FEBRUARY 25, 2002 VOLUME 9, NUMBER 35
When Ashley Tatum’s father Ernest died Ashley was still a minor. Ernest Tatum had named Ashley as beneficiary on several retirement and life insurance accounts with his employer, BellSouth, and so Ashley’s mother Rosalyn Felder had to go to court to secure an appointment as guardian of Ashley’s estate in order to handle the proceeds.
Ms. Felder hired Memphis, Tennessee attorney Philip Cooper as her attorney for the guardianship proceeding. Mr. Cooper presented the pleadings and evidence to the court, and Ms. Felder was appointed as guardian of Ashley’s estate (in Arizona and a number of other states, incidentally, Ms. Felder would have been named as “conservator” rather than “guardian”—but the roles would be the same).
The court was concerned, however, about protecting Ashley’s estate from poor management or misappropriation. In order to ensure that nothing would go awry, the court imposed two requirements on Ms. Felder. She was ordered to post a surety bond and the accounts were to be under the “joint control” of Ms. Felder and her attorney, Mr. Cooper.
A surety bond is essentially an insurance policy protecting the estate in a guardianship or conservatorship proceeding, and Ms. Felder purchased her bond through Fidelity & Deposit Company of Maryland (F&D). The joint control requirement was to be satisfied by attorney Cooper taking responsibility for collecting and overseeing Ashley’s money.
Mr. Cooper wrote to BellSouth to tell them of the conservatorship appointment. His letter enclosed a copy of the court pleadings and instructions that all monies were to be sent to his office address. Then he set up a guardianship account for Ashley and began depositing the life insurance and retirement proceeds into it.
Despite the instruction, however, BellSouth sent one of the checks directly to Ms. Felder, made payable to “Ashley J. Tatum, Rosalyn W. Felder Guardian of”. That check was in the amount of $18,622.38, and it never made it into the guardianship account. Presumably, Ms. Felder cashed the check and spent it, without ever notifying her attorney she had received it.
Five years later Ms. Felder was removed as guardian of Ashley’s estate and Fidelity & Deposit (the insurance company) paid off on its bond. Then the bonding company went after BellSouth for its failure to follow the lawyer’s initial instructions. The probate court (which handles guardianships of minors’ estates) ordered BellSouth to pay F&D the amount it had sent directly to Ms. Felder, plus interest, and BellSouth appealed.
The Tennessee Court of Appeals upheld the probate court’s judgment against BellSouth. The company knew about the joint control requirement, said the court, and if the company had followed instructions no loss would have occurred. BellSouth was ordered to pay the original amount, plus interest, and also costs of the appeal. Guardianship of Tatum, February 4, 2002.
