Guardianship of G.T.C. & E.M.c , 2014 S.D. 65 ( 2014 )

#27018-rev & rem-SLZ
2014 S.D. 65
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
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IN THE MATTER OF THE GUARDIANSHIP AND CONSERVATORSHIP OF
G.T.C. and E.M.C., Minor Children
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APPEAL FROM THE CIRCUIT COURT OF
THE FIRST JUDICIAL CIRCUIT
YANKTON COUNTY, SOUTH DAKOTA
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THE HONORABLE CHERYLE W. GERING
Judge
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TAMARA D. LEE
Yankton, South Dakota Attorney for appellants
Christine and Daniel Iiams.
WANDA HOWEY-FOX of
Harmelink, Fox & Ravnsborg
Yankton, South Dakota Attorneys for appellees
guardians & conservators
Larry and Joan Clark.
DANA J. LARSON of
Kabeiseman & Pollard
Yankton, South Dakota Attorneys for appellee mother
Roxanne Snoozy.
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CONSIDERED ON BRIEFS
ON AUGUST 25, 2014
OPINION FILED 09/17/14
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ZINTER, Justice
[¶1.] This case involves a dispute over the payment of reasonable attorney’s
fees necessarily incurred in the course of a guardianship and conservatorship. The
question is whether the fees are to be paid from the estate or by the guardian and
conservator personally. We conclude that under the relevant statutory language,
such fees are to be paid from the estate.
Facts and Procedural History
[¶2.] In 2009, after G.T.C.’s and E.M.C.’s mother was imprisoned, the
children went to live with their half-sister, Christine Iiams, her husband Daniel
Iiams, and the Iiamses’ three children. This was the third time G.T.C. and E.M.C.
had lived with the Iiamses because the children’s mother could not care for them.
The Iiamses did not petition for a guardianship and conservatorship, and they cared
for the children until 2013 without court involvement.
[¶3.] In 2013, with the release of the mother from prison approaching, the
Iiamses petitioned for a guardianship and conservatorship. The court appointed
them as temporary guardians and conservators. The Iiamses were not, however,
appointed the permanent guardians and conservators. They allowed their
temporary guardianship and conservatorship appointment to lapse, and they agreed
to the appointment of Larry and Joan Clark. 1 The Iiamses then moved for the
attorney’s fees that had been incurred while they were the temporary guardians
and conservators. The circuit court considered the motion in two memorandum
decisions.
1. Larry Clark is the cousin of the children’s father.
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[¶4.] In the first decision, the court found that the hourly rate charged by
the attorney and the time spent on the case were reasonable. However, the court
declined to decide who should pay the fees. The court explained “that before [the
Iiamses could] take monies from the children’s future estate assets, they [had] to
make some showing as to what was done with the assets they received on behalf of
the children during the time period the formal temporary guardianship and
conservatorship was in place.” 2 According to the court, that showing was necessary
before it could determine whether the fees should be paid from the children’s estate
or whether the Iiamses should pay the fees personally.
[¶5.] The court considered Iiamses’ showing and issued its second
memorandum decision. The court found that a vehicle retained by the Iiamses was
part of the children’s estate. The court allowed the Iiamses to keep the vehicle, and
the court reduced the attorney’s fee request by the vehicle’s value ($2,000). The
court indicated that it did “not expect [the attorney] to accept the vehicle as
payment for her fees, but rather, as the [Iiamses] are being awarded the vehicle,
they are expected to be personally responsible for $2,000 in attorneys’ fees[.]” The
court also found that the Iiamses, while acting as guardians and conservators, had
used the children’s estate (Social Security benefits) “for the benefit not only of the
minor children, but also for the benefit of themselves and their own children.” The
court calculated the value of that use ($1,800) and also subtracted that amount from
2. The court cited SDCL 29A-5-116 as its authority for ordering this showing.
However, the court also stated that “SDCL [c]hapter 29A-5 [did] not appear
to require an accounting when there is an appointment of temporary
conservators.” This issue was not briefed, and we express no opinion on the
matter.
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the attorney’s fee request. Finally, the court noted that the Iiamses still retained
$48.30 from the children’s estate, and the court subtracted that from the attorney’s
fee request. The court then calculated that the Iiamses had “received more in estate
assets for their personal benefit” than the claim for attorney’s fees. 3 Therefore, the
court denied the motion, concluding that the Iiamses were “personally responsible
for paying the attorneys’ fees[.]”
Decision
[¶6.] On appeal, Iiamses argue that the right to recover attorney’s fees is
statutory, and the relevant statute provides that reasonable fees are to be paid from
the estate. 4 We agree.
[¶7.] Iiamses had the power to employ attorneys and pay them reasonable
compensation for services rendered for the guardianship and conservatorship. See
SDCL 29A-5-411(18) (granting a conservator the power “[t]o employ persons,
including attorneys . . . and to pay them reasonable compensation”). Payment for
the attorney’s services is governed by SDCL 29A-5-116. That statute specifically
identifies the source from which the fees are to be paid. It states that “[a]ny . . .
attorney for any guardian or conservator . . . [is] entitled to reasonable
3. The court offset the fee request as follows:
$3,413.14 attorney’s fee request
- $48.30 cash still held by Iiamses
- $2,000.00 value of the vehicle
- $1,800.00 value of personal benefits Iiamses obtained
($435.16)
4. Statutory interpretation is a question of law reviewed de novo. Pfuhl v.
Pfuhl, 2014 S.D. 25, ¶ 4, 846 N.W.2d 778, 779 (citation omitted).
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compensation from the estate, including reimbursement for costs advanced.” Id.
(emphasis added). Thus, when attorneys for guardians and conservators are
entitled to reasonable compensation for their services, the fees are to be paid “from
the estate[.]” Id. See also In re Guardianship of S.M.N., 2010 S.D. 31, ¶ 38, 781
N.W.2d 213, 227 (noting that SDCL 29A-5-116 authorized compensation for
attorneys from the estate).
[¶8.] The circuit court was justifiably concerned with the Iiamses’ misuse of
the children’s estate. But in this case, no one contends that the fees were
unreasonable, unnecessary, or that the attorney’s services were in any way related
to the Iiamses’ misuse of the estate. Furthermore, the attorney represented the
guardianship and conservatorship, not the Iiamses personally. Under the clear and
unambiguous language of SDCL 29A-5-116, the attorney for the guardianship and
conservatorship was entitled to her fees from the estate rather than guardians and
conservators personally. 5 “When the language in a statute is clear, certain, and
unambiguous, there is no reason for construction, and [this] Court’s only function is
to declare the meaning of the statute as clearly expressed.” Save Our
Neighborhood—Sioux Falls v. City of Sioux Falls, 2014 S.D. 35, ¶ 8, 849 N.W.2d
265, 268 (alteration in original) (quoting Dep’t of Transp. v. Clark, 2011 S.D. 20, ¶ 5,
798 N.W.2d 160, 162).
[¶9.] The circuit court cited no authority authorizing a reasonable attorney’s
fee request to be offset by some benefit the guardian or conservator may have
5. An attorney’s complicity in or facilitation of the misuse of estate assets could
justify the denial of fees under SDCL 29A-5-116 because those fees would not
be reasonable.
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personally obtained. We also see no language in SDCL 29A-5-116 allowing the
court to directly or constructively permit guardians and conservators to retain
estate assets and then require the estate’s attorney to recover his or her fee from
the guardians and conservators personally. We acknowledge that the court and the
Clarks had legitimate concerns that the Iiamses had improperly used some estate
assets to benefit their family. See SDCL 29A-5-404. 6 But once the court found that
the fees were reasonably incurred, the court’s required “showing as to what was
done with the assets [the Iiamses] received” was no longer a prerequisite to the
payment of the fees from the estate under SDCL 29A-5-116. The remedy for the
guardians’ and conservators’ personal misuse of the estate’s assets lies elsewhere. 7
6. SDCL 29A-5-404 provides in part:
A conservator of a minor . . . shall apply the income and
principal of the estate as needed for the minor’s support, care,
health and education.
....
A conservator shall at all times act in the minor’s best interests
and shall exercise reasonable care, diligence, and prudence.
(Emphasis added.) We have not considered whether the Iiamses misused
estate assets because that issue was not raised on appeal. This opinion
should not be read to require or preclude further proceedings addressing that
issue on remand.
7. SDCL 29A-5-504 is one example. It provides in relevant part:
Upon petition by any interested person or on the court’s own
motion, the court may remove a guardian or conservator or order
other appropriate relief if the guardian or conservator:
...
(4) Wastes or mismanages the estate, unreasonably withholds
distributions or makes distributions in a negligent or profligate
manner, or otherwise abuses powers or fails to discharge duties;
(continued . . .)
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[¶10.] We conclude that under the facts of this case, the Iiamses’ personal use
of estate assets was not relevant to the question whether reasonable and necessary
attorney’s fees were payable from the guardianship and conservatorship estate.
SDCL 29A-5-116 is clear: the guardianship and conservatorship attorney was
entitled to reasonable compensation from the estate. The circuit court erred in
requiring attorney’s fees to be recovered from guardians and conservators
personally. This matter is reversed and remanded for further proceedings
consistent with this opinion.
[¶11.] Both parties moved for appellate attorney’s fees under SDCL 15-26A-
87.3. “[A]ppellate attorney’s fees may be sought ‘in actions where such fees may be
allowable.’” Ellingson v. Ammann, 2013 S.D. 32, ¶ 12, 830 N.W.2d 99, 102 (quoting
SDCL 15-26A-87.3). We have interpreted SDCL 15-26A-87.3 “to mean that
appellate attorney fees may be granted only where such fees are permissible at the
trial level.” Id. (internal quotation marks omitted) (quoting Grynberg Exploration
Corp. v. Puckett, 2004 S.D. 77, ¶ 33, 682 N.W.2d 317, 324). Here, attorney’s fees
were awardable at the trial level, there was no statutory basis to deny the motion
for attorney’s fees in the circuit court, and the Iiamses are the prevailing parties on
appeal. Appellate attorney fees of $2,257.27 are awarded.
[¶12.] GILBERTSON, Chief Justice, and KONENKAMP, SEVERSON, and
WILBUR, Justices, concur.
________________________
(. . . continued)
...
(12) Is not acting in the best interests of the minor or protected
person or of the estate even though without fault.
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