NO. 95-103 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1995 

APPEAL FROM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable Robert S. Keller, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Keith Tokerud, Jon S. McCarty; Scott & Tokerud, 

Great Falls, Montana 

For Respondent: 

Ward E. Taleff; Alexander, Baucus, Taleff & Paul, 

Great Falls, Montana 

J. Daniel Hoven; Browning, Kaleczyc, Berry & Haven, 

Helena, Montana 

Filed: 

Submitted on Briefs: July 6, 1995 

Decided: fiovember 2, 1995 

I Clerk 
Justice W. William Leaphart delivered the Opinion of the Court. 

Appellant Mazie Ross appeals from an order of the Eight 

Judicial District Court, Cascade County, denying Ross' requested 

relief regarding the conservatorship of Mazie Richardson, deceased, 

and denying Ross' request for attorney's fees. We affirm. 

Backqround 

In October 1981, respondent Gene B. Daly was, by court order, 

appointed conservator of Mazie Richardson's estate. Richardson was 

an incapacitated and protected person. Ross is her daughter and 

only surviving child. Pursuant to § 72-S-424, MCA, and the courtordered conservatorship appointment, Daly was required to file an 

inventory of the estate and annual accounting of estate 

administration. From its beginning, this conservatorship was 

subject to disputes between Daly and Ross and her sons. 

After a November 1984 hearing, the District Court appointed 

respondent Jack P. Stevens, P.C., C.P.A., as co-conservator to 

serve with equal and independent authority with Daly. The court 

further ordered that Stevens file an estate inventory within 90 

days, account for the period between October 1981 and November 

1984, and account annually for the estate‘s administration. Mazie 

Richardson died in September 1991 and Ross was appointed personal 

representative of her estate. 

In December 1991, Ross petitioned the court to order the coconservators to file an estate inventory and accounting. The court 

ordered that Daly file an inventory within two weeks and that both 

conservators file an account of estate administration within five 

2 
weeks. These tasks were not completed. Ross alleges that Daly was 

unwilling, while Daly alleges that health problems prohibited him 

from complying. 

As a result of Daly's alleged inaction, Ross requested a 

conference with the District Court. In June 1992, Ross and her 

counsel held the conference with Judge Joel Roth; Judge Roth 

subsequently held Daly in contempt and awarded Ross her attorney's 

fees and costs in an amount to be determined at a later hearing. 

Daly was not notified of this conference. In July 1992, Daly filed 

an accounting of the conservatorship estate, prepared by a private 

accounting firm, with the District Court. Ross objected to this 

accounting and requested a hearing to clarify Daly's accounting and 

to determine her attorney's fees and costs from the June contempt 

proceeding. Daly did not appear at the hearing scheduled to 

determine these issues, held in December 1992. Only Ross presented 

testimony and the court took the matter under advisement. 

In January 1993, Daly requested the court reopen the matter as 

well as continue the hearing on Ross' objections and request for 

attorney's fees and costs. On the April 1993 date set for the 

rehearing, Judge Roth recused himself. The matter was transferred 

to Judge Robert S. Keller. In November 1994, Judge Keller 

conducted a re-hearing on all issues and on December 31, 1994, 

issued an order denying Ross' requested relief. This appeal 

followed. 

Issues 

We restate Ross' issues as follows: 

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1. Did the District Court err by ruling that Daly and Stevens are 

not liable for misfeasance or for the alleged insufficiencies 

in the accounting of the estate administration? 

2. Did the District Court err by allowing the co-conservators 

their fees? 

3. Did the District Court err by disallowing Ross her attorney's 

fees? 

Standard of Review 

We use a three-step test to determine whether the findings are 

clearly erroneous. First, if a court's findings are not supported 

by substantial credible evidence, they are clearly erroneous. 

Second, if a court has misapprehended the effect of the evidence, 

its findings are clearly erroneous. Third, if a review of the 

record leaves the reviewing court with the definite and firm 

conviction that a mistake has been committed, the lower court's 

findings are clearly erroneous. Interstate Production Credit Ass'n 

v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287. We do 

not reweigh the evidence before the district court, evaluate 

witness credibility, or substitute our judgment for that of the 

district court. See Detienne Associates Ltd. v. Montana Rail Link, 

Inc. (1994) I 264 Mont. 16, 22, 869 P.2d 258, 262. "We review 

conclusions of law to determine whether the district court's 

interpretation of the law was correct." In re Marriage of Barnard 

(1994), 264 Mont. 103, 106, 870 P.2d 91, 93. 

1. Did the District Court err by ruling that Daly and Stevens are 

not liable for misfeasance or for the alleged insufficiencies in 

the accounting of the estate administration? 

Claims aaainst Daly 

The District Court described this situation as a family feud, 

a characterization that we cannot challenge. At the heart of Ross' 

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arguments is Daly's alleged misfeasance and deficient accounting. 

Because of health problems, Daly was unable to assist with the 

District Court's December 1994 hearing. The District Court found 

that the maximum disputed amount is $38,000, which includes $22,000 

of conservator fees paid to Daly ($10,000 is identified as 

conservatorship fees and $12,000 is identified as "possible" 

conservatorship fees). 

The District Court found that: 

any amounts of money not directly traceable to the care 

of Mazie Richardson are more than offset by convincing 

evidence illustrating that Mr. Daly and his wife Ruth 

utilized their personal funds to set up an incomeproducing account with Waddell and Reed [an investment 

firm]. The only credible evidence submitted to the Court 

establishes that Mr. Daly and his wife set up an income 

producing account by utilizing $24,000 of their own 

personal funds. 

This account provided Richardson with $150-200 per month from the 

time of its inception in 1986 until her death in 1991. The 

District Court heard evidence that the redemption value of the 

Waddell and Reed account was $27,315 and it paid dividends of 

$13,094 over the life of the account. The District Court found 

that "a total of over $40,000 of principal and dividends generated 

from the personal funds of Mr. Daly and his wife went directly to 

the care of Mazie Richardson and upon her death to her estate." 

The court concluded that the 1992 inventory was as complete 

and accurate as possible. It appears that Daly did not cooperate 

with all court orders and that Ross and her sons did not fully 

cooperate with Daly. The District Court concluded that Daly was 

not able to prepare an inventory of the estate's assets but Daly 

5 
did know what he had received and spent and he therefore could have 

made an annual accounting. The District Court balanced this 

deficiency against the fact that Daly provided for Richardson's 

best interests and Daly substantially augmented the assets of the 

conservatorship. 

We now apply the three-part test from De&ye. The District 

Court's findings are supported by substantial evidence. Further, 

the District Court did not misapprehend the evidence in the record. 

Finally, after a review of the District Court's order, we have a 

firm conviction that a mistake was not committed. The record 

supports that the District Court's findings were not clearly 

erroneous. We will not substitute our judgment for that of the 

District Court. 

Finally, we affirm the District Court's conclusion that in 

light of Daly's present health concerns no useful purpose can be 

served in examining questions of contempt or sanctions. 

Claims aqainst Stevens 

The District Court found that Stevens did not receive any fees 

for his conservatorship duties and no evidence was presented to 

contradict the finding that the only money paid to Stevens was for 

out-of-pocket expenses. The District Court also found that Ross' 

conduct and prior pleadings support the finding that Stevens was 

not jointly liable for the acts of Daly. The record supports that 

Stevens properly collected and accounted to the estate for all 

funds and assets collected by him or in his possession. Finally, 

the District Court held that Stevens did not consent to Daly's 

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failure to file an inventory, nor did Stevens negligently allow or 

enable Daly to commit a wrongful act. Our application of DeSaye is 

the same for Stevens as it was for Daly. The record supports that 

the District Court's findings were not clearly erroneous. We will 

not substitute our judgment for that of the District Court. 

2. Did the District Court err by allowing the co-conservators 

their fees? 

The District Court considered that Daly has no memory of the 

proceedings and no personal assets. The District Court applied the 

doctrine of in pari delict0 to conclude that the parties should be 

left the way they were found. The District Court noted that to 

disallow Daly his fees would require him to pay Ross $8,000. The 

District Court, as a court of equity, concluded that such a payment 

would be "fundamentally wrong." Particularly in light of Daly's 

care for Richardson, we agree. 

As we held in issue one, the District Court did not err in its 

findings regarding the co-conservators' conduct and liability. 

Further, the District Court correctly found that Richardson was 

well taken care of and her estate was augmented by Daly's conduct. 

It would be unequitable and manifestly unjust to disallow the coconservators' fees when these facts are combined with the 

contentious conduct of Ross and her sons and the apparent ongoing 

family dispute regarding the conservatorship. 

3. Did the District Court err by disallowing Ross her attorney's 

fees? 

The District Court properly considered that attorney's fees 

are awarded where authorized by statute or contract. This case 
does not fit into either of those categories and there is no 

equitable basis for awarding fees in this case. The District Court 

properly interpreted the law regarding Ross' attorney's fees. 

Ross' arguments to the contrary are not supported by the record or 

law. 

Affirmed. 

Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 

1988 Internal Operating Rules, this decision shall not be cited as 

precedent and shall be published by its filing as a public document 

with the Clerk of the Supreme Court and by a report of its result 

to Montana Law Week, State Reporter, and West Publishing Company. 

We concur: 

Justices 

8 
Justice Terry N. Trieweiler specially concurring in part and 

dissenting in part. 

I concur with those parts of the majority opinion which affirm 

the District Court's judgment in favor of Jack G. Stevens and deny 

attorney fees to the personal representative of Mazie Richardson's 

estate. 

I dissent from that part of the majority opinion which allows 

the respondent, Gene B. Daly, to recover fees for his services as 

conservator of Mazie Richardson's estate. 

It is not necessary to conclude that any of the District 

Court's findings of fact are clearly erroneous in order to conclude 

that Daly was not entitled to a fee for his services. A 

conservator who flagrantly violates his obligations to the estate 

that he manages is not entitled to a fee. The following findings 

of the District Court clearly establish that Daly flagrantly 

violated his duties: 

3. [Gene B.] Daly, of Helena, Montana, was 

appointed as Conservator of the Estate on October 20, 

1981. Pursuant to § 72-S-424, M.C.A., and Court Order, 

Daly was required to file an inventory of the Estate 

within 90 days. In addition, pursuant to § 72-5-438, 

M.C.A., and Order of the Court, Daly was required to 

account annually for his administration of the Estate. 

. . . 

5. Jack Stevens was appointed as Co-conservator of 

the Estate of Mazie Richardson on November 14, 1984. 

. . . . 

11. Following the auction of the personal property, 

the sale of the residence and recovery of the stock for 

the Estate, Stevens completed each item on the detailed 

memorandum he had advised the parties he would undertake 

9 
as Co-conservator. The only exception was the completion 

of the final inventory, a task he could not complete 

without the assistance of Daly. Stevens did prepare 

reconciliation of the Estate's bank account and a summary 

of the Estate in 1984, but thereafter was unable to 

obtain the cooperation of Mr. Daly or information 

necessary for Stevens himself to complete an inventory or 

accounting. 

. . . . 

13. Between approximately 1985 and 1991, Stevens 

attempted numerous times to obtain from Daly a final 

accounting and inventory. Stevens prepared one income 

tax return for the Estate, but Daly indicated he would be 

responsible for filing all others. Stevens' efforts to 

obtain the inventory and accounting information or 

documentation and to prevail on Daly to complete his 

duties included letters to Daly and telephone or personal 

conversations with Joseph Marra, counsel for the Estate 

and a long-time friend of Daly. In each instance, Marra 

prevailed on Stevens not to resign or take other steps, 

indicating that he would be able to convince Daly to 

provide an accounting. . . . 

. . . . 

16. Shortly after Mazie Richardson passed away Mr. 

Marra finally determined that he would not be successful 

in obtaining a final inventory from Daly. He withdrew as 

counsel. Upon Mazie Richardson's death Mazie R. Ross was 

appointed personal representative of her estate. Mr. 

Stevens was in the process of retaining counsel to seek 

his release as Co-conservator when the present 

proceedings were initiated. 

17. On December 16, 1991 [more than ten years after 

Daly was first appointed conservator], Mazie R. Ross 

filed a Petition in this matter seeking an order against 

the Co-conservators directing them to file an inventory 

and account for their administration of the estate. She 

also sought the discharge of the Co-conservators and 

turn-over of the residue of the estate to her as personal 

representative. 

. . . 

25. During the time period of 1984, following Mr. 

Stevens' appointment, through 1991, Mr. Daly failed to 

file an annual accounting. However, on July 24, 1992, 

Mr. Daly, in response to orders of the Court, filed a 

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final accounting, prepared by Anderson Zurmuehlen Co. 

The final accounting is representative of the activities 

undertaken by Mr. Daly on behalf of Mazie Richardson for 

the preceding ten years. The final accounting 

demonstrates that the maioritv of the disbursements from 

the conservatorship account can be directly attributable 

to the care of Mazie Richardson. 

26. The final accounting shows that there is 

approximately $38,000 which cannot be directly 

attributable to the care of Mazie Richardson. Of that 

amount, $10,000 is identified as conservatorship fees, 

and another $12,000 is identified as "possible" 

conservatorship fees. Unfortunately, Mr. Daly is unable 

to assist the Court in any further delineation of the 

$38,000 and whether it was attributable directly to the 

care of Mazie Richardson because of his present physical 

and mental condition, which this Court recognizes. 

. . . 

28. After her appointment as personal 

representative, Mazie Ross petitioned the Court on 

December 16, 1991, to order the co-conservators to file 

an inventory and accounting. The Court issued its Order 

on January 16, 1992, giving conservator Daly until 

January 31, 1992, to file an inventory and both 

conservators until February 21, 1992, to file an account 

of the administration of the Estate. 

29. Stevens filed a partial accounting which 

covered only the disposition of the ward's personal 

property and sale of her home in 1986. It did not list 

the Estate's income and expenses. Nor did it list the 

Estate's assets on hand and available for distribution to 

the ward's probate Estate. 

30. Daly did not comply with the Court's Order to 

file an inventory and accounting by the dates set forth 

therein. 

(Emphasis added.) 

As conservator of Mazie Richardson's estate, Gene B. Daly was 

required to file an inventory of her assets, and file it with the 

District Court within 90 days from the date of his appointment. He 

was also obligated to keep records of his administration of her 

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estate and provide it to any interested person upon that person's 

request. Section 72-S-424, MCA. Additionally, Daly was required 

bY law to account to the court annually regarding his 

administration of the Richardson estate. Section 72-S-430, MCA. 

For over ten years while he served as conservator of Richardson's 

estate, he did neither. Even after being ordered repeatedly to do 

so by the District Court, he did neither. Finally, after being 

held in contempt of court, he filed an inventory of assets which 

the District Court liberally found accounted for a "majority" of 

Richardson's assets, but which disclosed that $10,000 had been 

spent on conservatorship fees, and that $28,000 of expenses cannot 

be accounted for. 

While the District Court found that Daly's administration of 

the Richardson conservatorship was impeded by interference from 

Mazie Ross and her sons, the fact is that the last documented 

interference by Mazie Ross and her sons occurred prior to 

February 18, 1983. On that date, the District Court granted Daly's 

request for an injunction and ordered Ross and her sons to vacate 

Richardson's house, pay rent for the time that one of the sons had 

resided there, and return to the estate items of personal property 

which had been removed. Whatever Richardson and her sons did from 

1981 until 1983, does not account for Daly's repeated dereliction 

of responsibility and frustration of Stevens's efforts from 1983 

until 1992. 

The District Court excused Daly's inability to account for 

approximately $28,000 of conservatorship funds and the payment to 

12 
himself of $10,000 as a conservator fee based on the assumption 

that the sum of $24,000 which was placed in a Waddell and Reed 

account and used for Richardson's benefit came from Daly and his 

wife. However, the source of those funds was anything but clear. 

Furthermore, the fact that Daly and his wife may have at some time 

or other made a gift to Mrs. Daly's mother does not justify the 

award of a conservatorship fee to a conservator who has totally 

neglected his responsibilities under the law. 

This Court previously considered the propriety of a 

conservator fee under similar circumstances in In re AllardGuardianship 

(1914)) 49 Mont. 219, 141 P. 661. In that case, the district court 

also interpreted the propriety of fees to a conservator who, for a 

period of thirteen years, had failed to account for the estate's 

assets or provide an inventory of those assets. The law at that 

time provided for reasonable compensation to a conservator, just as 

§ 72-5-432, MCA, provides now. However, this Court held that the 

district court correctly denied attorney fees in that case for the 

following reasons: 

While a mere technical breach of duty which does not 

result in injury to the ward's estate will not ordinarily 

justify a court in withholding compensation altogether, 

a flagrant violation of the duties of the trust will do 

so. 

During the entire term of this guardianship the 

statute in force required every guardian to return to the 

court an inventory of the estate of his ward within three 

months after his appointment, and annually thereafter 

(Code Civ. Proc., sec. 2985; Rev. Codes, sec. 7774), and, 

upon the expiration of a year from the time of his 

appointment, to render an account to the court (Code Civ. 

Proc., sec. 2986; Rev. Codes, sec. 7775). Not only did 

the guardian absolutely ignore these provisions of law, 

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but the district court was equally remiss, for no 

inventory was ever made, and from the date of appointment 

in March, 1899, to December, 1912--a period of more than 

thirteen years--no report was ever required by the court 

or rendered by the guardian. It is not any answer to say 

that the guardian managed the estate prudently and 

accounted for every cent belonging to it. The purpose of 

these statutory provisions is to furnish a means by which 

the guardian's management may be checked and his accounts 

verified. In the present instance the trial court was 

practically limited to the guardian's own testimony as to 

what property of this ward came into his possession, and 

what disposition he made of it, without any means of 

determining the truth of the testimony. These statutes 

were enacted to be obeyed, and the conduct of the 

guardian in ignoring them altogether is inexcusable, and 

all the more so because he had the advice and assistance 

of able counsel. In disallowing the guardian's claim for 

compensation, the trial court doubtless reached the 

conclusion that, by reason of his mismanagement of the 

estate, he had forfeited all claim to compensation. 

InreAllard, 141 P. at 664 (citations omitted). 

Likewise, in this case, whether Daly actually managed Mazie 

Richardson's estate in her best interest is not the point. No one 

will ever know. There is no record of what was done with her 

assets for a period of over ten years. By the time Daly was 

finally forced to account for her assets, he was no longer capable 

of recalling what he had done with them. For all practical 

purposes, no one knows the full extent of the assets that he 

managed or what was done with all of her property. The statutes 

regarding an inventory and an annual accounting were designed to 

prevent the kind of uncertainty that now exists. Daly not only 

ignored those statutes, he ignored repeated efforts by his 

co-conservator to gather the necessary information to comply with 

them; he ignored previous requests by the estate's attorney to 

comply with them; and most seriously, he ignored repeated court 

14 
orders that he comply with them. When he finally did make an 

effort to comply with them, he was unable to completely do so due 

to the passage of time, his failed memory, and the impossibility of 

reconstructing what had happened during the previous ten years. 

According to our prior decision in InreAllard, a flagrant violation 

of a conservator's duties is a sufficient basis for denying that 

conservator a fee for his services. Under the undisputed facts in 

this case, I conclude that Daly flagrantly violated his duties as 

conservator and that the District Court abused its discretion when 

it allowed him to retain fees for acting as a conservator on 

"equitable" grounds. 

As a practical matter, I realize that Mazie Ross may be no 

better off had the District Court ordered Daly to return the fees 

that he had received. However, as a matter of precedent and 

principle, I also believe it is inappropriate for the courts to 

sanction Daly's conduct in this case. 

For these reasons, I dissent from the majority opinion. 

15 
Justice James C. Nelson specially concurring. 

I concur in our opinion to affirm the District Court's 

judgment in favor of Jack G. Stevens and against Mazie Richardson's 

estate. 

I also agree in substance with Justice Trieweiler's dissent as 

regards our opinion in favor of Gene B. Daly to recover fees for 

his services as conservator. Notwithstanding, I have signed the 

majority opinion because I am convinced that, given Daly's present 

circumstances--he is apparently under a conservatorship and is 

penniless--there is little, aside from moral victory, that will be 

accomplished in sending this case back for still further 

litigation. That which starts out badly usually ends worse. This 

case proves the rule. 

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