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Mills v. Mills

Court of Appeals of Tennessee, Jackson

June 24, 2015

ROBERT W. MILLS
v.
NITA D. MILLS, ET AL.

Session: May 13, 2015

Appeal from the Chancery Court for Shelby County No. CH1301272 Arnold B. Goldin, Chancellor

Lee S. Saunders and Robert Steven Butler, Somerville, Tennessee, for the appellant, Robert W. Mills.

Kacey L. Faughnan, Edward T. Autry, and Joseph B. Reafsnyder, Memphis, Tennessee, for the appellees, Nita D. Mills, and James Johnson.

J. Steven Stafford, P. J., W.S., delivered the opinion of the Court, in which Brandon O. Gibson, J., and Kenny Armstrong, J., joined.

OPINION

J. STEVEN STAFFORD, JUDGE

Background

On January 30, 2013, Plaintiff/Appellant Robert W. Mills ("Appellant") filed a Complaint to Compel Disclosure of Residual Trust or Alternatively for Declaratory Judgment and Judicial Estoppel, For Equitable Relief, For Constructive Trust to Prevent Unjust Enrichment, For Resulting Trust, For Accounting and for Injunction against Appellees Nita D. Mills ("Ms. Mills" or " Defendant Mills"), Individually and as Executrix of the Estate of William B. Mills, Deceased, and James Johnson ("Defendant Johnson"), Trustee of the Nita D. Mills Trust (collectively, " Appellees"). The complaint generally alleged that the assets of Appellant's deceased father, William B. Mills ("Decedent"), had been misappropriated by Ms. Mills, the Appellant's step-mother, after the administration of Decedent's estate. Decedent died in 1987, and his probate estate was closed in 1990. The dispute concerned the administration of Decedent's will, which provided a residuary trust benefitting Appellant. According to Appellant, Decedent, one his deathbed, verbally expressed his desire that his property should be divided as follows: (1) a specific bequest to Decedent's sister of $100, 000.00; (2) a specific bequest to Appellant in the approximate amount of $1, 000, 000.00; and (3) the remainder of his property one-half to his wife, Ms. Mills, and one-half to Appellant in trust. At the time the estate was closed, Appellant signed a waiver attesting to the fact that he had received all property bequeathed to him, and releasing Ms. Mills from any further liability in relation to the estate. However, Appellant alleged that after the estate was closed with no residuary trust established, Ms. Mills made continuous assurances to Appellant that she would fund the trust in accordance with Decedent's wishes. Accordingly, Appellant sought an order directing Ms. Mills to fund a trust representing one-half of Decedent's remaining estate after the distribution of the first two bequests. Although Appellant generally outlined the terms of Decedent's will in his complaint, he did not include a copy of the will as an attachment.

Appellees jointly filed a motion to dismiss on the basis of the expiration of the statute of limitations. Attached to the motion to dismiss was a copy of Decedent's Last Will and Testament. Decedent's will contains six specific bequests listed in order of priority. First, Decedent directed that all funeral, testamentary, and tax expenses related to Decedent's death or the administration of the estate would be paid. Second, Decedent directed that his sister, Marjorie Andre, should receive $100, 000.00, if she should survive Decedent. Third, Decedent confirmed that all household goods were the sole and separate property of Ms. Mills. Fourth, Decedent directed that Appellant would receive " an amount equal in value to that which will provide the maximum unified credit and estate death tax credit permitted to my estate by the Internal Revenue Code, " should Appellant survive Decedent. Fifth, Decedent directed that Ms. Mills should receive:

[A]n amount equal to one-half (1/2) of my adjusted gross estate[1] as finally determined under the Internal Revenue Code for federal estate tax purposes, diminished, however, by the value of any property or interests in property which pass or have already passed to my said wife under any other item of this will (excluding property or interests in property provided for my wife in the Item SIXTH of this Will), but only to the extent that such property or interests included in determining the value of my gross estate for federal estate tax purposes and which qualify for the marital deduction under the Federal Estate Tax Law in effect at my death.

Sixth, and finally, Decedent directed that a trust be created from the residual property in the estate for the benefit of Appellant. The trial court eventually denied the motion to dismiss.

Appellees subsequently filed a motion for summary judgment, arguing that Ms. Mills was under no duty to fund the residuary trust as no assets existed in the estate to fund the residuary trust, that all claims were barred by the applicable statutes of limitations, waiver, judicial estoppel, laches, and that any alleged oral promise was not supported by consideration. Appellees included with their motion a lengthy Statement of Undisputed Facts. Pertinent to this appeal, the Statement of Undisputed Facts submitted by Appellees provided significant background information regarding the administration and closing of Decedent's estate. According to the Statement of Undisputed Facts:[2]

5. On December 30, 1987, the Last Will and Testament of [Decedent] was admitted to probate by the Probate Court of Shelby County, Tennessee under Docket Number B-10927.
6. The Defendant, [Ms.] Mills, was appointed to serve as Executrix of the Estate of [Decedent] by Order entered December 30, 1987.
7. At the time of the death of the Decedent [], the total value of the assets owned jointly with right of survivorship and/or as tenants by the entirety between the Decedent [], and his spouse, [Ms.] Mills, was $8, 193, 203.58.
8. At the time of the death of the Decedent [], the total value of the assets individually owned by the Decedent [], was $198, 110.99.
(f) The total value of assets owned individually by the Decedent [], at the time of his death (according to the Federal Estate Tax Return) was $198, 110.99, exclusive of the $2, 500.00 of miscellaneous furniture, furnishings and personal effects.
[9] (g) The total value of assets owned individually by the Decedent [], at the time of his death (according to the Initial Inventory) was $193, 806.83.
10. Because the total value of the assets individually owned by the Decedent [], ($198, 110.99 per the Form 706, and $193, 806.83 per the Initial Inventory) and thus subject to a probate administration was not sufficient to fully fund either specific bequest under the Last Will and Testament of [Decedent] (Article Second " $100, 000 payable to Marjorie Andre and Article Fourth " $500, 000 payable to [Appellant]), [Ms.] Mills executed a Disclaimer filed with the Probate Court of Shelby County, Tennessee on February 26, 1988, disclaiming the following three (3) assets which were held as tenants by the entirety between the Decedent [] and [Ms.] Mills:
(a) Tennessee Local Development Authority State Loan Program Revenue 1986 Refunding Series A; Par Value = $500, 000.00; Purchased by the Decedent [], on May 29, 1987;
(b) Tennessee Local Development Authority State Loan Program Revenue 1986 Refunding Series A; Par Value = $500, 000.00; Purchased by the Decedent [], on May 29, 1987; and
(c)Tennessee Housing Development Agency homeownership Program Bonds Issue F; Par Value = $250, 000.00; Purchased by the Decedent [], on September, 1, 1987.
11.An Order accepting the disclaimer of non-probate property and accepting the disclaimed property as a probate asset of the Estate of [Decedent] was entered by the Probate Court of Shelby County, Tennessee on March 23, 1988.
12.The total value of the disclaimed assets was $1, 065, 578.76.
13.Accordingly, the total value of the assets subject to a probate administration from and after the filing of the disclaimer of non-probate property on February 26, 1988 and the entry of the Order accepting the disclaimer of non-probate property and accepting the disclaimed property as a probate asset of the Estate of [Decedent] on March 23, 1988 was $1, 263, 689.75.
14.On or about June 29, 1989, Ms. Mills, in her capacity as Executrix of the Estate, filed an interim settlement with the Probate Court of Shelby County, Tennessee showing an initial inventory of $1, 228, 806.83.[3]
* * *
17. Pursuant to the terms of the Last Will and Testament of [Decedent], the aforementioned assets ($1, 263, 689.75 using the
Form 706) were used to fund or satisfy the bequests, in their order of priority, as follows:
(a) $33, 075.19 was utilized for the payment of funeral expenses and expenses incurred in administering property subject to claims.
(b) $14, 834.10 was utilized for the payment of debts of the decedent.
(c) $100, 000 was utilized for the payment of the specific bequest to Marjorie Andre pursuant to the Second Article of the Last Will and Testament.
(d) $917, 669.47 was distributed to [Appellant] pursuant to the Fourth Article of the Last Will and Testament.
(e) The balance or $193, 806.83 was distributed to [Ms.] Mills in partial satisfaction of the Fifth Article, of the Last Will and Testament which required that one-half (1/2)of the Adjusted Gross Estate was bequeathed to [Ms.] Mills.[4]
(f) Following the partial satisfaction of the bequest to [Ms.] Mills in the Fifth Article of the Last Will and Testament, there were no estate funds remaining to fund any portion of Sixth Article which provided for the creation of QTIP or Residual Trust contained therein.
(g) Accordingly, there was no QTIP or Residual Trust created and no assets were distributed to Morris H. Mills in his capacity as Trustee.
26. On March 21, 1990, the Estate of [Decedent] was closed and [Ms.] Mills was discharged as Executrix.

In addition, the Statement of Undisputed Facts indicated that that Appellant participated in a meeting with Ms. Mills and attorney David T. Popwell prior to signing the waiver in 1990.[5] In this meeting, Mr. Popwell allegedly informed Appellant that because a substantial portion of Decedent's property was owned with Ms. Mills as tenants by the entirety, and therefore was not part of the estate, there was no money left in the estate to fund the residuary trust, and that no trust would be funded from the estate. Mr. Popwell also informed Appellant that " but for the Disclaimer of certain assets held as tenants by the entirety by [Ms.] Mills . . ., [Appellant] would have received no assets from the Estate[.]" Attached to Appellees' Statement of Undisputed Facts was a sworn affidavit from Mr. Popwell generally confirming discussion of the meeting contained in the Statement of Undisputed Fact. Accordingly, Appellees argued that Appellant knew or should have known, prior to signing the waiver in 1990, that the residuary trust had not been funded.

On February 28, 2014, Appellant filed a response in opposition to Appellees' Statement of Undisputed Facts. In his response, Appellant disputed many of the relevant allegations contained in Appellees' Statement of Undisputed Facts due to Appellees' failure to properly respond to requests concerning these facts during discovery. Notably, however, Appellant directed the court to no documents or other evidence in the record to dispute that: (1) the will contained in the record was the true Last Will and Testament of Decedent; (2) he received considerably more funds from the estate than he was originally entitled due to Ms. Mills's disclaimer of certain jointly owned property; and (3) following the partial satisfaction of Ms. Mills's specific bequest, there were no funds remaining in the estate to fund the final bequest, namely the residuary trust benefiting Appellant.

Appellant did, however, contest Appellees' assertions regarding the meeting with Mr. Popwell. Specifically, Appellant filed his own affidavit contesting the affidavit of Mr. Popwell.[6] In his affidavit, Appellant alleged that he attended no meeting with Mr. Popwell and that he was never informed that Ms. Mills did not intend to fund the residuary trust. Instead, Appellant alleged that Ms. Mills continually informed Appellant that the residuary trust would be funded and that he did not learn that Ms. Mills's representation was false until 2010, when an uncle informed him that Ms. Mills had not funded the trust. Nothing in Appellant's affidavit disputed the statement in Appellees' Statement of Undisputed Facts that the estate was extinguished by the partial satisfaction of Ms. Mills's specific bequest and that, therefore, no funds remained in the estate to fund the residuary trust.

After a hearing on the motion, the trial court granted summary judgment in favor of Appellees on three grounds: (1) the expiration of the statutes of limitations governing breaches of contract and breaches of fiduciary duties; (2) the fact that no assets remained in the estate to fund the residuary trust; and (3) laches. The trial court entered a final judgment on March 28, 2014. Appellant appealed.

Issues Presented

Appellant raises three issues, which are taken from his brief:
1. Whether the trial court erred in granting summary judgment on Causes of Action 1 through 5, on the ground that claims for breach of duty and breach of contract are ...

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