Case Title: RUSSELL v. CHASE INVESTMENT SERVICES CORP.

Citation: 

Docket Number: 106515

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2009-04-07T00:00:00Z

Document:
RUSSELL v. CHASE INVESTMENT SERVICES CORP.  RUSSELL v. CHASE INVESTMENT SERVICES CORP. 2009 OK 22 212 P.3d 1178 Case Number: 106515 Decided: 04/07/2009 THE SUPREME COURT OF THE STATE OF OKLAHOMA Suzanne Russell, not individually, but as Guardian of Donald R. Russell, an incapacitated person, Plaintiff, v. Chase Investment Services Corp., a Delaware corporation, Defendant. CERTIFIED QUESTION OF LAW FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA ¶0 Plaintiff filed suit in Tulsa County District Court of the State of Oklahoma and defendant removed the case to the United States District Court for the Northern District of Oklahoma. Pursuant to the Uniform Certification of Questions of Law Act, 20 O.S.2001, §§ 1601-1606, the Honorable Gregory K. Frizzell, United States District Judge for the Northern District of Oklahoma, certified the following question: "Does the appointment of a general guardian withdraw all of the assets from the estate of a ward subject to a durable power of attorney, such that the person holding power of attorney is without authority to control the ward's assets?" CERTIFIED QUESTION ANSWERED. Lawrence A.G. Johnson, Tulsa, Oklahoma, for the Plaintiff. James E. Weger, Tadd J.P. Bogan, Jones, Gotcher & Bogan, Tulsa Oklahoma, for the Defendant. TAYLOR, V.C.J. ¶1 The United States District Court for the Northern District of Oklahoma, pursuant to the Revised Uniform Certification of Questions of Law Act, 20 O.S.2001, §§ 1601-1606, certified the question: Does the appointment of a general guardian withdraw all of the assets from the estate of a ward subject to a durable power of attorney, such that the person holding power of attorney is without authority to control the ward's assets? We answer that the appointment of a general guardian of the property I. FACTS ¶2 The following facts are presented in the order certifying the question or in the record as certified to this Court. On April 7, 1999, Donald R. Russell (the ward) executed a durable power of attorney (DPA) naming Brenda Kennemer (Kennemer), his daughter, as his attorney-in-fact to "become effective upon [his] disability or incapacity." The ward's DPA gave Kennemer broad power over the ward's person and his property, including (1) the power to "sell, convey, lease, exchange, mortgage, pledge, release, hypothecate or otherwise deal with, dispose of, exchange, or encumber any of my property, either real or personal," (2) the power to "withdraw funds from and draw and sign checks in my name upon any bank or trust company, savings institution, or money-market fund in which I may have funds on deposit or in any new account opened in my name," (3) "the power to hold, invest, reinvest and otherwise deal with and manage all property in which I have any interest," and (4) "the power to transfer or surrender any securities which I may own." The ward's DPA provided that it "shall be valid and binding upon me until revoked or terminated." ¶3 In June of 1999, the ward arranged for the defendant, Chase Investment Services Corporation (Chase), to act as custodian of his Individual Retirement Account and to make $1,000.00 monthly distributions to him from the account. In April of 2000, the ward suffered a stroke, and Kennemer and the ward's wife, Suzanne Russell (Russell), agreed that the ward became incapacitated on or about April 23, 2000.3 ¶4 On February 26, 2001, the Oklahoma District Court for Wagoner County issued an order finding the ward to be incapacitated and naming Kennemer and Russell as co-guardians. ¶5 The record contains an amended plan for the ward's care and treatment. It provides that the ward shall remain in his home, that "Kennemer will be retained on a full time monthly basis to care for the Ward," that Kennemer "will be paid $1,500.00 a month," and that "[t]he Arkansas Valley CD will be cashed and used to provide the necessary funds to pay Brenda Kennemer." The record does Not contain a plan for management of the ward's financial resources. ¶6 According to Russell's deposition, soon after being named guardians, she and Kennemer presented Chase with the ward's DPA and the guardianship letters. ¶7 Russell sued Chase ¶8 In addressing certified questions, this Court's power is limited to answering questions of law. II. ARGUMENTS ¶9 Russell's position is that the appointment of a general guardian effectively terminates a DPA, that a specific court order is required for transactions involving bonds and retirement accounts subject to a guardianship, and, thus, Chase breached a fiduciary duty by disbursing funds pursuant to the ward's DPA without a court order. Russell urges that, with the appointment of a general guardian, all of the ward's property subject to the guardianship proceeding is brought within the court's exclusive control. Russell concludes that the court has exclusive power to authorize the property's disposition which is inconsistent with the continuing existence of a DPA. As we view it, the thrust of Russell's argument is that there is a conflict between the Oklahoma Guardianship and Conservatorship Act (Guardianship Act), ¶10 Chase argues that, under section 1074 of the ODPA Act, a DPA does not automatically terminate with the appointment of a general guardian but remains in effect until revoked by the guardian. III. THE OKLAHOMA UNIFORM DURABLE POWER OF ATTORNEY ACT ¶11 In 1988, Oklahoma enacted the ODPA Act. 1988 Okla. Sess. Laws 1453-1455, ch. 293, §§ 1-11 (now codified at 58 O.S.2001, §§ 1071-1077). The ODPA Act is taken from the Uniform Durable Power of Attorney Act of 1979 (UDPA Act), 8A U.L.A. 233 (2003), and sections 5-501 through 5-505 the Uniform Probate Code (UPC), 8-II U.L.A. 418 (1998). ¶12 Subsection 1074(A) of the ODPA Act A. If, following execution of a durable power of attorney, a court of the principal's domicile appoints a conservator, guardian of the estate, or other fiduciary charged with the management of all of the principal's property or all of his property except specified exclusions, the attorney-in-fact is accountable to the fiduciary as well as to the principal. The fiduciary has the same power to revoke or amend the power of attorney that the principal would have had if he were not disabled or incapacitated. (Emphasis added.) If the DPA was effectively terminated upon the appointment of a general guardian as Russell argues, there would be nothing for the guardian to revoke or amend, making the last sentence of subsection 1074(A) extraneous. Section 1074(A)'s plain language unambiguously expresses the legislative intent that the authority of an attorney-in-fact acting pursuant to a DPA does not automatically cease with the appointment of a guardian. ¶13 The legislative intent expressed in section 1074's plain language is supported by the comments to the UDPA Act and UPC. Section 1074's drafters wrote the UDPA Act and UPC so that the court appointment of a fiduciary, such as a guardian or conservator, would not automatically terminate the DPA but would leave it up to the fiduciary to determine if the agency is appropriate within the guardianship. Prefatory Note to UPC, 8-II U.L.A. 418 (1998). If a guardian is appointed, the attorney-in-fact becomes accountable to the guardian. Id. The guardian may revoke or amend the DPA the same as the principal if the principal were not disabled or incapacitated. Id. ¶14 In further support of a DPA's continuing viability after the appointment of a general guardian, the ODPA Act provides only two methods for the termination of a DPA after a ward becomes incapacitated. The first is by the court-appointed fiduciary revoking the DPA. IV. THE OKLAHOMA GUARDIANSHIP ACT ¶15 The same year that it enacted the ODPA Act (1988), the Legislature enacted the Oklahoma Guardianship Act, ¶16 We do not disagree with Russell that, in a general guardianship all of a ward's property is subject to the control of the court having jurisdiction over the guardianship. A court having jurisdiction over the guardianship has exclusive jurisdiction to determine "how the estate of the ward shall be managed, expended, or distributed to or for the use of the ward or the dependents of the ward." ¶17 Under subsection 3-101(D) of the Guardianship Act, a person seeking to be appointed guardian of the property of an incapacitated or partially incapacitated person may attach, to the petition, a guardianship plan for the management of the ward's financial resources or submit the plan at the time of the hearing on the petition. ¶18 A year after the guardian's appointment, every year thereafter, and upon court order, the guardian of the property is required by statute to file a report, which shall contain a complete financial statement of the ward's financial resources over which the guardian has control or supervision and "an accounting of any receipts and disbursements received, or expenditures made" on the ward's behalf. ¶19 Russell's argument that the Guardianship Act effectively terminates a DPA once a general guardian is appointed is unconvincing. The Guardianship Act's scheme for the management of a ward's estate is sufficiently broad as to allow a guardian to manage the ward's assets through an attorney-in-fact. The guardian is then accountable to the court for any actions taken by the attorney-in-fact. If a guardian does not want to be accountable to the ward and to the court for the attorney-in-fact's actions under a DPA, section 1074 of the ODPA Act allows the guardian to revoke or limit the agency created by a DPA. V. THE ODPA ACT CONTROLS OVER THE GUARDIANSHIP ACT ¶20 Our goal in construing statutes is to determine the Legislature's intent. Benjamin v. Butler, ¶21 Applying these rules leads to the conclusion that the ODPA Act, subsection 1074(A) controls over the Guardianship Act's provisions relied on by Russell. First, the language of the ODPA Act, section 1074 is clear that the Legislature intended that a DPA and guardianship coexist. To construe subsection 1074(A) otherwise would render the language giving the guardian the power to revoke or amend a DPA superfluous. Second, title 58, section 1074 is a specific provision dealing with the continuation of a DPA after the appointment of a guardian. As such, it would control over the general statutes of the Guardianship Act upon which Russell relies. Third, nothing in the Guardianship Act requires the automatic termination of a DPA upon the appointment of a general guardian. In spite of Russell's urging differently, the guardianship statutes can be applied in a manner to accommodate section 1074. ¶22 Russell relies on Rice v. Floyd, 768 S.W.2d 57 , 58-61 (Ky. 1989), which recognizes that the UDPA Act provides "for the coexistence of durable powers and guardians or conservators, and the attorney-in-fact is accountable to the fiduciary and the principal," and allows "the attorney-in-fact to continue to manage the principal's financial affairs, while the court-appointed fiduciary would take the place of the principal in overseeing the actions of the attorney-in-fact." The Rice court noted that Kentucky does not follow the UDPA Act's section 3, which is identical to title 58, section 1074 of the ODPA Act, and that, unlike the UDPA, section 386.093 of the Kentucky Revised Statutes, at the time Rice was decided, ¶23 Russell also cites Prickett v. Moore, ¶24 Russell states Corr v. Smith, VI. ¶25 Title 58, subsection 1074(A) unambiguously provides for the coexistence of a guardianship and a durable power of attorney. Russell has failed to point to anything, and we find nothing, in the Guardianship Act which would operate to effectively terminate a durable power of attorney upon the appointment of a general guardian. Therefore, we answer that the appointment of a general guardian of the property does not automatically withdraw all of a ward's assets such that an attorney-in-fact is without power to act pursuant to a durable power of attorney. Certified Question Answered. EDMONDSON, C.J., TAYLOR, V.C.J., and HARGRAVE, KAUGER, WATT, WINCHESTER, COLBERT, and REIF, JJ., concur. OPALA, J., concurs in result. FOOT