Schwager v. Christoffel

536 P.2d 717, 24 Ariz. App. 148, 1975 Ariz. App. LEXIS 663
CourtCourt of Appeals of Arizona
DecidedJune 13, 1975
DocketNo. 2 CA-CIV 1637
StatusPublished
Cited by1 cases

This text of 536 P.2d 717 (Schwager v. Christoffel) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schwager v. Christoffel, 536 P.2d 717, 24 Ariz. App. 148, 1975 Ariz. App. LEXIS 663 (Ark. Ct. App. 1975).

Opinion

OPINION

HOWARD, Chief Judge.

Appellant Herbert J. Schwager, the former guardian of the estate and person of Lillian Styer, and his wife, appeal from a superior court judgment which surcharged to them the sum of $381,403.21.

In 1960, Herbert Schwager was an investment advisor with a well-known stock brokerage firm. Among the stock portfolios he handled was that of Lillian Styer. Schwager had become a personal friend of Mrs. Styer and when her eyesight failed he petitioned for appointment as guardian of her person and property. He was appointed as guardian and was authorized by the court to receive the sum of $9,000 per year for his services. The inventory and appraisal filed by Schwager on September 24, 1969 showed the estate to have a value of $1,303,908.15.

In 1969, Schwager, pursuant to his petition, was authorized by the court to buy certain income-producing real estate for the sum of $145,000. In January of 1970, he again petitioned and received authority to buy certain vacant lands for $26,725. In March of 1970, he was authorized by the court to sell $205,000 worth of securities in the estate in order to place a building on the vacant land and also to execute a building contract. In July of 1970, Schwager was given authority to borrow the sum of $70,000 from the bank and pledge certain estate securities as collateral for the loan.

[150]*150On January 20, 1971, it came to the attention of superior court Judge Lee Garrett, that there had been a great deal of activity in the estate and no accounting had ever been made by the guardian. He ordered the guardian to appear on March 26, 1971 and show cause why an order should not be entered requiring (1) an accounting, (2) a new inventory and appraisement and (3) a substantial increase in the guardian’s bond. Prior to the date set for the hearing, Schwager was authorized by another superior court judge to borrow more money from the bank and to secure the loan with additional estate securities.

On March 18, 1971, Schwager filed an affidavit of bias and prejudice against Judge Garrett and the matter was permanently assigned to Judge Alice Truman, who, on April 5, 1971, ordered the guardian to file an account within sixty days.

On May 11, 1971, the attorney for the guardian retired from the practice of law and Richard Bailey, Esquire, now deceased, was substituted as Schwager’s attorney.

Judge Truman granted several continuances to the guardian on the matter of the accounting. The record shows that in the meantime more money was borrowed from the bank, more stocks pledged as collateral and an accounting firm was hired by the guardian to prepare an accounting, all with court authority.

Finally, on June 9, 1972, the court, noting that no accounting had ever been made, removed Schwager as guardian and appointed Lillian Fisher as successor guardian. Thereafter Lillian Fisher acquired new counsel to aid her in determining what happened to the assets of the estate.

Schwager, who was still being represented by Richard Bailey, then filed an affidavit of bias and prejudice against Judge Truman in an attempt to disqualify her from acting in this matter. A hearing on the affidavit was held before Judge J. Richard Hannah who determined that there was no cause shown for disqualifying Judge Truman.

Judge Truman appointed a certified public accountant, Mr. Seby, as referee in order to determine the dealings of Mr. Schwager. Mr. Seby took testimony of various witnesses and filed his four-volume report.

Schwager noticed the taking of Seby’s deposition and issued therewith a subpoena duces tecum. Upon motion of the new guardian, this notice and the subpoena was quashed. A hearing on the,issue of surcharging Schwager was eventually held. The referee’s report was introduced into evidence and upon stipulation of counsel only certain items were challenged. After hearing the evidence the court made extensive findings of fact and conclusions of law which led to the entry of judgment against appellants.

The record of Mr. Schwager’s administration of his guardainship was indeed dismal. He decided that he needed to diversify the nature of the Sty-er estate which consisted almost enitrely of common stocks. This was the reason for the purchase of the income-producing property. In 1970, when a major portion of the common stock was liquidated, Mr. Schwager constructed a building which housed two businesses, Tiffany West and Bridal Boutique, Inc. Tiffany West, a beauty salon, was a partnership comprised of his wife and another woman. Bridal Boutique was a disaster from the beginning. Schwager, without court approval, loaned money to Tiffany West and used at least $40,000 of the Styer estate funds to purchase for himself shares of stock in Bridal Boutique. Both businesses became defunct and Bridal' Boutique filed in bankruptcy.

A separate corporation was used by Mr. Schwager to manage the building. Large sums of money were taken from the Styer estate and paid to the building management corporation which in turn paid out sums of money to Schwager and his family. It is also clear that Schwager commingled large sums of money from the sale of estate securities in his own personal bank account. By the time the new guardian took over [151]*151the Styer estate the assets consisted of some shares of stock which were pledged as collateral to the bank on outstanding loans and a small piece of vacant property used in connection with the Tiffany West-Bridal Boutique building. The income-producing property, Mrs. Styer’s house, and the Bridal Boutique-Tiffany West building had all been sold for taxes. The house was subsequently redeemed.

Appellants claim the following errors require reversal: (1) the quashing of the notice to take the referee’s deposition and the subpoena duces tecum, (2) foreclosing discovery of the successor guardian’s objection to the former guardian’s accounting, (3) the referee’s exceeding his authority, (4) the denial of appellants’ motion for a change of judge, (5) improper surcharge of certain items and (6) inaccurate computation of the surcharge.

As for the first three claimed errors, assuming but not deciding that there was error, appellants have failed to show any prejudice as a result thereof. We parenthetically note that the second claimed error is rather ludicrous since the former guardian never filed anything that remotely resembled an accounting.

As to the right to disqualify Judge Truman it is apparently appellants’ claim that the first affidavit of bias and prejudice against Judge Garrett was pursuant to A.R.S. § 12-409 on March 18, 1971. On March 1, 1972, the amendment to Rule 42(f) of the Arizona Rules of Civil Procedure, 16 A.R.S., became effective. It is appellants’ contention that the amendment of the rule gave an additional peremptory challenge as a matter of right. This contention is without merit. In King v. Superior Court in and for the County of Maricopa, 108 Ariz. 492, 502 P.2d 529 (1972), the court stated:

“Prior to our1 amendment of R.C.P. 42(f), it was well-settled that a party had a right to a peremptory challenge of one judge . . .. The change of judge was accomplished by an affidavit of bias and prejudice which was a mere form and not intended or required to be true.
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Related

In Re Guardianship of Styer
536 P.2d 717 (Court of Appeals of Arizona, 1975)

Cite This Page — Counsel Stack

Bluebook (online)
536 P.2d 717, 24 Ariz. App. 148, 1975 Ariz. App. LEXIS 663, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schwager-v-christoffel-arizctapp-1975.