In re the Stephens Revocable Trust (CA2 7/31/20)

The Court of Appeals explains that you can’t throw out a Complaint before its filed.

Plaintiff believed that her stepmother financially exploited her father, who had suffered from dementia for some time before his death. Pursuant to the vulnerable-adult statute (45-456) she petitioned for leave to file a Complaint. Stepmother opposed it, arguing that the actions she took were authorized by the trust of which she was the trustee. The trial court agreed and denied the petition. Plaintiff appealed.

On appeal Stepmother argued that Plaintiff lacked “standing.” The statute allows the vulnerable adult or his conservator to file a Complaint; if they don’t, any “interested person” may petition the court to do so. Plaintiff’s interest was obvious, especially since Stepmother’s machinations had cut the daughter out of the trust. “Standing,” therefore, “was not in dispute.”

It isn’t clear whether the trial court thought this was an  issue of standing or whether it was perhaps thinking of failure to state a claim; the opinion mentions the latter, though that has no more to do with this than does standing. The trial court’s lengthy order ruled in detail on the merits: Stepmother’s actions were allowed by the trust instrument and therefore, by the terms of the statute, she cannot be liable under it. The question is whether you can do that before the case is even filed.

For guidance on what a court should look for before granting a petition under this statute the court looks to a recent hornbook. The answer is: standing. For some reason the court seems reluctant to say that but that’s what it boils down to. There must have been no filing by the vulnerable adult or conservator and the petitioner must be an interested person. If there are more than one of those then the trial court can, as “gatekeeper,” pick the most appropriate. It must “accept the factual allegations of the proposed complaint as true.” The matters considered by the trial court in this case should have been addressed by motion filed after the Complaint.

Reversed and remanded.

There are various other times when leave must be sought before making an allegation. Though the issue might be novel in connection with this statute, Stepmother was hardly unique or original in confusing a right to file with a right to prevail. It is unfortunate that the probate judge did so as well; perhaps he considered himself to be acting in the interest of “judicial efficiency,” which is nowadays — as we have mentioned before — routinely an excuse for cutting corners. The question now is whether, having announced his views on the merits, he will presume to keep the case.

We’re not sure what the court’s style book says this month about “complaint.” Without a capital, its what you have when someone aggrieves or annoys you. With a capital, its what you file to do something about that. Treating “Complaint” as a name used to be understood. The opinion does not capitalize it, even though it uniformly capitalizes “Trust,” the abbreviation of the name of the thing Mr. Stephens established.

(Opinion: In re The Stephens Revocable Trust)



In re Trust of West (CA2 7/1/20)

These Plaintiffs vaulted over a high bar then tripped over a low one they set up themselves.

They successfully sued to set aside a trust amendment for undue influence. Having prevailed, they applied for fees on various grounds. Defendant objected because Plaintiffs had not requested fees in their petition as required by Rule 54(g). The trial court awarded fees under the common-fund doctrine. Defendant appeals that order.

The Court of Appeals vacates it. The rule says that a claim for fees “must be made in the pleadings” or in  a Rule 12 motion. The rule is mandatory, unambiguous, and makes no exception for fees awarded in equity. (Rule 54(i) does provide for two exceptions — fees awarded as sanctions and fees that must be proved at trial as a substantive element of the claim — but neither applied here.) Plaintiffs did mention fees in their initial disclosure statement but that is insufficient; the purpose of the rule — to encourage settlement — requires that parties be put on notice of the claim “before each stage of the law suit” (quoting Wagenseller 1985, emphasis in original). Plaintiff’s catchall prayer — for ““such other and further relief as the Court deems appropriate under the circumstances” — did not put Defendant on notice. (Once upon a time the formula was “such further relief as the court deems proper” but modern scoring awards bonus points for extra words. Those who know just enough to choose between the two forms are confident that the longer one must be stronger and more sophisticated and protect them in a number of circumstances, though they can’t name any.)

(Opinion: In re the Restated Trust of Crystal H. West)



Heaphy v. Metcalf (CA2 6/18/20)

The court discusses how a medical condition is placed “at issue” to waive the doctor-patient privilege.

This is a wrongful-death case. Defendants sought discovery of Plaintiffs’ medical records, apparently arguing that their life expectancies are relevant to the value of their claim for loss of companionship. The trial court concluded that the claim waives the privilege; it allowed discovery. Plaintiffs brought this special action.

The Court of Appeals accepts it and grants relief. Placing “a particular medical condition at issue” waives the privilege. But “placing a condition ‘at issue’ means more than a possibility the condition could be relevant; upholding the privilege must instead deny the inquiring party access to proof needed fairly to resist the [privileged party]’s own evidence on that very issue.” “The bare assertion of a claim or defense does not necessarily place privileged communications at issue in the litigation, and the mere fact that privileged communications would be relevant to the issues before the court is of no consequence to the issue of waiver.” The court then analyzes a few selected Arizona cases.

Defendants had a 1986 case on point from the Southern District of New York. The Court of Appeals decides that the case is “wholly unpersuasive” because it can distinguish one of the cases the New York court cited. (The opinion is very short and doesn’t cite many cases — those were the days before District judges, even in the S.D.N.Y, had a bevy of career law clerks to do their writing — which one can’t help but feel actually had most to do with its being found “wholly unpersuasive.”)

The court doesn’t tell us whether Defendants had any special reason to question the life expectancy of the statutory beneficiaries. If they didn’t — or even if they did — then the case seems an odd context in which to pursue this argument since the decedent was 93 at his death.

(Opinion: Heaphy v. Metcalf)