Opinion
No. 88-2133
Submitted January 10, 1990
Decided April 18, 1990.
Guardians — Ward cannot bind her guardianship estate to obligations based upon contract, unless ratified — Debt arising out of services of an attorney to a ward — Probate court to determine what constitutes a necessary service — Termination of guardianship — Three-part test to determine if payment of attorney fees from guardianship estate is merited.
O.Jur 3d Guardian and Ward §§ 76, 91, 96, 193.
1. A ward cannot bind her guardianship estate to obligations based upon contract, unless ratified by the guardian.
2. Any debt arising out of the services of an attorney to a ward is in the nature of necessities, and it is for the probate court to determine what constitutes a necessary service.
3. In an action to terminate a guardianship, the probate court should applya three-part test to determine if payment of attorney fees from the guardianship estate is merited: whether the attorney acted in good faith, whether the services performed were in the nature of necessities, and whether the attorney's actions benefited the guardianship. ( In re Guardianship of Wolfe [P.C. 1938], 29 Ohio Law Abs. 184, 14 O.O. 525, 1 Ohio Supp. 372, approved.)
APPEAL from the Court of Appeals for Pickaway County, Nos. 87 CA 24 and 87 CA 34.
On September 23, 1985, attorney Charles W. Wilburn filed application to be appointed as guardian of the estate of Bernice A. Allen. At the time this application was filed, Allen was legally blind and extremely hard of hearing. Allen gave her consent to the appointment of a guardian of her estate in an open court proceeding.
At a September 26, 1985 hearing to consider Wilburn's application, Allen declared her desire to have Wilburn, her personal attorney for a number of years, act as manager of her business affairs. Based upon Allen's wishes and upon her physical infirmities, Wilburn was appointed guardian of Allen's estate.
The court allowed Allen to maintain a checking account for the direct deposit of Allen's teacher retirement and Social Security checks totaling approximately $650 per month. A guardian's Inventory, filed on December 16, 1985 by Wilburn, indicated that the real and personal property of Allen's estate was worth $461,980.87.
On March 25, 1986, Allen's counsel, James Barrington, filed an Application to Set Aside the Guardianship or Alternatively to Appoint a New Guardian. After a May 22, 1986 hearing, Allen withdrew this motion.
Newly revised R.C. 2111.01 et seq. (Sub. S.B. No. 46) governs situations such as that occurring in this case, if the guardianship or conservatorship is established after January 1, 1990.
Allen filed a second motion to terminate through her new attorneys, Stuart Benis and James Kingsley. A number of witnesses, including the ward, Allen, testified at a hearing held on July 23, 1987 to consider this second motion to terminate. In fact, at one point during this hearing, Allen stood up from her seat at counsel table and left the courtroom.
Dr. Robert A. Liggert, an optometrist, had testified as an expert at the first hearing that his May 13, 1986 examination of Allen indicated that she was legally blind. At the July 23, 1987 hearing, Liggert stated that he had again examined Allen on July 10, 1987 and discovered that her vision had worsened since the May 1986 examination. In fact, Liggert concluded that Allen's vision would not improve as she grew older, and that Allen's medical condition mandated that a guardian assist in her business affairs.
Dr. Jack D. Stewart, Allen's personal physician, had testified as an expert at the first hearing that he believed Allen needed a guardian, based on his March 21, 1986 conversation with her. Stewart had found Allen to have lapses in memory and a short attention span, both of which he stated would worsen with time. Stewart averred that on the March 21, 1986 visit, Allen expressed a desire for a guardian, but never mentioned that the court had already appointed one for her. At the second hearing, Stewart confirmed his testimony from the first hearing and again concluded that Allen needed help in conducting her business affairs.
While Allen was on the stand at the second termination hearing, she appeared at times to be confused. It was apparent from her testimony that Allen remained unaware that Charles Wilburn was the guardian of her estate. She had also exhibited this unawareness at the first termination hearing. Allen conceded that she had tried to cash a coupon to purchase luggage, believing it to be a check, at the Savings Bank of Circleville, Ohio. Connie Campbell, assistant vice-president of the bank, confirmed this testimony and stated that Allen had tried on other occasions to cash non-negotiable instruments.
Allen was unable to identify James Kerr, who claimed he was Allen's relative and that he visited Allen most weekends for about a year preceding the second hearing. Further, Allen identified Campbell as a distant relative, although Campbell was not related to Allen.
During this hearing, attorneys Kingsley and Benis attempted to have the deposition of Dr. Robert L. Turton, D.O., who had examined Allen, admitted into the record. In the course of arguments over the admissibility of this deposition, Allen's counsel admitted that Turton had no opinion regarding Allen's need for a guardian. Since one of the principal purposes of the second hearing was to determine the necessity of continuing the guardianship, Turton's deposition was ruled to be irrelevant and thus inadmissible under Evid. R. 401. Allen's counsel chose not to proffer Turton's deposition to preserve it on the record for appeal.
Based on the evidence presented regarding Allen's continuing inability to care for her business and legal affairs, the trial court, on July 24, 1987, overruled the second motion to terminate.
On August 14, 1987, the trial court held a hearing to consider the application of the guardian for attorney fees for Charles W. Wilburn and Bernard P. Wilburn, and to consider the application of Allen for payment of fees to her attorneys, James R. Kingsley and Stuart Benis, and for funds to prosecute an appeal. The court granted fees to Charles and Bernard Wilburn and to James Kingsley after presentation of itemized statements for services coupled with their testimony at trial. The trial court denied Benis any fees for his role in pursuing the second motion to terminate, based upon Benis's failure to present itemized expenses and to appear at the hearing for fees. The application for funds to pursue an appeal was denied.
On October 1, 1987, Allen filed an application with the trial court for additional funds of the guardianship estate to be released to pay Benis's fees and expenses that the trial court had denied in August 1987, Deciding the matter on briefs alone, the trial court, on November 5, 1987, again denied Allen's request for additional funds.
The Court of Appeals for Pickaway County consolidated the two appeals taken by the ward, Allen, from the trial court's judgments of July 24 and November 5 and reversed the trial court's ruling on the payment of attorney fees, remanding to the trial court for judgment in favor of Allen on her "contracts" for fees and expenses. The court of appeals premised this ruling on the theory that Allen was merely under guardianship of her estate as opposed to her person. The court of appeals held that Allen was thus competent to make contracts and to obligate her estate. Thus her guardian was obligated to pay those debts.
The court of appeals affirmed the trial court's ruling that Allen had failed to demonstrate that she was better able to take care of her property at the time of the termination hearing than at the time the guardian was appointed. The appellate court thus affirmed a continuing guardianship of Allen's estate and retained Wilburn as Allen's guardian.
The cause is now before this court upon the allowance of a motion and cross-motion to certify the record.
James R. Kingsley, for appellee and cross-appellant.
Bernard P. Wilburn, for appellant and cross-appellee.
Shane Egan, urging reversal on cross-appeal, for amicus curiae Ohio Legal Rights Service.
This case presents us with two questions. Appellant and cross-appellee Charles Wilburn asks this court to deny Benis attorney fees and expenses for challenging a guardianship, absent a finding of good faith, and a necessary service being rendered, coupled with a benefit being received by the ward. Here the court of appeals based its holding on the ward's ability to contract and to bind the estate. Appellee and cross-appellant Bernice Allen asks us to reverse the court of appeals' ruling that a guardian continue to administer her estate. Further, Allen argues that the court of appeals should not have upheld the probate court's ruling to continue her guardianship, even though she consented to the guardianship and her physical disabilities appeared to have actually worsened since the guardianship began.
For the reasons that follow, we reverse the court of appeals' grant of attorney fees and expenses to Benis and remand the cause to determine the appropriateness of granting payment on these items in light of the test adduced below. We affirm the court of appeals' decision to continue Charles Wilburn's guardianship of Allen's estate.
The court of appeals granted attorney James R. Kingsley additional fees for prosecuting Bernice Allen's appeals from the probate court's rulings. There is no evidence in the record to indicate that Allen ever appealed from the trial court's adverse ruling on her request for funds to prosecute an appeal. Thus, that matter was not properly before the court of appeals, which had no jurisdiction to release funds from Allen's estate to pay the appeal costs. We thus vacate this finding for Allen, since she was neither properly a party before the court of appeals nor before this court on this issue.
I
The trial court denied a motion to grant fees to Stuart Benis for his role in challenging Wilburn's guardianship of Allen's estate. The court of appeals determined that Allen's alleged obligation to pay Benis's fees and expenses was based in contract. The court of appeals held that since Allen was mentally competent to contract, Allen's estate and thus her guardian would be liable for her incurred contractual obligations. The court thus distinguished the ability to contract of a person under a guardianship based on mental infirmity from that of a person under a guardianship based on physical infirmity.
The R.C. 2131.02 definition of "legal disability" does not distinguish between mental and physical disability. R.C. 2131.02(B) and (D) deal specifically with the disabilities at issue in this case, and include the following as persons with "legal disabilities":
"(B) Persons of unsound mind;
"* * *
"(D) Persons under guardianship of the person and estate, or either." (Emphasis added.)
R.C. 2111.01(A), defining a "guardian," R.C. 2111.01(D), defining an "incompetent," and R.C. 2111.01(B), defining a "ward," all allow for a guardian to be appointed over person and property or either. Clearly the Revised Code makes no distinction between guardianship of the estate and guardianship of the person. Likewise, the Revised Code makes no distinction between a guardianship of a person with a physical disability and a guardianship of a person with a mental disability. Thus, we hold that the alleged mental competence of Allen is irrelevant to the question of the validity of the fees and expenses that the trial court denied Benis. Therefore, the court of appeals erred in basing its reversal of the trial court's denial of these fees and expenses on Allen's alleged mental competence at the time these services were performed.
The court of appeals also erred when it characterized Allen's alleged obligations to pay Benis's fees and expenses as contracts. The court held that Allen was legally capable of incurring such contractual obligations and that Allen's contracts would bind her estate and thus her guardian.
A ward cannot on her own bind her guardianship estate to obligations based upon contract, unless ratified by the guardian. Further, it is settled law in Ohio and in a number of other states that any debt arising out of the services of an attorney to a ward is in the nature of necessities. See In re Guardianship of Wolfe (P.C. 1938), 29 Ohio Law Abs. 184, 14 O.O. 525, 1 Ohio Supp. 372; Union Trust Savings Banks v. State Bank (Iowa 1971), 188 N.W.2d 300, 302-304, interpreting Iowa Code Ann. Section 633.637 (1966, amended 1980); Okla. Stat. Ann. Title 30, Section 3-219 (1989); 1 Restatement of the Law 2d, Contracts (1981) 34-35, Section 13, Comment c. It is within the province of the probate court to determine what constitutes a necessary good or service.
For attorney fees to be granted in this context, a court should apply a three-part test to determine if attorney fees are merited. In re Guardianship of Wolfe, supra, at 185, 14 O.O. at 526, 1 Ohio Supp. at 373. See Unger v. Wolfe (1938), 134 Ohio St. 69, 11 O.O. 483, 15 N.E.2d 955. A court applying this test determines whether the attorney acted in good faith, whether the services performed were in the nature of necessities, and whether the attorney's actions benefited the guardianship. Id.
Since neither the trial court nor the court of appeals applied the three-part test enunciated in Wolfe, we reverse the court of appeals' grant of additional fees and expenses to Benis and remand the cause to the trial court to determine the appropriateness of granting these fees and expenses in light of the three-part test in Wolfe.
II
The court of appeals affirmed the trial court's ruling that Allen's guardianship should continue under Charles Wilburn. The trial court applied the standard posited in In re Barr (P.C. 1958), 80 Ohio Law Abs. 488, 492, 156 N.E.2d 357, 360, to help determine whether Allen's motion to terminate the guardianship of her estate should be sustained. As the court of appeals noted, the Barr standard mandates that "* * * [i]n order to terminate a guardianship created as a result of physical incapacity, the court must determine [that] the ward is now able to care for his property and that the conditions which existed at the time of the creation of the guardianship have improved or been eliminated."
The Barr standard is consistent with the language of R.C. 2111.47, dealing with wards other than minors, which provides in part:
"Upon reasonable notice to the guardian, to the ward, and to the person on whose application the appointment was made, and upon satisfactory proof that the necessity for the guardianship no longer exists or that the letters of appointment were improperly issued, the probate court shall order that the guardianship of an incompetent terminate * * *." (Emphasis added.)
There was ample evidence before the trial court for it to determine that Allen was not better able to care for her property at the time of the termination hearing than she was at the time the guardianship of her estate was established. Allen's vision had actually worsened since the guardianship was established. She appeared confused at the second termination hearing. She was unable to deal properly with important aspects of her personal, business, and legal affairs. Since Allen failed to meet the evidentiary standard expressed in Barr, the trial court properly denied Allen's motion to terminate and the court of appeals properly affirmed this ruling.
It is clear that the trial court's ruling is not against the manifest weight of the evidence. Seasons Coal Co. v. Cleveland (1984), 10 Ohio St.3d 77, 79-80, 10 OBR 408, 410-411, 461 N.E.2d 1273, 1275-1276. Therefore, we affirm the court of appeals' ruling allowing Charles Wilburn to continue his guardianship of the estate of Bernice Allen.
Judgment affirmed in part, reversed in part and cause remanded.
MOYER, C.J., SWEENEY and HOLMES, JJ., concur.
RESNICK, J., concurs in the syllabus and judgment only.
DOUGLAS, J., concurs in part and dissents in part.
H. BROWN, J., concurs in judgment only.
I write separately simply to state that a ward who is mentally competent should be permitted to have the guardian of her choice. In this case the record evinces that irreparable differences have arisen between ward and guardian. The guardianship is that of the estate, not of the person. Bernice Allen, while competent, appeared not to fully understand that she was giving up complete control of her entire estate at the time she consented to the guardianship. When she learned of this situation and was unable to obtain information about her financial affairs, she requested that Wilburn be removed as guardian. The court denied her request and ordered that Wilburn continue as Allen's guardian. Where a competent ward consents to the creation of a guardianship of the estate such ward should be allowed to change guardians where irreparable differences exist and the ward has lost confidence in the guardian.
I concur in paragraphs two and three of the syllabus and in the affirmance of the judgment of the court of appeals (and thereby that of the trial court) allowing the guardianship of Bernice Allen to continue with Charles Wilburn as guardian. I concur in the reversal of the judgment of the court of appeals granting Benis additional fees and expenses, and in the vacation of the granting of appeal costs, but dissent from the judgment of the majority to remand the cause to the trial court for a determination as to the appropriateness of granting such fees and expenses and from the words "unless ratified by the guardian" in paragraph one of the syllabus.
In remanding, the majority says that "* * * neither the trial court nor the court of appeals applied the three-part test enunciated in Wolfe * * *." Who says so? It appears to me that the trial judge knew the law and applied it just as the majority has now set it forth. Just because a trial judge does not write a full opinion on every issue coming before the court does not mean that the law has not been properly applied. The trial judge arrived at the proper conclusion — and the majority opinion, read with understanding, concedes this.
With regard to the words "unless ratified by the guardian" found in paragraph one of the syllabus, it should be elementary that a guardian cannot ratify a contract that cannot, in the first place, exist. The guardian may very well accept as binding that which the ward has brought about, but such action then becomes the contract of the guardian — not that of the ward as "ratified by the guardian."
Since I would reinstate the judgment of the trial court in its entirety and thereby end the tribulations of this lady whose guardianship estate continues to be under siege for more legal fees and expenses (including now a remand and further hearing) all in the name of her "benefit," I dissent from that portion of the majority decision which orders a remand.