Estate of Keenan v. Colorado State Bank
252 P.3d 539
Colo. Ct. App.2011Background
- Keenan, a protected person, is beneficiary of a disability trust and an income trust stemming from a large medical settlement.
- CSBT served as conservator of the disability trust; Keenan’s mother had previously been guardian/conservator and CSBT trustee.
- In 2005 Keenan sought termination of the guardianship and conservatorship due to cognitive improvement; CSBT remained as conservator.
- In 2007 a dispute arose between Keenan and Grasee (the limited guardian), leading to Kutz's neuropsychological evaluation finding Keenan no longer incapacitated but indicating a professional fiduciary was appropriate.
- Keenen moved to replace CSBT with Members Trust; CSBT opposed termination and substitution, and a hearing was held with various rulings; CSBT paid substantial fees in defending its position.
- The trial court awarded CSBT attorney fees and costs, but the appellate court vacated some portions and remanded for further findings on certain disbursements, including an extraordinary $1,945 charge and the overall fee award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a conservator may oppose termination of a conservatorship | Keenan: opposing termination breaches ward’s autonomy. | CSBT: can oppose in good faith to protect assets and proper fiduciary duties. | Conservator may oppose in reasonable, good faith manner. |
| Whether common law supports the 'reasonably and in good faith' standard | Keenan asserts conflict-of-interest principles bar opposition. | CSBT argues common law allows such opposition and compensation from estate. | Common law supports the standard. |
| Whether section 15-14-417(3) permits expenses for opposing termination | Keenan: misapplication of statute; expenses should not be borne by Keenan. | CSBT: defense of estate litigation may be compensated under subsection (3). | Section 15-14-417(3) permits such compensation; remand to address specific expenditures. |
| Whether the same standard governs opposition to substitute conservators | Keenan argues substitution opposition should follow stricter fiduciary duties. | CSBT: standard aligns with opposition to termination and is applicable here. | Reasonably and in good faith standard applies to both. |
| Whether the award of fees and costs requires remand for specific findings | Keenan contends some costs/fees were not properly supported or allocated. | CSBT asserts the accounting and fees are generally reasonable. | Remand for precise determinations on certain items (e.g., $1,945 extraordinary services) and for independent findings on reasonableness and equity under 15-14-417. |
Key Cases Cited
- In re Guardianship of Cookingham, 45 Cal. 2d 367, 289 P.2d 16 (Cal. 1955) (guardian may oppose termination; fiduciary fees may be paid from estate)
- Conservatorship of Lefkowitz, 50 Cal. App. 4th 1310, 58 Cal. Rptr. 2d 299 (Cal. App. 1996) (conservator opposing termination may be justified)
- Bradford, 188 S.W.2d 979 (1945) (fiduciary loyalty and opposing restraint can be compatible)
- Lybarger v. People, 807 P.2d 570 (Colo. 1991) (defines good faith and standard of error-free conduct)
- Crandall v. City & County of Denver, 238 P.3d 659 (Colo. 2010) (statutory interpretation; specific provisions prevail)
- Heller v. First National Bank, 657 P.2d 992 (Colo. 1982) (reasonableness and good faith standards in fiduciary duties)
- Conservatorship of Lefkowitz, 50 Cal. App. 4th 1310 (Cal. App. 1992) (estate litigation expenses under fiduciary defense)