Young lawyers looking for the next hot area to specialize in might consider decedent’s defense work.  An awful lot of folks seem to be wrongly accused of being departed these days.  Even when they insist otherwise, they’re often met with “stiff” opposition, if you will.  The Feb. 18, 2014 Wall Street Journal recently ran an article entitled “Woman Files Lawsuit Claiming She Is Alive,” about a Saint Louis woman who was denied a mortgage because she was reported as deceased on her credit report.  Numerous attempts to resolve the matter were apparently unsuccessful.

Regular readers of our column might also remember a Halloween article a few months ago about an Ohio man who was presumed dead after a prolonged disappearance from his hometown.  The court found him to still be dead even after he showed up in person insisting otherwise. 

 

A New Twist

Another recent appellate court decision in Illinois adds a new twist in the saga of cases involving a condition that could perhaps be the premise for R.L. Stine’s next great series.  In this case, Samuel Zagaria turned up in court just months after being found presumptively dead at the request of his sister, Joanne, who was then appointed as administrator of his estate.  Although Samuel succeeded in getting the court to recognize his existence, in the end, he remained on the hook for paying the attorney’s fees incurred in the administration of his estate.1

Samuel Zagaria disappeared from his last known residence in 2000 and had not been seen or heard from since.  In 2009, at Joanne’s request, the Cook County probate court granted a petition for letters of office on presumption of death.  No will was found, and Joanne was his only heir at law. 

Letters of office were issued, and Joanne was appointed as independent administrator of Samuel’s estate.  Joanne hired attorneys who prepared Samuel’s personal tax returns for the years he was missing, recovered unclaimed assets he owned that the State of Illinois was holding, which totaled around $500,000 and tried to collect benefits for Samuel’s estate under an annuity contract with an insurance company.  In attempting the last endeavor, the attorneys discovered that they would need a “presumed-dead death certificate” to recover on the insurance contract.  In trying to get the certificate, they inadvertently discovered that someone had recently filed an application for food stamps using Samuel’s social security number.  The address listed on the application was that of a homeless shelter close to Samuel’s last known address. 

The attorneys contacted the shelter and were told that someone using Samuel’s name had been there, but the shelter refused to provide them with any additional information.  Several months later, the attorneys for Samuel’s estate confirmed that he was actually alive when they met with him in person, along with his counsel, at the homeless shelter.  After that, Samuel’s counsel filed an appearance in the estate case on his behalf and asked the court to revoke the letters of office issued to Joanne and make her provide an accounting of the estate.  The court so ordered.  Joanne’s attorneys prepared that accounting and filed it with the court in November 2010. 

For reasons unknown, the attorneys never filed a petition for attorney’s fees during the actual administration of the estate.  Rather, they filed a petition requesting their fees and costs only after the estate had been closed and the assets were distributed back to Samuel.  The probate court found that the petitioned-for fees and expenses were reasonable for the administrative services performed and imposed a judgment on the estate.  The court then granted a motion requiring Samuel to turn over the necessary funds required for the estate to pay the attorney’s fees.  A divided appellate court ultimately affirmed the probate court’s turnover order.

 

Appellate Court’s Reasoning

In analyzing the issue de novo under Illinois law, the appellate court first noted that the administration of an estate—whether on behalf of an actual or presumed decedent—is governed by the Illinois Probate Act.2 In fact, like most states, the Illinois Probate Act specifically permits the administration of an estate upon a legal presumption of death.3  In either scenario, the administrator of the estate has a duty to collect and conserve the assets of the estate, convert those assets into cash, pay any of the decedent’s outstanding debts and  distribute the estate as required by the decedent’s estate plan or as otherwise provided by law.  The administrator has the right to the assistance of an attorney in carrying out these duties, and the attorney’s compensation for the work performed on behalf of the estate is paid out of the estate’s assets.

The appellate court found that once Samuel was validly presumed dead, all of his assets became subject to the control of the state until the beneficiaries of the estate were determined and all charges against the estate were discovered and paid off.  The attorney’s fees at issue were just that: a charge against Samuel’s estate.  Because the probate court’s order opening the estate was valid and binding in accordance with the law, the estate was responsible for the payment of the reasonable expenses incurred by the attorney’s representing it.  And Samuel, the presumed decedent turned beneficiary of his own estate, was required to give back some of his own money to pay the attorneys he never wanted nor asked for.

Although the fairness of the result in this case is at least debatable given the strange facts at hand, the appellate court’s decision rests on important public policy considerations.  If estate administrators weren’t reimbursed for their services by the estate, then there would be little or no incentive for anyone to ever perform this important function.  For every presumed decedent who shows up late to his own probate proceedings, there are thousands who are actually gone for good and whose estates really do need to be administered and closed. 

 

The Saga Continues

But even after Samuel pays his bill, there will surely be more to come from his strange story.  After his counsel filed an appearance on his behalf in the probate court, they filed a supplemental proceeding alleging that Joanne took over $100,000 in distributions during the administration of his estate that she’s failed to refund to him.  Joanne has represented that a significant portion of these funds are long gone and that she used the money to purchase, among other things, two ponies for her grandchildren.    

 

Endnotes

1. In re Estate of Zagaria, 997 N.E.2d 913 (Ill. App. Ct. 1st Dist. 2013).

2. See 755 ILCS 5/1 et seq. (West 2010).

3. See 755 ILCS 5/9-6.