Court Opinion

ID: 7960347
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:36:24.515079+00
Date Added: 2024-06-11T16:34:25.012340
License: Public Domain

Wahls, J.
Respondent Manufacturers National Bank of Detroit, now known as Comerica Bank, appeals as of right the order of the probate court imposing a surcharge against it for releasing funds to the minor’s guardian upon presentment of an order from a foreign jurisdiction directing it to do so, where the guardian failed to settle the proceedings in the Macomb County Probate Court, which originally had appointed her as guardian of the minor. Respondent also appeals as of right the probate court’s award of attorney fees to petitioner Richard Sable. We affirm the surcharge, but reverse the award of attorney fees.
In October 1976, the Macomb County Probate Court appointed Dawn Goodhue as guardian of George J. Thomas,1 who was two years old at the time. In April 1977, Goodhue opened various accounts in the name of the estate with respondent pursuant to the letter of authority issued by the probate court. The probate court continually renewed the letters, the last of which expressly stated that Goodhue’s authority "shall terminate at midnight, December 25, 1987.”__
*597In August 1987, the Goodhues moved with the minor child to Vermont and petitioned a Vermont probate court for co-guardianship of the child. The petition was granted on September 22, 1987. Respondent subsequently received a certified order of the Vermont probate court, dated February 3, 1988, directing it to "redeem and/or close any and all accounts held in the name of dawn goodhue, as guardian of george j. thomas, and transmit forthwith the proceeds of such accounts . . . .” On March 3, 1988, respondent released $41,759.36 to Dawn and Richard Goodhue. The final letter of authority issued by the Macomb County Probate Court had expired when this transaction occurred.
On March 30, 1988, the Macomb County Probate Court formally suspended Dawn Goodhue’s appointment as guardian and appointed petitioner Richard Sable, Macomb County Public Administrator, as special fiduciary. After conducting an investigation, Sable filed a petition to surcharge and prosecute Goodhue as a suspended fiduciary. Sable also filed a petition seeking to surcharge respondent for the funds it had released to the Goodhues after the expiration of Dawn Goodhue’s letter of authority.
The parties éventually filed stipulations of fact and cross motions for summary disposition. The probate court ruled that respondent had improperly released the funds and issued an order surcharging respondent $41,759.36. The court also assessed $21,095 against respondent for the attorney fees incurred by petitioner. Respondent moved for reconsideration of the surcharge order pursuant to MCR 2.119(F) and for amendment of the judgment pursuant to MCR 2.611(A) and (B). The court granted respondent’s motion to decrease the surcharge by the amount of funds accounted for by Goodhue, which resulted in a surcharge of *598$9,463.53. The court otherwise denied the motion for reconsideration.
i
The relevant issue in this appeal is whether respondent is jointly and severally liable to the estate for the guardian’s misappropriation of funds by its release of the money in accounts in the name of the estate. Respondent seeks to avoid liability on the basis of the order of the Vermont probate court that directed it to release the funds to the Goodhues.
Section 462 of the Revised Probate Code, MCL 700.1 et seq.; MSA 27.5001 et seq., vests the court in which the original conservatorship petition is filed with exclusive jurisdiction "to determine how the estate of the protected person . . . shall be managed, expended, or distributed” until termination of the proceeding. MCL 700.462; MSA 27.5462. The court in the county in which the ward resides has concurrent jurisdiction with the court that appointed the guardian over resignation, removal, accounting, and other proceedings relating to the guardianship. MCL 700.435(1); MSA 27.5435(1). If these courts are not the same, MCL 700.435; MSA 27.5435 further provides:
(2) If the court in the county where the ward resides is not the court in which acceptance of appointment is filed, the court in which proceedings subsequent to appointment are commenced, in all appropriate cases, shall notify the other court, in this or another state, and after consultation with that court, shall determine whether to retain jurisdiction or transfer the proceedings to the other court, whichever will serve the welfare of the ward. After this determination has been made, the court accepting a resignation or removing a *599guardian shall direct this fiduciary to prepare and submit a final report to both courts. A copy of an order accepting a resignation or removing a guardian and a copy of the final report shall be sent to the court in which acceptance of appointment is filed. The court entering this order may permit closing of the guardianship in the court in which acceptance of appointment is filed, without notice to interested persons.
It appears that the transfer of jurisdiction is contingent upon the occurrence of a final accounting and resignation by the guardian in the court in which the letters of authority were issued. In this case, there was no termination of the proceeding in Michigan before the Vermont probate court accepted jurisdiction of the case and ordered respondent to release the funds.2 Therefore, it appears that the Vermont order was invalid.
Moreover, § 491 of the Revised Probate Code governs delivery of estate property held in this state to a foreign conservator:
A person indebted to a protected person or having possession of property or of an instrument evidencing a debt, stock, or chose in action belonging to a protected person may pay or deliver to a conservator, guardian of the estate, or other like fiduciary appointed by a court of the state of residence of the protected person, upon being presented with proof of his or her appointment and an affidavit made by the person or on the person’s , behalf stating that a protective proceeding relating to the protected person is not pending in this state; and that the foreign conservator is entitled to payment or to receive delivery. If the person to *600whom the affidavit is presented is not aware of any protective proceeding pending in this state, payment or delivery in response to the demand and affidavit discharges the debtor or possessor. [MCL 700.491; MSA 27.5491. Emphasis added.]
Clearly, the presentment of the requisite affidavit must be made before an asset owned by the estate in one jurisdiction may be transferred to another jurisdiction. The Goodhues did not present an affidavit stating that there was no pending proceeding in Michigan as required by § 491. Therefore, respondent’s release of the funds was improper regardless of the order of the Vermont probate court.
Next, we refer to § 4833 of the Revised Probate Code, which provides protection in certain circumstances to third persons dealing with a conservator:
A person who in good faith assists a conservator or deals with a conservator for value in any transaction other than those requiring a court order as provided in section 468, is protected as if the conservator properly exercised the power. The fact that a person knowingly deals with a conservator does not alone require the person to inquire into the existence of a power or the propriety of its exercise, except that restrictions on powers of conservators which are indorsed on letters as provided in section 485 are effective as to third persons. A person is not bound to see to the proper application of estate assets paid or delivered to a conservator. The protection here expressed extends to instances in which some procedural irregularity *601or jurisdictional defect occurred in proceedings leading to the issuance of letters. . . . [MCL 700.483; MSA 27.5483. Emphasis added.]
Because the final letter of authority expressly stated on its face that it expired on December 25, 1987, § 483 does not relieve respondent of liability.
Respondent argues, without citing any legal authority, that it was without actual knowledge of the restriction stated on the letter of authority. "Knowledge of facts putting a person of ordinary prudence on inquiry is equivalent to actual knowledge of the facts which a reasonably diligent inquiry would have disclosed.” Deputy Comm’r of Agriculture v O & A Electric Co-operative, Inc, 332 Mich 713, 717; 52 NW2d 565 (1952). See also Holly Lumber & Supply Co v Friedel, 271 Mich 425, 429; 261 NW 70 (1935). No claim has been asserted that respondent was not in possession of the letters of authority on file at -its offices. Thus, we believe that respondent would have discovered that the final letter of authority had expired if it had conducted a reasonably diligent inquiry.
We further find absolutely no merit in respondent’s argument that the expiration of the final letter of authority is irrelevant since Dawn Goodhue had already taken possession of the property belonging to the estate pursuant to the initial letter of authority and was responsible for the money deposited into the account. The bank was in possession of the funds upon deposit. By accepting the funds along with the letter of authority, which explicitly restricted Goodhue’s authority, respondent was responsible for maintaining the money in accordance with the letters of authority issued by the Macomb County Probate Court. See, e.g., In re Conservatorship of Roth, 804 P2d 265 (Colo App, 1990) (where the bank accepted funds *602knowing of a court-imposed restriction in the letters of conservatorship, it could not circumvent the restriction by a separate agreement with the conservator). Therefore, this Court holds that respondent is jointly and severally liable along with the Goodhues to the estate for any misappropriation of funds.
ii
Respondent contends that the probate court abused its discretion in awarding attorney fees to petitioner. We agree. Attorney fees are not recoverable unless expressly authorized by statute or court rule. Matras v Amoco Oil Co, 424 Mich 675; 385 NW2d 586 (1986); Bonner v Chicago Title Ins Co, 194 Mich App 462, 468; 487 NW2d 807 (1992). There is no express statutory authorization permitting assessment of attorney fees in this case.4
An exception to the general rule exists when the party seeking attorney fees as damages has been forced to expend money to prosecute or defend a prior lawsuit because of the wrongful acts of the third party. Id.; Warren v McLouth Steel Corp, 111 Mich App 496, 508; 314 NW2d 666 (1981). This exception is not applicable to this case because the bank is not a third party, the action filed by petitioner does not constitute a prior lawsuit, and the bank’s conduct was not wrongful as that term has been interpreted by this Court. See Walch v Crandall, 164 Mich App 181, 193-194; 416 NW2d 375 (1987); G & D Co v Durand Milling Co, Inc, 67 Mich App 253; 240 NW2d 765 (1976). Accordingly, we reverse the award of attorney fees._
*603Affirmed in part and reversed in part. We do not retain jurisdiction.
Corrigan, P.J., concurred.

 Goodhue’s original letters of authority designated her as guardian of the estate of George Thomas. Pursuant to the Revised Probate Code, a person exercising powers over the estate of a protected person is a "conservator.” MCL 700.3(5); MSA 27.5003(5); In re Clark, 103 Mich App 259, 261; 303 NW2d 16 (1981).

 Apparently, the Vermont probate judge consulted with the Ma-comb County Probate Court, but the Macomb County Probate Court determined that it would retain jurisdiction over the guardianship of the estate until the resolution of a dispute regarding Goodhue’s payment of fees to her attorney without first obtaining a court order.

 Section 580 of the code is equally applicable. MCL 700.580; MSA 27.5580. Article 4 of the Revised Probate Code governs guardianship and protective proceedings (for minors), while Article 5 governs fiduciaries, which by statutory definition includes conservators and guardians. See MCL 700.5(2); MSA 27.5005(2). The language of the two provisions is similar.

 The probate court is authorized to approve reasonable compensation for services rendered by counsel for the estate. MCL 700.541, 700.543; MSA 27.5541, 27.5543; MCR 8.303. These statutory provisions, however, contemplate an award of attorney fees being paid by the estate, not by a surcharged respondent.