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Morrow v. Gibson2/15/2002
On April 17, 1984, Lawrence Kenny Averette ("Kenny") was killed in a motorcycle accident. He left a daughter, April Averette ("April"), who was four years old at that time, and a wife, then known as Janet Diane Averette ("Diane"). At the time of his death, Kenny and Diane were in the process of obtaining a divorce; however, no divorce judgment had been entered as of the date of his death.
Kenny's mother, Irene Averette ("Irene"), filed a petition for letters of administration on the estate of her deceased son. Diane, the surviving spouse, filed a similar petition subsequent to Irene's filing. Diane's attorney entered into negotiations with Irene concerning the distribution of any proceeds resulting from litigation arising out of Kenny's death. Before these negotiations were concluded, Diane changed attorneys; Dan M. Gibson, a Tuscaloosa attorney, began representing her. Gibson revised the draft of the agreement resulting from the negotiations and submitted it to Irene. Irene and Diane signed the agreement on December 10, 1984, pursuant to which Irene agreed to dismiss her petition for letters of administration -- thus clearing the way for Diane to be appointed administratrix of Kenny's estate -- in exchange for Diane's agreement that "all sums recovered as a result of any litigation or settlement of [a wrongful-death action filed as a result of Kenny's death], less and except reasonable expenses, shall be placed in a trust for the use and benefit of April Michelle Averette."
Diane, in her capacity as the administratrix of Kenny's estate, filed a wrongful-death action against the driver and owner of the truck involved in Kenny's accident and against Allstate Insurance Company, which insured the truck. On January 13, 1987, the wrongful-death action was settled. According to the settlement agreement, Allstate agreed to pay an initial lump sum of $125,000 and agreed to make structured payments until December 1, 2012. After the wrongful-death action was settled, Gibson met with Diane, Diane's new husband, and a trust officer at the First National Bank of Tuskaloosa, and established a trust for April's benefit. According to Gibson's interpretation of the agreement between Diane and Irene, Diane's status as a surviving spouse meant that she would receive any proceeds that were payable to her personally, but that she had agreed to transfer those proceeds to the trust. Diane made an initial deposit of $50,000 into the trust, but made no other deposits.
Differences arose between April and Diane in October 1997; April was approximately 18 years old. April moved out of her mother's house and moved in with her grandmother, Irene. April and Irene maintain that they never learned of the settlement of the wrongful-death action until December 18, 1997. Around September 1, 1998, April and Irene discovered that Diane had failed to honor her agreement with Irene and that she had not deposited into the trust the balance of the initial payment, after attorney fees and expenses had been deducted, or any subsequently received structured-settlement proceeds payable to her in her individual capacity. Irene contacted Gibson, who referred her to the First National Bank of Tuskaloosa.
April and Irene retained an attorney, Mark D. Morrow, in an effort to recover the missing settlement proceeds. Morrow had worked as an associate in Gibson's law firm from 1989 through 1991, leaving in April 1991. Morrow wrote Gibson on April 8, 1999, inquiring about the missing settlement proceeds. In the letter, Morrow maintained that the agreement between Irene and Diane required that Diane formally disclaim any interest in the estate of her deceased husband, which she had not done. Gibson responded by disagreeing
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