In the Matter of Guardianship of Guzay, Unpublished Decision (9-23-2003)

CourtOhio Court of Appeals
DecidedSeptember 23, 2003
DocketNo. 02AP-745 (REGULAR CALENDAR)
StatusUnpublished

This text of In the Matter of Guardianship of Guzay, Unpublished Decision (9-23-2003) (In the Matter of Guardianship of Guzay, Unpublished Decision (9-23-2003)) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law.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In the Matter of Guardianship of Guzay, Unpublished Decision (9-23-2003), (Ohio Ct. App. 2003).

Opinion

OPINION
{¶ 1} This is an appeal by appellant, Ohio Casualty Insurance Company ("Ohio Casualty"), from a judgment of the Franklin County Court of Common Pleas, Probate Division, overruling objections to a magistrate's decision and setting aside the court's entry of April 28, 1999, settling the guardian's first partial account, and the court's November 9, 1999 entry, settling the guardian's second and final distributive account.

{¶ 2} On October 11, 1997, Katherine A. Guzay suffered traumatic brain injury as a result of an automobile accident. On November 14, 1997, Davis A. Erwin (hereafter "Erwin"), the daughter of Guzay, filed an application with the probate court for appointment of a guardian for Guzay. A magistrate of the court conducted a hearing on the application, at which time Erwin indicated that her mother had a brokerage account in the amount of approximately $200,000. Following the hearing, the magistrate issued a decision, recommending that Erwin be appointed guardian of the person and estate of Guzay, and setting a bond in the amount of $400,000. By judgment entry filed December 12, 1997, the trial court adopted the magistrate's decision finding Guzay to be incompetent and appointing Erwin as guardian.

{¶ 3} Ohio Casualty subsequently filed a guardian's bond in the amount of $400,000. On March 17, 1999, Erwin filed a first account with the court. On May 27, 1999, W. Sean Kelleher filed an application to be appointed successor guardian of the ward and her estate, and the court set a hearing on the application. On August 3, 1999, Erwin resigned as guardian of the estate, and a magistrate of the court subsequently appointed Kelleher as successor guardian of the estate. On September 28, 1999, Erwin filed a second and final account with the court. On August 30, 2000, the successor guardian of the estate filed a first account.

{¶ 4} On October 20, 2000, Andrew J. Art filed an application for appointment as successor guardian over the person and estate of Guzay. On October 27, 2000, a magistrate conducted a hearing on the application. At that hearing, successor guardian Kelleher expressed concern regarding one of the ward's accounts that she held with Eisner Securities, Inc. ("Eisner Securities"). Kelleher stated that a representative from Eisner Securities had informed him that Erwin's husband, Joseph Erwin, an employee at that firm, had been terminated from his employment, and that he was under investigation by the firm and by the Federal Bureau of Investigation. During the hearing, the magistrate accepted the resignations of both Erwin, as guardian of the person, and Kelleher, as guardian of the estate. The magistrate rendered a decision appointing Art as successor guardian of the person and estate of Guzay, with bond set at $272,000. The trial court adopted the magistrate's decision by entry filed October 27, 2000.

{¶ 5} On January 8, 2001, Art filed a motion for leave to file exceptions to the accounts. In the motion, Art asserted that Kelleher had informed him that certain monies might be missing from Guzay's account held with Eisner Securities due to an alleged malfeasance by an employee or principal of Eisner Securities. Art asserted that, while Kelleher reported assets of at least $83,762.98 in one of the Eisner Securities accounts, representatives of Eisner Securities recently informed him that there was a zero balance in the account.

{¶ 6} On February 14, 2001, Art filed exceptions to all accounts previously filed by both former guardians. The exceptions dealt primarily with missing assets in the Eisner Securities account, including a claim that a National City Bank account had received approximately $92,969 in wire transfers from the ward's account with Eisner Securities during the period from December 19, 1997 through February 26, 1998.

{¶ 7} On April 23, 2001, Art filed a Civ.R. 60 motion for relief from the judgments approving accounts, and for an order surcharging the former fiduciary, Erwin, and the fiduciary's bondsman. In the accompanying memorandum, Art asserted that, as a result of illegal conversions, apparently made by Erwin and/or her spouse, the guardianship was missing $185,838.33 in assets. Also on April 23, 2001, Art filed amended exceptions, asserting in part that a review of the ward's National City Bank account disclosed that ten checks were written to a Bank One account, held in the name of Joseph E. Erwin, totaling $90,338.33. Art also asserted that the National City Bank statements were delivered to former guardian Davis Erwin's home address; Art claimed that the former guardian knew or should have known that there were irregularities in the assets of the guardianship.

{¶ 8} On June 1, 2001, Ohio Casualty filed a memorandum opposing the guardian's motion for relief from judgment. Attached to the memorandum was the affidavit of former guardian, Erwin.

{¶ 9} A magistrate of the court conducted a hearing on Art's motion for exceptions. On February 19, 2002, the magistrate rendered a decision, including the following findings of fact:

1. Davis Erwin was appointed the guardian of the person and estate of Katherine A. Guzay on December 12, 1997. Davis Erwin posted a bond with Ohio Casualty Insurance Company in the sum of $400,000.00.

2. During her tenure as guardian, Davis Erwin was married to Joseph E. Erwin, a securities broker with Eisner Securities.

3. The evidence from the testimony of Andrew Art, the current guardian, and from the Exhibits indicate that $185,838.33 was diverted from the guardianship to Joseph Erwin during the time in which Davis Erwin was the guardian. No evidence was offered to indicate any of these funds were used for the benefit of the ward.

4. Although certain financial statements of Eisner Securities were forged by Joseph Erwin, many of these documents and documents from other financial institutions came directly to the residence of Davis Erwin who failed to exercise any diligence whatsoever to supervise, monitor, and invest the assets. Ms. Erwin delegated all of her responsibilities to her husband, Joseph Erwin.

5. In addition to the loss of principal, Joseph Erwin charged commissions of $8,570.91 in dealing with assets obtained through improper acts.

6. The failure of the guardian, Davis Erwin, to exercise any diligence whatsoever as guardian of the estate caused additional damage to the estate for loss of interest on the principal of the converted assets and for additional penalties in the interest caused by the ward being unable to timely pay her mortgage.

7. The Ohio Casualty Insurance Co. has been involved in the exceptions and other litigation including a concealment of assets since the inception of the litigation. The concealment of assets was filed due to the request of counsel for the Ohio Casualty Insurance Co. Therefore, the guardianship estate has lost additional sums in attorney fees and costs in attempting to recoup these assets through this action and through the concealment of assets that remains pending.

{¶ 10} The magistrate concluded that the loss of assets "was proximately caused by the failure of Davis Erwin to take any steps whatsoever to collect, invest, manage, or use the assets of her ward for the ward's best interest." Accordingly, the magistrate charged Erwin in exceptions to her account in the sum of $185,838.33, plus costs.

{¶ 11} Erwin sent a letter to the court from St.

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Bluebook (online)
In the Matter of Guardianship of Guzay, Unpublished Decision (9-23-2003), Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-the-matter-of-guardianship-of-guzay-unpublished-decision-9-23-2003-ohioctapp-2003.