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However, Lynch should have been given credit for the
payments of $30,950 to Reardon and $45,000 to Groen &
Smolow. After being given credit for those payments,
the amount of the "surcharge" should have been based
upon the difference between $424,811.19 (i.e.,
$500,761.19 less $30,950.00 and less $45,000.00) and
$401,256.10, or $23,559.09. That figure is the amount
of the refund Lynch must make as a result of the
overpayment of his fee.
Concerning Reardon's fee, the auditing judge
allowed him a fee of 15% of the market value of the
bonds recovered or the sum of $171,966.90. He
therefore "surcharged" Reardon the difference between
the amount paid to him by Lynch, i.e., $250,950.00, and
the fee he found to be reasonable, for a total
"surcharge" of $78,983.10. We find no error in the
auditing judge's finding and dismiss the exception.
However, the auditing judge was unmindful of the
fact that Reardon had been totally compensated by Lynch
for his services. When Lynch made the two payments to
Reardon, totaling $250,950.00, Reardon had received the
benefit of his bargain with Lynch. That is to say,
Reardon was paid by Lynch in accordance with the terms
of the contract he entered into with Lynch. In fact,
Reardon received somewhat more than 15% of the face
value of the bonds recovered.
Even after refunding the full amount of the
surcharge, Reardon is left with $171,966.90. His fee,
when added to Lynch's allowed fee of $401,256.10, makes
a total fee for services of $573,223.00. That amount
is exactly 50% of the total market value of the assets
recovered by Lynch and Reardon.
Although the auditing judge does not expressly
address the issue, it is clear from the amounts of
compensation awarded to Lynch and Reardon that he found
that Lynch was to receive 35% of the market value of
the bonds and that Reardon was to receive 15% of the
market value of the bonds and that each man was
compensated from the gross estate. We are of the
opinion that an allowance of 50% of the market value of
the assets recovered is unreasonable and excessive and
was error for the auditing judge to allow that amount
of compensation.
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