The Indiana Court of Appeals recently handed down a decision regarding probate litigation which probate attorneys may find instructive since one of the issues decided involved an attorney's decision to follow the client's instructions regarding disbursements from an estate.
Jerry Storey v. Theodore S. Leonas, Jr. and Leonas & Associates Ltd.
No. 46A03-0806-CV-300
The facts of this matter are somewhat unusual. An Illinois resident died in an automobile accident in Indiana. The other vehicle involved in the accident was owned by a Chicago-based company and was driven by an employee of that company. The deceased's mother was named as special administrator of the deceased's estate and she subsequently filed a wrongful death action in Illinois.
The threshold issue in that action was whether Illinois law (which has no statutory limit on damages for wrongful death) would apply or whether Indiana law (which imposes a statutory limit on damages for wrongful death of $300,000) would control. Faced with this possibility, the estate settled the matter for $650,000. The special administrator instructed the attorneys handling the estate to disburse a portion of the settlement to the deceased's father.
The deceased's father, however, had initiated his own wrongful death action "ostensibly as Special Administrator" for his daughter's estate. This action was eventually dismissed with prejudice but upon receipt of the disbursement check, the deceased's father returned it explaining that he would only accept it on certain conditions - one of which was that the receipt of the check would not constitute a settlement or waiver of the claims he had brought. The special administrator concluded that since the deceased's father had decided to continue his own action and did not consider himself a benefactor of the action she had filed, she directed her attorneys to deny any further disbursements from the settlement proceeds.
The deceased's father thereafter filed an action for legal malpractice and conversion against the attorneys representing the deceased's mother. The legal malpractice claim was decided against the deceased's father as was the conversion claim. In regards to the latter, the Court found that:
Here, [attorney] was acting at the behest of his clients ... She initially directed him to disburse $144,000 to [father], but when [father] attached metaphorical strings to the acceptance of the funds, [mother] changed her mind and directed [attorney] to deny any further disbursement. Thus, to the extent that anyone was controlling the money, it was [mother], not [attorney]. Furthermore, it is well established that the conversion statute “does not apply to the failure to pay a debt.” Tobin v. Ruman, 819 N.E.2d 78, 89 (Ind. Ct. App. 2005). Here, the settlement came as a result of [attorney's] representation of [mother] and the Estate. If [father] was owed money from the settlement, at most, [mother's] refusal to disburse the money to him was wrongful withholding of funds and a failure to pay a debt, which does not constitute conversion as a matter of law. (emphasis in original)
The decision was decided on April 3, 2009 and the full text can be found here.
Jerry Storey v. Theodore S. Leonas, Jr. and Leonas & Associates Ltd.
No. 46A03-0806-CV-300
The facts of this matter are somewhat unusual. An Illinois resident died in an automobile accident in Indiana. The other vehicle involved in the accident was owned by a Chicago-based company and was driven by an employee of that company. The deceased's mother was named as special administrator of the deceased's estate and she subsequently filed a wrongful death action in Illinois. The threshold issue in that action was whether Illinois law (which has no statutory limit on damages for wrongful death) would apply or whether Indiana law (which imposes a statutory limit on damages for wrongful death of $300,000) would control. Faced with this possibility, the estate settled the matter for $650,000. The special administrator instructed the attorneys handling the estate to disburse a portion of the settlement to the deceased's father.
The deceased's father, however, had initiated his own wrongful death action "ostensibly as Special Administrator" for his daughter's estate. This action was eventually dismissed with prejudice but upon receipt of the disbursement check, the deceased's father returned it explaining that he would only accept it on certain conditions - one of which was that the receipt of the check would not constitute a settlement or waiver of the claims he had brought. The special administrator concluded that since the deceased's father had decided to continue his own action and did not consider himself a benefactor of the action she had filed, she directed her attorneys to deny any further disbursements from the settlement proceeds.
The deceased's father thereafter filed an action for legal malpractice and conversion against the attorneys representing the deceased's mother. The legal malpractice claim was decided against the deceased's father as was the conversion claim. In regards to the latter, the Court found that:
Here, [attorney] was acting at the behest of his clients ... She initially directed him to disburse $144,000 to [father], but when [father] attached metaphorical strings to the acceptance of the funds, [mother] changed her mind and directed [attorney] to deny any further disbursement. Thus, to the extent that anyone was controlling the money, it was [mother], not [attorney]. Furthermore, it is well established that the conversion statute “does not apply to the failure to pay a debt.” Tobin v. Ruman, 819 N.E.2d 78, 89 (Ind. Ct. App. 2005). Here, the settlement came as a result of [attorney's] representation of [mother] and the Estate. If [father] was owed money from the settlement, at most, [mother's] refusal to disburse the money to him was wrongful withholding of funds and a failure to pay a debt, which does not constitute conversion as a matter of law. (emphasis in original)
The decision was decided on April 3, 2009 and the full text can be found here.
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Comments for Probate Litigation Update – April 7, 2009