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In re Estate of Stacy Feldman

Supreme Court of Colorado, En Banc

June 24, 2019

In Re In the Matter of the Estate of Stacy Feldman, Decedent.

          Original Proceeding Pursuant to C.A.R. 21 Denver Probate Court Case Nos. 18PR30274 & 18PR30656 Honorable Elizabeth D. Leith, Judge.

          Attorneys for Elizabeth Greenberg: Wade Ash Woods Hill & Farley, P.C. Herbert E. Tucker Jody J. Pilmer Denver, Colorado

          Attorneys for Special Administrator Melissa R. Schwartz: Gill & Ledbetter, LLP Anne Whalen Gill Castle Rock, Colorado

          Attorneys for Robert Feldman: Lathrop Gage, LLP Alison Z. Sheahen Denver, Colorado

          Attorneys for Haddon, Morgan and Foreman, P.C.: Haddon, Morgan and Foreman, P.C. Jeffrey S. Pagliuca David S. Kaplan David G. Maxted Denver, Colorado

          OPINION

          Coats Chief Justice.

         ¶1 Feldman and the law firm of Haddon, Morgan & Foreman petitioned for relief pursuant to C.A.R. 21 from an order of the probate court requiring the law firm to provide information to the special administrator concerning its representation of Feldman in a criminal prosecution for the murder of his wife, and to deposit funds held in its client trust account into the registry of the court. In response to the assertion of the special administrator that Colorado's "slayer statute" applies to the funds at issue as proceeds of the decedent's life insurance policy, the probate court determined that if Feldman were later found, in the manner prescribed by the statute, to be the decedent's killer, he would be ineligible to receive those proceeds. Against that eventuality, the probate court found that compelling the return of the unearned funds in the firm's client trust account would be the only way to protect the children's interests, and that the court's equitable powers permitted it to do so.

         ¶2 We issued our rule to show cause and now conclude that the probate court abused its discretion by issuing its order without weighing the considerations inherent in preliminarily enjoining the law firm from expending further funds in the representation of Feldman. In addition, however, because the slayer statute expressly protects third parties who receive a payment in satisfaction of a legally enforceable obligation from being forced to return that payment or from liability for the amount of the payment, no finding of a reasonable likelihood of success in attempting to force the return of the insurance proceeds would have been possible. Given this resolution, the disclosures ordered by the court would not serve their intended purpose. The rule is therefore made absolute.

         I.

         ¶3 As indicated in the probate court's order, Stacy Feldman died in 2015 and that same year her husband, Robert Feldman, received a disbursement of approximately $751, 910 as the sole beneficiary of an insurance policy on the decedent's life. Almost three years after his wife's death, Feldman was charged with her murder. Pursuant to a fee agreement, he retained the law firm of Haddon, Morgan & Foreman to represent him in this criminal matter, and his retainer was deposited into the firm's client trust account.

         ¶4 Those trust account funds, the probate court found, were derived from the life insurance proceeds distributed to Feldman, and he intended to spend approximately $550, 000 remaining from those proceeds to fund his criminal defense.

         ¶5 The record demonstrates that after criminal charges were filed against Feldman, Elizabeth Greenberg, as guardian for the Feldmans' two minor children, filed two petitions with the Denver probate court concerning the decedent's estate. The first petition asked for relief under Colorado's "slayer statute," § 15-11-803, C.R.S. (2018), and for a constructive trust, and the second petition requested the appointment of a special administrator.

         ¶6 The probate court then appointed a special administrator in both probate matters and granted her the authority to investigate and provide an inventory of the decedent's assets, pursue appropriate legal action on behalf of the decedent's estate, prevent further dissipation of estate assets by Feldman, review Feldman's attorney billing statements and attorney fee agreements, and ascertain the amounts held in client trust accounts for Feldman.

         ¶7 As recounted by the probate court in its order, the special administrator then sent the law firm a letter requesting copies of Feldman's fee agreement, copies of attorney billing statements, and the balance of funds remaining in the firm's client trust account for Feldman. Additionally, the special administrator notified the ...


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