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05/11/83 MATTER ESTATE LILIAN M. KOHLMETZ v. AUGUST

May 11, 1983

IN THE MATTER OF THE ESTATE OF LILIAN M. KOHLMETZ, DECEASED: WILLIAM J. KOHLMETZ, APPELLANT-CROSS-RESPONDENT,
v.
AUGUST FABYAN, JR., SUCCESSOR PERSONAL REPRESENTATIVE, RESPONDENT-CROSS-APPELLANT, DAVID M. QUALE, RESPONDENT



Appeal from an order of the Circuit Court for Waukesha County: Willis J. Zick, Judge.

Scott, C.j., Voss, P.j., and Brown, J.

The opinion of the court was delivered by: Brown

William J. Kohlmetz was an attorney for the personal representative of an estate. He appeals a determination of attorney's fees in the amount of only $4,000 instead of the requested sum of $20,000. Because the record shows the estate was not handled expeditiously and economically, the trial court did not abuse its discretion in making such award. The successor personal representative cross-appeals, claiming Kohlmetz deserves no fee. We affirm the trial court on this issue as well. Finally, Kohlmetz challenges an award of $1,800 from the estate to one of the creditor's attorneys. We hold that he has no standing to raise the issue.

Kohlmetz' aunt, Lilian M. Kohlmetz, died on November 19, 1968. Her will named Arthur W. Schroeder, a nephew, as personal representative. Schroeder hired the appellant as his attorney. As of the date of oral arguments on this appeal, more than fourteen years after Lilian's death, the estate had still not been closed.

Kohlmetz claims the delay is not his fault. He points out that the deceased was an attorney by profession. At her death, many files remained open. He had to work on closing the files for two reasons. First, by closing some files, he would obtain fees from the deceased's clients, which fees would become an asset to the estate. Second, some fees had been collected by the deceased in advance. To avoid claims against the estate for fees received but work uncompleted, he had to close those files. Winding up his aunt's legal business took a great deal of time. He says he spent 124 hours in this endeavor over a period of years.

He also claims the estate could not be closed until all the real estate was sold. He cites two instances which, he argues, justify the delay. There was a piece of property in Germantown that had been appraised at $71,000. Yet, no offer to purchase even came close to the appraised figure. Kohlmetz held off selling the property for a lesser sum because realization of the appraised value, or close to it, would assure solvency of the estate. Finally, due to a desire to close the estate, Kohlmetz sold the property for $40,000.

The other instance involving real estate concerned a twenty-five foot lot in Milwaukee. Kohlmetz felt that an attempt to sell this lot, standing by itself, would be futile because the lot was too small for a potential buyer to build upon. He hoped to enter an agreement with an adjacent owner, who also owned twenty-five feet. Together, the properties would be salable, Kohlmetz reasoned. The other owner died in the interim, however, and the two estates apparently did not or could not reach agreement. On August 4, 1974, Arthur Schroeder was removed as personal representative because the estate was not being handled in an expeditious manner. Kohlmetz asserts that since he was, therefore, no longer the attorney for the personal representative of record, he could do no more regarding the twenty-five foot lot. Therefore, the estate could not be closed, even though the lot was abandoned in 1975. He concludes that these reasons justify the delay in closing this estate.

Our reading of the record discloses, however, numerous instances of uneconomical and unexpeditious handling of the estate by the personal representative, through Kohlmetz. As a result, the property was tied up longer than necessary, depriving those entitled to the full measure of fruits and benefits. First, there were numerous instances of claimants getting paid out of turn, resulting in an improper division of the assets. One example was a payment of $1,367 on an ancillary claim that all agreed should never have been paid. Kohlmetz' defense to this and other out-of-turn payments was that he thought the Germantown property was going to make the estate solvent when sold. Therefore, he saw no need to follow established procedure.

Second, the deceased had a loan outstanding with the Layton State Bank. Stock was pledged as collateral. The stock garnered dividends of between $6,300 and $6,400. The bank took the stocks and applied them against their loan after having a special administrator appointed in 1975 so its claim could be heard. They also took the dividends, however, without any objection by the estate. The bank's legal right to the dividends is debatable, but the estate did nothing to stop it. Kohlmetz' defense was that because the Layton bank action took place in 1975, Arthur Schroeder was not the personal representative at the time, and, therefore, he was powerless to do anything about it.

Kohlmetz' answer does not explain why the Layton State Bank loan could not have been taken care of prior to 1973 when he could have done something about it. Kohlmetz' answer to this very question, posed during trial court testimony, was that some of the stock certificates were lost. Replacements had to be ordered. When asked why this would have taken such a long time so as to delay an early determination of the Layton claim, Kohlmetz admitted that: "We didn't get off our rear end and get replacements for those until the bitter end." Kohlmetz' acknowledged dilatory action in not closing this matter in 1973 directly contributed to the estate's acquiescence in the bank's taking of the stock dividends in 1975.

Third, although Kohlmetz claims the estate could not have been closed in 1973 because the twenty-five foot lot had not been sold, Kohlmetz does not explain why abandonment was any less feasible in 1973 than in 1975. The adjacent landowner had died prior to 1973, and Kohlmetz, himself, intimated that his plan for joinder of the properties was rather dormant after the neighbor's death.

The fact is that the estate could have been closed as early as 1973. It was not. The trial court received what was probably the real reason for Kohlmetz' conduct when he confessed that he did not close the estate in 1973 because the assets would then be dissipated by the creditors. By leaving the estate dormant, however,

there was inertia. We knew if we came back to court, everything had to go lickety-split. I mean, the money was all working. . . . There was no out go in expenses, so the estate technically grew by the earnings on the investments.

Why would an attorney let an estate lie dormant so that expenses would be held to nothing and the investments would increase the assets of the estate? Kohlmetz supplied the answer himself by admitting that the claims and the conventional administration expenses, if expeditiously paid, would exceed the amount of assets on hand. Kohlmetz then confessed, "I'm trying to make myself whole, I guess, for the lack of revenue that came in from this thing." The trial court could come to no other Conclusion but that Kohlmetz purposely let the estate lie dormant because the expenses exceeded the assets, and, since it looked as though he would not get paid for all the time he had already put into the estate, he did not ...


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