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Keywords

contractattorneyhearingtestimonycorporationexpert witness
contractattorneyprecedentappealcorporation

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In re Estate of Gregory, Not Reported in A.2d, 2006 WL 3041968, 27 Fiduc.Rep.2d 273

Facts

Flora Lee Gregory, a 91-year-old woman suffering from dementia, was the subject of incapacity proceedings initiated by the Philadelphia Corporation for Aging (PCA). A retainer agreement for $11,000 was established for her attorney, Darlene Snowden, to represent her in these proceedings. However, after a series of hearings and evaluations, it was determined that Ms. Gregory was totally incapacitated, leading to questions about the validity of the retainer agreement and the attorney's fees. The case was complicated by Ms. Gregory's subsequent removal to South Carolina and her eventual death, which rendered some issues moot.

On August 9, 2005, the Philadelphia Corporation for Aging (“PCA”) filed a petition for the adjudication of incapacity and the appointment of co-guardians for the person and estate for Flora Lee Gregory.

Issue

Whether the retainer agreement for a flat fee of $11,000 for attorney representation of Flora Lee Gregory is void due to her incapacity, and how attorney fees should be calculated.

The issue raised by the appeal of this court's February 28, 2006 order is whether a retainer agreement for a flat fee of $11,000 (fees and costs) for an attorney's representation of a 91 year old client in incapacity proceedings is void on the facts and precedent.

Rule

A totally incapacitated person is incapable of making any contract or gift, and contracts entered into prior to an adjudication of incapacity may be voided if the person lacked capacity at the time of execution.

A totally incapacitated person shall be incapable of making any contract or gift or any instrument in writing…. 20 Pa.C.S. § 5524.

Analysis

The court applied the rule regarding incapacity to determine that the retainer agreement was unenforceable due to Ms. Gregory's lack of mental capacity at the time it was executed. Testimony from an expert witness established that Ms. Gregory was unable to understand the implications of the agreement. Consequently, the court awarded attorney fees based on quantum meruit, reflecting the reasonable value of services rendered rather than the flat fee stipulated in the voided contract.

The court applied the rule regarding incapacity to determine that the retainer agreement was unenforceable due to Ms. Gregory's lack of mental capacity at the time it was executed.

Conclusion

The court concluded that the retainer agreement was void and awarded attorney fees to Ms. Snowden on a quantum meruit basis in the amount of $3,018.75, ordering her to refund any excess fees received.

The petition to void the retainer agreement was granted and Ms. Snowden was awarded fees on a quantum meruit basis in the amount of $3,018.75 by order dated February 28, 2006.

Who won?

The prevailing party was Flora Lee Gregory's estate, as the court found the retainer agreement void and limited the attorney's fees to a quantum meruit basis.

The prevailing party was Flora Lee Gregory's estate, as the court found the retainer agreement void and limited the attorney's fees to a quantum meruit basis.

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