MAY 2, 2016 VOLUME 23 NUMBER 17
When a litigant asks the court for particular relief, lawyers call the request a “prayer.” It isn’t always as spiritual or respectful as that sounds, but it does give us a chance to offer good generalized legal — and life — advice: be careful what you pray for.
Consider the family of Martha Young (not her real name). She had two children, son Donald and daughter Joanne. When Martha was in her early 90s, her ability to manage her own affairs had slipped somewhat, and Donald decided he needed to get legal authority to handle her affairs. He filed a petition for guardianship (of the person) and conservatorship (of the estate) in the Maricopa County (Phoenix) courts.
Donald immediately thought better of his prayer for relief, and dismissed the case before his mother or his sister had answered it. Still, Martha and her attorney filed a response — but rather than simply objecting to the guardianship and conservatorship, she alleged that Donald had stolen money from her, and had put the money he took into an account in his name alone. She alleged that she was a vulnerable adult under Arizona law, and asked that Donald be ordered to return her money.
The probate court ordered Donald to return the funds in question, and he appealed. The Arizona Court of Appeals reversed, finding that there was no jurisdiction in the probate court once Donald dismissed his initial petition. That looked like it might be the end of things.
Then Charles Schwab, where the account in question was held, filed a separate action with the court. The investment company said it knew about the allegations of theft and exploitation, and it didn’t want to turn the money over to the wrong person. Charles Schwab asked the court to tell it who should receive the balance of the account Donald had set up.
That got the issues back before the court. Donald insisted that his mother had given her half of a large parcel of land she had owned, and that when the land was sold (yielding $818,955.61), his mother had moved half of the net proceeds into an account in his name. With “her” half of the sale proceeds, she bought a home (leaving a small balance which, Donald insisted, she had voluntarily added to “his” half of the sale proceeds). After a number of transactions, the $150,000 of remaining funds found their way into the Charles Schwab account.
Meanwhile, it turned out that the bank where Donald had opened his account had filed a report with Adult Protective Services, expressing concern about the way Martha’s finances were being handled and her ability to protect herself. That report had led to an investigation but (apparently) no action to stop the use of funds or recover any of the money for Martha.
Here’s one of Donald’s problems: when he filed the guardianship and conservatorship petition against his mother, he listed the bank account as one of her assets. But the court ultimately ruled that, since the conservatorship matter had never been litigated, Donald could not be held to the position he took in the initial filing. Similarly, Martha’s claim could not be dismissed on statute of limitations grounds, since she had made a good-faith effort to recover her funds when she filed the petition in the guardianship and conservatorship action — even though it was ultimately dismissed by the Court of Appeals.
After a two-day trial, the judge ruled that Martha was a vulnerable adult (and had been for almost a decade), that Donald had acted as her de facto conservator throughout the banking and real estate transactions, and that the Charles Schwab account really belonged to Martha. The judge ordered Schwab to turn the money over to Martha’s estate (by the time of the court ruling she had died), and also imposed a judgment against Donald for attorney’s fees — another $92,000.
Donald appealed, arguing that Martha’s claims should have been dismissed because they were filed years after she knew or should have known to file her lawsuit. He also argued that he should not have to pay attorney’s fees to his mother’s estate, and that he had not been shown to have exploited his mother financially.
The Court of Appeals noted that the evidence had shown that Donald lived with his mother for years, that he had seriously reduced the value of her home property (five dumpsters of his trash was removed after her death and his eviction from the property), that Martha had weighed just 62 pounds when her daughter had her removed from Donald’s care, and that he had managed her affairs for at least five years before the litigation began. Donald had to admit that his mother had been unable to manage her own affairs for at least five years before his initial court filing — that was what he had alleged in that first petition seeking control of her affairs.
After review of all the evidence considered by the trial court, the Court of Appeals upheld the lower court’s rulings. The judgment against Donald — for return of all the funds in the Charles Schwab account plus over $100,000 in attorney’s fees and interest on those awards. The court also ordered Donald to pay attorney’s fees for the appeal, in an amount to be determined after his mother’s estate’s attorneys file fee affidavits with the court. Yamamoto v. Kercsmar & Feltus, April 19, 2016.
