Estate litigation can be downright awful. That is not to say that a great good cannot be done by advocating the rights of a Decedent in a financial exploitation action, or to assist an heir where a loved one now deceased was unduly influenced in writing a will. Ultimately, a lawsuit is never so sweet except when victory includes collecting a litigant’s attorney’s fees.
Today, in every practice area of law, the rules for collecting attorney’s fees whether as a remedy or a sanction are different with some exception, including attorney fees collected in contract.
Attorney’s Fees in Trusts & Estate Litigation
In estate and trust litigation, there are a variety of rules that allow a party to (a) collect fees to prosecute, (b) to defend a matter concerning a trust (A.R.S.§14-11004) or a probate estate (A.R.S.§14-3720), or (c) collect fees from a party who has acted unreasonably causing an individual or an estate to incur unnecessary legal fees (A.R.S.§14-1105). Similarly, in guardianship and conservatorship actions, a party who fails to prosecute a petition to appoint a guardian or conservator or the party withdraws the petition, may be required to pay attorney’s fees of all parties. (A.R.S. §14-5414 and 5314).
Very often, attorney’s fees will be used as a “sword” or a “shield” and are intended both to encourage early settlement and to give the litigants the opportunity to evaluate the risk borne if eventually ordered to pay the opposing party’s attorney’s fees and costs. All too often, attorneys defending claims involving estate and trusts try to bully their way through a case making repeated threats of sanctions under Arizona Rules of Civil Procedure Rule 11, or for unjustified claims under A.R.S. §12-349, or under the Common Fund Doctrine (an equitable theory used to prevent unjust enrichment such that a party in litigation who creates, discovers, magnifies, or protects a common fund for others who have a claim may be entitled to recover litigation costs and attorney’s fees from that fund). Often these threats become a red herring because the attorneys who take the bullying position force the constant litigation over fees and not the merits of the case.
Summer 2020 Ruling
The Arizona Court of Appeals ruled in the case of In Re the Restated Trust of Crystal H. West, No. 2 CA-CV 2020-0003 (July 1, 2020), that an award of attorney’s fees must be preceded by a claim in the Petition as required by Rule 54(g)(1) of the Arizona Rules of Civil Procedure. In this case, Nancy Moore challenged the trial court’s award of attorney’s fees to Amber Miller Adwell, Grant Miller, and Gentry Miller (the Millers) from a trust established by Crystal West, their great-aunt. The Pima County trial court awarded attorney’s fees to the Millers under the Common Fund Doctrine. Moore contended the court was precluded from awarding fees because the Millers had waived the claim by not including it in their Petition commencing the parties’ underlying lawsuit over the trust in accordance with Rule 54(g)(1). The Court of Appeals held that failure to make the claim for attorney’s fees in a Petition or Complaint precluded the court from awarding attorney’s fees.
Thus, let the lesson be learned: Request your fees or forever hold your peace. Regardless of the statutory basis for attorney’s fees, it is paramount that a litigant request attorney’s fees in the Complaint, or more appropriately, the Petition in an estate matter or risk not recovering attorney’s fees from an opposing party even when emerging victorious. To discuss whether attorney’s fees spent in an action can be recovered, contact the Probate attorneys at Mesch Clark Rothschild for a free consultation.
