Chapter 13.9 Attorney Fees and Costs Under RCW 11.96A.150

• Jurisdiction: Washington

§13.9 ATTORNEY FEES AND COSTS UNDER RCW 11.96A.150

This section discusses responsibility for attorney fees and costs in Washington.

(1) General rule

Washington courts apply the "American rule," which requires each party to litigation pay its own attorney fees unless a specific statute or contract requires otherwise. RCW 11.96A.150 abrogates the American rule for TEDRA matters and provides:

(1) Either the superior court or any court on an appeal may, in its discretion, order costs, including reasonable attorneys' fees, to be awarded to any party: (a) From any party to the proceedings; (b) from the assets of the estate or trust involved in the proceedings; or (c) from any nonprobate asset that is the subject of the proceedings. The court may order the costs, including reasonable attorneys' fees, to be paid in such amount and in such manner as the court determines to be equitable. In exercising its discretion under this section, the court may consider any and all factors that it deems to be relevant and appropriate, which factors may but need not include whether the litigation benefits the estate or trust involved.

(2) This section applies to all proceedings governed by this title, including but not limited to proceedings involving trusts, decedent's estates and properties, and guardianship matters. This section shall not be construed as being limited by any other specific statutory provision providing for the payment of costs, including RCW 11.68.070 and 11.24.050, unless such statute specifically provides otherwise. This section shall apply to matters involving guardians and guardians ad litem and shall not be limited or controlled by the provisions of RCW 11.88.090(10).

(2) An award of attorney fees and costs is discretionary

The court is given broad discretion to award attorney fees and costs to any party in such amount and manner as the court determines to be equitable. In re Estate of Earls, 164 Wn.App. 447, 262 P.3d 832 (2011). In determining a fee award, the court can consider any factors it deems relevant. In re Estate of Jones, 170 Wn.App. 594, 612, 287 P.3d 610 (2012).

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Practice Tip: There is no formula or specific list of factors that the court must adhere to in determining an award of fees, so the outcome regarding fees can be somewhat unpredictable. Therefore, it is important for you to raise the issue of ultimate responsibility for legal fees with clients as there is no guarantee that the court will award fees in favor of any party, even if it seems clear that one is completely without blame.

The legislature recognized the almost limitless sets of circumstances that arise in probate proceedings and that no set standard for the award of attorney fees could be successfully formulated. In re Estate of Burmeister, 70 Wn.App. 532, 539, 854 P.2d 653 (1993), rev'd on other grounds, 124 Wn.2d 282 (1994). However, the factors the court looks to in determining a fee award frequently include those set out below.

(a) Whether a party acted in good faith

In In re Estate of Watlack, 88 Wn.App. 603, 613, 945 P.2d 1154 (1997), the court concluded that an executor who acted in good faith was entitled to an allowance from the estate of his costs and attorney fees. In a pre-TEDRA case, In re Estate of Jolly, 3 Wn.2d 615, 101 P.2d 995 (1940), the court awarded attorney fees to an executor who unsuccessfully defended a will contest in good faith.

Practice Tip: Good faith will not always insulate a party from an award of attorney fees pursuant to RCW 11.96A.150; instead, the determination is entirely within the court's discretion.

(b) Whether a party acted in bad faith

Bad faith is defined as "actual or constructive fraud or a neglect or refusal to fulfill some duty, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive." In re Estate of Marks, 91 Wn.App. 325, 336, 957 P.2d 235, review denied, 136 Wn.2d 1031 (1998).

Courts frequently have held a party acting in bad faith responsible for payment of the attorney fees of other parties. This issue is often entangled with breaches of fiduciary duty wherein a trustee or personal representative is blatantly acting with his or her self-interest in mind to the detriment of the beneficiaries, and the beneficiaries have to take action to have the fiduciary removed. Depending on the facts, this circumstance will often give rise to a fee award not only through RCW 11.96A.150 but also RCW 11.68.070 (personal representative's failure to execute his duties faithfully) or RCW 11.76.070 (personal

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representative's failure to give an account or report). See §13.10(4) and (5), below.

In In re Irrevocable Trust of McKean, 144 Wn.App. 333, 345, 183 P.3d 317 (2008), the court held a father who transferred assets from his own name to that of his children's trust, attempting to hide them from the federal government (because of a lawsuit in which he was a party), and who wrongfully asserted control over the trustees of that trust, liable for the trustee's attorney fees, which were incurred as a result of the father's bad faith. The court reasoned that the trust's assets should not be further depleted as a result of his continuing efforts to frustrate the purpose of the trust he had established for his children.

Comment: Although bad faith is a factor courts will consider in making an equitable fee award under RCW 11.96A.150 and is frequently heavily weighed by the courts, bad faith or self-dealing is not a requirement for such award Gillespie v. Seattle-First Nat'l Bank, 70 Wn.App. 150, 177-78, 855 P.2d 680 (1993) (court concluded former RCW 11.96.140 clearly can be, and has been, used to award fees absent bad faith and self-enrichment), review denied, 123 Wn.2d 1012 (1994).

(c) Which party's actions necessitated litigation

In In re Estate of Jones, 152 Wn.2d 1, 20, 93 P.3d 147 (2004), the Washington Supreme Court held the personal representative liable for payment of the attorney fees incurred by the beneficiaries who petitioned for his removal, because the litigation was necessitated by his multiple breaches of fiduciary duty. The personal representative in Estate of Jones mismanaged the estate assets by inhabiting the house owned by the estate without paying rent and having the estate continue to pay utilities, real property taxes, and insurance while he inhabited the house. Additionally, the court concluded that the personal representative breached his duty by excessively using a vehicle owned by the estate (he put 17,000 miles on the car owned by the estate).

(d) Whether all beneficiaries are involved in the dispute

In In re Estate of Black, 116 Wn.App. 476, 490-91, 66 P.3d 670 (2003), aff'd, 153 Wn.2d 152 (2004), the court stated that when all the beneficiaries are involved in the litigation, the court may award fees from the estate to both sides because the litigation resolves the rights of all. Additionally, when both sides advance reasonable good-faith arguments in support of their respective positions, the trial court may

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order costs and fees to be chargeable against the estate, so that all parties bear the costs of the proceedings. Id.

In re Estate of Evans, 181 Wn.App. 436, 326 P.3d 755 (2014), involved a will contest and a claim for financial abuse under Chapter 74.34 RCW (Abuse of vulnerable adults) brought by three of the decedent's four children. The will in question had been prepared by the decedent's son. Pursuant to the terms of that will, the bulk of the decedent's estate went to that son and his children, the decedent's grandchildren. The will also disinherited one of the testator's children and significantly reduced the shares of the others. The court upheld the will but found that the son who prepared it was a financial abuser under RCW 11.84.010(1) and that he would be treated as having predeceased the decedent as a result. The decedent's grandchildren requested that the court apply Washington's antilapse statute, RCW 11.12.110, so the bequests made to their father would pass to them. The trial court concluded, and the appellate court affirmed, that RCW 11.12.110 applies when a beneficiary under a will is deemed to have predeceased the testator because he or she financially abused the testator under Chapter 11.84 RCW. The trial court awarded fees to both parties and assessed those fees against the estate (which the appellate court affirmed), reasoning that the litigation resolved all the beneficiaries' respective rights and awarding fees against the estate would not unfairly penalize absent beneficiaries because all the beneficiaries participated in the dispute. Moreover, the court concluded that a novel issue of law was raised (that of application of the antilapse statute in circumstances involving financial abusers) and reasonable good-faith arguments were made.

In Estate of Kvande v. Olsen, 74 Wn.App. 65, 71, 871 P.2d 669 (1994), the court also concluded that when both sides advance reasonable, good-faith arguments, it is reasonable that all attorney fees be paid from the estate.

(e) Whether the litigation resulted in a benefit to the trust or estate

Prior to 2007, arguably an award of attorney fees in a trust and estate matter required that the litigation result in a substantial benefit to the trust or estate. In re Estate of Niehenke, 117 Wn.2d 631, 648, 818 P.2d 1324 (1991) (prior to the enactment of RCW 11.96A.150, the Washington Supreme Court held that it was inappropriate to assess fees against an estate when the...