Probate litigation is back in the appellant courts. Probate attorneys involved in probate litigation involving claims for services provided to a decedent during lifetime will find this decision instructive:
Estate of Margaret H. Prickett, Deceased v. Marilyn Prickett Womersley
71S03-0808-CV-419
Indiana law presumes that services provided by a family member are rendered gratuitously. In this case, the Indiana Supreme Court concluded that presumption cannot be rebutted by evidence that the mother wanted her daughter to be compensated because the mother was under a guardianship and the guardian did not consent.
The mother was under a guardianship where an entity and a daughter were named guardians of the person while a bank was named guardian of the mother's estate. The guardians of the person were responsible for providing care for the mother's personal needs and the costs for which were to be overseen and paid by the bank. During the guardianship, the mother resided with another daughter. Upon the mother's death, the non-guardian daughter filed a claim in the mother's estate for $546,000 for various expenses and personal services she rendered to her mother during the time they lived together.
In the trial court, the estate sought summary judgment with respect to the daughter's claim on two grounds: (1) the expenses and personal services provided by the daughter were, as a matter of law, “gratuitous,” and therefore not compensable; and (2) that any claims asserted by the daughter were time-barred because they were not filed in the guardianship. The trial court denied the motion but certified its order for appeal. The Court of Appeals affirmed the trial court and the Indiana Supreme Court granted the petition for transfer.
The Indiana Supreme Court first noted that “Indiana law allows for the appointment of a guardian to act in the best interests of a person who is unable to care for [her]self or for [her] property" and that "A court in its discretion may limit the scope of a guardianship by restricting the responsibilities and powers a guardian would otherwise have under the Guardianship Code." In this instance, the Court concluded that the court ordering the guardianship imposed no limitations on the power of the guardian of the mother's estate. "Conversely, the [guardian] court did not direct that [the mother], an incapacitated person, reserved any such powers over her estate. Therefore, we conclude that [the bank], as guardian of [the mother's] estate, held all the power to possess and dispose of [the mother's] property pursuant to I.C. § 29-3-7-6, including the power to compensate care-providers, and that [the mother] retained no such power once the guardianship was established."
Turning to the issues raised on appeal, the Indiana Supreme Court first held that "We agree with the both the probate court and the Court of Appeals that the Guardianship Code does not require a claim for personal services rendered in a non-fiduciary capacity to a protected person to be filed in the guardianship estate rather than in the subsequent probate estate of the deceased protected person". As such, "[the daughter] was not required to pursue her claim in the guardianship proceeding; she properly filed her claim against her mother's estate. Therefore, the Estate was not entitled to summary judgment on this issue."
In regards to the second issue, the daughter sought to rebut the presumption that her services were rendered gratuitously, by relying on a "typed and signed 'Statement of [the mother]'. The statement expressed [the mother's] desire that the guardian of her estate compensate [the daughter] for her services. [The daughter also] submitted affidavits of two people who witnessed [the mother's] execution of the statement and opined that [the mother] had been 'well aware of what she was doing and her intentions when she executed the [statement].'"
The Indiana Supreme Court, however, found that "Traditionally, the sole method of rebutting the presumption [that the services were gratuitously rendered] requires evidence of either an implied or express contract formed by both intention and expectation. ... [the mother], however, could not enter into contracts at the time she executed the statement because she had already been adjudicated an incapacitated person under the Guardianship Code." The daughter argued "that the Court of Appeals . . . 'recognized well-established law holding that an implied contract can exist between the protected person and provider of services.'" The Indiana Supreme Court, however, found that "Though this contention may be true for general creditors or non-family members, when the provider is a family member, the implied contract must exist between that person and the incapacitated person‟s guardian." Since the daughter failed to offer evidence of an implied contract with the mother's guardian, the daughter "failed to rebut the presumption under the traditional analysis."
The Indiana Supreme Court also distinguished prior appellant decisions involving claims by family members from those that involving claims by attorneys who provided legal services to the protected person. In regards to the later, the Court held that these cases suggest no grounds for rebutting the presumption that family services are rendered gratuitously. The Court also noted that a prior decision also “suggests that exigent circumstances may warrant compensation for necessary services that were performed without approval of the guardian. … But in the absence of the exigent circumstances, the guardian's approval is required in order to secure compensation for those services.” In this instance, there was no evidence of such exigent circumstances.
Finally, the daugher argued, based a statutory change and other Indiana cases, that "'when a court determines that a person is incapacitated, no presumption or inference arises that the person is not mentally competent.'" The Court, however, held that "We do not see the distinction between 'incompetency' and 'incapacity' as affecting the outcome of this case. Indeed, [the daughter's] assertion runs counter to both the facts of this case and the overall purpose of a guardian of an estate. If the probate court had found that although physically incapacitated, [the mother] was still able to manage her estate, it would have either designated a guardian over only her person, placed limitations on the letters of the guardian of her estate, or directed that she reserved certain powers. In the absence of such limitations or direction, we must conclude that the court appointed a guardian over [the mother's] estate because she was unable to manage her property. The appointment of a guardian of her estate deprived [the mother] of the power to dispose of her property."
The Indiana Supreme Court reversed the trial court's denial of summary judgment and remanded for proceedings consistent with the opinion. The opinion was handed down on May 13, 2009 and a full text copy of the opinion can be found here.
Estate of Margaret H. Prickett, Deceased v. Marilyn Prickett Womersley
71S03-0808-CV-419
Indiana law presumes that services provided by a family member are rendered gratuitously. In this case, the Indiana Supreme Court concluded that presumption cannot be rebutted by evidence that the mother wanted her daughter to be compensated because the mother was under a guardianship and the guardian did not consent.The mother was under a guardianship where an entity and a daughter were named guardians of the person while a bank was named guardian of the mother's estate. The guardians of the person were responsible for providing care for the mother's personal needs and the costs for which were to be overseen and paid by the bank. During the guardianship, the mother resided with another daughter. Upon the mother's death, the non-guardian daughter filed a claim in the mother's estate for $546,000 for various expenses and personal services she rendered to her mother during the time they lived together.
In the trial court, the estate sought summary judgment with respect to the daughter's claim on two grounds: (1) the expenses and personal services provided by the daughter were, as a matter of law, “gratuitous,” and therefore not compensable; and (2) that any claims asserted by the daughter were time-barred because they were not filed in the guardianship. The trial court denied the motion but certified its order for appeal. The Court of Appeals affirmed the trial court and the Indiana Supreme Court granted the petition for transfer.
The Indiana Supreme Court first noted that “Indiana law allows for the appointment of a guardian to act in the best interests of a person who is unable to care for [her]self or for [her] property" and that "A court in its discretion may limit the scope of a guardianship by restricting the responsibilities and powers a guardian would otherwise have under the Guardianship Code." In this instance, the Court concluded that the court ordering the guardianship imposed no limitations on the power of the guardian of the mother's estate. "Conversely, the [guardian] court did not direct that [the mother], an incapacitated person, reserved any such powers over her estate. Therefore, we conclude that [the bank], as guardian of [the mother's] estate, held all the power to possess and dispose of [the mother's] property pursuant to I.C. § 29-3-7-6, including the power to compensate care-providers, and that [the mother] retained no such power once the guardianship was established."
Turning to the issues raised on appeal, the Indiana Supreme Court first held that "We agree with the both the probate court and the Court of Appeals that the Guardianship Code does not require a claim for personal services rendered in a non-fiduciary capacity to a protected person to be filed in the guardianship estate rather than in the subsequent probate estate of the deceased protected person". As such, "[the daughter] was not required to pursue her claim in the guardianship proceeding; she properly filed her claim against her mother's estate. Therefore, the Estate was not entitled to summary judgment on this issue."
In regards to the second issue, the daughter sought to rebut the presumption that her services were rendered gratuitously, by relying on a "typed and signed 'Statement of [the mother]'. The statement expressed [the mother's] desire that the guardian of her estate compensate [the daughter] for her services. [The daughter also] submitted affidavits of two people who witnessed [the mother's] execution of the statement and opined that [the mother] had been 'well aware of what she was doing and her intentions when she executed the [statement].'"
The Indiana Supreme Court, however, found that "Traditionally, the sole method of rebutting the presumption [that the services were gratuitously rendered] requires evidence of either an implied or express contract formed by both intention and expectation. ... [the mother], however, could not enter into contracts at the time she executed the statement because she had already been adjudicated an incapacitated person under the Guardianship Code." The daughter argued "that the Court of Appeals . . . 'recognized well-established law holding that an implied contract can exist between the protected person and provider of services.'" The Indiana Supreme Court, however, found that "Though this contention may be true for general creditors or non-family members, when the provider is a family member, the implied contract must exist between that person and the incapacitated person‟s guardian." Since the daughter failed to offer evidence of an implied contract with the mother's guardian, the daughter "failed to rebut the presumption under the traditional analysis."
The Indiana Supreme Court also distinguished prior appellant decisions involving claims by family members from those that involving claims by attorneys who provided legal services to the protected person. In regards to the later, the Court held that these cases suggest no grounds for rebutting the presumption that family services are rendered gratuitously. The Court also noted that a prior decision also “suggests that exigent circumstances may warrant compensation for necessary services that were performed without approval of the guardian. … But in the absence of the exigent circumstances, the guardian's approval is required in order to secure compensation for those services.” In this instance, there was no evidence of such exigent circumstances.
Finally, the daugher argued, based a statutory change and other Indiana cases, that "'when a court determines that a person is incapacitated, no presumption or inference arises that the person is not mentally competent.'" The Court, however, held that "We do not see the distinction between 'incompetency' and 'incapacity' as affecting the outcome of this case. Indeed, [the daughter's] assertion runs counter to both the facts of this case and the overall purpose of a guardian of an estate. If the probate court had found that although physically incapacitated, [the mother] was still able to manage her estate, it would have either designated a guardian over only her person, placed limitations on the letters of the guardian of her estate, or directed that she reserved certain powers. In the absence of such limitations or direction, we must conclude that the court appointed a guardian over [the mother's] estate because she was unable to manage her property. The appointment of a guardian of her estate deprived [the mother] of the power to dispose of her property."
The Indiana Supreme Court reversed the trial court's denial of summary judgment and remanded for proceedings consistent with the opinion. The opinion was handed down on May 13, 2009 and a full text copy of the opinion can be found here.
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