IN RE EST OF EUGENE T CAPUZZI MD
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Michigan Supreme Court
Lansing, Michigan
Opinion
Chief Justice
Justices
Maura D. Corrigan
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
FILED JULY 2, 2004
In re ESTATE OF EUGENE T.
CAPUZZI, M.D., Deceased,
______________________________
MICHAEL CAPUZZI and EUGENE T.
CAPUZZI, JR.,
Petitioners-Appellants,
v
No. 121106
CHRISTINA FISHER,
Respondent-Appellee.
_______________________________
BEFORE THE ENTIRE BENCH
CAVANAGH, J.
The
principal
issue
presented
revokes
his
is
whether
agent’s
order
the
to
death
transfer
of
the
limited
partnership shares when all necessary actions by the agent
were
completed
before
the
principal’s
death,
transfer was not yet completed by a third party.
but
the
We hold
that an agent’s actions are not revoked by the death of the
principal
when
the
agent
has
completed
all
actions
necessary for the transaction before the principal’s death.
Therefore, we reverse the decision of the Court of Appeals
and affirm the decision of the trial court granting the
petitioners summary disposition.
I. FACTS
Decedent, Eugene T. Capuzzi, M.D., owned shares in a
limited
partnership.
Dr.
Capuzzi’s
will
divided
that
interest equally among his three children, Michael, Eugene
Jr.,
and
Christina.
Capuzzi
directed
A
few
days
Michael
to
before
his
transfer
death,
the
Dr.
limited
partnership shares to his sons, Michael and Eugene, Jr.,
petitioners
in
this
case.
Michael
was
acting
as
Dr.
Capuzzi’s agent pursuant to a durable power of attorney
agreement.
The
agreement
gave
Michael
“full
power
and
authority to do and perform every act and thing whatsoever
requisite and necessary to be done.”
The transfer would
eliminate Christina’s interest in the limited partnership
shares; Christina is the respondent in this case.
Michael contacted the limited partnership on August
10, 1998, and again on August 11, 1998, and he directed
that the shares be transferred pursuant to the power of
attorney and Dr. Capuzzi’s wishes.
August
14,
partnership
Capuzzi’s
1998.
On
August
sent
Michael
a
death
had
revoked
19,
Dr. Capuzzi died on
1998,
letter
the
power
the
stating
of
limited
that
Dr.
attorney
and,
therefore, the transfer could not be completed.
During
probate
shares
proceedings,
petitioners
2
objected
to
the
passing under the will.
The probate court granted summary
disposition for petitioners.
The Court of Appeals reversed
and remanded, holding that the transfer of the shares could
not be completed because Dr. Capuzzi’s death immediately
revoked
the
power
attorney.1
of
This
Court
petitioners’ application for leave to appeal.
granted
468 Mich 925
(2003).
II. STANDARD OF REVIEW
We
review
de
novo
questions
of
law.
Hagerman
v
Gencorp Automotive, 457 Mich 720, 727; 579 NW2d 347 (1998).
Likewise,
“we
review
disposition motions.”
de
novo
decisions
on
summary
American Federation of State, Co &
Municipal Employees v Detroit, 468 Mich 388, 398; 662 NW2d
695 (2003).
III. ANALYSIS
It
is
authorized
a
longstanding
agent
has
the
legal
principle
power
to
act
that
and
a
bind
duly
the
principal to the same extent as if the principal acted.
See, e.g., Cowan v Sargent Mfg Co, 141 Mich 87, 91; 104 NW
377 (1905); see also 1 Restatement Agency, 2d, § 12, p 57.
A power of attorney provides the agent with all the rights
and responsibilities of the principal as outlined in the
1
Unpublished opinion per curiam, issued February 15,
2002 (Docket No. 227750).
3
agreement.
See, e.g., MCL 700.5501 et seq.; Kuite v Lage,
152 Mich 638, 640; 116 NW 467 (1908).
In effect, the agent
stands in the shoes of the principal.
It
is
also
well-settled
that
the
death
of
the
principal revokes the authority of the agent, unless the
agency is coupled with an interest.
See, e.g., Chrysler
Corp v Blozic, 267 Mich 479, 481-482; 255 NW 399 (1934);
Weaver v Richards, 144 Mich 395, 413; 108 NW 382 (1906).
Any act done by the agent after the principal dies cannot
affect the estate.
3 Am Jur 2d, Agency, § 52, pp 468-469.
This is true even if an agent performed some of the acts
necessary in a single transaction but not all of them.
CJS, Agency, § 122, pp 394-395.
midst
of
a
transaction
when
2A
If an agent is in the
the
principal
dies,
the
transaction cannot continue, regardless of the principal’s
previously stated wishes.
However,
when
an
agent
has
completed
all
necessary
actions and all that is left is for a third party to act to
complete
the
transaction,
we
hold
that
the
principal’s
death has no effect on the validity of the transaction and
does not relieve the requirement on the third party to act.
This is because the agent’s actions were complete at the
time of the principal’s death.
See 2A CJS, Agency, § 109,
p
party
386.
Notably,
if
a
third
requires
additional
information to confirm that the agent has the authority to
4
act or if, for example, the third party requires completion
of an additional form indicating power of attorney, then
the agent has obviously not completed all actions necessary
for the transaction.
If the principal dies before the
agent meets the third party’s requirements, then the third
party is not required to follow the directive of the agent.
This
is
because
all
necessary
actions
have
not
been
completed by the agent before the principal dies.
When all necessary actions have been completed, just
as
the
directive
third
of
party
the
would
be
principal,
required
the
third
to
follow
party
is
required to follow the directive of the agent.
Jur
2d,
Agency,
§
1,
p
429
(“the
the
also
See 3 Am
agent
is
the
representative of the principal and acts for, in the place
of,
and
instead
of,
the
principal”)(emphasis
added);
2A
CJS, Agency, § 4, p 308 (“a person may properly appoint an
agent
to
do
the
consequences
same
as
acts
if
and
he
achieve
or
the
she
same
had
legal
acted
personally . . . .”); see also 2A CJS, Agency, § 1, p 306.
Although the agent’s authority to act terminates when the
principal dies, actions completed before the termination no
longer require the agent to exercise authority.
the
principal’s
death
actions by the agent.
does
not
revoke
already
Therefore,
completed
See 2A CJS, Agency, § 109, p 386 (“A
5
revocation of the agent’s authority cannot retroactively
affect the completed acts of the agent.”).
In this case, in accord with Dr. Capuzzi’s wishes2 and
acting as Dr. Capuzzi’s agent pursuant to a durable power
of attorney, Michael contacted the third party and directed
that the shares be transferred.
Just as Dr. Capuzzi had
the authority to compel the third party to transfer the
shares, Michael, as Dr. Capuzzi’s agent, possessed the same
authority.
shares,
Once he ordered the third party to transfer the
this
concluded
the
agent’s
necessary to complete the transaction.
was for the third party to act.
actions
that
were
All that remained
Again, in this case, the
agent did all that was required to transfer the shares.
The failure to transfer the shares was solely the result of
the third party’s delay and had nothing to do with the
third
party’s
internal
procedures
or
concerns
that
the
agent did not have the proper authority.
2
We note that there is no assertion that Dr. Capuzzi,
from the time the agent acted to the time of the doctor’s
death, ever wavered in his decision to transfer.
The
record also contains an affidavit from decedent’s wife of
forty-four years averring that respondent had, for a number
of years, been estranged from her father; that despite the
affiant’s
efforts
to
obtain
reconciliation
and
reunification, respondent had refused to visit her parents;
and that in 1998, respondent had refused to visit her
father even though he was seriously ill.
The affiant
continued that her husband died not wanting his daughter to
receive the joint venture shares and that he also wanted to
divest himself of all remaining assets to avoid probate.
6
Notably, the agent acted on behalf of the principal
before the agent’s authority was revoked by the principal’s
death and, thus, there was nothing precluding the third
party from relying on the agent’s authority.
Because there
was
ordering
nothing
prohibiting
the
agent
from
the
transfer when he did, that is, while the principal was
still alive, there was nothing prohibiting the third party
from acting pursuant to the validly given order.
The third
party’s authority to transfer the shares does not depend on
the agent’s authority to act on behalf of the principal at
the time of the transfer of the shares; rather, it depends
on
the
agent’s
authority
to
act
at
the
ordered the shares to be transferred.
the
agent
properly
exercised
his
time
the
agent
Therefore, because
authority
while
the
principal was still alive, see 2A CJS, Agency, § 88, p 364,
the third party was not excused from acting on the agent’s
authority.
Although MCL 700.497 has been repealed, we are aware
that it was in effect at the time of the agent’s order to
transfer the shares.
MCL 700.497(1) stated, in pertinent
part, the following:
The death of a principal who has executed a
power
of
attorney
in
writing,
durable
or
otherwise, does not revoke or terminate the
agency of the attorney in fact, agent, or other
person who, without actual knowledge of the
death, acts in good faith under the power of
attorney or agency.
An action so taken, unless
7
otherwise invalid or unenforceable, binds the
principal and the principal's heirs, devisees,
and personal representatives.
In brief, MCL 700.497(1) stated that the death of a
principal who had executed a written power of attorney did
not terminate the agency of the attorney in fact, agent, or
other
person
who
acted
under
the
power
of
attorney
or
agency in good faith without knowledge of the death.
MCL
700.497(1)
the
is
not
germane
to
this
case
because
principal’s agent acted before the principal died.
Also, MCL 700.497(2) stated the following:
In the absence of fraud, an affidavit
executed by the attorney in fact or agent stating
that he or she did not have, at the time of doing
an act pursuant to the power of attorney, actual
knowledge of the revocation or termination of the
power of attorney by death, disability, or
incompetence
is
conclusive
proof
of
the
nonrevocation or nontermination of the power at
that time. If the exercise of the power requires
execution and delivery of any instrument that is
recordable, the affidavit when authenticated for
record is likewise recordable.
This
section
essentially
stated
that
an
affidavit
executed by the attorney in fact or agent stating that he
did not have knowledge of the principal’s death at the time
of
doing
the
act
in
question
is
conclusive
proof
of
nontermination of the power at that time and the act must
be enforced.
Thus, if, unknown to the agent, the principal
died, the agent’s act must be enforced nonetheless once the
agent files an affidavit.
The third party could not rebut
8
such an affidavit and would have no authority or basis to
refuse to carry out the agent’s order.
Of course, this
section is not applicable to the facts of this case because
when the agent completed his act the principal was still
alive.
And this section is not applicable to the third
party because the statute only applied to the attorney in
fact or agent and the third party in this case is neither.
However,
it
is
important
to
note
that
MCL
700.497(2)
mandated that the actions of an agent be enforced when the
agent was unaware of the principal’s death at the time of
the act in question; therefore, actions taken by an agent,
at the principal’s behest, when the principal was still
alive are certainly enforceable.
If
we
were
to
hold
to
the contrary, the actions of a third party could revoke the
completed acts of an agent.
This would circumvent the
intent of the principal and allow a third party’s actions
to control.
A third party’s delay, whether intentional or
not, should not be allowed to thwart the principal’s wishes
when
the
principal’s
agent
has
completed
actions before the principal’s death.
all
necessary
Further, to find
that an agent had the authority to order the transfer of
the shares but that the third party did not have to follow
the order would render the agent’s authority a nullity.
We
note
situations
in
that
our
which
an
decision
agent’s
9
today
does
actions
not
were
affect
not
yet
complete
at
the
decision
only
time
of
addresses
the
principal’s
situations
in
death.
which
an
Our
agent’s
actions were complete and the only actions remaining to be
done
are
those
of
the
third
party.
Although
the
principal’s death revokes the agent’s authority to act on
behalf
of
the
principal,
it
does
not
void
the
acts
completed by the agent on behalf of the principal before
the principal’s death.
today
does
not
We also note that our decision
preclude
a
third
party
from
taking
reasonable steps to ensure that an agent’s order stems from
a proper power of attorney.
See Cutler v Grinnell Bros,
325 Mich 370, 376; 38 NW2d 893 (1949).
However, in this
case, the third party’s delay was not related to any action
being
taken
to
ensure
that
the
agent
was
not
acting
improvidently or fraudulently.
IV. CONCLUSION
We
hold
that
an
agent’s
completed
actions
are
not
revoked by the death of the principal when all necessary
actions have been taken by the agent before the principal’s
death.
Accordingly, we reverse the decision of the Court
of Appeals and affirm the decision of the trial court.
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Stephen J. Markman
10
S T A T E
O F
M I C H I G A N
SUPREME COURT
In re ESTATE OF EUGENE T.
CAPUZZI, M.D., Deceased.
________________________________
MICHAEL CAPUZZI and EUGENE T.
CAPUZZI, JR.,
Petitioners-Appellants,
v
CHRISTINA FISHER,
No. 121106
Respondent-Appellee.
________________________________
YOUNG, J. (concurring).
I concur in the result reached by the majority because
I believe that the probate court appropriately determined
that
the
contested
partnership
shares
decedent’s sons rather the estate.
belonged
to
the
However, the majority
reaches beyond the simple issue presented in this case:
whether the probate court properly applied the principles
of MCR 2.116(C)(10) in resolving this property dispute in
favor of the decedent’s sons. In reaching beyond what is
essentially
a
simple
standard
of
review
question,
the
majority addresses other issues not squarely presented and
blurs the distinctions between the obligations of an agent
operating under a power of attorney and the obligations of
a third party responding to the direction of that agent.
Consequently, I write separately to provide an alternate
rationale–one
that
I
believe
will
reduce
the
risk
of
unintended consequences that I suspect the majority opinion
may create.
I.
At
Factual Background and Procedural History
issue
is
a
petition
in
the
probate
court
to
determine ownership of shares in a limited partnership that
owned a horse race track.
Decedent owned those shares
during his lifetime.
Two
years
appointed
his
before
son,
his
death,
Michael,
to
Eugene
be
under a durable power of attorney.
son
to
transfer
various
revocable trust.
assets
his
T.
Capuzzi
had
attorney-in-fact
He had instructed his
to
his
wife
and
to
a
In addition, he had instructed Michael to
transfer his shares in the racetrack to his sons Michael
Capuzzi and Eugene T. Capuzzi, Jr.
When the estate inventory was filed in probate court,
the
decedent's
daughter,
respondent
Christina
Fisher,
noticed that the racetrack shares were not included.
She
petitioned the court for the return of the assets to the
estate,
claiming
that
the
racetrack
shares
were
estate
assets because the racetrack company had not completed the
transfer
of
the
brothers
filed
a
shares
before
her
counter-petition,
2
father
died.
requesting
that
Her
the
probate
court
determine
racetrack shares.
affidavit
of
partnership,
the
proper
ownership
of
the
Among other proofs, they submitted the
the
who
executive
stated
manager
that
the
of
the
limited
limited
partnership's
general business practice with regard to share ownership
was
to
transfer
communication
shares
directing
a
upon
written
transfer.
or
The
telephone
sons
also
introduced evidence that the decedent desired the racetrack
shares to be transferred to his sons and that this desire
was
communicated
died.
to
Michael
Capuzzi
before
the
decedent
It is not contested that the transfer order was
communicated
to
the
attorney-in-fact
before
the
father
died.
On a motion for summary disposition pursuant to MCR
2.116(C)(10), the probate court ruled in favor of the two
sons, concluding that the limited partnership's practice
made transfer of ownership complete when the owner’s intent
was communicated.
It also found that the decedent's intent
was communicated to his attorney-in-fact before his death
and that the attorney-in-fact directed the transfer before
the
decedent’s
death
so
that
these
successfully changed ownership to the sons.
3
communications
The
opinion.1
Court
of
Appeals
reversed
in
an
unpublished
The Court ruled that the power of attorney was
effective until revoked by death.
Because the instruction
to transfer ownership of the shares had not been completed
by the limited partnership's manager, the Court of Appeals
determined that the shares remained in the decedent's name
and were, therefore, part of the probate estate.
II. Jurisdiction and Standard of Review
The probate court had jurisdiction to determine the
title to property pursuant to MCL 700.22(1):2
In addition to the jurisdiction conferred by
section 21 and other laws, the probate court has
concurrent legal and equitable jurisdiction of
the following matters involving an estate of a
decedent, ward, or trust:
(a) To
determine
interests. . . .
See
Noble
v
McNerney,
165
property
Mich
App
rights
586;
419
and
NW2d
424
(1988).
We review de novo the probate court’s grant or denial
of summary disposition.
Spiek v Dep’t of Transportation,
456 Mich 331, 337; 572 NW2d 201 (1998).
1
Unpublished opinion per curiam, issued February 15,
2002 (Docket No. 227750).
2
This section was replaced by MCL 700.1303 effective
April 1, 2000. 1998 PA 386.
4
III. The Probate Court Properly Decided
an Uncontested Motion
The
sons
submitted
evidence
establishing
their
father’s desire to have his shares transferred to them as
well as evidence regarding the transfer practices of the
limited
partnership.
Both
the
communication
of
the
decedent’s wish to have the shares transferred to his sons
and the communication of his instruction to the racetrack’s
transfer agent occurred before the decedent died.
facts
were
not
contested
by
Christina.3
There
These
was
no
genuine issue of material fact concerning the authority of
Michael Capuzzi to make the transfer order, there was no
good faith challenge by the transfer agent to Michael's
authority, and there was no genuine issue of material fact
about the typical manner in which the limited partnership
usually
handled
these
orders.
Accordingly,
the
probate
court properly concluded that the contested shares were not
an asset of the estate and granted judgment for the sons as
a matter of law.
Only this assessment of the probate court’s ruling is
necessary for the resolution of this case.
3
However, the
Under MCR 2.116(C)(10) and (G)(4), respondent had a
duty to oppose the sons’ motion by establishing a disputed
issue of material fact.
By Christina having failed to do
so, the probate court was authorized by statute and court
rule to rule in the sons’ favor if they are entitled to
judgment as a matter of law.
5
majority
launches
into
an
unnecessary
analysis
of
the
authority of agents operating under a power of attorney
upon the death of the principal, the general obligations of
third parties upon receipt of instructions of an agent, and
other issues I think wholly irrelevant to the disposition
of this case.
IV. Contrary to the Majority view,
a third party is not unqualifiedly “required”
to honor a power of attorney
My disagreement with the majority is its overbroad and
largely
unsupported
assertion
that
a
third
party
is
required to act in response to a directive from a person
serving as an attorney-in-fact:
However, when an agent has completed all
necessary actions and all that is left is for a
third party to act to complete the transaction,
we hold that the principal’s death has no effect
on the validity of the transaction and does not
relieve the requirement on the third party to
act. [Ante, p 4.]
When
all
necessary
actions
have
been
completed, just as the third party would be
required
to
follow
the
directive
of
the
principal, the third party is also required to
follow the directive of the agent. [Ante, p 5.]
Although
both
accurate,
they
statements
are
statements
are
at
are
at
unnuanced
odds
with
a
very
and
an
general
overbroad.
established
level
These
principle
actually discussed in an unconnected fashion later by the
majority: “[O]ur decision today does not preclude a third
party
from
taking
reasonable
6
steps
to
ensure
that
an
agent's
order
Ante, p 10.
stems
from
a
proper
power
of
attorney."
The conclusion that an agent was authorized to
act on behalf of the principal before the principal's death
does
not
compel
the
conclusion
that
a
third
party
is
obligated to respond in a particular fashion.4
It
is
common
practice
for
financial
institutions,
hospitals, and other businesses to ask customers to use a
power of attorney form created by that business.
And the
reason for such a request is obvious—the need to ensure
that one who purports to act for another under a power of
attorney is doing so with proper authority.
Generally, a
third party must exercise due diligence and due care to
ascertain the scope of authority.5
in
reasonable
reliance
on
the
A third party who acts
apparent
authority
of
an
agent is protected:
A third party with whom the agent deals may
rely on the appearance of authority only to the
extent that such reliance is reasonable.
Blind
reliance
is
incapable
of
giving
rise
to
ostensible authority; reliance must be had in
good faith and in the exercise of reasonable
prudence. [2A CJS, Agency, § 144, p 420.]
4
Indeed, because all the agent’s actions in this case
were completed before the death of the principal, it is
unclear why the majority devotes so much analysis to the
rules that apply when the principal dies before his agent
has completed all acts to effectuate the principal’s
direction—a circumstance inapposite to the facts of this
case.
5
2A CJS, §§ 150-151, pp 426-429.
7
Cowan v Sargent Mfg Co6 supports the principle that a
third party has a right to inquire into the authority for a
purported agent's commands.
In Cowan, the defendant was a
Michigan manufacturer of sickroom furniture who operated a
sales
showroom
manager
in
New
ordered
York.
furniture
The
from
defendant's
the
New
York
plaintiff,
a
manufacturer of bedroom furniture, for delivery to friends
in New York, purporting to act on behalf of the defendant.
When the bills for the bedroom furniture went unpaid, the
plaintiff
sued,
claiming
that
its
agent
had
bound
the
company for the purchases.
The Supreme Court held that the company was not liable
for the manager's purchases because he acted outside the
scope of his authority.
Had the manager bought jewelry or
automobiles, it would have been clear that he was operating
outside
the
scope
of
his
agency.
The
purpose
of
the
defendant's New York operations was to market its Michiganmade
furniture,
suppliers.
not
to
acquire
furniture
from
other
Accordingly, the manager was operating outside
the scope of his authority, and this Court held that the
company was not liable for the agent’s purchases.
6
141 Mich 87, 91; 104 NW 377 (1905).
7
141 Mich 91.
8
7
Thus,
contrary
to
the
majority’s
statements,
the
longstanding principle in Michigan is that a third party
who does not inquire sufficiently into an agent's authority
does so at his own financial peril.
That is why this Court
must be cautious and avoid language that might imply a
rigid duty or obligation for a third party to act.
I agree with the majority that former MCL 700.4978 is
not
directly
applicable
here.
Similarly,
700.495 is also not directly applicable.9
former
MCL
Nonetheless, both
sections show a legislative recognition of the role "good
faith" can play—and the insecurities a third party might
feel—by protecting a third party who acts in good faith.10
Our law permits—indeed encourages—the third party to
satisfy
himself
that
authorized to act.
the
purported
agent
is
in
fact
Nonetheless, the issue in this case is
not the third party’s alleged “obligation” to act, because
8
That section provided that a person who acted in good
faith without knowledge of the death was protected, but it
left open the question whether one who refuses to act
because of knowledge of the death would likewise be
protected.
9
Former MCL 700.495 gave legislative recognition to
durable powers of attorney.
10
The majority cites MCL 700.5501 et seq. for the
proposition that "[a] power of attorney provides the agent
with all the rights and responsibilities of the principal
as outlined in the agreement."
Ante, pp 3-4.
That
statute, codified as the Uniform Durable Power of Attorney
Act, was effective April 1, 2000, and, therefore, does not
apply to this dispute, which arose in 1998.
9
the
third
party
litigation.
has
not
been
named
a
party
to
this
Rather, this is an action in probate court to
determine the ownership of assets.
Accordingly, this case does not require the Court to
issue
a
broad
statement
attempting
to
define
for
all
purposes a third-party's obligation to obey (or disobey)
instructions
stated
from
above,
I
a
purported
concur
in
agent.
the
For
majority’s
the
reasons
decision
to
reverse the Court of Appeals and reinstate the judgment of
the probate court.
Robert P. Young, Jr.
Maura D. Corrigan
Clifford W. Taylor
10
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