## Facts

- At age 71, Theodore Ballard petitioned a Vermont probate court to place him under a voluntary guardianship and to appoint his niece, Leala Bell, as his guardian.
- The probate court granted the petition and entered an order that left Ballard with the ability to enter contracts and convey his real property, but only with Bell’s approval.
- While the voluntary guardianship was in effect, Bell assisted Ballard in refinancing real property he owned.
- CitiFinancial, Inc. loaned money to Ballard in the refinance transaction, and the loan was secured by a mortgage deed on Ballard’s property.
- Ballard signed the mortgage deed; Bell did not obtain probate-court authorization for mortgaging Ballard’s real estate.
- Bell did not use the loan proceeds for Ballard’s benefit.
- The loan went unpaid, and CitiFinancial brought a foreclosure action against Ballard seeking to enforce the mortgage.
- Ballard moved for summary judgment, arguing the refinance transaction was invalid because court approval was required to mortgage a ward’s real estate and no such approval had been obtained.
- CitiFinancial argued that, in a voluntary guardianship, court approval is required only when the guardian conveys the ward’s real property; because Ballard signed the mortgage deed, CitiFinancial contended Ballard had conveyed his own interest and no license was required.
- The trial court granted summary judgment to Ballard and dismissed CitiFinancial’s foreclosure action. After Ballard’s death, his estate (through a fiduciary) stood in his place on appeal.

## Issues

1. In a voluntary guardianship, does Vermont law require a probate-court license (court approval) before the ward’s real property may be mortgaged in a transaction carried out with the guardian’s involvement or approval?
2. If the required license was not obtained, did the trial court correctly dismiss the foreclosure action outright, or must the court instead determine the proper consequences and any available remedy?

## Decision

- The Vermont Supreme Court agreed that the guardianship statutes’ licensing requirement applies to a mortgage of a ward’s real property when the transaction proceeds through the guardian’s authority or participation, even in the setting of a voluntary guardianship.
- The Court held that the absence of a required license established statutory noncompliance.
- The Court nonetheless concluded the trial court went too far by treating the noncompliance as automatically defeating CitiFinancial’s entire foreclosure claim without considering what relief, if any, might still be available under the statutory scheme and related equitable doctrines.
- Disposition: affirmed in part and reversed and remanded in part for further proceedings on the consequences of the unlicensed mortgage transaction.

## Legal Principles

- A person subject to a limited or voluntary guardianship retains legal and civil rights except to the extent specific powers are granted to the guardian by the court’s order and the governing statute.
- Vermont’s guardianship statutes have long required probate-court authorization (a license) for selling or mortgaging a ward’s real estate; that requirement is a condition on the exercise of authority over the ward’s land.
- A ward’s voluntary status does not, by itself, remove a transaction from the licensing requirement where the mortgage is accomplished with the guardian’s exercised authority or approval as contemplated by the guardianship order.
- The existence of a statutory violation (failure to obtain the required license) is a separate question from the remedy: the statutes do not necessarily mandate that every unlicensed mortgage transaction is void for all purposes.
- When a transaction conflicts with guardianship protections, courts must examine the statutory design and available remedies to determine the appropriate outcome rather than reflexively ending the creditor’s case at summary judgment.

## Conclusion

CitiFinancial, Inc. v. Balch holds that Vermont’s probate licensing requirement can apply to mortgaging a ward’s real property during a voluntary guardianship when the mortgage is connected to the guardian’s authorized role, but the lack of a license does not automatically require outright dismissal of the lender’s foreclosure action; instead, the case must be remanded to determine the legal consequences of the statutory noncompliance and any relief that may still be available.


CitiFinancial, Inc. v. Balch, 86 A.3d 415 (2013)