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lawsuitattorneystatutefiduciarypower of attorneycorporationfiduciary dutybreach of fiduciary dutylegislative intent
attorneyfiduciarytrustpower of attorneyleaselegislative intent

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Russell v. Chase Investment Services Corp., 212 P.3d 1178, 2009 OK 22

Facts

Donald R. Russell executed a durable power of attorney (DPA) naming his daughter, Brenda Kennemer, as his attorney-in-fact, which became effective upon his disability. After Russell suffered a stroke, a court appointed Kennemer and his wife as co-guardians. Despite the guardianship, Chase Investment Services Corporation continued to make distributions from Russell's Individual Retirement Account (IRA) based on the DPA, leading to a lawsuit by Russell's wife, Suzanne, alleging breach of fiduciary duty by Chase for allowing these distributions without a court order.

On April 7, 1999, Donald R. Russell (the ward) executed a durable power of attorney (DPA) naming Brenda Kennemer (Kennemer), his daughter, as his attorney-in-fact to 'become effective upon [his] disability or incapacity.' The ward's DPA gave Kennemer broad power over the ward's person and his property, including (1) the power to 'sell, convey, lease, exchange, mortgage, pledge, release, hypothecate or otherwise deal with, dispose of, exchange, or encumber any of my property, either real or personal,' (2) the power to 'withdraw funds from and draw and sign checks in my name upon any bank or trust company, savings institution, or money-market fund in which I may have funds on deposit or in any new account opened in my name,' (3) 'the power to hold, invest, reinvest and otherwise deal with and manage all property in which I have any interest,' and (4) 'the power to transfer or surrender any securities which I may own.'

Issue

Does the appointment of a general guardian withdraw all of the assets from the estate of a ward subject to a durable power of attorney, such that the person holding power of attorney is without authority to control the ward's assets?

Does the appointment of a general guardian withdraw all of the assets from the estate of a ward subject to a durable power of attorney, such that the person holding power of attorney is without authority to control the ward's assets?

Rule

The authority of an attorney-in-fact acting pursuant to a durable power of attorney does not automatically cease with the appointment of a guardian, and the appointment of a general guardian does not automatically withdraw all of a ward's assets.

The authority of an attorney-in-fact acting pursuant to a durable power of attorney does not automatically cease with the appointment of a guardian.

Analysis

The court analyzed the relevant statutes, particularly the Oklahoma Durable Powers of Attorney Act and the Oklahoma Guardianship Act, concluding that the legislative intent was for a durable power of attorney to remain in effect even after a guardian is appointed. The court emphasized that the attorney-in-fact remains accountable to the guardian, who has the authority to revoke or amend the DPA, thus allowing both the DPA and guardianship to coexist.

The legislative intent expressed in section 1074's plain language is supported by the comments to the UDPA Act and UPC. Section 1074's drafters wrote the UDPA Act and UPC so that the court appointment of a fiduciary, such as a guardian or conservator, would not automatically terminate the DPA but would leave it up to the fiduciary to determine if the agency is appropriate within the guardianship.

Conclusion

The Supreme Court answered the certified question in the negative, affirming that the appointment of a general guardian does not automatically withdraw all of a ward's assets, allowing the attorney-in-fact to continue acting under the durable power of attorney.

Therefore, we answer that the appointment of a general guardian of the property does not automatically withdraw all of a ward's assets such that an attorney-in-fact is without power to act pursuant to a durable power of attorney.

Who won?

Chase Investment Services Corporation prevailed in the case because the court found that it was justified in honoring the durable power of attorney after the appointment of a general guardian.

Chase argues that, under section 1074 of the ODPA Act, a DPA does not automatically terminate with the appointment of a general guardian but remains in effect until revoked by the guardian.

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