In Re the Conservatorship of J.R. , 360 Mont. 30 ( 2011 )

April 5 2011
DA 10-0256
IN THE SUPREME COURT OF THE STATE OF MONTANA
2011 MT 62IN THE MATTER OF THE CONSERVATORSHIP OF
J.R.,
A Protected Person.
APPEAL FROM: District Court of the First Judicial District,
In and For the County of Lewis and Clark, Cause No. BDG 2006-18
Honorable Jeffrey M. Sherlock, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Janet Hetherwick Pumphrey, Attorney at Law, Lenox, Massachusetts
Joey Jayne, Joey Jayne Law Office, Arlee, Montana
For Appellee:
Jacqueline T. Lenmark, Thomas Q. Johnson, Keller, Reynolds, Drake,
Johnson & Gillespie, P.C., Helena, Montana
Submitted on Briefs: January 20, 2011
Decided: April 5, 2011
Filed:
__________________________________________
Clerk
Justice James C. Nelson delivered the Opinion of the Court.
¶1 J.R. appeals an order of the District Court for the First Judicial District, Lewis and
Clark County, dismissing his claims against his conservator for negligence and for breach
of fiduciary duty. We affirm.
¶2 J.R. raises four issues which we have restated as follows:
¶3 1. Whether the District Court erred in dismissing J.R.’s claims of breach of
fiduciary duty and negligence because J.R. did not offer expert testimony.
¶4 2. Whether the District Court’s ultimate finding that the conservator appropriately
managed J.R.’s assets and estate was erroneous.
¶5 3. Whether the District Court erred in discharging the conservator without
liability.
¶6 4. Whether the District Court abused its discretion in ordering payment of the
conservator’s attorney’s fees from the conservatorship’s assets.
Factual and Procedural Background
¶7 In May 2006, at the time the conservatorship proceedings in this case began, J.R.
was 78 years old. He has five children and three step-children. His wife passed away in
2003. J.R.’s daughter Marsha initiated this action when she petitioned the District Court
for appointment of a conservator for J.R. She stated in her petition that a conservator was
necessary for J.R.’s protection because he suffers from severe short-term memory loss
and has been diagnosed as suffering from early Alzheimer’s disease. She further stated
that J.R. is no longer capable of understanding his bank or financial statements; that
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significant funds owned by him have disappeared; and that he is extremely vulnerable to
the demands and influences of others.
¶8 The District Court scheduled a hearing on Marsha’s petition for September 26,
2006. However, shortly before the hearing date, J.R.’s daughter Robin, who opposed the
conservatorship action, removed J.R. from Helena and took him to live with her in
Massachusetts. Neither J.R. nor Robin notified J.R.’s counsel of J.R.’s move.
¶9 The parties eventually stipulated to a limited conservatorship, and the District
Court appointed the first conservator, Cindy Nickol of Capital City Case Management, on
November 24, 2006. In March 2007, Nickol filed an Inventory of Conservator showing
that the value of J.R.’s assets at that time was more than $290,000. These assets included
the condominium in Helena where J.R. had lived for many years, an investment account
with D.A. Davidson & Co., and a checking account at Mountain West Bank. Not
included in this valuation were any of J.R.’s personal belongings such as the antiques and
art work that he and his wife had collected over the years.
¶10 In June 2007, Nickol requested that the court terminate her appointment as
conservator because of persistent family interference with the performance of her duties
and efforts by various family members to undermine the conservatorship. A hearing on a
petition to amend the conservatorship was held on August 17, 2007. Thereafter, the court
issued an order allowing Nickol to withdraw as conservator. In her place, the court
appointed Joseph Shevlin, a Helena CPA, to act as successor conservator for J.R.
¶11 In its October 3, 2007 Order appointing Shevlin, the court stated: “Shevlin shall
have all powers granted under law to act as conservator, specifically, but not limited to,
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those powers set forth in [§§] 72-5-427 and -428, MCA.” The court also authorized
Shevlin to sell J.R.’s Helena condo and to expend whatever monies were necessary for
J.R.’s direct care. The court prohibited Shevlin from providing any money to J.R.’s
family members “unless it is for reimbursement for the direct care of [J.R.].”
¶12 During his conservatorship, Shevlin arranged for the sale of J.R.’s condo and
oversaw the packing and shipping of much of J.R.’s personal property to J.R. in
Massachusetts. However, many of the problems that had plagued Nickol throughout her
term as conservator persisted throughout Shevlin’s conservatorship. Other relevant facts
regarding these and other problems with the conservatorship will be set out more fully
where necessary in our discussion of the issues presented.
¶13 On June 16, 2009, several of J.R.’s family members, including daughters Robin
and Cheryl, J.R.’s brother William and his sister Betty, filed as “Interested Persons” a
Petition for Orders Subsequent to Appointment. The petitioners asked the court to
transfer the conservatorship to Massachusetts, to implement a trust and long-term-care
plan recommended by J.R.’s Massachusetts legal counsel, and to order that Shevlin’s
conservatorship fees and attorney’s fees be returned to J.R. because of Shevlin’s failure
to properly perform his fiduciary duties. In his response to the petition, Shevlin requested
that the court enjoin petitioners from interfering with the performance of his duties.
Shevlin also sought clarification from the court regarding portions of its prior order
naming him as conservator. The petitioners subsequently amended their petition adding
claims of negligence and breach of fiduciary duty against Shevlin.
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¶14 On October 19, 2009, J.R. filed a Motion for the Removal of Conservator and
Termination of the Conservatorship alleging deficiencies in Shevlin’s performance as
conservator. In addition, J.R. pointed out that his assets are dwindling rapidly because of
the multiple parties involved in maintaining a long-distance conservatorship.
¶15 These matters were heard by the District Court over three days, February 16, 2010,
March 9, 2010, and March 10, 2010. On April 27, 2010, the court entered its Findings of
Fact, Conclusions of Law and Order wherein the court removed Shevlin as conservator;
appointed J.R.’s brother William as successor conservator; approved Shevlin’s
accountings; approved the sale of J.R.’s condo; dismissed with prejudice the claims of
breach of fiduciary duty and negligence brought by the petitioners against Shevlin; and
ordered payment from the conservatorship’s assets of Shevlin’s attorney’s fees incurred
in defending this action. The order further provided that the successor conservator could
petition the court for transfer of the conservatorship to Massachusetts.
¶16 J.R. now appeals the District Court’s decision.
Standard of Review
¶17 We review a district court’s findings of fact to determine whether those findings
are clearly erroneous. In re Estate of Berthot, 2002 MT 277, ¶ 21, 312 Mont. 366, 59
P.3d 1080 (citing In re Eggebrecht, 2000 MT 189, ¶ 18, 300 Mont. 409, 4 P.3d 1207; In
re Estate of Bolinger, 1998 MT 303, ¶ 29, 292 Mont. 97, 971 P.2d 767). We review a
district court’s conclusions of law to determine whether that court’s interpretation of the
law is correct. Berthot, ¶ 21.
Issue 1.
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¶18 Whether the District Court erred in dismissing J.R.’s claims of breach of fiduciary
duty and negligence because J.R. did not offer expert testimony.
¶19 The District Court dismissed J.R.’s claims of breach of fiduciary duty and
negligence against Shevlin because J.R. did not provide expert testimony to establish the
standard of care, whether that standard was breached, and whether any such breach
caused the injury and damages about which J.R. complained. J.R. argues on appeal that
this was error because expert testimony is not required to prove breach of a fiduciary
duty; it is only required to prove professional negligence such as in cases of medical
malpractice.
¶20 Shevlin argues on the other hand that it was necessary for J.R. to present expert
testimony because Shevlin, as a CPA, is held to a higher standard of care than an ordinary
person and expert testimony is necessary to establish that standard and any breach of that
standard. Shevlin further argues that the standard of care may not be inferred, it must be
established by expert testimony.
¶21 Section 72-5-423, MCA, provides that in the exercise of the conservator’s powers,
the conservator is to act as a fiduciary and observe the standards of care applicable to
trustees as specified in Title 72, chapter 34, part 1. More specifically, under § 72-34-114,
MCA, a trustee is charged with the duty of administering the trust “with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent person
would use to accomplish the purposes of the trust as determined from the trust
instrument.” In addition, if a trustee has special skills, then the trustee “is held to the
standard of the skills represented.” Section 72-34-115, MCA; Redies v. Cosner, 2002
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MT 86, ¶ 37, 309 Mont. 315, 48 P.3d 697. Thus, based on §§ 72-5-423 and 72-34-115,
MCA, a conservator with special skills also must be held to the standard of the skills
represented. See In re Guardianship of Saylor, 2005 MT 236, ¶ 14, 328 Mont. 415, 121
P.3d 532 (“Conservators are thus under the same duties as trustees.”).
¶22 In addition, this Court noted the following regarding “special skills”:
“Professional persons in general, and those who undertake any work
calling for special skill, are required not only to exercise reasonable care in
what they do, but also to possess a standard minimum of special knowledge
and ability. Most of the decided cases have dealt with surgeons and other
doctors, but the same is undoubtedly true of dentists, pharmacists,
psychiatrists, veterinarians, lawyers, architects and engineers, accountants,
abstractors of title, and many other professions and skilled trades.”
[Emphasis added.]
Carlson v. Morton, 229 Mont. 234, 239, 745 P.2d 1133, 1137 (1987) (quoting W. Page
Keeton et al., Prosser and Keeton on the Law of Torts § 32 (W. Page Keeton ed., 5th ed.,
West 1984)); see also Romans v. Lusin, 2000 MT 84, ¶ 17, 299 Mont. 182, 997 P.2d 114(“The Restatement (Second) of Torts § 229A (1965), provides that ‘one who undertakes
to render services in the practice of a profession or trade is required to exercise the skill
and knowledge normally possessed by members of that profession or trade . . . .’ ”).
¶23 In its October 3, 2007 Order wherein the District Court appointed Shevlin as
conservator, the court pointed out that it was familiar with Shevlin and noted that not
only was Shevlin a CPA, he possessed expertise in the area of estate planning. And later,
in its April 27, 2010 Findings of Fact, Conclusions of Law and Order, the District Court
pointed out that
Shevlin is a Certified Public Accountant practicing in Helena with
the firm of Junkermier, Clark, Campanella, Stevens, P.C. (JCCS). Shevlin
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is a shareholder and member of the JCCS Board of Directors. Shevlin has
spen[t] over 35 years working in public accounting. He has extensive
experience with tax preparation and supervision. Shevlin also devotes a
portion of his practice to estate planning and business consulting. Shevlin
spends approximately 41 percent of his chargeable time engaged in
professional advisory services, including estate planning and long-term
financial care plans for the elderly.
Clearly the court believed that Shevlin had special skills that the court expected him to
use in his fiduciary capacity as conservator of J.R.’s estate.
¶24 This Court stated in Carlson that “ ‘[s]ince juries composed of laymen are
normally incompetent to pass judgment on questions [regarding what standard to apply
when special skills are employed], . . . it has been held in the great majority of
malpractice cases that there can be no finding of negligence in the absence of expert
testimony to support it . . . .’ ” Carlson, 229 Mont. at 239, 745 P.2d at 1137 (quoting
Keeton, Prosser and Keeton on the Law of Torts at § 32)).
¶25 Reading § 72-5-423, MCA, together with §§ 72-34-114 and -115, MCA, we
conclude that if, as here, a conservator is appointed in reliance on his or her special
skills,1 then an alleged breach of fiduciary duty involving those special skills requires
expert testimony to establish the standard of care for the exercise of those skills, whether
that standard was breached, and whether any such breach caused the injury and damages
about which the protected person complains.
1
While § 72-34-115(2), MCA, is framed in terms of a “trustor” appointment, we
conclude that a court effectively stands in the shoes of the trustor in appointing a
conservator for a protected person—that is, in selecting the conservator, the trial court is
relying on the special skills of the person to be appointed.
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¶26 However, even if the conservator possesses special skills, but the alleged breach of
fiduciary duty does not involve those skills, but rather, involves only the “care, skill,
prudence, and diligence” that any prudent person would possess, then expert testimony is
not required to establish that standard of care inasmuch as the “prudent person” standard
is set forth in § 72-34-114, MCA.
¶27 Here, the District Court erred in dismissing J.R.’s claims of breach of fiduciary
duty and negligence on the ground that J.R. did not offer expert standard-of-care
testimony. J.R.’s allegations did not involve Shevlin’s special skills as a CPA (which
would require expert standard-of-care testimony), but rather, were simply that Shevlin
failed to exercise the care, skill, prudence, and diligence that any prudent person would
possess (a standard of care which does not require expert testimony). On the record
before us, however, we conclude that the court’s error was harmless because, as
discussed infra, J.R. failed to provide sufficient evidence to prove that Shevlin breached
even this lesser, prudent person standard of care.
¶28 Accordingly, we affirm the District Court’s decision to dismiss J.R.’s claims of
breach of fiduciary duty and negligence against Shevlin
Issue 2.
¶29 Whether the District Court’s ultimate finding that the conservator appropriately
managed J.R.’s assets and estate was erroneous.
¶30 J.R. claims that the District Court erred in finding that Shevlin’s management of
J.R.’s estate was “appropriate” because: (1) the court removed Shevlin as conservator;
(2) the court used the wrong standard; (3) Shevlin failed to adequately provide for J.R.;
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(4) Shevlin failed to file an inventory; (5) Shevlin filed late and inadequate accountings;
(6) Shevlin sold some of J.R.’s property to himself, and (7) Shevlin charged exorbitant
fees. We address each of J.R.’s assertions in turn.
1. Removal of Shevlin as conservator
¶31 J.R. contends that the fact that the court removed Shevlin as conservator is “strong
evidence that Shevlin did breach his fiduciary duty.” Contrary to J.R.’s contentions, the
District Court determined that because of the continued bickering of J.R.’s children and
step-children, and the continuing pattern of interference with the conservatorship by
Robin, the court believed it to be in the best interests of all parties to appoint J.R.’s
brother William as conservator. Thus, Shevlin’s removal as conservator is evidence of
nothing more than the lack of cooperation Shevlin received from J.R.’s family.
2. The court’s use of the wrong standard
¶32 The District Court determined that Shevlin’s management of the conservatorship
was “appropriate” because he did what was ordered by the court in its October 2007
Order. J.R. claims that rather than a standard that Shevlin acted “appropriately,” the
correct standard is whether Shevlin failed to use the care, skill and diligence of a prudent
person. J.R. also points out that under § 72-5-423, MCA, and §§ 72-34-114 and -115,
MCA, a conservator has the same duty to use any special skills he or she possesses as
does a trustee.
¶33 This is the same argument that Shevlin made in Issue 1 with which we expressed
our agreement. And, as we indicated in Issue 1, not only did J.R. fail to provide the
expert testimony needed to establish that Shevlin breached the standard of care for his
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special skills as a CPA, J.R. failed to provide sufficient evidence that Shevlin breached
the prudent person standard of care. Thus, the District Court’s determination that
Shevlin’s management of the conservatorship was “appropriate” was not error.
3. Failure to provide for J.R.
a. Reimbursement for J.R.’s care
¶34 J.R. complains that Shevlin failed to provide funds for J.R.’s care, noting that
Shevlin only directly provided $2000 to J.R. J.R. cites to § 72-5-428, MCA, which
provides for reimbursement to any person for expenditures for services rendered to a
protected person, or when reasonable to expect they will be performed.
¶35 In its October 3, 2007 Order in this matter, the District Court expressed concern
with the amount of money Robin wanted to charge for caring for J.R. in her home. Thus
the court stipulated that no money was to be provided to any of J.R.’s family members
unless the expenditure was shown to be for J.R.’s direct care.
¶36 Consequently, Shevlin requested that Robin send him copies of various household
bills from before J.R. moved in with her so that Shevlin could determine a baseline usage
of utilities and other expenses to set an appropriate amount for reimbursement. While
Robin provided a few current bills, she refused to provide any past bills. Shevlin would
have provided reimbursement to Robin had Robin shown that the expenditures were
solely for J.R.’s direct care. But, because of the earlier complaints by other family
members, and the District Court’s Order, it was not reasonable for Shevlin to just assume
that all money sent to Robin would be used for J.R.’s direct care. And, because Robin
moved J.R. to Massachusetts, Shevlin had no other way to verify that the funds he sent
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would be used for J.R.’s direct care other than through bills and receipts received from
Robin or J.R.
¶37 Shevlin did pay J.R.’s monthly credit card bill even though Robin stopped sending
receipts for the expenses on the credit card statements. At the hearing in this matter,
Robin admitted that she or J.R. had been reimbursed for all of J.R.’s expenses except for
$100 for a lamp repair.
¶38 J.R. also complained that he was constantly embarrassed by not having ready cash.
Shevlin agreed to send $200 per month if J.R. or Robin would send him the
corresponding receipts. This system worked for only a few months before Robin insisted
it was too much trouble to keep track of the receipts.
b. Condo rental and sale
¶39 The District Court’s order authorized Shevlin to sell J.R.’s condo. Based on the
advice of two Helena real estate agents, Shevlin initially listed the condo at $234,000.
Prior to that listing, Shevlin had received a cash offer for the condo at $170,000. Shevlin
rejected that offer as being below the fair market value of the property. Nevertheless,
Shevlin negotiated with the real estate agents to exclude prior potential buyers from the
listing agreements.
¶40 One of the real estate agents testified at the hearing that he had difficulties
marketing the property due to significant structural problems with the property, problems
with the common area around the property, and the slump in the nationwide housing
market that began in 2007. The asking price was eventually reduced and the condo sold
in December 2009, netting J.R. only $137,000.
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¶41 The District Court noted in its order that “[i]n retrospect, it certainly would have
solved a lot of problems if the [initial cash offer] had been accepted. However, that
conclusion comes from the application of hindsight some three years after the fact.” See
§ 72-34-114(3), MCA (compliance with the prudent investor rule is not to be determined
by hindsight).
¶42 J.R. also complains that Shevlin should have rented the condo during the
legislative session as J.R. had done in years past. J.R. blames the failure to rent the condo
on the fact that Shevlin sold some of J.R.’s furnishings to himself. However, Shevlin
pointed out that the legislative session was from January to April, 2009, and neither
Robin nor J.R. mentioned renting the condo until the end of 2008, long after a moving
van full of J.R’s furniture and personal property was sent to J.R. in Massachusetts.
¶43 Furthermore, as Shevlin pointed out, the objective was to sell the condo, and when
the condo was put on the market in September 2008, the real estate agents advised
Shevlin that it would not show well if it was occupied by renters.
c. The trust
¶44 J.R.’s Massachusetts legal counsel, Paula Almgren, recommended that an
“intentionally defective grantor trust” be set up for J.R. that would deplete J.R.’s assets
and make him eligible for veteran’s benefits of up to $2000 per month and Massachusetts
healthcare benefits which would pay up to 60 hours of home health care for J.R. J.R.
faults Shevlin for not placing J.R.’s assets into this irrevocable trust.
¶45 Almgren discussed the trust with Shevlin and provided him with a copy of the
trust she proposed. Shevlin rejected the trust because it violated specific terms of the
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court’s Order. The trust named Almgren and Robin as co-trustees and gave them “sole
and unfettered discretion” to distribute the entire principal of the trust to Robin and
Cheryl during J.R.’s lifetime. Thus, Shevlin had no assurance that the funds in the trust
would be used for J.R.’s direct care.
d. VA benefits
¶46 J.R. is a veteran of the United States Navy and is potentially eligible for veteran’s
pension benefits. J.R. complains that Shevlin did not seek VA benefits on his behalf.
J.R. also faults Shevlin for refusing to fund the trust with J.R.’s assets claiming that it
delayed J.R.’s eligibility for receiving VA benefits.
¶47 Shevlin tried to apply for VA benefits for J.R., but the VA does not recognize
conservator status without the protected person’s signed consent. Because neither J.R.
nor Robin would give Shevlin the necessary authority to communicate with the VA,
Shevlin could not proceed.
¶48 J.R. could access his VA benefits once his assets were reduced to $80,000 or less.
J.R. faults Shevlin for failing to pay a bill from one of J.R.’s legal counsel, Stefan Wall,
in 2007 that would have brought J.R.’s assets below the $80,000 figure. J.R. claims that
failing to pay the bill delayed J.R.’s receipt of VA benefits by one year. Contrary to
J.R.’s claim, Wall did not submit his bill to Shevlin until June 2008. Along with the bill,
Wall sent his apology for failing to deliver it sooner citing the press of business. Shevlin
paid the bill shortly after receiving it.
¶49 The court noted that Robin proceeded to establish eligibility for VA benefits for
J.R. and obtained at least one monthly pension payment on J.R.’s behalf in the amount of
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$1,359. However, Robin placed the check in a special account and refused to provide
Shevlin or the court with an accounting of the use of those funds.
4. Inventory and personal property
¶50 Section 72-5-424, MCA, provides that within 90 days of appointment, a
conservator is to file with the court a complete inventory of the estate of the protected
person. The purpose of the 90-day requirement is to “furnish a means by which the
conservator’s management may be checked and the accounts verified.” Redies, ¶ 20.
However, the conservator has “discretion in deciding what to include and how to value
the items in the estate. A conservator [need not] write down every half bar of soap sitting
on a sink.” Redies, ¶ 22.
¶51 J.R. complains that an inventory of his personal property was not done by either
conservator. Shevlin admits that he did not file an inventory of J.R.’s personal property.
And, while Nickol filed an Inventory of Conservator in March 2007, it did not include
J.R.’s personal property.
¶52 Nevertheless, Shevlin points out that J.R.’s personal property was well known to
Robin and that she compiled extensive lists of the items she wanted sent to J.R. in
Massachusetts. In fact, Robin testified: “I just knew the house very well; I knew
everything in each room, and I have photographs.” Shevlin further points out that J.R.’s
daughter Cheryl was supposed to help sort and pack J.R.’s personal property, but she
contacted him shortly before the movers arrived to inform him that she would not be
there. Consequently, Shevlin had to undertake the sorting and packing of J.R.’s personal
property on his own.
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¶53 At Robin’s direction, Shevlin shipped most of J.R.’s personal belongings to him in
July 2008. He sent the remaining property requested by J.R. and Robin in January 2010.
The remainder of the property was to be donated to charity or discarded. The donated
property was receipted for tax purposes.
¶54 We do not condone Shevlin’s failure to file a complete inventory as required by
§ 72-5-424, MCA. Here the only property not inventoried was J.R.’s personal property.
While Shevlin should have timely performed and filed that inventory, we agree with the
trial court that his failure to do so under the facts of this case was not grounds for his
removal.
5. Late and inadequate accountings
¶55 J.R. complains that the accountings filed by Shevlin were late and that they were
inadequate or incomplete. Although the District Court had ordered Shevlin to file annual
accountings, he waited until May 14, 2009, more than 19 months after his appointment as
conservator, before filing the first accounting. This accounting covered the period from
November 5, 2007, through January 5, 2009. The second accounting provided by
Shevlin covered the period from January 5, 2009, through January 5, 2010, and was filed
on February 8, 2010. The District Court expressed its disappointment that Shevlin did
not file an accounting within one year of his appointment as conservator, but the court
pointed out that there was no adverse impact to J.R.
¶56 As to the completeness of the accountings, Shevlin explained that various bank
statements and tax returns were not provided to Shevlin by Robin or J.R. so they could
not be included. Shevlin did submit independent documentation with the accountings
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including his work papers supporting each accounting; however, J.R. objected to these
documents and they were withdrawn. Nevertheless, the court noted that each of the
accountings filed by Shevlin was “supplemented by detailed itemization of receipts and
disbursements.”
¶57 Again, we cannot find fault with the District Court’s determinations based on the
facts here.
6. Sale of property to Shevlin
¶58 J.R. complains that Shevlin bought some of J.R.’s personal property to use in
rental properties owned by Shevlin. Shevlin admits that he purchased a few items for fair
market value, but that these items were ones that Robin and J.R. told him to discard or to
try to sell.
¶59 We agree with J.R. that a conservator has a duty to avoid a conflict of interest, see
§ 72-34-105, MCA, and that obtaining this property for Shevlin’s personal use was
entirely improper. Nevertheless, as the court stated, J.R. did not introduce any evidence
that Shevlin sold the property to himself at less than market value.
¶60 J.R. also complains that at the time of the hearing, Shevlin was holding some of
J.R.’s personal property in Shevlin’s garage. Shevlin points out that these items had to be
removed from J.R.’s condo at the time of the condo’s sale and that it was necessary to
store the items until he received further instructions from J.R. and Robin on what to do
with the items.
7. Exorbitant fees
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¶61 J.R. claims that Shevlin paid himself exorbitant fees as conservator for attending
to minor details and that he never received any billing statements detailing Shevlin’s fees.
¶62 Shevlin billed the conservatorship his regular hourly rate which is determined by
JCCS and which ranged from $155 per hour when Shevlin was first appointed
conservator to $180 per hour when Shevlin was removed as conservator. Shevlin points
out that J.R. was a client of JCCS for many years prior to the conservatorship, thus J.R.
would have been familiar with JCCS’s billing practices. In addition, the court pointed
out that J.R. and Robin hired various counsel throughout the conservatorship proceedings
at hourly rates ranging from $165 to $225 per hour.
¶63 Contrary to J.R.’s assertion that he never received any billing statements, in their
Petition for Orders Subsequent to Appointment filed June 16, 2009, the petitioners, which
included Robin, point out various items from Shevlin’s billing statements with which
they disagreed. Consequently, it is evident that the billing statements were received.
Moreover, many of the fees that J.R. now takes issue with were the fees Shevlin charged
for sorting and packing J.R.’s personal belongings. Shevlin testified that although he did
bill the conservatorship his normal hourly rate, his billing statements reflect that he did
not bill for all of the time spent packing up J.R.’s condo.
¶64 Furthermore, J.R. complains on one hand that Shevlin did not do enough to
inventory and ship J.R.’s personal property, yet on the other hand he complains that
Shevlin charged exorbitant fees for doing so. We also note that it would not have been
necessary for Shevlin to spend time packing J.R.’s personal belongings if J.R.’s family
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members had participated in the packing and shipping of J.R.’s personal property as
promised.
Conclusion
¶65 Because we have determined that the trial court is in the best position to observe
and judge the credibility of witnesses, we do not “second guess the district court’s
determination regarding the strength and weight of conflicting testimony.” Brimstone
Mining, Inc. v. Glaus, 2003 MT 236, ¶ 20, 317 Mont. 236, 77 P.3d 175 (quoting Double
AA Corp. v. Newland & Co., 273 Mont. 486, 494, 905 P.2d 138, 142 (1995)).
¶66 With the exception of Shevlin’s failure to compile an inventory of J.R.’s personal
property and the sale of some of J.R.’s personal property to himself, we agree with the
District Court that Shevlin substantially complied with the District Court’s Order
regarding the conservatorship.
¶67 Accordingly, we hold that the District Court’s ultimate finding that Shevlin
appropriately managed J.R.’s assets and estate was not clearly erroneous.
Issue 3.
¶68 Whether the District Court erred in discharging the conservator without liability.
¶69 Although the District Court found fault with some of the things Shevlin did as
conservator, the court determined that they were “minor errors” or “insubstantial” and
that Shevlin corrected or compensated for all of them. The court further found that
ultimately Shevlin performed his duties as conservator in the manner the court anticipated
in its appointment and that the conservatorship had not been damaged through Shevlin’s
actions.
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¶70 J.R. contends on appeal that this was error by the District Court because the very
fact that the court removed Shevlin as conservator “implicitly suggests” that there was
“good cause” for Shevlin’s removal and, according to J.R., is strong evidence that
Shevlin breached his fiduciary duty. Thus J.R. argues that the court should have ordered
Shevlin to reimburse J.R. for the fees which Shevlin paid to himself. In support of this
proposition, J.R. cites In re Allard, 49 Mont. 219, 225, 141 P. 661, 664 (1914) (the
conservatorship statute “contemplates a faithful stewardship. While a mere technical
breach of duty which does not result in injury to the ward’s estate will not ordinarily
justify a court in withholding compensation altogether, a flagrant violation of the duties
of the trust will do so.”).
¶71 Contrary to J.R.’s assertions, the District Court did not remove Shevlin as
conservator because he committed a “flagrant violation” of his duties or even that he
committed any violation of his duties. Instead, the court pointed to the continued
bickering of J.R.’s children and step-children, and the continuing pattern of Robin
interfering with the conservator’s efforts devoted to J.R.’s conservatorship, both before
and after Shevlin’s appointment, as the reason for Shevlin’s removal. The court stated:
“It seems that some of [J.R.’s] children even refuse to acknowledge the existence of the
conservatorship and have failed to cooperate with it. In short, Shevlin was placed in a
very difficult situation and did not receive the full cooperation that he should have been
entitled to from [J.R.’s] children.” In Shevlin’s place, the court appointed J.R.’s brother
William as successor conservator in the hope that he would be better able to work with
the parties involved.
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¶72 As to Shevlin’s fees, § 72-5-432, MCA, provides:
Compensation and expenses. If not otherwise compensated for
services rendered, any visitor, lawyer, physician, conservator, or special
conservator appointed in a protective proceeding is entitled to reasonable
compensation from the estate.
In this case, the District Court determined, and we agree, that Shevlin’s fees were
reasonable as Shevlin’s management of J.R.’s assets and estate was appropriate to
provide for J.R.’s care.
¶73 Accordingly, we hold that the District Court did not err in discharging Shevlin
without liability.
Issue 4.
¶74 Whether the District Court abused its discretion in ordering payment of the
conservator’s attorney’s fees from the conservatorship’s assets.
¶75 J.R. argues that this litigation was brought “because of the inexcusable conduct on
the part of the conservator . . . .” Thus, J.R. maintains that because this litigation is
completely irrelevant to the proper administration of the conservatorship, he should be
reimbursed for the fees paid to Shevlin’s attorneys to defend Shevlin in this case.
¶76 Shevlin argues on the other hand that because he continued to receive
communications from Robin and from J.R.’s Massachusetts counsel that Shevlin
interpreted as threatening, it was necessary for Shevlin to employ counsel to advise him
regarding the District Court’s Order appointing him as conservator and to seek instruction
from the court.
¶77 We review a District Court’s grant or denial of attorney’s fees for an abuse of
discretion. Prescott v. Innovative Resource Group, LLC, 2010 MT 35, ¶ 16, 355 Mont.
21220, 225 P.3d 1253. This Court has repeatedly held that absent a contractual agreement
or statutory provision, the prevailing party in a civil action is not entitled to recover
attorney’s fees. In re Estate of Berthot, 2002 MT 277, ¶ 55, 312 Mont. 366, 59 P.3d 1080(citing In re Estate of Dern Family Trust, 279 Mont. 138, 154, 928 P.2d 123, 133 (1996);
Thompkins v. Fuller, 205 Mont. 168, 186, 667 P.2d 944, 954 (1983)). However, this case
is one in which statutory provisions governing the awarding of attorney’s fees and costs
do exist.
(3) A conservator, acting reasonably in efforts to accomplish the
purpose for which the conservator was appointed, may act without court
authorization or confirmation to:
. . .
(w) employ persons, including attorneys, . . . even though they are
associated with the conservator, to advise or assist the conservator in the
performance of administrative duties . . . ; [and]
(x) prosecute or defend actions, claims, or proceedings in any
jurisdiction for the protection of estate assets and of the conservator in the
performance of the conservator’s duties . . . .
Section 72-5-427, MCA.
¶78 In this case, the District Court found that a large number of Shevlin’s fees and
those of his counsel were attributable to the failure of some of J.R.’s children to
cooperate with or even recognize the existence of the conservatorship. Thus, contrary to
J.R.’s contention that the attorney’s fees were used to defend Shevlin, the attorney’s fees
were expended to protect the conservatorship. Accordingly, we hold that, on that basis,
the District Court did not abuse its discretion in ordering that Shevlin’s attorney’s fees be
paid from the conservatorship assets.
¶79 Affirmed.
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/S/ JAMES C. NELSON
We Concur:
/S/ MIKE McGRATH
/S/ MICHAEL E WHEAT
/S/ PATRICIA COTTER
/S/ JIM RICE
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