131 A.3d 158
R.I.2016Background
- William B. Ross suffered a disabling brain injury in 1958, was intermittently found incompetent, and amassed investments and annuities naming his three sons and two sisters (Nancy Howard and Lois Sanford) as beneficiaries or joint tenants.
- Nancy Howard became William’s VA legal custodian in 1992 and was appointed guardian by the probate court in 1994; she prepared annual accountings and a fifth and final accounting after William’s death in 1999.
- Plaintiffs (William Jr., Glen, and James Ross) objected to the final accounting, alleging breach of fiduciary duty, fraud, and undisclosed conflicts of interest because Howard (and Sanford) were joint owners/beneficiaries on some accounts.
- The probate court entered a consent order allowing the final accounting; plaintiffs appealed to Superior Court, which after a nonjury trial found for defendants, concluding Howard did not breach duties, did not change beneficiary designations, and acted prudently in managing investments.
- Plaintiffs appealed to the Rhode Island Supreme Court raising (1) breach of fiduciary duty/self‑dealing, (2) failure to disclose conflict of interest, and (3) statutory violations in veterans’ guardianship procedures and distributions prior to probate approval.
- The Supreme Court affirmed the Superior Court: it deferred to the trial justice’s factual and credibility findings, rejected pleadings not properly preserved, and held no evidence showed Howard diminished the estate or engaged in wrongful self‑dealing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of fiduciary duty/self‑dealing | Howard treated ward’s investments as her own, changed beneficiaries, and improperly benefited as joint tenant | Howard did not change beneficiary designations, only exchanged investment vehicles to increase returns; acted prudently | No breach; trial justice’s credibility findings supported—no evidence Howard changed beneficiaries or misappropriated funds |
| Failure to disclose conflict of interest | Howard concealed that she was joint tenant on some accounts when seeking guardianship, breaching duty of loyalty | Rhode Island law does not per se bar a guardian from being joint tenant; no demonstrated harm or diminution of estate | Claim not separately litigated below but trial findings implicitly preclude breach; no actionable conflict shown |
| Compliance with veterans’ guardianship statutes (§ 33‑16 etc.) | Statutory procedures for VA guardianships/accountings and bond requirements were not followed | Allegations not preserved below; procedures were followed as required in practice | Waived on appeal; not considered on merits due to preservation failure |
| Distribution prior to probate approval (§ 33‑18‑27) | Assets/distributions made before probate approval, violating statutory rules | Argument waived; even if preserved, statute permits later ratification if court approves and no fraud or manifest error | Waived; court also found no evidence of improper distributions that would defeat statutory protection |
Key Cases Cited
- Connor v. Schlemmer, 996 A.2d 98 (R.I. 2010) (fiduciary/constructive trust principles)
- Notarantonio v. Notarantonio, 941 A.2d 138 (R.I. 2008) (nature of fiduciary duty and effect of trial findings)
- Wellington Condominium Ass’n v. Wellington Cove Condominium Ass’n, 68 A.3d 594 (R.I. 2013) (deference to trial justice factual findings)
- Robinson v. Delfino, 710 A.2d 154 (R.I. 1998) (effect of joint survivorship accounts absent fraud or incapacity)
- Fielder v. Howell, 631 P.2d 249 (Kan. Ct. App. 1981) (declining strict rule forcing guardian to forfeit survivorship where estate not diminished)
- Dowdy v. Jordan, 196 S.E.2d 160 (Ga. Ct. App. 1973) (guardian–joint tenant conflict of interest can breach duty of loyalty)