April 16th, 2013

We’ve previously noted that litigation involving powers of attorney is popular right now.  Powers of attorney take on particular importance in undue influence cases because they can turn the case on its head by creating a presumption of undue influence.  The reason why is that a power of attorney can create a fiduciary relationship between the principal and agent.

But not all powers of attorney are created equal.  In In re: Estate of Stahling, an Illinois appellate court recently answered the important question of whether a health care power of attorney creates a fiduciary relationship with respect to the execution of a deed transferring property to the agent which, as a matter of law, raises a presumption of undue influence. (more…)

March 21st, 2013

We spend a lot of time here looking at civil cases involving corporate and individual fiduciaries.  That doesn’t mean that the wrongful acts underlying a breach of fiduciary duty can’t also pose criminal problems for a fiduciary.  Occasionally a criminal fiduciary case catches our attention, like the United States District Court for the Eastern District of Tennessee’s opinion in Elkins v. Gibson (link provided through Justia.com).  This was a case where a fiduciary sued a police detective for malicious prosecution stemming from a warrant issued for the fiduciary’s alleged theft from his principal.  The fiduciary was arrested but was not convicted of any crime.  Why we’re interested is because the alleged theft took place using a power of attorney.

The federal court dismissed the plaintiff’s case finding that the detective was entitled to qualified immunity.  Specifically, the federal court found that at the time the objectionable warrant was issued, the evidence known to the detective at the time supported probable cause that the plaintiff committed theft from the principal of over $10,000.  Let’s take a look at that evidence. (more…)

March 4th, 2013

In many jurisdictions, the existence of a confidential relationship can turn an undue influence inquiry on its head.  That’s because the existence of a confidential relationship – usually coupled with evidence of something else – can create a presumption of undue influence.  Under Wisconsin law, that “something else” is “suspicious circumstances surrounding making of the will.”  When you have a confidential relationship with suspicious circumstance, then a presumption of undue influence is raised, which must be rebutted by the proponent of the disputed will.

“Suspicious circumstances” seems like a fuzzy concept so we’re going to take notice when the Court of Appeals of Wisconsin finds that suspicious circumstances existed that precluded summary judgment on an undue influence claim.  In Estate of Ely (Ely v. Orth), the Court of Appeals did just that.  Let’s take a look at these “suspicious circumstances.” (more…)

January 24th, 2013

The role of experts in breach of fiduciary duty cases is an emerging and unsettled area of law.  Of course there will always be questions about whether an expert is qualified to offer an opinion.  But there are additional quirks when a state codifies the standard of care required of a trustee thereby creating a statutory standard of care.  Does a plaintiff need expert testimony establishing that the trustee breached the statutory standard of care?  Perhaps.  But does that testimony necessarily result in an expert impermissibly testifying on the ultimate issue of liability?  Again, perhaps.

It’s questions like these that cause us to pay close attention when one of the rare ‘expert opinion’ decisions gets issued in a breach of fiduciary duty case.  Just this week in Sierra v. Williamson (2013 WL 228333), the United States District Court for the Western District of Kentucky gave us some insight on expert testimony in a trust case involving allegations of undue influence and breach of fiduciary duty.  So, what clues did the federal court give us on how to qualify – or disqualify – experts in these cases?

(more…)

January 4th, 2013

It’s a pretty common mistake for litigators in Georgia unfamiliar with fiduciary litigation – naming a trust as a party to a lawsuit.  Apparently, as we recently saw in Ford v. Reddick, it’s a mistake made in real estate transactions, too.

It’s hard to blame them because, on the surface, the Georgia Code’s many references to trusts may unwittingly suggest to some that a trust is itself a legal entity.  But, under Georgia law, it’s not.

So what tripped up the real estate transaction in Ford? (more…)

December 11th, 2012

Litigation over powers of attorney is pretty popular right now.  And a lot of the dispute is whether an attorney-in-fact is authorized to perform some act under the authority granted in the power of attorney.

In Harris v. Peterson, the Georgia Court of Appeals is one of the latest courts to weigh in on these issues.  It tackled the question of whether an attorney-in-fact can perform an act that the principal refused to perform.

The background facts can be distilled to this: (more…)

August 7th, 2012

Let’s just jump right into this one: in 2010, a Houston County, Georgia jury declared that a Will and a Revocable Trust executed by Thomas Hines, Sr., in 2002 were invalid, as they were the product of undue influence.

In Davison v. Hines, the Georgia Supreme Court affirmed the jury verdict.  The reason we just jumped right into the discussion of this case is because undue influence cases are fact-intensive.  So, let’s look at the facts that supported the verdict. (more…)

July 2nd, 2012

The issue of standing regularly arises in fiduciary litigation.   Generally, to establish standing to sue, a plaintiff must have suffered an injury in fact, the injury must be traceable to the conduct complained of, and it must be likely that the injury will be redressed by a decision in the plaintiff’s favor.

Lack of standing can be a good defense in fiduciary litigation cases because many estate planning documents are ambulatory and can be changed at any time.  How can a person have suffered harm – an injury in fact – if they could have been written out of a will, taken off an account, or removed as the beneficiary of an insurance policy at any time?

The issue of standing in a fiduciary litigation context was recently before the United States District Court for the Northern District of Georgia in Hill v. Clark (2012 WL 1903265).  Let’s take a quick look at the background. (more…)

February 13th, 2012

Just a quick case update to start the week.  In December, we wrote about a Florida appellate court’s decision in Rosenkrantz v. Feit in which the court of appeals allowed one attorney-in-fact to pursue a lawsuit against her co-attorney-in fact.

Last week, the same Florida court of appeals denied the appellee’s motion for rehearing, but substituted this new opinion for the one issued in December.

December 19th, 2011

I understand why someone would want co-executors, co-trustees, co-attorneys-in-fact, etc.  Maybe it’s because they’re afraid of having too much power in one person’s hand.  Maybe it’s because they don’t want to offend a friend, child, or relative.  Maybe it’s because it may just be easier to have a few people with that power in case the other is indisposed.  I get it.  But, going in, they should also know it’s a recipe for litigation.

Co-fiduciaries often have to work unanimously – either by statute or by the underlying instrument.  Lack of unanimity leads to lawsuits.  Moreover, when, for example, one attorney-in-fact lives in the same state as the principal, the co-attorney-in-fact residing in another state may be cut out of the process.  Whether perceived or actual shenanigans exist, litigation may result.

In Rosenkrantz v. Feit, a Florida Court of Appeals considered whether one attorney-in-fact could pursue a lawsuit against her co-attorney-in-fact.  The trial court had dismissed the case on the grounds that the attorney-in-fact filing the suit had failed to state a claim against her co-attorney-in-fact.  The appellate court, however, disagreed. (more…)