Barbara Thompson v. William E. Barrow

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
LOREN MITCHELL LEONARD L. WILLIAMS JUSTICE CENTER
MAGISTRATE IN CHANCERY 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734

May 2, 2025

Timothy S. Ferry, Esquire Charles J. Durante, Esquire
Timothy R. Akers, Jr., Esquire Regina S. Schoenberg, Esquire
Ferry Joseph, P.A. Connolly Gallagher LLP
1521 Concord Pike, Suite 202 1201 N. Market Street, 20th floor
Wilmington, DE 19803 Wilmington, DE 19801

RE: Barbara Thompson v. William E. Barrow, et. al.,
C.A. No. 2023-0410-LM

Dear Counsel:

Through this post-trial report, I resolve a dispute between siblings on the

actions taken by William Barrow while he served as his father, Ralph Barrow’s,

power of attorney. Barbara Thompson, one of the daughters of Ralph Barrow, filed

this litigation alleging mismanagement, self-dealing, and a breach of fiduciary duties

by her brother while he served as their father’s power of attorney. Although Ralph

Barrow has since passed away, his estate remains open while his daughter seeks

transparency and potential accountability into her brother’s actions.
C.A. No. 2023-0410-LM
May 2, 2025
Page 2 of 36

I. FACTUAL BACKGROUND 1

Ralph W. Barrow (hereinafter, “Decedent”) and his wife, Anna Lee Barrow

(hereinafter, “Ms. Barrow”), had four children, who were all active in the long and

difficult process of providing end of life care for each of their aging parents. Ms.

Barrow predeceased her husband on February 9, 2020, after being diagnosed with

Lymphoma Leukemia. 2 A little over a year later, Ralph W. Barrow (hereinafter,

“Decedent”) died, testate, on June 15, 2021, survived by his four children: Barbara

Thompson (hereinafter, “Petitioner”), William E. Barrow (hereinafter,

“Respondent”), Rob Barrow, and Deborah Corrado (hereinafter, “Ms. Corrado”).3

The Decedent’s cause of death was Alzheimer’s dementia. 4

1
The facts in this report reflect my findings based on the record developed at trial January
7, 2025, and January 8, 2025. See Docket Item (“D.I.”) 43. I grant the evidence the weight
and credibility I find it deserves. Citations to the trial transcripts are in the form “Tr. #.”
D.I. 47 and 48. The parties’ jointly submitted exhibits are cited as “JX __.” JX A- M and
JX O-Q were admitted without objection. In addition, Petitioner’s Exhibits (“PX”) 1-12
and Respondent’s Exhibit (“RX”) 1 were admitted during witness testimony.
2
Tr. 18:2-7.
3
Tr. 23:19-21.
4
Tr. 23:22- 24:5.
C.A. No. 2023-0410-LM
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A. Decedent’s Declining Health

The Decedent started exhibiting signs of a mental decline in 2017.5 The

Decedent was still driving in the beginning of 2018 but became increasingly more

forgetful as the year progressed and stopped driving by the end of 2018. 6 The

Decedent was diagnosed with Lewy Body Dementia at one of his doctor’s

appointments between October 31, 2017 and January 18, 2018.7 Sometime after his

diagnosis, the Decedent’s daughters, Ms. Corrado and Petitioner, signed the

Decedent up for “Meeting of the Minds”, a memory class at the Newark Senior

Center, which he attended through the end of 2018.8 The Decedent’s wife, Ms.

Barrow, was caring for her husband in their home until her own health declined and

she herself was no longer able to live without assistance.9 Ms. Barrow subsequently

moved into Petitioner’s house on September 26, 2019, where she was taken care of

until she passed away. 10 Ms. Barrow’s physical decline and her husband’s mental

5
Tr. 221:14-21.
6
Tr. 118:14-20; Tr. 358:8-20.
7
PX 2; PX 12; Tr. 220:10-21.
8
Tr. 30:3-19; Tr. 300:14-301:9.
9
Tr. 261:12-21.
10
Tr. 260:21-261:7; Tr. 261:22-262:4.
C.A. No. 2023-0410-LM
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and physical decline, prompted their children to have the decedent to be admitted to

a memory care unit in an assisted living facility in October 2019. 11

B. Estate Planning

More than 25 years before his death, Decedent began his estate planning. On

June 3, 1992, Decedent and Ms. Barrow, with the assistance of an estate planning

attorney, executed their respective wills and trusts. 12 The Decedent and his wife had

functionally the same estate planning documents leaving the entirety of their

property to their spouse and then thereafter in equal shares to each of their four

children. 13 Petitioner and Respondent are named Co-Executors of each of their

parents’ estates.14 Pursuant to Article 20 of the Decedent and his wife’s Trusts,

Petitioner and Respondent were also named as Co-Trustees. 15 Article 4 of

Decedent’s Trust directs that the corpus “upon the death of his wife” shall be

distributed outright and free of trust, to his surviving issue, per stirpes. 16

11
PX 2; Tr. 29:20- 31:1; Tr. 207:8-10; Tr. 260:16-261:21.
12
Tr. 19:1-22; Tr. 27:19-28:2; JX M.
13
Tr. 22:5-11; Tr. 27:22-28:6; Tr. 29:10-19; Tr. 257:2-258:1.
14
Tr. 20:8-13; Tr. 28:23-29:1; Tr. 257:11-22; Tr. 270:18-19.
15
Tr. 28:11-14; Tr. 257:19-22; JX M.
16
JX M at 5.
C.A. No. 2023-0410-LM
May 2, 2025
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After the death of their mother, the Petitioner and Respondent acted as the Co-

Executors of their mother’s estate because their father was not capable of doing so

at the time of her death. 17 Ms. Barrow’s Estate was opened on May 4, 2020, and was

closed on March 26, 2021. 18 The Decedent’s estate remains open as of the time of

trial.19

C. The 2009 and 2018 Powers of Attorney

Approximately seventeen years after executing his will and trust documents,

on June 4, 2009, the Decedent executed a durable power of attorney (hereinafter, the

“2009 Power of Attorney”), first nominating his wife, then Ms. Corrado, then Rob

Barrow, as his agents.20 Respondent, Ms. Corrado, and Rob Barrow were all unaware

of the original 2009 Power of Attorney until a family meeting with their parent’s

estate attorney, after the Decedent had executed his new power of attorney in 2018.21

Through the end of 2017 and into the beginning of 2018, all four siblings had

begun discussing with one another the need for their father to execute a power of

17
Tr. 20:14-19.
18
PX 10; D.I. 42 at 8.
19
Tr. 29:2-4; Tr. 270:15-19.
20
JX L.
21
Tr. 39:21-40:2; Tr. 43:9-17; Tr. 216:19-217:7; Tr. 255:15-24.
C.A. No. 2023-0410-LM
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attorney due to his dementia. 22 The siblings all seemed to agree or expect that the

Respondent should be named Agent.23 Unaware of the 2009 Power of Attorney, and

feeling a sense of urgency with their father’s declining health, the siblings agreed it

was important to make sure a Power of Attorney was put into place. 24

Nine years after executing the 2009 Power of Attorney, Decedent executed a

new durable power of attorney on February 1, 2018 (hereinafter, the “2018 Power of

Attorney”) which nominated the Respondent as his sole agent. 25

On February 1, 2018, Respondent, the Decedent, and Ms. Barrow gathered at

the Petitioner’s husband’s veterinary office, and each executed new powers of

attorney.26 The Petitioner was not present.27 The documents were notarized by a

notary that worked with the Petitioner at the veterinary hospital.28 The Petitioner

testified that she was under the impression that her parents were signing banking

documents and was not aware at the time that the 2018 Power of Attorney was

22
Tr. 60:13-61:11; Tr. 215:11-216:6; Tr. 327:24-329:2.
23
Tr. 217:8-21; Tr. 328:12-20.
24
Tr. 43:22-44:24.
25
JX K at 2.
26
Tr. 59:4-21; Tr. 62:5-23.
27
Tr. 251:4-7.
28
Tr. 59:18-60:7; Tr. 251:23-253:23; Tr. 327:21-328:20.
C.A. No. 2023-0410-LM
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among the documents that were being notarized, but did organize her mother, father,

and brother coming and using the notary at her husband’s office. 29

The 2018 Power of Attorney designated the Respondent as the Decedent’s

Agent and granted him broad power over his father’s finances, while also mandating

that the Respondent prepare written, semi-annual, reports to the Petitioner on all

income received and expenses incurred during each 6-month period in which the

Respondent was acting as Agent of the Decedent.30 The Respondent, who served as

his father’s Agent for a little over three years, never sent any formal periodic reports

to the Petitioner as directed in section 5 of the 2018 Power of Attorney.31

D. Respondent’s Actions as Power of Attorney

1. Management of Decedent’s Assets

By September 2019, the Respondent was managing all of his father’s

finances.32 The Respondent’s parents had two vehicles, a 2010 Dodge caravan and

a 1998 Ford Ranger.33 The Respondent would drive the 2010 Dodge for the benefit

29
Tr. 252:15-253:23.
30
JX K.
31
JX K; Tr. 58:1-21; Tr. 333:23- 334:23.
32
Tr. 173:16-18.
33
Tr. 116:9-12.
C.A. No. 2023-0410-LM
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of the Decedent and for sporadic personal use. 34 The Respondent also used his

father’s funds to pay for repairs on the vehicles.35 Both cars were sold to CarMax,

the 2010 Dodge in March 2021 and the 1998 Ranger soon after that.36

The Respondent, by signing on his father’s behalf, transferred to himself the

Decedent’s black tag low digit Delaware license plate, PC 1145, from the 2010

Dodge Caravan to himself when he sold the car in March 2021. 37 There was a third

vehicle, jointly owned by the Decedent and Ms. Barrow, with a low digit Delaware

license plate number that was sold in relation to the handling of Ms. Barrow’s estate,

and this low digit tag was given to Rob Barrow by Respondent who again signed on

his father’s behalf. 38

The Decedent had two IRA investment accounts of his own. One was a larger

investment account that was originally managed by a company called First Financial,

until Respondent moved the investment account to Creative Financial because the

company was more local, which would make it easier to pay for the Decedent’s

34
Tr. 116:13-24; Tr. 117:7-118:9.
35
Id.
36
Tr. 118:21-119:14.
37
Tr. 119:15-120:24.
38
Tr. 121:4-122:9.
C.A. No. 2023-0410-LM
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healthcare and living expenses.39 The other IRA account was one the Decedent

opened originally with USAA that was later transferred to Victory Capital

Management (VCM). 40 The Decedent had two life insurance policies, one was

managed by Prudential and the other was managed by MetLife. 41

The Respondent used his parent’s two houses, located in Newark and Ocean

View, Delaware, in 2020 after his mother had died and while his father was in the

care facility, as his bases of operation to manage his father’s affairs.42 The

Respondent was using his time at the properties for the general upkeep of the houses

such as mowing the grass, getting the mail, and other general maintenance.43 When

the Respondent was traveling to and from each of these properties he was driving

his father’s car and was using his father’s account to keep the homes stocked with

groceries and alcohol. 44

39
Tr. 79:18-80:24.
40
Tr. 81:9-16.
41
Tr. 81:17-82:5.
42
Tr. 76:13-16.
43
Tr. 76: 16-77:1.
44
Tr. 77:2-20.
C.A. No. 2023-0410-LM
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For approximately 13-14 months, the Respondent’s son, Brian, temporarily

lived at the Decedent’s home. 45 The Decedent also received rental payments from

Brian because he was living in the Decedent’s home and driving the Decedent’s

truck with the Respondent’s permission.46 The Respondent’s son was paying $600 a

month in rent for his time living in the home. 47 Ms. Corrado and Respondent were

primarily managing the rental agreement for Respondent’s son living in the home

and both claimed that they felt it was beneficial to have someone living at the

property to maintain it.48 The Respondent seemed unsure of where the rental

payments for the 13 or 14-month period when his son was living there were being

deposited, with some testimony claiming the rent had been deposited into his

Mother’s joint account she had with his father and Petitioner, and other evidence

presented indicating some of the rental payments had been deposited into the joint

M&T Bank account the Respondent had with his father.49

45
Tr. 314:11-315:9.
46
Tr. 224:15-225:1; Tr: 128:11-13.
47
Tr. 128:5-17; Tr. 181:16-19; Tr. 353:7-24.
48
Tr. 353:7-24.
49
Tr. 128:11-129:23; PX 11.
C.A. No. 2023-0410-LM
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2. Joint Accounts

The Respondent opened a joint bank account for himself and his father with

M&T Bank on July 23, 2019 (hereinafter, “Joint Account”). 50 The Joint Account

was not designated as a power of attorney account.51 The Respondent testified that

he told M&T Bank when the account was opened that he needed an account that he

could use for his father and M&T Bank did not recommend a power of attorney

account.52

The reasoning for opening the Joint Account was for the Respondent to

manage his father’s finances separately from his mother’s finances, which at that

time were comingled in another M&T Bank joint account with his parents and the

Petitioner (hereinafter, “Mother’s Account”).53 The Mother’s Account was

originally where all of Decedent’s social security funds were being deposited but

these funds were later changed to be deposited into the Joint Account after it was

50
Tr. 103:4-20; PX 7.
51
Tr. 102:6-13.
52
Tr. 101:24-102:9.
53
Tr. 97:20-98:10.
C.A. No. 2023-0410-LM
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opened.54After the Respondent opened the Joint Account, the Mother’s Account was

intended to primarily be used to manage their mother’s assets. 55

The Petitioner was added as a co-account holder on the Joint Account in

January 2021.56 Both Petitioner and Respondent had access to the account

information on the Joint Account and Mother’s account which was evidenced by

testimony that they have both been using the same online login information to

respectively manage and view both the Joint Account and Mother’s Account.57

Eventually all but $100 of the funds from the Mother’s Account were transferred to

the Joint Account and remain there as of the time of the litigation. 58

3. Distributions to the Siblings

On October 22, 2020, the Respondent executed a disclaimer on the Decedent’s

behalf of his rights to Ms. Barrow’s home located in Newark, Delaware.59 This home

was the Decedent and his wife’s primary residence but was solely in the name of

54
Tr. 99:3-11.
55
Tr. 97:20-98:10.
56
Tr. 113:9-114:5; Tr. 266:18-267:18; PX 11 at 17-18.
57
Tr. 171:2-172:7; Tr. 284:4-285:1.
58
Tr. 264:20-265:15. The parties have stipulated to the funds in the joint account being an
asset of the Decedent’s Estate. Tr. 369:10-15; Tr. 369:18-370:1. I will not address any
issues as to the ownership of such funds herein.
59
Tr. 179:13-16.
C.A. No. 2023-0410-LM
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Ms. Barrow.60 The property would have passed to the Decedent according to the

terms of Ms. Barrow’s will at her death, however the effect of the disclaimer resulted

in the property passing to the Petitioner and his siblings. 61 The Respondent claims

to have approved of this disclaimer on his father’s behalf with the consultation of

his siblings and at the direction of his parent’s estate attorney. 62 The Newark

property was eventually sold in early 2022, after a lengthy process through 2020 and

into 2021 of cleaning out the home.63 The proceeds from the sale of the house were

equally distributed among all four siblings. 64

The Decedent owned a beach house in Ocean View, Delaware, which in the

1990’s he had rented out and then was used by the family on a shared basis until it

was sold to the Petitioner in 2022. 65 The Property was appraised and sold to the

Petitioner for $640,000 with the proceeds split equally among the siblings. 66

60
Tr. 25:7-13.
61
Tr. 25:7-13; Tr. 74:21-75-1.
62
Tr. 75: 4-5; Tr. 179:19-180:4.
63
Tr. 180:23-181:24.
64
Tr. 181:19-182:12.
65
Tr. 208:8-209:6; Tr. 344:1-5.
66
Tr. 194:1-9; Tr. 208:8-23; Tr. 231:15-232:16.
C.A. No. 2023-0410-LM
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Ms. Barrow had an IRA account with USAA and named the Decedent as the

beneficiary.67 On January 27, 2021, the Respondent managed the transfer of those

funds to the Joint Account, depositing $37,000 which was the amount remaining

after taxes were withheld from the original $43,000.68 In February 2021, the

Respondent, acting on his father’s behalf, renounced his father’s interest in the funds

and then wrote four checks, one for each sibling including himself, to be paid from

the Joint Account amounting to $9,250. 69

The Decedent had a life insurance policy with Prudential Insurance

Company.70 In February 2021, the Respondent, using the authority granted to him

to act on his father’s behalf by the 2018 Power of Attorney, named himself as the

sole beneficiary of the Decedent’s Prudential Life Insurance. 71 The Respondent

claimed his reasoning for doing this was to streamline the process of distributing the

funds from the life insurance account into the Joint Account so that when the time

came the funds could be distributed equally by check to each of the four siblings.72

67
JX H; JX I; Tr. 14:15-23.
68
JX I; Tr. 15:9-16:2.
69
Tr. 16:3-17:18; Tr. 311:5-312:22.
70
Tr. 87:20-22; Tr. 226:8-11.
71
JX J; Tr. 87:23-88:7.
72
Tr. 88:10-89:2.
C.A. No. 2023-0410-LM
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In November 2021, the Prudential Life insurance funds, amounting to $8,200, were

deposited into the Respondent’s personal bank account, and then the Respondent

wrote three checks for $2,045 to each of his siblings from his personal account.73

The Petitioner received her purported share from her father’s Prudential account but

never received the Prudential documentation from the Respondent that revealed the

amount of the disbursement.74

4. Decedent’s VCM Account

The Decedent’s VCM Account was an IRA account that was originally

opened with USAA but was then transferred to a different servicer, Victory Capital

Management, sometime during 2020 with access to the account through VCM

beginning on November 9, 2020.75 The Respondent claims that when he logged in

to view the account, while it was still being serviced by USAA, he learned that he

was named as secondary beneficiary, with his mother being named as primary

beneficiary.76 The Respondent claims to have immediately informed his siblings at

a family meeting in July 2020 that he was named beneficiary on the VCM Account.

73
Tr. 94:20-96:10; Tr. 227:4-19.
74
Tr. 269:17-24.
75
JX Q.
76
Tr. 144:22-145:5; Tr. 149:24-150:4.
C.A. No. 2023-0410-LM
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Ms. Corrado claims to have learned of this fact at the same family meeting, however

both the Petitioner and Rob Barrow claim to have been unaware of this fact until the

Respondent filed his answer in this action.77 The Respondent and Ms. Corrado claim

that at the family meeting when the Respondent informed his siblings, he explained

that it was his plan to distribute the funds from the account equally among all four

siblings but changed his mind when his sister filed this action.78

The Respondent, because he needed to do so, created a new online account

with VCM in November 2020. 79 The Respondent claims that when he first logged

onto the new online account through VCM he was prompted to identify the primary

beneficiary designation on the account, which he reflected as himself since his

mother had passed. 80 Presently, the respondent is listed as both the primary and

secondary beneficiary on the VCM Account. 81 Neither the Respondent nor the

Petitioner were able to provide any of the original USAA documentation that

identified who the original beneficiary designations were. 82

77
Tr. 145:1-11; Tr.184:22- 186:6; Tr. 313:2-314:5; Tr. 234:22-235:9; Tr. 270:20-271:3.
78
Tr. 166:7-22; Tr.186:7-187:3; Tr. 313:2-314:5.
79
JX Q; Tr. 146:7-21; Tr. 188:17-20.
80
Tr. 138:3-14; Tr. 146:22-147:2; Tr. 190:4-11.
81
JX G at 9; Tr. 189:9-190:11.
82
Tr. 158:14-159:9; Tr. 187:4-21.
C.A. No. 2023-0410-LM
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The VCM Account funds have since been distributed to the Respondent with

the original distribution amounting to $43,147.82.83 The Respondent has reinvested

the funds into a beneficiary IRA under his own name with Creative Financial where

the investment has grown to an estimated $48,000. 84

E. Procedural Posture

The Petitioner filed the petition presently at issue on April 10, 2023. 85 The

Respondent filed an Answer on June 20, 2023.86 A two-day trial was held on January

7, 2025, and January 8, 2025.87 Per the court’s directions, the parties submitted their

closing statements in writing January 10, 2025.88

II. ANALYSIS

Barbara Thompson brought this action against her brother requesting the Court

find that he breached fiduciary duties owed as Agent of their father under the 2018

Power of Attorney designation for engaging in self-dealing transactions and for

failing to provide regular financial accountings to the Petitioner as directed in the

83
Tr. 134: 2-9.
84
Tr. 134:8-17; Tr. 137:18-22.
85
D.I. 1.
86
D.I. 10.
87
D.I. 43.
88
D.I. 44; D.I. 45.
C.A. No. 2023-0410-LM
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2018 Power of Attorney. 89 Petitioner claims that Respondent has been unjustly

enriched by engaging in self-dealing transactions and requests that the Court order

an accounting and find the Respondent liable to the Decedent’s estate for all

unaccounted for assets and any losses attributable to any breaches of fiduciary

duty. 90

In short, I find Respondent has breached his fiduciary duty owed under his

father’s power of attorney for failure to provide regular accountings to Petitioner,

for using his status as Agent to transfer his father’s low digit Delaware license plate

to himself, for using his father’s vehicles for personal use, and for using funds from

the Joint Account to pay for groceries and alcohol for his personal consumption. I

do not find that the Respondent breached his fiduciary duty, nor was he unjustly

enriched, through the circumstance surrounding his status as beneficiary of his

father’s VCM Account. For reasons further explained below I find it appropriate to

order an accounting on all of Decedent’s assets under the control of the Respondent

during his time acting as Agent under the 2018 Power of Attorney and enter

90
Tr. 1.
90
Tr. 1.
C.A. No. 2023-0410-LM
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judgement in favor of the Decedent’s estate for all unaccounted-for assets and all

damages resulting from Respondent’s breaches of fiduciary duty as detailed herein.91

A. I find that Petitioner has successfully met her burden in part in her
claim that Respondent has breached his fiduciary duty.

To be successful in a claim of breach of fiduciary duty, two elements must be

proven by the Petitioner by a preponderance of the evidence: “(1) that a fiduciary

duty existed and (2) that the defendant breached that duty.”92 When acting as an

agent under a personal power of attorney, that agent owes duties enumerated under

Title 12 of the Delaware Code, Section 49A-114, which includes the duty to act in

good faith, duty to act in the principal’s best interest, and the duty of loyalty.

“An attorney-in-fact assumes the obligations of a fiduciary. This fiduciary

relationship, comparable to that created in a formal trust, subjects the holder of a

power of attorney to a duty of loyalty obligating her to act in the best interests of her

principal in exercising such power.”93 “An attorney-in-fact, under the duty of

91
I decline to specifically address the Respondent’s conduct in disclaiming the Decedent’s
rights in the proceeds from the sale of the Newark property and naming himself as
beneficiary of the Decedent’s Prudential investment account to facilitate distribution of
those funds equally amongst the four siblings as these transactions do not appear to be in
dispute and any discrepancies as to these distributions will be resolved through the ordered
accounting.
92
Sachs v. Sachs, 2023 WL 2379389, at *10 (Del. Ch. Mar. 7, 2023) (citing Beard
Research, Inc. v. Kates, 8 A.3d 573, 601 (Del. Ch. 2010)).
93
Coleman v. Newborn, 948 A.2d 422, 429 (Del. Ch. 2007).
C.A. No. 2023-0410-LM
May 2, 2025
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loyalty, always has the obligation to act in the best interest of the principal unless

the principal voluntarily consents to the attorney-in-fact engaging in an interested

transaction after full disclosure.”94 “[S]elf-dealing occurs when the fiduciary has a

personal interest in the subject transaction of such a substantial nature that it might

have affected [her] judgment in material connection.”95 A self-dealing transfer is

voidable.96

Here, it is established that a fiduciary duty existed because it is undisputed

that the Respondent was acting as Agent of his father under the 2018 Power of

Attorney.97 Below I address in turn each alleged instance of Respondent’s wrongful

conduct.

94
Schock v. Nash, 732 A.2d 217, 225 (Del. 1999) (citing Stegemeier v. Magness, 728 A.2d
557, 562-65 (Del. 1999)).
95
Sachs, 2023 WL at *10 (citing Stegmeier, 728 A.2d at 564).
96
Coleman, 948 A.2d at 429.
97
Both parties spent significant time at trial engaging in lines of questioning toward
witnesses addressing the events surrounding the execution of the 2018 Power of Attorney,
only for Petitioner’s counsel to inform the Court that they were not specifically asking the
court to invalidate the 2018 Power of Attorney. Tr. 368:3-4 (“I’m not specifically asking
the Court to invalidate and overturn the 2018 power of attorney”). Petitioner’s counsel
states that the petition did not contain a count requesting the Court’s opinion to address the
validity of the document and indicated their deferral to the Court on whether it was
necessary to address the issue. Tr. 367: 15-22. As this is not in dispute between the parties,
I decline to address issues related to the status of Respondent as Agent pursuant to the 2018
Power of Attorney.
C.A. No. 2023-0410-LM
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1. Petitioner has failed to prove that Respondent breached his
fiduciary duty by listing his name as the beneficiary
designation of the Decedent’s VCM Account.

The Petitioner has the burden to prove her claims by a preponderance of the

evidence.98 “Proof by a preponderance of the evidence means proof that something

is more likely than not,” and if the evidence presented at trial stands on equal ground

the Court must find against the party carrying the burden of proof. 99 It follows that

the Court is unable to find in favor of the party that bears the burden of proof when

the evidence presented to the Court is inconclusive.

The Petitioner’s allegation that the Respondent used his status as Agent to

designate himself as beneficiary of the VCM Account on behalf of his father, if

proven by the Petitioner by a preponderance of the evidence, would be considered a

self-dealing transaction.100 Respondent claims that the first time he logged onto the

VCM website it prompted him to inform them who the primary beneficiary was, and

he listed his own name to reflect his elevation from secondary beneficiary to primary

98
Sachs, 2023 WL at *10 (citing Heller v. Kiernan, 2002 WL 385545, at *3 (Del. Ch. Feb.
27, 2002)).
99
JER Hudson GP XXI LLC v. DLE Investors, LP, 275 A.3d 755, 782, (Del. Ch. May. 2,
2022) (citing Martin v. Med-Dev Corp., 2015 WL 6472597, at *10 (Del. Ch. Oct. 27,
2015).
100
Sachs, 2023 WL at *10 (citing Stegmeier, 728 A.2d at 564).
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beneficiary after his mother passed.101 At trial Petitioner presented evidence of the

VCM website data showing the moment that Respondent’s name was added as

beneficiary on the VCM website.102 Petitioner argues this action of listing his name

as beneficiary on the VCM website alone is sufficient evidence to prove that

Respondent engaged in a self-dealing transaction that constitutes a breach of his

fiduciary duties owed as agent of the Decedent. I disagree. This issue hinges not on

the Court’s ability to say, with certainty, that the Respondent was or was not

originally the named beneficiary of the Decedent’s VCM Account but rather is

decided on the Petitioner’s ability to prove by a preponderance of the evidence that

the Respondent’s conduct when first logging onto the new servicer’s website was a

self-dealing transaction in which he unlawfully designated himself a beneficiary, and

was not merely his informing the new servicer of his already established status as

beneficiary when prompted.103 A task the Court believes requires the Petitioner to

put forth evidence to the beneficiary designations prior to the account’s transfer from

one servicer to the other.

101
Tr. 138:3-14; Tr. 146:22-147:2; Tr. 190:4-11.
102
JX E 30:1-15; Exhibit G at 2.
103
See Sachs, 2023 WL at *10 (“The Plaintiff must prove [the breach of fiduciary duty
elements] by a preponderance of the evidence”); see, also In re Happy Child World, Inc.,
2020 WL 5793156, at *10 (Del. Ch. Sept. 29, 2020) (“By implication, the preponderance
of the evidence standard also means that if evidence is equipoise, the Plaintiff loses”).
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The Petitioner, as the bearer of the burden, is tasked with proving that

Respondent was not named the secondary beneficiary on the VCM Account when it

was under the control of USAA, not after it had been transferred to VCM. At trial,

the only evidence provided in reference to the original beneficiary designations was

the testimony of the Respondent stating that he was listed on the USAA website as

the secondary beneficiary and then Ms. Corrado’s testimony that her brother had

informed them of his beneficiary status at a family meeting, stating also his intention

at the time to distribute the funds equally among his siblings. 104 Arthur Wright,

employee for VCM, provided deposition testimony that the account from USAA was

linked to the account at VCM, but also revealed that he himself was not involved in

the transfer of the data as the transfer occurred prior to his start of employment

there. 105 The Court concedes that neither the Petitioner or the Respondent have been

able to provide sufficient evidence that is conclusive as to the original beneficiary

designations, but notes that both parties agree on the fact that USAA does not have

the original account information. 106 A lack of information available on the original

beneficiary designations is insufficient to determine whether the Respondent was

104
Tr. 166:7-22; Tr.186:7-187:3; Tr. 313:2-314:5.
105
JX E 36:1-24; Tr. 37:15-22.
106
Tr. 158:24-259:9.
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listed as a secondary beneficiary already but is sufficient for the Court to find that

the Petitioner has failed to meet her burden of proof.

I must find that the Respondent did not breach his fiduciary duty in relation to

the beneficiary designation because the Petitioner has failed to meet her burden of

proving that Respondent ever designated himself as the sole beneficiary of the

Decedent’s VCM Account. The Petitioner is therefore not entitled to requested relief

of entering judgment in favor of the estate for the value of the VCM Account because

the Court is unable to declare the Respondent’s status as beneficiary to be invalid.

The Respondent is also entitled as named beneficiary to the entirety of the funds in

the Decedent’s VCM Account.

2. The Respondent breached his fiduciary duties for
transferring his father’s license plate to himself on behalf of
his father, and for using his father’s assets for personal use.

An Agent acting under a power of attorney on the principal’s behalf, who

transfers the principal’s assets to himself, “has committed improper self-dealing,

absent voluntary and knowing consent of the principal.” 107 “A self-dealing transfer

of the principal’s property to the attorney-in fact is voidable in equity [,]” 108 and

107
Matter of Estate of DeGroat, 2020 WL 2078992, at *17 (Del. Ch. Apr. 30, 2020)
(quoting Pennewell v. Harris, 2011 WL 691618, at *3 (Del. Ch. Feb. 4, 2011)).
108
Coleman, 948 A.2d at 429.
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once the challenging party has proven a self-dealing transaction has taken place the

burden shifts onto “the agent to prove that a self-interested transaction involving the

principal is valid.” 109 The agent can fulfill their burden of establishing the fairness

of the transaction through a showing that they entered the transaction with the

voluntary and knowing consent of the principal after full disclosure.110

The Respondent, while acting on the Decedent’s behalf under the 2018 Power

of Attorney used the Decedent’s funds to buy groceries, alcohol, and gas for his own

personal benefit.111 The Respondent used his father’s vehicles and allowed for his

son to use his father’s vehicles for matter’s unrelated to benefiting the Decedent and

without the Decedent’s consent. 112 The Respondent, acting in his role as Agent,

transferred the Decedent’s low digit Delaware license plate to himself for no

consideration.113 All of these instances constitute self-dealing transactions that the

Respondent provides no proof were approved by his father after full disclosure. I

must therefore find that the Respondent breached his fiduciary duty when he used

109
DeGroat, 2020 WL at *17 (citing Pennewell v. Harris, 2011 WL 691618, at *3 (Del.
Ch. Feb. 4, 2011)).
110
Pennewell, 2011 WL at *3; Coleman, 948 A.2d at 429.
111
Tr. 77:2-20; Tr. 116:13-24.
112
Tr. 116:13-24; Tr. 117:7-118:9.
113
Tr. 119:15-120:24.
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his status as Agent to transfer his father’s license plate to himself without

consideration and for using his father’s assets for personal use.

3. The Respondent breached his fiduciary duties owed as agent
for failing to provide regular accountings to the Petitioner as
prescribed in the terms of the 2018 Power of Attorney.

“[A]n agent that has accepted appointment pursuant to a personal power of

attorney shall, in connection with exercising the authority granted to such agent

therein[,] [a]ct in accordance with the principal’s reasonable expectations to the

extent actually known by the agent and, otherwise, in the principal’s best interest.”114

Under Title 12 of the Delaware Code, Section 49A-114(g) “upon the death of the

principal” a “personal representative or successor in interest of the principal’s estate”

may request an accounting, and “[i]f so requested the agent shall comply with the

request within a reasonable period of time.” Failure to disclose the relevant financial

documents relevant to the Agent’s conduct as power of attorney upon the request of

“a successor in interest of the principal’s estate” constitutes a breach of an agent’s

duties imposed under Title 12 of the Delaware Code, Section 49A-114(g).115 “The

Court has not permitted fiduciaries to excuse themselves of this obligation with

114
12 Del. C. § 49A-114(a)(1).
115
Sachs, 2023 WL at *13 (finding that an Agent’s duties were breached “when she failed
to disclose receipts, disbursements, or transactions” upon request of a beneficiary of the
estate after the death of the principal).
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informal or incomplete accountings: ‘[a fiduciary] cannot excuse her own failure to

maintain records in a safe place, nor can she rely on a narrative and answers to

deposition questions as a substitute for a formal accounting.’”116

The 2018 Power of Attorney provides in its terms that the Respondent is to

“prepare written, semi-annual reports regarding [the Decedent’s] finances, including

income received and expenses incurred by my agent for me during the previous six-

month period. These reports shall be mailed within 30 days of the end of each six-

month period to [the Petitioner].” 117 The Respondent implies through his testimony

that he has fulfilled all accounting obligations by virtue of being available to answer

questions from the beneficiaries of the Decedent’s estate regarding his actions taken

as Agent and due to the Respondent having access to all the relevant account

information that would be used to compile the formal accounting that she requests.118

The Respondent admits to not providing a formal accounting upon formal request of

the Respondent.119 The Respondent, both under the 2018 Power of attorney and as a

116
Matter of Estate of DeGroat, 2020 WL 2078992, at *23 (Del. Ch. April 30, 2020)
(quoting In Matter of Estate of Dougherty, 2016 WL 4130812, at *12 (Del. Ch. Jul. 22,
2016)).
117
JX K at 3.
118
Tr. 171:2-172:7.
119
Tr. 58:1-21.
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beneficiary of the Decedent’s estate has standing to request a formal accounting of

all of Decedent’s assets within the Respondent’s control as Agent of the Decedent.120

The Respondent’s limited and vague answers to the Petitioner’s request for financial

information regarding their father’s assets and the fact that the Petitioner had the

online account log in information of most of the relevant accounts being managed

by the Respondent in his role as agent does not relieve him of his obligations under

the 2018 Power of Attorney and under Title 12 of the Delaware Code, Section 49A-

114(g) to provide the Petitioner with a formal accounting of all of the assets within

his control pursuant to the 2018 Power of Attorney. 121 I find that the Respondent

breached his fiduciary duties by not providing a regular formal accounting to the

Petitioner in compliance with the terms of the 2018 Power of Attorney and for then

failing to provide an accounting upon the Petitioner’s request when she was within

her rights to do so as a successor in interest and co-executor of the Decedent’s estate.

120
JX K at 3; 12 Del. C. §49A-114(g)
JX P; Tr. 347:6-17; DeGroat, 2020 WL at *23 (Del. Ch. April 30, 2020) (quoting In
121

Matter of Estate of Dougherty, 2016 WL 4130812, at *12 (Del. Ch. Jul. 22, 2016)).
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B. Petitioner, in part, has successfully met her burden of proof that
Respondent was unjustly enriched through actions taken as Agent
of his father.

“Unjust enrichment is the unjust retention of a benefit to the loss of another,

or the retention of money or property of another against the fundamental principles

of justice or equity and good conscience. The elements of unjust enrichment are: (1)

an enrichment, (2) an impoverishment, (3) a relation between the enrichment and

impoverishment, (4) the absence of justification, and (5) the absence of a remedy

provided by law.”122 Unjust enrichment claims are duplicative of fiduciary claims,

however “Delaware law does not bar both claims from proceeding.”123 When an

unjust enrichment claim relies on a breach of fiduciary duty in the same self-

interested transaction, Delaware Courts will “consider… both the breach of fiduciary

duty and unjust enrichment claims, even though Plaintiffs are entitled to only one

recovery.” 124

Petitioner brought claims for unjust enrichment against Respondent for

misuse of his father’s assets for personal use and through the alleged designation of

himself as beneficiary of his father’s VCM Account. For the same reason explained

122
Nemec v. Shrader, 991 A.2d 1120,1130 (Del. 2010).
123
DeGroat, 2020 WL at *21.
Id. (citing MCG Capital Corp. v. Maginn, 2010 WL 1782271, at *25 n147; Dubroff v.
124

Wren Holdings, LLC, 2011 WL 5137175, at *11 (Del. Ch. Oct. 28, 2011)).
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previously on this matter, I find that the Petitioner has failed to provide sufficient

evidence to make a showing by a preponderance of the evidence that the Respondent

was not the original secondary beneficiary on the VCM Account when it was

created, and I therefore am also unable to find that the Petitioner has met their burden

of proof on their claim for unjust enrichment relevant to Respondent’s beneficiary

status on the Decedent’s VCM Account.

As for the unjust enrichment claims related to the Respondent using the

Decedent’s funds to buy groceries, gas for personal use, use of the Decedent’s

vehicles by him and his son for personal use, and the transfer of the low number

license plate to himself, Petitioner has successfully proven the Respondent has been

unjustly enriched. The Respondent was unjustly enriched when he engaged in the

self-interested transactions of transferring the Decedent’s license plate to himself,

using Decedent’s funds for personal use, and using the Decedent’s vehicles for

personal use.

Because claims of unjust enrichment are duplicative of claims for breach of

fiduciary duty, I find the Decedent’s estate is only able to recover once for the

Respondent’s conduct in relation to using his father’s assets for personal use and for

engaging in the self-dealing transfer of the license plate. The transactions are to be
C.A. No. 2023-0410-LM
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found void, and the Respondent is liable to the Estate in the amount in which he was

enriched by his conduct in relation to his breach of fiduciary duty.

C. The Respondent must provide an accounting to the Decedent’s
beneficiaries/to the Petitioner.

A finding of a party’s breach of fiduciary duty or unjust enrichment can give

rise to a remedy of an accounting as a matter of law. 125 An accounting may be

ordered as “an equitable remedy that consists of the adjustment of accounts between

parties and a rendering of a judgment for the ascertained to be due to either as a

result.”126

I find it appropriate to order the Respondent to provide a formal accounting

of all of Decedent’s assets within his control during the time he was acting as Power

of Attorney and enter judgment in favor of the Decedent’s estate for all unaccounted-

for assets and any damages suffered because of the Respondent’s breaches of

fiduciary duty.

125
Matter of Estate of DeGroat, 2020 WL 2078992, at *23 (Del. Ch. Apr. 30, 2020); In
Matter of Estate of Dougherty, 2016 WL 4130812, at *12; Matter of Lomax, 2019 WL
4955315, at *5 (Del. Ch. Oct. 9, 2019).
126
Albert v. Alex Brown Mgmt. Servs., Inc., 2005 WL 2130607, at *11 (Del. Ch. Aug. 26,
2005).
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D. I do not find it necessary to impose a constructive trust.

“A constructive trust is an equitable remedy of great flexibility and generality.

The principle is that where a person holds property in circumstances in which, in

equity and good conscience, it should be held or enjoyed by another, he will be

compelled to hold the property in trust for that other.” 127 This remedy may be

imposed by a Court in instances where they have found the defendant to have

engaged in fraudulent, unfair, or unconscionable conduct that they have then been

unjustly enriched by at the expense of someone he owed a duty to. 128 “A constructive

trust is one imposed by a court of equity as a remedy to correct the unlawful vesting,

or assertion of, legal title.”129

“[A] constructive trust avoids a continuing relationship with the beneficiary

by requiring transfer of the property to the [party] who has established an equitable

entitlement.”130 This remedy may be imposed as it “relates to specific property or

Cannon v. Sineros, 1987 WL 16286, at *2 (Del. Ch. Aug. 31, 1987) (internal citations
127

omitted).
128
Adams v. Jankowskis, 452 A.2d 148, 152 (Del. 1982).
129
E. Lake Methodist Episcopal Church, Inc. v. Trs. Of Peninsula Del. Ann. Conf. of United
Methodist Church, Inc., 731 A.2d 798, 809 n.4 (Del. 1999) (citing Hogg v. Walker, 622
A.2d 648, 651-52 (Del. 1993)).
130
Hogg, 622 A.2d at 652.
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identifiable proceeds of specific property[,]” 131 and “has been applied to the recovery

of money, based on tracing an identifiable fund to which plaintiff claims equitable

ownership.”132 “A constructive trust cannot be imposed upon the proceeds…

[which] do not remain in an identifiable account.”133

Petitioner requested in their complaint for a constructive trust to be imposed

on the assets improperly obtained by the Respondent that were either assets that were

meant to pass through the Decedent’s Estate or assets that were intended to pass

directly to other beneficiaries including, but not limited to, proceeds from the

Decedent’s VCM and Prudential accounts.134 No constructive trust is necessary for

the funds relating to the VCM account as I have found that the Petitioner has not met

her burden of proof relating to her claim of unjust enrichment and breach of

fiduciary duty in relation to the Respondent’s beneficiary status on that account.

As for the Decedent’s Prudential Account, given that the proceeds from that

account have already been distributed among the four siblings, I find any

131
Id. (citing McMahon v. New Castle Associates, 532 A.2d 601, 608 (Del. 1987)).
132
Id. (citing Adams v. Jankouskas, 452 A.2d 148 (Del. 1998)).
133
Nash v. Schock, 1997 WL 770706, at *6 (Del. Ch. Dec. 3. 1997); see, also Sachs v.
Sachs, 2023 WL 2379389, at *13 (Del. Ch. Mar. 7, 2023) (finding a constructive trust to
be an inapt remedy to address liquidations when they did not remain in an identifiable
account.).
134
D.I. 1 at ¶58-60.
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discrepancies that may arise are best handled through an order of an accounting and

the award of a remedy in the amount of any unaccounted-for assets, and not through

an award of a constructive trust because the proceeds therefrom do not exist in an

identifiable account. The same is true for the low digit license plates, both the one

the Respondent transferred to himself and the one he transferred to his brother, and

although these are specific assets for which the Decedent’s Estate can claim

equitable ownership over after they were transferred unlawfully, I do not find a

constructive trust to be necessary. The transfers of the license plates are deemed

invalid and to the extent the brothers are interested in retaining them, they should be

reflected as a deduction in the amount of the value of the license plates from the two

brother’s final distributions from the Decedent’s estate.

E. Attorneys’ fees and costs

In Delaware, the Courts typically follow the general American rule that holds

litigants responsible for their own fees and an exception to this general rule exists in

instances where the Court finds that the losing party acted in bad faith.135 “[T]he bad

faith exception is applied in extraordinary circumstances primarily to deter abusive

litigation and protect the integrity of the judicial process.”136

135
Marra v. Brandywine Sch. Dist., 2012 WL 4847083, at *4 (Del. Ch. Sept. 28, 2012).
136
Nichols v. Chrysler Gp., LLC, 2010 WL 5549048, at *3 (Del. Ch. Dec. 29, 2010).
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I do not find that the Respondent acted in bad faith such that the Petitioner

should not have to bear her own fees in pursuing this litigation. Petitioner, as the

prevailing party, is entitled to costs associated with filing this lawsuit under Court

of Chancery Rule 54(d) which states, “costs shall be allowed as of course to the

prevailing party unless the Court otherwise directs.”

III. CONCLUSION

For the reasons explained herein, I find that the Respondent must provide to

the estate a full accounting of all assets under his control during his time as Agent

under the 2018 Power of Attorney and enter judgment in favor of the estate for all

unaccounted for assets. I also find that the Respondent is liable to the estate for all

expenses related to conduct in which he was found to be both unjustly enriched and

in breach of his fiduciary duties as Agent.

Barring the filing of exceptions, Petitioner shall file an affidavit under Court

of Chancery Rule 88 within 30 days of the date of this report, to which the

Respondent may reply within 10 days of filing.
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This is my final report, and exceptions may be filed under Court of Chancery

Rule 144.

Respectfully submitted,

/s/ Loren Mitchell

Magistrate in Chancery