Life Insurance

Wrapped in a mental fog, Donald Powelson spends his days in an Ohio nursing home 50 miles from the Allen County farm he worked for years, unaware of the ongoing legal fight over his money.

An 80-year-old widower with only a son and a daughter his closest heirs, Powelson is a man whose finances would seem simple. But in a sordid four-year court case that everyone would like to see end, where the money winds up is anything but clear.

Powelson's 250-acre, $700,000 farm is central to an estate dispute that attorneys have joined and abandoned. It has led to allegations of Medicaid fraud, questionable deed transfers, bankruptcy filings and mounting paperwork that fills two court folders, each 6 inches thick. A telephone threat to a magistrate has been linked to the case.

Known as "the homeplace" by at least some of Powelson's kin, the farm has been in the family since 1864. The land, down a gravel lane southeast of Monroeville, is now cleared for the winter by the tenant farmers who work it. An old-model van and an SUV sit unused in a farmyard that shows signs of occasional mowing and creeping neglect. Metal roofs rust on outbuildings that have seen better days.

Large shade trees mark the spot generations were raised along this stretch of Flatrock Road, but a house is absent, having accidentally burned down nearly five years ago without insurance to replace it. What the farm holds for the next generation is now in the court's hands.

Fundamental to the case is the question of Donald Powelson's competency when the farm was transferred to his grandson through paperwork crafted by his daughter. The daughter, a convicted felon in Ohio, also has a recent court ruling in Allen County ordering her to repay customers in a dog breeding business she operated.

She maintains her father knew what he was doing and calls an agreement her brother had to run the farm bogus. The brother calls his sister a pathological liar. Both say they have their father's best interest at heart but seem to agree only that fees paid to his court-appointed guardian are draining the estate.

It's hard to identify a spot in the farm's history that led to this point. Records filed in Allen Superior Court and interviews with the people involved reveal a modest estate whose heirs have prolonged the case to their own detriment.

Donald Powelson injured his leg Nov. 25, 2000. His son, John Powelson, 58, maintains he fell while on the farm; his daughter, Winifred Powelson May, 53, alleges her brother accidentally ran him over with a tractor. A family doctor said two days later Powelson was mentally incompetent because of "post-operative complications resulting from the fracturing of his leg and subsequent operations to repair the fracture."

Another doctor would later determine that the elder Powelson suffered from "severe Alzheimer's dementia" more than a month before his accident, which would have significant implications for Winifred Powelson May and her son's claim to the farm.

Citing the dementia, John Powelson petitioned to be his father's guardian. May objected, arguing her brother was not fiscally responsible. The petition languished with neither being appointed and was dismissed.

After his accident the elder Powelson lived at Fairfield Village, a Fort Wayne nursing home, until it closed. In November 2001, May admitted him to Paradise Oaks Nursing Home in Putnam County, Ohio, where he remains today.

In January 2002, May allegedly told Putnam County officials that her father had no assets to pay his nursing home bill, which led to Medicaid approval and $102,000 in federally subsidized payments. At the same time, she was telling Fairfield Village she was waiting for assets or income belonging to her father to pay a $28,400 bill for his stay there, according to lawsuits claiming fraud in both matters.

Two months later and four days after Fairfield Village sent May a final notice to pay, deeds were purportedly executed transferring Donald Powelson's two farm parcels to May's son, Beau D. Stauffer, 28. May signed the deeds for her father with a power of attorney she maintains he gave her on Oct. 23, 2000. That's the same day, she claims, the transfers actually occurred. The deeds, prepared by May, were not officially recorded in Allen County until Nov. 19, 2002.

John Powelson caught wind of the transfers and in March 2003 petitioned the court for temporary guardianship of his father, alleging in part that he had his own financial agreement with his father to work the farm, that his dad was incapacitated when the power of attorney was signed and that his sister had taken money from their father.

Allen Superior Court Magistrate Phillip E. Houk suspended May's power of attorney and appointed Fort Wayne lawyer Ronald Felger as the elder Powelson's permanent guardian.

Nearly three years after dementia began to define Donald Powelson's life, Felger sought to reclaim the farm's land for him in a lawsuit. May and Stauffer have opposed the move at every turn.

Through the years the mother and son repeatedly have alleged John Powelson ran over his father, causing his dementia after the power of attorney was signed. Stephanie Stauffer, May's daughter, suggested pursuing civil action against her uncle and offered to take her grandfather home, using his Social Security and retirement benefits to care for him. May claimed that her dad owed her money and the debt was used as payment under terms of the property transfer.

Felger maintained the power of attorney was invalid and that May overstepped her power by giving the property away. He also alleged that Beau Stauffer forfeited his interest in the real estate by not paying on contracts - mortgages, taxes, ditch assessments - related to the deeds, which he maintained were "procured through fraud."

Superior Court Judge Daniel G. Heath declined to settle the land dispute in August 2004, concluding substantial amounts had been paid on the contracts and that if May's aim was to commit fraud she did at "little benefit to herself and perhaps at her own detriment."

Robert Bechert had withdrawn as May's and Stauffer's lawyer citing a "lack of cooperation" from his clients. Felger had asked the court to be replaced by John Powelson as guardian but instead was appointed guardian of the farm property. John Powelson and his niece Stephanie Stauffer became co-guardians of Donald Powelson's care.

Who pays for that care has become a unifying issue for the Powelson heirs, who complain that farm income collected by Felger as guardian is being absorbed by his legal fees.

Felger would not say how much in income the farm has drawn since he became guardian and how much of that has gone to his firm. However, in January he filed an estate accounting showing $57,335 in income and $53,023 in disbursements, of which $41,000 were attorney fees. All fees are court-approved.

Felger - who for a second time unsuccessfully asked to quit as guardian to minimize fees - said the firm is not charging any more for the guardianship than for any other matter. He acknowledged that no one is paying Donald Powelson's nursing home bill, which he said is in excess of $80,000. Other outstanding debts include the $102,103 in Medicaid reimbursements and the Fort Wayne nursing home bill totaling $34,513 with interest, according to lawsuits filed to retrieve the money.

Attorney M. Robert Benson, hired by May and Beau Stauffer, had raised the issue of Felger's fees in court filings, but later quit the case because his clients didn't pay him. Not long after, the law firm Bonahoom and Bonahoom withdrew as John Powelson's attorney, citing $16,500 in unpaid fees. Benson and Joseph G. Bonahoom declined to comment.

An anonymous early-morning call on Dec. 29, 2004, by a woman to Magistrate Houk's house stating, "He's in bed with many lawyers and he is going down," was traced to a cell phone owned by Stephanie Stauffer's former boyfriend, according to police reports. The boyfriend told investigators that Stauffer had used the phone.

After being told by police that they were investigating a threat to a judge and responding, "Who, Judge Houk?", Stauffer denied making the call, claiming a setup. Houk did not pursue charges, the reports said.

Among those becoming frustrated with the direction of the case was John Powelson, the son who had so far played a limited role, at least on paper. He had stood by Felger, but that was about to change.

In a surprise reversal in March of this year, John Powelson and his sister maintained they had settled their differences. They agreed that the deeds were valid and asked the court, along with the Stauffers and John Powelson's daughter Heidi L. Sierra, to dismiss the case.

In response, Felger's law firm noted previous contradictory statements by the defendants and an August 2004 letter sent by John Powelson to Magistrate Houk describing Felger as doing a good job.

"If everybody involved in this complaint would submit to a polygraph test this whole thing could be over in less than a week," John Powelson wrote.

On July 26, Judge Heath declared that Donald Powelson was incapacitated before he signed the power of attorney and deemed it, the deeds and contracts void. The family, he ruled, could not present evidence showing competency without damaging previously sworn documents.

Her son, Beau Stauffer, filed for bankruptcy the next day in federal court asking for a stay of Heath's decision, arguing that his creditors would suffer. The bankruptcy was dismissed this month after Stauffer didn't appear for a hearing and didn't file a bankruptcy plan.

Stauffer also filed a petition to place his grandfather into "involuntary" bankruptcy, claiming Donald Powelson owes him $183,612. To fight that dispute, Felger received court approval to hire a lawyer experienced in bankruptcy law with a $3,000 retainer and at $295 an hour, money that also will come out of the estate.

The estate dispute, Felger said, could have been settled within a couple of weeks of his appointment as guardian more than two years ago. Negotiations fell though, he said, because the other parties "never follow through on anything."

"I had never met any of these people and got involved in this as a favor to their lawyers and the court to move the case forward," Felger said. "I can say it's the craziest case I've ever seen by a factor of 10."

"There was never, ever any intent to defraud anybody out of money," Beau Stauffer said. "The issue was to preserve a farm that has been in our family for over 100 years."

John Powelson said he changed positions and joined his sister just to end the matter and free the estate from rising legal costs, although he still believes his father was incompetent at the time the power of attorney was executed.

Far from her father, Winifred Powelson May now lives in Exeter, Mo., 700 miles away, "basically resting," she said. "It nearly brought me down to a nervous breakdown."

In 1998, May was convicted in Ohio of a felony count of tampering with records. A perjury count was dropped. May said the charge stemmed from a vehicle title application for which she used her cousin's Ohio address.

In July, May was ordered to pay $58,307 to the Indiana Attorney General's Office for selling what she described as purebred dogs but failing to provide paperwork to prove it to customers.

May, who did not attend that trial, said she has not paid the fine because she hasn't heard from the attorney general. She blamed preoccupation with the estate and lost paperwork for the unfavorable court ruling.

"It's taken my life the last five years and now my marriage is ruined, my reputation," May said of the estate dispute. "It wouldn't have been any worse than if I'd murdered somebody."

John Powelson, May and Stauffer said that if Felger's fees were withdrawn, or reduced, and the estate were turned over to a third party to administer, they would agree to void the deeds.

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