ELDER LAW ALERT: A family affair

By Alan Polack

Here we have two published Michigan Court of Appeals decisions involving the same family. 

The cases are In Re Brody Living Trust, Court of Appeals No. 330871 and In Re Conservatorship of RHEA Brody, Court of Appeals No. 332994.

The trust case involved the removal of Robert Brody as trustee for breach of fiduciary duties brought by Cathy Deutchman, the daughter of RHEA Brody. 

The alleged breach of duty arose out of business transactions related to trust business properties which benefited Jay Brody (RHEA’s son) to the detriment of the trust. The Probate Court did remove Robert as trustee.

On appeal, Robert and Jay contended that the Probate Court lacked jurisdiction because the Business Court Statute confers exclusive jurisdiction of a commercial or business dispute in the Business Court. 

The Court of Appeals held that proceedings under EPIC are excluded from Business Court jurisdiction pursuant to MCL 600.8301 (3) (e). 

It specifically stated that “to the extent the petition involved transactions of the Brody family business or existing contracts, these matters arose only tangentially to the central issue of Robert’s breach of fiduciary duty as trustee of the REHA Trust”
The second issue raised was whether the daughter-petitioner had standing  to seek removal of the trustee. 

The petitioner was a contingent beneficiary of the trust.

The court ruled that a trust beneficiary who has a future contingent interest in the trust property is an  interested person under MCL 700.1105 and so had standing to invoke the Probate Court’s jurisdiction to remove a trustee under MCL 700.7201 (3)(a).”

The conservator case involved Robert’s challenge to the appointment of Mary Lyneis as conservator of Rita’s personal assets. 

Apparently, Lyneis was appointed trustee of the RHEA Trust when Robert was removed.

The first issue raised on appeal is whether the protected person’s property will be wasted or dissipated unless proper management is provided.  RHEA’s husband argues that waste or dissipation had to have occurred already.

 The court held that it is discretionary with the Probate Court to determine if property will be wasted.  Evidence clearly showed that this would happen.

The husband next argued that he had priority to be appointed conservator or that no conservator was needed because he held RHEA’s power of attorney.

The court concluded that the existence of a power of attorney does not preclude appointment of a conservator. 

It also ruled that pursuant to MCL 700.5409, Mary Lyneis, as trustee and independent fiduciary, had priority over Robert despite his marriage to Rita.  It found Robert unsuitable apparently because of his activities which resulted in his removal as Trustee of the RHEA Trust.

There are several other issues raised in these cases that cannot be addressed here. 

I recommend that you review the case on your own.

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Alan F. Polack specializes in elder and probate law and practices out of Shelby Township. He is a former president of the Macomb County Probate Bar Association.

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