Lyneis v. Brody (In re Brody)

321 Mich.App. 332

909 N.W.2d 849

IN RE CONSERVATORSHIP OF Rhea BRODY.

Mary Lyneis, as Conservator for Rhea Brody, Appellee,

v.Robert D. Brody, Appellant,andJay Brody, Interested Party,

and

Gerald Brody and Cathy B. Deutchman, Interested Parties–Appellees.

No. 332994

Court of Appeals of Michigan.

Submitted September 6, 2017, at Detroit.

Decided September 19, 2017, 9:00 a.m.

Hertz Schram PC (by Kenneth F. Silver and Daniel W. Rucker ) for Mary Lyneis and Cathy B. Deutchman.

Giarmarco, Mullins & Horton, PC (by William H. Horton and Christopher J. Ryan ) for Robert Brody.

Before: O'Brien, P.J., and Jansen and Murray, JJ.

Per Curiam.

In this estate case involving Rhea Brody's personal assets, Rhea's husband—appellant Robert Brody—appeals as of right the probate court's order appointing Mary Lyneis as Rhea's conservator. Rhea and Robert's daughter, Cathy B. Deutchman, filed the petition for conservatorship, which was opposed by Robert and Jay Brody, the son of Robert and Rhea. We affirm.

I. APPOINTMENT OF A CONSERVATOR

Robert argues on appeal that the probate court abused its discretion by appointing a conservator to manage Rhea's estate and affairs under MCL 700.5401. We disagree.

This Court reviews for an abuse of discretion a probate court's appointment of a conservator.

In re Bittner Conservatorship , 312 Mich.App. 227, 235, 879 N.W.2d 269 (2015). "An abuse of discretion occurs when the court's decision falls outside the range of reasonable and principled outcomes." Id . This Court reviews for clear error the probate court's factual findings and reviews de novo its legal conclusions. Id. at 235–236, 879 N.W.2d 269. "A finding is clearly erroneous when a reviewing court is left with a definite and firm conviction that a mistake has been made, even if there is evidence to support the finding." In re Townsend Conservatorship , 293 Mich.App. 182, 186, 809 N.W.2d 424 (2011) (quotation marks and citation omitted). "The reviewing court will defer to the probate court on matters of credibility, and will give broad deference to findings made by the probate court because of its unique vantage point regarding witnesses, their testimony, and other influencing factors not readily available to the reviewing court." In re Erickson Estate , 202 Mich.App. 329, 331, 508 N.W.2d 181 (1993).

Article V of the Estates and Protected Individuals Code (EPIC), MCL 700.5101 et seq ., provides protection for individuals under disability. The standards governing conservatorship appointments are described in MCL 700.5401, which, in relevant part, provides:

(3) The court may appoint a conservator or make another protective order in relation to an individual's estate and affairs if the court determines both of the following:

(a) The individual is unable to manage property and business affairs effectively for reasons such as mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power, or disappearance.

(b) The individual has property that will be wasted or dissipated unless proper management is provided, or money is needed for the individual's support, care, and welfare or for those entitled to the individual's support, and that protection is necessary to obtain or provide money.

These prerequisites must be established by clear and convincing evidence. MCL 700.5406(7). "The clear-and-convincing-evidence standard is ‘the most demanding standard applied in civil cases ....’ " Bittner , 312 Mich.App. at 237, 879 N.W.2d 269, quoting In re Martin , 450 Mich. 204, 227, 538 N.W.2d 399 (1995). Clear and convincing proof

produce[s] in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established, evidence so clear, direct and weighty and convincing as to enable [the factfinder] to come to a clear conviction, without hesitancy, of the truth of the precise facts in issue. [ Martin , 450 Mich. at 227, 538 N.W.2d 399 (quotation marks and citations omitted; alterations in original).]

Robert does not dispute that MCL 700.5401(3)(a) is satisfied given that Rhea's frontotemporal dementia renders her unable to manage her property or business affairs effectively. On appeal, Robert argues only that the probate court clearly erred by concluding that Rhea "has property that will be wasted or dissipated unless proper management is provided...." We hold that the probate court did not clearly err when it found that Rhea had property that would be wasted or dissipated without proper protection and oversight, and it did not abuse its discretion when it appointed a conservator to oversee Rhea's estate.

The probate court thoughtfully considered Rhea's circumstances and the nature of each of the assets in Rhea's personal estate—composed of a Fifth Third bank account for tax refunds, an individual retirement account (IRA), a jointly held Chase Bank account, and jointly owned homes in Michigan and Florida—before concluding that the requirements of MCL 700.5401(3) had been established by clear and convincing evidence. The Fifth Third bank account, containing only $580.60 at the time of the hearing, existed for depositing tax refunds. Lyneis testified that, as the special conservator temporarily appointed during the pendency of the conservatorship proceedings, she was responsible for reviewing Rhea's personal tax return and paying any tax liabilities, which included taxes associated with Rhea's potentially substantial income from the Rhea Brody Living Trust (the Rhea Trust). Rhea risked negative tax consequences if she failed to file her signed return and pay any liabilities. While the probate proceedings were ongoing, Jay completed Rhea's tax return but refused to provide it to Lyneis for review. Without the ability to review Rhea's tax return, Lyneis was unable to verify whether any refund was properly deposited into the Fifth Third account. Accordingly, assets involving tax liabilities and refunds, including the Fifth Third account dealing with refunds, risked waste or dissipation without proper management.

The probate court noted that Rhea's IRA required an election of annual distributions. The probate court also noted that with no one in place to authorize mandatory distributions, Rhea's IRA would be subject to tax penalties, which created a risk of waste and dissipation of the IRA funds. Robert argues that the probate court could not have found the IRA subject to waste or dissipation as a result of tax penalties because distributions from the IRA had been occurring automatically for years, and Rhea's IRA requires "minimal involvement." Respondent fails to explain how the fact that an asset requires only minimal oversight renders the asset less likely to fall victim to waste or dissipation. Further, Robert's argument is not supported by the record. Although Lyneis testified that Rhea’s annual IRA distribution was deposited into the Rhea Trust for 2015, there was no evidence regarding annual distributions, automatic or otherwise, before 2015. Further, there is no evidence that appropriate distributions are guaranteed to occur absent intervention.

Rhea shares an interest in two homes, one in Michigan and one in Florida, with her husband Robert. The two also share a Chase Bank account, which is used to fund payments on the Florida home. The Brody family bookkeeper, Bonnie Dellinger, testified that she had actively requested that funds be transferred from the Rhea Trust account to the Chase Bank account in order to satisfy mortgage payments on the Florida home. Because the Florida home is not regularly used, it is particularly susceptible to waste. Rhea herself is incapable of traveling to the Florida home. The probate court reasoned that without management of the Florida home’s mortgage payments or oversight of each home’s maintenance, both the Michigan home and the Florida home risked waste or dissipation.

Robert suggests that it was improper for the probate court to consider joint assets when evaluating the risk of waste or dissipation because a conservator would be unable to change the nature of jointly owned property. Robert cites for authority our Supreme Court's 1988 opinion in In re Wright Estate , 430 Mich. 463, 469–470, 424 N.W.2d 268 (1988), wherein the Court held that while "a conservator has the power to collect, hold, and retain assets of the estate, he may not change the nature of joint accounts created by the disabled adult before the adult was declared incompetent." (Quotation marks, citations, and brackets omitted.) Robert misinterprets the Court's holding in that case. Although Wright precludes a conservator from changing the nature of joint accounts after the conservator's appointment, the case does not limit a conservator's power to manage the accounts. Similarly, the Wright case does not preclude a probate court from considering the joint assets at the conservatorship hearing. See id. Under MCL 700.5419, "[a]ppointment of a conservator vests in the conservator title as trustee to all of the protected individual's property ... held at the time of or acquired after the order...." (Emphasis added.) The probate court did not err when it considered whether the jointly held assets would be subject to waste or dissipation for purposes of MCL 700.5401(3)(b).¹

Dellinger testified that she stopped managing payments for Rhea's expenses in January 2016 when Lyneis was appointed special conservator. Dellinger was concerned that without a conservator, Rhea's expenditures would not receive continued oversight. The probate court agreed, stating, "If no one is making decisions, it is a certainty, frankly, that property will be wasted or dissipated." Given these facts, the probate court did not clearly err by concluding that, because Rhea's is unable to manage her property and business affairs, Rhea's property would be wasted without proper management.

Robert also argues that the probate court erred by appointing a conservator to act on behalf...