Thursday, September 21, 2023

Better Late Than Never

The Mississippi Supreme Court has reversed an order and directed that an $86,000 fee for legal services be paid out of the estate of the deceased client

The story

When Herbert died, he and Rebecca were entangled in divorce proceedings. Malouf was representing Herbert and had provided more than $86,000 in unpaid services. But Herbert’s Estate did not pay Malouf following the chancellor’s order accepting Rebecca’s offer “to pay the debts of the estate as submitted by [Rebecca]” in exchange for the assets. Instead, the estate matter dragged on. The chancellor retired. A special judge was appointed. And a substitute executor was agreed to.

The substitute executor at some point moved to declare certain unsecured claims against the Estate extinguished and time-barred. Malouf’s claim was included in this request. According to the substitute executor, by statute, Malouf had four years and ninety days from issuance of letters testamentary to file an action against the Estate for payment of its claim. Malouf countered that such an action was unnecessary because, during those four years, the original chancellor had entered the order directing the sale of assets. And in this order, the court accepted Rebecca’s offer “pursuant to its terms and conditions”—one such condition being that Malouf’s probated claim would be paid. The special judge sided with the substitute executor and denied Malouf’s probated claim as untimely.

In error

After review, we find the chancellor erred by ruling Malouf’s timely probated claim was barred by statute. Suggesting Malouf had to take further action against the Estate to protect its claim after the court had already ordered all timely probated claims be paid by the asset-sale proceeds defies logic. While the substitute executor now argues the parties never intended all probated claims be paid, that argument conflicts with the plain language of Rebecca’s offer, which was incorporated into the chancellor’s original order. Rebecca offered to buy the assets of the Estate for $8 million so that the Estate could pay the $8 million in probated claims. And this amount expressly included Malouf’s claim. So Malouf had no reason to pursue additional legal action to secure payment of this claim.

Therefore, we reverse the order denying Malouf’s claim. And we remand the case to the chancery court with instructions that Malouf’s probated claim be paid from proceeds of the purchase of the Estate’s assets.

Thus

We reverse the judgment denying Malouf’s claim, and we remand this matter to the chancery court with instructions to direct the Estate to pay Malouf’s claim with the proceeds from the asset purchase sale, just as the Estate was already ordered to do more than six years ago.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2023/09/the-mississippi-supreme-court-has-reversed-an-order-and-directed-that-an-86000-fee-for-legal-services-be-paid-out-of-the-es.html

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