Justia Trusts & Estates Opinion Summaries

The Supreme Court affirmed the orders of the district court granting summary judgment and dismissal in favor of a loan servicer and trustee in this case involving a home equity line of credit agreement (HELOC) with a defined maturity date and closed draw period, holding that there was no error.At issue before the Court was whether a loan servicer and trustee were entitled to foreclose upon Borrowers' residence due to Borrowers' failure to repay the funds provided to them under the terms of their HELOC. The Supreme Court affirmed, holding that the district court (1) did not err in determining that Borrowers' HELOC was both a negotiable instrument under Nev. Rev. Stat. 104.3104(1) and a promissory note under Nev. Rev. Stat. 104.3104(5), entitling the loan servicer and trustee to enforce the document under Nev. Rev. Code chapter 104 due to Borrowers' default; and (2) erred in finding that Borrowers' property was not owner-occupied and thus not subject to statutory requirements pertaining to foreclosures affecting owner-occupied housing, but the error was harmless. View "Wishengrad v. Carrington Mortgage Services" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the circuit court denying the motion for partial summary judgment brought by the Estate of Robert T. Lynch as to its action against Kevin Lynch and entering judgment as a matter of law for Kevin on his counterclaim for conversion, holding that remand was required.The Estate sued Kevin alleging claims for fiduciary fraud, conversion, breach of fiduciary duty, and elder exploitation. Kevin filed a counterclaim alleging conversion, among other claims. After the circuit court denied the Estate's motion for partial summary judgment on its claims against Kevin the court entered judgment as a matter of law for Kevin on his counterclaim. The Supreme Court (1) reversed as to the Estate's claims involving two payable-on-death CDs Kevin deposited in his individual account and directed that, on remand, the circuit court shall enter judgment as a matter of law for compensatory damages plus prejudgment interest on the Estate’s claims for breach of fiduciary duty and conversion; (2) ruled that the Estate's claim for punitive damage on the reversed portion of the judgment was an open question on remand; and (3) otherwise affirmed. View "Estate of Lynch v. Lynch" on Justia Law

The United States sued several heirs of A.P., alleging that they were trustees of the trust or received estate property as transferees or beneficiaries and were thus personally liable for estate taxes under 26 U.S.C. Section 6324(a)(2). The United States also alleged that two of the heirs were liable for estate taxes under California state law. The district court ruled in favor of Defendants on the Tax Code claims and in favor of the United States on the state law claims.   The Ninth Circuit reversed the district court’s judgment in favor of Defendants, and remanded with instructions to enter judgment in favor of the government on its claims for estate taxes and to conduct any further proceedings necessary to determine the amount of each defendant’s liability for unpaid taxes. The panel held that Section 6324(a)(2) imposes personal liability for unpaid estate taxes on the categories of persons listed in the statute who have or receive estate property, either on the date of the decedent’s death or at any time thereafter (as opposed to only on the date of death), subject to the applicable statute of limitations. The panel next held that Defendants were within the categories of persons listed in Section 6324(a) when they had or received estate property and are thus liable for the unpaid estate taxes as trustees and beneficiaries. The panel further held that each Defendant’s liability cannot exceed the value of the estate property at the time of the decedent’s death or the value of that property at the time they received or had it as trustees and beneficiaries. View "USA V. JAMES D. PAULSON, ET AL" on Justia Law

Appellant Elkin King sued Appellee Forrest King, Jr., his former stepfather, in federal district court, alleging that Forrest had concealed, misused, and converted the proceeds of a wrongful death settlement that had been placed in an account for Appellant’s benefit when Appellant was a minor, and Forrest was the custodian. Appellant further alleged that Forrest’s actions had allowed Appellant’s mother, Peggy Fulford, to spend the funds remaining in the account after Appellant turned 18 years old. The district court granted summary judgment in favor of Forrest. The United States Court of Appeals for the Eleventh Circuit affirmed summary judgment on the misuse claim and held that Appellant had forfeited his conversion claim. But as to the concealment claim, the Eleventh Circuit certified three questions to the Georgia Supreme Court, seeking clarification of the parameters of Georgia’s duty to disclose in a confidential relationship. The Supreme Court responded to the Eleventh Circuit’s certified questions: when a confidential relationship is also a fiduciary relationship, the fiduciary’s fraudulent breach of the duty to disclose can give rise to a breach-of-fiduciary-duty tort claim if that breach violates a fiduciary’s duty to act with the utmost good faith. "But whether a fiduciary has failed to act with the utmost good faith in a particular circumstance is a question of fact, not law." Accordingly, the Supreme Court answered the Eleventh Circuit’s first question and declined to answer the other two questions. View "King v. King" on Justia Law

Angelia Taylor, as personal representative of the Estate of Willie Latham, appealed the denial by operation of law of her Rule 59(e), Ala. R. Civ. P., motion seeking to vacate an arbitration award entered in favor of Methodist Home for the Aging d/b/a Fair Haven and its administrator, Maria Ephraim (collectively, "Fair Haven"). While a resident, Latham fell and broke her hip. Latham was eventually transported to a hospital for surgery, and she died a few days later. In November 2019, Taylor, as the personal representative of Latham's estate, filed a wrongful-death action under the Alabama Medical Liability Act of 1987. In December 2019, Fair Haven moved to compel arbitration pursuant to an arbitration agreement Latham had signed. The parties filed a joint stipulation to submit the case to arbitration, and in February 2020 the circuit court entered an order compelling arbitration. In November 2021, an arbitrator issued a final award in favor of Fair Haven. A month later, Taylor filed a notice of appeal. Thereafter, she filed a motion to set aside or vacate the arbitration award. In response, Fair Haven filed a motion for the entry of a final judgment. On February 2, 2022, the circuit court entered an order noting that the purported postjudgment motions were not ripe, because the circuit clerk had not entered the arbitration award as a final judgment. On February 22, 2022, the circuit clerk entered the arbitration award as a final judgment. Taylor's motion to vacate was denied by operation of law 90 days later, on May 23, 2022. The Alabama Supreme Court concluded Taylor failed to demonstrate a recognized basis under 9 U.S.C. § 10 for vacating the arbitration award; the denial by operation of law of her Rule 59 motion to vacate the arbitration award was therefore affirmed. View "Taylor v. Methodist Home for the Aging d/b/a Fair Haven, et al." on Justia Law

Alabama Somerby, LLC, d/b/a Brookdale University Park IL/AL/MC; Brookdale Senior Living, Inc.; and Undrea Wright (collectively, Brookdale) appealed a circuit court's order denying their motion to compel arbitration of the claims asserted against them by plaintiff, L.D., as the next friend of her mother, E.D. Brookdale operated an assisted-living facility for seniors ("the nursing home") in Jefferson County, Alabama; Wright was the administrator of the nursing home. In March 2022, L.D. filed on E.D.'s behalf, a complaint against Brookdale and Wright and others, asserting various tort claims and seeking related damages premised on allegations that, following her admission to the nursing home, E.D. had been subjected to multiple sexual assaults both by other residents and by an employee of Brookdale. The Brookdale defendants jointly moved to compel arbitration of L.D.'s claims against them or, alternatively, to dismiss the action without prejudice to allow those claims to proceed via arbitration. Following a hearing, the trial court, denied the motion seeking to dismiss the action or to compel arbitration. The Brookdale defendants timely appealed, asserting that the trial court had erred by failing to order arbitration. The Alabama Supreme Court concluded the Brookdale defendants established that an agreement providing for arbitration existed and that the agreement affected interstate commerce. The trial court erred in denying the Brookdale defendants' request to compel arbitration. The Supreme Court reversed the trial court's order and remanded the case for further proceedings. View "Alabama Somerby, LLC, et al. v. L.D." on Justia Law

In 2015, a conservatorship of the estate of Thomas Tedesco, a wealthy nonagenarian (Thomas), was created, and Thomas requested the appointment of respondent David Wilson, an independent professional fiduciary, as conservator of the estate. Thomas’s second wife, Gloria Tedesco (Gloria) was present at the hearing and stipulated on the record, through counsel, to Wilson’s appointment. Approximately six years later, on March 23, 2021, Gloria petitioned the probate court to vacate the order creating the conservatorship, along with all subsequent orders “emanating” from the conservatorship. The court denied the petition, and she appealed. Through a "myriad of disjointed arguments," Gloria challenged the probate court’s order striking her petition to vacate all the orders in this conservatorship, including the establishment of the conservatorship and appointment of Wilson as the conservator. Finding no reversible error, the Court of Appeal affirmed. View "Conservatorship of Tedesco" on Justia Law

Clifton Capital Group (“Clifton”) was chair of an official committee of unsecured creditors appointed by the Office of the United States Trustee to monitor the activities of debtor East Coast Foods, Inc., manager of Roscoe’s House of Chicken & Waffles. The bankruptcy court appointed Bradley D. Sharp as Chapter 11 trustee. Clifton objected to Sharp’s fee application, but the bankruptcy court awarded the statutory maximum fee. Clifton appealed. The district court concluded that Clifton had standing to appeal, and it remanded. On remand, the bankruptcy court again awarded the statutory maximum. Clifton again appealed, and the bankruptcy court, this time, affirmed.   The Ninth Circuit reversed l reversed the district court’s order affirming the bankruptcy court’s enhanced fee award to the trustee. the panel wrote that the Ninth Circuit historically bypassed the Article III inquiry in the bankruptcy context, instead analyzing whether a party is a “person aggrieved” as a principle of prudential standing. The court, however, has returned emphasis to Article III standing following Susan B. Anthony List v. Driehaus, 573 U.S. 149 (2014), in which the Supreme Court questioned prudential standing. The panel held that Clifton lacked Article III standing to appeal the fee award because it failed to show that the enhanced fee award would diminish its payment under the bankruptcy plan, and thus it failed to establish an “injury in fact.” The panel also concluded that Clifton did not suffer injury to the timing of its payment because Clifton’s alleged harms were conjectural, and it remained possible that Clifton would be paid within the plan’s initial estimated window. View "IN RE: CLIFTON CAPITAL GROUP, LLC, ET AL V. BRADLEY SHARP" on Justia Law

Kinney, an adjudicated vexatious litigant and disbarred former attorney, obtained leave to pursue an appeal from the final judgment in this probate proceeding. Leave was granted not because Kinney made the necessary threshold showing of merit and absence of intent to harass or delay under Code of Civil Procedure section 391.7, but because the vexatious litigant statute has no application to a party who files an appeal in a proceeding he did not initiate.Kinney appealed the Final Distribution and Allowance of Fees Order, apparently claiming that the probate court erred in approving the Special Administrator’s decision not to pay him his $1,000 statutory fee, cancellation of an agreement with a prior administrator of the estate to manage and perform various services relating to a house owned by the estate, and approval of a distribution of $329,684.82 out of the sales proceeds of that house to satisfy indebtedness pursuant to certain judgment liens against that property.The court of appeal affirmed, describing Kinney’s arguments as “incoherent” and a “hodgepodge.” On all but one of the issues presented, Kinney either has no standing to appeal or is barred under the doctrine of claim preclusion; on the remaining claim of error, the probate court acted within its discretion. View "Estate of Kempton" on Justia Law

In pleading guilty to wire fraud and tax evasion, Defendant agreed to forfeit to the Government his interests in Jreck Subs, a franchised chain of sandwich shops that he used to perpetrate his fraud. Claimants, the Swartz Family Trust and Orienta Investors, LLC filed third-party petitions asserting an interest in the forfeited property. The district court granted the Government’s motions to dismiss the petitions, finding that the Trust’s petition was not submitted before the thirty-day deadline to file such petitions expired and that Orienta failed to state a claim under the forfeiture statute, as either the holder of an interest superior to the Government or as a bona fide purchaser for value. The district court also denied Orienta’s motion for reconsideration, as well as Orienta’s motion for leave to amend its petition.   The court affirmed in part and vacated in part. The court concluded that the Trust’s petition was correctly dismissed as untimely and that Orienta’s petition does not state a claim. The court remanded, however, to allow the district court to further consider Orienta’s motion for leave to amend its petition with respect to its claim that it is a bona fide purchaser for value. The court explained that here, two things potentially tip the scales in favor of granting Orienta leave to amend its bona fide purchaser claim. First, the district court based its dismissal of that claim primarily on a technical issue. Second, the Government acknowledged that additional factual development was necessary to resolve whether Orienta’s petition stated a bona fide purchaser for value claim. View "United States v. Swartz Family Trust" on Justia Law