Blackwood, Langworthy & Tyson, LLC v. Knipp

• Decision Date: 22 January 2019
• Docket Number: WD 81006
• Citation: 571 S.W.3d 108
• Parties: BLACKWOOD, LANGWORTHY & TYSON, LLC, Appellant, v. Jon D. KNIPP, et al., Respondents.
• Court: Missouri Court of Appeals

571 S.W.3d 108

BLACKWOOD, LANGWORTHY & TYSON, LLC, Appellant,

v.Jon D. KNIPP, et al., Respondents.

WD 81006

Missouri Court of Appeals, Western District.

OPINION FILED: JANUARY 22, 2019 Motion for Rehearing and/or Transfer to Supreme Court Denied February 26, 2019

Bernard Francis Weinand, Kansas City, MO, Counsel for Appellant.

Hugh Lawrence Marshall, Kansas City, MO, Counsel for Respondents.

Before Division Three: Anthony Rex Gabbert, Presiding Judge, Alok Ahuja, Judge, Victor C. Howard, Judge

Anthony Rex Gabbert, Judge

Blackwood, Langworthy & Tyson, L.C. (Appellant) appeals the circuit court’s grant of judgment on the pleadings in favor of Jon D. Knipp and Linda Miller (Respondents collectively), thereby dismissing Appellant’s Petition for Accounting. Appellant asserts that the trial court erred in granting Respondents' motion because Appellant’s petition complied with all pleading requirements and stated a valid claim under Section 461.300,¹ Appellant had standing to bring the action, the action was brought in the proper forum, and Appellant had not waived its claims. We reverse.

Background

Walter Knipp was a resident of Jackson County, Missouri. He had three adult children, Jon Knipp, Robin Choudhury, and Linda Miller. In August 2008, Walter Knipp became the subject of a guardianship and conservatorship proceeding. Competing petitions were filed in the Probate Division of the Circuit Court of Jackson County seeking the appointment of a guardian and conservator, one filed by Jon Knipp and the other filed by Robin Choudhury. On May 5, 2009, Choudhury was appointed as guardian of the person and conservator of the estate of Walter Knipp, an incapacitated and disabled person, and letters of guardianship and conservatorship were issued to Choudhury on June 11, 2009.

Walter Knipp died testate June 8, 2011. On July 8, 2011, a decedent’s estate was opened in the Probate Division of the Circuit Court of Jackson County. Jon Knipp was thereafter granted Letters Testamentary in the decedent’s estate.

Shortly before Walter Knipp’s death it was discovered he owned certain financial assets that had not been included in the original inventory for his conservatorship. Those assets included U.S. Savings Bonds titled in Walter Knipp’s name with pay on death designations to certain of Walter Knipp’s children, U.S. Savings Bonds titled in Walter Knipp’s name jointly with certain of Walter Knipp’s children, stock certificates titled in Walter Knipp’s name jointly with his son, Jon Knipp, and certificates of deposit titled in Walter Knipp’s name jointly with his two daughters. In the first "annual settlement filing" filed after Walter Knipp’s death (spanning June 12, 2010 to April 5, 2012) Choudhury amended the conservatorship inventory to include these assets. The assets were never physically turned over to Choudhury.

On January 27, 2012, Appellant filed a claim against the decedent’s estate "for professional services rendered" in association with administration of decedent’s guardianship and conservatorship estate. Appellant represented Choudhury from August 12, 2008, to approximately February 21, 2012, in the guardianship proceeding.²

On August 24, 2012, Appellant filed in the decedent’s estate a demand for recovery of nonprobate assets, demanding pursuant to Section 461.300 that the personal representative, Jon Knipp, recover for the estate and creditors all recoverable transfers of decedent’s property sufficient to satisfy claims of creditors and expenses of administration of the probate estate. Appellant demanded, in the alternative, that the personal representative bring an action for accounting against the recipients of all property of decedent transferred other than from the administration of the decedent’s probate estate. Appellant also demanded that the personal representative provide knowledge related to the identity of recipients of recoverable transfers. Jon Knipp did not commence an action on behalf of the estate but filed a "Response" to Appellant’s demand addressing Appellant as "Claimant," not disputing Appellant’s right to make the demand under Section 461.300, and providing four and a half pages of information regarding the identity of alleged recipients of recoverable transfers and/or property belonging to and withheld from decedent’s estate.³

On December 6, 2012, Appellant filed a Petition for Accounting in the decedent’s estate against Respondents and Robin Choudhury alleging that these individuals possessed property owned by Walter Knipp immediately before his death, or were recipients of recoverable transfers of decedent’s property as defined in Section 461.300, and should be required to deliver those assets so that claims and expenses of administration of the conservatorship could be paid. Jon Knipp and Linda Miller filed answers in February of 2013 denying Appellant was entitled to relief, primarily arguing that Appellant inadequately performed its duties as attorney in the conservatorship and sought unreasonable fees for that service.

On December 6, 2012, Appellant also filed an Application for Allowance of Compensation to Attorneys for Guardian and Conservator ("Application") in the conservatorship, seeking $28,578.43, for the period from August 12, 2008 through February 21, 2012.

On March 29, 2013, Choudhury filed a Final Settlement and Revised Third Amended Inventory of Property in the conservatorship. The revised inventory continued to list the stock, insurance proceeds, savings bonds, and certificates of deposit as personal property of the estate. The Final Settlement also noted that causes of action against the recipients of those items were being pursued in the decedent’s estate.

On April 17, 2013, Jon Knipp filed Objections to Petition for Approval of Final Settlement, Final Settlement and Inventory. He objected, in part, to the inclusion of the stock, insurance proceedings, savings bonds, and certificates of deposit in the inventory of the conservatorship estate. Additionally, he objected to causes of action against the recipients of those items. Jon Knipp then resigned as personal representative of the decedent’s estate and on April 18, 2013, the court issued Letters of Administration De Bonis Non⁴ appointing Robin Choudhury personal representative de bonis non. On December 24, 2014, the court dismissed Jon Knipp’s objections, holding that Jon Knipp had no vested property interest in the decedent’s estate because the decedent’s will named the decedent’s wife as the sole beneficiary of his estate. The court determined that Jon Knipp, therefore, had no standing to object to the settlement of the conservatorship estate because he had no vested property interest in the decedent’s estate.⁵ The court further stated that, even if Jon Knipp had standing to object to the final settlement, "[t]he Objections seek to litigate title to various assets which Objector alleges belonged to persons other than Walter. Such claims are the proper subject of a discovery of assets proceeding in the Decedent’s Estate under § 473.340 RSMo., and may not be adjudicated via the procedure of ruling on objections to a final settlement."

On May 6, 2015, Appellant filed a Second Amended Application for Allowance of Compensation to Attorneys for Guardian and Conservator in the conservatorship. The probate court heard evidence on the Second Amended Application on August 27, 2015. On September 2, 2015, the court awarded Appellant’s requested total of $20,578.43, as a class 2 claim pursuant to Section 475.211.

On February 29, 2016, Choudhury filed an Amended Final Settlement in the conservatorship case. Among the cash distributions noted in the "Paidout/Credit" column in the spreadsheet attached to the Amended Final Settlement was an entry dated 12/28/2015 described as "Proportionate amount of Legal Fees Paid to Blackwood, Langworthy, & Tyson" (sic), in the amount of $3,912.04. Other credits listed in the same spreadsheet included various causes of action against Jon Knipp and Linda Miller for alleged wrongful disposition of assets noted as "Being Pursued in the Decedent’s Estate." (At the time of the final settlement, Choudhury was also personal representative of the decedent estate.) On March 7, 2016, Jon Knipp filed an objection to the Amended Final Settlement. The court issued a "Judgment Dismissing Objections to Amended Final Settlement" stating that nothing had changed since the court entered its Judgment regarding Jon Knipp’s earlier objections.

The circuit court entered judgment approving the conservator’s Amended Final Settlement on April 1, 2016, and entered an Order of Discharge on April 5, 2016, declaring "all assets have been distributed during the administration of the estate." The court further ordered "the conservator and the sureties on the conservator’s bond if any be hereby discharged."

On November 21, 2016, Respondents filed their Motion for Judgment on the Pleadings in the decedent’s estate to dispose of the issues raised by Appellant’s Petition for Accounting. They raised two grounds for dismissal: 1) that the remedy of "accounting" the Petition sought was not available under the statute, only a money judgment, and 2) there was no basis to pursue recoverable transfers for the payment of administrative expenses. Respondents' motion acknowledged Appellant claimed to be a "qualified claimant" of the deceased’s estate and did not challenge this claim.

Appellant responded with Suggestions in Opposition to Respondents' Motion for Judgment on the Pleadings. In a Reply in support of their motion, Respondents argued that Appellant was not a "creditor" of Walter Knipp or his decedent’s estate, but of Choudhury in her personal capacity or capacity as conservator, and she had been discharged from any liability as conservator.

The trial court granted Respondents' motion for judgment on the pleadings on June 30, 2017, ruling that the "primary argument of Movant is that Petitioner is not a creditor of the estate of Decedent, and...