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In re Guardianship and Conservatorship of Chott

Court of Appeals of Iowa

September 11, 2019


          Appeal from the Iowa District Court for Polk County, Lawrence P. McLellan, Judge.

         Katherine Myer appeals the district court ruling finding she violated her obligations to her mother Sylvia Chott as her mother's power of attorney by withdrawing funds from the mother's bank account and ordering her to return the money and pay attorney fees and court costs.

          Eric G. Borseth of Borseth Law Office, Altoona, for appellant.

          Chad W. Eichorn of Pearson Bollman Law, West Des Moines, for appellee.

          Considered by Potterfield, P.J., and Doyle and Mullins, JJ.

          POTTERFIELD, Presiding Judge.

         Katherine Myer appeals the district court's decision ordering her to return $29, 597.29 to her mother, Sylvia Chott. Katherine transferred the money from Sylvia's bank account to her own while she had a power of attorney for Sylvia. On appeal, Katherine argues the district court erred by: (1) reviewing the transfer of funds under Iowa Code section 633B.116 (2017) as an agent's use of a power of attorney; (2) finding Katherine did not act in good faith by transferring the money from Sylvia's bank account to her own and that Sylvia did not act intelligently and voluntarily when making the transfer; and (3) assessing attorney fees and court costs against her. Katherine further argues Kenneth, her brother and the current holder of Sylvia's power of attorney, should pay her attorney fees for this appeal. In response, Sylvia asks that we affirm the award of the district court and award her appellate attorney fees.

         I. Background Facts and Proceedings

         This case involves three family members: siblings Katherine Myer and Kenneth Chott-Olsen and their mother Sylvia Chott. At the time of trial, Katherine was sixty-six years old and lived in West Des Moines; Kenneth was seventy and lived in Indianapolis, Indiana. Sylvia was ninety-four and lived in Indianapolis as well. Sylvia had lived in Illinois for many years and moved to West Des Moines in 2009 to be closer to Katherine and her husband, Chuck. She moved to Indianapolis in December 2017 after the events leading to this litigation.

         Between 2009 and September 2017, Katherine and Chuck helped take care of Sylvia. They arranged for her to live in an apartment in the same apartment complex Katherine and Chuck lived in. Sylvia became dependent on Katherine and Chuck in 2016 after she lost her driver's license and was diagnosed with dementia or early Alzheimer's. She relied on Katherine and Chuck to take her grocery shopping and otherwise help her each day.

         In March 2010, Sylvia gave Katherine a durable power of attorney. The power of attorney named Kenneth as an alternate. It gave Katherine the authority to manage Sylvia's finances and perform banking activities on Syliva's behalf, including the power "to receive and endorse checks and other negotiable paper, deposit and withdraw funds (by check or withdrawal slips) that I now have on deposit or to which I may be entitled in the future." It directed Katherine to "exercise all powers in [Sylvia's] best interest and for [Sylvia's] welfare." Katherine was unaware of the power of attorney until around 2015 and maintains she never used it. Katherine testified at trial that she never paid Sylvia's bills. Instead, she only kept track of Sylvia's bank account online to make sure Sylvia had not accrued overdraft fees or gave too much money to charity. Katherine emphasizes on appeal that Sylvia was always protective of her finances and did not want other people managing them for her.

         The transaction at issue here occurred on September 19, 2017. Katherine testified Sylvia became worried about leaving her family with a large bill from Medicaid if she had to go on long-term care and insisted on giving some of her money to Katherine and Kenneth. To that end, Katherine devised a plan to transfer money from Sylvia's bank account to Kenneth and herself. Katherine drafted a letter expressing Sylvia's desire to transfer $29, 597.29 to Katherine "for services rendered that allow [Sylvia] to continue living apart from assisted care." Katherine calculated the amount of compensation.[1] On September 17, 2018, Katherine and Sylvia went to Sylvia's bank, got the letter notarized, and transferred the money to Katherine's bank account. Katherine never consulted an attorney, accountant, or financial professional about the prudence of making the transfer or its effect on Sylvia's eligibility for Medicaid if she went on long-term care before making the transfer.

         Katherine and Sylvia did not discuss the transfer of funds at all until Kenneth came to visit on October 10. Kenneth did not agree with the decision to transfer the money and accused Katherine of attempting to take Sylvia's money and put her in an assisted living home. Sylvia did not speak to Katherine at any point during the argument. The next day, Sylvia called Katherine and asked her to return the money, which Sylvia characterized as a gift. Katherine refused. She and Chuck had given some of the money to their children and spent some of it themselves. Katherine ended the call and went to Sylvia's apartment, where she found Kenneth and Sylvia waiting for her. Kenneth again accused Katherine of stealing Sylvia's money. The two argued again, and Katherine left. On October 12, Katherine and Chuck drafted a letter relinquishing Katherine's power of attorney to Kenneth. The letter noted Katherine "was responsible for [Sylvia's] well-being, finances, and care-taking" up until that day. Katherine and Chuck had the letter notarized and delivered it to Sylvia the same day.

         Sylvia filed the petition on February 16, 2018, requesting review of Katherine's actions as an agent ...

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