In 2023 there were approximately 14 appellate North Carolina cases (2 from our state Supreme Court) touching on fiduciary disputes.
Cases are searchable to the public via this website maintained by the North Carolina judiciary and are listed in shorthand here: Howard v. IOMAXIS, LLC (NCSC), Galloway v. Snell (NCSC), Skenes v. Ingle (NC-COA), In re estate of Corbett (NC-COA), In re Estate of Corbett II (NC-COA), In re W.J.M. (NC-COA), Cusick v. Estate of Longin (NC-COA), Olschner v. Estate of Goines (NC-COA), Mann v. Huber Real Estate, Inc. (NC-COA), Jones v. J. Kim Hatcher Insurance Agencies, Inc. (NC-COA), In re Will of Lance (NC-COA), Lowrie v. Estate of Csanyi (NC-COA), Venable v. Grep Southeast LLC (NC-COA), and In re Estate of Seamon (NC-COA).
From these 14 cases we can determine the following rough statistics:
Low Case Values: The majority (over 60%) of cases involved disputes and/or estates valued at less than $500,000.
Probate Troubles Outweigh Trusts: Disputes arose in the probate setting more often than in the private trust arena, and at least one case pertained to involuntary commitment proceedings.
Leading Claim = Settlement Agreements Getting “Unsettled”: A unique number of cases dealt with the enforcement and alleged reneging of settlement agreements. Several of these touched on the intersection between family law settlement and pre/post nuptial arrangements, which is a reminder to make sure your estate planner is fully aware of any such agreements early on.
Professional Fiduciary Claims: More than one case dealt with the evaluation of when and how fiduciary relationships (and all the trappings that go with them) arise in professional dealings, such as real estate agents. This includes the phantom issue when courts “find” a fiduciary relationship from the circumstances of a case even if no formal arrangement was ever set forth on paper. You never want to accidentally “find” yourself in a fiduciary duty to another accidentally, as the role carries significant (and legally enforceable) responsibilities.
Attorneys Making a Splash with Fees: Two cases helped showcase the wide range of attorney fees and how courts deal with them (answer: they can approve, disapprove, and adjust them). One matter involved a courts rejection of a $14,000 attorney fee in probate due to a conflict of interest in the representation, yet another matter upheld the total cost (from both sides) of a caveat’s litigation (over $1,500,000) as payable from the estate.
Cost of Metropolitan Living (and Dying): Most cases (almost a 2:1 ratio) arose in metropolitan venues, as opposed to rural areas. This is likely reflective of the culture of metropolitan living (not to mention an urban practice of law which can be a bit more trigger happy when it comes to clients and legal counsel preferring to use courts to resolve their differences as opposed to other means).
Takeaways:
Don’t dismiss low value legal trouble, as it can still turn into a full lawsuit (however financially imprudent). The emotional and practical drive to resolve these cases is apparently relatively blind to case value. So, if you think the high impact of legal fees will obviate escalation of a dispute in a lower value dispute, you may be surprised.
Probate provides transparency, which can help ease tensions, but it also highlights filing deadlines and a ready-to-use cookbook (complete with fillable AOC forms) for fiduciary discipline in chapter 28A.
“It’s not over until it’s over” applies to settlement agreements. While succeeding in a settlement agreement’s execution is a vital milestone to often be worried and celebrated over in its own right, it is not the end of the road. The agreement must have authentic party buy-in so that it can go beyond execution and be fulfilled by the parties. It must be detailed enough to both survive changes in circumstances and also weather the storm of judicial scrutiny. When a fiduciary dispute storm finally relents enough for parties to agree on a settlement approach, over eagerness to drive the finishing nails into place can result in a sometimes short-sighted (or overly optimistic) final product. This highlights both the need for sophisticated counsel who will draft thorough settlement agreements, and also the advantage that non-adversarial methods like the Collaborative process provide in that parties remain better situated to work together to resolve future disputes and uncertainties that may arise regarding a settlement agreement.
Comments