October 24th, 2011
There are so many ways to abuse powers of attorneys. That’s why they’ve been referred to as “vehicles for fraud.” While we’ve previously looked at ways in which they’ve been abused and our colleagues at Bryan Cave, Stephanie Moll and Mary McMath, have examined them in the context of “Who Can You Trust?” over at TrustBryanCave.com, the ways in which they can be abused are seemingly endless. The reality is that these cases will continue to appear in increasing numbers as the Baby Boomers get older.
Last month, in Ward v. Patrizi, the Ohio Court of Appeals dealt with a a classic power of attorney abuse fact pattern. A person who needed some help managing his bills designated a family member as his attorney-in-fact. The attorney-in-fact dutifully paid the principal’s bills from his checking account, but, on the day the principal died – before his body was even cold – the attorney-in-fact cut herself a check made out to “cash” from the principal’s account.
You can probably figure out how this turned out for the attorney-in-fact. But the interesting part of this story is what happened to the attorney-in-fact after she tried to give the money back to the estate.
Linda Patrizi was Richard Shine’s niece. Pursuant to a power of attorney, Richard named Linda as his attorney-in-fact. During Richard’s life, Linda used the power of attorney to pay Richard’s bills from his checking account. The day Richard died, using her power of attorney, Linda drafted a check from Richard’s account, made payable to cash, in the amount of $7,000. Within hours of Richard’s death, Linda went to a bank and cashed the check. Linda also removed personal property from Richard’s home after his death.
Audrey Ward was appointed administrator of Richard’s estate. Audrey sued Linda for concealment, embezzlement, and conversion of assets.
Before the pretrial conference, Linda gave back the $7,000 to Richard’s estate and returned the personal property she had taken, but, for Linda, it was too little too late.
Because the administrator had to pursue the litigation to get the money and property back, Linda was required to pay the estate’s attorney’s fees. The probate court also imposed a $700 sanction against Linda, which was the statutory 10 percent permitted under Ohio law.
It looks like Linda may have tried to make it right, but only after the administrator had to sue her. The time to return the money was before a lawsuit was filed. Waiting until the near eve of trial to return the property caused the estate to incur a lot of expense it otherwise should not have had to incur. Therefore, an award of attorney’s fees was appropriate.