COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 73506 IN RE: ERIC BONNER, ETC. : ACCELERATED DOCKET : : JOURNAL ENTRY Plaintiff-appellant : AND : OPINION : : PER CURIAM DATE OF ANNOUNCEMENT OF DECISION: JUNE 25, 1998 CHARACTER OF PROCEEDING: Civil appeal from the Court of Common Pleas Probate Division Case No. 902482 JUDGMENT: Reversed and Remanded DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellant: MICHAEL WESTERHAUS, ESQ. 14255 Peppercreek Drive Strongsville, Ohio 44136 For Defendant-Appellee ANTHONY J. DIVENERE, ESQ. Lillie Bonner: MCDONALD, HOPKINS, BURKE & HABER 2100 Bank One Center 600 Superior Avenue, East Cleveland, Ohio 44114 For Ohio Farmers Insurance Company: EDWARD C. BARAN, ESQ. JANET L. MIGGINS, ESQ. BARAN, PIPER, TARKOWSKI & -2- FITZGERALD 10574 Ravenna Road, Suite 3 Twinsburg, Ohio 44087 ANNE M. WALKER, ESQ. One Park Circle P.O. Box 5001 Westfield Center, Ohio 44251 -3- DYKE, J.: Eric Bonner appeals from the judgment entered by the probate court in his action to surcharge his former guardian for a defi- ciency in the guardianship estate. For the reasons set forth below, we reverse and remand for further proceedings consistent with this opinion. Following the deaths of Rose Marie and Eddy Bonner, Sr. in 1979, Bessie Culp and Lillie Bonner were appointed guardians of Eddie Bonner, Jr. (d.o.b. June 6, 1969) and appellant Eric Bonner (d.o.b. August 1, 1975). The record further reveals that the guardians were duly bonded and that they retained attorney Yale Barkan to file various accounts and other documents. The record further reveals that the co-guardians received insurance proceeds, social security payments of the wards, and other property, and made various disbursements. In June 1984, there was approximately $244,175 in the guardianship. By 1989, Eddy Bonner reached the age of majority. Also by 1989, Bessie Culp had died, and Lillie Bonner was the sole guardian of Eric Bonner. The guardian was subsequently represented by attorney William J. Lavin. She obtained a bond by Ohio Farmer's Insurance Company in the amount of $345,000. An account filed in May 1989 indicates that the guardianship disbursed $150,000 to Eddy Bonner and that there were remaining assets of $161,253. The record further reveals that in November 1993, Lavin filed a final account with the probate court. In relevant part, this document indicates that $189,885 was distributed to Eric Bonner. -4- On June 17, 1996, Eric Bonner filed a motion to vacate the final account on the basis of fraud, and asserted that he received only $89,000 from the guardianship. He further asserted that attorney Ronald Sears, who shared space with Attorney Lavin and was the guardian's attorney for small matters, retained over $20,000 of the $89,000 for attorney fees. The motion to vacate the final account proceeded to hearing before a referee on February 14, 1997. The referee subsequently concluded that the final account should be vacated. On March 11, 1997, the trial court vacated the final account and on March 18, 1997, Eric Bonner filed a motion to surcharge Lillie Bonner for the deficiency. Within the same action, Lillie Bonner, in her capacity as guardian, and Ohio Farmers Insurance Company filed a complaint for concealment of assets in which they alleged that Sears and/or Lavin may be in possession of funds belonging to the guardianship. Thereafter, on September 8, 1997, the trial court journalized an agreed judgment entry against Lavin and in favor of Lillie Bonner and Ohio Farmer's Insurance Company in the sum of $97,915, plus a 10% penalty in the amount of $9,715, plus interest at the rate of 10% from October 15, 1993. On October 8, 1997, the parties filed stipulations with the court with respect to the consideration of the Motion to Sur- charge. The parties additionally asked the court to consider the deposition of Lillie Bonner and their briefs. In relevant part, the stipulations provided: -5- 4. On May 3, 1990, Lillie posted a bond with the Court in the amount of $354,000, issued by Ohio Farmers Insurance Company as surety. 5. Lavin wrote checks from the guardianship bank account; a separate account into which the monthly social security checks were deposited was con- trolled by Lillie. Lavin controlled several certi- ficates of deposit and the checking account at Huntington Bank. 6. Around June, 1992, pursuant to the power of attorney, Lavin began to write numerous checks for his own use, without court authorization, payable to himself; and Lavin conveyed away funds belonging to the Guardianship Estate of Eric Bonner, in the amount of $97,915.00. 7. In August, 1993, Eric received $89,000.00 at the termination of the guardianship upon turning 18. Lavin falsely told Eric that he had mailed the remaining funds in October, 1993. 8. Lavin is being prosecuted pursuant to an Informa- tion in the United States District Court for the Northern District of Ohio, Eastern Division, under Case No. 1:97CR181. * * *. 9. Lavin has also admitted in a judgment filed with this court that he conveyed away for his personal use Bonner guardianship funds in the sum of $97,915.00. ****. Finally, on October 17, 1997, the trial court determined that Lillie Bonner delegated almost the entire administration of the guardianship estate to Lavin and therefore failed to act prudently and exercise due care in the supervision of Eric Bonner's guardian- ship estate. The court then surcharged Lillie Bonner $97,915 but made no provision for interest. Thus, the lower court awarded Lillie Bonner and Ohio Farmer's Insurance Company $97,915 plus a 10% penalty and interest from October 1993, on their claim against Lavin, but did not award Eric Bonner interest or penalty in his -6- action against Lillie Bonner. Eric Bonner now appeals and assigns a single error for our review. Eric Bonner's assignment of error states: THE TRIAL COURT ERRED BY FAILING TO PROVIDE FOR INTEREST IN ITS JUDGMENT ENTRY OF OCTOBER 17, 1997, SURCHARGING LILLIE BONNER IN THE AMOUNT OF $97,915. Within this assignment of error, Eric Bonner contends that the trial court erred in failing to award him interest on the judgment surcharging Lillie Bonner for the loss of guardianship funds. Eric Bonner correctly observes that trustees have a duty to invest idle trust funds so that they will be productive of income. See Stevens v. National City Bank (1989), 45 Ohio St.3d 276, 280; R.C. 2109.41. In this connection, the trustee must act as would an ordinary person during that time period. See In re Estate of Hamm (November 28, 1997), Geauga App. No. 96-G-2022, unreported; Miller v. Proctor (1870), 20 Ohio St. 442, 447. A remedy for failure to invest is set forth in R.C. 2109.42 which provides as follows: Subject to section 2109.372 [2109.37.2] of the Revised Code, a fiduciary who has funds belonging to a trust which are not required for payment of current obligations of his trust or distribution shall, unless otherwise ordered by the probate court, invest such funds within a reasonable time according to section 2109.37 or 2109.371 [2109.37.1] of the Revised Code. On failure to do so, such fiduciary shall account to the trust for such loss of interest as is found by the court to be due to his negligence. (Emphasis added.) The purpose of this statute is to require the negligent trustee to account to the trust for interest lost due to the trustee's failure to invest or due to negligent investment -7- strategies, and to attempt to make the trust whole. See In re Estate of Hamm, supra. R.C. 2109.04 further requires that trustees obtain a bond. The purpose of the bond is to insure against possible nonfeasance or malfeasance and it insures against a breach of the duty to invest and accumulate interest income. Adams v. Mann (December 11, 1985), Summit App. Nos. 12229, 12230. Moreover, we note that within their plenary powers, probate courts are vested with authority to surcharge the trustee for the mismanagement of trust funds pursuant to R.C. 2109.42 and the losses occasioned thereby. In re Estate of Hamm, supra. In re Guardianship of Zimmerman (1943), 141 Ohio St. 207, paragraphs two, three and four of the syllabus. We further note that an appellate court's review of actions concerning surcharge and interest is governed by the abuse of discretion standard. See Whitaker v. Estate of Whitaker (1995), 105 Ohio App.3d 46, 55. Abuse of discretion "'implies an unreasonable,arbitrary, or unconscionable attitude on the part of the court * * *.'" See Quonset Hut, Inc. v. Ford Motor Co. (1997), 80 Ohio St.3d 46, 47, quoting Klever v. Reid Bros. Express, Inc. (1951), 154 Ohio St. 491, paragraph two of the syllabus. Our review of this matter is constrained by the limited nature of the record which has been presented on appeal. That is, in the absence of a transcript, this court presumes regularity, unless such regularity is rebutted within the record. Cf. Gaskins v. Shiplevy (1986), 76 Ohio St.3d 380, 382. In this instance, the -8- judgments of record demonstrate that a judgment was entered against Attorney Lavin and in favor of Lillie Bonner and Ohio Farmer's Insurance Company in the amount of $97,915 plus a 10% penalty and interest from October 1993. The record further reveals that on October 17, 1997, the probate court awarded Eric Bonner $97,915 in his surcharge action against Lillie Bonner but the court did not award him interest or penalty. We find such result unreasonable because the sums awarded to Lillie Bonner and Ohio Farmer's Insurance Company are necessarily the same sums lost by Eric Bonner. Accordingly, we conclude that the lower court abused its discretion in awarding Eric Bonner $97,915 but neither penalty nor interest is unreasonable and such judgment must be modified to reflect the terms of the agreed judgment entry entered against William Lavin. Additionally, based upon the stipulated facts, the trust proceeds were to be paid to Eric in August 1993. Therefore, pursuant to R.C. 1343.03(A), he was entitled to interest from this time, and not from October 1993. Eric Bonner additionally complains that the probate court erred in failing to award him interest upon Lillie Bonner's failure to invest the missing funds. We note, however, that this claim was not presented below. Rather, the stipulated record focused entirely upon Lillie Bonner's liability for turning over the entire administration of the estate to Lavin who then allegedly embezzled from it. Accordingly, we cannot credit this claim herein. The October 17, 1997 judgment of the probate court surcharging Lillie Bonner $97,915 is reversed and the matter is remanded in -9- order that the judgment in the surcharge action may indicate that Eric Bonner is also authorized to receive a penalty of 10% and 10% interest from August, 1993. -10- It is therefore considered that said appellant recover of said appellee his costs herein. It is ordered that a special mandate be sent to said Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. JAMES M. PORTER, PRESIDING JUDGE ANN DYKE, JUDGE MICHAEL J. CORRIGAN, JUDGE N.B. This entry is an announcement of the court's decision. See App. R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App. R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the .