No Beneficiary = No Will
April 16, 2015 § 2 Comments
Ramon Regan was residing in a personal care home operated by Swilley. In 2008, Swilley arranged for a notary public to meet with Regan to help him prepare his will. The notary, Beckham, presented Regan with a pre-printed form, which Regan executed, and had properly witnessed. No attorney was involved.
The will specifically spelled out that it was Regan’s intent to make a testamentary disposition of his estate. It also mentioned that he had no surviving wife, and that he had had no children.
What the will failed to spell out, though, was who were to be the beneficiaries of his bounty. There were no specific or residuary beneficiaries named in the will.
After Regan died in 2011, Swilley filed a petition to probate the will. Elsie LeBlanc, Regan’s aunt, was determined to be his sole surviving heir. After Elsie died in 2013, her son Kenneth filed a caveat against probate of Regan’s will.
Kenneth filed a motion to declare Regan’s will invalid due to absence of any beneficiaries. Swilley responded that the document met the requirements of testamentary intent and attestation, and that parol evidence of Regan’s intent should be considered by the court.
The chancellor ruled that he was to look first to the four corners of the document to determine Regan’s intent. Since the document was not susceptible to multiple interpretations, but merely failed to name any beneficiaries, the court refused to consider parol evidence. The judge pointed out that he could not add language to the will, and that the absence of any named beneficiaries left him with nothing to interpret. He ruled that it was invalid to serve as a testamentary instrument. Swilley appealed, complaining that the chancellor erred in ruling the document invalid, and in refusing to consider parol evidence of Regan’s intent.
The COA, in the case of Estate of Regan: June Swilley v. Estate of LeBlanc, decided April 7, 2015, affirmed. Judge Carlton wrote for the unanimous court:
¶15. In the present case, Regan’s “Last Will and Testament” stated the following regarding the disposition of his property: “Upon my death, I want my property distributed as follows: All my estate, this includes monetary and real property.” As in In re Roland, [920 So.2d 539, 541 (Miss.App. 2006)] our review of Regan’s last will and testament reveals that the document contains no ambiguous language or imprecise description of a beneficiary. Instead, as the record reflects, Regan’s purported last will and testament simply failed to devise or bequeath Regan’s property because Regan failed to name or otherwise identify a beneficiary.
¶16. Because Regan’s last will and testament lacks ambiguity, we find that the chancellor correctly refused to allow parol evidence as to Regan’s testamentary intent. As the record reflects, to give effect to Regan’s will, this Court would have to insert a beneficiary’s name where the will completely failed to provide one. Although our precedent establishes that we construe a will in light of the circumstances surrounding the testator at the time he wrote the will, our caselaw also recognizes that “[c]ourts may not amend or reform a [w]ill, neither may courts add to or take from a [w]ill or make a new [w]ill for the parties.” Hemphill v. Robinson, 355 So. 2d 302, 306-07 (Miss. 1978) (citations omitted).
¶17. As reflected in the record, the invalidity of Regan’s purported last will and testament is rooted in the document’s failure to distribute any of Regan’s assets upon his death. Since Regan’s last will and testament failed to devise or bequeath his property to a named beneficiary, and since the document reflects no attempt within its four corners to identify a beneficiary, we affirm the chancellor’s decision declaring the will invalid and his refusal to admit parol evidence. Accordingly, this assignment of error lacks merit. [Footnote omitted]
Earlier in the opinion, the court noted that MCA 91-1-13 requires that all property, “real and personal, not devised or bequeathed in the last will and testament of any person shall descend and be distributed in the same manner as the estate of an intestate; and the executor or administrator shall administer the same accordingly.”
There is some other authority in the opinion pertaining to parol evidence that you might find useful.
I have had several cases in which someone wanted me to vary the unambiguous terms of the will via parol evidence. The usual situation is that dad had made it abundantly clear to everyone that he was going to change his will, but he died before he got around to it. Their argument is that the will was no longer his testamentary intent. If the document is unambiguous, that parol evidence simply will not vary the written document’s terms.
U-Turn in a Temporary Administrator Case
March 16, 2015 § Leave a comment
I posted here previously about how and why the chancery court may appoint a temporary administrator in a contested estate case. The post dealt with the case of Parker v. Benoist, decided in August, 2014, which is notable for establishing the good faith exception to challenges to in terrorem clauses in wills.
In its 2014 decision, the MSSC affirmed the chancellor’s refusal to appoint a temporary administrator, even though the court was troubled by the chancellor’s statement that he believed uncontested evidence was necessary to support removal of the executor and appointment of a temporary administrator. I said about the appellate decision, “To put it in simpler terms: even though the chancellor followed the wrong road map, he arrived at the right destination, so no reversal.”
The MSSC granted rehearing, and in an opinion rendered February 19, 2015, withdrew its original opinion and substituted a new opinion reversing the chancellor’s decision and remanding on the basis that he applied a wrong legal standard in refusing to appoint a temporary administrator.
So, I withdraw my prior statement and substitute the following: “To put it in simpler terms: the chancellor followed the wrong road map, and even though he may have arrived at the right destination, the case is reversed and remanded so he can follow the correct road map.”
The 2015 opinion does not affect the court’s original ruling about in terrorem clauses.
When an Estate is Unnecessary
February 17, 2015 § Leave a comment
The children and widow shuffle into your office. The father and husband has passed on, and they want you to open his estate.
The only assets are a bank account in his sole name with a balance of $6,000, and stock certificates with a value of around $10,000. They’d like you to get the estate opened up so that they can divvy things up and get on with their lives.
Is an estate necessary to get them the money in the bank account and to transfer the stock?
Don’t forget that this property is most likely exempt so that an estate would not be necessary. You can read a prior post about that subject here. But even so, how can you get the funds into the hands of the family without probate?
MCA 81-5-63 provides that any “banking institution” in Mississippi may pay to the “successor” of the decedent any sum to the credit of the decedent up to $12,500, without any court order and free of any liability. The term “successor” includes: (1) the surviving spouse; or, (2) if no surviving spouse, the adult with whom the minor children are residing; or (3) if there is no surviving spouse or no minor children, then either parent of the decedent; or (4) if none of the above, then any adult sibling of the decedent.
MCA 91-7-322 allows any person indebted to a decedent, or having personal property of the decedent, or having negotiable instruments, including stock certificates, of the decedent, to deliver, transfer, or issue the item to the decedent’s successor (as defined above). There are several conditions attached to this code section. They must be incorporated into an affidavit presented to the holder that provides as follows:
- The value of the decedent’s entire estate, excluding liens and encumbrances, can not exceed $50,000; and
- At least 30 days have elapsed since the death of the decedent; and
- No application for appointment of an executor or administrator is pending, nor has one been appointed by a court; and
- The facts of the relationship to the decedent that establish the status of “successor.”
You should read these statutes carefully before advising your clients. The language above is merely a summary. Both statutes give the successor(s) power of disposition over the funds or assets.
These are tools you can use to avoid getting entangled in one of those estates that you can’t ever seem to wind up, and to which you devote many thankless and uncompensated hours. Only last week I commiserated with an attorney about one of those cases, and we agreed that it would be advantageous if lawyers had a crystal ball to divine the future of estates before taking them on. Alas, there is no such prophetical device. One has to rely on one’s own judgment without benefit of foresight.
When is a Constructive Trust Appropriate?
January 28, 2015 § 1 Comment
Jeanette Brown and Edward Wilson (Brown) filed suit against Virginia Jones and others (Jones) to set aside a will and some inter vivos gifts made in favor of Jones by the decedent, J.T. Smith. After a trial, the chancellor upheld the will, but did order that the $484,000 in inter vivos gifts were the result of undue influence, and ordered that they be repaid to the estate.
Brown appealed, claiming inter alia that the trial court erred by not imposing a constructive trust on the funds.
The COA, In the Matter of the Last Will and Testament of J.T. Smith: Brown, et al. v. Jones, et al., handed down September 2, 2014, affirmed the chancellor’s decision not to impose a constructive trust. Judge James, for the court:
¶39. A constructive trust has been defined as follows:
A constructive trust is one that arises by operation of law against one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy.
Yarbrough v. Patrick, 65 So. 3d 865, 871 (¶28) (Miss. Ct. App. 2011) (quoting Alvarez v. Coleman, 642 So. 2d 361, 367 (Miss. 1994)). A constructive trust is “a means by which one who unfairly holds a property interest may be compelled to convey that interest to another to whom it justly belongs.” Van Cleave v. Estate of Fairchild, 950 So. 2d 1047, 1054 (¶29) (Miss. Ct. App. 2007). A constructive trust “arises by implication from the relationship and conduct of the parties and may be established by parol testimony.” Id. “It is the relationship plus the abuse of confidence that authorizes a court of equity to construct a trust for the benefit of the party whose confidence has been abused.” Id. at 1054-55 (¶29). Finally, “the proponent of such a trust must show its necessity by clear and convincing evidence.” Yarbrough, 65 So. 3d at 871 (¶28).
¶40. Here, we find that Brown has failed to show, by clear and convincing evidence, that a constructive trust is necessary. The chancellor found that a confidential relationship existed between Jones and Smith and that Jones failed to rebut the presumption of undue influence, which arose due to that confidential relationship. However, the chancellor did not find that Jones abused the confidential relationship, only that she failed to rebut the presumption of undue influence that arose by operation of law due to the existence of a confidential relationship. Absent a finding of fraud, duress, abuse of confidence, commission of wrong, unconscionable conduct, or the use of other questionable means, we are not compelled to impose a constructive trust.
¶41. Furthermore, a constructive trust is typically imposed where the aggrieved party has no adequate remedy other than through equity. As our supreme court has stated, “[a] constructive trust is raised by equity to satisfy the demands of justice.” Church of God Pentecostal Inc. v. Freewill Pentecostal Church of God Inc., 716 So. 2d 200, 207 (¶23) (Miss. 1998). The supreme court has further noted:
A constructive trust is a fiction of equity. It is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee. The equity must shape the relief and courts are bound by no unyielding formula. Id. (quoting Russell v. Douglas, 243 Miss. 497, 505-06, 138 So. 2d 730, 734 (1962)).
¶42. However, here, we fail to see why the remedy ordered by the chancellor was inadequate, necessitating the imposition of a constructive trust. The chancellor ordered that the $450,000, which was removed from Smith’s AmSouth account and placed in the various CDs, and any interest earned upon the funds, be returned to the estate and distributed pursuant to the terms of the will.
¶43. We find that the chancellor did not abuse his discretion by failing to impose a constructive trust and Brown has failed to demonstrate, by clear and convincing evidence, that a constructive trust is necessary here. Accordingly, this issue is without merit.
The key point here is that you must establish by clear and convincing evidence that a constructive trust is necessary, and that other avenues of relief would be inadequate. It’s within the chancellor’s discretion. In this case, the chancellor was satisfied, apparently, that the funds were readily identifiable, available, liquid, and would be repaid — all without the necessity of a constructive trust.
How Not to Prove Attorney’s Fees
November 24, 2014 § Leave a comment
Allene Crowell died in 2006. Her two surviving daughters, Caron Crowell and Jackie Trotter, were named co-executrixes.
Jackie filed a complaint charging that Caron had unduly influenced Allene to gift her an unfair share of Allene’s estate, and with converting the mother’s assets.
The chancellor did find undue influence and granted the estate a judgment against Caron. She filed a R59 motion, based on which the court added $100,000 to the judgment, on its own motion, finding that Caron had spent more than $100,000 of estate assets “on more than 40 lawyers” looking for legal opinions to support her position. The court ruled her actions to be a dissipation of estate assets.
Caron appealed, and the MSSC affirmed the chancellor’s ruling on the undue influence and judgment, but reversed on the $100,000 addition for attorney’s fees.
Here’s what Justice Randolph said for the unanimous court in the case of Estate of Crowell: Crowell v. Trotter, handed down November 6, 2014:
¶20. Caron argues that the trial court’s finding that she spent $100,000 of the estate’s money on attorney fees is contrary to the facts in evidence. Caron further argues that ordering her to pay $100,000 increases the value of the estate by $100,000 over the value established by Jackson.
¶21. We find that the trial court erred in sua sponte, post-judgment, increasing the judgment by $100,000 for Caron’s estimated expenditures on attorney fees. The record is inconclusive about both the amount of money spent on attorney fees, and from whose money the funds to pay the legal fees came. The trial court noted that Caron testified that the money came from her own funds, which was the only evidence presented.
¶22. At trial, Caron testified that she had seen at least forty-two lawyers. When asked how much she had spent on legal fees, Caron testified “It’s a lot.” When asked if she had paid for legal fees out of her own money, Caron responded:
A. Well, it depends – as long as Mother was alive, I think I used her funds. I didn’t spend that much really. You know, I was trying to get good legal advice for her and get her totally protected. A lot of the attorneys didn’t charge. But I don’t know how much. I don’t know how much it was. I don’t think it was all that much. Then since her, I have paid my own attorneys fees, and it’s been a lot. I – you know, there’s – it’s been a lot.
Q. Well, give me an estimate.
A. $100,000, I think.
Q. In attorney fees?
A. Yes, that’s a guesstimate, estimate.
¶23. The record does not disclose substantial evidence to support a $100,000 increase in judgment. Caron “guesstimated” the attorney fees to be around $100,000. No testimony of bank statements, canceled checks, bills from attorneys, or any other form of evidence was offered to support or contest Caron’s “guesstimate.”
¶24. If Caron actually spent $100,000 on legal fees, the only testimony before the court was that she paid most of the fees out of her own pocket. The $100,000 “guesstimate” followed her statement that she has paid “a lot” of her “own” legal fees. After Caron testified that she had spent a lot of her own money, counsel asked Caron for an estimate. “$100,000.00, I think” was responsive to a question asking how much of her own money she had spent, which is not substantial evidence to support the trial court’s finding.
* * *
¶26. The record lacks substantial evidence supporting that Caron actually spent $100,000 of the estate’s money. Caron’s ambiguous and unsupported $100,000 “guesstimate” is not substantial evidence. We find such a conclusion is in error.
No surprise here. The reason I am pointing this out is that Caron’s testimony is not too far off what I hear sometimes from witnesses on the issue of attorney’s fees. Vague, indefinite, ballpark figures, unsubstantiated with proof of payment and other supporting evidence, is simply not adequate to prove a claim for attorney’s fees that will stand up on appeal.
Non-marital Children, Estates, and the Statute of Limitations
November 18, 2014 § 4 Comments
Boyce Elmore died in 2000. His widow, Kathleen, opened an administration and was appointed administrator in 2002.
In 2010, more than ten years after Boyce Elmore died, Cedric Williams filed a paternity action in an effort to establish a claim to recover from Boyce’s estate.
The version of MCA 91-1-15(3)(c) in effect at the time provided that a non-marital child might file an action to establish paternity ” … within one (1) year of the death of the intestate or within ninety (90) days after the first publication of notice to creditors to present their claims, whichever is less …” Since Boyce’s estate had not been opened in the first year following his death, the publication provision was inapplicable.
Faced with the issue of Cedric’s timeliness, the chancellor ruled that, because Kathleen had failed to give Cedric notice of the estate, the statute of limitations had been tolled, and his action was timely.
The COA reversed the chancellor’s decision that failure to give Cedric notice tolled the statute of limitations, but would not apply the one-year statute because the appellant had failed to raise the issue on appeal.
MSSC granted cert.
In In the Matter of the Estate of Elmore: Jamison v. Williams, handed down November 6, 2014, the court affirmed the COA’s decision, but held that the appellant had “squarely presented” the issue before the chancellor on appeal and at trial by raising the issue of application of SOL under 91-1-15, so that the one-year statute did apply, and barred Cedric’s suit.
Based on all of this, I believe it is fair to say that failure to give notice to a purported non-marital heir will not toll the statute under the language in effect before 2005. The Mississippi legislature resolved the question in 2005 by adding language to MCA 91-1-15 that ” … this one-year limitation shall be self-executing, and may not be tolled for any reason, including lack of notice.”
A Case for Sanctions
November 10, 2014 § 3 Comments
Louis Pannagl had made a will in 2001. In April, 2011, he contacted Kellems, a lawyer, about changes he wanted to be made in his will. He sent Kellems handwritten notes with the changes, including a document that included the language, “The Will of April 23rd 2011 … has been destroyed and March 23, 1993 [sic].” It is undisputed that the notes were in Louis’s handwriting.
Louis died on June 8, 2011, and Louis’s widow, Donis, contacted one of Louis’s lawyers, who sent her the notes described above. Donis gave the notes to her son, David Lambert, Louis’s step-son, who read them and passed them on to Holmes, an attorney he had hired to open Louis’s estate. On August 19, 2011, a sworn petition was filed, with Louis’s will attached, alleging that the original had been lost and that the will had not been destroyed by Louis with intent to revoke it. The handwritten notes were not attached to the petition.
Both of Louis’s biological son, Curt, and daughter, Sammi, filed contests to probate of the will. It was not until around a year after the petition had been filed that they found out, in the course of discovery, about the handwritten notes revoking the prior will(s). Sammi filed for summary judgment and sanctions under MRCP 11 and the Litigation Accountability Act. The chancellor granted summary judgment, but declined to impose sanctions.
Sammi and Curt appealed the denial of sanctions.
In the case of Estate of Pannagl: Pannagl and Spence v. Lambert and Holmes, the COA on November 4, 2014, reversed. Since this case makes some important points about sanctionable behavior and the applicable law, I am quoting at length:
¶7. In this appeal, Curt contends that Lambert’s failure to include the document in this petition constituted fraud; thus, the chancellor erred in failing to award sanctions. Curt argues that Lambert, having read the handwritten document prior to filing his petition, knew the will had been destroyed with an intent to revoke it and, therefore, had no hope of success. According to Curt, the action was frivolous and constituted a fraud on the court because Lambert withheld the document and filed a sworn petition alleging that the original will was lost and not destroyed by Louis with the intent to revoke it.
¶8. Mississippi Rule of Civil Procedure 11(b) states, in pertinent part:
If any party files a motion or pleading which, in the opinion of the court, is frivolous or is filed for the purpose of harassment or delay, the court may order such a party, or his attorney, or both, to pay to the opposing party or parties the reasonable expenses incurred by such other parties and by their attorneys, including reasonable attorneys’ fees.
M.R.C.P. 11(b). The Litigation Accountability Act states, in pertinent part:
Except as otherwise provided in this chapter, in any civil action commenced or appealed in any court of record in this state, the court shall award, as part of its judgment and in addition to any other costs otherwise assessed, reasonable attorney’s fees and costs against any party or attorney if the court, upon the motion of any party or on its own motion, finds that an attorney or party brought an action, or asserted any claim or defense, that is without substantial justification . . . .
Miss. Code Ann. § 11-55-5(1) (Rev. 2012). The phrase “without substantial justification” is defined by the Act as a filing that is “frivolous, groundless in fact or in law, or vexatious, as determined by the court.” Miss. Code Ann. § 11-55-3(a) (Rev. 2012). “The term ‘frivolous’ as used in this section takes the same definition as it does under Rule 11: a claim or defense made ‘without hope of success.’” In re Spencer, 985 So. 2d at 338 (¶26) (quotations omitted). “A plaintiff’s belief alone will not garner a ‘hope of success’ where a claim has no basis in fact.” Foster v. Ross, 804 So. 2d 1018, 1024 (¶21) (Miss. 2002) (quotations omitted). Whether a party has any “hope of success” is an objective standard to be analyzed from the vantage point of a reasonable plaintiff at the time the complaint was filed. Tricon Metals & Servs. Inc. v. Topp, 537 So. 2d 1331, 1335 (Miss. 1989).
¶9. The chancellor found the following: (1) it was unclear whether the will had been revoked or if Louis merely contemplated doing so; (2) more information was required to determine Louis’s intent; (3) the handwritten document was insufficient to put a proponent of a will having minor children as beneficiaries on notice that it had been revoked; (4) the handwritten document was not subscribed, but merely signed at the top, and the various copies of the document contained different-color ink; and (5) tendering a copy of Louis’s will was not so egregious as to warrant the imposition of sanctions against Lambert and Holmes.
¶10. The Mississippi Supreme Court has found that a misrepresentation of pertinent facts to a chancellor, who entered an order based on the misrepresentations, was a violation of the Litigation Accountability Act and Rule 11 of the Mississippi Rules of Civil Procedure and warranted sanctions. In re Estate of Ladner, 909 So. 2d 1051, 1056 (¶17) (Miss. 2004). In that case, an executor and his attorney failed to inform the court of the testator’s brother’s claim to ownership of cattle located on the brother’s land prior to obtaining a court order to seize the cattle. Id. at 1055-56 (¶¶15-16). In addition, this Court has found that a verified creditor’s notice of claim, filed by the counsel of a creditor of potential heirs of a decedent’s estate and containing a misrepresentation of pertinent facts, was frivolous. In re Necaise, 126 So. 3d 49, 57 (¶30) (Miss. App. Ct. 2013). This Court found that the misrepresentation caused the estate to incur unnecessary attorney’s fees in having to respond to those filings and thus warranted sanctions under Rule 11 and the Litigation Accountability Act. Id.
¶11. In this case, Lambert failed to disclose the existence of the handwritten document when he filed his petition. A reasonable person in Lambert’s position, with Lambert’s knowledge, would have no hope of success in rebutting the presumption that Louis’s will had been lost and not destroyed. Lambert admitted that, when he filed his petition, he had received and read the documents attached to Carrigee’s letter, which included the handwritten document. This letter, with attachments, was later given to Holmes prior to filing this action. In that document, Louis listed a myriad of changes he wanted to make to his will. At the bottom of the first column of the two-column document, he wrote: “The will of April 23rd 2001 Brookhaven/Brady Kellems has been destroyed.” The words “and March 23, 1993,” were written in a different-color ink on Kellems’s copy. The document was signed by Louis, and Donis testified that the document was in his handwriting. Lambert searched for a will, but could not find one. The file folder in Louis’s office entitled “will” was empty.
¶12. From this document, it is clear that Louis wanted to make changes to his will and that he intended to revoke all prior wills. Even though Louis signed this document at the top of the page, Donis testified that it was his handwriting. When taken in context, the statement that: “The will of April 23rd 2001 Brookhaven/Brady Kellems has been destroyed,” effectively put Lambert and his attorney on notice that Louis destroyed his will with the intent to revoke it. This is evidenced by Lambert’s attempt to convert the proceedings to that of intestate succession. On the same day that the court ruled on a motion to compel Kellems to give his deposition, and prior to any other depositions being taken, Lambert filed a motion to amend his petition. He sought a declaration that Louis had died intestate and asked the court to appoint Donis the administrator. The handwritten document had not yet come to light, and judging from the timing of the motion’s filing, Holmes knew that once it did, there would be no hope of success in overcoming the presumption. In the hearing on the motion for summary judgment, Holmes admitted that he filed that motion because he did not think he could overcome the presumption that Louis’s will had been lost and not destroyed.
¶13. The chancellor did not consider the fact of nondisclosure to be important when making her decision about whether to award sanctions. But the fact remains that the nondisclosure was a misrepresentation, making the petition to probate the will frivolous in light of the evidence. The chancellor abused her discretion in not considering Lambert’s nondisclosure in determining the frivolity of the action. Curt incurred unnecessary expense in contesting the probate of this will, only to uncover a document that Lambert withheld for almost a year and a half and that would later serve as the basis for summary judgment.
¶14. Finding that the chancellor abused her discretion in deciding not to award sanctions pursuant to Rule 11 and the Litigation Accountability Act, we reverse and remand for a determination of attorney’s fees and costs.
So the shortcoming here was the failure to disclose the handwritten notes. Hindsight, which is always high-def, tells us that the better practice would have been to disclose the notes and leave it up to the chancellor, as finder of fact, to interpret them. By not disclosing the notes, Lambert and counsel gave the reasonable impression that they were trying to hide something to change a possible adverse outcome. That’s always a recipe for sanctions and even discipline.
Publishing for Unknown Heirs
November 5, 2014 § 1 Comment
Every district I know of requires publication for unknown heirs in administrations (intestate estates). There are times, also, when you need to establish who the heirs are for other reasons.
In those type cases you have to publish process to the unknown heirs. I have seen lawyers attempt it in a variety of ways, but there is only one right way to do it.
It’s spelled out in MRCP 4(c)(4)(D), which provides, in pertinent part:
When unknown heirs are made parties defendant in any proceeding in chancery court, upon affidavit that the names of such heirs are unknown, the plaintiff may have publication of summons for them, and such proceedings shall be thereupon in all respects as in the case of a nonresident defendant. …
R81(d)(1) requires 30 days’ notice. R81(d)(5) requires that the defendant(s) be summoned to appear and defend at a specific time and place. R81(d)(4) provides that no answer is required. R81(d)(3) states that the matter shall not be taken as confessed.
So here it is, step by step:
1. Prepare a petition stating the names of the known heirs, and stating that there are no other known heirs. If the petition is sworn, you can skip step 2.
2. Have the administrator or some other person(s) with knowledge state in an affidavit that the only known heirs are named in the petition, and that there are no other known heirs. File the affidavit.
3. Prepare a summons to the unknown heirs returnable to a day and time certain more than thirty days from the date of first publication.
4. Publish the summons in a newspaper published in the county of the action or, if there is no newspaper published there, post it on the door of the county courthouse and ” … published as above provided in a newspaper in an adjoining county or at the seat of government of the state.” The publication is once a week for three consecutive weeks (R4(c)(4)(B)).
5. On the return day, appear at the appointed time and have the case called. You can proceed in the manner that the chancellor directs. Since the rule provides that the matter may not be taken as confessed, most chancellors require testimony, although some will rely on the affidavit, per R78.
6. If the case can not be heard on the return day, for whatever reason, have an order entered on that same day, continuing the case to a future date (R81(d)(5)). And every subsequent continuance order must be signed by the chancellor on the day to which the case was continued. If you fail to do this, you will have to reissue process.
Recovering Loans for the Estate
October 9, 2014 § Leave a comment
Thomas Kennedy, Sr., during his lifetime wrote twenty checks payable to his son, Timothy. The checks, ranging from $1,000 to $40,000 totaled in the aggregate $180,900. Timothy did not dispute that the checks constituted loans to him from his father.
Thomas, Sr., died, and Thomas, Jr., became executor of his father’s estate. A year and a half after opening the estate, Thomas filed a final account and petition to close the estate. In his prayer for relief, he asked that Timothy be required to repay the amounts loaned to him, or that his distributive share be decreased by that amount.
Timothy raised three defenses: (1) that filing the pleading in the estate action was not sufficient to toll the statute of limitations; (2) that the executor should have filed a collection action in circuit or county court; and (3) that collection of some or all of the loans was barred by the statute of limitations (SOL).
The chancellor found that the checks were, indeed, loans, and that, since they had no specific due dates, the general 3-year SOL applied, running from the date of each check, and that, therefore, some of the loans were barred from recovery. He calculated that Timothy owed $91,700, and that he could either repay the estate or have his share reduced by that amount. The chancellor did not buy Timothy’s argument about a separate action in a different court. Timothy appealed.
In Kennedy v. Estate of Kennedy, decided September 30, 2014, the COA affirmed. Here are the takeaways from this case:
- Although Mississippi law is less than clear as to whether loans to a legatee should be treated differently than loans by the decedent to others, the COA held that they should be treated the same, and that the SOL does apply. The SOL is not interrupted by the death of the decedent. Judge Maxwell’s reasoning and authority on this point is so sound that it’s hard to imagine that the MSSC would reach a different conclusion, despite the fact that there is some old authority to the contrary. You might want to watch this case for cert if you do a lot of estate work.
- The COA agreed with the chancellor that the SOL began to run on each transaction on the date of the check. The chancellor had analogized the checks to demand notes, which become due and payable from the date of execution, with no demand being necessary.
- The executor was not required to file a separate collection action in circuit or county court to reduce the claim(s) to judgment. Since Timothy was an heir, his waiver of process in the estate matter made him amenable to the claims of the estate against him. The COA cited an 1870 case that said when ” … distributees are debtors of the estate there is no reason why their indebtedness should not be treated in the light of a set-off against their distributive share.” Judge Maxwell also cited one of the maxims of equity in support of his rationale. Hear, hear.
If you are representing an executor in an estate which is owed debts, keep in mind that the SOL is ticking away every day, and that your dilatoriness could cost the estate some money that you might have to find a way to repay. In my opinion, if your executor is not successful in collecting those debts from non-distributees, it would be better practice to get chancery authority to sue to collect them in circuit or county court, and to get a judgment. If the debtors are distributes, make sure you get process on them promptly in the estate action on a pleading to collect, so as to stop the SOL from running.
Attorney’s Fees Directed by the Will
October 1, 2014 § Leave a comment
B.D. Benoist included a provision in his will that any beneficiary who contested his will “shall pay all attorneys fees and court costs associated with the Will contest or related action.”
The will was, indeed, unsuccessfully contested by Bronwyn Parker, B.D.’s daughter and a beneficiary, and the executor demanded award of an attorney’s fee.
Before we go any further, we’ve posted twice before here about this case. One post addressed the question as to when a temporary administrator should be appointed. The second post set out the MSSC’s new rule that there is a good faith and probable cause exception to enforceability of in terrorem clauses in wills.
As to that later point, you will recall that the MSSC reversed the chancellor’s ruling that Bronwyn was disinherited because she challenged the will. Due to the fact that she acted in good faith and with probable cause to believe her position was correct, neither she nor the executor were bound by the in terrorem clause.
But what about where a will directs, as in the language above, simply that the contestant must pay the fees and court costs, without language that the challenging beneficiary will be disinherited? Can that be enforced?
Here’s what the MSSC said:
¶28. The forfeiture provision of B.D.’s will stated that if any beneficiary instituted a will contest, that beneficiary “shall pay all attorneys fees and court costs associated with the Will contest or related action.” When the chancery court initially held that the forfeiture provision in B.D.’s will was enforceable, it also concluded that Bronwyn was required to pay attorney fees for initiating the will contest. Upon granting Bronwyn’s motion to reconsider, the chancellor held that B.D.’s will could not obligate her to pay attorney fees. The chancellor reasoned that, although the “paramount duty of the court is to ascertain the intent of the testator,” the court still may not give effect to such intent if it is “contrary to law or public policy.” The chancellor reasoned that, in requiring payment of attorney fees, the testator essentially was attempting to dictate the transfer of property that was not his and was beyond his control. The chancellor analyzed Mississippi Code Section 91-5-1,12 which governs the authority of individuals to create wills, and concluded that it did not give persons power over property which was not theirs to begin with. We agree with this conclusion. Section 91-5-1 permits the testator to dispose of and “devise all the estate, right, title and interest in possession, reversion, or remainder, which he or she hath, or at the time of his or her death shall have. . . .” Miss. Code Ann. § 91-5-1 (Rev. 2013). The testator is not empowered to control assets that do not belong to him or her through a will, but may control only those things “which he or she hath, or at the time of his or her death shall have. . . .” Id. This clearly does not contemplate funds of a third party over which the testator had no control during his or her life or at his or her death. Mississippi does not statutorily authorize the payment of attorney fees by an unsuccessful will contestant. Accordingly, William can prevail in his claim only if there is an alternative avenue through which an award of attorney fees is appropriate.
¶29. We review a chancellor’s determination of whether to award attorney fees under an abuse of discretion standard. Schwander v. Rubel, 221 Miss. 875, 897, 75 So. 2d 45, 54 (1954) (quoting King v. Wade, 175 Miss. 72, 166 So. 327, 330 (1936)) (emphasis added). “[W]hen there is no contractual provision or statutory authority providing for attorney’s fees, they may not be awarded as damages unless punitive damages are proper as well.” Willard v. Paracelsus Health Care Corp., 681 So. 2d 539, 544 (Miss. 1996). There is no statutory authority for a testator to require the payment of attorney fees, and Bronwyn and William were not parties to a contract which included an attorney fees provision. Bronwyn has not been subject to punitive damages, nor is she in contempt of court. The chancellor did not abuse his discretion in denying attorney fees to William. The chancellor correctly noted that Mississippi does not statutorily authorize the payment of attorney fees by an unsuccessful will contestant. All that is permissible is for the will to detail the disbursement of the testator’s property. The Legislature has not seen fit to grant testators the authority to invoke the power of the courts to compel unsuccessful contestants to pay attorney fees incurred in defending a will contest. As concluded by the chancellor, there are no means by which William can obtain attorney fees in these circumstances.
A couple of useful points in this case:
- A testator may only direct the disposition of funds over which he had control during his life. Since an award of attorney’s fees would be a disposition of a third party’s funds, that’s outside the scope of the testator’s power.
- There are only three avenues for a chancellor to award attorney’s fees: (1) where there is a contractual agreement for award of attorney’s fees; or (2) where there is a statute authorizing an award of attorney’s fees; or (3) where there is an award of punitive damages. Of course, attorney’s fees may be awarded on a finding of contempt, but there are statutes authorizing that.
I wonder whether language that authorized the executor to reduce the share of any unsuccessful or bad faith contestant (or contestants pro rata) by the amount of attorney fees and costs incurred by the estate in defending the will, with the amount to be adjudicated by the court, would get by?
Remember that Benoist does not do away with in terrorem clauses in our jurisprudence. It merely opens a line of attack that had heretofore been closed to Mississippi litigants. So can still use your legal creativity to help your clients come up with language that will help blunt or mitigate the attack.
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