CitiFinancial, Inc. v. Balch

At age 71, Theodore Ballard (defendant) asked a probate court to have his niece, Leala Bell, appointed as his guardian. The court granted Ballard’s request. Under this voluntary guardianship, Ballard could still enter into contracts and sell his own real property, but only with Bell’s approval. While the voluntary guardianship was in effect, Bell helped Ballard refinance a property that he owned. In this transaction, CitiFinancial, Inc. (Citi) (plaintiff) loaned money to Ballard, and the loan was secured with a mortgage deed on Ballard’s property. Ballard alone signed the mortgage deed. Bell did not seek or obtain court approval for the refinance transaction, and Bell did not use the loan proceeds for Ballard’s benefit. The loan went unpaid, and Citi sued Ballard to foreclose on the property. Ballard moved for summary judgment. Ballard claimed that the entire refinance transaction was invalid because, among other grounds, (1) court approval was necessary for any sale of a ward’s real property and (2) no court had approved the transaction. In response, Citi argued that for a voluntary guardianship, court approval of a real-property sale was necessary only if the guardian sold the ward’s property—but not if the ward sold his own property. Citi claimed that because only Ballard had signed the mortgage deed, Ballard had transferred his own property rights and, therefore, no court approval was necessary. The trial court granted judgment to Ballard and dismissed the foreclosure action. Citi appealed.