Court Opinion

ID: 7826046
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:07:13.355903+00
Date Added: 2024-06-11T16:30:52.046954
License: Public Domain

Donald L. Corbin, Justice, dissenting. This dissent focuses on this case to illuminate the ageless determination that probate courts have exclusive jurisdiction of guardianship matters concerning the persons and estates of wards. The chancery court lacked subject-matter jurisdiction of the guardianship matters in this case, and the case therefore should be reversed and dismissed. Moreover, this case illuminates the confusion this court creates when it interprets our antiquated constitutional judicial article and attempts to blend its separation of jurisdiction of trial courts into circuit, chancery, probate, juvenile, and various combinations thereof. While I agree with the majority, based on the cases cited therein, that chancery courts have jurisdiction of matters concerning trust, fraud, and accountings and fiduciaries other than those relating to guardianships, I do not agree that the chancery court has jurisdiction of such issues or claims when they concern guardianships. This court has recently addressed the issue of a chancery court’s lack of jurisdiction over guardianship matters in Dent v. Wright, 322 Ark. 256, 909 S.W.2d 302 (1995), where we affirmed in part a chancery court’s rulings on issues of fraud and constructive trust, but reversed and dismissed in part, for lack of subject-matter jurisdiction, the chancellor’s appointment of a guardian. There, we explained the subject-matter jurisdiction relationship between chancery and probate courts as follows: Jurisdiction of the probate court over all matters of guardianship, other than guardianships ad litem in other courts, is exclusive. Ark. Const. art. 7, § 34; Ark. Code Ann. § 28-65-107(a) (1987) (emphasis added). The section of the Arkansas Constitution that is now Article 7, section 34, did not consolidate the chancery and probate courts, and, while the judge of the chancery court is also the judge of the probate court, the judge conducts each court separately. Wooten v. Penuel, 200 Ark. 353, 140 S.W.2d 108 (1940). The section does not permit courts of chancery to lift matters over which the probate court has exclusive jurisdiction out of probate courts and apply equitable principles in disposing of controversies cognizable only in probate. Id. at 357-58, 140 S.W.2d at 111; see also Hilburn v. First State Bank, 259 Ark. 569, 535 S.W.2d 810 (1976) (“probate courts are vested with exclusive jurisdiction in matters relative to . . . guardians. . . .”); Thompson v. Dunlap, 244 Ark. 178, 424 S.W.2d 360 (1968) (holding that chancery and probate courts are separate tribunals, each having [its] own jurisdiction and that a chancery court cannot “inherit jurisdiction” from the probate court in same county); Janssen v. Blissenbach, 210 Ark. 22, 193 S.W.2d 814 (1946) (stating that the two courts are wholly distinct and operate independently of one another and that [the] trial court, sitting as chancery in that case, correctly did not pass on questions reserved for probate). Dent, 322 Ark. at 265-66, 909 S.W.2d at 307. Subject-matter jurisdiction is determined from the pleadings. Union Pac. R.R. Co. v. State ex rel. Faulkner, 316 Ark. 609, 873 S.W.2d 805 (1994). In this case, the complaint was for an accounting and judgment. As against Reid, appellees alleged that he breached his fiduciary duty and committed fraud. As against appellant, appellees alleged that appellant negligently paid the proceeds to Reid by failing to verify Reid’s authority to collect the proceeds and by failing to require proof of bond. As against both appellant and Reid, appellees requested an accounting of and judgment for the proceeds. Thus, the critical and threshold issues were whether appellant paid the proceeds to Reid as the duly qualified, appointed, and serving guardian, and the accounting of the proceeds. Such determinations can only be made by the probate court — the court that is given exclusive original jurisdiction of guardianship matters. Ark. Const. art. 7, § 34; Ark. Code Ann. § 28-65-107(a) (1987); Dent, 322 Ark. 256, 909 S.W.2d 302. There can be no cause of action for fraud, breach of fiduciary duty, or negligence until the probate court has entered a ruling on the accounting and judgment for deficiency of the proceeds. Thus, while the pleadings raise tort issues that are cognizable in chancery court, the threshold issues of whether appellant properly paid the proceeds to Reid as the duly qualified, appointed, and serving guardian of appellees’ persons and estates, and the accounting of the funds in appellees’ guardianship estates are not cognizable in chancery court. The chancery court was not permitted to lift the guardianship matter from the probate court’s exclusive jurisdiction. Id. The majority opinion contributes to the jurisdictional confusion by concluding that the chancery court has jurisdiction of this case, without overruling Dent. The majority opinion illustrates the problems courts face and compound when they erroneously exercise subject-matter jurisdiction by referring to Reid as appellees’ “former” guardian. Such a reference assumes facts not in the record. Under current law, a guardianship of the estate of a ward based solely on the ward’s minority does not terminate automatically upon the ward’s attainment of majority. See generally Ark. Code Ann. § 28-65-401 (Supp. 1995). There is nothing in this record to show that the probate court has approved a final accounting of the appellees’ accounts as wards and terminated Reid’s guardianship. An accounting of a ward’s account and termination of a guardianship are matters that lie exclusively in probate court. Section 28-65-107. The majority’s assumption that Reid is the “former” guardian magnifies the lack of chancery’s subject-matter jurisdiction in this case. Moreover, it demonstrates that the chancery court assumed jurisdiction of this case too soon. The chancellor should have transferred the case to probate, settled the accounting, and determined whether Reid was the duly qualified, appointed, and acting guardian. Once those determinations were made by the probate court, the chancellor could then have exercised jurisdiction of the fraud and negligence claims. See, 65th Center, Inc. v. Copeland, 308 Ark. 456, 825 S.W.2d 574 (1992); In Re Morgan, 310 Ark. 220, 833 S.W.2d 776 (1992); Forehand v. American Collection Serv., Inc., 307 Ark. 342, 819 S.W.2d 282 (1991). Dudley and Newbern, JJ., join in this dissent.