March 17, 2016 – Lois Noone held a power of attorney for her mother. She hired an attorney, who was ultimately paid $25,000, to defend an action by five siblings, who wanted the court to review certain decisions that Noone made on her mother’s behalf.
The mother, Elizabeth Carpenter, passed away while the case was pending. Thus, the court ruled that the underlying action was moot, never deciding the merits of the case, although a guardian ad litem had concluded that Noone did not engage in misconduct.
But the parties continued to litigate costs and fees. The circuit court judge thought the case was over-litigated and limited attorney fees to $6,000 in Noone’s favor, 30 hours at $200 per hour. Noone’s attorney, John M. Kelly, appealed the circuit court’s decision.
Kelly argued that Wis. Stat section 244.16(1), part of the Uniform Power of Attorney for Finances and Property Act, did not give the circuit court authority to reduce his fee absent a finding that Noone engaged in misconduct as her mother’s agent.
In Kelly v. Brown, 2015AP777 (March 16, 2016), a three-judge panel for the District II Appeals Court agreed with Kelly and reversed.
“We conclude that the plain language of Wis. Stat. § 244.16(1), especially when viewed in tandem with the remedies provided in Wis. Stat. § 244.17, does not grant the circuit court authority to limit attorneys’ fees in this case,” wrote Judge Mark Gundrum.
The panel noted that under section 244.16(1), circuit courts may grant “appropriate relief” after construing a power of attorney (POA) or reviewing an agent’s conduct.
Under section 244.17, if the attorney-in-fact violates obligations, he or she can be liable to restore the principal’s property and reimburse the principal or the principal’s successors in interest “for the attorney fees and costs paid on the agent’s behalf.”
Here, Kelly argued, and the appeals court agreed, that the circuit court judge did not have discretion to grant “appropriate relief” in the form of reduced attorney fees because the underlying issue – whether Noone engaged in misconduct – was never decided.
“The relief must fit the purpose of the action; it is not a broad invitation to the court to wade into the private attorney-client arrangements of the parties unless it is within the realm of construing a POA or reviewing the conduct of an agent,” Gundrum wrote.
“The circuit court exceeded its authority under Wis. Stat. § 244.16(1) because its order limiting fees was not aimed at remedying Noone’s actions as attorney-in-fact.”
The panel also noted that Harold Carpenter, Elizabeth’s husband and father to all 10 of the couple’s children, personally paid a portion of Kelly’s fees. The rest came from the Harold and Elizabeth Carpenter Trust, authorized by a corporate trustee. The siblings did not bring claims that anyone breached any duty to them as trust beneficiaries.
