Redies v. Cosner

• Decision Date: 02 May 2002
• Docket Number: No. 00486., No. 00481
• Parties: Janet B. REDIES, Protected Person and Appellant, v. C.A. COSNER and Judy Uerling, Petitioners and Respondents.
• Court: Montana Supreme Court

48 P.3d 697

309 Mont. 315

2002 MT 86

Janet B. REDIES, Protected Person and Appellant, v. C.A. COSNER and Judy Uerling, Petitioners and Respondents.

Nos. 00481, 00486.

Supreme Court of Montana.

Submitted on Briefs March 29, 2001.

Decided May 2, 2002.

Rehearing Denied May 30, 2002.

For Appellant: Alexandra Volkerts, Andree Larose, Montana Advocacy Program, Missoula, Montana.

For Respondents: Lynn M. Grant, Peterson & Schofield, Billings, Montana (Conservator Cosner); John Addy, Billings, Montana (Conservatorship and Guardian Uerling).

For Amici: James P. Reynolds, Reynolds, Motl, Sherwood, Helena, Montana (AARP; ADAPT Montana; the Association of Disabled Students at the University of Montana (ADSUM); AWARE Group Homes (AWARE); the Brain Injury Association of Montana (BIA); the Coalition of Montanans Concerned with Disabilities (CMCD); the Montana Center for Disabilities (MCD); the Montana Mental Health Association (MHA); the Montana Senior Citizens Association (MSCA); NAMI — Montana Association for the Mentally Ill (NAMI-MT); People First; Parent's, Let's Unite for Children (PLUK); the State Independent Living Centers Council (SILC); Summit Independent Living Center (Summit); and the Western Montana Mental Health Center, Inc. (WMMHC)).

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 The Appellant, Janet Redies (Redies), appeals from two orders of the Thirteenth Judicial District Court, Yellowstone County, discharging the Respondents, her conservator, C.A. Cosner (Cosner), and her guardian, Judy Uerling (Uerling), without liability. We reverse.

¶ 2 We address the following issues on appeal as framed by this Court:

¶ 3 1. Did the District Court err in holding that the inventory requirement in § 72-5-424, MCA, is discretionary?

¶ 4 2. Did the District Court err in discharging the conservator and guardian without liability?

I. FACTUAL AND PROCEDURAL BACKGROUND

¶ 5 Prior to the events that gave rise to this conservatorship and guardianship, the parties in this case were involved in a different dispute. Rosalie Redies (Rosalie), the mother of Redies and Uerling, sold her real property in Billings and deposited the proceeds in an account which Redies and Uerling could both access. Upon discovering that Redies had withdrawn over $63,000 from this account without Rosalie's knowledge, Uerling withdrew the rest of the money so that neither Redies nor Rosalie could access it. Eventually, the parties reached an agreement by which Redies signed a note to repay Rosalie, the money withdrawn by Uerling was returned to Rosalie, and Cosner, a certified public accountant (CPA), was appointed conservator for Rosalie. This agreement was reached in September 1994. These events are relevant to explain how Cosner came to be conservator for both Rosalie and Redies and also serve as background for Redies' belief that Cosner and Uerling had conflicts of interest that prevented them from properly managing her affairs.

¶ 6 A few months later, the events that gave rise to this action occurred. Redies moved from Billings to Wyoming to start a new job. On or about May 29, 1995, Redies was in a bicycling accident which resulted in a temporary coma and traumatic brain injury. Redies was taken to St. Vincent's hospital in Billings for treatment. After two months had passed and realizing the severity of Redies' condition, her mother Rosalie and her sister Uerling petitioned the district court in Billings for appointment of a conservator and guardian. In September 1995, the court granted the petition and appointed Cosner as conservator and Uerling as guardian for Redies as requested in the petition.

¶ 7 Following their appointment, Cosner and Uerling met with Uerling's counsel and the counsel appointed for Redies by the court. At this meeting, the parties developed a management plan for Redies' estate. The overall goal of the plan was to "properly address Janet's needs and to conserve and properly manage her property." The parties addressed specific assets in Redies' estate and further agreed that the plan should "maximize the amount of Jan's wealth that is exempt from recapture by the government [Medicare] or the claims of creditors." However, because of Redies' existing debt which included mounting medical bills, because of the possibility of bankruptcy and because Cosner was conservator for Rosalie as well, the plan also sought to "maximize the amount of the combined family estate." Therefore, the plan also discussed the possibility of Rosalie revising her will to prevent any devise to Redies actually going to creditors or the government under the recapture provisions of the Medicare program. Shortly after this meeting, Cosner determined that while Redies had substantial assets which included 20 acres in Red Lodge, payments due from the sale of her former Billings restaurant Juliano's, and its liquor license, vehicles, and other assets, these assets would be quickly depleted by medical costs, since Redies did not have health insurance to cover her bicycle accident.

¶ 8 Cosner proceeded to manage Redies' property. This management consisted of selling real and personal property that was owned by Redies, paying debts owed by Redies, putting the remaining personal property in storage, and seeking settlement with the remaining creditors. Cosner successfully avoided bankruptcy and was able to negotiate forgiveness of approximately $123,000 in medical bills. After this was resolved, Uerling qualified Redies for Medicaid and Social Security Supplemental Security Income (SSI) coverage. At the same time that Cosner and Uerling addressed Redies' finances, Uerling arranged medical care for Redies. Eventually, Redies made a significant recovery.

¶ 9 In 1998, Redies began to question the need for a guardian because she believed she understood the "risks and benefits so as to make decisions in her best interest." She also began to question the disposition of her assets, since she was subsisting on SSI payments. Rather than contacting her court appointed counsel, she contacted new counsel in Missoula where she now resides. Through counsel, Redies sought details from Cosner regarding the management of her estate. She also retrieved her remaining personal property from Cosner. Over the next year, Cosner and Uerling attempted to answer Redies' questions through counsel. Each time Cosner and Uerling provided information, it gave rise to more detailed questions from Redies. The tone of correspondence eventually became completely adversarial.

¶ 10 As a consequence of this correspondence, Cosner and Uerling filed petitions to terminate their conservatorship and guardianship roles and a hearing was set. Redies sought to continue the hearing, but the District Court denied her motion. We note here that Redies asserts as a factual matter on appeal that she did not have enough time to prepare for the hearing, but does not argue on appeal that the District Court's denial of her motion for continuance was error. At the hearing, the parties each presented evidence, which largely consisted of the documentation produced as a result of their adversarial correspondence. In addition, Cosner submitted final accountings and Uerling submitted a final report. After the hearing, the District Court issued its Findings of Fact, Conclusions of Law, and Order (Order) which found that Redies' estate was fully and accurately accounted for and properly managed. Accordingly, the Order discharged Cosner without liability. This Order also stated that Redies still needed a guardian. Later, the District Court allowed a new guardian to be substituted for Uerling by stipulation of the parties. Based on the findings in its earlier Order, the court issued a Judgment that also discharged Uerling without liability. Redies filed separate appeals from the Order discharging Cosner and the Judgment discharging Uerling, which we consolidated into one appeal upon motion of the Respondents. Further facts are discussed below.

II. STANDARD OF REVIEW

¶ 11 We review a trial court's determinations of law de novo. In re Kovatch (1995), 271 Mont. 323, 326, 896 P.2d 444, 446

. We review a trial court's findings of fact to determine whether those findings are clearly erroneous. Kovatch, 271 Mont. at 326,

896 P.2d at 446. A finding of fact is clearly erroneous if substantial evidence does not support it, if the district court misapprehended the effect of the evidence, or, if after reviewing the record, this Court is left with a firm conviction that a mistake has been made. Eschenbacher v. Anderson, 2001 MT 206, ¶ 22, 306 Mont. 321, ¶ 22, 34 P.3d 87, ¶ 22 (citing Interstate Prod. Credit Ass'n v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287). However, we refined the clearly erroneous test when considering accountings submitted for conservatorships by holding that an accounting is clearly erroneous if it is not accurate, complete, and verifiable. In re Estate of Clark (1989), 237 Mont. 179, 184, 772 P.2d 299, 302.

III. DISCUSSION

¶ 12 1. Did the District Court err in holding that the inventory requirement in § 72-5-424, MCA, is discretionary?

¶ 13 Redies first argues that, as a matter of law, the District Court erred in waiving the inventory requirement in § 72-5-424(1), MCA, because the statute is mandatory. Section 72-5-424(1), MCA, reads:

Within 90 days after his appointment, every conservator shall prepare and file with the appointing court a complete inventory of the estate of the protected person, together with his oath or affirmation that it is complete and accurate so far as he is informed. The conservator shall provide a copy thereof to the protected person if he can be located, has attained the age of 14 years, and has sufficient mental capacity to understand these matters and to any parent or guardian with whom the protected person resides. (emphasis added)

Redies also argues that the District Court erred in waiving the inventory requirement by virtue of it...