IMO the Estate of Richard L. DeGroat, deceassed
C.A. 12738-MZ
| Del. Ch. | Oct 2, 2017Background
- Decedent Richard DeGroat executed a 2012 will leaving his estate to his five children and authorizing sale/partition of real estate; Michael DeGroat is executor.
- Decedent formerly married to Lucinda; they divorced in 2008; they had bought 3 Somerset Lane in 2001 as tenants by the entirety; divorce converted title to tenancy in common.
- In 2013 Decedent executed a deed converting the Property to joint tenancy (allegedly at Lucinda’s urging) and a power of attorney naming Lucinda as agent; Property sold in 2014 and Lucinda retained the sale proceeds.
- Michael alleges Lucinda used the POA to name herself beneficiary of accounts/policies, converted/kept property proceeds, and otherwise misappropriated funds; Lucinda contends there was an agreement that she would receive assets in return for caring for Decedent.
- Michael sued individually and as executor asserting breach of fiduciary duty, accounting, constructive trust, and unjust enrichment; discovery produced disputes over privilege and deposition errata.
- Master Zurn recommends granting in part Michael’s motion to amend (adding specific allegations and defendant Ziatyk), denying addition of two proposed plaintiffs for lack of verification, granting the motion to compel production of attorney Ferry’s file, denying the motion to strike errata, and treating Lucinda’s motion to dismiss as a motion for summary judgment and deferring ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to amend complaint (add details, add Jan & Carroll as plaintiffs, add Ziatyk as defendant) | Michael says discovery supports specifying accounts/transactions, adding Jan and Carroll (previous beneficiaries), and adding Ziatyk as a recipient of misappropriated funds | Lucinda argues proposed additions are futile, prejudicial, untimely, and Jan/Carroll lack personal knowledge/failed to verify | Grant amendment to add factual detail and to add Ziatyk; deny addition of Jan and Carroll for lack of required verifications and evidence Jan lacks personal knowledge |
| Standing to pursue claims over beneficiary designations and property proceeds | Michael asserts statutory standing as child, personal representative, and beneficiary and can seek accounting and recovery | Lucinda contends Michael lacks standing for assets never belonging to estate or to him personally | Held Michael has statutory standing to pursue accounting and claims on estate’s behalf; amendment not a futile attempt to cure standing defects |
| Privilege over attorney Ferry’s file (motion to compel) | Michael contends Lucinda put Ferry’s communications at issue by testifying about his advice re deed and thus waived/subject to at-issue exception | Lucinda claims portions of Ferry’s file are privileged and her production/witness status limits waiver; attempts to carve representation by date | Master applies the at-issue exception: because Lucinda relied on Ferry’s advice to justify the deed and related actions, she placed those communications at issue and must produce Ferry’s file relevant to the deed; motion to compel granted |
| Motion to dismiss (reliance on discovery) and dispositive standard | Michael says discovery ongoing; needs full record before responding | Lucinda filed motion relying on materials outside the pleadings | Court treats Lucinda’s motion as one for summary judgment, requires parties be given opportunity to present all pertinent material and defers decision |
| Motion to strike portions of deposition errata | Michael alleges numerous substantive contradictory changes invoking sham affidavit doctrine | Lucinda says changes are timely, Rule 30(e) allows changes, and plaintiff’s challenge is conclusory | Denied: plaintiff failed to meet elements of sham-affidavit analysis and changes were timely under Rule 30(e); issues remain for summary judgment/trial |
Key Cases Cited
- Princeton Ins. Co. v. Vergano, 883 A.2d 44 (Del. Ch. 2005) (describing the "at-issue" exception to attorney-client privilege when a party injects privileged communications into litigation)
- Cain v. Green Tweed & Co., Inc., 832 A.2d 737 (Del. 2003) (Delaware Supreme Court discussion relevant to sham-affidavit analysis)
- Hughes Tool Co. v. Fawcett Publ’ns, Inc., 350 A.2d 341 (Del. 1975) (rule on compulsory joinder and necessary parties)
- Appriva S’holder Litig. Co., LLC v. EV3, Inc., 937 A.2d 1275 (Del. 2007) (procedural requirement to give parties notice when converting a motion to dismiss into summary judgment)