My experience with Judge Walter A. "Sleepy" Clebowicz and the New Britain, CT Probate Court

This article was posted March 1, 2010.

Guide to Connecticut Probate Court

Connecticut's probate courts have a long and colorful history of fraud, corruption, incompetence, and fee gouging that goes back decades. In 1949, Professor Thomas Atkinson of the New York University School of Law, then the leading American authority on probate law, wrote that "Connecticut is just about at the bottom of the list so far as its probate court system is concerned" ^{(Note (1))} Alarmed at the number of his clients that were abused and gouged in Probate Court, Bridgeport estate planner Norman F. Dacey wrote the book "How to Avoid Probate" which sold over 2 million copies and became a national best-seller in the 1960's. More recently, Yale Law School Professor John Langbein testified before a Connecticut Legislature Committee on Program Review and Investigations in 2005. He outlined a number of failings in the Connecticut Probate Court System; "(1) the wasteful multiplicity of our probate courts; (2) the use of persons who are not legally trained to serve as judges; (3) the corruption that inheres in having lawyers sit as judges part-time, while they continue to practice law; (4) the perverse incentives of Connecticut's probate court fee system, which rewards the probate judges for inflicting makework on estates; and (5) the sustained, self-serving opposition that the probate judges have mounted to protect their turf and fight off benign national trends and standards in probate procedure that would reduce expense for our citizens." Professor Langbein singled out the Probate Court's fee system as the worst abuse. "These courts are run on the same principle as a Popeye's Chicken franchise or a Midas Muffler store: The proprietor gets paid by the amount of business he or she can drum up."

Judge Walter A. "Sleepy" Clebowicz runs the Popeye's Probate Franchise for the District of Berlin with offices in New Britain, CT. Judge Clebowicz's court had jurisdiction over the probate my late cousin William's estate. As an out-of-state heir, I was surprised at how poorly the court policed the Fiduciary (i.e., Connecticut's term for the executor of an Estate) and the size of the fee Judge Clebowicz awarded to the Fiduciary in the case.

William died in January 2004 after a short illness leaving an estate of a bit over $400,000 largely consisting of a small home in New Britain appraised at $70,000 and two saving accounts at a local bank that totaled approximately $340,000. It should have been a fairly straightforward process for the Fiduciary to 1) hire a contractor to clean out the home, 2) engage the services of a realtor to sell the home, 3) pay the 50 or so bills and invoices either incurred by the Estate or left outstanding by the deceased and, 4) distribute the remaining assets to the seven heirs.

The Fiduciary left the home vacant for over 2 years and never listed the property with a real estate agent while the Estate paid thousands of dollars in property taxes during that period. He also ignored two letters from the Court warning that the State Succession Tax Return was past due and he was 16 months late in paying the tax. The estate incurred a $2,949 penalty as a result. Despite the rather lax administration of the estate, Judge Clebowicz awarded a fee of 6% of the estate assets or $24,565 for a claim of 289 hours of work by the Fiduciary. This calculates to an hourly rate of $85, well in excess of the $20 to $25 per hour typically charged by lay Fiduciaries.

Connecticut law apparently requires that fiduciary fees in probate matters be "reasonable" and does not allow judges to award a "percent of assets" fee. ^{(Note (2))} When I complained that $85 per hour was way too much, Judge Clebowicz asked "Where'd the $85/hour come from?". In a disturbing display of laziness and lack of attention to detail, Judge Clebowicz apparently hadn't done the arithmetic before awarding the grossly unreasonable fee.

I asked Judge Clebowicz to require the Fiduciary to produce records and documents supporting the man-hours claimed, and copies of the receipts and invoices the Fiduciary had previously collected in a manilla folder. Here are a few highlights with costs based on the $85/hour rate:

• 1) 169 hours ($14,365) to clear 38 cubic yards of debris (mostly light trash and paper) from a 1,200 square foot home.

• 2) 61 hours ($5,185) to review and shredd approximately 1,000 pieces of junk mail and old paystubs.

• 3) and the Pièce de résistance (as the French say), 18 hours ($1,530) to photocopy the contents of the manilla folder containing the receipts and invoices, a total of approximately 130 8-1/2" x 11" sheets.

Judge Clebowicz had awarded the Fidcuiary $23,580 six months earlier in a partial distribution in advance of the final accounting of the estate with an additional $985 to be paid to the Fiduciary upon closing the Estate account. When I complained about the excessive fee, Judge Clebowicz agreed to not award the final $985, but declined to make any adjustment in the $23,580 already disbursed. Thus, the only relief was to appeal his ruling to Superior Court.

In calling around looking for an attorney to handle the Probate appeal, I found that Judge Clebowicz was very popular. Of course, I don't know whether this popularity is due to the quality of Judge Clebowicz's jurisprudence, or a propensity to award unusually generous fees to the attorneys and fiduciaries that appear before him. Based on the facts of this case, I'd have to assume the latter.

Appealing a Probate Ruling in Connecticut Superior Court

While many people see Connecticut Probate Courts, like the one where Judge Clebowicz presides, as a haven for irresponsibility and incompetence, you are likely to find a more distingushed jurist in Connecticut Superior Court, where at a minimum, judges are required to have law degrees. Unfortunately, an attorney will likely want a $5,000 to $10,000 retainer to take the appeal and it may cost another $10,000 to $15,000 if the case actually goes to trial. Thus, many heirs of modest means are priced out of the court and a lot of these abuses go unexamined.

Fortunately, I had sufficent resources to mount an appeal, and felt the brazenness of the apparent fee gouging deserved a thorough review, so I went ahead.

It took almost a year and two motions for default to get the Fiduciary to file an appearance and an answer to the lawsuit. Then another year and a half for a deposition and lining up two expert witnesses.

In the deposition the Fiduciary admitted he just took 6% of the estate as his fee and had no timesheets or other contemporaneous records to document the 289 hours of work claimed or a subsequent claim for an additional 113 hours.

The first expert, an eminent Connecticut attorney who had probated hundreds of estates over the past few years, would testify that a Connecticut Fiduciary's fees must be reasonable and based on the time actually spent and responsibilities assumed. A lay Fiduciary cannot charge an Estate an excessive amount simply because they are inexperienced. Furthermore, a Fiduciary has an obligation to preserve the Estate assets and delegate work to professionals who would charge less than the amounts the Fiduciary earned as part of his fee. A lay Fiduciary in Connecticut would typically charge between $20 to $25 per hour.

The second expert witness was the Operations Manager for a debris hauling contractor that had cleaned out hundreds of homes in the Central Connecticut area over the past few years. He examined photographs of the debris inside the home and would testify that his firm would have charged $2,500 to remove the 38 cubic yards material -- a big discount to the $14,365 charged by the Fiduciary.

After attending a hearing in July to set a December 2009 trial date, the Fiduciary and his attorney went AWOL and missed their next two pre-trial conferences without warning or an attempt to reschedule. The Judge declined issue a Default and allowed them to reschedule the second hearing for the following week. The Fiduciary and his attorney were again absent without explanation, so the Judge finally issued the Default and scheduled a Hearing in Damages in lieu of a Trial for the December trial date.

The Fiduciary and his attorney did show up on the December trial date with a motion to set aside the Default Judgement and hold the trial. The Judge noted the Fiduciary's failure to appear in the previous three scheduled pre-trial hearings and sustained the Default Judgement -- which meant that the Fiduciary lost his entire fee and would have to return the whole $23,580 he'd previously collected.

Since it was the Christmas season, I offered to settle the case for $19,000 ($13,000 returned to the estate, and $6,000 to me for legal expenses) giving the Fiduciary about a 20% discount. After a few weeks, the opposing side agreed to those terms and the matter came to a close.

How to avoid getting screwed in Probate Court

Even if you have a will, you could still fall prey to excessive fees if you allow your assets fall under the jurisdiction of a Connecticut Probate Court. For example, the 6% fee that Judge Cleowicz applied to the $340,000 bank account in this case amounted to a more than $20,000 fee for the relatively simple task of cutting a check to each of seven heirs. Most people who work for a living would see that as nothing short of legalized theft.

While some wealthy people go to the expense of having an attorney devise a complicated trust to keep their assets out of probate court, there are a few very simple things you can do to protect your retirement accounts, bank and brokerage accounts, and mutual funds.

Most early retirees know the importance of designating a beneficiary for their retirement accounts (i.e., IRAs and 401(k) accounts), but not everyone knows that that you can also designate benefiaries for non-retirement assets like CDs and savings accounts at a bank, or your brokerage account and mutual funds with an investment firm.

Financial accounts at a bank (e.g., savings accounts, checking accounts, Certificates of Deposit, etc.) can be registered with a Payable on Death (POD) beneficiary that will usually pass directly to the beneficiary without going through Probate. Investments like a brokerage account or mutual funds can pass directly to a beneficiary with a Transfer on Death (TOD) registration. According to the Uniform Law Commissioners website, only the states of Texas and Louisiana have failed to adopt the uniform TOD law.

If you're interested in learning more, here's a typical Transfer on Death agreement from the Vanguard Group.

Probate Reform Comes to Connecticut -- at least partially

In 2009 the Connecticut Legislature passed a probate reform law that consolidates the state Probate Courts to 54 from the current 117 outposts, and requires that Probate Judges be attorneys in good standing with a minimum of ten years experience, and provides a pension sweetener to weed out some of the deadwood amongst the sitting Probate Judges.

Unfortunately, as Yale Law School Professor John Langbein complained, the probate reform passed by the Connecticut Legislation did nothing to end the corruption of having sitting Probate Judges maintain private law practices on the side. "This just smells of favoritism," Langbein said. "To allow a judge to maintain a private practice of law is to invite a serious structural conflict of interest."

Langbein said the new law is "the minimum they can get away with" in light of deficits. "They are trying to keep as much of this corrupt system as they can," Langbein said. {Hartford Courant, Sept. 27,2009}

Note (1): 59 Yale Law Journal at 1409 n. 59 (1950).

Note (2): http://www.chadbarr.com/uploads_chadbarr/Berall_Attorneys%27_Fees.pdf