Robert Rauschenberg Foundation v. Grutman
Robert Rauschenberg Foundation v. Grutman, --- So.2d --- (Fla. 2d DCA 2016)
In this decision, the Court considered which methodology to apply when calculating trustee fees. The beneficiary of the trust, a charitable foundation, argued that the trustee fees should be calculated using the lodestar method set forth in Florida Patient's Compensation Fund v. Rowe, 472 So.2d 1145. The trustees argued that their fees should be calculated based on the factors set forth in West Coast Hospital Ass'n v. Florida National Bank of Jacksonville, 100 So.2d 807 (Fla. 1958).
The Court reviewed the history of the two methods and ultimately determined that the West Coast factors should be used to calculate trustee fees, not the lodestar method described in Lowe.
As a review, the West Coast factors include: the amount of capital and income received and disbursed by the trustee; the wages or salary customarily granted to agents or servants for performing like work in the community; the success or failure of the administration of the trustee; any unusual skill or experience which the trustee in question may have brought to his work; the fidelity or disloyalty displayed by the trustee; the amount of risk and responsibility assumed; the time consumed in carrying out the trust; the custom in the community as to allowances to trustees by settlors or courts and as to charges exacted by trust companies and banks; the character of the work done in the course of administration, whether routine or involving skill and judgment; any estimate which the trustee has given of the value of his own services; payments made by the cestuis to the trustees and intended to be applied toward compensation.
Thirty years after the West Coast decision, the Rowe decision adopted the lodestar method for determining reasonable attorney fees. The lodestar method calculates fees by multiplying the number of hours reasonably expended by a reasonable hourly rate. To determine the reasonable number of hours or the reasonable hourly rate, the court considers factors similar to the West Coast factors. Following the Rowe decision, the Court held that the use of the word "reasonable" in the fee statute was consistent with the lodestar method for attorneys and personal representatives in In re Estate of Platt, 586 So.2d 328 (Fla. 1991).
Another fifteen years went by, and the Florida legislature enacted F.S. 736.0708(1) which provides for trustee's fees that are "reasonable under the circumstances." The Court considered the legislative history of the statute, and determined that the legislative history showed an intent to apply the West Coast factors, and that there was no legislative intent to apply the lodestar method. The Court upheld the trial court's calculation of fees using the West Coast factors and found that the court's findings regarding those factors and the reasonable fee amount were supported by the evidence presented at trial.