IN RE: ESTATE OF VLADA SOFIA STANCIKAITE ABRAITIS [Appeal by Attorney Catherine M. Brady]
No. 104816
Court of Appeals of Ohio, Eighth Appellate District, County of Cuyahoga
June 29, 2017
[Cite as In re Estate of Abraitis, 2017-Ohio-5577.]
JOURNAL ENTRY AND OPINION; Civil Appeal from the Cuyahoga County Court of Common Pleas, Probate Division, Case No. 2011 EST 172533
BEFORE: Stewart, J., Kilbane, P.J., and E.T. Gallagher, J.
RELEASED AND JOURNALIZED: June 29, 2017
For Catherine M. Brady
Catherine M. Brady
4417 West 189th Street
Cleveland, OH 44135
ATTORNEYS FOR APPELLEES
For Adam M. Fried
Adam M. Fried
Martin T. Galvin
Paul R. Shugar
David J. Walters
Reminger Co., L.P.A.
1400 Midland Building
101 Prospect Avenue, West
Cleveland, OH 44115
For Vivian Abraitis-Newcomer
Randall M. Perla
19443 Lorain Road
Fairview Park, OH 44126
Also Listed
Egidijus K. Marcinkevicius
A. Sirviaitis & Associates
880 East 185th Street
Cleveland, OH 44119
{¶1} After finding that appellant-attorney Catherine M. Brady engaged in frivolous conduct with respect to the administration of an estate, the probate court ordered her to pay attorney fees and expenses to appellee Adam Fried, the successor fiduciary to the estate of Vlada Sofija Stancikaite Abraitis.1 The nine assignments of error on appeal collectively challenge whether the court properly determined that sanctions were warranted and whether the amount of sanctions was reasonable.
{¶2} This case has a long history that belies the simplicity of the facts. In 2004, Abraitis was named guardian for his mother, Vlada, but was later removed. Vlada died in 2008. No will was offered into probate at that time.
{¶3} In June 2011, the Internal Revenue Service issued Abraitis a final notice of intent to levy on assets he held in an investment account under his own name and social security number in order to satisfy his tax obligations for prior years. Abraitis claimed that the proceeds of the investment account had been deposited into the account by his
{¶4} With the tax matter finally adjudicated, Abraitis offered into probate a will that his mother executed in 1978. The will named Abraitis and his brother as equal beneficiaries of the estate. The court named Abraitis as the executor of the estate. An inventory of the estate listed a single asset—the investment account that the IRS ruled belonged to Abraitis—and noted that the funds were the subject of state2 and federal tax proceedings.
{¶5} Abraitis‘s brother died in Florida in November 2013. The brother‘s will named his ex-wife as his personal representative and sole beneficiary. One day after a Florida court made the ex-wife the personal representative of the estate (and less than three weeks after the brother‘s death), Abraitis filed an application to probate a new will
{¶6} The court removed Abraitis as executor of the estate and named Fried the successor executor. The court found that Abraitis “acknowledged that he was aware in 2011 when he opened his mother‘s estate that there was a later will that was not presented for probate.” The court also found that Abraitis had “no explanation for why he did not probate the most recent will at that time but that he put it away for later.” And the court found that when Abraitis was asked what made him decide to apply for admission of the 1993 will, Abraitis said that “he did it because his brother had died” and he wanted to prevent the brother‘s ex-wife from being a beneficiary of his mother‘s estate.
{¶7} In addition to removing Abraitis as executor of his mother‘s estate, the court ordered him to deposit the investment account funds into an estate bank account. Abraitis not only failed to comply with the order, he refused to testify at a subsequent contempt hearing on the advice of his attorney, Brady. The court found Abraitis in
{¶8} These facts spawned a multitude of motions and filings in the probate court, this court, and the Ohio Supreme Court. As relevant here, Fried filed a complaint in the probate court alleging that Abraitis concealed estate assets. Abraitis defended by claiming that the IRS determined that the estate assets belonged to him, so he had no choice but to amend the inventory. The court rejected that assertion when finding Abraitis guilty of concealing estate assets. It found it unsurprising that the IRS determined Abraitis owned the investment account because the account was “listed in his name for all of the relevant tax years. What Abraitis cannot explain is how the [investment account] came to be in his name and from what sources the account was funded.” The court‘s question about how the investment account was funded arose because Abraitis testified that “he has not worked or had taxable income from employment for many years, if ever.” This suggested that he could not have been the source of the money: “What is clear however, is that Abraitis has never had taxable income from employment and therefore the monies that funded the [investment] account got there one way or another from his father, his mother, or both.”
{¶9} Following the court‘s ruling that Abraitis concealed estate assets, Fried filed a motion for attorney fees against Brady under both
{¶10} The court granted the motion for attorney fees, making the following findings of fact:
The Court finds that as a result of Sarunas Abraitis’ [sic] actions in this Estate case, all of which were done by and through his attorney, Catherine Brady, Fried was required to file two separate adversarial actions including a concealment action and a complaint for declaratory judgment. The Court further finds that Fried has also been required to defend against multiple appeals.
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The Court further finds that it has set out in other entries the factual history of this case which can be summarized as the concerted effort by Abraitis and Brady to convince the taxing authorities that funds listed in the inventory of this Estate belonged to the decedent only to argue to this Court that the money belongs to Abraitis after the tax cases were resolved.
The Court finds that the actions taken by Abraitis and Brady, from the filing of the original inventory through the filing of several accounts, applications for attorney fees and attempted distributions are contrary to their current argument that the funds at issue belong to Abraitis. The Court finds that the arbitrary positions and actions of both have caused irreparable harm to the Estate and have resulted in extraordinary fees.
{¶12}
{¶13}
{¶14}
{¶15} Under both
{¶16} Brady argues, without relevant citation to authority, that the probate court had no jurisdiction to award sanctions under
{¶17} Probate matters are “special proceedings” as that term is used for purposes of the final order statute,
{¶18} We first consider whether the court erred by imposing sanctions against Brady under
{¶19} When granting the motion for sanctions, the court found that Brady engaged in frivolous conduct that it summarized as “the concerted effort * * * to convince the taxing authorities that funds listed in the inventory of the Estate belonged to the decedent only to argue to this Court that the money belongs to Abraitis after the tax cases were resolved.”
{¶20} Brady maintains that she acted properly by listing the investment account as an estate asset at the same time that Abraitis was arguing to the IRS that the investment account belonged to his mother; she claims it was only after the IRS determined that the investment account actually belonged to Abraitis that she filed a new inventory to reflect that determination.
{¶21} This argument ignores that Brady filed court documents representing that the investment account belonged to Abraitis long before she filed the initial estate
{¶22} Abraitis reaffirmed his sole ownership of the investment account in a November 2013 complaint for a writ of prohibition filed in this court. That complaint alleged that a guardianship over Abraitis‘s mother was closed in March 2009, “with no assets remaining.” See Abraitis v. Gallagher, 8th Dist. Cuyahoga No. 101037, 2014-Ohio-2987, complaint at ¶ 9. The record shows that Abraitis was, for a time, his
{¶23} It bears noting here that Abraitis was removed from his position as guardian over his mother and was later sued by the successor guardian for concealment of assets. The concealment case settled in February 2005. A January 2014 motion to correct the inventory stated that the concealment case determined that the mother‘s account “was an asset owned by Sarunas Abraitis, outright.”
{¶24} Brady represented Abraitis throughout all of the proceedings we have described. Those proceedings spawned litigation with the IRS, in the federal courts, and at all levels of the state courts. The legal arguments offered by Brady in these matters have been criticized as “specious (and often incomprehensible),” Abraitis v. Testa, 137 Ohio St.3d 285, 2013-Ohio-4725, 998 N.E.2d 1149, at ¶ 4, to doing “little to clarify Abraitis‘s position[.]” Abraitis v. United States, N.D.Ohio No. 1:11-cv-2077, 2012 U.S. Dist. LEXIS 123073, *5 (June 12, 2012). And the probate court could agree with the district court‘s finding that Brady raised “arguments that contradict positions taken in other pleadings[.]” Id. The court acted within reason to find that Brady acted frivolously by taking inconsistent positions when representing Abraitis in the estate matters.
{¶25} We reach a similar conclusion with respect to the award of sanctions levied against Brady under
{¶26} The preceding discussion shows that Brady was subjectively aware that she filed an estate inventory which claimed that the investment account was an estate asset
{¶27} Brady filed inventories and motions that she knew were unsupported by the record. Those acts spawned needless and expensive litigation that required Fried‘s response. The court acted rationally by finding that Brady‘s inconsistencies with the positions she took during the litigation amounted to bad faith.
{¶28} We next address Brady‘s arguments relating to the amount of fees and costs awarded. She first argues that the court erred by awarding Fried attorney fees and expenses for professional services rendered by him in our court. We reject this assertion because
{¶29} Brady next argues that the court erred by awarding Fried his expenses. She maintains that Fried failed to authenticate or properly introduce into evidence the claimed expenses. But Brady failed to object on this basis at the hearing and has forfeited the argument on appeal.
{¶30} Brady complains that the court erred by failing to require Fried to verify the amounts requested under oath. We have rejected this type of argument in the context of
{¶31} Brady argues that the amount of attorney fees awarded “shocks the conscience.” Certainly, the amount of attorney fees ordered are high, but they were substantiated in Fried‘s fee statement. As we earlier noted, Brady has relentlessly litigated estate issues in this case. By doing so, she forced Fried to respond. This greatly escalated the number of hours he billed.
{¶32} Brady also argues that Fried failed to “mitigate damages.” She characterizes Fried as engaging in “a blitzkrieg of expensive countermeasures while ignoring some of the basic tasks associated with being an administrator” and that he failed
{¶33} Judgment affirmed.
It is ordered that appellee recover of appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the probate division to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
MELODY J. STEWART, JUDGE
MARY EILEEN KILBANE, P.J., and EILEEN T. GALLAGHER, J., CONCUR