970 N.W.2d 372
Mich. Ct. App.2021Background
- Nina Jean Murray was diagnosed with dementia (Jan 2014). Her son, Mark A. Murray, was appointed conservator in Sept 2014 and ordered to file an inventory and annual accountings.
- Preston Murray (another son) petitioned to modify the conservatorship, and by agreement Mark resigned; successor conservator Ella McClatchey was appointed Aug 11, 2015 and Mark was ordered to file a final accounting by Sept 4, 2015.
- Mark failed to file the final accounting and failed to produce records; the court suspended his powers and appointed attorney William Mollison as special fiduciary to prepare an accounting. Mark refused to cooperate and many bank records were missing.
- Mollison prepared an accounting and found discrepancies; Preston (as personal representative) petitioned to surcharge Mark for breaches and missing funds. The probate court found Mark breached fiduciary duties and ordered a $51,348.86 surcharge (itemized amounts for special fiduciary fees, a bank shortfall, unexplained checks, payment to Mark’s wife, and post-death misappropriation).
- Mark appealed, arguing principally that surcharging required proof by clear and convincing evidence and challenging specific surcharge items and entitlement to setoffs for caregiving expenses. The Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument (Preston) | Defendant's Argument (Mark) | Held |
|---|---|---|---|
| Standard of proof to surcharge a conservator for breach of fiduciary duty | Preponderance of the evidence is the default when statute is silent | Clear and convincing evidence required (relying on In re Baldwin) | Preponderance applies; EPIC is silent so default civil standard governs |
| Whether Mark breached fiduciary duties (inventory/accounting, recordkeeping, segregation) | Mark failed to file accurate inventory/accounting, failed to keep records, commingled funds, and engaged in self-dealing | Denies liability for many items; claims joint-account ownership and reimbursement entitlement | Probate court’s factual findings of breach were supported by a preponderance of the evidence; affirmed |
| Validity of specific surcharge items (special fiduciary fee $6,540.90; $1,800 bank shortfall; $37,099.58 unexplained checks) | Surcharges correspond to costs and unexplained deficits shown in Mollison’s accounting and testimony | Challenges reliability of Mollison’s testimony and accounting; claims some payments were legitimate reimbursements or joint-account transfers | Court deferred to probate-court credibility findings; upheld those surcharges as supported by the record |
| Claim for recoupment or setoff for caregiving expenses and other alleged legitimate charges | Mark claims entitlement to reimbursement/setoff for care-related expenses and prior $10,000 payment to himself | Argues he incurred documented expenses for housing/care and should offset surcharges | Denied: Mark failed to plead or prove recoupment/setoff with adequate receipts or accounting; probate court properly rejected the claim |
Key Cases Cited
- In re Baldwin’s Estate, 311 Mich. 288 (discussed historic appellate language but did not establish a trial-level burden of proof)
- In re Baldwin Trust, 274 Mich. App. 387 (standard-of-review and fiduciary principles)
- In re Conservatorship of Brody, 321 Mich. App. 332 (deference to probate court credibility and factual findings)
- In re Guardianship of Redd, 321 Mich. App. 398 (when statute is silent, preponderance is default civil standard)
- Mayor of Cadillac v. Blackburn, 306 Mich. App. 512 (application of default preponderance standard where statute is silent)
- Kar v. Hogan, 399 Mich. 529 (presumption of undue influence when fiduciary benefits and had opportunity to influence)
- In re Susser Estate, 254 Mich. App. 232 (fiduciary duties arising from power of attorney and conversion liability)
- Walters v. Nadell, 481 Mich. 377 (raise-or-waive preservation rule in civil appeals)