Court Opinion

ID: 4195039
Source: CourtListenerOpinion
Date Created: 2017-08-11 07:08:45.909844+00
Date Added: 2024-06-11T14:40:18.765831
License: Public Domain

STATE OF MICHIGAN

                              COURT OF APPEALS

In re DOREEN M. SEKLAR, a Protected Person.

JOHN YUN, Conservator,                                              UNPUBLISHED
                                                                    August 8, 2017
               Intervenor-Appellee,

and

WILLIAM D. SEKLAR and KIMBERLY C.
KEYES,

               Intervenors,

v                                                                   No. 330829
                                                                    Oakland Probate Court
JEFFREY HARTMAN,                                                    LC No. 2014-359279-CA

               Intervenor-Appellant.

Before: O’CONNELL, P.J., and GLEICHER and BOONSTRA, JJ.

PER CURIAM.

       This case involves the administration of protected person Doreen M. Seklar’s estate.
Doreen’s brother, intervenor William Seklar, began the proceeding by filing a petition asking the
Oakland County Probate Court to appoint a conservator for Doreen’s estate. The probate court
appointed intervenor-appellee John Yun to act as a conservator. Yun then filed a petition asking
the probate court to: (1) set aside a trust, will, power of attorney, and patient advocate executed
by Doreen under respondent-appellant Jeffrey Hartman’s supervision, and (2) surcharge Hartman
$190,369.89. The probate court entered an order that surcharged Hartman $190,369.89. Yun
then moved for entry of judgment for Doreen against Hartman for the surcharge amount. The
probate court entered judgment against Hartman, and Hartman appeals this judgment as of right.
We affirm.

                                            I. FACTS

       William stated that Doreen owned real property valued at approximately $176,780 and
personal property valued at approximately $115,000. Doreen’s neurologist, Dr. Jodi Ganley,

                                                -1-
D.O., concluded that Doreen suffers from vascular dementia and required a guardian to make
financial decisions.

        William believed that as of January 2014, Doreen stopped seeing Dr. Ganley and stopped
taking her prescribed medications. William believed that Hartman influenced these decisions.

       Around this time, Hartman also became involved with Doreen’s estate. Yun alleged that
Hartman began assisting Doreen with her financial transactions and took Doreen to a law office
on or about March 14, 2014, to prepare a new estate plan. A Revocable Trust Agreement,
amended and restated March 14, 2014, named Hartman as Doreen’s successor trustee.1 A
Durable Power of Attorney, dated March 14, 2014, named Hartman Doreen’s Attorney-in-Fact.
A Nomination of Conservator/Guardian, dated March 14, 2014, named Hartman as a
conservator/guardian. The record contains a Last Will and Testament for Doreen dated March
14, 2014. In total, Yun alleged that these documents named Hartman as beneficiary, trustee,
personal representative, power of attorney, and patient advocate.

       Additionally, William alleged that Hartman depleted Doreen’s estate by opening
numerous lines of credit over a six month span in 2014. Similarly, Yun stated that Hartman
improperly spent $37,364.25 of Doreen’s funds and fraudulently opened accounts in Doreen’s
name that were not used for Doreen’s benefit. Yun stated that the accounts, when added
together, had a total balance of $153,364.25.

       Further, an Offender Tracking Information Service (OTIS) search indicated that Hartman
had two convictions. Hartman admitted having a prior felony money laundering conviction.

       On September 29, 2014, William filed a petition in probate court alleging that Doreen
needed protection and asking to be appointed conservator of her estate. The probate court held a
hearing on the petition and found that Doreen was an incapacitated individual by reasons of
“mental illness” and “mental deficiency,” who “recently has been under the undue influence of a
non-relative,” and who was “impaired to the extent of lacking sufficient understanding or
capacity to make or communicate informed decisions[.]” Accordingly, the probate court
appointed Yun as Doreen’s guardian and as conservator of all assets of Doreen’s estate.

       On July 10, 2015, Yun filed a petition in the probate court to (1) set aside the trust, will,
power of attorney, and patient advocate form that Doreen executed under Hartman’s supervision,
averring that Hartman unduly influenced Doreen while acting as her fiduciary, and Doreen now
wanted the documents set aside, and (2) surcharge Hartman $190,368.89, representing the total
of the improperly spent $37,364.25 and $153,364.25 balance on the fraudulent accounts. A
proof of service indicates that the petition was sent to Hartman by first-class mail.

       The probate court scheduled a hearing on the petition and then adjourned the hearing
until August 19, 2015. A proof of service indicates that the order of adjournment was sent to
Hartman by first-class mail.

1
    The document named Michael Hartman as a second successor trustee.

                                                -2-
       Hartman did not appear at the August 19, 2015 hearing. At the hearing, the probate court
asked if all of the interested parties had been notified. Yun, through counsel, responded, “Yes,
Your Honor.” Following the hearing, the probate court entered an order setting aside the March
14, 2014, “Trust, Will, Power of Attorney and Patient Advocate” and surcharged Hartman
$190,369.89. A proof of service indicates that the order was sent to Hartman by first-class mail.

      On September 23, 2015, Yun moved for a $190,369.89 judgment for Doreen against
Hartman. A proof of service indicates that the motion and a notice of hearing were sent to
Hartman by first-class mail.

        Hartman objected to the entry of judgment. Significantly, Hartman argued that Yun, a
fiduciary, was required to seek a surcharge as a civil action pursuant to MCR 5.101(C)(1). A
civil action requires (1) the filing of a complaint and (2) service of a summons and complaint by
(a) personal service or (b) registered or certified mail. These requirements would have provided
Hartman due process. But neither requirement was met. Therefore, Hartman lacked proper
notice of the August 19, 2015 hearing, and the probate court lacked jurisdiction to enter a money
judgment against him.

        Yun argued that the surcharge should be brought as a proceeding, because “it’s how
we’ve always done it,” and a surcharge “is an action against a fiduciary who is under the
jurisdiction of this Court,” not “an action against a third party.” Further, Yun argued that
Hartman did not deny that he committed a breach of fiduciary duty when he had a power of
attorney over Doreen, had access to Doreen’s accounts and personal information, fraudulently
opened accounts in her name, and gained personal financial benefit. Therefore, the probate court
had the authority to enter a surcharge. Hartman was served with notice of the hearing on the
petition to set aside documents and for a surcharge.

       The probate court agreed with Yun, stating:

               I agree with counsel’s argument; this is not an action against a third party.
       This is a proceeding. Probate court clearly has jurisdiction over proceedings with
       respect to fiduciaries. This is a surcharge action. And with respect to the
       constitutional concerns, the due process clause offers parties notice and an
       opportunity to appear. And I am satisfied that Mr. Hartman had that opportunity.
       He did receive notice by first class mail. There’s no indication that it was
       returned or he didn’t receive it. Further, as counsel’s indicated, an order
       followed, and that was also served and never returned. He clearly had notice and
       opportunity to come into court and to object if there were—there was a basis for
       that. The petition clearly sets forth the request for relief, which is the surcharge,
       so I certainly believe that Mr. Hartman was well aware of what the proceeding
       was and could have come in and challenged had he chosen to do so.

Accordingly, the probate court entered judgment against Hartman. This appeal followed.

                                 II. STANDARD OF REVIEW

      We review de novo whether the probate court possessed subject-matter jurisdiction, In re
Lager Estate, 286 Mich. App. 158, 162; 779 NW2d 310 (2009), whether the probate court
                                                -3-
properly interpreted court rules, Staff v Johnson, 242 Mich. App. 521, 527; 619 NW2d 57 (2000),
and whether a party received “sufficient notice to satisfy due process,” In re Baldwin Trust, 274
Mich. App. 387, 396; 733 NW2d 419 (2007).

                                      III. JURISDICTION

       Hartman argues that the probate court lacked jurisdiction over him. We disagree.

        Subject-matter jurisdiction is “ ‘a court’s power to hear and determine a cause or matter.’
” In re Lager Estate, 286 Mich. App. at 162, quoting In re Wayne Co Treasurer Petition, 265
Mich. App. 285, 291; 698 NW2d 879 (2005). Probate courts have limited jurisdiction as set forth
by statute. Id. The Estates and Protected Individuals Code (EPIC), MCL 700.1101, et seq.,
states that the probate court has exclusive legal and equitable jurisdiction over:

              (b) A proceeding that concerns the validity, internal affairs, or settlement
       of a trust; the administration, distribution, modification, reformation, or
       termination of a trust; or the declaration of rights that involve a trust, trustee, or
       trust beneficiary, including, but not limited to, proceedings to do all of the
       following:

               (i) Appoint or remove a trustee.

                                               ***

                (v) Determine a question that arises in the administration or distribution of
       a trust, including a question of construction of a will or trust.

              (vi) Instruct a trustee and determine relative to a trustee the existence or
       nonexistence of an immunity, power, privilege, duty, or right.

                                               ***

               (c) . . . a proceeding that concerns a guardianship, conservatorship, or
       protective proceeding.

               (d) A proceeding to require, hear, or settle the accounts of a fiduciary and
       to order, upon request of an interested person, instructions or directions to a
       fiduciary that concern an estate within the court’s jurisdiction. [MCL 700.1302.]

Therefore, the probate court had jurisdiction to resolve Yun’s petition to set aside a trust, will,
power of attorney, and patient advocate executed by Doreen under respondent Hartman’s
supervision, and to settle Hartman’s accounts.

        Further, EPIC provides the probate court “concurrent legal and equitable jurisdiction to”
“[h]ear and decide a claim by or against a fiduciary or trustee for the return of property” “in
regard to an estate of a . . . protected individual.” MCL 700.1303(1)(h). This includes
jurisdiction over a petition to surcharge a fiduciary. See In re Estate of Graves, unpublished

                                                  -4-
opinion per curiam of the Court of Appeals, issued December 3, 2009 (Docket No. 286674), pp
3-4.2

        The probate court concluded that Hartman was a fiduciary. Hartman abandoned any
challenge to this conclusion. He simply referred to himself as an alleged fiduciary, without
crafting any argument to challenge the trial court’s conclusion. An appellant abandons an issue
when he “merely announce[s] his position and leave[s] it to this Court to discover and rationalize
the basis for his claims,” or “give[s] only cursory treatment of an issue with little or no citation
of supporting authority.” People v Matuszak, 263 Mich. App. 42, 59; 687 NW2d 342 (2004)
(internal quotations, alterations, and citations omitted).

        Further, Hartman meets the definition of a fiduciary. First, the March 14, 2014,
revocable trust named Hartman a successor trustee. EPIC lists a trustee as a type of fiduciary,
MCL 700.1104(e), and defines a trustee a “successor trustee, whether or not appointed or
confirmed by the court,” MCL 700.1107(o). Second, the March 14, 2014, Durable Power of
Attorney named Hartman Doreen’s Attorney-in-Fact.              EPIC defines a fiduciary as a
nonexhaustive list of persons. MCL 700.1104(e). This Court has held that “a fiduciary
relationship exist[s] between a principal and [an] attorney in fact ‘by virtue of the grant of a
general power of attorney.’ ” In re Susser Estate, 254 Mich. App. 232, 235; 657 NW2d 147
(2002), quoting In re Conant Estate, 130 Mich. App. 493, 498; 343 NW2d 593 (1983). Therefore,
the probate court had jurisdiction over Yun’s petition to surcharge Hartman.

                 IV. TYPE OF ACTION: PROCEEDING OR CIVIL ACTION

       Hartman then argues that the surcharge constituted a civil action as defined in MCR
5.101(C) and, therefore, the service requirements under MCR 2.105 governed. We disagree.

        Chapter 5 of the Michigan Court Rules governing probate courts states that “[t]here are
two forms of action, a ‘proceeding’ and a ‘civil action.’ ” MCR 5.101(A). MCR 5.101(C) lists
two types of actions that “must be” civil actions: (1) “[a]ny action against another filed by a
fiduciary or trustee,” and (2) “[a]ny action filed by a claimant after notice that the claim has been
disallowed.” Accordingly, all other actions can be proceedings.

        The different types of actions require filing different documents and different manners of
service. To begin a proceeding, a petitioner must file “an application or a petition.” MCR
5.101(B). MCR 5.105(A) governs the manner of service. Significantly, a petitioner can serve an
interested person at his or her “current address” by “ordinary first-class mail” “[u]nless another
method of service is required by statute, court rule, or special order of a probate court.” MCR
5.105(A)(2). To begin a civil action, a petitioner must file a complaint. MCR 5.101(C). MCR
2.105 describes the manner of service. Significantly, MCR 2.105 requires service of a complaint
and summons and does not allow service on an individual by ordinary first-class mail.

2
 We find this non-binding opinion persuasive. See MCR 7.215(C)(1); In re Estate of Klein, 316
Mich. App. 329, 335; ___ NW2d ___ (2016).

                                                -5-
        We hold that a surcharge against a fiduciary need not be titled a civil action under MCR
5.101(C). The Institute of Continuing Legal Education (ICLE), cited by Yun on appeal, wrote in
Michigan Probate Litigation: A Guide to Contested Matters (2013), § 8.36, p 341, that “[a]ctions
brought against a fiduciary are considered proceedings.” Further, it concluded that “although
MCR 5.101(C)(1) provides that any ‘action against another filed by a fiduciary’ is a civil action
and not a proceeding, actions filed by a successor fiduciary against a prior fiduciary should be
treated as a proceeding.” Id. This conclusion is consistent with our discussion of surcharge
actions in multiple published opinions. See, e.g., Steinway v Bolden, 185 Mich. App. 234, 236;
460 NW2d 306 (1990) (noting that a “[p]laintiff filed a petition for surcharge of [a] fiduciary”);
In re Goldman Estate, 236 Mich. App. 517, 518; 601 NW2d 126 (1999) (noting that “[p]etitioners
filed a petition . . . to surcharge [a] respondent for breaching its fiduciary duties”); In re Baldwin
Trust, 274 Mich. App. at 389, 397 (reviewing a denial of a petition to surcharge fiduciaries for an
abuse of discretion). Therefore, we adopt ICLE’s interpretation as our own. Thus, Yun correctly
characterized his surcharge action as a proceeding, filed that action with a petition, and served
Hartman by ordinary first-class mail.

        Accordingly, Hartman’s due process claim also fails. The Fourteenth Amendment of the
United States Constitution and Article 1, § 17 of Michigan’s 1963 Constitution prevent the
government from depriving a person of property without due process of law. In re Keyes Estate,
310 Mich. App. 266, 274; 871 NW2d 388 (2015). Due process requires the government to
provide “notice reasonably calculated, under all the circumstances, to apprise interested parties
of the pendency of the action and afford them an opportunity to present their objections.” Id.
(internal quotations and citations omitted). Here, proofs of service indicate that Hartman
received the petition for surcharge, notice of the August 19, 2015 hearing on the petition, the
motion to enter judgment for the surcharge amount, and a notice of a hearing on the motion.
Therefore, Hartman received notice and an opportunity to present his objections.

       We affirm.

                                                              /s/ Peter D. O’Connell
                                                              /s/ Elizabeth L. Gleicher
                                                              /s/ Mark T. Boonstra

                                                 -6-