In Family Dispute, Court Orders Proposed Protected Person to Pay Attorney Fees

On April 14, 2021, the Iowa Court of Appeals issued a ruling in a dispute over a conservatorship. Two sisters separately incurred substantial attorney fees in a court battle over the proposed conservatorship of their mother. The court found that the district court did not abuse its discretion in determining that the mother, as the proposed protected person, would pay for her daughter’s attorney fees.

Background

Alda Haravon is the lifetime beneficiary of a credit shelter trust. After Alda passes away, the trust assets will be divided between her two daughters, Leslea and Anita. The trust assets are valued at approximately $2.5 million.

In 2010, Alda signed a General Durable Power of Attorney (POA) appointing both of her daughters as her agents “to act for [her] in any lawful way, with the requirement that they act together.” By 2017, the sisters disagreed on how their mother’s assets should be invested. Leslea filed a petition to be appointed as her mother’s conservator.

In response, Anita obtained legal counsel and filed an answer claiming to appear as an “attorney-in-fact and agent for Alda.” At trial, it was undisputed that Alda was unable to manage her financial affairs. A separate attorney was appointed to represent Alda. After many filings, answers, and discovery requests between the two sisters, the district court dismissed Leslea’s petition finding that the POA clearly stated Alda’s intent that her daughters work together to manage her financial assets. Additionally, there was insufficient evidence that Alda needed a conservator. Neither party appealed.

Anita then filed a request under Iowa Code § 633.551(5) for $193,146 in attorney fees she had incurred defending against Leslea’s petition. Leslea also requested $106,775 in attorney fees to be paid by Alda, but claimed that Anita was not a proper party entitled to attorney fees under § 633.551(5). Finally, the attorney representing Alda also requested attorney fees. The district court found that Anita’s and Leslea’s attorneys provided reasonable and necessary legal services and that Alda, having sufficient assets, would pay these costs. Leslea appealed the order directing Alda to pay Anita’s attorney fees.

Proper Party to Intervene in Conservatorship Proceeding

First, Leslea claimed that Anita was not a proper party to obtain attorney fees under § 633.551(5). A “party” is defined as “the respondent, petitioner, guardian, conservator, or any other person allowed by the court to participate in a guardianship or protective proceeding.” Iowa Code § 633.701(9). Throughout the two and one-half years during which the petition for a conservatorship was on file, Leslea only objected to Anita’s participation when Anita requested attorney fees. Because Leslea did not timely object to Anita’s participation, the court did not consider whether Anita met the definition of “party” under Iowa Code section 633.701(9) and deemed Leslea’s objection waived.

In a conservatorship proceeding, costs, including attorney fees, will generally be paid by the proposed protected person. Iowa Code § 633.551(5). If the proceeding is dismissed, either voluntarily or involuntarily, the court may assess costs against the petitioner “for good cause shown.” Id.  The law does not limit who can receive attorney fees, but rather who will pay the fees. Because the case was dismissed, the district court could order either Alda or Leslea to pay. The court found that the trial court did not abuse its discretion when ordering Alda to pay the attorney fees.

Authority under Power of Attorney

Leslea next argued that because the POA required the sisters to work together, it prohibited Anita from appearing as an “attorney-in-fact and agent for Alda” and incurring attorney fees. The court found that Anita’s attorney fees were incurred for the benefit of Alda. Additionally, Alda’s appointed attorney did not object to the award of attorney fees for Leslea or Anita. Therefore, the court affirmed that Anita’s attorney fees would be paid for by Alda.