In yesterday’s post, I covered the basic principle of breach of fiduciary duty from what the term actually means to a few examples of how the role of someone with a fiduciary duty should play out. If you missed that article, you should read it before today’s followup, you can do so here: Breach of Fiduciary Duty: A Commentary on Why a Probate Attorney is Necessary, Part I.
Today, as promised, I want to take a look at one of the most egregious examples of breach of fiduciary duty that I have observed in a long time, the case of Edward Reid Mcdaniel Vs. Tania Nichole Drapp and Michael Roland Streiff.
The Fiduciary Duty of Tania Nichole Drapp
This case begins on October, 13th, 2014 when the Plaintiff in the case, Mr. Edward Reid Mcdaniel, signed a Power of Attorney which allowed for his daughter, Tania Nichole Drapp. At this time, Mr. Mcdaniel was suffering from Lymphoma as well as what the court refers to “infirmities of age” and felt that his daughter would be able to fulfill a fiduciary duty and serve as his POA. On May 6th, 2015, Mr. Mcdaniel revoked this power of attorney.
At some point during the time when Tania Drapp was assisting her father with his financial matters, she claims to have discovered that her father owed $12,000 in property taxes that had not been paid. Rather than speak with her father about the money owed or go about any “usual” method of borrowing the money (for example borrowing money against the two parcels of land that her father owned), Tania Drapp went to her co-defendant, Michael Roland Streiff.
A Serious Breach of Duty
If you remember yesterday, we spoke briefly about the responsibility of someone who is named as a fiduciary, in May 2016, Tania Drapp breached this duty for the first time. Although when questioned about her activity by the authorities, she claimed that the man she borrowed the $12,000 from – Mr. Michael Streiff, was just “someone she knew who regularly loaned money,” the truth was evidenced shortly thereafter when the two became boyfriend and girlfriend. The kicker? In the “loan agreement” it was established that a failure to promptly pay back the $12,000 loan would relinquish all of Mr. Mcdaniel’s real property to Michael Streiff. The value of that real property? $500,000.
It doesn’t take a genius here to realize that something underhanded was taking place…
…But Wait, It Gets Worse…
In an even more egregious breach of fiduciary duty, Tania Drapp then had her father sign over the deed of his property knowing that at the time he was both infirm as a result of his age and critically ill with cancer. Even more devastating, the Notary Public who was present at the signing noticed how unwell Mr. Mcdaniel appeared, yet allowed the signing to go on (something he notes regretting thereafter).
It was in April of 2017, that Mr. Mcdaniel discovered two deeds recorded in the Pinellas County Public Records that recorded the transfer of Mr. Mcdaniel’s two properties to Michael Streiff. Upon this discovery, he filed suit against his daughter and Streiff.
Once the suit was filed, Mr. Mcdaniel’s daughter then saw fit to transfer the properties to intervenor South Florida Lending (an entity believed to be in cahoots with Drapp and Streiff) for $12,000 despite their worth being over $500,000.
Fighting Back Against Breach of Fiduciary Duty
Upon the discovery of his daughter’s betrayal, Mr. Mcdaniel vehemently denied signing the deeds – something which (although untrue) the courts believe was dismembered due to Mr. Mcdaniel’s illness. This is where it came out that the Notary suspected something was awry when Mr. Mcdaniel signed his name in a strange manner.
When questioned about her actions, Tania Drapp stated that she was serving her father’s interest while acting under the power of attorney that was granted to her by her father. The same POA that had been revoked in May 2015.
The Court Ruling
If you’re wondering how this case turned out – the Circuit Court of The Sixth Judicial Circuit in and for Pinellas County, Florida found Tania Drapp and her co-conspirator guilty of Count I- Breach of Fiduciary Duty, Count II- Civil Conspiracy, Count III- Conversion, Count IV- Declaratory Judgment, Count V- Violation of Recording Statute- 817.535, Count VI- Imposition of Constructive Trust, Count VII- Civil Theft- 772.11, and Count VII- Civil Theft- 772.11. The deeds for the two properties that were transferred were declared to be null and void.
Preventing the Breach of Fiduciary Duty
In the case of Mr. Mcdaniel, preventing the breach of fiduciary duty would have been a rather difficult task to undertake. As a vulnerable adult, Mr. Mcdaniel believed that he could trust his daughter to carry out her duty to him without fail and sadly, she proved him wrong.
There are some methods of preventing a breach of fiduciary duty in the future, however. Namely, relying on a reputable attorney to assist with all legal documents related to estate planning, power of attorney documents, and real estate transactions. With a reputable attorney to review all transactions, it not only offers a pair of legally trained eyes to observe the situation, but it also creates a buffer zone between the vulnerable and those who would take advantage of them. Unfortunately, Mr. Mcdaniel did not have that buffer zone.
If you are drafting your will, creating a power of attorney, or creating any other legal protocol in which you are trusting your assets to another party, it’s always best to consult an attorney first. Thankfully for Mr. Mcdaniel, things turned out in his favor in the end, but it doesn’t always turn out that way.