Questions surround ex-conservator’s cases (AL)

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K.E. lived in a middle-class home in east Tuscaloosa for much of her life. She and her husband had no children, and they built up a sizable nest egg for their twilight years.

As she neared 70, age began to take a toll on K.E.’s mind and body. Her sight began to fade, she got lost while driving and would sometimes put on a shirt inside out. It became clear to her doctors and close friends that someone else needed to be in charge of her finances, since she was going through a divorce from her husband of more than 30 years.

J.B. was 67 and bedridden after a stroke in 2009, unable to eat, bathe or care for himself. He lived in a modest home in west Tuscaloosa and owned real estate, savings and Greenetrack shares that together totaled nearly half a million dollars.

In both cases, family and close friends realized that their loved ones could no longer pay their own bills, manage their money or live unassisted. But there were disputes among those families and friends over how to do that. The two cases ended up in Tuscaloosa County Probate Court. They were assigned to a conservator — a third party responsible for managing finances and care for those who no longer could do so.

The conservator who was assigned their cases and hundreds of similar cases in Tuscaloosa County since 2005 was attorney Zondra Hutto. She retired from the practice of law last year when allegations arose that a staff member used more than $20,000 of an elderly woman’s money to buy gas, clothing, a designer purse and a trip to Mexico for himself and Hutto. She is now serving a three-month federal prison term for knowing about but not reporting the felony.

Since then, auditors have found that Hutto mismanaged and misspent funds in other cases. They found that she didn’t always pay bills on time, paid a family friend hundreds of dollars to care for the lawns of small properties and sometimes used one person’s money to pay nursing home bills for another.

She has been ordered to repay about $114,000 to clients whose cases have been examined in Circuit Court. But there still are an unknown number of cases in Tuscaloosa Probate Court that haven’t yet been examined.

Lack of accounting

A review of more than two dozen case files examined by The Tuscaloosa News indicated that Hutto didn’t consistently file financial accountings in probate court every three years, as required by state law. Documents required when a conservator resigns were missing from each file.

Several attorneys and other professionals who have examined some of Hutto’s cases said that a lack of oversight by the probate court for years has led to the mess they have been cleaning up for the past several months.

Only one, however, would say so publicly — an attorney in Baldwin County. In private, nine local attorneys and other professionals involved said some of the most vulnerable people in Tuscaloosa are being victimized twice: once by the conservator who may have been irresponsible with their life savings, and again by the court officials who haven’t set things right.

One prominent Tuscaloosa attorney said that the situation was one of the worst miscarriages of law he had observed in a career of many decades.

Some conservatorship cases originate in circuit court, but most fall in probate court. Cases reviewed in circuit court document where Hutto has been ordered to return money to the wards or their estates. Forensic accountings have been ordered and bank records subpoenaed in some of the cases that involved larger amounts of money. Those cases are still pending.

But it appears that dozens of cases in probate court have not been properly addressed nearly a year after Hutto resigned from her position as conservator. Probate Judge Hardy McCollum was not able to provide a full list of Hutto’s open cases.

In probate court, unlike circuit court, the judge is not required to be a lawyer. McCollum, like most probate judges in Alabama, does not have a law degree.

According to state law, when a conservator resigns, they are required to give notice and provide a final accounting, justified with receipts and bills. The judge in the case is then required to appoint an attorney as a guardian ad litem to act as an advocate for the ward during proceedings. The guardian ad litem reviews the accounts and a hearing is held during which the judge determines whether the money was handled properly. That’s when the appointed guardian ad litem has a chance to dispute any of the accounting.

The judge then rules whether the former conservator is owed any attorney fees or whether the conservator should repay any money to the account. The conservatorship is then closed and, if necessary, a new conservator is appointed by the judge. The new conservator is then required to file an inventory of the ward’s assets within 90 days.

In 40 cases reviewed by The Tuscaloosa News that originated in or were transferred to circuit court, a guardian ad litem was appointed to examine Hutto’s accounting. The guardian ad litem found unwarranted charges to the accounts that weren’t justified with receipts or bills. In all of the cases, the guardian ad litem determined that Hutto charged individuals hundreds or thousands of dollars in unnecessary postage, storage rental, lawn care or other fees.

Circuit Judge Brad Almond has ordered Hutto to reimburse more than $114,000 to the accounts of the wards and their families.

But probate court records don’t indicate a similar process. Hutto has said in circuit court hearings that she had about 100 cases in probate court. Probate court officials were not able to give an exact number. The Tuscaloosa News examined close to 30 found in online probate records.

People who have conservators appointed to handle their finances often have no family. For those who do, circumstances such as strained relationships make it in the person’s best interest for an impartial person to take over. That’s the situation in many of the cases that have been moved from probate to circuit court by attorneys hired by those family members.

Fairhope attorney Jim Smith handles conservatorships in Baldwin County. He expects to become the conservator for a man in one of Hutto’s cases that a local attorney had moved from probate court to circuit court. The ward now lives in south Alabama.

Smith has been receiving the man’s Social Security checks since June 2011 after being contacted by the man, who felt his money wasn’t being properly administered by probate court in Tuscaloosa. He supported moving the case after learning that Hutto had never filed an accounting in the case.

“There hadn’t been an accounting filed in a long time. By the time I was involved, she had filed something and there were questions about who his checks were going to,” Smith said. “It didn’t look like the probate office was doing the job right. Frankly, the impression was that nothing was going to be done.”

As a conservator in Baldwin County, Smith files regular accounting each year. If he forgets, the probate office there sends him a reminder.

“The procedures up there had been allowed to descend into a shambles, apparently,” Smith said of the Tuscaloosa probate office.

Attorney John McCulley, who represents the present guardian and conservator for K.E., said that proper procedures had not been followed in her case, which is why it was moved to circuit court. For example, he said, Hutto had never acquired a bond, which is required to protect the ward in case of mismanagement.

“The court ordered the appointed conservator to file a bond. The conservator did not file a bond, and despite that order, the court issued letters to the conservator,” he said. “Letters are the conservator’s written evidence of authority to act on behalf of the ward. Once we found out that there had been no bond issued, we immediately sought an accounting.

Additionally, the probate court entered judgment in the case against a third party in favor of Zondra Hutto and at her request without giving the third party either notice or an opportunity to defend.”

The case was moved to circuit court. Hearings have been held and the case is pending a detailed analysis of the accounting. McCulley said that he was also concerned about money that the probate court had ordered a third party to pay K.E.’s estate. A judgment had been filed in the case against that person, who had been given no notice of a hearing.

Attorney Bryan Winter represents a family member of a woman whose case was moved from probate to circuit court. He said that the case is pending while Hutto’s accounting receives an in-depth review.

“The parties are working in the current litigation to appropriately address the significant issues that have been raised with the accounting of the estate,” he said.

McCollum, the probate judge, said that he wasn’t sure how many cases remain open in his court.

After asking to review Hutto’s cases, a Tuscaloosa News reporter was provided 66 court files. In most of those cases, Hutto had been appointed to serve as a guardian only, meaning that she was not required to handle any money or assets. Guardians are tasked with ensuring that wards’ basic needs are met, such as housing, clothing and health care.

Most of the files provided in which she was a conservator involved very little money. No final accounting had been filed in any of those cases, which was required when Hutto resigned.

The News later learned that there were many more cases that weren’t made available. Many files in those cases, when viewed on the Tuscaloosa County website, did not include final accountings. Others did include an accounting similar to what Hutto submitted in the circuit court cases, but without receipts or further explanation of charges.

The News found charges in those accounts similar to the ones that were disputed in the circuit court cases, including a $5 monthly charge for postage and copies to each account, lawn care fees paid to a family friend and hundreds of dollars in storage fees. Hundreds of dollars were paid to an accountant for tax preparation.

Almond, the circuit judge, ordered Hutto to reimburse accounts for those type of charges, which also included late fees for bills or money spent on another ward.

J.B.’s account showed that Hutto charged him nearly $300 each month for storage fees. Another $178 from his account was used to pay for medicine for another of Hutto’s clients who has no connection to J.B. Like the other court files reviewed, J.B.’s file indicates that there has been no guardian ad litem to represent him by reviewing his account and that no final hearing has been set to approve Hutto’s accounting.

McCollum says that the cases in his court have been reviewed by an accountant and that he plans to review more detailed examinations of Hutto’s accounts and issue a final order in each one.

In the resignation filings in which she submitted accounting, Hutto requested that the judge hold a hearing and issue a final order in each case.

There were no hearings scheduled as of last week. McCollum said that final orders have been issued in some of the cases; however none of the files provided by his office or viewed online indicated that.

“We’ve looked at all of her files. We scrutinize these closely, we’ve gone through these with a fine-tooth comb,” McCollum said. “We haven’t found anything that’s missing in the way of the accounting, and no funds have been disbursed in any case. In fact, she’s owed money for legal fees in some cases.”

In several of the probate cases reviewed, orders accepting her resignation and appointing a new conservator were included in files, but they were undated and unsigned by the judge.

None of the court files reviewed for this story indicate that a guardian ad litem had been appointed to review accounts, or that a hearing had been scheduled and advertised in a newspaper or posted in a public building for the three weeks required by statute.

McCollum appointed Carol Geer to serve as the successor guardian and conservator in Hutto’s old cases. He said that there was no need to appoint someone else as a guardian ad litem to review Hutto’s submitted finances because Geer would do that. The law, however, states that the guardian ad litem must be an attorney. Geer, who is president of Complete Nursing Service, which provides nursing care and sitting services for patients, is not an attorney. In the cases reviewed by The News, no inventories had been filed listing the wards’ money and personal property, another requirement of the conservator law.

When she took over many of the cases, Geer took a check to the circuit clerk’s office with money Hutto had pooled from several wards’ accounts.

As of last week, Almond has ordered that $61,397.73 be returned to wards after hearings in his court regarding Hutto’s accounting. There is still $46,369.10 being held by the circuit clerk that has not been ordered paid to anyone. It is unknown who the money belongs to.

Court records also indicate that Hutto wasn’t keeping up with the required accounting in her cases. Law requires conservators to file accounting at least every three years. In all of the resignation documents filed by Hutto, she states that no previous accounting had been filed, even though many of those cases were at least three years old.

It was customary for Hutto to give herself a commission of

5 percent in each case.

In at least one case involving a large amount of money, an attorney has questioned that

5 percent. In one circuit court case, Hutto took $95,366 in commission from the woman’s accounts and requested around $20,000 in attorney fees. Attorney Paige Oldshue wrote in a motion disputing Hutto’s accounting that “in this case, Hutto routinely paid herself a

5 percent commission on monies she paid on behalf of (the ward) and items she sold on behalf of (the ward) without any approval from the court and without any proof of reasonableness. Any compensation to Ms. Hutto for her service as the conservator should have been reviewed and approved by the court with a finding of reasonableness as to the fee.”

Those fees and others are among the ones disputed in the circuit court cases. One of those still pending is the case that originated in circuit court that involves the federal charges against Hutto and her former employee.

Hutto, 62, will be released from the medium-security Coleman Federal Correctional Complex in central Florida on March 4. Her former employee, Brian Lunceford, 30, has agreed to plead guilty to spending $20,291 that belonged to a woman who was in a nursing home, suffering from dementia, a delusion disorder and paranoia. According to the federal plea agreement, he said that the woman had more than $2 million in her accounts and said, “I don’t disagree what I did was wrong or against the law.”

The court records do not indicate a sentencing date.

Attribution:

Questions surround ex-conservator’s cases
Stephanie Taylor
February 27, 2012
Tuscaloosanews.com
http://www.tuscaloosanews.com/article/20120227/NEWS/120229777/1291/news04?p=1&tc=pg

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