United States Fidelity & Guaranty Company v. Iris Althea Melson

IN THE SUPREME COURT OF MISSISSIPPI

NO. 2000-CA-00117-SCT

UNITED STATES FIDELITY & GUARANTY COMPANY
v.
THE CONSERVATORSHIP OF IRIS ALTHEA MELSON, RANCE O'QUINN,
MASSACHUSETTS CONSERVATOR

DATE OF JUDGMENT: 12/29/1999
TRIAL JUDGE: HON. MICHAEL L. CARR, JR.
COURT FROM WHICH WILKINSON COUNTY CHANCERY COURT
APPEALED:
ATTORNEYS FOR MARK D. HERBERT
APPELLANT:
MICHAEL D. HERRIN
ATTORNEYS FOR APPELLEE: ERIK M. LOWREY

DENNIS L. HORN
NATURE OF THE CASE: CIVIL - OTHER
DISPOSITION: AFFIRMED IN PART; REVERSED AND RENDERED IN PART
- 03/07/2002
MOTION FOR REHEARING
FILED:
MANDATE ISSUED: 3/28/2002

BEFORE PITTMAN, C.J., EASLEY AND GRAVES, JJ.

EASLEY, JUSTICE, FOR THE COURT:

¶1. Rance O'Quinn (O'Quinn), as Massachusetts conservator of Iris Althea Melson (Melson), filed suit for
moneys spent and invested without court approval on May 30, 1995, in the Chancery Court of Wilkinson
County, Mississippi. Previously, on August 4, 1994, O'Quinn had filed to have the Mississippi temporary
conservator, Thomas T. Tolliver, Jr. (Tolliver), discharged and the 1992 first and final accounting set aside.
Tolliver had been appointed to serve as the conservator in Wilkinson County, Mississippi, on December 2,
1988. The chancellor had specifically stated in the order of December 5, 1988, appointing Tolliver, that he
would served as temporary conservator for Melson under his current public official's bond. The chancellor
determined that it was "urgent and necessitous" that the original conservator be removed and a temporary
conservator appointed. Melson's original conservator was her husband Clarence Edward Melson
(Clarence), who was appointed March 20, 1986. On February 9, 1988, Melson filed for divorce from
Clarence thereby necessitating a new conservator.

¶2. A special chancellor was appointed to hear the matter. On September 28, 1994, Tolliver's 1992
accounting was set aside by the special chancellor, however, Tolliver remained conservator pending further
proceedings. O'Quinn's suit filed on May 30, 1995, originally alleging that Tolliver, Chancery Clerk of
Wilkinson County, as temporary conservator, spent and invested money belonging to Melson's
conservatorship without prior court approval. On June 16, 1997, O'Quinn amended the original suit to
name United States Fidelity & Guaranty Company (USF&G) as an additional defendant. USF&G had
issued the public official's bond to Tolliver as chancery clerk. O'Quinn also added Sam Gwin (Gwin) and
David S. Crawford (Crawford), original attorneys for the ward, as additional defendants. Gwin and
Crawford settled and were released from the suit for a total settlement of $20,000, paying $10,000 each.

¶3. The special chancellor held that Tolliver "had a clear and unequivocal duty to obtain court orders prior
to spending the ward's money. He did not do so...Now, my judgment is for the $128,666 [sic] spent
without court authority, less the $20,000 previously collected from the attorneys as agreed to by the parties.
It's the courts' opinion that the statute of limitations is no bar to actions within the period of the effectiveness
of the bonds. The court awards no interest except on the judgment entered herein, and there are no
attorney's fees awarded any of the attorneys by this court."

¶4. The special chancellor's final judgment was entered on January 18, 2000. The judgment was entered
against USF&G and Tolliver, jointly and severally, in the amount of $108,666.03, plus interest at the rate of
8% per annum from December 29, 1999. No pre-judgment interest or attorney fees were awarded. The
appeal by USF&G was filed on January 21, 2000, and on January 31, 2000, O'Quinn filed a cross appeal
seeking attorney's fees and prejudgment interest. Both appeals were timely filed with this Court. Tolliver did
not appeal.

FACTS

¶5. On November 7, 1985, Melson was severely injured in an automobile accident. As a result of the
accident, Melson received a structured settlement which paid her $633,099.67 in a lump sum payment and
$1,800 a month until the longer of her death or twenty five (25) years. Melson's husband, Clarence, was
appointed conservator on March 20, 1986, by the Chancery Court of Wilkinson County, Mississippi.
Melson's conservatorship was based on her physical and mental incapacity due to her coma subsequent to
the automobile accident.

¶6. By 1986, Melson had regained consciousness and moved to Massachusetts. In 1988, she instituted
divorce proceedings against her husband, Clarence, in Wilkinson County, Mississippi. Due to the conflict
created by the ongoing divorce proceedings, it was inappropriate for Clarence to continue to serve as
Melson's conservator. In response, the Chancery Court of Wilkinson County issued an order appointing
Tolliver as temporary conservator for Melson. Tolliver was never required by the court to post a separate
conservator's bond. The court order stated that Tolliver would serve under his public official's bond to
secure his service as Melson's conservator. Tolliver never applied for or received a separate conservator's
bond from USF&G nor did he ever authorize his official bond to be put up for his service as conservator.

¶7. On February 9, 1988, as part of the divorce proceedings, the chancellor conducted an evidentiary
hearing to determine Melson's mental capacity. After receiving medical testimony, the chancellor found
Melson to be mentally competent in the divorce decree of February 17, 1989. However, Melson's
conservatorship continued based solely on her physical incapacity.

¶8. On January 22, 1991, Melson made a formal written request to Tolliver that he release to her attorney
any legal documents he had in his possession. Tolliver did not respond to the request. On July 16, 1991,
Melson's uncle, O'Quinn, petitioned a Massachusetts court to be appointed a temporary conservator of
Melson in Massachusetts based on her physical incapacity. A decree granting this petition was signed on the
same date in Massachusetts. O'Quinn accompanied his petition for appointment with a doctor's certificate
that Melson was sufficiently mentally competent to join in the petition. Subsequently, on October 8, 1991,
O'Quinn petitioned to be and was appointed permanent conservator of Melson in Massachusetts based
solely upon her physical incapacity. Melson joined in O'Quinn's latter petition to be appointed permanent
conservator in Massachusetts.

¶9. On August 10, 1991, O'Quinn's attorney wrote Tolliver demanding an accounting. On February 25,
1992, O'Quinn's attorney having received no response from Tolliver, again wrote Tolliver demanding an
accounting. On July, 1, 1992, O'Quinn's attorney made yet another demand for an accounting from
Tolliver.

¶10. On June 5, 1992, Tolliver filed his first and final accounting as temporary conservator for the period
covering December 2, 1988, to June 5, 1992. Tolliver took no further action as conservator after June 5,
1992. On August 10, 1992, the chancellor approved Tolliver's first and final accounting and discharged
Tolliver as conservator.

¶11. On August 4, 1994, O'Quinn filed a motion to set aside the final accounting and the order discharging
Tolliver as conservator. O'Quinn's motion was granted on September 28, 1994. On December 30, 1994,
Tolliver filed a substitute final accounting. On February 3, 1995, O'Quinn filed an objection to the
substituted final accounting. O'Quinn's objections were based upon Tolliver's failure to obtain court
approval for expenditures and investments of Melson's money.

¶12. On May 30, 1995, O'Quinn, as Massachusetts conservator, instituted suit against Tolliver in
Wilkinson County, Mississippi. In his complaint, O'Quinn sought recovery of all funds spent by Tolliver
without court approval. A special chancellor was appointed. On June 16, 1997, O'Quinn amended his suit
to add USF&G as an additional defendant based upon USF&G issuance of a public official's bond to
Tolliver in his capacity as the Chancery Clerk of Wilkinson County.

¶13. During the hearing, the parties stipulated that of the $108,666.03 in total challenged transactions, $62,
961.71 of identified payments were made directly to Melson at her request between November 28, 1989,
and September 30, 1991. Tolliver testified without dispute as to another $36,686.26 in payments that were
made to third parties for the benefit of Melson. Included in the $36,686.26 expended, $22,000 was paid to
Melson's former husband, Clarence, and his attorney pursuant to the chancellor's decree granting Melson a
divorce. The following issues are raised on appeal by USF&G:

I. Whether O'Quinn's claim is barred by the statute of limitations.

II. Whether Tolliver's public official's bond with USF&G should provide coverage as surety
on Melson's conservatorship.

III. Whether it produced inequitable results by requiring USF&G to repay all disbursements
made by Tolliver.

On cross-appeal, O'Quinn raises the following issues:
 I. Whether the special chancellor erred in denying the award of prejudgment interest.

II. Whether the special chancellor erred in denying the award of attorneys' fees.

DISCUSSION

¶14. This Court uses a de novo standard of review when passing on questions of law. Miss. Farm
Bureau Cas. Ins. Co. v. Curtis, 678 So. 2d 983, 987 (Miss. 1996); Estate of Bodman v. Bodman,
674 So.2d 1245, 1248 (Miss. 1996). In order to begin our legal discussion of this issue raised by USF&G,
it is necessary to first examine the differences and similarities between guardianships and conservatorships.

¶15. This Court in Harvey v. Meador, 459 So.2d 288, 291-92 (Miss. 1984), distinguished guardianships
from conservatorships as follows:

Guardians may be appointed for minors, Miss. Code Ann. § 93-13-15 (1972); or incompetent
adults, Miss. Code Ann. § 93-13-121 (Supp. 1983); a person of unsound mind, Miss. Code Ann.
§ 93-13-123, 125 (1972); alcoholics or drug addicts, Miss. Code Ann. § 93-13-131 (1972);
convicts in the penitentiary, Miss. Code Ann. § 93-13-135 (1972); persons in the armed forces or
merchant seamen reported as missing, Miss. Code Ann. § 93-13-161 (1972); or for veterans entitled
to receive moneys from United States Veterans' Bureau, Miss. Code Ann. § 35-5-5(1972) or minor
wards of a veteran, Miss. Code Ann. § 35-5-7 (1972). The guardian is the legally recognized
custodian of the person or property of another with prescribed fiduciary duties and responsibilities
under court authority and direction. A ward under guardianship is under a legal disability or is
adjudged incompetent.

In recent decades there has been an increased number of older adults in our society who possess
assets in need of protective services provided through a guardianships. But modification of laws have
broadened the definition of persons for whom assistance can be afforded by the courts, and such
statutes do not restrict such protection only to the adult incompetent or insane.

Noting that trend in our society, the Mississippi Legislature incorporated into law in 1962 the
conservatorship procedure for persons who, by reason of advanced age, physical incapacity, or
mental weakness, were incapable of managing their own estates. Miss. Code Ann. § 93-13-251, et
seq. (1972).

Thus, the Legislature provided a new procedure through conservatorships for supervision of estates
of older adults with physical incapacity or mental weakness, without the stigma of legally declaring the
person non compos mentis. This additional procedure was intended to encompass a broader class of
people than just the incompetent. See Uniform Probate Code § 5-304 Comment (1975). See also 18
J.Fam.L. 819 (1980). Family Law, Vol. 18, p. 819.

Therefore, the distinguishing feature of conservatorship from a guardianships lies in part in the lack of
necessity of an incompetency determination of the existence of a legal disability for its initiation. After
establishment of such protective procedures, the duties, responsibilities and powers of a
guardian or conservator are the same. Miss. Code Ann. § 93-13-259 (1972). See also 51
Miss.L.J. 239, 266 (1980).

(emphasis added).
¶16. Miss. Code Ann. § 93-13-259 (1994) provides that the general functions of a conservator are as
follows:

Should the court appoint the conservator of the property or person or property and person of the
subject party, the said conservator shall have the same duties, powers and responsibilities as a
guardian of a minor, and all law relative to the guardianship of a minor shall be applicable to a
conservator.

I. Whether O'Quinn's claim is barred by the statute of limitations.

¶17. USF&G argues that O'Quinn's claim is time barred by the statute of limitations. O'Quinn was
appointed temporary conservator of Melson in the State of Massachusetts on July 16, 1991, and
subsequently, conservator on October 8, 1991. Since being appointed Melson's Massachusetts
conservator, O'Quinn made two demands on Tolliver for an accounting, on August 10, 1991, and February
25, 1992. USF&G contends that the statute of limitations began running on O'Quinn's claim from the date
of his appointment as temporary conservator. However, Tolliver only filed his first and final accounting on
June 5, 1992, for the period of December 2, 1988, to June 5, 1992. O'Quinn filed suit against Tolliver on
May 30, 1995. Later O'Quinn amended his suit to include USF&G as a party defendant. In addressing this
issue, we must first determine the applicable statute of limitation.

A. Applicable Statute of Limitations

¶18. The applicable statute of limitation to the case at hand is Miss. Code Ann. § 15-1-49 (1995). Miss.
Code Ann. § 15-1-49 is Mississippi's general "catch all" statute of limitations. In State v. Smith, 156
Miss. 288, 125 So. 825 (1930), this Court held that the limitation on an action brought on an official bond
is that provided for actions on written contracts. This holding was cited and followed in Sanders v.
Nunley, 1997 WL 88200 (N.D. Miss. 1997). See also City of Mound Bayou v. Johnson, 562 So.2d
1212, 1217 n.3 (Miss. 1990).

¶19. Since there is no specific statute of limitations for claims on written contracts, § 15-1-49 therefore
applies. Miss. Code Ann. § 15-1-49 states:

(1) All actions for which no other period of limitation is prescribed shall be commenced within (3)
years next after the cause of such action accrued, and not after.

(2) In actions for which no other period of limitation is prescribed and which involve latent injury or
disease, the cause of action does not accrue until the plaintiff has discovered, or by reasonable
diligence should have discovered, the injury.

(3) The provisions of subsection (2) of this section shall apply to all pending and subsequently filed
actions.

Thus, the claims of O'Quinn as Melson's conservator, or of Melson herself, are subject to the three year
limitations pursuant to Miss. Code Ann. § 15-1-49. Therefore, the real question addressed to this Court is
when the three-year statute of limitations begins to run against O'Quinn's claims.

B. Tolling or "Saving" Provision
¶20. O'Quinn argues that Miss. Code Ann. § 15-1-59 (1995) provides that the statute of limitations does
not run against a person who is under a legal disability. That, however, is not completely accurate. Miss.
Code Ann. § 15-1-59 states that:

If any person entitled to bring any of the personal actions mentioned shall, at the time at which the
cause of action accrued, be under the disability of infancy or unsoundness of mind, he may bring
the actions within the times in this chapter respectively limited, after his disability shall be removed as
provided by law. However, the saving in favor or persons under disability of unsoundness of mind
shall never extend longer than twenty-one (21) years.

(emphasis added).

¶21. Melson was determined to be mentally competent by the Wilkinson County Chancery Court on
February 9, 1988, in her divorce proceedings. Melson's conservatorship in Mississippi continued based
solely on her physical incapacity. Furthermore, on October 8, 1991, O'Quinn was appointed Melson's
permanent conservator based solely on her physical disability. The Massachusetts court did not determine
Melson to be of unsound mind in establishing O'Quinn as conservator. Melson had a permanent
conservator in Massachusetts protecting her financial affairs. Therefore, USF&G contends that the Miss.
Code Ann. § 15-1-59 is not applicable to the facts at bar. We agree.

¶22. Melson does not fall under the "saving" clause provided in Miss. Code Ann. § 15-1-59. Miss. Code
Ann. § 15-1-59 allows the statute of limitations to be tolled in favor of persons under the disability of
unsound mind until the disability is removed. However, the saving in favor of persons under the disability of
unsound mind shall never extend longer than twenty-one years. The facts do not support that Melson was
of unsound mind during the time that Tolliver served as conservator.(1) Therefore, we find that Melson does
not fall within the tolling provisions of § 15-1-59. Melson's conservatorships in Mississippi and
Massachusetts both exist for the sole reason of her physical incapacity.

¶23. Miss. Code Ann. § 1-3-57 (1998) defines the term "unsound mind" when used in any statute to
reference idiots, lunatics, and persons non compos mentis. The test for determining whether a person is of
unsound mind for purposes of tolling the statute of limitations was provided by this Court in Shippers Exp.
v. Chapman, 364 So.2d 1097, 1107 (Miss. 1978), which held:

The test as to whether the claimant is so 'mentally incompetent' as to toll the running of the statute of
limitations, is this: Is his mind so unsound, or is he so weak in mind, or so imbecile, no matter from
what cause, that he cannot manage the ordinary affairs of life?

¶24. This Court in Rockwell v. Preferred Risk Mut. Ins. Co., 710 So.2d 388, 391 (Miss. 1998), further
provided that:

The purpose of the savings statute is to protect the legal rights of those who are unable to assert their
own rights due to disability.

¶25. USF&G argues that Miss. Code Ann. § 15-1-59 is also not applicable to tolling Melson's claim since
O'Quinn, as Melson's conservator, had full authority under Massachusetts law to bring suit for Melson to
recover any assets. See § § 20,37 and 38 C. 201, Annotated Laws of Massachusetts. USF&G cites Miss.
Code Ann. § 15-1-53 (1995) in support of its argument.
¶26. Miss. Code Ann. § 15-1-53 provides:

When the legal title to property or a right in action is in an executor, administrator, guardian, or other
trustee, the time during which any statute of limitations runs against such trustee shall be computed
against the person beneficially interested in such property or right in action, although such person may
be under disability and within the saving of any statute of limitations; and may be availed of in any suit
or actions by such person.

¶27. Therefore, under Miss. Code Ann. § 15-1-53, if a person who is subject to infancy or unsoundness of
mind does in fact have a guardian or conservator appointed for them, then the action may be brought in the
name of that guardian or conservator, without the consideration of any savings clause. Where a guardian or
conservator has been court appointed for a ward, there is no logical or equitable reason to prevent the
running of the statute of limitations inasmuch as that guardian or conservator is fully authorized to employ
attorneys and bring actions on their behalf. McCain v. Memphis Hardwood Flooring Co., 725 So.2d
788 (Miss. 1998)(statute of limitations is not tolled when a person of unsound mind has a guardian).

¶28. USF&G argues that the statute of limitations began to run from the date of the last disbursement made
by Tolliver which occurred on March 20, 1992. The lawsuit against Tolliver was filed on May 30, 1995,
and amended to include USF&G on June 16, 1997. USF&G argues that with no savings clause to toll the
running of Miss. Code Ann. § 15-1-49, Melson faces the same limitations as O'Quinn. As previously
noted, all of the questioned transactions occurred between February 13, 1989, and March 20, 1992.
USF&G contends that, at the very least, statute of limitations on all of these claims expired on March 20,
1995.

¶29. The problem with USF&G's argument, that being the statute of limitations runs from the date of the last
disbursement, is that it conflicts with existing holdings of this Court. This Court in Bell v. Rudolph, 70
Miss. 234, 12 So. 153, 154 (1882), held that:

The statute of limitations does not begin to run in favor of a surety on a guardian's bond against the
ward from the time he is discharged from liability for future acts of the guardian but from the time the
guardian accounted to the wards.

See also Nunnery v. Day, 64 Miss. 459, 1 So. 636 (1887).

¶30. In Patterson v. Clingan, 93 Miss. 310, 47 So. 503, 504 (1908), this Court stated that:

When the functions and authority of the guardian over the person and estate of the ward for the future
ends, and his obligation to make [a] final account and settlement for the past begins, and he remains
guardian for such purpose, and the statute of limitations does not begin to run in favor of him, or the
sureties on his bond, until this is done.

¶31. The Court in Patterson further stated that:

The general rule is that the office of a trustee ceases only with the execution of his trust, and the duty
of a guardian, as trustee, to account and settle, continues until he has done so and is discharged by
order of the proper court. Henderson v. Winchester, 31 Miss. 290; Davis v. Cheves, 32 Miss.
317; Denson v. Denson, 33 Miss. 560.
47 So. at 504.

¶32. Tolliver filed his first and final accounting with the lower court on June 5, 1992. Tolliver was then
discharged on August 10, 1992. On September 28, 1994, the lower court granted O'Quinn's motion dated
August 4, 1994, to set aside Tolliver's accounting. O'Quinn filed suit against Tolliver on May 30, 1995. The
suit against Tolliver was amended on June 16, 1997, to add USF&G as a party defendant. The last
disbursement made by Tolliver without court approval occurred on March 20, 1992.(2)

¶33. Since Tolliver's first and final accounting was not filed until June 5, 1992, we find that O'Quinn satisfied
the statute of limitations by filing suit on May 30, 1995, within the three year statute of limitations.
Therefore, this issue is without merit.

II. Whether Tolliver's public official's bond should with USF&G provide coverage as surety
on Melson's conservatorship.

¶34. The chancellor specifically ordered that Tolliver would be appointed temporary conservator for
Melson and that his public official's bond would stand as surety. USF&G argues that for it to incur any
liability for acts committed by Tolliver as conservator of Melson's assets, those actions must have been
contemplated by the parties at the time the public official's bond was executed and included under the
bond's clear and unambiguous terms. USF&G's position is that the public bond only covers Tolliver's
performance or nonperformance of the duties of his office. In order for the surety to be held liable under its
public official's bond, the official's act or omission must be within the scope or duties of his office. United
States Fid. & Guar. Co. v. State ex rel. Stringfellow, 254 Miss. 812, 182 So.2d 919, 922 (1966);
see also McCoy v. Key, 155 Miss. 64, 123 So 873 (1929); Dean v. Brannon, 139 Miss. 312, 104
So.173 (1925).

¶35. USF&G cites Miss. Code Ann. § § 9-5-137 (Supp. 2001) and 9-5-141 (1991) as a listing of the
duties of a chancery clerk. Miss. Code Ann. § 9-5-137 provides:

It shall be the duty of the clerk to preserve and keep all records, files, papers and proceedings
belonging to his office, and to record all last wills and testaments which may be probated; all letters
testamentary, of administration, and guardianship; all accounts allowed; all inventories, appraisements,
and reports duly returned; all instruments which are duly proved, and by which law are required to be
recorded in his office, in well-bound books to be kept for that purpose, each class in a separate book
or books, or by means of electronic filing or storage or both in addition to or in lieu of any such
physical records as provided in Section 9-1-51 through 9-1-57, as the clerk may elect; all records
shall be properly indexed. He shall issue all process which may be required of him by law or by order
of the court, or the chancellor in vacation; and shall discharge all other duties which may be required
of him by law, or which properly appertain to the duties of his office. The clerk shall be under the
direction of the court in term time, and of the chancellor in vacation.

Furthermore, Miss. Code. Ann. § 9-5-141 provides:

The clerk or his deputy may at any time receive and file all bills, partitions, motions, accounts,
inventories, reports, or other papers offered for that purpose, and may issue all process authorized by
law and proper in any matter or proceeding. He may also at any time, in term time or vacation,
perform the following functions; issue warrants of appraisement to appraise the personal estate of
 decedents; allow and register claims against estates being administered in the court of which he is
clerk; make all orders and issue all process necessary for the collection and preservation of estates of
decedents, minors, and persons of unsound mind; appoint some person to collect and preserve the
estate of any decedent in the state in any case provided for; grant letters of administration to the
husband or wife, or other person entitled thereto; take the proof of wills, admits wills to probate, in
common form, grant letters testamentary, letters of administration with the will annexed and de bonis
non; appoint guardians for minors, persons of unsound mind, and convicts of felony; grant letters of
administration; institute suits in cases provided for, and, whenever an appeal shall be taken from the
grant of letters testamentary, of administration, or guardianship, appoint some fit person to discharge
duties pending the appeal. He may do all such other acts as are provided by law and by the
Mississippi Rules of Civil Procedure.

¶36. USF&G argues that "the duties of a chancery clerk set forth above do not include serving as
conservator over the assets of a physically incapacitated ward." The chancellor appointed Tolliver
temporary conservator of Melson due to the fact that her original conservator had a conflict serving in that
capacity. The lower court ruled that "Thomas C. Tolliver, Jr., is a fit and proper person to serve in that
capacity under his current public bond." Despite the chancellor's ruling, USF&G argues that they never
agreed that Tolliver's public official's bond would stand as surety. USF&G contends that Tolliver's
appointment was not based on his position as a chancery clerk and that no proof was submitted to prove
that no one else was qualified to serve as conservator for Melson other than Tolliver.

¶37. Miss. Code Ann. § 93-13-251 (1994) provides:

If a person by reason of advanced age, physical incapacity or mental weakness is incapable of
managing his own estate, the chancery court of the county wherein such person resides may, upon the
petition of such person or of one or more of his friends or relatives, appoint a conservator to have
charge and management of the property of such person, and if the court deems it advisable, also to
have charge and custody of the person subject to the direction of the appointing court.

¶38. Additionally, Miss. Code Ann. § 93-13-21 (1994) provides for appointment of the chancery clerk
when no guardian will qualify. Miss. Code Ann. § 93-13-21 states:

If someone will not qualify as guardian of a ward who has property, it shall be the duty of the
chancery court or the chancellor in vacation to appoint the clerk of said court to be the guardian of the
ward, who shall discharge the duties of guardian, under the order and direction of the court, and be
subject to be dealt with as for a contempt for failure. He shall be required to give a special cumulative
bond as guardian, and his official bond shall also cover his liability as guardian, and he shall; but he
shall not be bound to incur any cost, except out of the estate of his ward; and he shall be allowed not
more than ten percent (10%) on the amount of the estate, if finally settled. At the expiration of his right
to the office, he shall make a settlement of his guardianship, and immediately deliver the property of
the ward to his successor in office or to such other person as the court or chancellor may have
directed.

¶39. This Court in Faust v. Murphy, 71 Miss. 120, 13 So. 862 (1893), stated:

Where the chancery clerk has been appointed guardian, if no specified bond be required of him, the
code provisions control, and his official bond will stand as security for the ward.
¶40. We find that the trial court did not err in appointing Tolliver to serve as conservator subject to his
public official's bond. Therefore, this issue is without merit.

III. Whether it produced inequitable results by requiring USF&G to repay all disbursements
made by Tolliver.

¶41. During Tolliver's service as conservator, he never obtained prior court approval for disbursements
made from Melson's conservatorship. This fact is undisputed by the parties.

¶42. Miss. Code Ann. § 93-13-38(2) (Supp. 2001) states:

It shall be duty of the guardian of wards as defined by Section 1-3-58, Mississippi Code of 1972, to
improve the estate committed to his charge, and to apply so much of the income, profit or body
thereof as may be necessary for the comfortable maintenance and support of the ward and of his
family, if he have any, after obtaining an order of the court fixing the amount. And such guardian may
be authorized by the court or chancellor to purchase on behalf of an in the name of the ward with any
funds of such ward's estate sufficient and appropriate property for a home for such ward or his family
on five (5) days' notice to a member of said family, or the necessary funds may be borrowed and the
property purchased given as security. The guardian is empowered to collect and sue for and recover
all debts due his said ward, and shall make payment of his debts out of the personal estate as
executors and administrators discharge debts out of the estate of decedents, but the exempt property
of the ward shall not be liable for debts, and no debts against such estate shall be payable by such
guardian unless first probated and registered, as required of claims against the estate of decedent.

¶43. The special chancellor, in the bench opinion, stated that Miss. Code Ann. § 93-13-39 absolutely
required prior approval of expenditures and without such prior approval, the conservator would be liable.
The special chancellor relied on Conservatorship of Mathews, 633 So.2d 1038, 1039-40 (Miss. 1994).
In Mathews, Dan Mathews (Dan) was appointed conservator for his aunt, Frances Mathews (Frances).
Dan's first three accountings were approved by the chancellor. However, Dan was later removed as
conservator upon the petition of another one of Frances's nephews. During the conservatorship, Dan made
expenditures from the conservatorship without first obtaining court approval, among other issues.

¶44. This Court in Matthews, in criticizing the actions of the conservator stated:

It shall be the duty of the guardian...to improve the estate committed to his charge, and to apply so
much of the income, profit or body thereof as may be necessary for the comfortable maintenance and
support of the ward and of his family, if he have any, after obtaining an order of the court fixing
the amount... The guardian is empowered to collect and sue for and recover all debts due his said
ward...(Emphasis added).

This statute requires that a court order fixing the amount to be spent for the care and maintenance of
the ward be obtained prior to making such expenditures. Dan simply made the expenditures as he
saw fit. When this Court addressed such action in Welch v. Childers, 195 Miss. 415, 420, 15
So.2d 690, 691 (1943), we held:

A minor under guardianship is a ward of the [c]hancery [c]ourt. All receipts and disbursements of his
estate are required to be under the authority and direction of the [c]hancery [c]ourt or the [c]hancellor
 in vacation. The expenses for the maintenance and support of the ward cannot be proved in any other
way. The object of the law is to guard against dishonesty and mismanagement of the estate by the
guardian...

The law does not leave the amount of the expenditures by the guardian for the maintenance, support
and education to (the guardian's) discretion. The sum must be fixed by the court. If the guardian
contracts therefor without the sanction of the chancery court or chancellor, the liability therefor is
personal to him, and he cannot be allowed for it in this accounts for the ward. The guardian has no
power to bind the estate of his ward without the sanction of the chancery court or the chancellor.

Mathews, 633 So.2d at 1039-40.

¶45. However, this Court in Mathews, further held that the chancellor has authority to consider the
expenditures made without court approval. Id. at 1041. The Court found that the sole question for
consideration in Matthews was whether the chancellor abused his discretion in removing Dan as
conservator. The Court did not address the justification for any expenditures made by Dan as conservator,
or their reasonableness or necessity. Id. The Court stated that these may be proper inquiries on remand.
Id. (citing Neville v. Kelso, 247 So.2d 828, 834-35 (Miss. 1971)).

¶46. In Neville, this Court stated that:

A guardian of a non compos mentis has a reasonable area of discretion in determining what part of the
income of his ward should be spent for support, maintenance and education. Previously unauthorized
but reasonable and proper expenditures from income for the n. c. m. ward may be ratified and
approved by the court after they are made, either by special order or on the annual or final account.
The chancery court has the power to ratify and approve such expenditures. However, the only way
the guardian can protect himself absolutely (except for fraud) from a later contest of reasonableness
and propriety of the expenditure from income is by obtaining a prior order. Where he fails to do so
the guardian must risk disallowance by the court of the income expenditure, if it was not a reasonable
and proper expense in supporting, maintaining or educating the ward.

Accordingly, the chancery court erred in concluding that an expenditure by the guardian from income,
without previous express authority, is invalid and cannot be ratified and approved by the court.

The rule which we have adopted is in accord also with the general rule in other jurisdictions. 39
Am.Jur.2d, Guardian and Ward § 70 (1968) states:

A guardian may use the interest and profits of his ward's estate for the support and education of his
ward and may obtain credit therefor upon the rendition of his account, even though, as a general rule,
such expenses were incurred without previous authorization by the court.

¶47. The same text in section 72 states:

As a general rule, however, even though prior authorization therefor was not obtained, a guardian will
be allowed credit in his accounting for judicious expenditures made in good faith from the income of
the ward's estate, and the courts of some of the jurisdictions adhere to the view that in a proper case
a guardian may, without prior order of court, expend the principal of a ward's estate for his
maintenance or education.
See also Annot., 130 A.L.R. 113, 117 (1941).

¶48. In 39 C.J.S. Guardian and Ward § 88, at 155-56 (1944), it is stated:

[O]rdinarily where a court order is obtained authorizing particular expenditures the guardian is
protected, and the expenditures cannot be questioned, except for fraud, in the settlement of the
guardian's final account. As a general rule a prior authorization by the court is not necessary, since the
court may, by allowing the credit or otherwise, approve or ratify a previously unauthorized
expenditure. Obviously, however, a guardian who proceeds with the management of the estate and
makes expenditures without a previous court order faces the hazard that the court afterward may not
ratify or approve such acts.

Neville, 247 So.2d at 834-35.

¶49. In Neville, the Court only allowed distribution of income of the conservatorship to be made without
the necessity of prior court approval. Id. at 834. The Court in Neville, quoting Deposit Guar. Bank &
Trust Co. v. Mangum, 172 Miss. 443, 16 So. 386, 387 (1935), addressed the expenditure of capital
without a court order by stating:

In order to expend more than the income of the estate it is necessary for the guardian to secure an
order of the court prior to such expenditure. Chapman v. Pentecost, 161 Miss. 600, 137 So. 539,
in which it was held that a precedent order of the court or chancellor is indispensable in determining
whether the guardian shall bear the expenses of a ward whose parents are living. It is true this
decision was rendered in a case where a minor was involved, but the same rule is applied as to
others. The statute plainly requires a previous order of court.

¶50. Furthermore, Miss. Code Ann. § 93-13-261 (1994) limits the ward's powers as follows:

So long as there is a duly appointed conservator, the person whose property or person is in the
charge of such conservator shall be limited in his or her contractual powers and contractual obligations
and conveyance powers to the same extent as a minor.

¶51. Incompetence is not a sole issue in determining whether a conservator has the power to act on behalf
of a ward since a conservator has the power to act for a ward who is also mentally competent. See Will of
Mingo v. Mingo, 743 So.2d 433, 434 (Miss. Ct. App. 1999). A conservatorship limits the contractual
and conveyance powers of its ward. See Lee v. Lee, 337 So.2d 713, 714 (Miss. 1976); Miss. Code Ann.
§ 93-13-261.

¶52. It is undisputed that no court order was obtained for disbursements made by Tolliver from Melson's
conservatorship. The case law and statutory language clearly require that prior court approval be obtained
before expenditure of capital. This was not done in the case at hand. USF&G notes that the special
chancellor did not make a distinction as to whether all the expenditures were capital or some from the
conservatorship income.

¶53. The facts are further undisputed that since at least February 17, 1989, Melson was mentally
competent. Melson also had a Massachusetts conservator in addition to Tolliver in Mississippi. The record
reflects that Melson participated significantly in the management of her assets and often communicated
directly with Tolliver as to transactions in her account. She also came back to Mississippi on a regular basis,
during which she would confer with Tolliver concerning her business affairs. Tolliver testified that of the
$108,666.03 in challenged transactions, $62,961.71 were payments made directly to Melson at her
express direction. There was no testimony that these funds were wasted in any way or that they, in fact, do
not this day still remain on deposit in Melson's Massachusetts bank account.

¶54. Another $36,686.26 of the funds were spent on Melson's behalf, most paid to third parties at her
express direction, $22,000 pursuant to the divorce decree, $15,000 to her former husband and $7,000 to
her husband's divorce attorney.

¶55. Besides meeting with Melson, Tolliver testified as to meetings he had with O'Quinn including one in
which O'Quinn advised Tolliver to pay the income taxes from the conservatorship. The taxes were also paid
to the Internal Revenue Service without obtaining prior approval.(3)

¶56. Clearly, Tolliver should have requested prior court approval before making any expenditures from the
conservatorship. To allow the payments to be made without court approval to parties other than Melson
could create a dangerous precedent that would undermine the protections afforded a ward. However,
forcing USF&G to repay all of the expenditures would create a windfall to Melson and produce inequitable
results. Nothing in the record supports a finding that the payment of the $62,961.71 to Melson and the $22,
000 pursuant to the divorce decree was driven by dishonesty on the part of Tolliver or that it resulted in
mismanagement of the estate.

¶57. While mentally competent, Melson remained under a conservatorship. Melson also had a conservator
appointed in Massachusetts. However, no evidence was presented that the $62,961.71 received by
Melson was misused or wasted in any way by Tolliver. To allow the $62,961.71 in repayment to Melson
would create an inequitable outcome. It is undisputed by the parties that $62,961.71 of the $108,666.03 in
expenditures went directly to Melson at her request.

¶58. In Quitman County v. Turner, 196 Miss. 746, 18 So.2d 122, 124 (1944) this Court held that:

Legislative intent as an aid to statutory construction, although often elusive to the perception of
unaided vision, remains nevertheless the pole star of guidance... It is our duty to support a
construction which would purge the legislative purpose of any invalidity, absurdity or unjust
inequality. Robertson v. Texas Oil Co., 141 Miss. 356, 106 So. 449.

(emphasis added). See also City of Jackson v. Lakeland Lounge of Jackson, Inc., 688 So.2d 742,
747 (Miss. 1996); Thornhill v. Ford, 213 Miss. 49, 56 So.2d 23 (1952). Therefore, we decline to
require the repayment of the $62,961.71 that was paid directly to Melson.

¶59. Furthermore, disbursements were also made from the conservatorship to Melson's former husband,
Clarence, for $15,000 and to Clarence's divorce attorney for $7,000. Melson was obligated to pay the
$22,000 by court order to Clarence and his attorney. While Tolliver did not petition the chancery court as
conservator for approval of these payments in advance, both payments were made pursuant to Melson's
divorce decree. Had Tolliver, as conservator, in fact petitioned for approval to make these two payments,
he would have submitted his petition to the same chancellor who had granted the divorce decree and who
had ordered Melson to make the payments to her former husband. No one disputes the money was paid as
ordered in the divorce decree.
¶60. Clearly, as argued by USF&G, requiring repayment of the money specifically approved by the
chancery court in the divorce is putting form over substance. The chancellor was clearly aware of the
conservatorship and the extent of Melson's assets during the divorce proceedings. This transaction aptly
illustrates the inequity created as to USF&G by the special chancellor's decision.

¶61. Without extending this case beyond the facts at hand, in order to avoid creating an absurd and
inequitable result in this specific case, we find that the special chancellor's award to Melson for $108,
666.03 should be reduced by the $62,961.71 paid directly to Melson, and the $22,000 paid to Melson's
former husband and his divorce attorneys pursuant to the divorce decree. This reduction is solely for the
purpose of preventing an unfair result and in no way is intended to weaken the protections afforded a ward
under a conservatorship or beyond the specific situation at bar.

Cross-Appeal:

I. Whether the special chancellor erred in denying to award prejudgment interest.

¶62. On cross-appeal, O'Quinn further seeks to recover prejudgment interest from USF&G and Tolliver
which was denied by the special chancellor. The special chancellor did not award the prejudgment interest
and attorney's fees to O'Quinn. In the bench opinion, the trial court stated that "the court awards no interest
except on the judgment entered herein, and there are not attorney's fees awarded any of the attorneys by
this court." The special chancellor further stated in the court's written opinion that, "the court further finds
that it does not allow any prejudgment interest, nor does this court award any attorney's fees to any of the
attorneys in this matter."

¶63. O'Quinn argues that the appropriate interest rate is 8%, and that this interest should be added to the
$108,166.03 which was disbursed from the conservatorship from the date of filing the motion to set aside
Tolliver's accounting, August 4, 1994, through the date of the judgment, January 18, 2000. O'Quinn
submits that applying 8% simple interest without compounding amounts to $43,266.41.

¶64. O'Quinn's claim for prejudgment interest is based on Miss. Code Ann. § 93-13-57 (1994), which
provides that:

Any guardian who fails to report to the court the fact that he has money of the ward not needed or
allowed to be used for current expenditure and to ask the order of the court as to the disposition of
such money, may be chargeable with interest on the same at the rate of 8% per annum during the time
of failure."

(emphasis added).

¶65. O'Quinn argues that in the interest of justice and equity the word "may" in § 93-13-57 should become
the word "shall," citing Welch v. Childers, 195 Miss. 415, 15 So.2d 690, 691 (1943) as authority. In
Welch, this Court allowed the award of both prejudgment interest and post-judgment interest. However,
the Court in Welch did not state that the award of prejudgment interest was mandatory.

¶66. O'Quinn further relies upon Miss. Code Ann. § 75-17-7 (2000) which provides that prejudgment
interest may be awarded in an amount to be set by the court for all liquidated amounts. Whether to award
prejudgment interest under both Miss. Code Ann. §§ 93-13-57 and 75-17-7 remains absolutely within the
discretion of the chancellor. This Court in Fred's Stores of Miss., Inc. v. M&H Drugs, Inc., 725 So.2d
902, 921 (1998) held that, "an award of prejudgment interest is normally left in the discretion of the trial
judge." (citing Warwick v. Matheney, 603 So.2d 330, 342 (Miss. 1992)).

¶67. It is the well-settled law in this State regardless of the statute under which prejudgment interest is
sought, the award of such interest is entirely within the discretion of the trial court. "An award of
prejudgment interest rests in the discretion of the awarding judge." Murphree v. Aberdeen-Monroe
County Hosp., 671 So.2d 1300, 1304 (Miss. 1996). See also Sentinel Indus. Contracting Corp. v.
Kimmins Indus. Serv. Corp., 743 So.2d 954, 971 (Miss. 1999); Preferred Risk Mut. Ins. Co. v.
Johnson, 730 So.2d 574, 577 (Miss. 1998). Therefore, we find that no proof was submitted to support
that the special chancellor erred in denying to award prejudgment interest. This issue is without merit.

II. Whether the special chancellor erred in denying the award of attorneys' fees.

¶68. O'Quinn argues on cross-appeal that the special chancellor erred in denying to award any attorneys'
fees. O'Quinn states that the attorneys' fees are shown to be $42,473.64.(4) O'Quinn alleges that "when
Mr. Tolliver ceased to act as a conservator and assumed the role of the chancellor and court, he became
liable in both his personal and professional capacity not only for the unauthorized amount withdrawn, but
also for the cost of attorney's fees in rectifying the situation. To award anything less results in an unjust
enrichment to Mr. Tolliver at the expense of the ward."

¶69. The special chancellor's decision denied the award of all attorneys' fees. Whether to award attorney's
fees rests entirely within the discretion of the trial court. "A trial court's decision on attorney's fees is subject
to the abuse of discretion reviewed (citations omitted)...It is well-settled that attorney's fees are not to be
awarded unless the state or other authority so provides." Sentinel, 743 So.2d at 971. "Unless the
chancellor is manifestly wrong, his decision regarding attorney's fees will not be disturbed on appeal. Absent
an abuse of discretion, the chancellor's decision in such matters will generally be upheld." Zeman v.
Stanford, 789 So.2d 798, 806 (Miss. 2001) (citations omitted).

¶70. We find that O'Quinn has failed to meet the abuse of discretion standard regarding the trial court's
specific decision to not award attorney's fees. Therefore, this issue is without merit.

CONCLUSION

¶71. The special chancellor's award of $108,666.03 plus post-judgment interest is reduced by the $62,
961.71 paid directly to Melson and the $22,000 paid pursuant to the divorce decree on Melson's behalf.
This holding is limited to the specific facts of the case at bar. The special chancellor's denial of prejudgment
interest and attorney's fees is hereby affirmed.

¶72. AFFIRMED IN PART AND REVERSED AND RENDERED IN PART.

PITTMAN, C.J., McRAE AND SMITH, P.JJ., WALLER, DIAZ, CARLSON AND
GRAVES, JJ. CONCUR. COBB, J., CONCURS IN RESULT ONLY.

1. After her accident, Melson was initially in a coma. The facts are clear that Melson remains a ward of the
conservatorship solely on the basis of her physical incapacities rather than being of unsound mind.

2. Ex. P-15 lists as a challenged transaction on April 16, 1992, disbursement to the Internal Revenue
Service. However, at trial, O'Quinn stipulated that he was not seeking relief as to this transaction.
3. O'Quinn did not pursue the money paid to the Internal Revenue Service.

4. Two attorneys represented O'Quinn, Dennis Horn and Erik Lowrey. O'Quinn argues that the only
objection to the attorney's fees was whether there was a duplication of services provided. However,
USF&G counters that the attorneys' fees amount was never introduced into evidence but only offered for
identification purposes.