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In re Tsai

Court of Appeals of Ohio, Eleventh District

June 28, 2013


Appeal from the Lake County Court of Common Pleas, Probate Division, Case No. 09 GU 0127.

Paul W. Flowers, Paul W. Flowers Co., L.P.A., and Kimberly J. Baranovich, The O'Brien Law Firm, L.L.C., (For Appellants, Kathleen L. Leber and Ling Zhang).



{¶1} Appellants, Kathleen L. Leber and Ling Zhang, co-guardians of Ing H. Tsai, appeal from the judgment of the Lake Count Court of Common Pleas, Probate Division, adopting the magistrate's decision. At issue is whether the trial court was authorized to render a substantive judgment on the issue of guardianship fees where the magistrate's decision, which it adopted, concluded more evidence was necessary to adjudicate the matter. For the reasons discussed below, the judgment of the trial court is reversed and remanded.

{¶2} On August 27, 2009, a guardianship estate was opened for Tsai's person and estate. After a physician's evaluation, Tsai was diagnosed with moderate dementia due to Alzheimer's Disease. Tsai's brothers, one living in California and one living in Illinois, consented in writing to appellants' appointment and approved appellants as co-guardians. Given the circumstances, appellants were appointed to serve as co-guardians.

{¶3} Over the next several years, the co-guardians assisted Tsai in managing her personal affairs as well as her substantial estate. Throughout the course of the guardianship, appellants prepared and submitted necessary accountings addressing Tsai's financial holdings, real estate, income, and expenses. In October 2011, the record indicates Tsai moved to California to live with certain family members and a conservatorship was established for Tsai in that state. The guardianship remained opened in Ohio, however, to continue managing properties Tsai owned in Lake and Ashtabula counties. There is no dispute regarding the necessity of continuing the guardianship in Ohio.

{¶4} In December 2011, appellants moved the trial court to release funds from the estate to pay attorney fees relating to the administration of Tsai's guardianship estate. After reviewing the motion, the magistrate found "there was significant time and labor involved in administering the guardianship and many novel and difficult issues." The magistrate granted the motion and the trial court adopted the magistrate's decision.

{¶5} In March 2012, appellants filed a Second Partial Account that detailed Tsai's balances from her multiple accounts, income, and itemized expenses. The co-guardians' fees were calculated at $233, 346.18, which represented the fees calculated from both the first and second accounting. In early April 2012, Tsai's siblings sent a letter to the probate court questioning the fee computation. Tsai's siblings acknowledged the work of the co-guardians, but requested a "justification" for the significant fee. The siblings also expressed their belief that only Appellant-Leber was needed to manage the estate because Tsai resided in California and no longer required the type of personal assistance that Appellant-Zhang formerly provided.

{¶6} In June 2012, a hearing was held at which the magistrate asked counsel for the co-guardians to file an application for the fees, setting forth what was specifically accomplished to justify the amount. The hearing adjourned and counsel subsequently filed the application pursuant to the court's request. The application described the work of the co-guardians and calculated the fee using the monetary value of the estate (taken from the March 2012 accounting) and formulae set forth in Lake County Probate Rule 73.1 (governing guardianship fees).[1]

{¶7} After considering the application, the magistrate issued her decision, noting the probate court's considerable discretion in determining fees in a guardianship case. She also observed that, while Loc.R. 73.1 provides the formulae used by appellants for calculating their fees, that rule also provides that the fees for services shall not exceed amounts generated by those formulae. Implicitly acknowledging that, while appellants may be entitled to the amount calculated, that amount represents the ceiling fee for guardian compensation under the rule. The magistrate consequently concluded additional evidence was necessary to rule on the reasonableness of the fees. The magistrate therefore determined an evidentiary hearing would be held on that issue "upon further order of the court." The decision further gave the parties notice that they could file written objections to the decision within 14 days from the date of its filing.

{¶8} The parties ordered a transcript of the June hearing, but filed no objections to the magistrate's decision. And, despite the magistrate's decision that more evidence was necessary to rule on the fee issue, no hearing was scheduled. Notwithstanding this irregularity, on October 17, 2012, the trial court issued a judgment which purported to adopt the magistrate's decision in full. In doing so, however, the trial court concluded that "guardian fees in the amount of $233, 346.18 are excessive. The court finds that payment of $85, 000 to Kathleen L. Leber and 40, 000 to Ling Zhang are reasonable fees based upon the work performed by each co-guardian." Appellants have filed a timely appeal from this judgment.

{¶9} Appellants assign two errors for this court's review. Their first assignment of error provides:

{¶10} "The probate judge erred, as a matter of law, by prematurely adjudicating the application for co-guardian fees before the magistrate had conducted a hearing."

{¶11} Appellants contend the trial court committed prejudicial error when it adopted the magistrate's decision, which underscored the necessity of hearing additional evidence to adjudicate the substantive issue of the reasonableness of fees, but nevertheless concluded, without the ...

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