This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. ァ 480A.08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

CX-02-1410

 

In the Matter of the Estate of: Louis J. Krenik, Deceased.

 

Filed May 6, 2003

Reversed in part and remanded

Minge, Judge

 

Le Sueur County District Court

File No. P499803

 

Robert O. O誰eill, O誰eill, Traxler, Zard, Neisen & Morris, Ltd., Law Building, 222 East Main Street, P.O. Box 105, New Prague, MN 56071 (for appellant)

 

William Marek, 205 First Street South, Montgomery, MN 56069 (for estate of Louis Krenik)

 

Considered and decided by Minge, Presiding Judge, Kalitowski, Judge, and Hudson, Judge.

 

U N P U B L I S H E D O P I N I O N

 

MINGE, Judge

This is an appeal by special administrator Robert O. O誰eill from the determination by the district court that his fees to the estate should be reduced. Because the record does not contain evidence supporting that determination, we reverse and remand.

FACTS

On September 30, 1999, Louis Krenik died at the age of 97. Due to uncertainty as to its value and the interest of the personal representative in purchasing the farm, its sale was a sensitive task. At the outset, two appraisals were performed: one valued the farmland at $280,000 and the other at $314,000. John Krenik, the personal representative, and his daughter, Patricia Knish, offered $300,000 for the property. Other heirs objected to such a sale due to an inherent conflict of interest and asked that Krenik resign as personal representative or be removed by the court.

In September 2000 the attorney for the estate, William Marek, received an $816,000 offer for the property, which was withdrawn. Later that fall, Marek received an offer of $408,000. Subsequent to the offers and recognizing that several people were interested in the property, it was determined that the farm should be sold using some kind of bidding process.

To resolve the conflicts over the sale of the property, a district court hearing was held on April 12, 2001 for the purpose of appointing a special administrator. Attorney Marek testified that based upon a meeting in chambers, the court would be appointing a special administrator

solely for the purpose of handling the farm sale, including the advertising, conducting the auction of the farm and the bidding procedure, and also closing on the sale of the farm property.

 

Marek indicated that he had talked with Robert O誰eill, an attorney in New Prague, who had agreed to serve as such a special administrator. Although two other people, including a banker, had been considered, the court and Marek concluded that O誰eill would be a better choice because of the sensitivity of the sale and the fact that he was an attorney. At the time of the appointment, Marek and O誰eill had agreed to a fee of $100 per hour. This was $50 per hour less than what O誰eill normally charged as an attorney. Nothing in the record indicates that this rate of compensation was disclosed to or approved by the court or the heirs. However, Marek warned the heirs that in retaining O誰eill to act as the special administrator, the fees would be a bit more but that the money was well spent just to avoid the problems already encountered in trying to sell the farm. The family had earlier agreed that a realtor would show potential buyers the property and be compensated at a rate of $50 per hour to perform that service.

After the April 12, 2001 hearing, the district court issued an order appointing Robert O誰eill as 都pecial administrator for the marketing and sale of the real property.箱 The court determined that unusual circumstances existed such that appointment of the special administrator was necessary to preserve and enhance the estate. On May 10, 2001, the district court issued an order regarding the sale of the real estate. The proposed ad for the sale of the land was approved. The order stated that

[i]t is further noted that in the court order appointing the special administrator dated April 13, 2001 the special administrator shall have the authority to amend or supplement the terms of this court order * * * [and that] the special administrator shall be paid reasonable fees and expenses from the estate for his services in handling the sale and closing of the farm real estate.

 

While the basic procedure and advertisement for the sale had been discussed and determined prior to the April 12, 2001 hearing, O誰eill modified the Notice of Sale and Call for Bids to emphasis the land痴 natural attractions. He also set up the sale, arranged advertising, talked to prospective purchasers, showed them the property, and conducted the sale.

After 14 rounds of bidding, the property was sold for $1 million. At noon the high bid was at $795,000. The high bidder asked for a recess to once again view the land. Before he left, O誰eill reminded him that the farm tenants were waiting for the end of the bidding to determine if they wanted to take advantage of their right of first refusal. After the recess, bidding was reopened and the high bidder increased his bid to $1 million. No further bids were made, the tenants declined to exercise their right to match the bid, and the property was sold for $1 million.

O誰eill assisted in the closing of the sale. Both O誰eill and Marek stated the closing was difficult because the purchaser was an attorney acting as an agent for the actual buyer and was very particular about his demands.

O誰eill submitted his fee statement for his services accompanied by a letter briefly detailing his activities in connection with the sale of the property. O誰eill detailed 174 hours of work; according to O誰eill痴 understanding with Marek he was to be paid $100 per hour or $17,400. Marek told the court that he believed O誰eill痴 fees were reasonable

considering the work that was involved, the difficulty of this matter and the results that were obtained. These results were a prompt sale, a great price realized and a successful closing thirty days after the auction sale without delay or litigation.

 

Four heirs objected to the fees charged by O誰eill, attorney Marek, and personal representative Krenik. The court approved Marek and Krenik痴 fees. Notwithstanding testimony from O誰eill detailing his efforts and from Marek supporting O誰eill痴 fees and pointing out that the farm sold for about three times the appraised value, the court reduced O誰eill痴 fees from $17,400 to $4,000. The court did not state specific reasons for the reduction.

O誰eill moved for a reconsideration and a hearing was held. O誰eill again stated that he believed he had performed as the court had instructed him to preserve and enhance the property and that his actions were instrumental in selling the property for $1 million. Attorney Marek again supported O誰eill痴 requested fee as reasonable and stated that the 菟roof is in the pudding.箱 John Krenik, the personal representative, agreed that O誰eill should be paid the fees that he billed.

The court issued its order on June 17, 2002, denying O誰eill痴 request for a new trial or amended findings and judgment. The memorandum was short and stated that the issue was

the value of the task that was assigned to the Special Administrator, not the task performed.

The Special Administrator was to finalize the sale of the Krenik farmsite. The attorneys for the estate and certain heirs had basically put the sale package together before the Special Administrator even got involved in the proceeding. In addition, persons other than the Special Administrator were called upon during the sale process to deal with survey and title concerns. In reviewing the work file of the Special Administrator, as well as the court file, this Court concludes that the actual work performed exceeded the actual task assigned and was not necessary or reasonably related to the task.

 

O誰eill now appeals.

D E C I S I O N

 

There are two issues to be determined in this case: (1) What were O誰eill痴 duties as special administrator for the estate; and (2) did the district court abuse its discretion in determining that O誰eill痴 fee should be reduced?

A determination of what O誰eill was asked to do as the special administrator of the Krenik estate is a fact question, which this court will review under a clearly erroneous standard. Maxfield v. Maxfield, 452 N.W.2d 219, 221 (Minn. 1990). If the findings of fact are undisputed or sustainable because they are not clearly erroneous, this court will affirm the district court absent an abuse of discretion. Id.

Based upon the record, O誰eill was approached and asked to be the special administrator of the Krenik estate by attorney Marek. Marek explained the family situation to O誰eill and the history of the difficulties surrounding the distribution of the estate. Marek stressed the importance of completing the sale quickly. O誰eill also received a copy of a court order appointing him as the special administrator. The order stated that a special administrator was needed to resolve issues surrounding the marketing and sale of the property, that O誰eill was to be appointed as that special administrator, that while the court would issue a separate order outlining the procedure and timing of the sale, O誰eill would have the authority to carry out all the duties associated with the marketing and sale of the property, 妬ncluding the authority to amend or supplement the terms which are set forth in the Order, that the circumstances were unusual, and that the appointment of the special administrator was 渡ecessary to preserve and enhance the estate.箱

O誰eill argues that the court痴 order clearly details his responsibilities and that marketing is a distinct and separate responsibility. He states that he fulfilled his responsibility to market the property by stressing the beauty of the property when communicating to numerous interested persons by letter, phone, and in person. He further argues that the court gave him broad latitude to use his expertise and experience to preserve and enhance the estate without demanding that this be accomplished within a specific period of time. O誰eill also contends that whether he fulfilled the duties assigned him by the court can be determined by looking at the results. While the highest appraisal for the property prior to O誰eill痴 appointment was $380,000 and the highest offer prior to O誰eill痴 appointment was $408,000, the property sold for $1 million.

In contrast, the court held in its order that O誰eill痴 duties actually were simply to 吐inalize the sale of the property and thus 殿ctual work performed exceeded the actual task assigned and was not necessary or reasonably related to the task.箱

Based on the language in the order appointing O誰eill, Marek痴 testimony, and the results of the sale, O誰eill reasonably interpreted the intentions of the court to market the property in such a way as to preserve and enhance the estate. We thus hold that the district court erred in determining that the special administrator痴 duties were narrowly limited to a finalization of the sale of the property.

II.

The next issue to address is whether $17,400 is reasonable compensation for the services O誰eill performed as the special administrator. A special administrator痴 appointment and duties are similar to those of a personal representative. See Minn. Stat. ァ 524.3-617 (2002) (甜A] special administrator appointed by order of the court * * * has the power of a general personal representative except as limited in the appointment * * * .). Neither Minnesota state law nor the order appointing O誰eill as the special administrator address the compensation to be paid to a special administrator. The court痴 order approving the sale advertisement stated that O誰eill was to be paid 途easonable fees.箱 An application of Minnesota law addressing compensation of a personal representative is appropriate. O誰eill and attorney Marek had an initial understanding that he would be paid $100 per hour. Although attorney Marek did not have authority to bind the estate to that figure, the discussion and O誰eill痴 resulting expectation are relevant.

A personal representative is entitled to reasonable compensation for his services. Minn. Stat. ァ 524.3-719(a) (2002). To determine what is reasonable compensation, the court is to consider three factors: (1) the time and labor required; (2) the complexity and novelty of the problems involved; and (3) the extent of the responsibilities assumed and the results obtained. Minn. Stat. ァ 524.3-719(b) (2002).

While O誰eill and attorney Marek addressed these factors in testimony, affidavits, letters, and a brief to this court, the district court did not specifically address the factors in its order denying the payment of O誰eill痴 fees. While the court did state that the 殿ctual work performed exceeded the actual task assigned, the court gave no indication as to how it arrived at the $4,000 fee it allowed in its order, stating only 鍍he fees and costs afforded to the Special Personal Representative shall be $4,000. The court gave no indication as to which items on O誰eill痴 fee statement were excluded from payment.

We review an award of attorney fees by the district court under an abuse of discretion standard. Becker v. Alloy Hardfacing & Eng暖 Co., 401 N.W.2d 655, 661 (Minn. 1987). Because the district court abused its discretion in rejecting O誰eill痴 request for $17,400 and setting his compensation at $4,000 and because the district court gave no indication how it determined the fees allowed, we reverse. Based on the record on appeal, it appears O誰eill痴 duties were to market and sell the property and that the fee of $17,400 is fair and appropriate. We reverse and remand to the district court with instructions to grant a fee of $17,400.

Reversed and remanded.