Background
Janie B. Sanders appointed her niece, Cynthia M. Fox, as her attorney-in-fact under a durable power of attorney in October 2013. The instrument authorized Fox to manage Sanders’s property and accounts but prohibited gifts, joint accounts between Sanders and Fox, and compensation for Fox’s services. Sanders later entered a nursing home and died in June 2014.
Sanders’s estate alleged that Fox misused Sanders’s assets, including by moving money into an account held in Fox’s name, receiving a Social Security payment, paying expenses that did not benefit Sanders, and using Sanders’s credit cards for purchases near Fox’s home and for two Louis Vuitton handbags. After a four-day bench trial, the Wayne Circuit Court found breach of fiduciary duty and conversion and awarded the estate $41,026.50 plus attorney fees and costs.
The Court’s Holding
The Michigan Court of Appeals affirmed. It held that the trial court did not clearly err in finding that Fox breached her fiduciary duties. Evidence supported findings that she violated the power of attorney’s restrictions by placing Sanders’s money in an account under Fox’s name, received a Social Security check payable to Sanders and the estate representative, facilitated gifts benefiting Sanders’s grandson, and misused Sanders’s credit cards. The appellate court deferred to the trial court’s determination that Fox’s explanations were not credible.
The court also upheld the conversion ruling because Fox wrongfully exercised control over Sanders’s money and credit-card accounts in a manner inconsistent with her authority. It treated Fox’s challenge to the power of attorney’s validity as moot because the trial court had not invalidated the instrument and its validity would not alter the judgment. Several other appellate arguments were abandoned, waived, moot, or meritless, including Fox’s civil speedy-trial claim and challenges to evidentiary rulings and alleged relitigation of a previously adjudicated property dispute.
Key Takeaways
- An attorney-in-fact owes fiduciary duties to the principal and may be liable for using the principal’s assets contrary to the power of attorney’s express restrictions.
- A trial court may infer conversion from financial records, control over accounts and addresses, and credibility findings even when the defendant denies personally making disputed purchases.
- Appellate arguments may be lost when they are inadequately briefed, raised for the first time on appeal, based on material outside the trial-court record, or directed at issues the trial court did not decide against the appellant.
Why It Matters
The decision illustrates the exposure an attorney-in-fact faces when financial transactions benefit the agent or third parties without documentation or authority under the governing instrument. Express prohibitions on gifts, joint accounts, and compensation can provide direct grounds for fiduciary-breach and conversion findings.
It also underscores the importance of preserving and properly briefing appellate issues. The court declined to reach numerous claims because Fox’s pro se appellate filings did not adequately develop them or relied on material outside the record.