The Indiana Court of Appeals has reversed a trial court’s grant of summary judgment in favor of an attorney who failed to monitor an estate checking account while serving as the estate’s counsel.

In Corrine R. Finnerty, as Successor Personal Representative of the Estate of Dora Grace Lee, deceased v. Joseph A. Colussi and the Colussi Law Office, No. 39A01-1011-ES-622, Corrine Finnerty appeals a trial court’s ruling in favor of attorney Joseph Colussi, claiming that genuine issues of material fact exist to preclude judgment in favor of Colussi on a legal malpractice claim.

Dora Grace Lee died in 2007, and her designated co-personal representatives – sister Helen Ricketts and granddaughter Christina Mason – hired Colussi as the estate’s counsel.

On February 6, 2007, Colussi mailed Mason and Ricketts their letters testamentary along with the court’s order appointing them as co-personal representatives and letters explaining that either document would allow them to conduct business for the estate. The letter to Mason instructed her to “immediately open up an estate account and handle all expenses and deposit all income in that account” and to forward a check to Colussi to reimburse him for the estate’s filing fee. The letter to Ricketts made no mention of a bank account or filing fee. Colussi had previously advised Mason and Ricketts that either of them could write checks on the estate account, and it was agreed that Mason would retain the estate’s checkbook.

Mason and Ricketts opened an account at Main Source Bank in Madison, Ind., but did not establish an “and” account, which would have required both parties to sign checks. Instead, the two set-up an “or” account, meaning either could write checks independently. Only Mason received a checkbook and monthly account statements from the bank.

Over the next several months, Ricketts and Mason liquidated the estate’s assets and deposited approximately $236,000 into the account. However, unbeknownst to Ricketts and Colussi, Mason began writing checks on the estate account for her personal use, the use of her family and in-laws, and the use of the three other beneficiaries of the will. The majority of the estate funds were depleted by September 11, 2007.

On October 31, 2007, Ricketts contacted Colussi and told him that she suspected problems existed with the account. Ricketts, per Colussi’s instructions, contacted the bank and learned the account was overdrawn. Colussi and Ricketts then reported Mason’s embezzlement to police, and both Ricketts and Mason resigned as co-personal representatives, Colussi withdrew as estate counsel, and Corrine Finnerty was appointed as personal representative.

In February 2009, the estate filed a complaint against Colussi alleging that he had committed legal malpractice by failing “to inform himself as to the status of estate assets or monitor their use.” Colussi filed a counterclaim to recover from the estate unpaid attorney fees. The estate enlisted expert Thomas C. Bigley, Jr., who said Colussi breached the applicable standard of care by failing to control and monitor the checking account. The trial court ruled in favor of Colussi, holding that: “The testimony of Bigley and Finnerty as to their practice as attorneys in monitoring an estate bank account are simply their personal opinions based on their own experiences which renders their opinions as to Colussi’s actions lacking foundation and inadmissible conclusions of law.”

The COA called that conclusion “puzzling,” writing that personal experience is often the source of an expert’s expertise. The appeals court held that in order to prove a breach of duty, the estate needed to prove only that Colussi’s behavior fell below the applicable standard of care.

In his deposition, Bigley testified that the applicable standard of care requires an attorney for an estate to retain the estate’s checkbook, thereby requiring the personal representative to come to the attorney’s office to obtain checks. He also said he would have monitored more carefully the opening of the estate and would have monthly bank statements from the estate sent to his office. Accordingly, the appeals court held that the trial court erred when it ruled in favor of Colussi.

According to the estate, because a genuine issue of material fact exists as to whether Colussi is liable for malpractice, a genuine issue of material fact must necessarily exist with regard to Colussi’s counterclaim for unpaid attorney fees. The appeals court agreed, and remanded for proceedings consistent with its opinion.