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Estate lawyers' duty of responsibility clarified in proposed legislation

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Indiana Lawyer Focus

Estate attorneys are hoping the Indiana General Assembly will provide a remedy after a ruling by the Indiana Court of Appeals muddied the waters concerning the scope and duties of a lawyer working on behalf of an estate’s personal representative.

Lawyers are optimistic that the proposed bill, which many say puts into law what is already common practice, will pass the 2013 legislative session and answer confusion raised by the court’s opinion. Passage would also give Indiana a law that is consistent with most other states.

The Indiana General Assembly’s Probate Code Study Commission is recommending a bill – currently PD3188 – that would clarify an estate lawyer owes a duty only to the personal representative and not to the beneficiaries.

Proposed by the Probate, Trust and Real Property Section of the Indiana State Bar Association, the bill codifies what has been the majority rule, said Jeffrey Kolb, managing partner at Kolb Roellgen & Kirchoff LLP in Vincennes. The push for legislation arose from a ruling by the Indiana Court of Appeals that sounded an alarm and had estate lawyers questioning what their duty is.

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, the COA reversed the trial court’s grant of summary judgment in favor of attorney Joseph Colussi.

It agreed with the beneficiaries that Colussi owed a duty to the estate to use his skill and knowledge as an attorney. The ruling was contrary to common practice and has attorneys questioning who they represent in such matters.

Jim Martin, an attorney in Merrillville and member of the Probate Code Study Commission, likened the court’s opinion to a “slippery slope.” The decision, he said, makes way for the lawyer to be held liable for the handling of the estate’s assets.

“It opens the door to the attorney having to closely monitor all the activities of the personal representative even more than before,” Martin said. “The personal representative still has power but that would be subjected to the decisions of the attorney. The personal representative would become a figure head.”

A lawyer could not take on that level of responsibility because it would be a heavy burden of work, and malpractice insurance does not provide coverage for an attorney to act as an executor or trustee, Martin said.

Two sections of the Indiana State Bar Association filed amicus briefs, trying to convince the Indiana Supreme Court to grant transfer to Colussi. The Supreme Court denied transfer in a 3-2 vote.

Now the ISBA is turning to the Legislature. Jeffrey Dible, attorney with Frost Brown Todd LLC, echoed other estate attorneys when he advocated for passage of a bill that defines an attorney’s duties.

“I think it’s generally helpful because it says, unless some other agreement is in writing, the lawyer only owes a duty to the personal representative,” he said.

The case

The family of Dora Grace Lee in Madison sued Colussi after they discovered that one of the two personal representatives of the estate had embezzled nearly $250,000. In February 2009, the estate filed a complaint against the attorney, alleging that he had committed legal malpractice by failing to keep apprised of the estate’s assets and monitor their use.

Colussi filed a motion for summary judgment, arguing he had no duty to monitor the estate bank account. The trial court granted Colussi’s motion, but the estate appealed and the COA reversed and remanded for proceedings.

When the estate filed its opposition to the attorney’s motion, it offered the deposition testimony of attorney Thomas C. Bigley, Jr., who maintained Colossi breached the applicable standard of care by failing to control or monitor the estate checking account.

Bigley testified that the applicable standard of care requires an attorney for an estate to retain the estate’s checkbook. He said he would have monitored the paperwork that established the estate’s bank account more carefully than Colussi did, and he would have had the monthly statements sent to his office.

The trial court rejected Bigley’s testimony because it did not establish a uniform and accepted practice among attorneys. However, the COA held a uniform practice was not required and that through his testimony as an expert witness, Bigley did establish the standard of care.

Bigley is listed on the Indiana Supreme Court Roll of Attorneys as retired as of May 2012, and Colussi is listed as active in good standing. Neither have any concluded or pending discipline procedures.

In Dible’s opinion, the COA went further than it needed to when it found the standard of care dictates that lawyers should keep the checkbooks. He is not sure anybody subscribes to that belief. With online access and ATMs, having possession of the checkbook would not prevent the personal representative from getting into the bank account.

PD3188, recommended 11-1 by the commission, would amend Indiana Probate Code 29-1-10-20.

It is a short bill that defines an estate lawyer as representing and owing a duty only to the personal representative, unless a written agreement defines the attorney’s role otherwise. Key provisions in the bill note the lawyer has no duty to monitor or account for estate assets, unless directed by the court, and the attorney is not liable for any loss suffered by the estate, except to the extent the loss was caused by the estate lawyer’s breach of duty owed to the personal representative.

The legislation does not prohibit an attorney taking on more responsibility. Lawyers and personal representatives can still determine the scope of the duties and put the terms in a letter of engagement.

Sen. Joseph Zakas, R-Granger, vice chair of the commission, and Sen. Susan Glick, R-LaGrange, long-time member of the commission, were unavailable to comment on PD3188.

Kolb and Martin are optimistic the bill will be enacted. The draft has the approval of the legislative commission and it does not appear to have opposition.

Passage of the proposed statute will not solve all problems, Dible said. The bill clarifies duties in the absence of an agreement, but it is not going to stop an estate from suing for malpractice.

Martin agreed.

“Even though this law may be passed, the attorney still has an obligation to make sure the estate gets handled properly,” he said.•

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  1. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  2. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

  3. Hi there I really need help with getting my old divorce case back into court - I am still paying support on a 24 year old who has not been in school since age 16 - now living independent. My visitation with my 14 year old has never been modified; however, when convenient for her I can have him... I am paying past balance from over due support, yet earn several thousand dollars less. I would contact my original attorney but he basically molest me multiple times in Indy when I would visit.. Todd Woodmansee - I had just came out and had know idea what to do... I have heard he no longer practices. Please help1

  4. Yes diversity is so very important. With justice Rucker off ... the court is too white. Still too male. No Hispanic justice. No LGBT justice. And there are other checkboxes missing as well. This will not do. I say hold the seat until a physically handicapped Black Lesbian of Hispanic heritage and eastern religious creed with bipolar issues can be located. Perhaps an international search, with a preference for third world candidates, is indicated. A non English speaker would surely increase our diversity quotient!!!

  5. First, I want to thank Justice Rucker for his many years of public service, not just at the appellate court level for over 25 years, but also when he served the people of Lake County as a Deputy Prosecutor, City Attorney for Gary, IN, and in private practice in a smaller, highly diverse community with a history of serious economic challenges, ethnic tensions, and recently publicized but apparently long-standing environmental health risks to some of its poorest residents. Congratulations for having the dedication & courage to practice law in areas many in our state might have considered too dangerous or too poor at different points in time. It was also courageous to step into a prominent and highly visible position of public service & respect in the early 1990's, remaining in a position that left you open to state-wide public scrutiny (without any glitches) for over 25 years. Yes, Hoosiers of all backgrounds can take pride in your many years of public service. But people of color who watched your ascent to the highest levels of state government no doubt felt even more as you transcended some real & perhaps some perceived social, economic, academic and professional barriers. You were living proof that, with hard work, dedication & a spirit of public service, a person who shared their same skin tone or came from the same county they grew up in could achieve great success. At the same time, perhaps unknowingly, you helped fellow members of the judiciary, court staff, litigants and the public better understand that differences that are only skin-deep neither define nor limit a person's character, abilities or prospects in life. You also helped others appreciate that people of different races & backgrounds can live and work together peacefully & productively for the greater good of all. Those are truths that didn't have to be written down in court opinions. Anyone paying attention could see that truth lived out every day you devoted to public service. I believe you have been a "trailblazer" in Indiana's legal community and its judiciary. I also embrace your belief that society's needs can be better served when people in positions of governmental power reflect the many complexions of the population that they serve. Whether through greater understanding across the existing racial spectrum or through the removal of some real and some perceived color-based, hope-crushing barriers to life opportunities & success, movement toward a more reflective representation of the population being governed will lead to greater and uninterrupted respect for laws designed to protect all peoples' rights to life, liberty & the pursuit of happiness. Thanks again for a job well-done & for the inevitable positive impact your service has had - and will continue to have - on countless Hoosiers of all backgrounds & colors.

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