2017 COA 114
Colo. Ct. App.2017Background
- In a conservatorship for Kylee Becker, Wells Fargo was ordered to establish a restricted conservatorship account for settlement funds, to be maintained by her father Aaron Becker.
- Funds were deposited in 2011; in 2014 Becker reported a balance of about $56,642.46, which the court approved.
- Becker withdrew funds for personal and household expenses from 2012 onward; the account eventually ran negative and was closed in 2015.
- A 2016 show-cause hearing revealed the account was not opened as restricted due to a coding error, allowing withdrawals without a court order.
- The trial court ordered Wells Fargo and Becker to restore $56,642.46 to a new restricted account, finding joint and several liability for breach of fiduciary duty.
- Wells Fargo sought reconsideration, arguing [a] liability should be apportioned and [b] the amount to restore should be based on actual beneficiary-benefiting expenditures; the court denied reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does 13-21-111.5 apply to surcharge proceedings? | Wells Fargo argues it should apportion liability via 13-21-111.5. | Becker contends 13-21-111.5 governs joint liability in tort-like contexts. | No application; statute not applicable to fiduciary surcharge. |
| May the court surcharge Wells Fargo for the full amount without determining beneficiary expenditures? | Wells Fargo contends it is liable for mismanagement and should be surcharged for the total amount. | Becker argues some funds were used for beneficiary needs; full restoration risks double recovery. | Remanded to determine actual amount spent for beneficiary and adjust liability accordingly. |
| Did the court err by not holding a hearing to apportion liability or offset amounts due to misused funds? | Wells Fargo seeks a hearing on relative fault and misused funds. | Becker supports the restorative order as a fiduciary surcharge. | Not needed to decide given (1); remand for factual determinations. |
Key Cases Cited
- Taylor v. Taylor, 381 P.3d 428 (Colo. 2016) (statutory reading and context govern interpretation)
- People v. Bagby, 734 P.2d 1059 (Colo. 1987) (comprehensive regulatory scheme precludes broader liability schemes)
- Taylor, 381 P.3d 433 (Colo. 2016) (fiduciary supervision under 15-10-504: surcharge, not tort remedy)
- Lexton-Ancira Real Estate Fund, 1972 v. Heller, 826 P.2d 819 (Colo. 1992) (double recovery concerns in fiduciary contexts)
- Resolution Trust Corp. v. Heiserman, 898 P.2d 1049 (Colo. 1995) (fiduciary regulation and tort distinctions in fiduciary contexts)
- Schwankl v. Davis, 85 P.3d 512 (Colo. 2004) (contextual reading of surrounding statutes supports interpretation)