September 22, 2018

Colorado Supreme Court: Trial Court Had Jurisdiction to Impose Constructive Trust where Sister Misspent Multi-party Funds

The Colorado Supreme Court issued its opinion in Sandstead-Corona v. Sandstead on Monday, April 9, 2018.

Implied Trusts—Probate Jurisdiction—C.R.S. § 15-10-501—No-Contest Clause.

This case raised multiple issues arising from a dispute between two sisters concerning their mother’s estate and funds contained in a multi-party account alleged to be non-probate assets. The supreme court first held that pursuant to C.R.S. § 13-9-103(3)(b), the trial court had jurisdiction to resolve the dispute over the funds in the multi-party account and to impose a constructive trust if appropriate because the facts presented a question as to whether the funds were part of mother’s estate. The court further concluded that the trial court properly imposed a constructive trust over these funds because the sister who was the surviving signatory on the multi-party account was in a confidential relationship with her mother and her sister, and she abused that relationship when she misspent the funds. Next, the court held that because an implied trust is included in the fiduciary oversight statute’s definition of an “estate,” the trial court properly surcharged the sister who was the signatory on the multi-party  account because she had misused the funds in the implied trust. Finally, the court found that although a no-contest clause that was contained in mother’s revocable trust was incorporated by reference into her will, by its plain language, that clause applied only to actions contesting the trust, not challenges to the will. Accordingly, the court held that the trial court erred in enforcing the no-contest clause against the sister who challenged the will. The court of appeals’ judgment was reversed and the case was remanded for further proceedings.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Denial of Attorney Fees Not Error in Close Case with No Vexatious, Groundless Claims

The Colorado Court of Appeals issued its opinion in In re Estate of Fritzler on Thursday, January 12, 2017.

Wills—Business Records Exception—Jury Instruction—Presumption of Undue Influence—Attorney Fees—Costs.

Fritzler and his wife executed numerous wills during the last 10 years of their lives. The last will was drafted just a few years before they each passed away. In all of the wills, the Fritzlers sought to distribute their farm in a generally equitable manner among their five children, but the last will increased son Glen’s portion over son Steven’s portion. Steven contested the will, contending that Glen unduly influenced Fritzler. After a lengthy trial, a jury concluded that the will was valid. Following the verdict, the estate and the personal representative (PR) sought attorney fees and costs. The court denied the award of fees, finding that the case was “close” and Steven did not lack substantial justification. The court partially denied costs, concluding that it lacked equitable authority to grant fees without concurrent statutory authority.

On appeal, Steven contended that the trial court abused its discretion by excluding Fritzler’s hospital medical records because they were admissible under the business records exception. Although the exclusion was an abuse of discretion, any error was harmless because the records were cumulative of other admitted evidence.

Steven also contended that the trial court erred by refusing to instruct the jury on the presumption of undue influence. However, the PR offered sufficient evidence to rebut this presumption. Thus it would have been improper for the court to instruct the jury thereon.

The PR contended that the trial court erred by denying her request for attorney fees under C.R.S. § 13-17-102 and by denying her certain costs as the prevailing party under C.R.C.P. 54(d). The trial court noted that this was a close case and found that even though Steven did not prevail, his claims were not groundless, frivolous, or vexatious. Therefore, the court did not err by denying the request for fees. As to the costs, the trial court awarded most of the requested costs to the PR after a hearing, denying only some that it found to be unreasonable. Therefore, the court did not err in its award of costs.

The judgment and orders were affirmed.

Summary provided courtesy of The Colorado Lawyer.