Finder's Fees in Estate and Probate Disputes
Professional finders are engaged in the business of locating and assisting in the recovery of unclaimed funds on behalf of another person, or an estate, in exchange for a fee.
This month, the 10th District Court of Appeals affirmed the trial court’s decision denying an estate’s disbursement of a finder’s fee in In re Estate of Zeak, 2022-Ohio-951 (10th Dist.2022). Various rules and restrictions are imposed on professional finders, and in the context of an estate administration, it is important that the representative of the estate be aware of how to navigate the requirements and procedures. Attorneys at Reminger handle all aspects of such claims, including explanation of a beneficiary’s rights and the mechanism by which to claim unclaimed funds through the process of an estate administration.
The Decedent, in In re Estate of Zeak, passed away in 2016 without a will, leaving eight surviving next of kin. Decedent had no known probate assets, so an estate was not opened. Two years later, a professional finder company apparently found proceeds that belonged to the estate from a sheriff’s sale of Decedent’s house. Prior to opening Decedent’s estate, one of the eight next of kin signed a contract with the professional finder, agreeing to a finder’s fee of 33.33% of the recovered assets. Thereafter, an attorney applied to be appointed administrator of Decedent’s estate. Each of the next of kin waived the right to administer. The attorney filed an inventory indicating the only asset in the estate were the proceeds from the sheriff’s sale, which was over $90,000. Thereafter, the attorney filed Acknowledgment, Waiver, and Consent to Finder’s Fee forms, signed by the next of kin, waiving objections to the finder’s fee. Finally, the attorney filed accountings, showing $59,000 was disbursed among the beneficiaries, following the disbursements for the finder’s fee, fiduciary fees, attorney’s fees, and reimbursement of court costs, which totaled over $30,000.
The court set a hearing to consider the account and directed the attorney to appear and present evidence. Prior to the hearing, at the magistrate’s direction, the attorney filed a Memorandum Concerning Finder’s Fee, but he did not attend the hearing. Thereafter, the magistrate issued a decision, finding the attorney waived his right to appear at the hearing, and determining the finder’s fee could not be appropriately distributed because the contract was not executed by anyone with authority to bind the estate, nor was it approved by the court.
The attorney filed objections and asked the trial court to reject the magistrate’s decision. Ultimately, the trial court overruled the objections. Specifically, the trial court adopted the magistrate’s findings of fact because no transcript of the hearing existed, and the attorney failed to file an affidavit of evidence under Civ.R. 53(D)(3)(b)(iii). Further, the court found that the attorney could have appeared at the hearing, and the fact that he did not appear suggested that he waived his right. Finally, the court agreed with the magistrate on the merits of the finder’s fee issue, and found the magistrate had authority under R.C. 2109.32(A) to disallow the payment for contract services.
On appeal, the attorney’s assignment of error included new arguments that were not raised to the trail court. As such, the 10th District did not consider his newly raised arguments involving due process. Rather, the appellate court found that the accounting hearing was not canceled, and the attorney had the opportunity to present his claim but failed to appear. Accordingly, the 10th District affirmed the trial court’s judgment.
Attorneys at Reminger have experience handling all aspects of estate administration. We encourage you to get in touch with our Estate, Trust, and Probate Litigation team to utilize our counsel in navigating estate administration, applications, and disputes arising therefrom.
