Appeal of Estate of Beatrice Jakobiec
176 A.3d 187
| N.H. | 2017Background
- Beatrice Jakobiec died in 2001; Thomas Tessier was appointed estate administrator and materially underreported the estate value and misappropriated funds (CD proceeds, insurance refund, and fees), per an ADO auditor report.
- The Estate (administrator Edmund Hibbard) claimed $404,830.76 against the New Hampshire Public Protection Fund (PPF): $208,798.95 in stolen assets, $96,500 in stolen legal fees, and $99,531.81 in lost income, minus recoveries from a probate bond and a CPA.
- The PPF found the Estate suffered $208,798.95 in stolen assets and $89,686.07 in stolen legal fees, disallowed lost income as ineligible under Sup. Ct. R. 55(4), and subtracted gross third-party recoveries to reach a $28,485.02 net eligible recovery.
- The PPF then reduced that net recovery by 50%, reasoning Thaddeus Jakobiec (one of two beneficiaries) had already been made whole in a separate proceeding, yielding $14,242.51 to the Estate.
- The Estate appealed, arguing (1) the PPF improperly halved the recovery by treating estate beneficiaries as indistinguishable from the estate; (2) the PPF improperly excluded certain checks from stolen fees; (3) the PPF mischaracterized the Estate’s claim as including lost income; and (4) the PPF deducted gross rather than net third-party recoveries.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PPF could reduce the Estate's award by 50% because a beneficiary (Thaddeus) was previously made whole | Estate: Estate is a separate legal entity from beneficiaries; PPF may not alter probate distribution or halve estate's PPF reimbursement | PPFC: Limiting PPF payment to actual losses avoids double recovery where beneficiary was already compensated | Court: Reversed; PPF unsustainably exercised discretion by treating beneficiaries as indistinct from the estate; probate court should address double-recovery allocation post-PPF determination |
| Whether two checks (Excluded Checks) payable to Tessier should be excluded from stolen legal fees reimbursable by PPF | Estate: Checks were payable to Tessier; no evidence they were advanced for Thaddeus’s support; thus they are estate losses reimbursable by PPF | PPFC: Prior Thaddeus proceeding found those payments properly paid Thaddeus’s expenses and did not benefit Tessier | Court: Rejected PPFC reliance on Thaddeus proceeding; remanded for PPFC to determine whether those checks were stolen from the Estate (treating estate as entity distinct from beneficiary) |
| Whether PPF properly treated lost income as included in the Estate's claim and thus ineligible for PPF reimbursement | Estate: Lost income claim was used only to calculate the gross probate-bond claim; PPF should not reduce PPF claim by recoveries without first allocating recoveries to lost income | PPFC: Lost income and collection costs are ineligible under Rule 55(4); deduct gross recoveries to avoid reimbursing collection expenses | Court: Agreed lost income is ineligible for PPF reimbursement but held that when recoveries from other sources legitimately include lost income, claimants may allocate gross recoveries first to PPF-ineligible items (like lost income) before reducing PPF claim; remanded for PPFC to assess legitimacy of lost-income claim |
| Whether PPF correctly deducted gross third-party recoveries (instead of net recoveries) when calculating net eligible PPF claim | Estate: Net recoveries (gross less collection expenses) should be deducted; RSA 556:14 supports deducting expenses of recovery so estate receives net | PPFC: Deducting net recoveries would effectively have PPF reimburse attorney fees used to collect recoveries; Rule 55(4) bars reimbursement of collection expenses | Court: Affirmed PPFC: because the PPFC credited the Estate’s own offer of proof that net = gross less attorney fees, deducting net would permit PPF to cover collection costs (disallowed by Rule 55(4)); so PPF properly deducted gross recoveries and not the attorney-fee portion from PPF payout |
Key Cases Cited
- Bingham v. Zolt, 66 F.3d 553 (2d Cir. 1995) (estate is distinct from beneficiaries; jury need not consider beneficiary entitlement where probate unresolved; probate can prevent double recovery)
- Lisbon Sav. Bank & Co. v. Moulton's Estate, 91 N.H. 477 (N.H. 1941) (probate court has exclusive jurisdiction over settlement and distribution of estates)
- In re Proposed Public Protection Fund Rule, 142 N.H. 588 (N.H. 1998) (PPF is a limited, last-resort reimbursement mechanism; other avenues of compensation remain available)