Tag: plene administravit
A recent class action proceeding against the estate of a deceased illustrates an estate’s limited liability. That is, an estate can’t be liable for more than what is left in the estate.
The case, Davidson v. Solomon (Estate), 2020 ONSC 2898, involved a class action against the estate of a deceased orthodontist. The orthodontist was alleged to have, for years prior to his retirement in 2015, “inappropriately” video recorded patients while he was providing them with dental services. 295 patients, many of whom were minors, were identified as victims.
Dr. Solomon was charged in 2017 with various offences, including voyeurism, making child pornography and possessing child pornography. He died on October 5, 2017 at the age of 69, before the criminal charges were tried. Accordingly, the criminal charges were withdrawn.
The incidents were discovered in 2017 when the Royal College of Dentists began investigating after receiving a complaint about Dr. Solomon’s services. In the course of the investigation, camcorder tapes were discovered, and Children’s Aid and the police were notified. The tapes dated from 1994 to 2014.
A class action was brought against Dr. Solomon on September 29, 2017. According to a news report, the claim sought damages of $1m, Family Law Act damages of $50,000 for each family law claimant, and $500,000 in punitive and exemplary damages. The claim was continued against Dr. Solomon’s estate after his death.
The estate denied the allegations. The allegations were never proven in court.
However, after extensive investigation, including dialogue with the estate’s lawyers, the representative plaintiff’s lawyer determined that the value of the estate was likely limited to $500,000. In light of the criminal nature of the allegations, it was determined that professional liability insurance was not likely to respond to the claim. Thus, it was concluded by the representative plaintiff that any judgment for damages would be limited to $500,000.
In light of this, a settlement was reached which saw to the estate paying a total of $425,000 for damages, administration fees, and legal costs. The court approved this settlement, noting, amongst other factors, that the estate had limited assets to satisfy any judgment. In approving the settlement, the judge hearing the approval motion stated, “Furthermore, there is a significant risk that but for this settlement, the Class Members would recover nothing, given the limited assets available to satisfy any judgment.”
Presumably, the estate plead plene administravit praetor: that the estate had limited assets. Read about this doctrine here.
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Are you an estate trustee? Is the estate being sued? Are there no, or insufficient, assets left in the estate to satisfy any judgment that may be obtained? Then plene administravit (or plene administravit praeter) is the doctrine for you!
Plene administravit is Latin for “fully administered”. It is pleaded where there are no assets remaining in the estate to satisfy any judgment and costs award that may be obtained. Plene administravit praetor means “fully administered except”, and is pleaded when there are some but insufficient assets in the estate to satisfy any judgment and costs.
Failure to plead plene administravit could lead to personal liability on the part of the estate trustee for the claim. As stated in Commander Leasing Corp. Ltd. v. Aiyede (1983) CanLII 1649 (ON CA):
It has long been established that if an executor or administrator has no assets to satisfy the debt upon which an action is brought, in the absence of a plea of no assets or plene administravit, he will be taken to have conclusively admitted that he has assets to satisfy the judgment and will be personally liable for the debt and costs if they cannot be levied on the assets of the deceased. If the executor has some, but insufficient, assets to satisfy the judgment and costs, a plea of plene administravit praetor will render him liable only to the amount of assets proved to be in his hands as executor”.
Where the doctrine is pleaded, the burden of proof falls on the plaintiff to show that assets existed or ought to have existed in the hands of the estate trustee at the time the action was commenced.
In Commander Leasing, the estate trustee distributed the proceeds of the estate to the beneficiary (herself), with knowledge of the claim. The Court had no difficulty in finding that as the doctrine was not pleaded, the estate trustee was personally liable for the judgment.
In Commander Leasing, the Court of Appeal also discussed the companion doctrine of devistavit. Devistavit, or a wasting of assets, is defined to be “mismanagement of the estate and effects of the deceased, in squandering or misapplying the assets contrary to the duty imposed on them, for which the executors or administrators must answer out of their own pockets, as far as they had, or might have had, assets of the deceased.” In Commander Leasing, the court found that in distributing the estate the estate trustee breached her duty as estate trustee, rendering her personally liable.
However, all is not lost if the estate trustee fails to plead plene administravit. In Brummund v. Baumeister Estate, 2000 CanLii 16988 (ON CA), the Court of Appeal upheld a trial judge’s decision to allow the defendant to amend the defence at trial to plead the doctrine. The Court of Appeal held that the plaintiff was not prejudiced by the amendment, as the facts underlying the application of the doctrine were fully canvassed at trial.
Have a great, plenus weekend.
Today on Hull on Estates, Paul Trudelle and Doreen So discuss plene administravit in the context of the Mortgage Insurance Company of Canada v. Grant case.
Today on Hull on Estates, Paul Trudelle and Joshua Eisen discuss the pleading of plene administravit: Avoiding personal liability as an estate trustee for claims against the estate. If you have any questions, please email us at firstname.lastname@example.org, or leave a comment on our blog page.
Click here for more information on Joshua Eisen.