10/31/2018 News and Film
By Kurt R. Mattson
Four adult siblings battled over their mother's estate. Two of the children claimed that their brother, the executor, breached his duties for holding an estate auction without distributing their mom's specific bequests.
Brenna and Ben appealed the trial court's order dismissing their claims against their other two siblings, Brad and Barb. They were all the children of Violet. She died in 2012, and in her will, she made specific bequests of personal property to all four kids. Brad was named executor of Violet's estate. The expenses of her estate were $2,800, but at the time of her death, she had less than $100 cash and lived in a rental home.
Executor Fails to Distribute Personal Property and Instead Sells it Auction
Brad, as the executor, failed to distribute Violet's specific bequests to Brenna and Ben. Instead, he held an estate auction. Brenna and Ben were upset and claimed that several of the items bequeathed to them were sold at the auction. In 2012, Brad and Barb filed a lawsuit against Brenna and Ben disputing some jointly-owned property that wasn't part of the estate. A few months after their mom's death, the four children reached a settlement. That settlement was important to the issue of the bequests of Violet's personal property.
In the summer of 2013, the County Clerk asked Brad, the executor, to complete the appraisement of his mom's estate. When he failed to do so, Brenna and Ben wrote to Brad asking that he comply with his duty to administer the estate and deliver the items that were bequeathed to them.
The case was referred by the County Commission to a fiduciary commissioner. The next day, Brad filed the appraisement and non-probate inventory of their mom's estate. Brenna and Ben filed an objection to the proposed report of receipts and disbursement by the executor. The fiduciary commissioner heard evidence on the objections to the appraisement and final settlement, and he submitted his findings and recommended order to the county commission. These were adopted and approved.
The Commission held that the release executed by the parties in the settlement prohibited Brenna and Ben from asserting other claims related to the distribution of property in their mom's estate. Not happy with that result, the two filed a lawsuit.
At trial, the court entered an order in favor of Brenna and Ben. The court found that the settlement agreement executed by the parties concerning their property dispute didn't prospectively prohibit any claims arising after the date of the settlement related to distribution of their mom's estate. In addition, the judge ordered Brad, the executor, to file an amended appraisement, inventory, and final report, and to distribute bequests pursuant to the will.
In October 2015, the executor filed an amended appraisement and inventory. Brenna and Ben filed an objection to this, and then objected again in early 2016. They also filed a separate civil action for breach of statutory duties, detinue, conversion, breach of fiduciary duties, interference with inheritance, and fraud against Brad.
In the court's order setting the evidentiary hearing, the judge noted that the issue for determination at the hearing was the identification of all items of personal property which should be included in the Violet's estate and distributed pursuant to the terms of her will.
The trial court entered its order ratifying, approving, and confirming the amended appraisement and amended non-probate inventory of Violet's estate.
Executor's Actions Ruled Unintentional
However, the judge found that Brad's actions in administering the decedent's estate, including the failure to give specific bequests and gifted items to petitioners, were unintentional. Based on the facts of the case, he didn't act in bad faith, vexatiously, wantonly, or for oppressive reasons in his position of executor. The judge determined that Brad acted reasonably and in good faith as the executor in administering the estate. The court also found that Brad believed that the release in the settlement included claims for distributions of items of personal property from their mom's estate and that he consulted with his attorney to confirm this contention.
Supreme Court Agrees with Executor
On appeal to the Supreme Court of West Virginia, Brenna and Ben argued that the trial court erred regarding Brad's intent in administering their mom's estate and in addressing the personal property included as part of her estate. The two siblings were critical of the trial court's alleged failure to cite any evidence to support its faulty conclusions. Brenna and Ben also argued that these conclusions contradicted the executor's prior appraisement and inventory documents filed with the court, the executor's own testimony, the record, and state law.
In response, Barb and Brad said that the trial court didn't err and simply assessed the credibility of the witnesses and made findings accordingly. The Supreme Court agreed.
After Violet's death, Barb and Brad said they didn't have anywhere to store their mom's personal property, and there were no estate funds. Thus, Brad, the executor held a public estate auction that was advertised in the local newspaper, including a list of items to be sold. The judge found that his actions as to the estate administration were "unintentional," in light of his belief that the estate matters had been previously resolved by the settlement.
While the executor's actions were deemed unintentional, the trial court found Brad personally responsible for all costs of the proceedings, including the fiduciary commissioner's fees because the proceedings were "brought to correct his improper handling of the estate."
Ultimately, the Supreme Court determined that while Brenna and Ben offered no testimony or evidence regarding the monetary value of most of the personal property items at issue, they were owed the fair market value of those items, subject to the offset of their share of the expenses of their mom's estate.
As a result, the Supreme Court found no error and affirmed the trial court's decision. Mitchell v. Mitchell, 2018 W. Va. LEXIS 570 (W.Vir. October 10, 2018).
Avoid Valuation Issues and Family Litigation
This case illustrates how a family can go to court and fight over their parent's personal property. Here, Brad, the executor, simply thought he should auction off the personal items to get some cash for the estate. His unintentional actions set off six years of litigation, and no doubt resulted in a severe rift among Violet's four children-something she wouldn't have wanted.
While the executor did consult with an attorney, they both could have benefitted from an experienced appraisal company and a qualified appraiser to conduct proper asset valuation and management to prudently appraise disputed estate property.
About the Author
Kurt R. Mattson is the President of Union Legal Research. He is the former Director of Library Services and Continuing Education at Lionel Sawyer & Collins in Las Vegas. Prior to this, he worked at BNA and other legal publishers, spending a substantial portion of his career working for Thomson Reuters. He serves as a consultant for several businesses, law firms, and marketing companies.
Kurt received his JD from William Mitchell College of Law and his Masters of Law (LLM) from George Washington University. He received his Masters of Library Information Science (MLIS) from Wayne State University. Kurt is the editor of Lexis' BSA/AML Update, co-author of A.S. Pratt's Mortgage Procedure Guide to Federal and State Compliance, and author of Fair Debt Collection Practices: Federal and State Law and Regulation. He is also a contributing author of Brady on Bank Checks. Kurt is also a contributor to other business and legal publications.