In Re Adams Estate

667 N.W.2d 904, 257 Mich. App. 230
CourtMichigan Court of Appeals
DecidedAugust 20, 2003
DocketDocket 236421
StatusPublished
Cited by25 cases

This text of 667 N.W.2d 904 (In Re Adams Estate) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Adams Estate, 667 N.W.2d 904, 257 Mich. App. 230 (Mich. Ct. App. 2003).

Opinions

Fitzgerald, P.J.

Petitioner Bank One appeals as of right a probate court order rejecting petitioner’s final [232]*232accounting as trustee of the George Adams trust. Petitioner also challenges the probate court order requiring petitioner to pay the trust beneficiaries’ attorney fees. We affirm part, vacate in part, and remand.

George Adams died in 1994 and his assets were placed in a trust previously established by Adams. Adams’ three children — Mary, William, and Jeff Adams — were the personal representatives of the estate and the trust beneficiaries. Petitioner became trustee of Adams’ trust on May 31, 1995. The beneficiaries became dissatisfied with petitioner’s performance as trustee, and respondent Mary Adams filed a motion to compel petitioner to provide a final accounting of the trust and to compel petitioner to begin distributing assets to the trust beneficiaries.

The motion precipitated a host of issues surrounding petitioner’s management of the trust assets and, on December 2, 1999, the probate court ordered that an arbitrator resolve those issues. Among the issues resolved was the reasonableness of petitioner’s fees for managing the trust assets. The arbitrator ultimately reduced the administrative fees by $118,510. On August 8, 2000, the probate court entered an order reflecting the arbitrator’s opinion. Pertinent to the issues presented on appeal, the probate court ordered that

[petitioner]... shall take no further actions giving rise to additional fees or expenses to be charged against the beneficiaries [of] the Estate, Trust and Voting Trusts without first receiving written approval of the beneficiaries, with the exception that within ten (10) days of the date of this Order and Judgment that [petitioner] file a final account as fiduciary for approval by the beneficiaries and the Court as to all matters involving the Estate, Trust and Voting Trusts.

[233]*233In November 2000, Mary Adams filed a petition and order to show cause as a result of petitioner’s failure to comply with the time provisions of the August 8, 2000, order. On December 5, 2000, petitioner filed its “Second and Final Accounting.” Jeff Adams filed objections to the accounting.

On February 8, 2001, the probate court held a hearing regarding petitioner’s final accounting and respondent’s objections thereto. Petitioner requested that the court receive the final accounting and permit petitioner to charge the beneficiaries fees for services rendered in preparing the final accounting. Respondent objected on the grounds that petitioner charged fees for services rendered without the approval of the beneficiaries and did not file the accounting in compliance with the court’s order. At the conclusion of the hearing, the court permitted discovery and requested proposed orders from each of the parties. The parties filed proposed orders and briefs with supporting evidence in support of the proposed orders.

In a June 13, 2001, order, the probate court denied petitioner’s final accounting and ordered petitioner to pay respondent’s and Jeff Adams’ “actual attorney fees and costs” incurred in litigating petitioner’s final accounting. Petitioner filed a motion for reconsideration, and the court requested that the parties brief the issues raised in the motion. The motion for reconsideration was denied.

Petitioner first contends that it was denied due process of law because the “summary rulings” of the court deprived it of its rights without a hearing. We disagree.

The federal and state constitutions provide citizens with certain due-process rights. The essence of due [234]*234process is “fundamental fairness.” Lassiter v Dep’t of Social Services of Durham Co, 452 US 18, 24; 101 S Ct 2153; 68 L Ed 2d 640 (1981). Whether the judicial proceedings were fundamentally fair requires an inspection of the particular facts of the case because due process “ ‘negates any concept of inflexible procedures universally applicable to every imaginable situation.’ ” Bd of Curators of Univ of Missouri v Horowitz, 435 US 78, 86; 98 S Ct 948; 55 L Ed 2d 124 (1978), quoting Cafeteria Workers v McElroy, 367 US 886, 895; 81 S Ct 1743; 6 L Ed 2d 1230 (1961).

At the very least, due process requires the court (1) to offer to hold a hearing before it deprives the litigant of a property interest and (2) to provide notice of the hearing to the litigant. In other words, “[t]he fundamental requirement of due process is the opportunity to be heard ‘at a meaningful time and in a meaningful manner.’ ” Mathews v Eldridge, 424 US 319, 333; 96 S Ct 893; 47 L Ed 2d 18 (1976) (citation omitted).

Here, the court held a hearing with regard to petitioner’s final accounting and respondent’s objections to the accounting. The court then permitted the parties to brief their respective positions with regard to the accounting and to submit proposed orders. In an order rejecting the final accounting, the court ordered petitioner to show cause why the “compilations and summary of fees paid . . . shall not be held to be true and accurate.” The court also gave petitioner another opportunity to brief the issues raised in petitioner’s motion to reconsider. Under these circumstances, the court complied with all due-process requirements by giving petitioner full and ample opportunity to present its position to the court by hearings and by briefs.

[235]*235Petitioner also argues that the probate court erred by rejecting petitioner’s proposed order without first determining that petitioner’s final accounting was factually inaccurate. However, by accepting respondent’s accounting and rejecting petitioner’s accounting, the court implicitly found that petitioner’s accounting was factually inaccurate. Further, the parties were given the opportunity to submit briefs and evidence in support of their respective positions before the court issued its order, and the show cause order permitted petitioner an opportunity to demonstrate any inaccuracies in respondent’s accounting.

Petitioner contends that the beneficiaries did not properly object to petitioner’s final accounting. It argues that the beneficiaries were required to specifically object to petitioner’s payments to third parties for professional services rendered in administration of the trust during the period of the final accounting. Specifically, petitioner contends that MCL 700.7205 required that the beneficiaries file a petition and demonstrate “some reason” why the fees are not proper. In addition, petitioner argues that Mann v Day, 199 Mich 88; 165 NW 643 (1917), requires (1) that any objection to a trustee’s accounting be specific and (2) that the beneficiary offer “good reason” to disallow certain fees.

MCL 700.7205 provides in relevant part:

On petition of an interested person, . . . the court may review the propriety of employment of a person by a trustee including an attorney, auditor, ... or other specialized agent or assistant, and the reasonableness of the compensation of a person so employed and the reasonableness of the compensation determined by the trustee for the trustee’s own services.

[236]*236Here, Jeff Adams, a clearly interested person, filed an objection to petitioner’s final accounting, asserting that all

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Cite This Page — Counsel Stack

Bluebook (online)
667 N.W.2d 904, 257 Mich. App. 230, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-adams-estate-michctapp-2003.