### IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON January 25, 2001 S ession DONALD E. BLACKBURN, CO-EXECUTOR OF ESTATE OF GE ORGE C. BLACKBURN, DECEASED v. BETTY BLACKBURN
A Direct Appeal from the Probate Court for Shelby County No. B-28092 The Honorable Donn Southern, Judge

No. W2000-00393-COA-R3-CV - Filed March 27, 2001

Exec utor of deceased’s estate appeals the probate court order closing the dec eased’s conservatorship. The final order closing the c onse rvatorship, among other things, set aside a part of the order appointing conservator which ordered the appointed conservator to convey to the ward real estate owned by the

ward that she had previously conveyed to her self as attorney in fact for the ward. Executor ap

peals. Tenn.R.App.P. 3; A

ppeal as of Right; Judgm ent of the Probate

Court is Vacated a

nd Remanded

W. F RANK C RAWFORD , P.J., W.S., delivered the opinion of the court, in which A LAN E. H IGHERS , J. and H OLLY K IRBY L ILLARD , J., joined. George P. Collier, Jr., Collierville, For Appellant, Donald E. Blackburn Jerry H. Schwartz, Memphis, For Appellee, Betty Blackburn
OPINION Appellant, Donald E. Blackburn, Executor of the Estate of

George C. Blackburn, deceased, appealsthe “Order Appr

oving Amended F

inal A ccounting and Discharging Co nservator and Closing Conservatorship” in the matter of Conservatorship of George C. Blackburn.

There is no transcript of testimony in this case. The facts are basical ly undi sputed as reflected in the documents filedas part of what was formerly referred to as the tec hnical record. On September

3, 1996, petitioner, Bett

y Blackburn (“Appellee” or “Conservator”), filed a petition for the appointment of conservator for r espo ndent, George C. Blackburn, her husband. The petition alleged that respo ndent, beca use of advan ced age and mental infirmities, was un able to manage

his
own affairs. The af

fidavit of a physici

an, Dr. John Harris , was filed with the petition. On September 3, 1996, the probate court appointed a guardian ad litem to represent the respondent, to inv

estigate-2-

anddetermine the fa

cts and report the

facts to the court. A hearing was scheduled for September 30, 1996 at 11:00 a.m. On September 16, 1 996, respondent, George C. Blackburn, filed a “Response and Petition for Relief by Respondent.” The

response denies that respondent is unable to manage his own affairs anddenies that he should have a conservator appointed. Respondent avers that he is able to look after himself and that although he had serious physical ailments, he has improved and is able to take
care of himself. Respondent further avers that he lives at 4231 Zaio, Memphis, Tennessee, owned by bothpetitioner and respondent, and that the properties at 4219 and 4327 Zaio were

in his name onl y. He further avers that a 444-acre fa

rm i n Fayette County was in his name only , and that the peti tionerused a p ower of attorney to execute a quit claim deed on March 21, 1996 in which she conveyed the property to he rself. By counter-complaint, respondent avers that w hile he was seriously ill and in the hospital withcancer on March 17, 1996, the petitioner obtained a power of attorney f rom him for the purp

ose “to take care of bu

siness while he was sick.” He avers that there was no notary public pr esent in the hospital when he signed

the document, that the acts on the part of petitioner constitute a fraud, and that the document

was obtained when he was incapable of protecting himself. He avers that a paper writing betwee n him an d George D. Bl ackburn was rec

orded in the Regi

ster’s Office o

f Fayette Cou nty, Tennessee, which purports to lease the 444-acre farm to George D. Blackburn for a period of 55 years at one dollar per y ear. He further avers that petitioner executed a quit clai m deed o n March21, 1996, which she recorded in the Register’s Office of Fay ette Count y, conv eying respondent’s 444-acre farm to herself. He avers that petitioner and George D. Blackburn have acted in concert to perpetrate a fraud on the respondent. He further avers that petitioner execute

d a quit claim deed for the properties at 4219 Zaio and 4237 Zaio in Memphis conveying the properties to respondent

and petitioner

as tenants by the entirety. Respondent pray s in the counter-complaint that the court place the parties back in the position they held prior to the transfer of prope rty by use of the pow er of att orn ey. Although a hearing was initially set for September 30, 1996, there is no record that a

hearing took place onthat date, nor is there an order in the record continuing the case. The record indicates that on January 7, 1997, a

motion was filed on behalf of petitioner to amend the petition appointing the conservator. A copy of an amended petition is included in the record, although there is no order allowing such an amendmen t. This amended petition updates some additional income and assets of the respondent and f

urther avers tha

t Donald Blackbu

rn took the r espondent to James Crislip, att orn ey, who prepared a

revocatio n of power of attorney for the respondent. The petition further
avers that Paul J. Neal, Ph.D. evaluated the responden t, and that respondent was ho spitalized at a Memphis hospital after

experiencing seizures. The petition alleges that respondent moved important documents from their usual place, and that he should be enjoined from disposing of or liquidating any of his assets. The petition again prays that the petitioner to be a

ppointed as conse

rvator with all of the rights and duties thereunto belonging.-3-

On March 4, 1997, “Further Response to Amended Petition for Appointment of C onservator ”
was filed by James A. Crislip, as a friend of the court, and in which Ronald Blackburn joined. The response avers that the said James A. Crislip is simultaneously filing a response to the report of the guardian ad litem and is also moving the court to issue an order requiring appointment of an attorney ad litem to represent the interest of the respondent, G

eorge C. Blac

kburn. In par

ticular, Mr. Crisli

p moved the cou rt t o au tho riz e su ch at tor ney ad litem to move to set aside the deed on the farm transferring it from George C. Blackburn to Betty Blackburn by use of a power of attorney, and moved that

the court set aside the power of attorney. “Further, the Att orn ey Ad Litem should move to set aside an alleged lease of the f arm to George D. Bl ackburn for a period of fifty (50) y ears at $1.00 per year. ” The response a lludes to a hearing, but there is nothing in the record to indicate a hearing was held nor an order of court thereon. The response prays that the transfers of respondent’s property be nullified.

On March 4, 1997, James A. Crislip, as a friend of the court, filed a “Response to Report and Recommendation of Guardian Ad Litem and Motion to A ppo int Att orn ey Ad Litem. ” At this point, the record indicates that there had been no report of the guardian ad litem filed, but apparently a copy of the report had been furn ished to James Crislip. On July 16, 1997, the petitioner filed a second amended petition for the appointment of conservator and outlined the deterioration of respondent’s medical condit

ion. The petition also averred the removal of funds fro m responden t’s savings account which were pl aced in

the name of Donal

d Blackburn. I

t asked for a res

training order

to prevent Donald Blackburn from disposing of any of the said funds. The petition re itera tes the request to be appointed conservator. A hearing was set for this petition on August 8, 1997.

On August 8, 1997, the guardian a d li tem , Kathleen Gomes, filed “Report and Recommendation of Guardian Ad Lite m .” We see no need to det ail the statements

in the report, except to the extent that the report states that the petitioner admitted that she used the power

of attorney to make the transfers of respondent’s real prope rty to herself. The guardian ad litem also noted that she expressed to the petitio ner that “the transfer of real property by power of attorney appears to be inappropriate.”

On August 8, 1997, the court held a hearing upon the petition, the first amended petition, and the second amended p

etition . On August 11, 1997, the court entered an “Order Appointing Conservator

of the Person and Estate,” which appointed petitioner, Betty Blackburn, as conservator of the estate and person of George C. Blackburn. The order recites that it is premised on the pleadings,

the report of the guardian ad litem , statements of counsel for

petitioner and the guardian ad litem , affidavits of physicians, testimony in open court of B etty Blackburn and Donald Blackburn andthe entire record in the cause. The court found that the respondent was in need of a conservator andappointed Betty Blackburn conservator, and also specificall

y authorized her to p

ay certai n debts and to do other necessary things not material to this appeal. The order spe cifically stated:

4. Th at a ny rea l es tat e tr ans fers here tof ore m ade b y B ETT Y B LACKBURN

as Power of Attorn ey for GEO

RGE C.-4- BLACKBURN

shall be transferred back

to the original ow

nership of GEORGE C. BLACKBURN.

5. That BETTY BLACKBURN as Conservator is to receive all assets ownedby the Respon

dent in cludi ng bank accounts and personal property and to place such

funds in a Conserva

torshipaccount(s). ...

The record indicates that by notice dated Nov ember 12, 1997, the Conser vator, Betty Blackburn, was notified to file a settlement

in the cas

e on or bef

ore Dece mber 12, 1 997. The n

ext entry in the record is c

lerk’s citation is sued March 1, 1999 , in which the Conse rvator is notified

to filean accounting on

or before March 31, 1999. By order entered April 5, 1999, the court gra nted a continuance for the matter of filing the annual settlement until May 28, 1999.

The next entry in th

e record is April

28, 1999: a filing of

a “Petition to Admit to Probate the Last Will and Testament of Georg e C. Blackburn” in Cause No. B33191. The petition is filed by Donald Ethridge Bla ckburn and Bo bby Striplin , as execut ors of the es tate of Geor ge C. Blackburn pursuant to a will dated May 20, 1994, which petitioners allege they were rece ntly furnished. The petition alleges that

George C. Blackburn died on August 14, 1997 . The will present ed to the court, among other

things, leaves th

e two properties i

n Memphis at 4219 Z

aio and 4237 Zai

o to Betty G. Blackburn. The will also

leaves the eastern half of the 444-acre farm to Donald Ethridge Bla ckburn, and western half of the farm to George David Blackburn.

On April 28, 1999, an order was entered in cause number B33191 and file d in this record admitting the will to probate and appointing Donald Ethrid ge Blackburn and Bobby Striplin as executors. Other pleadings filed in this record concerning the estate in Cause No. B33191 are not material to this app eal, i ncluding Betty Blackburn’s “Pe

tition for Elective

Share, Year Supp

ort, Exempt Property and Homestead,” and a claim filed by Betty Blackburn.

On November 8, 1999, Betty Blackburn filed a “Petition to

Approve Final Accounting in the conservatorship

proceeding.” She prayed that the accounting be approved

and that she be discharged from further fiduciary responsibilities.

Sub seq uen tly, further ple adings were filed in this cause in connection with the estate of the deceased, andon January 21, 2000, the court entered “Order Approving Amended Final Accounting andDischarging Conservator and Closing Conservatorship in

the conservatorship proceeding.” The court approved the amended accounting and noted tha t Ge orge C. B lac kbu rn d ied thr ee da ys after the opening of the conservatorship, and no assets were received by the Conservator. The order then states:

It

further appearing to the

Court that under

item 4 of the Court order appointing the con servat or that the real estate transfers heretofore made by Be tty Blackb

urn as Power of At

torney for

George C. Blackburn

wereordered transferred

back to the original ownership of-5- George C. Blackburn and that this was not d one. The Court now finds that it appointed a conservator based upon the expectation that the administration of the Ward’s affairs was needed over a reasona

ble time period and which now did not occur due to the immediate de ath of the Ward following the opening of the Conservatorship. It further appears that there were

no assets receiv

ed by the Co

nser vator or expended by the Conser

vator for the ben

efit of the Ward, Geor

ge C. Blackburn, andt hat for all prac tical purposes the

conservatorship should be regarded

as a non-existent. It further appears that there was
no necessity for

the administration of this Conservator ship for Betty Blackburn

to transf erback to the orig

inal ownership of

George C. Blackburn

an y real estate tra

nsfers heretof

ore made by

Betty Blackburn

as Power of Attorney for George C. Blac kburn. The Court further finds that Betty

Blackburn asse

rts personal owners

hip in the real estate assets an

d objectsto the order requ iring her individ

ually to convey rea l estate transfers heretofore made by her as Power of Attorney for George C. Blackburn bac k to his original ownership, and it appears from statements of Counsel and from the entire record that proper pleadings and notice of hearing were not serve d upo n Betty Blackburn, individually, regarding the issue of ownership of the real estate, and that she was not afforded an opportunity

to have a proper hearing on this matter andshe was not afforded due process of law. The C ourt therefore concludes that the part of this Court’s order compelling her to transfer the real estate is not proper under the circumstances and therefore should be annulled , ca nceled and vacated. It fur

the r appears that the personal representative of the Estate of George C. Blackburn

has made an appearance in open Court
on the he aring of the p etition t o approve th e final accou nting a n d sought of the Court to retain jurisdict i on over Betty Blackburn and
res e rve for its further orders her failure to comply with the Court’s order to transfer the real estate and noted his exceptions, which exceptions are not well taken and so noted. The order then pr

ovides:

3. That item 4 of this Cou rt’ s Order in this Cause appointing Conservator

of the Person andEstate, which states as follows: “That any real estate tra

nsfers heretof

ore made by

BETTY BLAC

KBURN
as Power of Attorn ey f or GEORGE C. BLACKBURN shall be transf erredb ack to the origin al ownership of GE

ORGE C. BLACKBURN,” is hereby annulled, c anceled and vacated.-6-

Donald A Blackburn, as

Executor of the Esta

te of George C. Bla

ckburn, deceas

ed, appeals andpresents the issue for review whether

the trial court erred in vacating its order of August 11, 1997, requiring the Conservator to reconvey property to the respondent, George C. Blackburn. Following the example o f our Supr eme Court in Grahl v. Davis , 971 S.W.2d 373 (Tenn. 199 8), we deem it appropriate to present a brief review of the fiduciary duties of the conservator. Justice Drowota, speaking for the Court in Grahl , provided us with a concise and enlightened review of such duties, which we quote:
FIDUCIARY DUTI ES

We begin our analy

sis with a brief re

vie w of the fiduciary duties which govern the actions of a conservator. The purpo se of appointing a conservator is “to preserve the estate of an incompetent
or disabled person.” Tenn. Code Ann. § 34-4-202 (1991 Repl.). Pursuant to Tenn. Code Ann. § 34-4-207 (1991 Repl.), a conservator “shall have the same duties and powers as a guardian of a minor,and all laws related to the guardianship of a minor shall be ap

plicable to
a conservator.” A conservator occupies a fiduciary position of

trust of the highest and most

sacred character. See Meloy v. Nashv ille Trust Co. , 177 Tenn. 340, 149 S.W.2d 73 (1941). The conservator is to manage the conservatee ’s estate to the best advantage. See Steele v. Reese, 14 Tenn. (6 Yer.) 263 (1834). The conserva tor shoul d endeavor to mana ge the estate so that if the incompetent person recovers, he or she will find the e st ate as nearly as possible in the
samecondition as he or

she left it. Folts v. Jones , 175 Tenn. 74, 132 S.W.2d 205, 208 (1939). A conservator sho uld not change the character of the conservatee ’s property interests unless th

e change is necessary to protect andpromote the intere sts of the conservatee. Id

. In consideri ng a conservator’s r equest to cash

a life insurance policy f or the benefit of the conservatee’s estate, this Court, in Fo lts v

. Jones , stated:

Before the character of

the interest in property held by
a [ conservatee] can be changed, it must be made manifest that it is necessary to protect and promote his interest. Although as a rule, the court will preserve, as far as possible, the inter e sts of the success ion, this ruleyields to

t he paramount rule which makes the [conservatee’s

] welfare the fir

st consider ation without regard to the rights of those who may have eventually rights to succession.-7- Id.; see also Morris v. Morris , 195 Tenn. 133, 258 S.W.2d 732 (1953).

A conservator is not the alter ego of the

conservatee, however, andhas no authority to exercise an elective right or power of the conservatee. Folts, 132 S.W.2d at 207. Therefore, a conservator has no authority

to terminate joint accounts in which the conservatee has
an interest or to change a beneficiary on a life insurancepolicy. Folts , 132 S.W.2d at 207; see also Howard v. Imes , 90 S o.2d 818 ( Ala. 1956); In Re: Es tate o

f Wright , 424 N.W.2d 268 (Mich. 1988); Hendricks v. Grant County Bank , 379 P.2d 693, 697 (Okla. 1963); Ma t ter of Guardianship of Rich , 520 N.W.2d 63 (S.D. 1994); Rozycke v. Sroka , 279 N.E.2d 155 (Ill. Ct. App . 1972); Matter of Estate of Briley , 825 P.2d 1181 (Kan. Ct. App. 1992); Maess v. Greenfield

, 547 S.W.2d 777 (Ky. Ct. App. 1977); Strain v. Rossman , 614 P.2d 102 (Or. App. 1980). Instead, the conservator must petition the court, and the court, on behalf of the conservatee, c an exercise such an election if it is clearly proven to be in the best interests of the
conser v atee. Folts v. Jones , 132 S.W.2d at 207; see also Schlieper
v. Rust, 360 N.E.2d 1192, 1197 (Ill. Ct. App. 1977); Rozycke v. Sroka , 279 N.E.2d at 158.

A conservator owes the conservatee an un divided duty of loya lty. 18 Tenn. Juris., Mentally Ill and Other I ncompetents , § 8, p. 323 (1984). The conservator cannot be allowed by law to have any inducement

to neglec t t he interests of the conservatee. Freeman v. Martin , 181 Tenn. 470, 181 S.W.2d 745, 746 (1944). Therefore, it is generally held that a conservator violates his or her fiduciary duty by acquiring, by purchase or otherwise, the property of the conservatee. Id. ; see also Lanius v. Donnell , 222 Tenn. 58, 432 S.W.2d 659 (1968).
Id. at 377-378 (footnotes omitted). Appel lee fi rst asserts that the appellant does not have standing to contest the trial court’s action, because the executor of the estate

has no interest in the deceased’s real estate. While we do notdispute that real e

state vests in the successor immediately upon the death of deceased, either by will or intestate succession, this is not the issue in this case. We are dealing with the approval of a final accounting of a conservator.

The conservator is charged with the duty of managing the w

ard’s estate to th

e best advantage. See Grahl , 971 S.W.2d at 377. To this end, the cons ervato r must acquire and take charge of the ward’s ass ets. It is

undisputed that, prior to her appointment as conservator, Betty Blackburn,1 T.C.A. § 35-50-1 05 (199 6) appe ars to make the order a ppointing a conservato r a fi nal order for appeal

purposes by the conservator.
-8- conveyed property to

her self that belonged to the ward pursuant to a power of attorney . The trial court properly ordered her, as conservat or, to c onvey the property back to the w ard as part of the conservato

rship estate. Upon the death of the ward, the duty devolved upon the ward’s pe rsonal representativeto approve or disapprove the final accounting of the conservator

ship estate. The failure of the conservator to comply with orders of the court and preserve the ward’s assets gives the executor standing to dispute the final accounting and to appeal the court’s approval thereof.

The appellee next asserts that the order of August 1997, requiring the Conservator to convey the property ba

ck to the responde

nt-ward, was an

interlocutory

order subject to

a revision at

any time and, thus, the provision in the final decree vacating that order was proper. In the alternative, appellee assertsthat if the Augus

t 1997 order was a

final order, the trial court acted within its prerogative pursuant to Tenn.R.Civ.P. 60.02 in setting aside that part of the order.

We agree with appellee that if the 1977 order

is an interlocutory order 1 , the trial court can set it aside at any

time prior to

the entry of

a final order. As to the appellee’s alternative assertion that the trial court, if de

alin g with a final o

rder, was corr

ect in setting the

order aside purs

uant to Tenn.R.Civ.P. 60.02, we have reservations, since no motion was filed for such relief. However, we do not deem it necessary to decide whether the 1977 order wa s final or interlocutory.

This appeal is from the final order approving the Conservator’s accounting which shows that the Conservator did not take any steps to gather and protect the ward’ s property. Particularly, o n August 11, 1997, the cour

t o rdered t he Conservator to perform her duties as conservator, and she totally ignored thecourt’s order from that time to the final accounting in January 2000. The trial court indicatedin the final order that the Conservator did not have notice of thecourt’s action in requiring the return of the ward’s property, but we beg to disagree. The Conservator and h er counsel clea

rly hadnotice of the 1997 order when she ma de the required b

ond. Yet, for a pe

riod of over two y

ears, she took no action to contest the order and deliberately failed to perform her duty as conservator as the court ordered her to do.

The Conservator does not dispute that she, as a fiduciary under a power of attorney , conveyed property of the grantor of the power of attorney to herse lf. In William H. Inman, Gibson’s Suits in Chancery , § 22 (7th ed. 1988), it is stated:

In order to a void any possible contention, and to leave absolutely no
roomfor casuistry, Courts of Equity consistent lyrule, without exception, that no trustee shall in any case, or u nd er any circumstances,

directly or indirectly, acquire any personal interest or title in or to the trust property, or its proceeds, or make any pers ona l profits out of the trust, or by means of his trust character, without the full conse nt of the beneficiary, given under circumstanc es that leave-9- no room whatever to question the perfect fairness and good faith of the whole transaction.

The author not es that thi s rule appl ies to the e ntire range of fiduciaries and, thus, would apply to an attorney in fact. See id

. § 22.

From the early days of Tennessee jurisprudence, the duty of a fiduciary has be en certain. As this Court noted in Gillespie v. Branham , 337 S.W.2d 689 (Tenn.Ct.App. 1959):

No statement of the general rule can excel i n strength and clarity the statem ent of Jud ge Caruthers on our Supreme Court (1855) when considering the dut y th at a trustee owed to the beneficiaries when dealing with trus

t property.

The case is Tisdale v. Tisdale , 3 4 Tenn. 596, and the Court said:

T hus circumstances, then, could he take t o himself, ind i vidually, the benefits of his pur

chase, to the exclusion of his cote

nants? Surely no

t. Nothing is better settl ed in e quit y juris prude nce. It is one of the
canons of a court of

equity that

one who undertak

es to act for others canno

t in the same

matter act for himself. Where confidence is reposed, du t ies and obligations arise which equity

will enforce. A trustee cannot throw off the trust

at pleasure, to the injury of the cestui que trust. He will not be allowed to mix u p his own interests and affairs with

those of the beneficiar

y. This doctrine has its f

oundat ion not so much in the
commissi on of actual fraud, but in that profound knowledge of

the human heart, which dictated that hallowedpetition, ‘lead us not into temptation, but deliver us from evil,’ an d that caused the announcement

of the i nfall ible truth, that ‘a man cannot serve two master

s.’ The right to se

ll andto buy cannot exist in the same p erson, because of the antagonistic

interest in the two positions. Hence the fairness or unfairness o

f the transaction, and the comparison of price and value, or the existence or absenceof actual fraud, are not permitted to enter

into the consideration of

the court. It i s enough that the relation of trustee and ce stui que trust existed

. This appearing, the inves tigation is at an end, and the doctrine applies with

all its force. It is certainly too-10- latein the day to require t he cita tion of authorities

to establish this doctrine.
Id. at 691.

In the instant case, the undisputed breach of trust by the attorney in fact cannot

be allowed to stand. The Conservato

r’s failure to rectify the situation as ordered by the court taints the final accounting to the extent that it should not have been approved.

Acco rdi ngly, the order of theprobate court is vacated, and this case is remanded to the probate court for further proceedings consistent with this opinion. Costs of this appeal are assessed against the appellee, Betty Blackburn.

__________________________________________ W. FRANK CRAWFORD, PRE SIDING JUDGE, W.S

.