Archive for February, 2013

In In re Lohausen, NYLJ, July 20, 2012 at 38 (Sur.Ct. Queens County), the Surrogate Court considered a petition by the decedent’s daughter, the sole distributee and executrix of the estate, to fix and determine the fees of her attorney. The petitioner had signed a retainer agreement whereby the attorney was retained to “probate the estate” and the fee for services was set at 5% of the value of the gross taxable estate. Pursuant to the retainer agreement, counsel billed the client approximately $103,000.00 for legal services performed.

In her petition, the petitioner argued that the fees were unreasonable and that the reasonable value of the services was not more than $10,000.00. Counsel moved to dismiss the petition alleging that (1) the estate had been fully probated and the fees already paid, thus the court no longer had jurisdiction over the matter, (2) because petitioner had executed the retainer agreement in her individual capacity, the matter was a contractual dispute between living persons which the Surrogate Court had no power to address, (3) because petitioner had executed the retainer agreement individually and had already paid Counsel, she was bound by the retainer and the court could not modify its terms.

The Surrogate Court disagreed with counsel, holding that it had the authority to determine issues concerning attorney’s fees pursuant to the provisions of SCPA 2110, finding that there was no time limitation on their jurisdiction. The Surrogate Court further held that where a retainer prescribes the legal fee to be paid, an attorney bears the burden of establishing that its terms were fairly presented and understood by the client, and that the fee is fair and reasonable. The Surrogate Court ruled that it does have the power to review retainer agreements, even after the retainer fees have been paid and the estate closed, even when fees are based on a percentage, and said fees may be disallowed if the amount of the fee is so large as to become out of proportion to the value of the professional services rendered.

The Surrogate Court denied counsel’s motion to dismiss the petitioner’s petition and concluded that an evidentiary trial was necessary.

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