In re Guardianship of Thomas, 2008 Ohio 2409 (Ohio App. 5/12/2008)
| Decision Date | 12 May 2008 |
| Docket Number | No. 06 MO 7.,No. 06 MO 8.,06 MO 7.,06 MO 8. |
| Citation | 2008 Ohio 2409 |
| Parties | In re: Guardianship of Adrienne Thomas. In re: Guardianship of Kerri Jo Thomas. |
| Court | Ohio Court of Appeals |
Atty. Jonathan M. Bryan, McNamara & McNamara, LLP, 88 East Broad Street, Suite 1250, Columbus, Ohio 43215, for Ohio Casualty Insurance Co.
Atty. H. Ritchey Hollenbaugh, Atty. Emily A. Smith, Carlile, Patchen & Murphy, LLP, 366 East Broad Street, Columbus, Ohio 43215, for First Investors Corp.
Atty. James W. Peters, 107 West Court Street, Woodsfield, Ohio 43793, for Adrienne & Kerri Jo Thomas.
Before: Hon. Cheryl L. Waite, Hon. Joseph J. Vukovich, Hon. Mary DeGenaro.
{¶ 1} This appeal involves questions of financial misconduct of the guardian of two minor children, as well as the liability of the guardian's bond company and the institution where the guardianship funds were deposited. The two wards are Adrienne Thomas (d.o.b. 7/21/86) and Kerri Jo Thomas (d.o.b. 5/18/91). The need for the guardianships arose when their mother, Susan Thomas, was killed in a car accident. The two children were in the vehicle at the time and were both severely injured. Appellant John R. Thomas ("Mr. Thomas"), Susan's surviving spouse and father of the two girls, was appointed as the legal guardian. The girls received uninsured motorists benefits arising from the accident, and this money was placed into sequestered accounts by the probate court. The girls later received wrongful death benefits that were put into the same sequestered accounts. Mr. Thomas withdrew various amounts from those accounts without receiving court approval and without accounting for the withdrawals. He was removed as guardian, and a successor guardian, Appellee James W. Peters, was appointed. After lengthy proceedings, the Monroe County Court of Common Pleas, Probate Division, found Mr. Thomas liable for over $67,000 in mismanaged funds in the two guardianships, and further ordered the bonding company, Appellant Ohio Casualty Insurance Company ("Ohio Casualty"), to pay the judgment after 21 days. The court also found that the bank where the funds were held, Appellant First Investors Corporation ("First Investors"), was jointly liable because it allowed the funds to be withdrawn without a court order. Mr. Thomas, Ohio Casualty, and First Investors all filed appeals.
{¶ 2} One of the preliminary questions in this complex appeal is whether the probate court obtained jurisdiction over First Investors. The record reflects that First Investors submitted itself to the jurisdiction of the court by signing a court-ordered verification when it accepted the initial deposits, and it appears that notice of subsequent court proceedings was made on various corporate offices of the bank. Our review of the record reflects that the probate court did have jurisdiction to find First Investors liable for improperly releasing funds from the guardianship accounts.
{¶ 3} An additional fundamental question on appeal is whether the probate court had any jurisdiction in this matter over the funds held for Adrienne Thomas once she reached her 18th birthday. A recent ruling of the Ohio Supreme Court, however, makes it clear that a probate court retains limited jurisdiction for consideration and settlement of a guardian's final account after the ward has reached the age of majority. See In re Guardianship of Hollins, 114 Ohio St.3d 434, 2007-Ohio-4555, 872 N.E.2d1214. Therefore, the probate court in the instant case had proper jurisdiction to resolve the wide variety of issues surrounding the final accounting process in Adrienne's guardianship even after Adrienne had reached her majority.
{¶ 4} While all of the Appellants claim that someone else is liable for the losses to the guardianship estates, pursuant to R.C. 2109.13, the depository bank is liable for releasing funds from a sequestered account without obtaining prior court authorization. The guardian loses its immunity from liability by not acting in good faith. The probate court made what appears to be a finding of a lack of good faith. Thus, the depository bank, the guardian, and the guardian's bonding company are all liable for losses to the guardianship estates and this matter must be affirmed.
{¶ 5} On September 19, 1998, Susan M. Thomas, mother of Adrienne and Kerri Jo and wife of John R. Thomas, was killed in an automobile accident near Malaga, Ohio. Her automobile was struck by a stolen vehicle driven by an uninsured motorist. Adrienne and Kerri Jo were in the car during the accident, and they both suffered serious injuries. Adrienne was 12 years old at the time, and Kerri Jo was 7. Susan and the girls had uninsured motorists coverage under a policy issued by State Farm Insurance Company.
{¶ 6} Mr. Thomas was named the personal representative of his wife's probate estate. The estate was filed in Monroe County Court of Common Pleas, Probate Division, Case No. 8264.
{¶ 7} On October 19, 1999, Mr. Thomas was appointed as legal guardian for both girls in the Monroe County Court of Common Pleas, Probate Division, under Case Nos. 1999GDM8303 and 1999GDM8304.
{¶ 8} On November 24, 1999, State Farm issued checks for UM benefits in the amounts of $100,000 to Adrienne and $27,000 in UM benefits to Kerri Jo. On December 29, 1999, State Farm approved a settlement for those amounts, disposing of the UM claims of the two girls, and the funds were immediately deposited in two separate accounts with First Investors. These were sequestered accounts in lieu of bond pursuant to R.C. 2109.13, opened in the name of the wards and with the funds to be released to the wards at age 18. An officer of the bank, Mr. Timothy D. Black signed "Verification of Receipt and Deposit" forms for each deposit. These forms were modeled after the standard probate form found in Sup.R. 51, Form 22.3.
{¶ 9} The verification forms stated: "By accepting said deposit for said minor, this institution agrees that said deposit, together with accumulated interest, shall be held and no part thereof released until minor attains the age of majority or upon further order of this Court." When this type of language is used to deposit funds, the accounts are referred to as "impounded accounts" or "sequestered accounts." The verification forms were captioned with the name of the Probate Court of Monroe County, and the probate guardianship case numbers were listed on the forms. There is no indication that First Investors considered or could consider the initial deposits as anything other than sequestered account funds.
{¶ 10} Mr. Thomas, as guardian, posted bonds of $200,000 and $54,000, respectively, in the two guardianship cases.
{¶ 11} On December 23, 1999, Mr. Thomas (as personal representative of the estate of Susan Thomas) initiated wrongful death proceedings in Monroe County, Case No. 8264. In the wrongful death action, State Farm proposed a settlement of $103,000 in UM benefits. The probate court and Mr. Thomas (as personal representative) approved the settlement on February 8, 2000, and further proceedings were held to divide the proceeds among various beneficiaries. It was determined that $11,000 would be allocated as expenses and attorney fees, $12,000 would go to Jennifer Majors (an emancipated daughter of the Thomas'), and $40,000 each was ordered to Adrienne and Kerri Jo, payable at the time to their guardian. None of the settlement was ordered for the benefit of Mr. Thomas. Mr. Thomas signed an approval of the settlement on February 28, 2000, and signed the distribution order on March 10, 2000. The report of distribution was accepted by the court on March 31, 2000.
{¶ 12} Mr. Thomas received the two checks on behalf of his daughters for $40,000 each from State Farm and deposited these funds with First Investors. The funds were deposited in the sequestered accounts previously set up for the wards. There is no evidence that the bank was required to sign additional verification forms in order to accept these two deposits into the sequestered accounts.
{¶ 13} The two sequestered accounts at First Investors were mutual fund accounts in which the deposits were actually used to purchase shares of the mutual fund. It does not appear that any separate bookkeeping was maintained to keep the initial deposits, which were sequestered funds, separate from the later $40,000 deposits, which were not separately ordered to be sequestered but which were nevertheless deposited into sequestered accounts. The total principal deposit for Kerri Jo was $67,000. Adrienne's total was $140,000.
{¶ 14} Mr. Thomas failed to list the two $40,000 deposits from the wrongful death action in his inventory of the guardianship estates, so on March 24, 2000, the probate court ordered the $40,000 proceeds to be listed in each inventory by interlineation.
{¶ 15} On January 18, 2002, Mr. Thomas filed two accounts showing the initial deposits of $27,000 and $100,000, and including the interest earned on those amounts, but failing to list or account for the later $40,000 deposits. The probate accounts did not mention any withdrawals, expenditures or distributions.
{¶ 16} On May 3, 2004, Mr. Thomas filed two more probate accounts which again failed to mention the $40,000 deposits. The account for Kerri Jo listed $17,000 in redemption withdrawals, and Adrienne's account listed $32,000 in redemption withdrawals. Importantly, there were no court orders approving any withdrawals from either sequestered account up to this time.
{¶ 17} On August 5, 2004, the court ordered Mr. Thomas to provide receipts for the withdrawals he had made from the accounts. On August 23, 2004,...
To continue reading
Request your trial