The case concerns the estate of Vernon S. Bates, who died intestate (without a will) in Michigan in 2018, with an estate valued at $8.6 million USD.
Mr. Raeside, Bates' cousin, became the personal representative of the estate and obtained a $4 million bond from the plaintiff.
He signed an indemnity agreement with the plaintiff, which required him to cover any losses or expenses.
Legal Dispute:
In 2019, paternal heirs emerged, claiming part of the estate.
Despite this, Mr. Raeside distributed $7 million of the estate, primarily to maternal heirs, including $500,000 to himself.
A Michigan court found Mr. Raeside in breach of fiduciary duty, ordering him and the other maternal heirs to return funds to the estate.
Plaintiff's Claim:
The plaintiff sought summary judgment, demanding $3,585,000 in collateral based on the indemnity agreement after setting aside a reserve for potential losses.
Defendant's Arguments:
Raeside claimed he didn’t fully understand the bond terms and acted on legal advice when distributing the estate.
He raised defenses of non est factum (claiming ignorance of the contract terms) and sought relief from forfeiture.
Court’s Decision:
The court rejected Raeside’s defenses, finding him negligent for not reading the contract and failing to fulfill his fiduciary duties.
Ordered Raeside to post collateral of $2,456,335 USD (converts to approximately $3,316,052.25 CAD).
