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Justices differ on reasonableness of GAL fees

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If two parties in a domestic relations dispute sign a written contract to retain the services of a guardian ad litem, then the trial court must enforce the terms of the agreement unless it is contrary to public policy, the Indiana Supreme Court ruled Friday.

In In re the paternity of N.L.P; R.P., v. L.S. n/k/a L.B., No. 45S03-0904-JV-133, guardian ad litem Jill S. Swope challenged the trial court’s reduction of her GAL fees from $34,800 to $20,000 for work she did from 2004 to 2008 for parents R.P. and L.S. The parents executed a joint written agreement to hire Swope as the GAL to help resolve existing visitation and parenting issues. The written agreement outlined the hourly fee of $150 and that the parents would pay for various expenses such as long-distance phone calls.

The trial court found Swope’s original fees to be unreasonable because she charged for phone calls and other things that should have been included in the hourly rate; the parents may not have the ability to pay those fees; and some of her services duplicated services done by the court-appointed custody evaluator.

The Indiana Court of Appeals vacated the trial court’s decision and remanded for the trial court to support its determination that the $20,000 fee was reasonable. The COA sua sponte ruled the fees were unreasonable because Swope acted as a GAL and attorney, and that she should have billed her work separately.

In this issue of first impression, the majority of justices found the focus on the reasonableness of the GAL fees to be misplaced. The clients didn’t contest Swope’s bill and entered into a contract to set the hourly rate and fees she could charge, wrote Justice Robert Rucker.

There is a strong presumption in the enforceability of private contracts unless the contracts somehow violate public policy grounds, but that isn’t the case here, the justice continued.

“We see no basis for the trial court to modify the terms of the parties’ agreements,” he wrote.

The trial court erred by not enforcing the term of the parties’ written agreements. The justices also noted they disagreed with the COA that someone acting as a GAL and attorney should bill separately for services and by not doing so, that renders the fees unreasonable.

Justice Theodore Boehm agreed with his colleagues that the parties’ hourly rate and reimbursement for incidental expenses are presumptively enforceable, but he agreed with the COA that the trial court may review the reasonableness of services rendered.

“Even if the hourly rate agreed is reasonable, a fee agreement is not a blank check for the attorney to fill in the amount of services rendered irrespective of the need for services,” wrote Justice Boehm.

The trial court is in the best position to determine if the services rendered were reasonable or useful, he continued, and whether duplication of services provided were reasonable.
 

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