Justia Trusts & Estates Opinion Summaries

In 2000, husband and wife, with an estate valued at $3 to $4 million, revised their estate plan with the assistance of their Illinois lawyer, a Minnesota lawyer, and a law partner of their son-in-law. The plan included a trust that treated their son and his daughter, India, less favorably than their two daughters and other grandchildren. When they died within a month of each other in 2004, their son and India sued the three lawyers, alleging malpractice and breach of fiduciary duty. The district court rejected a conflict-of-interest argument and dismissed most of the claims as untimely or barred. India's minor status tolled the limitations period, but the court dismissed her claim as premature. The Seventh Circuit affirmed and held that India's claim should have been dismissed with prejudice. The district court properly chose Illinois's statute of limitations over Minnesota's; and properly rejected waiver and equitable-tolling arguments. The court properly dismissed the fiduciary-duty claims as barred by res judicata; there had been state court litigation concerning sale of the family home. There was no evidence to support India’s contention that her grandparents intended her to receive more than the documents provide. View "Ennenga v. Starns" on Justia Law

As part of a retention package, the bank purchased a split dollar life policy for plaintiff's trust with cash value of more than $662,000. The bank paid part of the premiums and had a senior interest in the policy to the extent of those premiums. To safeguard this interest, the trust assigned the policy to the bank as collateral. The bank paid $421,890 of the premiums. The trust interest was about $240,000. In 2009, the bank failed and was placed under FDIC receivership. The Insurer surrendered the entire cash value of the policy to the FDIC. The trustee demanded return of the value of the policy; the insurer refused. The trustee first contacted the FDIC receiver after expiration of the 90-day period for claims under the Financial Institutions Reform, Recovery, and Enforcement Act, 12 U.S.C. 1821(d)(13)(D), although he received notice 12 days before expiration of the period. The district court dismissed for lack of jurisdiction. The Seventh Circuit affirmed. It would be possible for a claim to arise so close to the bar date as to deprive a claimant of due process, but this case did not present that situation. View "Campbell v. Fed. Deposit Ins. Corp." on Justia Law

This case addressed the effect of a pooled special-needs trust created by an over-65-year-old beneficiary on his medicaid benefits. The Center for Special Needs Trust Administration appealed a summary judgment in favor of the North Dakota Department of Human Services. Invoking 42 U.S.C. 1983 and the Constitution's Supremacy Clause, the Center alleged that North Dakota's demand for reimbursement and its state regulations violated a paragraph of the Medicaid Act, 42 U.S.C. 1396p(d)(4)(C). The court held that the district court properly determined that section 1396p(d)(4)(C) afforded the Center a right of action under section 1983; that North Dakota did not waive its claim to recover for reimbursements and should not be estopped from making that claim; that the Center's claim was without merit; and that preemption did not apply. View "Center for Special Needs, etc. v. Olson, etc." on Justia Law

As part of an order approving the final report of the executor of the estate of Loren S. Bockwoldt, the district court approved extraordinary attorney fees for Pete Wessels and the law firm of Stanley, Lande and Hunter (SLH), attorneys for the estate. The extraordinary services contained in the application filed by Wessels and SLH were primarily for the defense of an earlier application for fees for extraordinary services that Wessels provided to the estate. The court also approved expenses. The court found that these attorney fees and expenses were for necessary and extraordinary services to the estate pursuant to Iowa Code 633.199. The court of appeals reversed, holding that attorney fees may not be awarded for litigating an application for attorney fees under chapter 633. The Supreme Court vacated the court of appeals and affirmed the district court in part and reversed in part, holding (1) extraordinary attorney fees may be awarded for defending a fee application in district court and on appeal; but (2) the case must be remanded for a hearing to determine the amount of fees to be awarded to SLH. View "In re Estate of Bockwoldt" on Justia Law

Henry Gibson was a resident of Arnold Avenue Nursing Home (AA) in Greenville from 2001 until 2002. After being hospitalized in December 2002, Gibson was moved to another nursing home and died on January 26, 2003. Gibson's estate filed a wrongful-death action in 2004 seeking compensatory and punitive damages. The plaintiffs averred that Magnolia Healthcare, Inc., the owner of AA, and Foundation Health Services, Inc. were negligent in causing various injuries, some of which contributed to Gibson's death. The jury awarded $1.5 million in compensatory damages, which the trial court reduced to $500,000 for noneconomic damages and $75,000 for permanent disfigurement. The trial court refused to allow the jury to consider punitive damages. Plaintiffs appealed asserting: (1) whether the trial court erred in refusing to allow the jury to consider punitive damages; and (2) whether the statutory cap for noneconomic damages was constitutional. Upon review, the Supreme Court found no error in the trial court's refusing to allow the jury to consider punitive damages. The Court found that Plaintiffs failed to raise the constitutionality of the statutory cap before the trial court; thus that issue was procedurally barred. View "Estate of Henry Gibson v. Magnolia Healthcare, Inc." on Justia Law

Plaintiff, an irrevocable trust, filed a complaint against Defendant, a university graduate student, alleging that he breached his lease agreement by painting over expensive historical wallpaper inside Plaintiff's nineteenth century building and by failing to pay the last month's rent. The superior court trial justice found that Defendant breached the lease by painting portions of the premises but ruled that Plaintiff had failed to prove that the trust had incurred damages that exceeded the amount of unpaid rent. The trial justice then awarded Plaintiff $1,600, plus interest, representing one month of unpaid rent. The Supreme Court vacated the judgment with respect to that portion of the trial justice's decision declining to award damages for the repair of Plaintiff's property and for her failure to award attorney's fees, holding (1) the trial justice erred when she determined damages because she applied the wrong standard; and (2) the clear language of the lease agreement provided contractual authorization for the award of attorneys' fees, and the trial justice abused her discretion in failing to do so. View "Sophie F. Bronowiski Mulligan Irrevocable Trust v. Bridges" on Justia Law

Petitioners Todd and Trent Bemis appealed a probate court order that dismissed their petition for guardianship over the person and estate of their step-father Dr. Raymond B. More than seven months after Dr. B left an assisted-living facility in Florida, Petitioners filed their petition for guardianship when Dr. B engaged in behavior the Supreme Court "assume[d] was evidence of his legal incapacity at that time." The petition contained no allegations about the doctor’s behavior, and Petitioners had no contact with him after he left Florida. Dr. B objected to a request for a psychological evaluation, and moved to dismiss the petition, arguing that it was "per se defective" because the guardianship statute requires that all evidence of a proposed ward's inability to care for himself "must have occurred within 6 months prior to the filing of the petition and at least one incidence of such behavior must have occurred within 20 days of the filing of the petition." After a hearing, the trial court dismissed the petition and denied the petitioners' motion for a psychiatric evaluation. The petitioners appealed both decisions. Finding that the trial court could have reasonably concluded that the doctor’s interest in freedom from an unwanted psychological examination outweighed the petitioners' interests in procuring evidence of his alleged incapacity, the Supreme Court affirmed the probate court's decision. View "In re Guardianship of Raymond B." on Justia Law

Plaintiffs Wade Tucker, the Wendell H. Cook, Sr. Testamentary Trust, and HealthSouth Corporation appealed a circuit court's partial summary judgment in favor of the Richard M. Scrushy Charitable Foundation. In 2009, the court entered a judgment against the Scrushy Foundation in favor of Plaintiffs for approximately $2.7 billion. As part of their efforts to collect on the judgment, Plaintiffs issued a process of garnishment to the Foundation. The Foundation responded to the garnishment by denying that it had possession or control of any belongings to Mr. Scrushy. Plaintiffs then contested the Foundation's response alleging, among other things, that Mr. Scrushy "dominated and controlled" the Foundation such that it was his alter ego. The Foundation did not respond to Plaintiffs' garnishment contest, but moved for summary judgment a few months later on all of Plaintiffs' claims. The Foundation maintained that Plaintiffs' actions were time barred. The Foundation’s motion did not address Plaintiffs' garnishment contest. Ultimately, the circuit court entered a summary judgment in favor of the Foundation concerning Plaintiffs’ clams brought under the Alabama Uniform Fraudulent Transfer Act (AUFTA), finding that Plaintiffs' claims under the statute were time-barred. With regard to the garnishment contest, the court entered summary judgment again, holding that Plaintiffs' claims arose from transfers Mr. Scrushy made to the Foundation rather than upon the Judgment. Upon review, the Supreme Court concluded the circuit court exceeded its discretion by conducting a hearing on the Foundation's request for a summary judgment in Plaintiffs' garnishment contest on less than ten days' notice in violation of the rules of procedure and over Plaintiffs' objections. Accordingly, the Court reversed the Circuit Court's summary judgment "insofar as it considered the Plaintiffs' garnishment contest," and remanded the case for further proceedings. View "Tucker v. Richard M. Scrushy Charitable Foundation, Inc " on Justia Law

This case arose when the Yankton Sioux Tribe requested that the Bureau of Indian Affairs (BIA) acquire 39 acres of land located in Charles Mix County in trust for the tribe pursuant to section 5 of the Indian Reorganization Act, 25 U.S.C. 465. The court held that the Secretary's decision to acquire the land was neither arbitrary nor capricious where the administrative record indicated that contrary to the county's assertions, the Secretary thoroughly considered all of the necessary factors when deciding to acquire the travel plaza in trust. Accordingly, the judgment was affirmed. View "County of Charles Mix v. U.S. Dept. of the Interior, et al." on Justia Law

The issue before the Supreme Court involved whether the children of a decedent's predeceased spouse could be considered "stepchildren" under the wrongful death recovery statute. The decedent Audrey Blessing and the children's father were married in 1964. The children's father died in 1994, and Blessing died in 2007. Her estate brought a wrongful death suit, arguing that the children ceased being her step children when their father died. The trial court relied on the close relationship the children and decedent maintained up until her death, and ruled that the children were indeed "stepchildren" and could be beneficiaries in the wrongful death action. The Court of Appeals reversed, holding that the stepchild/stepparent relationship legally ended before Blessing's death. Finding that the statutory term "stepchildren" was undefined in the statute, the Supreme Court held that which parent died first was irrelevant to whether a stepchild could maintain that status. "Any concerns over the result or regarding which stepchildren should be entitled to recover in a wrongful death suit are more appropriately factored into any damages determination." View "In re Estate of Blessing" on Justia Law