In the Matter of The Conservatorship of J.R., No. DA 10–0256.

• Docket Nº: No. DA 10–0256.
• Citation: 360 Mont. 30, 252 P.3d 163, 2011 MT 62
• Case Date: April 05, 2011
• Court: United States State Supreme Court of Montana

360 Mont. 30
252 P.3d 163
2011 MT 62

In the Matter of the CONSERVATORSHIP OF J.R., a Protected Person.

No. DA 10–0256.

Supreme Court of Montana.

Submitted on Briefs Jan. 20, 2011.Decided April 5, 2011.

[252 P.3d 166]

For Appellant: Janet Hetherwick Pumphrey, Attorney at Law, Lenox, Massachusetts, Joey Jayne, Joey Jayne Law Office, Arlee, Montana.For Appellee: Jacqueline T. Lenmark, Thomas Q. Johnson, Keller, Reynolds, Drake, Johnson & Gillespie, P.C., Helena, Montana.Justice JAMES C. NELSON delivered the Opinion of the Court.

[360 Mont. 31] ¶ 1 J.R. appeals an order of the District Court for the First Judicial District, Lewis and Clark County, dismissing his claims against his conservator for negligence and for breach of fiduciary duty. We affirm.

¶ 2 J.R. raises four issues which we have restated as follows:

¶ 3 1. Whether the District Court erred in dismissing J.R.'s claims of breach of fiduciary duty and negligence because J.R. did not offer expert testimony.

¶ 4 2. Whether the District Court's ultimate finding that the conservator appropriately managed J.R.'s assets and estate was erroneous.

¶ 5 3. Whether the District Court erred in discharging the conservator [360 Mont. 32] without liability.

¶ 6 4. Whether the District Court abused its discretion in ordering payment of the conservator's attorney's fees from the conservatorship's assets.

Factual and Procedural Background

¶ 7 In May 2006, at the time the conservatorship proceedings in this case began, J.R. was 78 years old. He has five children and three step-children. His wife passed away in 2003. J.R.'s daughter Marsha initiated this action when she petitioned the District Court for appointment of a conservator for J.R. She stated in her petition that a conservator was necessary for J.R.'s protection because he suffers from severe short-term memory loss and has been diagnosed as suffering from early Alzheimer's disease. She further stated that J.R. is no longer capable of understanding his bank or financial statements; that significant funds owned by him have disappeared; and that he is extremely vulnerable to the demands and influences of others.

¶ 8 The District Court scheduled a hearing on Marsha's petition for September 26, 2006. However, shortly before the hearing date, J.R.'s daughter Robin, who opposed the conservatorship action, removed J.R. from Helena and took him to live with her in Massachusetts. Neither J.R. nor Robin notified J.R.'s counsel of J.R.'s move.

¶ 9 The parties eventually stipulated to a limited conservatorship, and the District Court appointed the first conservator, Cindy Nickol of Capital City Case Management, on November 24, 2006. In March 2007, Nickol filed an Inventory of Conservator showing that the value of J.R.'s assets at that time was more than $290,000. These assets included the condominium in Helena where

[252 P.3d 167]

J.R. had lived for many years, an investment account with D.A. Davidson & Co., and a checking account at Mountain West Bank. Not included in this valuation were any of J.R.'s personal belongings such as the antiques and art work that he and his wife had collected over the years.

¶ 10 In June 2007, Nickol requested that the court terminate her appointment as conservator because of persistent family interference with the performance of her duties and efforts by various family members to undermine the conservatorship. A hearing on a petition to amend the conservatorship was held on August 17, 2007. Thereafter, the court issued an order allowing Nickol to withdraw as conservator. In her place, the court appointed Joseph Shevlin, a Helena CPA, to act as successor conservator for J.R.

¶ 11 In its October 3, 2007 Order appointing Shevlin, the court stated: [360 Mont. 33] “Shevlin shall have all powers granted under law to act as conservator, specifically, but not limited to, those powers set forth in [§§ ] 72–5–427 and –428, MCA.” The court also authorized Shevlin to sell J.R.'s Helena condo and to expend whatever monies were necessary for J.R.'s direct care. The court prohibited Shevlin from providing any money to J.R.'s family members “unless it is for reimbursement for the direct care of [J.R.].”

¶ 12 During his conservatorship, Shevlin arranged for the sale of J.R.'s condo and oversaw the packing and shipping of much of J.R.'s personal property to J.R. in Massachusetts. However, many of the problems that had plagued Nickol throughout her term as conservator persisted throughout Shevlin's conservatorship. Other relevant facts regarding these and other problems with the conservatorship will be set out more fully where necessary in our discussion of the issues presented.

¶ 13 On June 16, 2009, several of J.R.'s family members, including daughters Robin and Cheryl, J.R.'s brother William and his sister Betty, filed as “Interested Persons” a Petition for Orders Subsequent to Appointment. The petitioners asked the court to transfer the conservatorship to Massachusetts, to implement a trust and long-term-care plan recommended by J.R.'s Massachusetts legal counsel, and to order that Shevlin's conservatorship fees and attorney's fees be returned to J.R. because of Shevlin's failure to properly perform his fiduciary duties. In his response to the petition, Shevlin requested that the court enjoin petitioners from interfering with the performance of his duties. Shevlin also sought clarification from the court regarding portions of its prior order naming him as conservator. The petitioners subsequently amended their petition adding claims of negligence and breach of fiduciary duty against Shevlin.

¶ 14 On October 19, 2009, J.R. filed a Motion for the Removal of Conservator and Termination of the Conservatorship alleging deficiencies in Shevlin's performance as conservator. In addition, J.R. pointed out that his assets are dwindling rapidly because of the multiple parties involved in maintaining a long-distance conservatorship.

¶ 15 These matters were heard by the District Court over three days, February 16, 2010, March 9, 2010, and March 10, 2010. On April 27, 2010, the court entered its Findings of Fact, Conclusions of Law and Order wherein the court removed Shevlin as conservator; appointed J.R.'s brother William as successor conservator; approved Shevlin's accountings; approved the sale of J.R.'s condo; dismissed with prejudice the claims of breach of fiduciary duty and negligence brought [360 Mont. 34] by the petitioners against Shevlin; and ordered payment from the conservatorship's assets of Shevlin's attorney's fees incurred in defending this action. The order further provided that the successor conservator could petition the court for transfer of the conservatorship to Massachusetts.

¶ 16 J.R. now appeals the District Court's decision.

Standard of Review

¶ 17 We review a district court's findings of fact to determine whether those findings are clearly erroneous. In re Estate of Berthot, 2002 MT 277, ¶ 21, 312 Mont. 366, 59 P.3d 1080 (citing In re Eggebrecht, 2000 MT 189, ¶ 18, 300 Mont. 409, 4 P.3d 1207; In re Estate of Bolinger, 1998 MT 303, ¶ 29, 292 Mont. 97, 971 P.2d 767). We review a district

[252 P.3d 168]

court's conclusions of law to determine whether that court's interpretation of the law is correct. Berthot, ¶ 21.

Issue 1.

¶ 18 Whether the District Court erred in dismissing J.R.'s claims of breach of fiduciary duty and negligence because J.R. did not offer expert testimony.

¶ 19 The District Court dismissed J.R.'s claims of breach of fiduciary duty and negligence against Shevlin because J.R. did not provide expert testimony to establish the standard of care, whether that standard was breached, and whether any such breach caused the injury and damages about which J.R. complained. J.R. argues on appeal that this was error because expert testimony is not required to prove breach of a fiduciary duty; it is only required to prove professional negligence such as in cases of medical malpractice.

¶ 20 Shevlin argues on the other hand that it was necessary for J.R. to present expert testimony because Shevlin, as a CPA, is held to a higher standard of care than an ordinary person and expert testimony is necessary to establish that standard and any breach of that standard. Shevlin further argues that the standard of care may not be inferred, it must be established by expert testimony.

¶ 21 Section 72–5–423, MCA, provides that in the exercise of the conservator's powers, the conservator is to act as a fiduciary and observe the standards of care applicable to trustees as specified in Title 72, chapter 34, part 1. More specifically, under § 72–34–114, MCA, a trustee is charged with the duty of administering the trust “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person would use to accomplish the purposes [360 Mont. 35] of the trust as determined from the trust instrument.” In addition, if a trustee has special skills, then the trustee “is held to the standard of the skills represented.” Section 72–34–115, MCA; Redies v. Cosner, 2002 MT 86, ¶ 37, 309 Mont. 315, 48 P.3d 697. Thus, based on §§ 72–5–423 and 72–34–115, MCA, a conservator with special skills also must be held to the standard of the skills represented. See In re Guardianship of Saylor, 2005 MT 236, ¶ 14, 328 Mont. 415, 121 P.3d 532 (“Conservators are thus under the same duties as trustees.”).

¶ 22 In addition, this Court noted the following regarding “special skills”:

“Professional persons in general, and those who undertake any work calling for special skill, are required not only to exercise reasonable care in what they do, but also to possess a standard minimum of special knowledge and ability. Most of the decided cases have dealt with surgeons and other doctors, but the same is undoubtedly true of dentists, pharmacists, psychiatrists, veterinarians, lawyers, architects and engineers, accountants, abstractors of title, and many other professions and skilled trades.” [Emphasis added.]

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