Opinion
NUMBER 2016 CA 1146 C/W NUMBER 2016 CA 1147
07-20-2017
SUCCESSION OF MYRA DAROUSE LARUE
Walter Antin, Jr. Hammond, LA Attorney for Appellant Southeastern Louisiana University Foundation Ronald J. White Timothy D. DePaula New Orleans, LA Attorneys for Appellees Judy Polidori and Murphy, Rogers, Sloss, Gambel and Tompkins -- Intervenors
NOT DESIGNATED FOR PUBLICATION
Appealed from the 21st Judicial District Court In and for the Parish of St. Helena, Louisiana
Trial Court Numbers 21172 and 21174 Honorable Jeffrey S. Johnson, Judge Walter Antin, Jr.
Hammond, LA Attorney for Appellant
Southeastern Louisiana University
Foundation Ronald J. White
Timothy D. DePaula
New Orleans, LA Attorneys for Appellees
Judy Polidori and
Murphy, Rogers, Sloss, Gambel
and Tompkins -- Intervenors BEFORE: WELCH, CRAIN, AND HOLDRIDGE, JJ. WELCH, J.
Southeastern Louisiana University Foundation ("the Foundation"), a legatee under the March 6, 2009 last will and testament of Myra Darouse LaRue, appeals a judgment homologating the first tableau of distribution by the administrator of the Succession of Myra LaRue. The judgment recognized, as a debt of the succession, the Foundation's claim for attorney fees in the amount of $100,000.00, which the Foundation claimed it had incurred in its action to annul the October 9, 2010 will executed by the decedent, and the judgment apportioned that claim among the legatees of the probated will on a pro rata basis. Judy Polidori, another legatee under the March 6, 2009 will, has answered the appeal. For reasons that follow, we reverse in part and vacate in part the judgment of the trial court, we render judgment, and we remand with instructions.
Southeastern Louisiana University Foundation was formerly Southeastern Development Foundation. For the sake of clarity and consistency herein, we refer to both entities as "the Foundation."
FACTUAL AND PROCEDURAL HISTORY
Myra LaRue died on October 22, 2010. Approximately thirteen days prior to her death, October 9, 2010, Myra LaRue executed a will ("the October 9, 2010 will"), which provided, in pertinent part, as follows:
Subject to funeral expenses, personal debts owed, and any specific legacies; I leave my entire estate that I may own at the time of my death, real, personal, mixed, tangible, and intangible, to my sister Mary Elizabeth Darouse Pardue, and these three nieces, Judy Pardue Polidori, Mary Sue Darouse, and Barbara Irene Pardue. I leave 25% (twenty-five percent) of my entire estate to each of them to share and share alike. I have been married twice and my last husband is deceased. I have never been adopted and have never adopted anyone. I have no children.
* * *
I name and appoint Mary Sue Darouse as executrix of my estate. ...
On November 3, 2010, Mary Sue Darouse, filed a petition to probate the October 9, 2010 will. That same date, in a separate proceeding, the Foundation filed a petition for appointment of provisional administrator. Therein, the Foundation asserted that Myra LaRue had died testate, leaving one or more testaments, that no will had been filed with the Court, and that a search for a will needed to be made. The Foundation further alleged that during Myra LaRue's lifetime, she was a great friend and benefactor of Southeastern Louisiana University ("SLU"), her alma mater, and that on information and belief, Myra LaRue had bequeathed her home, its contents, and other assets to the Foundation. The Foundation further alleged that there were assets of Myra LaRue's estate that needed to be preserved, safeguarded and managed, and that an administration of the succession was necessary. Therefore, the Foundation sought to have a provisional administrator of the succession appointed. The trial court declined to appoint a provisional administrator, and the two proceedings were subsequently consolidated.
On December 1, 2010, the Foundation filed a petition to annul the Ocober 9, 2010 will ("the nullity action"). Named as defendants in the nullity action were the legatees under the October 9, 2010 will—Mary Sue Darouse, Mary Elizabeth Darouse Pardue, Judy Pardue Polidori, and Barbara Irene Pardue. In the petition, the Foundation alleged that it was a legatee under a previous will executed by Myra LaRue on March 6, 2009, which had been prepared by Clifton Speed, and that Mr. Speed was in possession of that will, but he had not filed it with the court and had refused to provide a copy to the Foundation. The Foundation further alleged that the October 9, 2010 will was invalid because: the requisite testamentary formalities set forth in La. C.C. arts. 1573 and 1576, et seq., were not observed during its execution; Myra LaRue lacked the requisite mental capacity to make the dispositions, as set forth in La. C.C. art. 1477; the will was the product of fraud or duress, as set forth in La. C.C. art. 1478; and the will was procured through undue influence, as set forth in La. C.C. art. 1479.
The nullity action proceeded to a trial on the merits, and at the conclusion of trial, the trial court took the matter under advisement. On February 24, 2012, the trial court issued extensive written reasons and rendered judgment in favor of the Foundation. In its written reasons, the trial court found, first and foremost, that the October 9, 2010 will was not confected in accordance with La. C.C. art. 1577(1), and therefore, it declared the October 9, 2010 will "null, void[,] and invalid." Next, the trial court found that it had "been shown by a clear and convincing standard that it [was] highly probabl[e] that the [October 9, 2010 will] was the product of undue influence, fraud, or duress[,]" and that it was "not the will of Myra LaRue; the trial court then declined to address the issue of Myra LaRue's mental capacity. On March 1, 2012, the trial court signed a judgment in accordance with its written reasons for judgment, finding that the October 9, 2010 will of Myra LaRue was "null, void, and invalid" and assessing all costs to Mary Elizabeth Darouse Pardue, Judy Pardue Polidori, Mary Sue Darouse, and Barbara Irene Pardue.
La. C.C. art. 1577 provides, in pertinent part, that:
The notarial testament shall be prepared in writing and dated and shall be executed in the following manner. If the testator knows how to sign his name and to read and is physically able to do both, then:
(1) In the presence of a notary and two competent witnesses, the testator shall declare or signify to them that the instrument is his testament and shall sign his name at the end of the testament and on each other separate page.
We note that after determining that the October 9, 2010 will was null, void, and invalid due to the lack of testamentary formalities, the trial court then addressed the issue of whether the October 9, 2010 will was null because it was the product of undue influence, fraud, or duress. However, since the trial court had already determined that the October 9, 2010 will was null, void, and invalid, any additional determinations as to whether the will was null because it was the product of undue influence, fraud, or duress or whether Myra LaRue lacked mental capacity were unnecessary and not essential to the judgment. Thus, the trial court's statements regarding undue influence, fraud, or duress constituted an advisory opinion that must be considered as purely obiter dicta and not binding on either the trial court or this Court. See Meaux v. Wendy's Intern., Inc., 2010-2613 (La. 5/13/11), 69 So.3d 412, 413.
An appeal of the March 1, 2012 judgment declaring the October 9, 2010 will null and void was never perfected.
On April 19, 2012, the Foundation filed a motion to fix costs against Mary Elizabeth Darouse Pardue, Judy Pardue Polidori, Mary Sue Darouse, and Barbara Irene Pardue. Therein, the Foundation sought to recover costs in the total amount of $45,334.56, which it claimed to have incurred in the nullity action. Thereafter, on September 25, 2012, the trial court rendered and signed a judgment granting the motion to fix costs, in part, and entering a money judgment in favor of the Foundation and against Judy Pardue Polidori, Mary Sue Darouse, Barbara Irene Pardue, and Mary Elizabeth Darouse Pardue, in solido, for costs in the total amount of $25,615.77 ("the costs judgment").
An appeal of the September 25, 2012 judgment taxing costs to Judy Pardue Polidori, Mary Sue Darouse, Barbara Irene Pardue, and Mary Elizabeth Darouse Pardue was never perfected.
The trial court did not assess the remaining $19,718.79 in costs to the defendants. The Foundation subsequently sought to have those remaining costs recognized as a debt of the estate; however, the trial court declined the request.
At some point, a copy of the will executed by Myra LaRue on March 6, 2009 ("the March 6, 2009 will") was filed into the record of these proceedings. The March 6, 2009 will provided, in pertinent part, as follows:
The record herein was designated by the parties. The parties do not dispute the validity of the March 6, 2009 will or that the March 6, 2009 will was probated after the October 9, 2010 will was declared null, void, and invalid.
I leave and bequeath unto my niece, Judy Pardue Polidori, all of the certificates of deposit that I die possessed of in any bank, savings and loan or other financial institution.[]
I leave and bequeath unto my friend, Beatrice Arnone, those funds on deposit in my personal checking account at my death.
I leave and bequeath unto [the Foundation] Endowment all of the remainder of my property which I die possessed of, of every
nature and kind, whether movable or immovable, tangible or intangible, separate or community.
Notably, Judy Polidori (Myra LaRue's niece) was the only person (or entity) named as a legatee under both the October 9, 2010 will and the March 6, 2009 will. As noted hereinafter, based on the sworn detailed descriptive list filed by the administrator of the succession, the value of Judy Polidori's legacy under either will was almost the same. See footnote 10.
Notably, Judy Polidori (Myra LaRue's niece) was the only person (or entity) named as a legatee under both the October 9, 2010 will and the March 6, 2009 will. As noted hereinafter, based on the sworn detailed descriptive list filed by the administrator of the succession, the value of Judy Polidori's legacy under either will was almost the same. See footnote 10.
The sworn detailed descriptive list filed by the administrator of the succession reveals that the estate of Myra LaRue was comprised of property with a total value of $350,680.74. Specifically, the estate consisted of immovable property with an appraised value of $250,000.00; a certificate of deposit in the amount of $85,000.00, a checking account with a balance of $14,337.52, a savings account with a balance of $143.22, a vehicle with a value of $600.00, and personal tangible property, furniture, fixtures, and personal effects valued at $600.00.
Although the detailed descriptive list is not contained in the record of these proceedings, it was offered into evidence at the hearing on the petition for homologation of the first tableau of distribution. Furthermore, the property comprising the succession of Myra LaRue and its value is not disputed by the parties.
Under the March 6, 2009 will, this asset was bequeathed to Judy Polidori; thus, Judy Polidori's legacy under the March 6, 2009 will had a value of $85,000.00. Under the October 9, 2010 will that was declared invalid, Judy Polidori was bequeathed 25% of Myra LaRue's entire estate. The detailed descriptive list sets forth that the value of Myra LaRue's estate was $350,680.74; thus, Judy Polidori's legacy under the October 9, 2010 will was approximately $87,670.19.
On October 29, 2013, the administrator of the succession filed a petition for homologation of the first tableau of distribution. Therein, the administrator sought the trial court's approval to make distributions, as charges and offsets from Myra LaRue's legacy to Judy Polidori (the $85,000 certificate of deposit), for the following: (1) $26,844.58 (plus judicial interest on that amount) to the Foundation for the costs owed by Judy Polidori (and the other defendants) pursuant to the costs judgment; (2) $12,047.00 to Beatrice Arnone for monies withdrawn by Judy Polidori, Barbara Irene Pardue, Mary Sue Darouse and/or Mary Elizabeth Darouse Pardue, from Myra LaRue's checking account after her death; (3) and $427.00 to the succession of Myra LaRue for electric services paid to DEMCO after Myra LaRue died and while the home was being occupied by Judy Polidori, Barbara Irene Pardue, Mary Sue Darouse, and/or Mary Elizabeth Darouse Pardue. In addition, as to the remaining $45,681.42, the administrator sought a determination from the trial court as to whether that sum should be paid directly to Judy Polidori (i.e., placing Judy Polidori into possession of the funds remaining in her legacy) or to the Foundation pursuant to a claim by the Foundation for reimbursement or offset for the litigation expenses/attorney fees it incurred in the nullity action in the amount of $100,000.
As discussed hereinafter, on January 22, 2013, the Foundation obtained a writ of fieri facias ("fifa") directing the seizure of Judy Polidori's property in the succession administrator's possession (i.e., her legacy) to satisfy the entire costs judgment, plus judicial interest.
This sum represents the funds remaining from the certificate of deposit, i.e., the sum of $85,000.00 less the above-mentioned charges and offsets of $26,844.58 to the Foundation, $12,047.00 to Beatrice Arnone, and $427.00 to the Succession of Myra LaRue.
The Foundation made a claim to the succession representative for attorney fees in the amount of $100,000.00. According to the record, Southeastern incurred attorney fees in the amount of $320,571.67 in its effort to nullify Myra LaRue's October 9, 2010 will, which sum was based on the attorneys' hourly fee for work performed. However, pursuant to the Foundation's contract with its attorneys, the attorney fees owed by the Foundation to its attorneys would be the lesser of either the total hourly fees or 40% of the Foundation's total recovery. As set forth above, according to the detailed descriptive list of the administrator of the succession, the value of the property bequeathed to the Foundation in the March 6, 2009 will was $251,343.22. 40% of that sum is $100,537.28. Thus, the Foundation's claim for attorney fees in the nullity action was the sum of approximately $100,000.00, the lesser of the two amounts under its contract with its attorney.
Thereafter, on June 13, 2014, the attorneys representing Judy Polidori filed a petition of intervention and notice of claim pursuant to La. R.S. 9:5001. Therein, Judy Polidori's attorneys asserted that they had been hired by Judy Polidori and her family to represent their interests in the succession of Myra LaRue; that the March 6, 2009 will had been probated, which named Judy Polidori as a beneficiary of "all certificates of deposit;" that Judy Polidori had agreed to compensate her attorneys on an hourly basis and to satisfy her legal or professional fees through any judgment of possession or other adjudication to her of property from the estate; and that Judy Polidori had incurred legal or professional fees in the amount of $309,622.01 that had not been paid. Accordingly, the attorneys sought to intervene and file a notice of claim pursuant to La. R.S. 9:5001 to protect their professional fee interest in any judgment of possession and/or property awarded to Judy Polidori in the succession.
The attorney for the Foundation also filed an intervention, asking the trial court to recognize a privilege under La. R.S. 9:5001 in favor of the Foundation's attorney on any funds recovered by Judy Polidori as a result of her legacy under the March 6, 2009 will (the funds in the certificate of deposit) and to declare that Judy Polidori's attorneys did not have a privilege because their efforts did not result in Judy Polidori recovering the legacy of the certificate of deposit. The record does not reveal the disposition of this request; however, the attorney for the Foundation was clearly not entitled to a privilege under La. R.S. 9:5001 on any funds recovered by Judy Polidori. The privilege on professional fees set forth in La. R.S. 9:5001 only applies to "the agreed upon fee" or other amount advanced by the attorney to or on behalf of a client. See La. R.S. 9:5001(B). Herein, Judy Polidori was not a client of the Foundation's attorneys (or represented by them in any capacity) and there was no "agreed upon fee" between the Foundation's attorneys and Judy Polidori.
Judy Polidori filed an opposition to the administrator's proposed first tableau of distribution, arguing that: (1) to the extent that the tableau of distribution sought to pay the Foundation's claim for attorney fees, that claim was a debt of the Foundation, not the estate, and should be rejected; (2) the Foundation, as a legatee, lacked standing to bring any claim on behalf of the estate; (3) the petition of intervention and notice of claim filed by Judy Polidori's attorneys primed any claim by the Foundation to any of the funds in Judy Polidori's legacy (the certificate of deposit) for either the costs judgment or attorney fees; (4) even if the Foundation's claim for attorney fees was a debt of the estate, pursuant to La. C.C. arts. 1423 and 1424, those debts should be charged to the universal legatee—i.e., the Foundation—rather than to a particular legatee—i.e., Judy Polidori; (5) the Foundation's claim for attorney fees as a debt of the succession was barred by res judicata because it was not raised in the nullity proceeding or addressed by the March 1, 2012 judgment annulling that will; and (6) the Foundation's purported seizure of Judy Polidori's legacy (certificate of deposit) was improper because the costs judgment was not a debt or expense of the succession, and thus, could not be paid by the administrator of the succession from Judy Polidori's legacy (the certificate of deposit).
After a hearing on the first tableau of distribution, the trial court rendered and signed a judgment on October 15, 2015 declaring that: (1) the Foundation's claim for attorney fees (litigation expenses) in the amount of $100,000.00, which the Foundation incurred in the nullity action, be recognized as a debt of the estate; (2) the Foundation's claim for attorney fees (litigation expenses) be apportioned on a pro rata basis to the legatees under the probated will of March 6, 2009 in accordance with their proportionate share of the estate (i.e., $4,088.48 to Beatrice Arnone from her legacy of $14,337.52 (the balance of the checking account); $24,238.57 to Judy Polidori from her legacy of $85,000.00 (the certificate of deposit), and $71,672.95 to the Foundation from its universal legacy of $251,343.22 (the remaining property Myra LaRue died possessed of); (3) the costs judgment be paid to the Foundation from Judy Polidori's particular legacy to the extent of one-fourth of the judgment's principal and accrued interest balance; (4) the writ of seizure and garnishment against Judy Polidori's legacy issued by the Foundation be satisfied in full as to Judy Polidori, insofar as the funds that she received from the certificate of deposit for which she was a particular legatee under the provisions of the March 6, 2009 will; (5) the legacy of Beatrice Arnone be paid, less her prorated share of the Foundation's claim for attorney fees, leaving a net balance due Beatrice Arnone of $10,240.04; and (6) Judy Polidori be paid the remaining balance of her legacy (i.e. the balance of her legacy less the sums set forth in the judgment for the costs judgment and attorney fees), which balance was then subject to the lien (or privilege) of her attorney for professional fees.
The Foundation has appealed this October 15, 2015 judgment, and Judy Polidori has answered the appeal. On appeal, the Foundation contends that the trial court erred in (1) apportioning only a pro rata portion of the Foundation's claim for attorney fees to Judy Polidori's legacy under the March 6, 2009 will rather than ordering that the entire claim be paid from Judy Polidori's legacy; and (2) apportioning only a one-fourth share of the costs judgment to Judy Polidori's legacy under the March 6, 2009 will rather than ordering that the entire costs judgment be paid from her legacy. In Judy Polidori's answer to the appeal, she contends that the trial court erred in: (1) recognizing the Foundation's claim for attorney fees as a debt of the estate; (2) apportioning the Foundation's claim for attorney fees to the particular legatees (Judy Polidori and Beatrice Arnone) rather than charging it to the estate's universal legatee (i.e., the Foundation); and (3) awarding any sums to the Foundation for either its claim for attorney fees or the costs judgment because the attorney fee privilege in favor of her attorneys had priority and preference over any sums purportedly owed to the Foundation.
Judy Polidori's attorneys also filed an answer to the appeal; however, that answer to the appeal was dismissed by this Court on our own motion because it was untimely. See Succession of Myra Darouse LaRue, 2016-1146, 2016-1147 (La. App. 1st Cir. 12/5/16) (unpublished action).
In addition, the Foundation filed a motion to strike Judy Polidori's answer to the appeal, essentially arguing that she should not be entitled to relief through an answer to the Foundation's appeal because she did not perfect her own suspensive appeal. We find no merit to this motion. Pursuant to La. C.C.P. art. 2133, Judy Polidori was entitled, as a matter of right, to answer the Foundation's appeal if she desired to "have the judgment modified, revised, or reversed" by filing an answer to the appeal "not later than fifteen days after the return date or lodging of the record, whichever is later." The record was lodged with this Court on September 1, 2016, and the return date was September 12, 2016; thus, the later date was the return date of September 12, 2016. Judy Polidori filed her answer to appeal on September 15, 2016, which was within fifteen days of September 12, 2016; therefore, she is entitled to seek, through an answer to the Foundation's appeal, a modification, revision, or reversal of the judgment. Accordingly, we deny the Foundation's motion to strike.
LAW AND DISCUSSION
Classification of the Foundation's Claim for Attorney Fees as a Debt of the Estate
and Pro Rata Allocation of that Expense to the Legatees
At the outset, we recognize the well-settled principle that attorney fees are not recoverable unless expressly authorized by statute or by a contract between the parties. Huddleston v. Bossier Bank and Trust Co., 475 So.2d 1082, 1085 (La. 1985); Tassin v. Golden Rule Ins. Co., 94-0362 (La. App. 1st Cir. 12/22/94), 649 So.2d 1050, 1058. However, in this case, the issue is not whether attorney fees can be recovered by the Foundation from Judy Polidori, but rather, whether the litigation expenses, including attorney fees, that a legatee (the Foundation) incurred in nullifying another will executed by the decedent (the October 9, 2010 will) were properly classified as a "debt of the estate;" and if so, whether such debt should be allocated among all the legatees on a pro rata basis (the Foundation, Judy Polidori, and Beatrice Arnone), to a particular legatee or legatees (Judy Polidori), or to the universal legatee (the Foundation).
We note that the Foundation argues that it was entitled to recover attorney fees from Judy Polidori due to her "fraud," citing La. C.C. arts. 1958 and 2324(A). However, we find no merit to this argument. First and foremost, as noted in footnote 3, the trial court's determination that the October 9, 2010 will was the product of "undue influence, fraud, or duress" was obiter dicta, and was not subsequently binding on either the trial court or this court. Furthermore, the record does not reveal that Judy Polidori perpetrated any "fraud" against the Foundation; Judy Polidori was in California when the October 9, 2010 will was executed and she did not file the petition to probate the October 9, 2010 will. In addition, the trial court's determination that the October 9, 2010 will was the product of "undue influence, fraud, or duress" was based on La. C.C. arts. 1478 and 1479. Notably, these article are contained in Title II of Book III of the Civil Code, which relates to "Donations," and these articles do not provide for an award of attorney fees when a donation is nullified. Although La. C.C. art. 1958 provides that "[t]he party against whom rescission is granted because of fraud is liable for damages and attorney fees," that article is set forth in Title IV of Book III of the Civil Code, which relates to "Conventional Obligations or Contracts." In this case, a contract (or other conventional obligation) was not rescinded because of fraud; hence, La. C.C. art. 1958 is not applicable to this case (which involves a donation mortis causa) and does not support a claim for attorney fees or damages to the Foundation from Judy Polidori.
The primary purpose of succession administration is payment of debts of the succession, and all powers and duties of an administrator are incidental to that purpose. Succession of Roberts, 255 So.2d 610, 611 (La. App. 1st Cir. 1971), writ denied, 260 La. 682, 257 So.2d 148 (1972). Louisiana Code of Civil Procedure article 3301 provides, in pertinent part, that "[a] succession representative may pay an estate debt only with the authorization of the court[.]" "When a succession representative desires to pay estate debts, he shall file a petition for authority and shall include in or annex to the petition a tableau of distribution listing those estate debts to be paid." La. C.C.P. art. 3303(A). "Estate debts" are defined in La. C.C. art. 1415 as "debts of the decedent and administration expenses."
"Debts of the decedent are obligations of the decedent or those that arise as a result of his death, such as the cost of his funeral and burial." Id. "Debts of the decedent are charged ratably to property that is the object of general or universal legacies and to property that devolves by intestacy, valued as of the date of death." La. C.C. art. 1423. "Administration expenses are obligations incurred in the collection, preservation, management, and distribution of the estate of the decedent." La. C.C. art. 1415. Administration expenses are broadly defined to include expenses that are incurred after death in preserving, safeguarding, and operating the property of the estate, such as repairs, costs of maintenance and upkeep, interest attributable to a debt, and custodial fees. La. C.C. art. 1415, Revision Comments—1997. "Administration expenses are charged ratably to the fruits and products of property that is the object of the general or universal legacies and property that devolves by intestacy." La. C.C. art. 1424. "When the fruits and products do not suffice to discharge the administration expenses, the remaining expenses are charged first to the property itself, next to the fruits and products of property that is the object of particular legacies, and then to the property itself." Id.
Louisiana Civil Code article 1423 also sets forth how debts of the decedent are to be paid when the property that is the object of a general or universal legacy does not suffice; however, those provisions are inapplicable herein because there is no evidence in the record that the debts of the decedent exceeded the value of the property that was the object of the universal legacy.
In this case, the attorney fees/litigation expenses incurred by the Foundation in the amount of $100,000.00 to nullify the October 9, 2010 will were not a "debt of the decedent," as defined by La. C.C. art. 1415; Myra LaRue did not incur that obligation and that debt or expense did not arise from Myra LaRue's funeral, burial, or otherwise from her death. Hence, the issue is whether the Foundation's claim for attorney fees to nullify the October 9, 2010 will was an "administration expense." We have not found, nor have we been directed to, any authority providing that the attorney fees or litigation expenses incurred by an heir or legatee in annulling a will of the decedent can be classified as an "administration expense" or otherwise as a "debt of the estate." Rather, under the jurisprudence of this State, the rule is well-settled that an attorney representing particular heirs or claimants in a succession proceeding has no claim against the estate for his services, even though such services benefited the other heirs. In re Succession of McCoy, 2010-0453 (La. App. 1st Cir. 9/10/10) (unpublished); Succession of Meier, 204 So.2d 793, 797 (La. App. 4th Cir. 1967); Succession of Bradford, 130 So.2d 702, 706 (La. App. 2nd Cir. 1961); Succession of Guichard, 225 La. 315, 319, 72 So.2d 744, 745 (La. 1954); and Succession of Russell, 208 La. 213, 220, 23 So.2d 50, 52 (La. 1945). See also Succession of Rosenbrock, 175 La. 1049, 1056-1057, 145 So. 4, 6 (La. 1932).
Although the Foundation relies on Succession of Horrell, 2011-0194 (La. App. 4th Cir. 11/30/11), 79 So.3d 1162, writ denied, 2012-0180 (La. 3/23/12), 85 So.3d 96, and Succession of Bell, 2006-1710 (La. App. 1st Cir. 6/8/07), 964 So.2d 1067, in making its argument, neither of those cases classified attorney fees incurred by a legatee to nullify a will as a debt of the estate. Rather, both cases involved allocating the expenses of the administratrix, which were properly classified as "administration expenses," to the legatee that caused the expense. Furthermore, there is no evidence that Judy Polidori "caused" the litigation expenses incurred by the Foundation; Judy Polidori was a legatee under both wills, she did not file the original petition seeking to probate the October 9, 2010 will, and she was a defendant in the nullity action solely because she was a legatee under the October 9, 2010 will.
On the other hand, Louisiana jurisprudence establishes there are instances where attorney fees incurred by the succession representative may be classified as estate debts. See Succession of Daste, 254 La. 403, 423, 223 So.2d 848, 855 (La. 1969) (approving the expenditure of $19,300.00 in attorney fees for work performed by attorneys for the executor and in "winding up" the succession as estate debts); Succession of Cole, 2012-802 (La. App. 3rd Cir. 12/26/12), 108 So.3d 240, 254-255, writ denied, 2013-0257 (La. 3/15/13), 109 So.3d 384 (where the court noted the unappealed portion of the district court judgment authorizing one-half of the submitted legal fees to be paid as an estate debt, but rejecting the authorization of payment of the other half of the legal fees, which it found were incurred for the personal benefit of the executor when he defended, as co-heir, the challenge to a prior consent judgment that constituted the apportionment of inherited stock). Additionally, legal expenses of administration incurred by an executor on behalf of the estate, and expenses incurred in defense of the will when under attack, are proper charges against the succession. Succession of Bradford, 130 So.2d at 706. Further, while the estate may be liable for attorney fees incurred by the administrator for services performed for the benefit of the estate, the estate is not liable for attorney fees that benefit the administrator individually. Succession of Reno, 2015-0854 (La. App. 1st Cir. 9/12/16), 202 So.3d 1147, 1154, writ denied, 2016-2106 (La. 2/10/17), ___ So.3d ___; Succession of Menendez, 160 So.2d 827, 829 (La. App. 4th Cir. 1964).
In this case, the Foundation was neither the administrator of the succession nor the succession representative such that the attorney fees it incurred in the nullity action could be classified as an "administration expense" or "debt of the estate." The Foundation incurred the litigation expenses and attorney fees at issue to attack, rather than defend, the validity of the October 9, 2010 will. As a result of the Foundation's nullity action, the March 6, 2009 will was the will that was probated. Judy Polidori did not file the petition seeking to probate the October 9, 2010 will, she was not in Louisiana when the October 9, 2010 will was executed, and she was made a defendant in the nullity action solely because she was a legatee under the October 9, 2010 will. And, as previously noted, she was a successor (or legatee) under both wills and the value of her legacy under either will was approximately the same—thus, she would benefit from either will being probated. On the other hand, the Foundation was not a legatee under the October 9, 2010 will; it was only a legatee under the March 6, 2009 will. Although Beatrice Arnone, the other legatee under the March 6, 2009 will, may have benefitted from the Foundation's nullity action, the Foundation clearly brought the nullity action for its own benefit. Furthermore, the Foundation's nullity action did not serve to preserve, safeguard, or operate the property of the estate; rather, the result of the nullity action merely changed who the successors to Myra LaRue's estate would be. Thus, we cannot say that the attorney fees and litigation expenses incurred by the Foundation in the nullity action were administration expenses of the succession, or otherwise a "debt of the estate" and the trial court erred in determining otherwise.
As we have determined that the trial court erred in determining that the litigation expenses, including attorney fees, that the Foundation incurred in the nullity action were not properly classified as a "debt of the estate," we need not address whether those expenses were properly allocated among all the legatees on a pro rata basis or whether it should have been allocated to a particular legatee or to the universal legatee.
Accordingly, those portions of the October 15, 2015 judgment of the trial court declaring the Foundation's claim for attorney fees (litigation expenses) in the amount of $100,000.00, which the Foundation incurred in the nullity action, be recognized as a debt of the estate and apportioning that claim on a pro rata basis to the legatees under the March 6, 2009 will in accordance with their proportionate share of the estate are hereby reversed.
In addition, we render judgment ordering the administrator of the succession of Myra LaRue to place Beatrice Arnone in possession of her entire legacy (the balance of Myra LaRue's checking account on the date she died) less any and all advances made to her on her legacy by the administrator. See La. C.C.P. art. 2164.
Although the record is not clear, it appears that after Myra LaRue died, some of the funds in the checking account were used to pay the debts of Myra LaRue or to pay administration expenses; hence, the trial court's October 15, 2015 judgment ordered that Beatrice Arnone's legacy (the value of the legacy less her prorated portion of the Foundation's claim) be paid from the Foundation's residual (universal) legacy. See La. C.C. arts. 1423 and 1424. Likewise, herein, we order any remaining sums owed to Beatrice Arnone pursuant to her legacy be paid from the Foundation's universal legacy in accordance with La. C.C. arts. 1423 and 1424.
Louisiana Code of Civil Procedure article 2164 authorizes this Court to "render any judgment which is just, legal, and proper upon the record on appeal." Although Beatrice Arnone has neither appealed nor answered the appeal by the Foundation, as part of this Court's inherent authority to regulate the practice of law and inquire into the reasonableness of attorney fees, together with the unusual facts of this case, i.e., the reversal of both the classification of the Foundation's claim for attorney fees as a debt of the estate and the apportionment of that claim to the legatees on a prorated basis, we find that, pursuant to La. C.C.P. art. 2164, correction of the trial court's order erroneously requiring Beatrice Arnone to pay a portion of the Foundation's attorney fees and judgment in favor of Beatrice Arnone with respect to sums she is now owed under her legacy is warranted. See West Jefferson Levee District v. Coast Quality Construction Corporation, 640 So.2d 1258, 1298 (La. 1994), cert. denied, 513 U.S. 1083, 115 S. Ct. 736, 130 L.Ed.2d 639 (1995); see also Smith v. State, Department of Transportation & Development, 2004-1317 (La. 3/11/05), 899 So.2d 516, 527.
Apportionment of Judgment on Motion to Tax Costs and
Privilege on Professional Fees of Judy Polidori's Attorneys
Next, we address the issue of the seizure of Judy Polidori's legacy to satisfy one-fourth (rather than all) of the balance of the costs judgment and whether the attorney fees privilege asserted by Judy Polidori's attorneys had priority and preference over any sums purportedly owed to the Foundation by Judy Polidori for the costs judgment.
"Privilege is a right, which the nature of a debt gives to a creditor, and which entitles him to be preferred before other creditors, even those who have mortgages." La. C.C. art. 3186. "Among creditors who are privileged, the preference is settled by the different nature of their privileges." La. C.C. art. 3187.
Louisiana Code of Civil Procedure article 2291 provides that "[a] judgment for the payment of money may be executed by a writ fieri facias [("fifa")] directing the seizure and sale of property of the judgment debtor." Pursuant to La. C.C.P. art. 2292(A), a seizing creditor, by the mere act of seizure, acquires a privilege on the property seized, which entitles him to a preference over ordinary creditors. The rights and interest of a litigant in a pending lawsuit may be seized. See La. R.S. 13:3864. An heir's share or interest in a succession, inclusive of all its rights obligations, and charges may be seized and sold. Houma Mortgage & Loan Inc. v. Stoufflet, 602 So.2d 1147, 1149 (La. App. 1st Cir. 1992); see also Van Der Karr v. Stead, 21 So.2d 111, 112 (La. App. 1st Cir. 1945).
As noted above, the costs judgment was a money judgment in favor of the Foundation and against Judy Polidori, Mary Sue Darouse, Barbara Irene Pardue, and Mary Elizabeth Darouse Pardue, in solido, in the total amount of $25,615.77, plus legal interest until paid. It is undisputed that this money judgment was not paid; thus, to execute on that judgment, the Foundation obtained, on January 22, 2013, a writ of fifa directing the seizure of Judy Polidori's property in the succession administrator's possession to satisfy the entire costs judgment, plus judicial interest. The administrator sought to make a return on this writ of fifa in the petition for homologation of the first tableau of distribution. However, on June 13, 2014, prior to the hearing on the homologation of the first tableau of distribution, Judy Polidori's attorneys filed a petition for intervention and notice of claim pursuant to La. R.S. 9:5001.
As previously set forth, in their petition and notice of claim, Judy Polidori's attorneys asserted that they had been hired to represent Judy Polidori in the succession proceeding, that Judy Polidori was a beneficiary of "all certificates of deposit" under the March 6, 2009 will that had been probated, and that Judy Polidori had agreed to compensate her attorneys on an hourly basis and to satisfy her legal or professional fees through any judgment of possession or other adjudication to her of property from the estate. Her attorneys also asserted that Judy Polidori had incurred legal or professional fees in the amount of $309,622.01 that have not been paid, and therefore, the attorneys sought to intervene and file a notice of claim pursuant to La. R.S. 9:5001 to protect their professional fee interest in any judgment of possession and/or property awarded to Judy Polidori in the succession.
Louisiana Revised Statutes 9:5001 provides:
A. A special privilege is hereby granted to attorneys at law for the amount of their professional fees on all judgments obtained by them, and on the property recovered thereby, either as plaintiff or defendant, to take rank as a first privilege thereon superior to all other privileges and security interests under Chapter 9 of the Louisiana Commercial Laws.
B. The term "professional fees", as used in this Section, means the agreed upon fee, whether fixed or contingent, and any and all other amounts advanced by the attorney to or on behalf of the client, as permitted by the Rules of Professional Conduct of the Louisiana State Bar Association.(Emphasis added.)
This statute grants attorneys a special privilege that ranks first for the amount of their professional fees on all judgments obtained and property recovered by them. Bixenman v. Radlauer, 94-682 (La. App. 3rd Cir. 12/7/94), 647 So.2d 565, 567; see also Calk v. Highland Const. & Mfg., 376 So. 2d 495, 500 (La. 1979). Further, La. R.S. 9:5001 contains no requirement that there be a written contract nor that any written contract or other written evidence be filed or recorded in order for the privilege to come into existence, for the attorney to have priority on the proceeds or property recovered from a judgment, and for the privilege to be effective as against other creditors of the client who may have claims against the judgment obtained by the attorney. Roberts v. Hanover Insurance Company, 338 So.2d 158, 160 (La. App. 2nd Cir. 1976); see also Calk, 376 So. 2d at 500. However, for the attorney to succeed in his claim of a privilege for his fees, he must assert his claim by intervention or other legal proceedings prior to disbursement of the proceeds to a third party. Calk, 376 So. 2d at 499; see also Selly v. Watson, 210 So.2d 113, 116 (La. App. 1st Cir. 1968). In addition, an attorney asserting a privilege has an evidentiary responsibility to establish the professional fees protected by the privilege. See Bixenman, 647 So.2d at 567.
In this case, the trial court ordered that one-fourth of the balance of the principal and accrued interest from the costs judgment be paid to the Foundation from Judy Polidori's legacy so as to satisfy the writ of fifa against her legacy and that the balance of Judy Polidori's legacy be subject to the lien or privilege of her attorneys for professional fees. Thus, with respect to Judy Polidori's legacy, the trial court apparently concluded that the Foundation's money judgment outranked the professional fee privilege asserted by Judy Polidori's attorneys.
The trial court's judgment also ordered that Judy Polidori's proportionate share of the Foundation's claim for attorney fees be satisfied from her legacy before the balance of the legacy was subject to the privilege of her attorneys. However, as that portion of the judgment has already been reversed herein, we need not address the ranking of that claim.
Under La. C.C. Arts. 3186 and 3187, privileges are ranked by their nature and by the rank given the privilege by the law establishing it. Roberts, 338 So.2d at 159. Louisiana Revised Statutes 9:5001 grants to attorneys a privilege of first rank for their fees on judgments obtained by them and on the property recovered thereby. Roberts, 338 So.2d at 159. Louisiana Code of Civil Procedure article 2292 gives the seizing judgment creditor a privilege on the property seized entitling the creditor to preference over "ordinary creditors, and La. R.S. 13:3865, relating to seizure of the interest of a litigant in a lawsuit, gives the seizing creditor a "lien or preference" on whatever is realized by his debtor out of the suit, but it does not purport to elevate the rank of the preference stipulated in La. C.C.P. art. 2292 for seizures generally. Roberts, 338 So.2d at 159-160. An attorney with a privilege of first rank is not an ordinary creditor. Roberts, 338 So.2d at 160.
In this case, by its nature, the privilege of Judy Polidori's attorneys for their professional fees outranks that of the Foundation as seizing creditor against the judgment or property recovered by her attorney and the proceeds thereof, i.e., her legacy of the certificate of deposit. Judy Polidori's attorneys asserted their claim prior to disbursement of the proceeds; therefore, their privilege takes first rank as provided by La. R.S. 9:5001. However, no evidence was introduced to establish the amount of professional fees incurred by Judy Polidori. The only information in the record concerning the amount of professional fees is the petition for intervention wherein Judy Polidori's attorneys claimed that she incurred legal fees of $309,622.01. While the filing of that intervention may have been sufficient to preserve the professional fees privilege, it was not sufficient to prove the amount of the privilege as no itemization of the fee was provided, and no testimony or exhibits were introduced to substantiate the claim.
Furthermore, the lack of evidence regarding the amount of professional fees owed by Judy Polidori is particularly problematic in this case, as the attorneys claiming the professional fees privilege not only represented Judy Polidori, but they also represented the three other legatees (Mary Sue Darouse, Mary Elizabeth Darouse Pardue, and Barbara Irene Pardue) under the October 9, 2010 will. Notably, the October 9, 2010 will was declared null and void after a seven-day bench trial. No doubt, substantial professional fees were incurred by those other three legatees in both their initial attempt to probate the October 9, 2010 will and in the nullity action filed by the Foundation, and those professional fees would not be secured by the privilege on Judy Polidori's legacy. Due to the lack of evidence in the record, we are unable to determine whether the substantial professional fees privilege claimed by Judy Polidori's attorneys ($309,622.01) is limited to the professional fees owed solely by Judy Polidori or includes professional fees owed by the three other legatees (Mary Sue Darouse, Mary Elizabeth Darouse Pardue, and Barbara Irene Pardue) under the October 9, 2010 will.
However, because the record before us is unclear as to whether Judy Polidori's attorneys' claim for a privilege for professional fees was actually before the court on the date of the hearing on the administrator's first tableau of distribution, we vacate that portion of the October 15, 2015 judgment which orders that one-fourth of the balance of the principal and accrued interest from the September 25, 2012 judgment on the motion to fix costs be paid to the Foundation from Judy Polidori's legacy so as to satisfy the writ of fifa against her legacy and that the balance of Judy Polidori's legacy be subject to the lien (privilege) of her attorneys for professional fees. We remand this matter to the trial court for the determination of the professional fees incurred by Judy Polidori and note that the scope of representation and the amount of professional fees incurred shall be governed by the contract between Judy Polidori and her attorneys, which forms the law between the parties. See La. C.C. art. 2045, et seq.; see generally Caldwell v. State, ex rel. Dept. of Social Services, Office of Community Services, 2007-0890 (La. App. 5th Cir. 5/27/08), 991 So.2d 546. The trial court shall also determine what professional fees incurred by Judy Polidori, if any, are included in the privilege asserted by her attorneys under La. R.S. 9:5001. Following the determination of the professional fees subject to the privilege, the trial court shall rank, in accordance with the legal precepts detailed herein, the competing interest in the funds due to Judy Polidori from the estate (i.e., her legacy), namely by the privilege asserted by her attorneys for professional fees and the Foundation's interest arising out of the execution of the writ of fifa, and then shall place Judy Polidori into possession of the remainder of her legacy.
We note that the Foundation has challenged the trial court's apportionment of only a one-fourth share of the costs judgment to Judy Polidori's legacy under the March 6, 2009 will rather than ordering that the entire costs judgment be paid from her legacy. However, until there has been a determination as to what professional fees incurred by Judy Polidori are included in the privilege asserted by her attorneys and what remaining funds, if any, are available to satisfy the writ of fifa against her legacy, it is premature for this court to address the merits of that assignment of error. --------
CONCLUSION
For all of the above and foregoing reasons, the October 15, 2015 judgment of the trial court is reversed in part and vacated in part; judgment is rendered in favor of Beatrice Arnone; and this matter is remanded with instructions. All costs of this appeal in the amount of $8,369.00 are assessed to the appellant, Southeastern Louisiana University Foundation formerly known as Southeastern Development Foundation.
REVERSED IN PART AND VACATED IN PART; JUDGMENT RENDERED; MOTION TO STRIKE DENIED; REMANDED WITH INSTRUCTIONS.