KEELY RAE JOHNSON FUENTES, as Successor Conservator and Guardian ad litem of Allison Marie Johnson Fuentes; and ALLISON MARIE JOHNSON FUENTES, an individual, Appellants,
MARY L. TILLETT, Respondent. ALLISON MARIE JOHNSON FUENTES; and KEELY FUENTES, successor conservator for Allison Fuentes, Plaintiffs-Appellants,
MARY TILLETT, ST. PAUL FIRE & MARINE/TRAVELERS INSURANCE COMPANY, and DOUGLAS M. FELLOWS, Defendants-Respondents. KEELY FUENTES, as Successor Conservator for Allison Marie Johnson Fuentes; and ALLISON MARIE JOHNSON FUENTES, an individual, Appellants,
MARY L. TILLETT; ST. PAUL FIRE & MARINE/TRAVELERS INSURANCE COMPANY; and DOUGLAS M. FELLOWS, Respondents
Argued and Submitted June 12, 2012.
Clackamas County Circuit Court. P0806024. Clackamas County Circuit Court. CV09080193. Clackamas County Circuit Court. P0806024. Robert D. Herndon, Judge.
Ira R. Weatherhead argued the cause and filed the opening brief for appellants. With him on the reply brief was Draneas & Huglin, P.C.
Brian R. Talcott argued the cause for respondents Mary L. Tillett and St. Paul Fire & Marine/Travelers Insurance Company. With him on the brief were Donald E. Templeton and Dunn Carney Allen Higgins & Tongue LLP.
James M. Callahan argued the cause for respondent Douglas M. Fellows. With him on the brief was Callahan & Shears, P.C.
Before Wollheim, Presiding Judge, and Nakamoto, Judge, and Schuman, Senior Judge.
[263 Or.App. 12] WOLLHEIM, P. J.
This consolidated appeal involves interrelated judgments in two separate actions concerning a conservatorship for Allison Fuentes. The first action, the conservatorship proceeding, was commenced in 1999 in the probate court after the death of Allison's mother; Allison's aunt, Mary Tillett, was appointed conservator and guardian ad litem for Allison. In 2008, Allison's sister, Keely Fuentes, became the successor conservator and filed objections on behalf of Allison to the annual accountings that had been submitted by Tillett between 1999 and 2008. Keely's objections alleged that Tillett had mismanaged conservatorship funds during that time and had concealed that mismanagement from the probate court during the annual accounting process. The probate court entered a judgment dismissing those objections as untimely, ruling that Tillett's intermediate accountings, which had been approved each year by the court, were final and no longer subject to objection.
Keely and Allison (plaintiffs) then sought relief by way of a separate civil action alleging tort and other claims against Tillett, as well as Tillett's attorney, Douglas Fellows, and the surety that issued a bond for the conservatorship, St. Paul Fire & Marine Insurance Company/Travelers Insurance Company (St. Paul). The trial court  dismissed
those claims, however, on the grounds that the probate court had exclusive jurisdiction over protective proceedings, that plaintiffs had alleged " precisely the same claims brought within the conservatorship proceedings," and that Fellows had been acting within the scope of the attorney-client relationship and was therefore protected by a qualified privilege.
At that point, plaintiffs returned to probate court, where they filed a petition for surcharge that asserted the same claims that had been dismissed in the civil action. The [263 Or.App. 13] probate court likewise refused to entertain those claims, ruling that the surcharge petition raised the same issues that Keely had initially raised in her untimely objections to the final accountings, that she was precluded from relitigating those same issues, and that, as the trial court had ruled, Fellows was protected by a qualified privilege.
On appeal, plaintiffs contend that the probate court and trial court erroneously denied Allison the opportunity to challenge the mishandling of her estate, effectively insulating Tillett and Fellows from any liability for their actions. For the reasons that follow, we conclude that plaintiffs should have been permitted to pursue relief against Tillett and St. Paul in the probate court, but that their claims against Fellows were properly dismissed. We therefore reverse and remand the judgments in the probate case with respect to Tillett and St. Paul, but otherwise affirm, including the circuit court's judgment dismissing the civil action.
The relevant background facts are not disputed for purposes of this appeal. In 1999, the conservatorship was established after Allison's mother, Marie Johnson Fuentes (Marie), died as a result of complications caused by the prescription drug Fen-Phen. The conservatorship was funded with settlement proceeds from a wrongful death action against the manufacturer of Fen-Phen filed on behalf of Marie's estate by California attorney Arthur Sherman, and Sherman held back additional funds to pay any remaining medical bills against Marie's estate. On September 8, 1999, Tillett was appointed as guardian and conservator for Allison and Keely, who were ages eight and 12 at that time. Tillett filed an initial conservatorship inventory showing that Allison's estate had assets close to $600,000.
Between 1999 and 2008, Tillett received a monthly salary from the conservatorship estate, in an amount approved by the probate court, for providing " nanny services" to plaintiffs. In addition to that salary, Tillett received [263 Or.App. 14] regular monthly payments for plaintiffs' benefit, including a check from the Social Security Administration, child support payments from plaintiffs' father, and a lump-sum allowance from the conservatorship checking account--in an amount approved by the court--to cover plaintiffs' monthly living expenses. Tillett also received funds by request from the conservatorship checking account for the reimbursement of additional expenses on an as needed basis.
Fellows represented Tillett in her capacity as conservator. Fellows managed the conservatorship checking account for Tillett and issued monthly checks to Tillett for her salary and expense allowance, as approved by the court, as well as supplemental checks for the reimbursement of additional expenses that Tillett requested and Fellows approved. Fellows also filed annual accountings in the probate court on Tillett's behalf, selected and managed investments for the conservatorship, facilitated the purchase of a residence for plaintiffs, facilitated Tillett's purchase of interests for herself in that residence with loans from the conservatorship, and served as the point of contact with Sherman on plaintiffs' behalf regarding the funds that Sherman withheld from plaintiffs' share of the Fen-Phen settlement proceeding. Fellows petitioned for attorney fees on an annual basis, which the probate court approved.
For the first eight years of the conservatorship, the probate court approved each of the annual accountings that Fellows filed on Tillett's behalf. Then, in 2008, Keely, no longer a minor, succeeded Tillett as Allison's guardian and conservator. Thereafter, she filed a document styled " Keely Fuentes, Objections to Conservator's First through Eighth Annual Accountings." The objections alleged a wide range of misconduct by Tillett, including the receipt of excessive compensation for nanny services, improper delegation of conservator duties to Fellows, her failure to account for how she spent plaintiffs' monthly expense allowance, her failure [263 Or.App. 15] to pay her pro rata share of house-related expenses, her failure to account for and repay loans from the conservatorship to purchase an interest in the residence, use of conservatorship funds for personal expenses without disclosure to the court, receipt of conservatorship funds after she left the residence and moved to southern Oregon in 2008, and mismanagement of the conservatorship funds in several other ways.
In response to the objections, Tillett filed a motion for summary judgment. Tillett argued that Keely's objections were barred by the plain ...