Skip Maine state header navigation

Agencies | Online Services | Help
Estate of McCormick
Download as PDF
Back to the Opinions page

MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	2001 ME 24
Docket:	Yor-00-102
Argued:	October 3, 2000
Decided:	January 31, 2001

Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, and ALEXANDER, JJ.



ESTATE OF PEARL McCORMICK


DANA, J.

	[¶1]  Mark Lukas appeals from judgments entered in the York County
Probate Court (Nadeau, J.) in favor of Lorraine Bowdoin, the personal
representative of Pearl McCormick's estate.  On appeal, Lukas contends that:
(1) his motion for reference should have been granted because allowing
part-time probate judges to maintain active probate practices denied him
due process of law; (2) the Probate Court erred in ordering him to pay
Bowdoin's attorney and personal representative fees, and in denying his
request for attorney fees; (3) he should not have been sanctioned, pursuant
to M.R. Civ. P. 37, for asserting the attorney-client privilege during a
deposition; (4) the judgment disallowing the holographic will should have
been vacated; and (5) the Probate Court abused its discretion by ordering
separate trials.  We agree that the Probate Court erred in requiring Lukas to
pay Bowdoin's attorney and personal representative fees.  In all other
respects we affirm.
I. CASE HISTORY
	[¶2]  The record supports the following facts:  In 1976, Mark Lukas
and his wife Suzanne purchased a home in Kennebunk across the street
from Mearl Stiller.  The Lukases and Stiller became close friends, and in late
1988, Mark Lukas agreed to serve as Stiller's guardian.  Stiller had
previously created an inter vivos trust naming her sister, Pearl McCormick,
beneficiary.  Stiller died in January 1989, and McCormick became the
owner of the trust's equities, valued at approximately $300,000.  Lukas was
appointed guardian and conservator for McCormick in February 1989.     
	[¶3]  Throughout 1988 and 1989, McCormick had urged her attorney,
Stephen Hodsdon, to draft a will on her behalf.  Despite McCormick's
requests, Hodsdon never drafted the will because he questioned
McCormick's testamentary capacity.{1}  In October 1989, however, Lukas and
his wife assisted McCormick in drafting a holographic will.  The will
provided that $40,000 be given to an English relative of McCormick's
deceased husband, with the remainder going to the Lukases.
	[¶4]  McCormick died in January 1997.  Mark Lukas began to close the
conservatorship estate, and Hodsdon drafted an affidavit to assist Lukas with
the closing.  The Lukas affidavit provided that McCormick had no living
relatives.  Lukas closed McCormick's bank account and retained the balance
of that account, $895, as a fee for unpaid services.  Lukas admits that he
overcharged McCormick for his conservatorship services by approximately
$90,000, and he has placed $90,000 in an escrow account to cover those
overcharges.
	[¶5]  In June 1997, Lorraine Bowdoin, McCormick's cousin, was
appointed personal representative of McCormick's estate.  James Mitchell
entered his appearance as Bowdoin's counsel in September 1997.  At that
time Attorney Mitchell served, and continues to serve, as Probate Judge in
Kennebec County.
	[¶6]  Lukas, through his counsel James Young, filed McCormick's
holographic will in October 1997.  Young testified that Lukas had a "clear
statutory duty" to file the holographic will.  In November 1997, Lukas filed
an inventory and accounting of his conservatorship, and a petition to probate
the holographic will and for him to be appointed the personal
representative.  Bowdoin filed objections to the inventory, the accounting,
and the petition for probate.
	[¶7]  Approximately one year later, Bowdoin filed a motion for separate
trials regarding the inventory dispute, the accounting dispute, and Lukas's
claim for extra fees against the estate.  In early December 1998, Bowdoin
testified at her deposition that she had met with McCormick in June 1989,
and that McCormick discussed making a will.  On December 14, 1998, the
court entered an order dismissing with prejudice Lukas's petition to probate
the holographic will because Lukas had voluntarily abandoned the petition. 
One week later, Bowdoin filed a motion seeking recovery from Lukas
directly for her attorney and personal representative fees incurred during
the holographic will contest.
	[¶8]  In March 1999, the court granted in part Bowdoin's motion for
separate trials by ordering successive inventory and accounting trials. 
Approximately one month later, Lukas filed a motion for appointment of a
referee pursuant to M.R. Prob. P. 53.  Lukas sought a reference of the
inventory dispute, the accounting dispute, and Bowdoin's request for
attorney and personal representative fees, contending that a reference
would be expeditious and would ameliorate the due process concerns raised
by Attorney Mitchell's appearance before a fellow probate judge.  The court
denied Lukas's motion for reference in May 1999.  The court subsequently
reconsidered that order, affirmed its denial of a reference as to the attorney
fees and inventory trials, but granted a reference on the accounting trial.
	[¶9]  Attorney Young was scheduled to be deposed in May 1999, in
preparation for the fees trial, but Lukas refused to allow him to testify
without an agreement between the parties regarding a limited waiver of the
attorney-client privilege.  Because the parties could not reach agreement on
the limited waiver, the deposition was terminated after only ten minutes. 
Bowdoin then filed a motion to compel discovery and to award expenses
pursuant to M.R. Civ. P. 37, which the court granted in the amount of
$3,690.02.
	[¶10]  The attorney fees trial was held on May 18, July 6, October 26
and 27, and November 17, 1999.  In December 1999, Lukas filed a motion
to vacate the judgment disallowing the holographic will, claiming newly
discovered evidence and fraud based on Bowdoin's testimony during the fees
trial.  The court denied the motion.  The next day, the court denied Lukas's
motion for attorney fees, stating that Lukas's actions in offering the
holographic will for probate were "dilatory and calculated to protect
himself, rather than to benefit the estate."  In January 2000, the court
entered an order requiring Lukas to pay Bowdoin the $40,420 in attorney
fees and $10,263 in personal representative fees Bowdoin incurred as a
result of the will contest and attorney fees litigation.  By subsequent
amendment, Bowdoin's fee award was increased to $51,087.  In March
2000, the court entered a judgment pursuant to M.R. Civ. P. 54(b) with
respect to the order denying Lukas's motion to vacate the judgment
disallowing the holographic will.  This appeal followed.
II. MOTION FOR REFERENCE
	[¶11]  Before discussing the merits of Lukas's claims, we first address
Bowdoin's contention that the order denying Lukas's motion for reference is
not ripe for appellate review.  Bowdoin contends that the order is not a final
judgment because two of the three trials addressed in the order have yet to
take place.  Ordinarily, an appeal is only cognizable if it arises from a final
judgment.  See Millett v. Atl. Richfield Co., 2000 ME 178, ¶ 8, 760 A.2d
250, 253.  Interlocutory orders that are not immediately appealable merge
with a final decree and become appealable at that time.  See Boyle v. Share,
377 A.2d 458, 462 (Me. 1977) (stating that because "an interlocutory order
is related to the main action, the rule allowing merger of the appeal from
the order with the appeal from the final decree is well founded").  Although
the order denying reference was not a final judgment, it nevertheless
became appealable when it merged with the final judgment on the fees trial
and is therefore properly before this Court.

A.  M.R. Civ. P. 53(b)

	[¶12]  We review for an abuse of discretion a trial court's decision
whether to appoint a referee.  See George D. Ballard, Builder, Inc. v. City of
Westbrook, 502 A.2d 476, 479 n.4 (Me. 1985); Hedberg v. Wallingford, 379
A.2d 126, 128 (Me. 1977).{2}  The plain language of the rule establishes that
absent an agreement of the parties, a motion for appointment of a referee is
only granted in exceptional circumstances.  See Frank v. Assessors of
Skowhegan, 329 A.2d 167, 169 n.3 (Me. 1974) (stating that "[b]efore any
order of reference without agreement may issue, showing must be made
some exceptional condition warrants reference").
	[¶13]  Lukas contends that all issues on appeal should have been
referred because it is logistically difficult to try the issues in Probate Court
over several nonconsecutive days.  Lukas further asserts that witnesses are
being forced to appear several more times in the remaining trials, rather
than having the convenience of appearing once before a referee on all
matters over an estimated two week period.  Accordingly, Lukas contends
that the burden placed on the parties and witnesses by separate trials in the
Probate Court create precisely the exceptional condition envisioned by Rule
53(b)(2).
	[¶14]  Lukas directs our attention to a series of cases in which we
approved a reference.  See George B. Ballard, Builder, Inc., 502 A.2d at 479
n.4; Bruk v. Town of Georgetown, 436 A.2d 894, 896-97 (Me. 1981);
Hedberg, 379 A.2d at 127-28.  Because the parties agreed to a reference in
each of those cases, however, we did not address the restrictive language of
Rule 53(b)(2).{3}  Here, because the parties did not agree to the reference,
Lukas first bears the burden of establishing that this case involves an
exceptional condition, and if so, that the court abused its discretion in
denying the reference.  Although the length of the trials and relative
inconvenience to the parties and witnesses may constitute an exceptional
condition, we cannot conclude that the court abused its discretion in
denying Lukas's motion for reference based on the logistical difficulties of
trying the case in the Probate Court.  See, e.g., 1 Field, McKusick & Wroth,
Maine Civil Practice § 53.1 at 698 (2d ed. 1970) (stating that in the "absence
of agreement by the parties, the rule puts a tight damper on appointment of
referees").

B.  Due Process

	[¶15]  Lukas also contends that his due process rights were violated
because denying his motion for reference necessarily permitted Attorney
Mitchell to appear as Bowdoin's counsel before a fellow probate judge. 
According to Lukas, an unfair advantage inures to the litigant represented by
a judge, with a correlative disadvantage to the adverse party, when, as here,
a probate judge with years of service on the bench appears as a lawyer before
another probate judge who is comparatively new to the bench and who may
someday appear before the advocate-judge now before him.  Although we
understand Lukas's concern, we do not believe the situation rises to the
level of a constitutional due process deprivation in the circumstances of this
case.
	[¶16]  The practice of allowing part-time probate judges to litigate
cases as part-time lawyers has received widespread criticism.{4}  The
criticism focuses on 4 M.R.S.A. § 307 (Supp. 2000), which explicitly
authorizes probate judges to maintain active probate practices.{5}  Lukas has
not challenged the constitutionality of that provision.  Moreover, the
principal case Lukas relies on, Aetna Life Ins. Co. v. Lavoie, 475 U.S. 813
(1986), recognizes that issues involving potential judicial bias or prejudice
rise to a constitutional level "only in the most extreme of cases," and thus
are more appropriately addressed by the policy decisions of state
legislatures.  Id. at 821-22.  The Maine Legislature has addressed this issue
and has continued to allow probate judges to maintain active probate
practices.
	[¶17]  Finally, we need not decide on these facts whether a due
process deprivation occurs when a probate judge has a case pending before
counsel and refuses either to recuse himself or grant a timely motion for
reference.  Lukas never sought Judge Nadeau's recusal, and Lukas concedes
that no direct conflict existed because Judge Nadeau did not have a case
pending in Judge Mitchell's court while this case has been pending. 
Moreover, Lukas's motion for reference was untimely because by the time it
was filed, Judge Nadeau had already addressed the substance of the matter.{6} 
Lukas has not established that the asserted appearance of impropriety is
sufficient to give rise to a due process claim.  Accordingly, we conclude that
the court did not abuse its discretion in denying Lukas's motion for
reference on the ground of due process.
III. ATTORNEY/PERSONAL REPRESENTATIVE FEES
A.  Bowdoin's Motion For Attorney/Personal Representative Fees{7}

	[¶18]  Title 18-A M.R.S.A. § 1-601 (1998) provides, in pertinent part,
that "[i]n contested cases in the original or appellate court of probate, costs
may be allowed to either party, including . . . attorney's fees, to be paid to
either or both parties, out of the estate in controversy, as justice requires." 
In "determining whether the Probate Court has exceeded the authorization
of [section 601], this Court employs an error of law standard of review." 
Estate of Wright, 637 A.2d 106, 109 (Me. 1994) (citing Estate of Stowell,
595 A.2d 1022, 1026 (Me. 1991)).  We defer to the Probate Court's findings
of fact unless such findings are clearly erroneous.  See Estate of Plummer,
666 A.2d 116, 118 (Me. 1995).
	[¶19]  Despite Bowdoin's contentions, section 1-601 does not authorize
a surcharge for attorney fees incurred by a personal representative in
contesting a holographic will.  Rather, section 1-601 allows a party to recover
fees from "the estate in controversy, as justice requires."  Although Bowdoin
may seek recovery of her fees from the estate, the statute does not authorize
the surcharge of fees against opposing litigants.
	[¶20]  In the absence of a statute or some exception recognized at
common law, the American Rule provides that parties to litigation pay their
own attorney fees.  See Foy v. Linscott, 1998 ME 206, ¶ 17, 716 A.2d 1017,
1021; Colquhoun v. Webber, 684 A.2d 405, 413 (Me. 1996) (stating that the
American Rule provides that "absent a statutory provision or contractual
agreement litigants bear their own attorney fees and litigation costs"). 
Bowdoin contends that because Lukas was a fiduciary of the estate, and
because Lukas acted in bad faith toward the estate while a fiduciary,
equitable principles permit Bowdoin to recover her attorney and personal
representative fees directly from Lukas.  See Estate of Whitlock, 615 A.2d
1173, 1178-79 (Me. 1992) (affirming a surcharge for attorney fees and costs
against a personal representative where trial court determined that he had
abused his fiduciary powers and failed to represent the estate in good faith). 
Lukas responds that he cannot be surcharged as a fiduciary because he was
not a fiduciary when he offered the will for probate.  Thus, Lukas contends
that 18-A M.R.S.A. § 5-249(d) (1998) does not apply because his
conservatorship terminated at McCormick's death.{8}  See Estate of
Mouckerezi, 468 A.2d 993, 995 n.1 (Me. 1983) (noting in dicta that a
conservator's obligations to "prosecute or defend actions, claims or
proceedings . . . for the protection of estate assets" terminates at the death
of the protected person).
	[¶21]  Despite Lukas's assertions, the court properly concluded that
Lukas remained a fiduciary of the estate during the holographic will contest. 
Lukas acknowledges that he owed money to the estate for his
conservatorship overcharges.  On McCormick's death, Lukas had a statutory
obligation to retain the estate for delivery to the personal representative. 
See 18-A M.R.S.A. § 5-425(e) (1998).  Lukas has not delivered the estate to
Bowdoin because the overcharge still rests in an escrow account.  In
addition, Lukas had a duty to file an inventory and accounting within 90 days
of his appointment as guardian and conservator.  Lukas, however, was tardy
in filing the inventory and accounting by more than eight years, and
litigation on those issues is pending.  Because Lukas owes the estate money
as a result of his conservatorship, and because his conservatorship duties
have not been fully resolved, we conclude that the court's finding that Lukas
remained a fiduciary of the estate during the will contest was not clearly
erroneous.
	[¶22]  Lukas next contends that even if he remained a fiduciary of the
estate, he was not acting in his fiduciary capacity when filing and offering
the holographic will.  In this case, Lukas occupied the dual role of
conservator and beneficiary.  Each role has distinct rights and obligations
with regard to Lukas's conduct toward the estate.  Whether a fiduciary
breaches his fiduciary duty when he engages in conduct appropriate in his
nonfiduciary role arises in other contexts.  For instance, the issue arises
when an individual occupies the dual role of shareholder and officer of a
corporation.  Whereas a shareholder may act to maximize the value of his
shares, an officer owes a duty of care and loyalty to the corporation and its
shareholders.  See 13-A M.R.S.A. § 716 (Supp. 2000) (duty of corporate
directors and officers).  These two interests may not always converge, and
the law, in contemplation of divergence, recognizes that situations may arise
when although the officer role requires an unfettered, unmitigated duty of
loyalty, the shareholder role simultaneously permits the individual to act in
his or her own self-serving interest.  See Northeast Harbor Golf Club, Inc. v.
Harris, 1999 ME 38, ¶ 25, 725 A.2d 1018, 1025 (discussing corporation's
burden in establishing a conflict of interest in a transaction where the
corporation's president purchased real estate abutting the corporation's
property).{9}  Applying this principle to the present matter suggests that
Lukas was not precluded from filing and offering the holographic will
because he occupied the role of conservator.  Rather, as beneficiary, Lukas
had a natural interest in having the will probated, and Bowdoin has not
established that the will was filed and offered by Lukas in his role as
conservator.  Accordingly, we conclude that Lukas filed and offered the will
in his capacity as beneficiary, and that such filing and offering does not
offend any fiduciary obligations he owed as conservator.
	[¶23]  Finally, Lukas contends that even if he was a fiduciary of the
estate and was acting in his fiduciary capacity when filing and offering the
will, his conduct in filing the holographic will in court and offering it for
probate was neither a breach of any fiduciary duty he owed the estate nor
did it constitute "bad faith" for purposes of the bad faith fiduciary exception
to the American Rule.  Cf. Estate of Whitlock, 615 A.2d at 1178-79. 
Although the Probate Court made no finding that Lukas's offer and petition
to probate the will was a breach of his fiduciary duties to the estate, the
court did find that Lukas demonstrated bad faith by filing and offering the
will for probate with the knowledge that McCormick lacked testamentary
capacity.  In addition, the court made several subsidiary findings to support
its determination that Lukas exhibited bad faith.  For instance, the court
determined that Lukas protracted the fee dispute and noted that Bowdoin
was forced to file a motion to compel discovery.  The record establishes,
however, that Lukas responded in a timely fashion to Bowdoin's voluminous
discovery requests, only a fraction of which related specifically to the
probating of the will.  Moreover, the evidence establishes that the fees trial
extended over a five day period because Bowdoin, with the court's approval,
elicited testimony regarding both Lukas's conduct as conservator and the
inventory of the estate.  Such testimony was not relevant to Lukas's filing or
offering the will.  Nevertheless, the court relied on that evidence as the
principal means of establishing Lukas's bad faith.  Pursuant to the court's
own separation order, that evidence was distinct from the narrow issue on
which the fee award was actually sought; that is, Lukas's conduct in filing
and probating the will.
	[¶24]  Bowdoin also contends that Lukas's bad faith was evidenced by
his failure to disclose, when the will was filed, the doctors' letters
addressing McCormick's testamentary capacity.  However, Lukas had no
obligation to disclose that evidence until Bowdoin contested the will. 
Moreover, the fact that Lukas filed the holographic will at the insistence of
counsel, and the fact that he voluntarily abandoned the petition on the
advice of counsel, mitigate any finding of bad faith.  Viewed in the aggregate,
we cannot conclude that the evidence supports a finding of bad faith.
	[¶25]  For all the reasons discussed above, we conclude that the
Probate Court erred in allowing Bowdoin to recover fees incurred as a result
of the will contest, and therefore we vacate that award.{10}


click here for the rest of this opinion