions. He cites several cases in support
of this proposition. See In re Painter’s Estate, 628 P.2d 124, 126 (Colo.
App. 1980); In re Andrews’ Appeal, 826 A.2d 1267, 1272–74 (Conn. App.
Ct. 2003); In re Estate of Halas, 512 N.E.2d 1276, 1286 (Ill. App. Ct.
1987); Inlow v. Estate of Inlow, 735 N.E.2d 240, 253–54 (Ind. Ct. App.
2000); In re Sloan Estate, 538 N.W.2d 47, 49–50 (Mich. Ct. App. 1995); In
re Estate of Larson, 694 P.2d 1051, 1059–60 (Wash. 1985), abrogated by
statute Wash. Rev. Code Ann. § 11.96A.150(1) (West, Westlaw through
March 26, 2012), abrogation recognized in In re Estate of McCuen, 137
Wash. App. 1017, 2007 WL 512541, at *4 (Feb. 20, 2007). Wessels
points to In re Estate of Trynin, 782 P.2d 232 (Cal. 1989), to support his
claim that section 633.199 allows a district court to award fees for
defending a fee claim. 782 P.2d at 239.
While the cases cited by Willows address the issue of fees for
defending fees, only one of the cases cited by the parties addresses the
precise issue presented to this court today. The California statute at
issue in Trynin, like section 633.199, divides fees into those awarded for
ordinary services and those awarded for extraordinary services. Id. at
232–33. As the Indiana Court of Appeals noted in Inlow, the ordinary–
extraordinary dichotomy found in the California statute was not present
in the Indiana statute that led to the categorical ban on so-called “fees
for defending fees.” 735 N.E.2d at 252–53 & n.9. The court noted that
17
the statutes at issue in Inlow, Larson, Sloan, and Halas did not have
“extraordinary services” provisions and distinguished Trynin on that
basis. See id. at 251–53 & n.9. The statutes at issue in Painter and
Andrews also did not contain the ordinary–extraordinary dichotomy
found in the Iowa and California statutes. See Painter, 628 P.2d at 124–
26 (discussing Colo. Rev. Stat. Ann. § 15-12-721 (2009), repealed by
2011 Colo. Sess. Laws ch. 101, § 27); Andrews’ Appeal, 826 A.2d at
1272–74. Because the statute at issue in Trynin is most similar to
Iowa’s, we feel Trynin’s reasoning is the most helpful in deciding the case
before us.
When asked to determine whether California’s statute might permit
an attorney to receive fees for defending a fee request, the court stated,
We conclude . . . that extraordinary services
compensable under [the statute] include work reasonably
performed by the attorney to establish and defend the fee
claim. This does not mean, however, that an additional
award of fees for fee-related services is invariably required.
Where the trial court reasonably concludes that the amounts
previously awarded the attorney for both ordinary and
extraordinary services are adequate, given the value of the
estate and the nature of its assets, to fully compensate the
attorney for all services, including fee-related services, denial
of a request for fee-related fees would not be an abuse of
discretion.
Trynin, 782 P.2d at 239. This conclusion mirrors our own. Under the
statutory scheme enacted by the legislature, the district court is to
determine whether a service is necessary and extraordinary, and the
appellate courts must review that decision for an abuse of discretion.
Therefore, like the Trynin court, we decline to create a categorical rule
stating that the defense of an application for fees is never an
extraordinary service under section 633.199, and instead leave that
18
decision to the sound discretion of the district court, to be made based
on the individual facts of each case.
B. The Services Provided by Wessels in the 2009 Application.
Having determined that a court may award fees for defending an
application for fees, we must determine whether Wessels has shown he is
entitled to such fees in this case. Prior to awarding fees for extraordinary
services, the district court must make a determination that the services
rendered were both necessary and extraordinary. We review these
determinations for abuse of discretion. See Brady, 308 N.W.2d at 74–75.
Wessels filed the 2007 application on behalf of the estate, seeking,
among other things, fees for necessary and extraordinary services
provided between March 23, 2005, and February 1, 2007. 7 Willows
objected. Wessels defended the application, as he was obliged to do, and
it was granted in its entirety. Willows then appealed. On appeal,
Wessels successfully defended the application on a majority of the issues
presented, but the case was remanded to properly determine which of
Wessels’ services were ordinary and which were extraordinary. Wessels
filed a revised fee application, which was contested, granted by the
district court, appealed, and subsequently modified by the court of
appeals. At the conclusion of the litigation and appeals arising out of the
2007 application, Wessels filed the 2009 application, which sought fees
for necessary and extraordinary services in connection with defending
the 2007 application. The district court found the services Wessels listed
in the 2009 application were “reasonable, ordinary, and required services
7Willows claims the court of appeals decision on the remanded 2007 application
bars Wessels from receiving any of the fees requested in the 2009 application. The
2009 application requests fees for services provided on or after February 1, 2007.
Wessels has not received fees for services provided on or after February 1, 2007.
Willows’ claim on this issue is therefore without merit.
19
that were not ordinary services, and were required by the appeal filed by
the objector. . . . These fees were incurred and made necessary by the
appeals filed by the objector.” 8
Willows claims defending the 2007 application on appeal and
handling the remand and the appeal of the remand were not “necessary
for the protection of the estate,” and were therefore not necessary under
section 633.199. The language used by Willows comes from In re
Carmody’s Estate, 163 Iowa 463, 465–66, 145 N.W. 16, 17 (1914), where
we stated, “To justify the allowance of anything in excess of the statutory
commissions, the executor or administrator must have actually rendered
services of an extraordinary character, and these must have been
necessary for the protection of the estate.” More recently, however, we
have considered those services that benefit the estate to be necessary, as
opposed to only those services which protect the estate. See Brady, 308
N.W.2d at 74 (noting section 633.199 “authorizes fees only for services
which protect or benefit the estate”). We also note that a service does not
have to directly benefit or protect an estate in order to be a “necessary”
service. Accord Trynin, 782 P.2d at 235 (“Services that do not directly
benefit the estate in the sense of increasing, protecting or preserving it
are nonetheless compensable if the estate’s attorneys or representatives
in performing the services were ‘acting in consonance with the fiduciary
duties imposed upon them.’ ” (citation omitted)).
Wessels contends that his services were necessary and benefitted
the estate. The district court agreed, finding Wessels’ fees were “required
8The district court’s conclusion is somewhat contradictory. In the quoted
sentence, the court calls the services ordinary, but then goes on to say that they are
“not ordinary services.” However, when this sentence is viewed in the context of the
district court’s ruling and the fact that it found Wessels was entitled to extraordinary
fees, it becomes clear that the district court believed Wessels performed extraordinary
services for the estate.
20
to protect the executors of the estate and the estate.” The first appeal of
the 2007 application involved several issues other than Wessels fee
request. As part of that appeal, Wessels defended removing Willows as
an executor due to a conflict of interest. Removing an executor with a
conflict of interest protects an estate, and therefore, even under the
narrow definition found in Carmody, it was “necessary” for Wessels to
defend the 2007 application on appeal.
Following remand, the only issue left to determine was whether the
services Wessels provided were in fact extraordinary. However, this
limited purpose does not mean Wessels’ actions were no longer
“necessary.” Once Wessels defended the 2007 application on appeal, he
was required to file a revised application in order to comply with the
court of appeals instructions on remand. As a result, the district court
found the application that Wessels filed on remand was “made
necessary” by Willows’ appeals. The district court observed that if
presenting reasonable arguments to an appellate court when an
interested party objects to a fee request is not considered a necessary
service, then any objector could force the attorney to work for no pay.
This observation has merit. As the attorney for the estate, Wessels was
obligated to defend the estate’s filing from Willows’ appeal and to file the
required, revised application on remand. Because Wessels’ defense of
the application benefitted the estate and was made necessary by Willows’
appeals, we find the district court did not abuse its discretion when it
found Wessels’ services were necessary under section 633.199. This was
not an erroneous application of the law.
To be compensable under section 633.199, the services provided
by an attorney must not only be necessary, they must also be
extraordinary. The district court found Wessels’ actions in defense of the
21
2007 application were extraordinary services. “We have defined
extraordinary services as ‘those which “in character and amount [are]
beyond those usually required.” ’ ” Mabie, 401 N.W.2d at 31 (citation
omitted) (alteration in original). Most estates do not involve a dispute
over fees for extraordinary services that requires numerous district court
hearings and two court of appeals opinions. Thus it was not “clearly
unreasonable” for the district court to determine Wessels provided
necessary and extraordinary services to the estate. See In re Estate of
Roethler, 801 N.W.2d 833, 837 (Iowa 2011) (holding a court abuses its
discretion when it exercises discretion on untenable or unreasonable
grounds). The district court also did not abuse its discretion when it
determined Wessels’ actions in defending the 2007 application were
beyond those usually required and were a necessary and extraordinary
service.
Having established that Wessels provided necessary and
extraordinary services to the estate when he defended the 2007
application, we now turn to the 2009 application to determine whether it
complies with the applicable probate rule. Iowa Rule of Probate
Procedure 7.2(3) governs the procedure for requesting fees for
extraordinary services. A request for payment for extraordinary services
can be made in the final report or by separate application. Iowa Ct. R.
7.2(3). The attorney seeking fees bears the burden of proving that the
fees should be paid. Id. The request for payment for extraordinary
services
shall include a written statement showing the necessity for
such expenses or services, the responsibilities assumed, and
the amount of extra time or expense involved. In appropriate
cases, the statement shall also explain the importance of the
matter to the estate and describe the results obtained.
22
Id. The statement required by the rule “allows the court to make an
informed decision regarding the necessity and value of the attorney’s
claimed extra services to the estate.” Mabie, 401 N.W.2d at 32. We have
noted that “[i]t is not the role of this court or the district court to divine
those services that are extraordinary from an attorney’s itemization of
services. Rule [7.2(3)] clearly requires a written statement, to assist the
court and make a better record, in addition to the itemization.” Id. An
attorney is not entitled to extra compensation if he or she does not follow
rule 7.2(3). Id. We review de novo whether an attorney has complied
with rule 7.2. Id.
Wessels complied with rule 7.2(3) when he completed the
application at issue today. He filed a written statement indicating the
necessity of the services he provided and the responsibilities he
assumed. Wessels pointed out that Willows appealed the estate’s fee
application and various other matters and, that as the attorney for the
estate, Wessels was obligated to defend the filings he had made on the
estate’s behalf. Wessels’ itemized billing statement indicated the amount
of extra time involved, a description of the service provided, and
importantly, which itemized services he provided were ordinary and
which were extraordinary. He has not asked us to “divine those services
that are extraordinary from” the list of services he provided. Id. On our
de novo review, we determine Wessels has complied with rule 7.2(3) and
is therefore entitled to $15,845.50 in fees for extraordinary services.
C. The Services Provided by SLH. Willows raises two issues
regarding the fees that the district court awarded to SLH. First, he
claims SLH functioned as the attorney for Wessels personally and did not
represent the estate. Second, he claims that even if SLH represented the
23
estate, the fee request does not comply with applicable law and should
therefore be denied.
Wessels claims that SLH represented the estate, as opposed to him
personally. The first court of appeals decision, issued December 28,
2007, which remanded the 2007 application to the district court, listed
Eric M. Knoernschild of SLH as the attorney for Pete Wessels. Upon
remand, the amended 2007 application initially requested fees for SLH.
These fees were for services provided from February 2, 2007, to February
16, 2007. The bill was addressed to Wessels but indicated it was for
work done on the Bockwoldts’ estates. However, this request was
withdrawn from the amended 2007 application on February 13, 2008.
The transcripts of the February 25 and April 24, 2008 hearings on the
amended 2007 application list Eric M. Knoernschild as the attorney for
Pete Wessels. On August 4, 2008, in response to Willows’ appeal from
the district court’s decision approving the amended 2007 application,
Wessels filed a motion requesting the district court appoint Eric M.
Knoernschild and Kenza B. Nelson of SLH as attorneys for the appeal.
The district court “conclude[d] it ha[d] no authority to decide the motion
presented.” Nelson signed the brief the estate filed in response to the
appeal of the ruling on remand. The court of appeals decision on the
remanded application listed attorneys Knoernschild and Nelson of SLH
as the attorneys for the estates and did not list an attorney for Wessels
personally.
Regarding the services SLH provided, the 2009 application asserts
that Wessels and SLH “have acted for the Estate in regard to contested
and litigation matters.” Wessels also claims, “The Estate’s executor hired
[SLH] as its attorney to assist in the hearing on Wessels’ application for
approval of extraordinary fees following remand from the first appeal to
24
the Court of Appeals and in the second appeal to the Court of Appeals.”
Wessels further claims that “Wessels’ and [SLH’s] actions defending those
fee awards are a direct extension of the original beneficial services
provided by Wessels to the Estate.” In addition to handling the second
appeal, Wessels notes that SLH was hired after the first appeal because
“Wessels was deposed and called as a witness to address the services he
performed for the Estate. For this reason, the Estate hired [SLH] to
assist in litigation matters related to Wessels’ application.” By assisting
in the hearings on the amended 2007 application and handling the
appeal of the remanded 2007 application, Wessels claims SLH was
assisting the estate and not him personally. We agree.
We give a district court great deference when ruling on whether
services benefit an estate. Brady is instructive on this point. There, we
found the district court did not abuse its discretion when it refused to
award a second law firm fees for assisting with litigation because the
district court found “the employment was not reasonably necessary for
protection of the estate’s interests.” Brady, 308 N.W.2d at 74. It was,
however, appropriate to award the second firm fees for appellate work
done on the same case. Id. at 75. The district court refused to order fees
for defending a malfeasance action against the executor, finding those
services did not benefit the estate in any way. Id. at 74. The district
court similarly found that hiring an expert witness on attorney fees did
not benefit the estate and accordingly denied the application for fees. Id.
This finding was also not an abuse of discretion. Id. The district court
did find that litigation efforts defending the final report were
extraordinary services that entitled the attorney to compensation. Id.
We upheld this finding as being within the court’s discretion. Id. at 75.
25
In this case the district court found “the attorney’s fees for [SLH] of
$17,957.91 are reasonable, appropriate and required to protect the
executors of the estate and the estate” and approved the fees requested.
SLH assisted with the preparation of the estate’s fee request and acted as
counsel when Wessels was called on to be a witness and when the ruling
was later appealed. These services may have benefited Wessels, but they
also benefited the estate by ensuring the fees awarded for extraordinary
services complied with the statute. Some of the documents in the file
indicate that SLH was the attorney for Wessels as opposed to the estate.
However, these inconsistencies are insufficient to lead us to conclude the
district court abused its discretion when it determined the services
provided by SLH benefited the estate and were therefore eligible for
compensation under section 633.199. The only services SLH claims it
provided to the estate were related to litigation and appellate services. It
was not an abuse of discretion to determine these services were the type
of services that are compensable under section 633.199.
Having determined that the district court did not abuse its
discretion in finding that SLH was acting as the estate’s attorney and
that the litigation and appellate services provided by SLH could
constitute necessary and extraordinary services, we now turn to Willows’
claim that SLH did not comply with applicable law when proving up its
fee request.
All of the fees requested for SLH in the 2009 application are
asserted to be for extraordinary services “in regard solely to
representation relative to litigation and appeal matters.” In support of
these fees, Wessels submitted a list of sixteen “Advances” in his itemized
bill. The advances were labeled as “Outside professional fee STANLEY
LANDE & HUNTER” and totaled $17,952.91. The statement of
26
extraordinary fees stated the necessity and importance of SLH’s services
and claimed SLH spent a total of 101.7 hours working on the estate. In
the reply to Willows’ resistance to the 2009 application, Wessels attached
“a summary of services performed by [SLH] for the Estate.” He added, “If
the Court needs additional information to determine whether the services
provided by [SLH] were extraordinary, [SLH] is prepared to submit an
itemized billing statement.”
The summary describes SLH’s services as follows:
Ordinary services rendered in connection with this case:
reviewing, preparing, and drafting documents for hearings
on applications for approval of fees and other matters,
following remand from the Court of Appeals; representation
at hearings; attending deposition of Attorney Wessels; office
conferences with Attorney Wessels concerning the case;
reviewing appeal documents and briefs submitted by
Willows; drafting and filing Court of Appeals briefs; research
regarding the case; drafting correspondence to all parties
involved regarding status of the case.
The district court’s ruling found that the itemizations contained in
Wessels’ bill were for “services that were not ordinary services.” The only
finding the district court made that specifically referenced SLH’s services
was, “The Court therefore FINDS, that the extraordinary fees of Pete
Wessels of $15,845.50 and the attorney’s fees for [SLH] of $17,957.91 are
reasonable, appropriate and required to protect the executors of the
estate and the estate.”
While we give broad discretion to the district court’s
determinations of whether an attorney’s services were necessary,
extraordinary services to the estate, we review de novo whether an
attorney has met his burden and proven his fee under section 633.199
and rule 7.2. See Mabie, 401 N.W.2d at 32. In Mabie, we reviewed a
decision where an attorney had submitted an itemized application, but
failed to indicate which items were ordinary and which were
27
extraordinary. See id. We stated, “It is not the role of this court or the
district court to divine those services that are extraordinary from an
attorney’s itemization of services. Rule [7.2(3)] clearly requires a written
statement, to assist the court and make a better record, in addition to
the itemization.” Id. We then reversed the district court, finding there
was an inadequate basis to support the award of extraordinary fees. Id.
This case presents a different problem. Wessels and SLH claimed
all of the services SLH provided the estate were extraordinary but failed
to present any itemization describing the time spent performing each of
those services in greater detail. Willows claims the statement Wessels
provided is inadequate. The statement of extraordinary fees explains the
necessity for the services, which we have already discussed. It also
explains the responsibilities SLH assumed, notably preparing appeals
and assisting Wessels with litigation surrounding the 2007 application
on remand. Finally, the application includes the amount of extra time
involved, which was 101.7 hours. However, unlike Wessels’ application,
the SLH application does not offer any sort of breakdown of how those
hours were spent.
Section 633.199 only allows “just and reasonable” fees to be
awarded for necessary and extraordinary services. The court of appeals
has summarized our case law regarding what constitutes a reasonable
fee as follows:
In endeavoring to ascertain a reasonable legal fee,
relevant factors include the time necessarily spent by the
attorney, the nature and extent of the service, the amount
involved, the difficulty of handling and the importance of the
issues, responsibility assumed, results obtained and the
experience of the attorney.
In re Estate of Bolton, 403 N.W.2d 40, 44 (Iowa Ct. App. 1987); see also
Boyle v. Alum-Line, Inc., 773 N.W.2d 829, 832–33 (Iowa 2009) (using the
28
same factors to determine whether attorney fees were reasonable under
the Iowa Civil Rights Act and Title VII of the Civil Rights Act of 1964). 9
The applicant bears the burden of proving the fees should be awarded.
Iowa Ct. R. 7.2(3); see also In re Metcalf’s Estate, 227 Iowa 985, 994, 289
N.W. 739, 743 (1940).
In Metcalf, we addressed a similar situation where an attorney had
requested fees for extraordinary services, but only documented his time
in broad and approximate terms. See Metcalf, 227 Iowa at 988, 289 N.W.
at 740. The district court found the attorney provided extraordinary
services and that the reasonable value of the services was $3500. Id. at
988–89, 289 N.W. at 740–41. Accordingly, the court granted the fee
request. Id. at 989, 289 N.W. at 741. The beneficiaries objected, noting,
among other things, “that services were not itemized” and the fees were
unreasonable. Id. at 992, 289 N.W. at 742. We stated that “[i]t requires
but a glance at the statement of the attorney . . . to apprise one that the
same was too indefinite to furnish a proper legal basis for [a finding as to
the extent of value of the alleged extraordinary services].” Id. at 993, 289
N.W. at 743. The application for SLH’s fees poses a similar problem.
Willows resisted the application for fees for SLH, pointing out that
other than the general statement of the type of duties performed, there
was no “documentation or evidence showing the services performed by
[SLH] from which the Court can determine whether the advances are
reasonable or for the benefit of the estate.” Without an itemized
statement from SLH, Willows argues that “there is no way for the Court
9We note that the legislature added these factors to Iowa Code section 633.199
in 2007. 2007 Iowa Acts ch. 134, § 10. However, as noted earlier, the decedent in this
case passed away prior to July 1, 2007, before the 2007 amendment took effect.
29
or interested parties to know whether the firm and Wessels double-billed
for the work.”
We agree. Without a more detailed breakdown, such as the one
Wessels provided to justify his own fees, it was impossible for the district
court to determine whether the fees provided by SLH were “reasonable.”
Specifically, it is impossible to determine whether SLH and Wessels
duplicated each other’s efforts. In his reply brief in support of the fee
application, Wessels offered to provide an itemized breakdown of SLH’s
services to the estate, should the court require it. The district court
should have insisted he do so. Without an itemized billing statement, it
is not possible for the district court to evaluate Willows’ claims that SLH
and Wessels may have duplicated their efforts and spent an excessive
amount of time defending the appeal.
Since the application submitted does not support an award of fees
for extraordinary services, it should not have been granted by the district
court. See Mabie, 401 N.W.2d at 32. When a district court awards
attorney fees without specifically addressing complaints raised by one of
the parties, and the basis for the court’s decision is not clearly evident
from the court’s ruling, we have found it appropriate to remand the case
to the district court to review the application and make specific findings.
Boyle, 773 N.W.2d at 833–34. Accordingly, the $17,957.91 in fees
awarded to SLH is set aside, and the case is remanded. The district
court is to request an itemized statement of the services provided by SLH
and make a determination as to the reasonableness of the fee request
after reviewing the exact services SLH provided to the estate.
IV. Disposition.
We affirm the district court’s finding that Wessels and SLH
provided necessary and extraordinary services to the estate of Loren
30
Bockwoldt when they defended the estate’s application for fees. This
finding does not constitute an abuse of discretion on the part of the
district court. On our de novo review, we find Wessels’ application was
adequately supported, but SLH’s was not. Accordingly, we vacate the
decision of the court of appeals and affirm the holding of the district
court in part and reverse in part. On remand, the district court is to
award Wessels extraordinary fees of $15,845.50 and $631.79 in
expenses. Since there is an inadequate basis to conclude SLH’s fees
were reasonable, the district court is to request an itemized statement of
the extraordinary services provided by SLH and evaluate SLH’s fee
request accordingly.
DECISION OF COURT OF APPEALS VACATED; DISTRICT
COURT JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND
CASE REMANDED.
All justices concur except Mansfield, J., who takes no part.