ATTORNEYS FEES FOR COLLECTION ON COMMON FUND: CUMMINGS V. COVEY (COA 7/6/2007)

CUMMINGS V. COVEY
CIVIL:  ATTORNEYS FEES
2005-CA-001584
PUBLISHED: AFFIRMING
PANEL:  HOWARD, PRESIDING; WINE, BUCKINGHAM CONCUR
COUNTY: CLINTON
DATE RENDERED: 7/6/2007

This appeal had it’s genesis in a dispute over an estate administration.  Cummings (children of Covey) obtained the removal of their mother Covey as executrix of their grandmother Shirley Cummings’ estate.  A jury returned a verdict finding that Covey had indeed breached her duties as executrix, but ordered her to repay the estate only $3,826.00, far less than the amount sought. Don Cummings et. al. brought a motion pursuant to KRS 412.070 seeking $10,000 in attorney fees, over and above the judgment. The

Although the trial court granted appellant’s motion by awarding attorney fees of $8,000.00, the trial court effectively limited that award by allowing recovery of the fee only from the funds recovered from the Appellee, Peggy Ann Covey pursuant to a judgment already awarded against her in the sum of $3826.00. Appellant appealed, and COA AFFIRMED the trial court’s award.

Kentucky has long followed the “American Rule,” that in the absence of a statute or contract, attorney fees are not allowable as costs, nor recoverable as an item of damages. (see, eg., Dulworth & Burress Tobacco Warehouse Co. v. Burress, 369 S.W.2d 129 (Ky. 1963); Holsclaw v. Stephens, 507 S.W.2d 462 (Ky. 1973), disapproved on other grounds by Jacobs v. Lexington-Fayette Urban County Government, 560 S.W.2d 10 (Ky. 1977)).

KRS 412.070(1) is clear on its face. By using the mandatory term “shall,” the statute unequivocally requires that attorney fees awarded under this statute must be paid from the funds recovered. “Shall means shall.” Vandertoll v. Commonwealth, 110 S.W.3d 789, 796 (Ky. 2003).

Though there are a few cases indicating that a trial court may have the discretion to award attorney fees in certain situations beyond the general rule, acting in equity. Kentucky State Bank v. AG Services, Inc., 663 S.W.2d 754 (Ky. App. 1984) and Flag Drilling Co., Inc. v. Erco, Inc., 156 S.W.3d 762 (Ky. App. 2005), the COA noted that exactly what circumstances would justify this exception to the general rule have never been spelled out.

In short, KRS 412.070(1) sets forth specific situations in which attorney fees may be awarded in suits “for the settlement of estates,” and only “out of the funds recovered.” It does not in any way authorize the award of a separate fee against a wrongdoer, beyond the amount of the recovery. COA concluded it had no latitude to decide, even if it might seem equitable, to do what the statute does not permit.  The judgment of the Clinton Circuit Court is affirmed

By Michael Stevens

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One thought on “ATTORNEYS FEES FOR COLLECTION ON COMMON FUND: CUMMINGS V. COVEY (COA 7/6/2007)

  1. ATTORNEYS FEES: Attorneys fees in common fund recovery for estate limited to the amount of the recovery (Cummings v. Covey, COA, 7/6/2007)

    In applying the common fund doctrine found in KRS 412.070(1), the Court of Appeals in Cummings v. Covey limited the attorney fees to the funds recovered for the benefit of the estate. See, ATTORNEYS FEES FOR COLLECTION ON COMMON FUND: CUMMINGS V. COVEY…