Art v. Erwin, 10th Dist. App. No. 10AP-747, 2011 Ohio 2371. Former guardian transferred her wards securities account from former financial institution titled solely in the name of the ward into a guardianship account at a new financial institution, despite the language in guardians letters of administration stating: Funds being held in the name of the within named ward shall not be released to the Guardian without a Court Order directing release of a specific fund and amounts thereof.
Over time, guardians husband, an employee of the new financial institution, embezzled almost all of wards account, unbeknownst to guardian. After the appointment of successor guardian, during the settling of the wards accounts, the probate court found former guardian liable for the loss because of her lack of diligence in monitoring the wards accounts. Successor guardian ultimately settled against former guardians bond insurer and assigned the bond insurer the wards claims against former financial institution for initially authorizing the transfer of funds into the guardians possession.
The bond insurer filed an action pursuant to R.C. 2109.52 against former financial institution. In reversing summary judgment for former financial institution, the court of appeals explained that the letters of administration function as a court order, therefore the financial institution had an obligation to require a court order from the guardian before transferring the funds held in the wards name, pursuant to the language in the letters of administration. The former financial institutions liability was triggered because the former guardian lacked the authority to take possession of assets held in solely in the wards name, therefore it was the former financial institutions obligation to require a court order from former guardian.
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