Session October 28, 2014.
Appeal from the Chancery Court for Anderson County No. 04PB0077 William Everett Lantrip, Chancellor.
This is an estate case before this court a second time. The decedent's eldest son was named the personal representative of his mother's estate. Two siblings, citing accounting irregularities and other issues, eventually sought their brother's removal from the personal representative position. The trial court agreed with the siblings and named a substitute personal representative. The initial personal representative appeals. Discerning no error, we affirm.
Donald K. Vowell, Knoxville, Tennessee, for the appellant, John H. Schorn.
Ann Mostoller, Oak Ridge, Tennessee, for the appellees, Mary V. Schorn and Charles A. Schorn.
Joseph H. Van Hook, Oliver Springs, Tennessee, pro se, Court Appointed Personal Representative.
John W. McClarty, J., delivered the opinion of the Court, in which Charles D. Susano, Jr., C.J., and Thomas R. Frierson, II, J., joined.
JOHN W. McCLARTY, JUDGE.
Mary Pauline Stumpe Schorn ("Decedent") of Clinton, Tennessee, died on January 14, 2004. A Last Will and Testament ("Will") was found among Decedent's papers, naming John Henry Schorn, Decedent's eldest son, as personal representative ("the PR"). The beneficiaries listed in the Will were John, sisters Mary Victoria Schorn and Virginia Ann Chandler, and brother Charles Albert Schorn. The Will, filed for probate in March 2004, provided that the estate of Decedent ("Estate") was to be divided equally between the four siblings. The Estate was initially valued by the PR at approximately $415, 000.
After a September 2006 hearing, the trial court announced an "order to approve settlement of all parties" on January 30, 2007. The court stated inter alia:
1) John H. Schorn is the qualified Personal Representative of this estate.
2) The estate is solvent.
3) Charles Schorn was indebted to the testator in the amount of $7, 541.24 which amount is to be subtracted from Charles Schorn's distributable share.
4) The parties agreed that Donald B. Roe should be awarded an attorney's fee in the amount of $10, 217.54; Ann Mostoller should be awarded an attorney's fee in the amount of $2, 000.00, and John Schorn should be awarded a personal representative's fee in the amount of $13, 284.81.
5) That the parties have agreed to resolve all other issues and submit an agreed final accounting.
However, the agreement to "resolve all other issues and submit an agreed final accounting" did not come to fruition.
Prior to Decedent's death, the PR, using a power of attorney, removed $15, 000 from his mother's bank account and deposited the cash into a new account at NBC on which he and Mary initially were listed as the joint owners. According to the PR, this account was opened to allow for the paying of Decedent's expenses until the time the Estate was opened. At a later date, however, the PR placed the $15, 000 in a safe deposit box. He explained that he did so to keep Mary from getting the money after "her actions became unpredictable."
Mary and Charles eventually began asking questions about the money seemingly missing from the NBC account and other matters concerning the management of the Estate. In particular, it was claimed that the PR paid himself approximately $72, 000 after the September 2006 hearing. Another issue involved applying for a taxpayer identification number for the Estate, but not opening a checking account in the Estate's name. It is contended that at least eight bank accounts were maintained during the PR's tenure. He used these accounts as "estate" accounts except for paying the bills; he opened a checking account in his name for that purpose.
In light of the alleged mismanagement by the PR, Mary and Charles requested accounting and banking information, along with other documentation. The trial court granted the motion for an accounting. After much time and expense, no money was found to be missing.
At some point during the course of events, Decedent's home at 215 Cedar Road in Clinton suffered water damage after the hot water heater burst. Insurance paid $11, 076.59 for repairing the damage. The PR, on his own, decided the home needed extensive repairs beyond the work related to water damage and mold remediation, including removal of non-standard wiring, repair of an interior brick wall, refinishing of the basement, and painting and general repair of the house. Assisted by his wife, the PR performed all of the repair work himself. He thereafter submitted an expense claim of $19, 958.40 (480 hours at $41.58 per hour). Outside vendors made repairs of $4, 600.75. The house eventually sold for $135, 000.
When Decedent's house was sold, the beneficiaries and the PR all signed the deed, with the PR executing the settlement statement and other documentation. The PR asserts that no one objected to the way he handled the repairs of the house, the method by which the sale of the house was conducted, or the partial distribution. The insurance check in the amount of $11, 076.59 was also deposited into the Estate account, with no objection from any of the parties.
Prior to the sale of the house, all of the siblings gathered for a yard sale at the home. During the sale, Mary requested that she be allowed to remove certain items of personal property in order to have them appraised. The value of the items given by the appraiser was $1, 342.
As noted previously, Charles had borrowed a sum of money from his parents and the promissory note had an initial interest rate of 10%. The parents later reduced the rate to 8%. The PR determined that Charles owed the Estate $7, 541.24.
By 2008, the siblings were requesting that the PR be replaced. In September 2009, the trial court did not yet act on the removal request, but ruled as follows:
1. That the PR shall promptly return the $15, 000.00 he segregated in a safe deposit box to the estate;
2. That the share of the PR shall be reduced by the loss of interest to the estate for the $72, 190.00, removed on October 31, 2006 by the PR, and not returned until October 20, 2008, calculated at an interest rate of six percent (6%), also six percent (6%) on the $15, 000.00 from May 16, 2005 until the date of this hearing;
3. That the application for compensation for out of pocket compensation for expenses filed by the PR in the amount of $19, 958.40 shall be allowed in the amount of $6, 500.00;
4. That the application for additional PR fees filed in the amount of $8, 250.00 shall be allowed in the amount of $2, 500.00;
5. That Ann Mostoller, attorney for Mary V. Schorn and Charles A. Shorn, shall be allowed an additional fee of $4, 000.00 for a total to be paid from the estate of $6, 000.00;
6. That the PR shall immediately provide to the beneficiaries all banking records for the estate from September, 2008 to the date of this hearing;
7. That the final accounting and disbursements shall be completed within 60 days or, upon motion, this Court will take steps to remove the PR.
Specifically, the trial court found that the record provided that "work done on the house is not supported by the evidence." It was further determined that "the rate of pay requested of $41.85 is not reasonable and that many of the activities provided in the accounting introduced did not benefit the estate . . . .”
In March 2010, the trial court altered and amended the September 2009 order, changing the rate to calculate interest due the Estate from the PR on the sums of $72, 190 and $15, 000 from 6% to 1.9%. The court further amended the order to find that the PR had already returned the $15, 000 to the Estate account by the time of the July 31, 2009 hearing, that the PR returned the money on March 17, 2009; accordingly, the court determined the Estate was due interest on the sum from May 16, 2005, through March 17, 2009. The trial court declined to further alter the prior order.
The PR thereafter appealed to this court. We, however, found the order appealed from was not a final judgment and entered a dismissal.
On September 12, 2011, the PR was removed for good cause. The trial court stated the PR "has failed to faithfully execute the duties of a personal representative. . . . [T]here's proof that he converted estate assets, which necessitated legal fees and actions by other heirs, and I think he's in a situation where he bears an apparent conflict of interest in pursuing his claims . . . ." The court found the PR's claims to be "inflated and unjustified." The court further related:
Good cause has existed for years to remove Mr. Schorn. He has done everything in his power, in the Court's opinion, to thwart the orders of the Court and failed to comply. If there ever was a case where good cause has existed, for a substantial period of time, to have this matter concluded and resolved and to avoid the continuous costs associated to all the heirs, this is the case. . . . Seven years on what is one of the most simple estates I have been presented ...