In re Corbett

1

IN THE MATTER OF THE ESTATE OF DAVID SCOTT CORBETT, Deceased.

No. COA22-618

Court of Appeals of North Carolina

July 5, 2023

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

Heard in the Court of Appeals 25 April 2023.

Appeal by executrix from order entered 31 March 2022 by Judge J Stanley Carmical in New Hanover County, No. 16E1551 Superior Court.

Moore &Van Allen PLLC, by Elena F. Mitchell, Thomas D. Myrick and Caitlin N. Horne, for executrix-appellant.

Essex Richards, PA, by Jonathan E. Buchan, for propounders-appellees, no brief.

Brooks, Pierce, McLendon, Humphrey &Leonard, L.L.P., by James C. Adams, II, Daniel L. Colston, and Thomas G. Varnum for caveator-appellee.

GORE Judge.

Executrix Shannon Corbett Maus appeals the trial court's Order on motions for award of fees and costs entered 31 March 2022. Executrix argues the trial court: (i) lacked subject-matter jurisdiction to enter the fee Order; (ii) erred in granting caveator Diana G. Corbett's fee petition; and (iii) erred in denying in part executrix's motion for award of attorneys' fees and costs as estate expenses. Upon review, we affirm in part and dismiss in part.

I.

On 12 September 2017, caveator Diana G. Corbett filed a caveat to the 12 September 2016 will of her deceased husband, testator David Scott Corbett. Caveator alleged testator lacked testamentary capacity or was unduly influenced in executing a new will while in the hospital one month prior to his death from cancer. On 14 December 2017, executrix Shannon Corbett Maus filed a response.

Caveator was represented by James C. Adams, II, Thomas Varnum, and Ryan Fairchild of Brooks, Pierce, McLendon, Humphrey, &Leonard, LLP ("Brooks Pierce"). Executrix was represented by Thomas D. Myrick, Caitlyn N. Horne, Elena F. Mitchell, and Catherine R. Prater of Moore Van Allen, PLLC, ("MVA") of Charlotte.

Executrix filed multiple petitions for payment of MVA's fees throughout the litigation. Caveator opposed each petition on grounds that MVA's fees were excessive, and payment was not consistent with executrix's statutory and fiduciary duty to preserve estate assets. The New Hanover County Clerk of Court issued orders awarding 100% of the invoiced fees and costs billed by MVA. The estate had paid MVA a total of $634,843.53 in fees and costs from the initiation of the caveat through 30 June 2020. However, ruling on future payments to MVA was deferred pending resolution of caveat proceeding.

From 12 July 2021 to 30 July 2021, this matter was tried before a jury in New Hanover County Superior Court. On 27 July 2021 executrix filed for a motion for directed verdict at the close of caveator's evidence, which was denied. On 28 July 2021, executrix made an oral motion for directed verdict at the close of all evidence, which was also denied.

On 30 July 2021, the jury returned a unanimous verdict in favor of caveator on all issues. On 9 August 2021, the trial court rendered judgment for caveator based on the jury's verdicts, entered 16 August 2021. Following trial, executrix filed a motion for judgment notwithstanding the verdict, or in the alternative, a new trial ("JNOV" motion), which the trial court denied.

Following trial and denial of her JNOV motion, executrix sought to have the estate pay MVA an additional $984,261.69 in attorneys' fees and costs for the period of June 2020 to September 2021, for a total of $1,619,105.22 in fees and costs since the initiation of the caveat. In contrast, the total amount of legal expenses sought by caveator since the initiation of the caveat was $935,492.01.

On 16 September 2021, caveator filed a petition for payment of attorneys' fees and costs. On 19 October 2021, executrix filed a motion seeking entry of an order directing the estate to pay the attorney's fees and costs incurred by executrix's counsel from 30 June 2020 through 30 September 2021. On 22 October 2021, propounders Melissa A. Corbett and Rebecca Corbett McGowan-executrix's sisters-filed a motion seeking an order directing the estate to pay the attorneys' fees and costs they incurred related to the caveat.

In support of their respective fee petitions and motions, the parties submitted affidavits on the reasonableness of the attorneys' fees sought. Executrix submitted the affidavits of attorneys attesting that MVA's fees were "comparable to those charged by comparably skilled and experienced practitioners at similar firms in North Carolina for similar work in similar matters," but did not mention the locality of New Hanover County. Caveator's affidavits attested that the rates for Brooks Pierce were "well within the range of reasonableness" for complex civil superior court cases in the Wilmington, North Carolina area, but that rates over $500 per hour for partners or $350 per hour for associates "would be outside the range of reasonableness" for Wilmington and New Hanover County.

On 8 November 2021, caveator filed an opposition to executrix's motion for payment of attorneys' fees, again arguing that the requested rates for executrix's attorneys were unreasonable for the locality of New Hanover County, and that executrix had neglected her statutorily imposed fiduciary duty to the estate in paying unreasonably high rates. Also on 8 November 2021, executrix filed an opposition to caveator's petition on grounds that the trial court would lose jurisdiction to rule on caveator's fee petition once executrix noticed an appeal of the trial court's denial of her JNOV motion. Executrix also argued that despite a unanimous verdict, the caveat lacked substantial merit and so no fees should be paid to caveator. Later that day, executrix filed notice of appeal to this Court, appealing the trial court's orders denying the directed verdict motions, the judgment, order denying her JNOV motion, and "all [other] orders contributing to the trial court's resolution of this action" ("First Appeal").

After executrix filed the first notice of appeal but before the First Appeal was docketed, the trial court entered its Order on Motions for Award of Fees and Costs on 31 March 2022. The trial court found that all parties had brought good-faith arguments and that counsel had "demonstrated exceptional skill" and conducted themselves "ethically and with laudable collegiality." The trial court determined that it had jurisdiction to award fees notwithstanding executrix's First Appeal and found that the caveat had substantial merit based on the triable issues of fact and the evidence presented at trial. The court noted it would still find substantial merit even if the jury had returned a verdict in favor of executrix. Additionally, the trial court found that attorneys' fees requested by caveator were reasonable within New Hanover County. The trial court also allowed propounder's motion in full.

The trial court partially granted executrix's motion, reducing the total amount of attorneys' fees to be awarded to MVA to $724,518.90 (reducing the original, requested amount of $866,122.30 by $161,603.40). The trial court did so after holding that: (i) all attorneys' fees awarded to counsel must be "within the range of the customary fee for like work . . . in New Hanover County" rather than North Carolina more generally; and (ii) the affidavits submitted in support of caveator's petition "show that the attorneys' fees sought by Executrix . . . [are] not comparable to the rates found in New Hanover County for attorneys of [their] level of experience", and are "in excess of those rates customary and reasonable within the New Hanover County geographic area." The trial court also concluded, however, that MVA's customary rates "are clearly warranted based on demonstrated skill and expertise as well as what the market for legal services will bear in Mecklenburg and Wake counties."

On 26 April 2022, executrix filed notice of appeal from the trial court's fee Order (the "Second Appeal"). The fee Order is a final determination regarding the parties' rights to attorneys' fees and costs and, therefore, appeal lies to this Court pursuant to N.C. Gen. Stat. § 7A-27(b)(1).

II.

First, executrix argues the trial court lacked subject-matter jurisdiction to enter the fee Order after executrix filed and served the first notice of appeal. We disagree.

"The issue of jurisdiction over the subject matter of an action may be raised at any time during the proceedings, including on appeal." McClure v. Cnty. of Jackson, 185 N.C.App. 462, 469, 648 S.E.2d 546, 550 (2007) (citation omitted). "Whether a trial court has subject-matter jurisdiction is a question of law, reviewed de novo on appeal." McKoy v. McKoy, 202 N.C.App. 509, 511, 689 S.E.2d 590, 592 (2010) (citation omitted).

"When an appeal is perfected . . . it stays all further proceedings in the court below upon the judgment appealed from, . . . but the court below may proceed upon any other matter included in the action and not affected by the judgment appealed from." N.C. Gen. Stat. § 1-294 (2022). Under our precedent, "it is only when an award of costs is directly dependent upon whether the judgment is sustained on appeal, that, under N.C. Gen. Stat. § 1-294, the trial court lacks jurisdiction to enter an award of costs once notice of appeal has been filed as to the underlying judgment." Blanchard v. Blanchard, 279 N.C.App. 269, 277, 865 S.E.2d 686, 691 (2021) (cleaned up).

In this case, the trial court entered its fee Order pursuant to section 6-21(2). Under this statute, the trial court is authorized to enter a discretionary award in a will caveat proceeding ...