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In re Estate of Bingham

Court of Appeals of Tennessee, Nashville

June 13, 2017

IN RE ESTATE OF BESSIE ADCOCK BINGHAM

          Session Date: February 23, 2017

         Appeal from the Chancery Court for Bedford County No. 28900 James B. Cox, Chancellor

         This appeal arises from the probate administration of an estate. The principal issues concern a certificate of deposit and the trial court's approval of attorney fees paid from the estate to the estate's first attorney. The trial court awarded the certificate of deposit to the decedent's son, finding that the certificate of deposit passed to the son as the surviving joint tenant. With respect to attorney fees paid to estate's first attorney, the trial court approved fees in the amount of $12, 400 and disapproved fees in the amount of $7, 600. The decedent's daughter appealed. Finding no error, we affirm.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed.

          W. Kennerly Burger, Murfreesboro, Tennessee, for the appellant, Peggy Artley.

          Megan Kingree Trott, Shelbyville, Tennessee, for the appellee, William S. Bingham.

          Frank G. Clement Jr., P.J., M.S., delivered the opinion of the Court, in which Andy D. Bennett and W. Neal McBrayer, JJ., joined.

          OPINION

          FRANK G. CLEMENT, JR., P.J., M.S.

         Bessie Adcock Bingham ("the decedent") died on July 14, 2011, at the age of 92. She was survived by her two children, Peggy Bingham Artley ("Petitioner") and William S. Bingham. In her Last Will and Testament, the decedent divided her estate equally between her children and appointed Mr. Bingham the executor ("Executor"). Executor hired attorney Wayne Bomar to assist with the probate of the estate. Executor's contract with Mr. Bomar, dated July 20, 2011, included a list of the services Mr. Bomar would provide for the estate at a fee of 5% of the gross estate as determined by the Tennessee Department of Revenue Inheritance Tax Return. The contract also listed services that would not be included at the agreed percentage fee but rather at his hourly fee of $200, including, inter alia, contested lawsuits by any beneficiary or representative of any beneficiary.

         On July 22, 2011, the decedent's will was admitted to probate in the Bedford County Chancery Court. Executor filed his initial inventory and accounting ("Original Accounting") in February 2012. Among the assets listed in the Original Accounting was a certificate of deposit in the amount of $80, 000 that the decedent acquired from Regions Bank in 2003. Three months later, Petitioner commenced this action by filing a Petition to Remove Executor, Seek Accounting, Object to Inventory, and to Inspect Estate. Executor filed an answer to the petition, denying that he had defaulted in his duties as Executor. Following a hearing on the petition, the trial court granted Petitioner access to the estate. Thereafter, substantial discovery ensued.

         On November 1, 2012, Petitioner filed a motion to disqualify Mr. Bomar as the attorney for the estate, alleging that Mr. Bomar had assumed an adversarial role for Executor's individual interests and that he had taken actions on behalf of Executor that were adverse to the obvious interests of Petitioner. Mr. Bomar subsequently submitted an order voluntarily withdrawing. On November 9, 2012, Ralph McBride Jr. entered an appearance as the attorney for the estate and Andrew C. Rambo entered an appearance on behalf of the individual interests of Executor.

         Following protracted proceedings, Executor filed his "Interim Accounting" on July 23, 2014, in which Executor had omitted the certificate of deposit. Executor explained the omission of the certificate of deposit as follows: "The [Original Accounting] in this cause included as an asset a Regions Bank time deposit/IRA . . . in the amount of $80, 000. Further investigation indicates that this account was jointly owned by the decedent and [Executor]. This account is therefore not included in this Interim Accounting."

         Petitioner filed an objection to the Interim Accounting in which, as relevant on appeal, she objected to Executor's failure to include the certificate of deposit as an asset of the estate and an expense of $20, 000 in attorney fees paid from the estate to Mr. Bomar. A hearing on Petitioner's objections was held on January 22, 2015, at which Petitioner, Executor, and Mr. Bomar testified.

         With respect to the certificate of deposit, it was undisputed that the account was jointly held by the decedent and Executor. Executor argued that, following the death of the decedent, the certificate of deposit passed to Executor by right of survivorship and was not an asset of the estate. In support of his position, Executor presented the documents the bank utilized in establishing the account. The following documents were admitted into evidence: (1) Time Certificate of Deposit, (2) Regulation CC Funds Availability Disclosure, (3) Deposit Account Agreement and Disclosure, and (4) an untitled, one-page document that the parties referred to as the Signature Card.

         The Time Certificate of Deposit states that the "account name" is "Bessie A. Bingham or Billy Bingham."

         The Regulation CC Funds Availability Disclosure states that the "account holder" is "Bessie A. Bingham or Billy Bingham."

         The Deposit Account Agreement and Disclosure states at the top of page one that the depositor is "Bessie A. Bingham or Billy Bingham." On the middle of page two, the Deposit Account Agreement and Disclosure reads as follows:

MULTIPLE-PARTY ACCOUNTS. This section pertains to multiple party accounts:
(A) Joint Account Ownership. An account with two or more Account Holders is a joint account. Unless you designate otherwise on the Signature Card, joint Account Holders will be considered joint tenants with right of survivorship.
(1) Joint Tenants With Right of Survivorship. If your Account is a joint account with right of survivorship, upon the death of one of the joint Account Holders, that person's ownership interest in the Account will be immediately pass to the other joint Account Holder(s).
(2) Joint With No Right of Survivorship. If your Account is a joint account with no right of survivorship (Joint as Tenants in Common), upon the death of one of the joint Account Holders, that person's proportionate ownership interest will pass to the estate of the deceased Account Holder.

(Emphasis in original).

         The Signature Card states that the account holders are "Bessie A. Bingham or Billy Bingham" and designates the account's "ownership type" as "Joint (Right of Survivorship)." (Emphasis in original). The Signature Card provides a space for the signature of the decedent and a space for the signature of Executor, neither of which contain a signature. In clarifying the absence of their signatures, Executor testified that, although he was not present when the decedent purchased the certificate of deposit, the decedent and he signed the Signature Card and returned it to the bank. Executor further testified that when he attempted to obtain a copy of the signed Signature Card, the bank informed him that it "[didn't] keep anything over seven years . . . ."

         Executor argued that the account documents clearly and unambiguously state that the funds were held by the decedent and Executor as joint tenants with right of survivorship. Executor further argued that the account's designation of right of survivorship is "conclusive evidence . . . of the intentions of all named that title vests in the survivor, " pursuant to Tenn. Code Ann. § 45-2-703(e)(1). Thus, Executor insisted that the funds were not part of the decedent's estate and did not pass under the will.

         Petitioner argued that Executor could not rely on the conclusive presumption established in Tenn. Code Ann. § 45-2-703(e)(1) because the Signature Card was not signed by the decedent. According to Petitioner, the decedent was mentally alert and physically capable of executing the paperwork related to the certificate of deposit; thus, the absence of the decedent's signature on the Signature Card evinces that the decedent did not agree with the manner in which the account was established, that being a joint account with right of survivorship. Petitioner further argued that, without any signed documents designating that the account carried a right of survivorship, there is a rebuttable presumption that the "property held under the title, joint tenancy, carries no right of survivorship, " pursuant to Tenn. Code Ann. § 45-2-703(e)(4). Petitioner contended that Executor failed to overcome that presumption. Thus, she insisted that the funds were part of the decedent's estate and should pass under the will rather than to Executor.

         As to the issue of attorney fees, Executor testified that the estate paid Mr. Bomar $20, 000 for legal services he provided to the estate. Executor stated that he was satisfied with the services provided by Mr. Bomar, that the services rendered were of value to the estate, and that he believed the $20, 000 fee was reasonable.

         For his part, Mr. Bomar testified at length as to the difficulty of the case. Specifically, Mr. Bomar testified that Petitioner employed four different attorneys while he represented the estate, which caused his work to increase because it was necessary to repeat work following the employment of each new attorney. In addition to Petitioner's frequent changes of attorneys, Mr. Bomar testified that he also had to expend time to deal with Petitioner's unauthorized removal of personal property from the decedent's house. He further noted that there were numerous unsuccessful attempts to settle the estate during his representation. Mr. Bomar provided an itemization of his time spent on the case, showing that he spent 72 hours defending this action. With respect to the itemization, Mr. Bomar testified ...


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