Court Opinion

ID: 9702277
Source: CourtListenerOpinion
Date Created: 2023-08-25 23:04:46.900076+00
Date Added: 2024-06-11T18:21:36.140781
License: Public Domain

MACK, Associate Judge,
dissenting:
Seen in its best light, the majority’s position has the salutary effect of advancing the cause of judicial economy. It does not, however, advance the cause of the sound and fair administration of decedents’ estates. On the facts of this case, I cannot agree with the majority’s conclusions that, without notice, a show cause petition to protect assets can double as a pleading to determine title, that a show cause hearing can be deemed an adequate substitute for a trial, and that the trial court’s action in deciding this case on the merits, after a show cause hearing, can be merely “harmless procedural error.”
Upon the death of Katie Presgrave, ap-pellee Stephens took possession of a jointly titled checking account and two jointly titled certificates of deposit. Appellant Wilkes, the personal representative of the estate, requested that appellee turn over the property to the estate, but Mr. Stephens refused. The personal representative filed a petition for rule to show cause, which would require appellee to turn over the property to the estate pending a final judgment on the merits establishing legal ownership. But upon completion of the show cause hearing, the trial court declared Mr. Stephens owner of the accounts.
I believe the trial court erred in essentially converting this show cause hearing into a trial on the merits. The majority’s assertion that the parties were fully aware of the finality of the proceedings is unpersuasive. Its conclusion that a full trial on the merits would have yielded results identical to the show cause hearing is, quite simply, premature.
The majority states it was “clear that [appellant] Wilkes intended for the court to determine legal title to the assets at the show cause hearing.” Majority opinion at 278. The facts show otherwise. While the record reveals no explicit references by either party to the temporary or final nature of the proceedings, circumstantial evidence supports the inference that the parties assumed the hearing was one to determine temporary possession pending a full trial regarding legal ownership.
Appellant filed the petition for rule to show cause in order to protect what the estate regarded as its assets from possible dissipation by the appellee — not an impossibility, given that bank accounts are easily depleted. After the court issued the order *282to show cause, the appellee filed an answer which indicates that it was his assumption that the hearing would determine only temporary possession pending a full trial on the merits. Not only did Mr. Stephens’ answer request the show cause petition be dismissed, or in the alternative, that a hearing be set to establish ownership of the accounts, but appellee requested a jury trial in the answer.
At no time during the hearing did the trial court indicate that it was about to issue a final determination on the merits. Nor does the record reveal remarks by either party that express this expectation. In fact, the conduct of the entire proceeding was consistent with the understanding that the hearing was only a show cause hearing and not a full trial on the issue of ownership of the disputed assets. The format of the proceeding was in conformity with that of a show cause hearing, with Stephens presenting his evidence first. The opening remarks of the trial judge indicate that the court understood the proceeding to constitute nothing other than a show cause hearing.1 Most rignificantly, the estate presented only one witness and had not even completed discovery by the time of the show cause hearing.2 After the judge asked Stephens to submit findings of fact and conclusions of law incorporating her findings, appellant submitted a proposed order allowing Stephens to retain possession of the accounts and setting a trial date for determining the issue of legal title. In a cover letter, appellant stated that it was his belief the show cause hearing was never intended to determine legal ownership and was not the proper forum for that determination. He also informed the Register of Wills that he regarded the hearing as an interim proceeding pending a full trial.
The majority concedes that “the petition, rule and format of the hearing were in the style of a show cause proceeding.” Majority opinion at 278. However, the majority concludes that a full trial on the merits would yield results identical to the show cause hearing, and thus maintains appellant suffered no prejudice from the trial court’s action. My response is twofold. First, I believe that such a prognosis requires a level of foresight which at this point we simply do not have; we cannot know what evidence appellant would have presented at a full trial on the merits. As the court in Commodity Futures Trading Commission v. Board of Trade, 657 F.2d 124, 127 (7th Cir.1981) commented in discussing the problem with converting a hearing on a motion to issue a preliminary injunction to a permanent injunction hearing:
Evidence adduced at the preliminary injunction hearing may be incomplete because “[a] plaintiff putting on his case for temporary relief may hold back evidence, or indeed, his case may not be fully developed. Thus it is important for him to know that when he puts on his evidence he is having his final ‘day in court’ ”.
Citing 7 Moore’s FedeRal Practice § 65-04(4) at 65-67 (2d ed. 1980).
Appellant in the instant case did not put forward all of his evidence or fully develop his case. He certainly was not on notice that it was to be his first and last chance to prove ownership of the disputed assets. The majority fails to explain how we can assume that undiscovered and/or undeveloped evidence would unquestionably lack substance and effect.
But secondly, and more significantly, appellant has provided ample support for his contention of prejudice. Had he known the *283show cause hearing was to be a final decision regarding ownership of the assets, appellant contends that he would have presented additional witnesses, inter alia, Mabel Mullen, who was expected to testify that appellee converted the decedent’s accounts into joint accounts without the decedent’s knowledge and against her wishes. Appellant indicated he expected to call other members of decedent’s family, including Arthur Mullen, decedent’s nephew, and Virginia Nessenthaler, decedent’s niece, to testify regarding the establishment of the joint accounts. Appellant also expected to call Richard J. Slabach, decedent’s attending physician, to testify as to decedent’s mental capacity. Finally, he intended to conduct discovery and present evidence concerning income tax returns filed by the decedent and the appellee, revealing that decedent paid all taxes and received all benefits from the interest income of the disputed accounts.
The majority errs in concluding that the trial court was justified in deciding this case on the merits prior to full discovery and presentation of witnesses also because of the closeness of this case. Based on the testimony of witnesses at the show cause hearing, the question of whether the checking account and certificates of deposit were given to Stephens by the elderly Presgrave as an inter vivos gift presented the court with a very close call. There is an explicit presumption that joint accounts created with funds supplied only by one party are presumed opened solely for the convenience of the depositor. Davis v. Altmann, 492 A.2d 884 (D.C.1985). As the majority points out, it is appellee Stephens’ burden to prove by clear and convincing evidence that Mrs. Presgrave indeed gave him the money in the accounts as an inter vivos gift. Despite the testimony showing Stephens to have been a caring and devoted caretaker, he himself made several statements which are inconsistent with his ownership of the accounts, testifying repeatedly at the show cause hearing as to his belief that the monies remaining in the accounts would only pass to him upon decedent’s death. At the same time, appellee testified that he enjoyed access to the monies for his personal use during decedent’s life, although he never drew on the accounts for personal expenditures or deposited his own money in them. Given that Stephen’s testimony regarding his ownership of the accounts is inherently ambiguous, it is certainly arguable whether appel-lee has proved by clear and convincing evidence that the decedent intended to confer a present interest in him in the disputed assets.
At a minimum, the trial court should have alerted the parties to its decision to elevate the show cause hearing to a final determination of ownership of the disputed assets. As the court in Gellman v. State of Maryland, 538 F.2d 603 (4th Cir.1976) states in discussing the conversion of a hearing on a preliminary injunction to a permanent injunction hearing without notice to the parties:
“Although there is no indication that plaintiff would have produced further testimony if notified earlier that the entire case would be disposed of after a single hearing, this does not sanction the court in changing, sub silentio, the nature of the game at halftime.”
Id. at 605 (quoting T.M.T. Trailer Ferry Inc. v. Union De Tronquistas, P.R. Loc. 901, 453 F.2d 1171, 1172 (1st Cir.1971)).
Cases in which hearings on motions for preliminary injunctions were converted into determinations of whether permanent injunctions should issue uniformly indicate that the parties must be put on notice that a consolidation of trial on the merits with a hearing on a motion for a preliminary injunction is to be ordered, either before the hearing begins or at a time which will still afford the parties a full opportunity to present their respective cases.3 These *284cases point out that to do otherwise requires the petitioning party to face a Hob-son’s choice; to either forego discovery in order to seek immediate relief, or forego a prompt application for an injunction in order to prepare adequately for trial. Appellant faced a similar choice: forego discovery in order to gain possession of the assets at once, or engage in discovery and risk depletion of the accounts.
In allowing the trial court to determine ownership of the accounts based on an incomplete presentation of witnesses and facts, the majority gives short shrift to the commendable policy reasons underlying our decision in Davis v. Altmann, supra. Joint accounts are extremely useful for the elderly or ill who, with the passage of time, become less mobile or less able to manage their oivn finances. Such accounts allow another person to deposit and withdraw money from the original depositor’s account for the well being of the original depositor. The convenience of such accounts would be greatly diminished if the mere listing of a second name on the account was sufficient to vest unconditional ownership in the second person when the depositor is no longer able to speak to intent. It is for this reason that we held in Davis v. Altmann, that, where a party opens a joint account for himself (or herself) and another, the account is presumed open for the convenience of that party. The presumption of convenience operates to ensure that a caretaker can administer a depositor’s finances without running a risk that a court of law will lightly construe the depositor as a donor with present intent to give the accounts to the caretaker.
In allowing the trial court to determine Kate Presgrave made an inter vivos gift of the $55,965.21 to Robert Stephens after a show cause hearing, the majority does not afford the presumption the weight it deserves. The question of intent here is a close one. I cannot accede to the majority’s conclusion that the trial court’s proceeding to the question of ownership despite the lack of full discovery and notice is harmless (procedural) error. At the very least, the action by the trial court in the instant case — consolidating the show cause hearing and trial without notice — should be disapproved. While I would not overturn the trial court’s determination that appellee presented sufficient evidence to sustain his burden of proof as to temporary possession, which is what the show cause hearing was meant to establish, I would remand for a full trial on the merits to establish legal title in the assets. I respectfully dissent.

. After explaining the theory on which appellee was going to proceed, appellee stated: "That’s going to be our case, your honor. Now, as I understand it, you want us to proceed, your Honor? The respondent?” The court responded: "Well, yes, here on the show cause claim— and appellee rejoined, "All right. So its up to the show cause.”

. I note that at oral argument it was revealed that the law firm representing the estate had sent a first-year associate to the show cause hearing. One might ask whether it is reasonable to assume that a law firm would send an inexperienced first-year associate to such a "hearing,” if the firm realized that in fact the hearing was to be a final determination on the merits.

. See, e.g., Woe v. Cuomo, 801 F.2d 627 (2d Cir.1986); Gellman v. State of Maryland, supra; Am.Fed’n of Gov’t Employees, Local 3319 v. Colburn, 531 F.2d 314 (5th Cir.1976) (per curiam); Penn v. San Juan Hosp., Inc., 528 F.2d 1181 (10th Cir.1975); Pughsley v. 3750 Lake Shore Drive Coop. Bldg., 463 F.2d 1055 (7th Cir.1972); Eli Lilly & Co. v. Generix Drug Sales, Inc., 460 F.2d 1096 (5th Cir.1972); T.M.T. Trailer Ferry, Inc. v. Union De Tronquistas P.R. Local 901, *284supra; Nationwide Amusements, Inc. v. Nattin, 452 F.2d 651 (5th Cir.1971); Puerto Rican Farm Workers ex rel. Vidal v. Eatmon, 427 F.2d 210 (5th Cir.1970) (per curiam); Capital City Gas Co. v. Phillips Petroleum Co., 373 F.2d 128 (2nd Cir.1967).