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In re Guardianship of McClinton

Court of Appeals of Mississippi

February 3, 2015

IN RE: GUARDIANSHIP OF DEMON B. MCCLINTON: MICHAEL J. BROWN, APPELLANT
v.
THOMAS A. MCCLINTON JR., APPELLEE CONSOLIDATED WITH IN RE: GUARDIANSHIP OF DEMON B. MCCLINTON: THOMAS A. MCCLINTON JR. AND LOTTIE CAMPBELL, APPELLANTS
v.
DEMON B. MCCLINTON, APPELLEE

Page 863

COURT FROM WHICH APPEALED: HINDS COUNTY CHANCERY COURT. DATE OF JUDGMENT: 03/20/2012. TRIAL JUDGE: HON. J. DEWAYNE THOMAS. TRIAL COURT DISPOSITION: FOUND APPELLANT IN CONTEMPT FOR FAILURE TO ACCOUNT FOR OR REPAY MISSING GUARDIANSHIP FUNDS.

COURT FROM WHICH APPEALED: HINDS COUNTY CHANCERY COURT. DATE OF JUDGMENT: 11/13/2012. TRIAL JUDGE: HON. J. DEWAYNE THOMAS. TRIAL COURT DISPOSITION: FOUND APPELLANTS IN CONTEMPT FOR FAILURE TO ACCOUNT FOR OR REPAY MISSING GUARDIANSHIP FUNDS.

ATTORNEY FOR APPELLANT: CLAYTON LOCKHART.

ATTORNEYS FOR APPELLEE: PRECIOUS MARTIN, SUZANNE G. KEYS.

ATTORNEY FOR APPELLANTS: RICK D. PATT.

ATTORNEYS FOR APPELLEE: PRECIOUS MARTIN, SUZANNE G. KEYS.

BEFORE LEE, C.J., ROBERTS AND CARLTON, JJ. LEE, C.J., IRVING AND GRIFFIS, P.JJ., BARNES, ISHEE, MAXWELL, FAIR AND JAMES, JJ., CONCUR. CARLTON, J., CONCURS IN PART AND IN THE RESULT WITHOUT SEPARATE WRITTEN OPINION.

OPINION

Page 864

ROBERTS, J.

¶1. Today's case is a prime example of how the unanticipated receipt of a substantial amount of money can result in destroyed lives, broken familial relationships,

Page 865

and even incarceration. Following his mother's death in 1999, DeMon McClinton (DeMon), sixteen-years old at the time, inherited over three million dollars. The Hinds County Chancery Court appointed DeMon's father, Thomas McClinton Jr. (McClinton), as guardian in 2000, and he hired attorney Michael J. Brown to help administer and oversee the guardianship. DeMon's guardianship was closed in 2006, but through numerous unauthorized actions by McClinton, Brown, and other persons, that will be outlined in much greater detail later in this opinion, the bulk of DeMon's inheritance went missing. After appointing a special master to investigate the guardianship's finances, the chancery court found Brown, Linus Shackelford,[1] McClinton, and Lottie Campbell in contempt for their misuse and misappropriation of guardianship funds, and it ordered them incarcerated until they repay the guardianship. These findings of contempt are at issue in this appeal. We affirm as it relates to Brown. We also affirm as it relates to the chancery court's holding McClinton and Campbell in contempt, but reverse and remand for the chancery court to specifically address McClinton's and Campbell's inability to pay.

FACTS AND PROCEDURAL HISTORY

¶2. Rebecca Henry, daughter of prominent civil rights leader, Aaron Henry, died in 1999, leaving her estate to her two sons, one of them being DeMon McClinton. DeMon, sixteen-years old at the time of his mother's death, inherited half of her estate, requiring the appointment of a guardian and the opening of a guardianship on DeMon's behalf. McClinton, DeMon's biological father, petitioned to be appointed DeMon's guardian and to open a guardianship for DeMon's inheritance. To aid him in establishing and overseeing the guardianship, McClinton hired attorney Brown, and on June 16, 2000, the chancery court issued an order opening the guardianship and appointing McClinton as DeMon's guardian. Regrettably, McClinton, as guardian, was never required to post a bond guaranteeing his faithful performance of his duties. In its order, the chancery court ordered that " if bond and accounting are dispensed with, any guardianship funds obtained will be deposited in a fully insured account at a banking corporation in this state, there to remain until further order of this [chancery c]ourt."

¶3. DeMon turned twenty one, the age of majority, on November 30, 2004; however, prior to the closing of the guardianship, attorney Glover Russell was retained to investigate distributions from Rebecca Henry's estate in Coahoma County. On November 21, 2005, Russell, although his representation of DeMon apparently had been terminated, filed a petition, by a next friend, to compel an accounting of the guardianship. In his petition, he stated that McClinton informed him that $300,000 was withdrawn from the guardianship, without chancery court approval, for an unauthorized and unpaid loan. Additionally, one million dollars belonging to the guardianship was never deposited into the guardianship estate but was deposited into an account maintained by Brown. However, the prior chancellor, Stuart Robinson, approved the final accounting and closed the guardianship, and an order was entered to that effect on August 11, 2006, without specifically addressing Russell's petition.

Page 866

¶4. Three years later, on September 4, 2009, McClinton filed a petition to reopen the guardianship and to be reappointed guardian of the now-adult DeMon. According to the petition, McClinton alleged that Brown loaned guardianship money, without McClinton's or the chancery court's approval, to Shackelford to invest in a cemetery, and there had not been any repayment on the loan. On September 30, 2009, the chancery court granted McClinton's petition to reopen the guardianship. Shortly thereafter, McClinton filed a petition for accounting of the guardianship. The petition specifically sought information related to two checks issued from the Rebecca Henry estate that were cashed by Brown, but unaccounted for in the guardianship. The petition also requested the chancery court to compel Shackelford and Brown to show that they have " satisfied the signed promissory note to repay the unauthorized transactions" from the guardianship.

¶5. The chancery court did order Brown to provide a more detailed accounting of the guardianship funds expended throughout the course of the guardianship. After several hearings on the issue where Brown failed to give " meaningful explanation or testimony as to account for the funds inherited by De[M]on . . . from his mother's estate[,]" or provide a " satisfactory explanation of the unethical 'loans' of [g]uardianship funds to himself and . . . Shackelford[,]" the chancery court, by order on February 1, 2012, found Brown " in willful and contumacious contempt of this [chancery court] for his failure to account . . . for the funds he has borrowed from . . . [DeMon] without order of the [chancery court]" and also for " his failure to deposit [DeMon's] funds in a federally insured banking institution pursuant to [Mississippi Code Annotated s]ection 93-13-17 [(Supp. 2014)] as ordered by . . . [the chancery c]ourt on June 16, 2000." Additionally, the chancery court noted that Brown committed a fraud upon the court relating to the documents and accounting he submitted when closing DeMon's guardianship in 2006, as well as the $398,000 attorney fee he received. Brown was ordered to be " immediately placed within the confines of the Hinds County Jail until [he] purges himself of this contempt . . . ." The chancery court also stated that Brown would be permitted to post bond for his conditional release should he appeal the final judgment.

¶6. Brown filed a motion for reconsideration, and on February 7, 2012, the chancery court entered an order granting Brown a conditional release from the Hinds County Detention Center after posting a $100,000 bond and agreeing to appear on March 20, 2012, for a hearing and to provide " a complete accounting for all funds that came into Brown's possession from . . . [DeMon's] guardianship, and to show cause why Brown should not be further held in contempt of . . . the [chancery c]ourt."

¶7. The following day, the chancery court appointed attorney and C.P.A. Paul Rogers as special master to investigate the guardianship's finances and to report his findings to the chancery court. Rogers filed his first Report of Special Master on March 19, 2012, in which he stated that " the funds to be accounted for by the Guardian and his attorney total $3,441,736.45." The only disbursements of guardianship funds authorized by the chancery court were: $398,000 to Brown for attorney's fees; $79,293.13 to McClinton for a guardian fee and expenses; $1,600.47 to another law firm for attorneys' fees; and a $3,000 monthly allowance for DeMon's expenses. However, Rogers found that Brown was responsible for $2,035,573.36 unaccounted for from the guardianship. At this point, Rogers was

Page 867

unable to provide any specific amount owed by McClinton because McClinton had not yet provided the necessary documentation of the assets that came into the guardianship, the disbursements, and a summary of the remaining assets. Additionally, Rogers noted that McClinton's motion for payment of a guardian fee and expenses was not in compliance with Uniform Rule of Chancery Court 6.11, because it neither contained the required financial information nor did it list the expenses for which McClinton sought reimbursement. And " McClinton remains answerable to . . . [the chancery c]ourt for his breach of duties and false statements in the management of this Guardianship's funds."

¶8. Brown appeared before the chancery court again on March 20, 2012. Following that hearing, the chancery court entered a " [f]inal [j]udgment of this [chancery c]ourt [f]inding Michael J. Brown in [c]ontempt[.]" The chancery court found Brown to be " in willful and contumacious contempt" for:

1. [H]is unapproved loans of guardianship funds to third parties;
2. [H]is fraudulent and unreasonable [attorney's] fee;
3. [H]is personal loans from . . . [DeMon, a minor];
4. [H]is forgery of two checks from Regions Bank on December 23, 2002, for the sums of $205,020.81 and $32,725;
5. [H]is failure to deposit . . . [DeMon's] funds in a banking corporation pursuant to Section 93-13-17 as ordered by . . . [the chancery c]ourt on June 16, 2000;
6. [H]is conversion of life insurance proceeds of $52,747.27 from the death of Rebecca Henry, . . . [DeMon's] mother;
7. [H]is embezzlement of guardianship funds of approximately $235,000 through writing checks to himself or cash.

And Brown was again ordered to be incarcerated until he could purge himself of contempt by " depositing all funds of . . . [DeMon], for a total sum ...


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