Wednesday, August 22, 2018

Davidson v. Holman (Cal. Ct. App. - Aug. 22, 2018)

Three cheers for Judge Thomas Cahraman, who's on the probate court in Riverside County.  I'm extraordinarily impressed by his initiative, effort, and even-handed justice in this case.

Judge Cahraman gets a routine probate petition filed by Christine Davidson, who was the court-appointed conservator for a particular disabled person.  I'm sure the probate courts gets a million of these every year.  They're perfunctory, and generally just get approved.  Much like Davidson's prior petitions had been routinely approved.

But Judge Cahraman takes his job seriously.  He looks over the petition, in which Ms. Davidson is seeking conservator’s fees of $12,621.60 for work over a six-year period.  Given the relatively small amount of fees and the detailed bills that Davidson submitted, any judge would be forgiven if he just essentially rubber stamped the thing.

But Judge Cahraman examines the bills and notices some stuff that bothers him.  Rightly so.  To take an example from the opinion:

"The probate court said, “Page 17 of Ms. Davidson’s bill, ‘Received, reviewed, and filed. Notice of changes from Security Bank, re in form of changes in bank fees, terms, and effective date, two-tenths of an hour at $60 an hour, $12.’ [¶] Well, in reading billings like this, the Court doesn’t want to be petty or feel petty, but we all get that little slip of paper once in a while from the bank that says, ‘We have exciting new changes to the terms of your account.’ And then you look at it and what they have done is increased the punishment for a bounced check from $20 to $22. We all glance at those papers and we throw them away. Why this estate has to pay $12 for glancing at that and throwing it away is a big question.”

The probate court went on to question why fees were being charged for confirming that a bank statement went to the correct mailing address when it was clear Davidson received the bank statement. The court questioned why Davidson charged for meeting with a financial advisor to discuss how laws related to the “Affordable Care Act” taxes would affect her clients. The court explained that it is beneficial to be educated, but that is not the type of activity that should be billed to a client. The court said, “I wonder if this appears in 30 clients’ billings or a hundred clients’ billing[s].” The court said, “I worry about this. It’s a hypothesis that makes me worry. I’m not sure that there’s something going on. I’m not sure, but it’s concerning when you read this.”

The court questioned Davidson’s charge for 24 minutes for taking a check to the bank. The court asked, “Is that the only check she took the bank? Or did she take a hundred checks from a hundred clients? In which case, it was four hours billed if you add them all up, and did it take four hours to go to the bank? Or did she do the foolishness of taking this [one] check[?]”"

Faced with these issues, Judge Cahraman sets a hearing and gives Davidson the opportunity to explain things.  To which Davidson responds by defensively saying that the court's essentially not empowered to even question her bills since her charges in those other cases have already been rubber stamped by other judges in other cases.  But Judge Cahraman responds -- totally correctly -- that he's got the power to assess whether fees should be paid in this case by looking at other bills to see if she's billing the exact same thing to a plethora of different clients.

So Judge Cahraman gets his staff to dig a little deeper into the issue, and what does he find?

"The court said, “And so we studied 15 cases of Ms. Davidson in San Bernardino and Riverside counties. And, for instance, the telephone call of September 6th, 2013, there were eight disabled people in eight separate cases billed two-tenths of an hour for receiving telephone calls from representatives from Security Bank . . . ; so 1.6 hours [were] billed if you count all of these disabled people for that call. [¶] Now, it may be that six different offices of Security Bank were used or eight different offices were used and it was eight different phone calls. I don’t know.”

The probate court pointed to a similar issue with a charge for traveling to Security Bank and meeting with a manager. Eight clients were billed for a total of 3.6 hours. The court explained it was possible the meeting and travel lasted 3.6 hours, so each client was billed proportionally, but the court was uncertain. The court explained, “And it goes on and on like this.” The court cited a conference call that was billed to eight clients for a total of 1.8 hours, another bank meeting that was billed for a total of 5.4 hours, and a telephone call that was billed to 10 clients for a total of two hours.

The court said, “But once we did this study, it seemed like something might be deeply wrong.” The court continued, “[W]hen we studied 15 cases and it looks very much like there’s redundant billing of eight different people who are absolutely helpless [and/or] incompetent, that one phone call seems to have been made that two-tenths of an hour and eight different people got charged for it, if that’s not what happened I really am going to want to know. [¶] . . . I’m really hoping there’s some other explanation. But tentatively it looks pretty bad.”"

So Judge Cahraman gives Davidson another opportunity to respond.  At that January 2016 hearing, he essentially asks Davidson's attorney whether Davidson wants to explain whether she's really been double- (or more) billing the same charges to multiple clients.  For example, "the court said it would like to know, for the aggregate 8.4 hours that were billed for a conference with a banker, how many hours Davidson would testify she spent at the bank and traveling for the conference. The court asked Horspool [Davidson's attorney], “Do you want her to tell me that, or do you want me to reach my own conclusions based on what I have?”  To which Davidson's attorney responded "Your Honor, she really doesn’t have anything more to say,” and that was that.

So Judge Cahraman reduces he requested fee, from $12,600 to $7,000.  Still a hefty fee.  At which point Davidson appeals.  And the Court of Appeal entirely properly affirms.

It's not an appeal I would have taken were I in Davidson's position.  Not only did the trial court get it totally right, in my view, but the resulting publication of the opinion is bad press the value of which far exceeds the roughly $5,000 in fees she didn't receive (and still didn't receive after the opinion).

Plus there's the time, effort and fees expended on appeal.

Regardless of the wisdom of the appeal, I was heartened to see judges taking real initiative and doing hard work, essentially sua sponte, to ensure that attorneys don't overbill in probate petitions.  So easy to just do the same thing as everyone else.  Much harder to actually drill down on this stuff and make sure no one's getting ripped off.