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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. Applause, applause, applause ..... but, is this duty to serve the constitutional order not much more incumbent upon the State, whose only aim is to be pure and unadulterated justice, than defense counsel, who is also charged with gaining a result for a client? I agree both are responsible, but it seems to me that the government attorneys bear a burden much heavier than defense counsel .... "“I note, much as we did in Mechling v. State, 16 N.E.3d 1015 (Ind. Ct. App. 2014), trans. denied, that the attorneys representing the State and the defendant are both officers of the court and have a responsibility to correct any obvious errors at the time they are committed."

  2. Do I have to hire an attorney to get co-guardianship of my brother? My father has guardianship and my older sister was his co-guardian until this Dec 2014 when she passed and my father was me to go on as the co-guardian, but funds are limit and we need to get this process taken care of quickly as our fathers health isn't the greatest. So please advise me if there is anyway to do this our self or if it requires a lawyer? Thank you

  3. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  4. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  5. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

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