November 22, 2017

Colorado Court of Appeals: Trial Court Within Discretion to Impose Surcharge in Protective Proceeding

The Colorado Court of Appeals issued its opinion in Becker v. Wells Fargo Bank, N.A. on Thursday, August 24, 2017.

Aaron Becker was the conservator on an account set up for his daughter after she was the beneficiary of settlement funds from a personal injury claim. The trial court’s order to set up the restricted account specified that “no funds could be withdrawn from the account except by ‘separate certified order of this court.'” However, due to a “coding error,” Wells Fargo failed to set up the account as a restricted account. The account balance was $56,642.46 as reported in August 2013. Wells Fargo allowed Becker to make unauthorized withdrawals until the balance was negative, then closed the account.

The trial court issued an order to show cause in August 2016 to both Wells Fargo and Becker regarding the withdrawn funds. At the show cause hearing, Becker testified that he used the funds for his personal expenses, as well as to pay rent, groceries, utilities, sports activities expenses, and other expenses for the beneficiary. The court ordered Becker to file an accounting of how the funds were used from August 2013 until the account was closed. He agreed to do so, but never filed the accounting.

The court ordered Becker and Wells Fargo to restore to the account the last amount reported and found them jointly and severally liable for breach of fiduciary duty. The court ordered Wells Fargo to restore $56,642.46 to a new restricted account. 

Wells Fargo appealed, arguing the court should have apportioned liability per C.R.S. § 13-21-111.5. Wells Fargo also requested a hearing to determine the amount of the funds used to benefit the protected person so as not to afford her a double recovery. The trial court denied Wells Fargo’s motion.

On appeal, the court of appeals disagreed with Wells Fargo that C.R.S. § 13-21-111.5 applied, ruling instead that the court properly determined that it was a surcharge action under C.R.S. §§ 15-10-501 to -504. The court noted that the trial court had authority to impose a surcharge on Wells Fargo for failing to correct its error. The court of appeals agreed with Wells Fargo, however, that requiring the bank to restore the full amount of the settlement funds could potentially result in an impermissible double recovery to the protected person, and remanded for a determination of how the conservatorship funds were spent.

Colorado Court of Appeals: Medical Evidence of Competency Not Required Under Conservatorship Statute

The Colorado Court of Appeals issued its opinion in In the Interest of Neher v. Neher on Thursday, July 30, 2015.

Special Conservator—Medical Expert—Stipulation—Witness Disclosure—Evidence.

After receiving several unsolicited e-mails asking for money, Galen Neher (father) sent almost $500,000 to anonymous offshore bank accounts. Suspecting fraud, Christopher Neher, his son, petitioned the court to appoint a special conservator over father’s financial affairs. Although there was no medical evidence to support the petition, the court appointed a conservator to oversee father’s financial affairs.

On appeal, father contended that the conservatorship statute requires medical evidence before a court can properly make a determination of whether an individual is impaired. Because the current statute does not include such a requirement and the prior statute was amended to remove language that might have suggested it, father’s argument was rejected.

Father also argued that the trial court committed reversible error by denying his motion to enforce an oral stipulation whereby father would retake control of his financial affairs but would be monitored by an accounting firm for a year. The parties later disagreed over the terms to be included in a written stipulation. Even assuming that the court should have found the oral stipulation enforceable, the court still proceeded consistent with that stipulation by holding a hearing on whether to make the conservatorship permanent. Therefore, the court did not err in denying father’s motion.

Father further contended that the trial court abused its discretion when it denied his motion for a new trial. The court did not deny father a fair trial when it stopped the proceedings and directed counsel into chambers for discussion without the parties present. Further, his son’s late disclosure of an expert witness did not require reversal because father’s counsel failed to request a continuance. Finally, his son presented clear and convincing evidence that father was unable to manage property and business affairs. The orders appointing a permanent conservator over father’s estate and denying his motion for a new trial were affirmed.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Status as VA Designated Payee Does Not Confer Priority for Appointment as Conservator

The Colorado Court of Appeals issued its opinion in In re Estate of Runyon on Wednesday, December 31, 2014.

Appointment of Uniform Veterans’ Guardianship Act Guardian—Appointment of Guardian by Incapacitated Person.

Gladys Runyon (mother) was the authorized payee for Sidney Runyon’s Department of Veterans Affairs (VA) benefits until August 2011, when Elizabeth Knight (sister) became the payee. In February 2012, the VA designated Colorado State Bank and Trust (Bank) as payee.

The Bank petitioned for appointment as Runyon’s guardian under the Uniform Veterans’ Guardianship Act (UVGA). It also petitioned to have Jeanette Goodwin appointed as Runyon’s guardian under the Colorado Probate Code. The Denver Probate Court concluded that the Bank’s petitions were filed in the wrong venue but appointed Goodwin as emergency guardian through August 2012.

Ten months after the expiration of the emergency guardianship, mother and sister sought appointment as co-guardians and conservators in Arapahoe County. Runyon advised the court-appointed visitor that he didn’t want mother and sister appointed. The court appointed counsel for Runyon.

The Bank then entered an appearance and sought appointment as conservator and UVGA guardian, and nominated Goodwin as guardian. At the hearing, Runyon’s attorney advised the court of Runyon’s preferences to appoint the Bank and Goodwin as conservator and guardian, and the court granted the appointments.

On appeal, mother and sister argued that the trial court erred because (1) their purported status as designated payees for Runyon’s VA and Social Security Administration (SSA) benefits entitled them to be appointed, and (2) the court should not have given effect to Runyon’s preferences. The Court of Appeals disagreed with the first point and remanded for further proceedings on the second.

The appointment of a guardian lies within the sound discretion of the probate court. A respondent’s nomination of a guardian creates a priority for that nominee, but only if the respondent had “sufficient capacity to express a preference” at the time of the nomination. The respondent may make an oral nomination at an appointment hearing. There is a similar scheme for appointment of conservators and UVGA guardians.

Here, mother and sister had no priority claim to be a guardian or conservator, and being appointed as designated payees of Runyon’s SSA and VA benefits did not confer any such priority claim on them. By nominating the Bank and Goodwin at the hearing, Runyon conferred on them a priority for appointment. However, the record did not reflect whether the trial court found that Runyon had sufficient capacity to express a preference at the time of the nomination. The Court remanded for such a determination, but noted that a finding that a respondent is an “incapacitated person” under the statute does not necessarily mean that the respondent lacks sufficient capacity to express a preference as to a guardian or conservator.

Summary and full case available here, courtesy of The Colorado Lawyer.

Probate JDF Forms Revised in Protective Proceedings Category

In April 2014, the Colorado State Judicial Branch issued several revised forms in the Probate category. The revised forms deal with protective proceedings. The forms are available here in PDF format, and may be downloaded in Word format from State Judicial’s website.

PROBATE

  • JDF 847 – “Instructions for Filing a Petition for Appointment of Co-Guardian/Conservator or Successor Guardian/Conservator” (Revised 4/14)
  • JDF 800 – “Acknowledgment of Responsibilities Conservator and/or Guardian” (Revised 4/14)
  • JDF 821 – “Affidavit of Acceptance of Appointment by Written Instrument as Guardian for Minor” (Revised 4/14)
  • JDF 878 – “Order Appointing Conservator for Adult” (Revised 4/14)
  • JDF 882 – “Conservator’s Financial Plan with Inventory and Motion for Approval” (Revised 3/14)
  • JDF 960 – “Petition for Final Settlement” (Revised 4/14)
  • JDF 964 – “Order for Final Settlement” (Revised 4/14)

Click here to access all of State Judicial’s JDF forms.

Colorado Court of Appeals: No Fiduciary Duty Owed by Party to Real Estate Transaction so Attorney Fee Award Inappropriate

The Colorado Court of Appeals issued its opinion in In the Interest of Delluomo v. Cedarblade on Thursday, April 10, 2014.

Revocable Living Trust—Trustee—Beneficiary—Breach of Fiduciary Duty—Undue Influence—Attorney Fees—Breach of Trust Exception.

Respondent Phillip Delluomo created a revocable living trust. He named himself trustee and Wells Fargo Bank as co-trustee. The beneficiaries of the trust were his niece, appellant Brenda Cedarblade, and his nephew, Timothy Corcoran. A few months after the creation of the trust, Delluomo transferred five parcels of real property from the trust to Cedarblade.

The court thereafter appointed Janice Eder as Delluomo’s conservator. Eder initiated an action on Delluomo’s behalf to quiet title, seeking to set aside the real property transactions involving Cedarblade on the basis of undue influence and breach of fiduciary duty. A jury found that Cedarblade had exerted undue influence on Delluomo with regard to the conveyances of property into joint tenancy. Thus, the court set aside the property transfers to Cedarblade and awarded attorney fees to plaintiffs.

Cedarblade argued on appeal that the court erred in awarding attorney fees to plaintiffs. Cedarblade was not a trustee or custodian of funds (or other trust assets). Although she breached her duty as an individual, she did not breach any duty owed based on a relationship to manage property.

Because the circumstances of this case did not fit within the breach of trust exception to the general rule that parties in a lawsuit must pay their own legal expenses, the Court of Appeals ruled that the district court erred when it denied Cedarblade’s motion for directed verdict and allowed the jury to award attorney fees to plaintiffs. The portion of the judgment awarding attorney fees was vacated.

Summary and full case available here.

Many Probate JDF Forms Amended by Colorado Supreme Court and State Judicial

The Colorado State Judicial Branch issued several new and revised JDF forms in the Probate category in June and July, after the Colorado Supreme Court issued Rule Change 2013(08) on June 19, 2013.

Most of the instruction forms were changed, as well as forms regarding guardianships for adults and minors, the Conservator’s Report, and the small estate affidavit. Click the links below to view and download the forms.

PROBATE FORMS

  • JDF 782 – Instructions to File Petition to Accept Adult Guardianship and/or Conservatorship in Colorado From Sending State (revised 7/13)
  • JDF 786 – Instructions to File a Petition to Transfer Adult Guardianship and/or Conservatorship from Colorado to Receiving State (revised 7/13)
  • JDF 820 – Instructions for Appointment of Guardian by Will or Other Signed Writing (revised 7/13)
  • JDF 823 – Instructions for Appointment of Guardian – Minor (revised 7/13)
  • JDF 840 – Instructions for Appointment of Guardian – Adult (revised 7/13)
  • JDF 860 – Instructions for Appointment of Conservator – Minor (revised 7/13)
  • JDF 875 – Instructions for Appointment of Conservator – Adult (revised 7/13)
  • JDF 887 – Instructions to File a Petition to Terminate Conservatorship (revised 7/13)
  • JDF 906 – Instructions for Probate With a Will (revised 7/13)
  • JDF 907 – Instructions for Probate Without a Will (revised 7/13)
  • JDF 957 – Instructions for Closing an Estate Formally (revised 7/13)
  • JDF 958 – Instructions for Closing a Small Estate Informally (revised 7/13)
  • JDF 959 – Instructions for Closing an Estate Informally (revised 7/13)
  • JDF 989 – Instructions to Re-Open an Estate (revised 7/13)
  • JDF 998 – Instructions for Completing Affidavit for Collection of Personal Property (revised 6/13)
  • JDF 827 – Order Appointing Guardian for Minor (revised 6/13)
  • JDF 828 – Order Appointing Temporary Guardian for Minor (revised 6/13)
  • JDF 829 – Order Appointing Emergency Guardian for Minor (revised 6/13)
  • JDF 830 – Letters of Guardianship – Minor (revised 6/13)
  • JDF 843 – Order Appointing Emergency Guardian for Adult (revised 6/13)
  • JDF 846 – Order Appointing Temporary Substitute Guardian – Adult (revised 6/13)
  • JDF 848 – Order Appointing Guardian for Adult (revised 6/13)
  • JDF 885 – Conservator’s Report (revised 6/13)
  • JDF 999 – Collection of Personal Property by Affidavit (revised 6/13)

For all of State Judicial’s JDF forms, click here.