‘Attorney fees contract in probate unenforceable’

Superior Court Associate Judge Juan T. Lizama has denied a lawyer’s claim for reimbursement pursuant to his attorney fees contract in representing an estate in the litigation.

Lizama ruled that attorney Jay Sorensen’s claim is unenforceable, although he is entitled to reimbursement.

Lizama said that, as an attorney calculating his fees as a percentage of the value of all or any part of an estate, Sorensen clearly fails within the scope of the statute.

But the judge noted that Sorensen should be justly compensated for the work he had performed on behalf of the heirs.

“There is not basis for total forfeiture of compensation,” Lizama said as he directed the lawyer to submit documentation of the services performed and proof of the value of these services in the estate of Isaac Kaipat.

Lizama agreed with the administratrix’s proposal that compensation be based on a statute that requires the personal representative to “account for the services rendered during probate, the time and skill required to perform them, the date of the services performed, the benefit to the estate, and the customary charge and rate for such services within the Commonwealth.”

Court records show that Isaac Kaipat, one of three children of Vicenta Kaipat, died in 1944. The estates of Vicenta and her children, Rita, Benigno and Isaac, have only recently been probated, following the availability of compensation from a land condemnation.

The Isaac Kaipat estate asserted that the deadline for claims was Oct. 24, 2005.

Sorensen filed his notice of claim for attorney fees in the Isaac Kaipat estate on Nov. 8, 2005. In February 2006, the Isaac Kaipat estate’s administratrix, Mystica Kaipat, denied Sorensen’s claim, arguing that it was untimely and unenforceable.

Sorensen’s claim arises out of his representation of the estate in the litigation of the estate of Isaac Kaipat’s mother, Vicenta Kaipat.

Sorensen successfully argued that two subject lots should be divided among all the heirs of Vicenta Kaipat.

He sought collection of fees pursuant to an attorney-clients fee contract entered in October 1990 with heirs Joaquina K. Laniyo, Rosalie I. Kaipat, Jesus Kaipat (on behalf of Maria Kaipat), Luis K. Pelisamen (on behalf of Dolores K. Pelisamen), Margarita K. Lisua (on behalf of the heirs of Angelina Kaipat), and Antonio F. Kaipat (on behalf of the heirs of Jose I. Kaipat).

The contract provides for a fee of 25 percent of any money recovered in the litigation. In the event that heirs receive land instead of money, the contract requires heirs to lease the land and pay Sorensen 25 percent of the amount received from the lease, or “lease” the land to Sorensen for 55 years at no cost.

Sorensen argued, among other things, that even if administratrix was not specifically told about his claim, the administratrix should have made a diligent effort to ascertain and notify creditors to the estate.

In denying the claim, Lizama pointed out that the fact that other jurisdictions lack a similar restriction on contingency fees in probate cases does not alter the court’s interpretation.

The CNMI has a system designed to safeguard traditional customs as well as ownership by indigenous people, Lizama said.

“This system is unique among all American jurisdictions. An agreement that would allow a percentage of the assets of an estate to be siphoned away is incongruous with the CNMI’s system of law,” he said.

The court, Lizama said, will not enforce the attorney fee described in the contract.

He cited that one alternative also takes the form of a contingency fee, requiring heirs to lease any land they inherit and pay Sorensen 25 percent of the proceeds.

The other alternative, he said, requires the heirs to “lease” for 55 years any land they inherit to Sorensen without compensation.

“Given that the subject land is Carolinian family land held in trust by a family trustee, the land cannot be divided unless all the heirs of Vicenta Kaipat, not just those Sorensen represented,” Lizama said.

Because the second alternative would violate the statute, it is unenforceable, the judge said.

The Rita Kaipat estate was awarded by the Marianas Public Lands Authority with $4.7 million in land compensation settlement. The $4.7 million land compensation settlement was split equally among three estates, including the estates of Rita and Isaac Kaipat.