California Attorney/Trustee Surcharged for Excessive Fees Upheld on Appeal

In the Conservatorship of the Person and Estate of Lester Moore

Friend v. Salzwedel

William Salzwedel, a California licensed attorney, had his attorney fees/trustee fees and costs surcharged by $96,077.14.  In the decision, the Second Appellate District Court of Appeals upheld the trial court’s ruling, which held that Mr. Salzwedel put his own financial interests ahead of the interests of his client, an elderly person suffering from dementia.

                Mr. Salzwedel was hired by Lester Moore, an elderly man who was subject to a conservatorship petition against him.  Mr. Moore was found by his doctor’s to have impaired capacity (he was previously determined by his treating physicians to suffer from dementia and lacked the ability to handle his affairs).  During the conservatorship proceedings Mr. Salzwedel then amended Mr. Moore’s estate plan by having Mr. Moore modify his trust to name Mr. Salzwedel as the temporary successor trustee; obtained Mr. Moore’s resignation as trustee; and created a durable power of attorney appointing Mr. Salzwedel as Mr. Moore’s agent under the power of attorney also known as his attorney-in-fact.  Mr. Moore’s new estate planning disinherited his family in favor of what the Court determined to be one of Mr. Salzwedel’s “allies.”  During his tenure as trustee, Mr. Salzwedel billed at his attorney rate.  His total fees were $148,015.11.

                The billing matters were brought before the Court by Mr. Salzwedel who filed a petition to settle his accounting that were objected to by the temporary conservator.  The trial court ruled before the evidentiary hearing that the fees ($148,015.11) were disapproved absent a showing that the services benefitted Mr. Moore in the amounts charged and a showing that Mr. Moore had the capacity to contract for and approve the fees when the services were rendered.  Mr. Salzwedel used a “spare-no-expense strategy,” which the Court of Appeals stated calls for close scrutiny on questions of reasonableness, proportionality, and trust benefit and that where the trust is not benefited by the litigation or does not stand to be benefitted if the trustee succeeds, there is no basis for the recovery of expenses out of the trust assets.

                Of the fees, $70,044.99 were attorney fees/trustee fees, $25,015.13 were medical expert fees (part for a “celebrity psychiatrist” who didn’t even render a written report or testify), and $1,017.02 were costs.