Cavaretta v. Bixby
Before his death, Albert W. Duclos retained the services of attorney Kelly W. Bixby (now also deceased) for Mr. Duclos’s divorce from his wife. In the course of that divorce, the family home was sold, and Mr. Duclos’s share of the proceeds was deposited into Mr. Bixby’s client trust account. Mr. Bixby also received for deposit into Mr. Bixby’s client trust account a cashier’s check settling an insurance claim for damage to the family house. None of these funds were ever paid to Mr. Duclos.
Following Mr. Duclos’s death, his estate sought to recover the money during probate proceedings to administer his will. Mr. Bixby failed to respond to a petition filed pursuant to Probate Code section 850 to recover the funds, and a default judgment was entered, ordering Mr. Bixby to turn over more than $317,000 to the estate, and to provide an accounting.
Mr. Bixby failed to provide an accounting, and ultimately filed for bankruptcy protection. The personal representative of the Duclos estate filed a subsequent petition under Probate Code section 859, seeking double damages for Mr. Bixby’s bad faith retention of Mr. Duclos’s money.
Before the hearing on that petition, the bankruptcy court granted the motion of the personal representative of Mr. Duclos’s estate for relief from the bankruptcy stay. However, the order granting relief from the stay was not signed and entered on the bankruptcy court’s docket until after the hearing on the Probate Code section 859 petition in probate court.
The probate court found that Mr. Bixby acted in bad faith, and doubled the damages previously ordered.
After Mr. Bixby’s death, his widow, Sheila Bixby, special administrator of his estate, substituted for her husband to pursue this appeal. Mrs. Bixby asserts a number of arguments on appeal. Among them is her argument that the probate court lacked jurisdiction to conduct the Probate Code section 859 hearing at which the court ordered double damages, because the order granting relief from the bankruptcy stay had not been entered. We agree, and on that basis, we reverse, declining to reach the other arguments asserted on appeal.
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