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10/26/83 MATTER GUARDIANSHIP & ESTATE P.A.H. v.

October 26, 1983

IN THE MATTER OF THE GUARDIANSHIP & ESTATE OF P.A.H., A MINOR: WESTERN SURETY COMPANY, APPELLANT,
v.
P.A.H., A MINOR, JOSEPH MURATORE, GUARDIAN AD LITEM, AND WILLIAM R. BINETTI, SUCCESSOR GUARDIAN OF THE ESTATE OF P.A.H., RESPONDENTS



Appeal from a judgment of the Circuit Court for Racine County: Jon B. Skow, Judge.

Scott, C.j., Voss, P.j., and Robert W. Hansen, Reserve Judge.

The opinion of the court was delivered by: Hansen

The threshold issue on this appeal is whether a successor guardian's attorney fees and the guardian ad litem fees are proper items of costs to be assessed against a former guardian and his surety where the trial court has determined that the former guardian has mismanaged guardianship assets. *fn1

On October 15, 1980, Vernon A. Hanks petitioned the Racine county circuit court, probate branch, for an order appointing him guardian of his sister, P.A.H., a minor. On November 11, 1980, he was appointed the guardian of his sister's estate and person. He signed a surety bond in the amount of $40,000, appellant Western Surety Company being the surety.

On November 19, 1981, Joseph J. Muratore, guardian ad litem of P.A.H., filed an order to show cause for an accounting by Vernon A. Hanks. On December 11, 1981, Vernon Hanks agreed to step down as guardian for the estate of his sister. On February 10, 1982, William R. Binetti, an attorney, was appointed successor guardian of the estate of P.A.H. On February 22, 1982, following court hearings, the trial court made a finding that Vernon Hanks had received, on behalf of P.A.H., the sum of $26,870.86. The court also ruled that Vernon Hanks had constructively received the amount of $3,293 in interest, for total receipts on behalf of P.A.H. in the sum of $30,164.45. The trial court gave Vernon Hanks credit for approved expenditures in the amount of $7,250.28, leaving a total shortfall of $22,914.17. The liability of the guardian, Vernon Hanks, and his surety, Western Surety Company, for this shortage or shortfall in estate funds is not in dispute.

Rather, this appeal challenges the order of the trial court entered on July 23, 1982 holding that guardian Hanks and his surety were liable for the attorney fees of Joseph J. Muratore as guardian ad litem ($3,961.60) and of William R. Binetti as successor guardian ($2,490.50) plus disbursements of $49.25 and $72.50, respectively. Finding these fees both necessary and reasonable, the trial court ordered that the fees involved be paid by the ex-guardian and his surety as "costs of the suit."

On the initial or threshold issue of the attorney fees involved being taxable as "costs of suit," we begin by noting that in this state, no costs are "recoverable in any judicial proceeding except as clearly thus authorized [by statute]." In re Reeseville Drainage District, 156 Wis. 238, 239, 145 N.W. 671, 671 (1914). Review of the various statutes involved, including ch. 814 and sec. 878.09, Stats., dealing with costs allowable, shows no basis for the taxing of guardian ad litem fees against a former guardian and his surety. In fact, sec. 814.04(2), Stats., expressly provides: "Guardian ad litem fees shall not be taxed as a cost or disbursement." In regard to the fees for services of an attorney for a successor guardian, it appears clear that such fees are an expense of the guardian, chargeable to the estate of which he is guardian. As our state supreme court has held:

While a guardian may employ an attorney to collect funds belonging to the estate of the ward, which attorney may be of the guardian's choosing, the necessity of the attorney's services and the amount of his fee are subject to the determination of the court having jurisdiction of the guardianship. Attorney's fees under sec. 319.24, Stats., are considered an expense of the guardian and are allowed in a reasonable amount in his account if the legal services were necessary for the proper performance of the guardian's duty. [Citations and footnotes omitted.]

In re Guardianship of Schott, 23 Wis. 2d 213, 216, 127 N.W.2d 19, 20-21 (1964).

On this appeal, in their brief and on oral argument, the respondents spend little time in the search for statutory authority for taxing guardian ad litem and attorney fees as costs of suit against a former guardian of an estate and his surety. Rather, they view the trial court order for payment of attorney and guardian ad litem fees as an equitable surcharge against the former guardian. In a case involving a suit by a remainderman for removal of a trustee and an accounting, the trial court had assessed the attorney fees incurred by the remainderman against the trustee. On the point of law involved, the state supreme court held:

he court surcharged the trustee with the attorney's fees and accountant's fees of the remaindermen on equitable grounds and this action is claimed to be error.

The court considered it was not taxing costs for the amount of the fees but was surcharging the trustee and based its decision on the equitable proposition that the trustee had needlessly caused the remaindermen to incur these expenses to attain a proper accounting which they had a right to have. The trustee argues the trial court had no such equitable power and that this so-called surcharge is in effect a taxing of costs not authorized by the statute and especially cannot be justified under sec. 271.14, Stats., because no mismanagement or bad faith was found. . . .

On first impression there would seem to be merit in surcharging or making a trustee personally responsible for causing needless expenditures on the part of the remandermen. However, where the trustee's conduct is not found to be in bad faith but only substandard performance of his duty, we think that although compensation for his work may be denied ...


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