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In re Estate of McCartt

Court of Appeals of Tennessee, Knoxville

July 25, 2017


          Assigned on Briefs June 1, 2017

         Appeal from the Chancery Court for Morgan County No. P-6-12, 14-79 Frank V. Williams, III, Chancellor

         Appellant brought this action challenging the settlement agreement reached by the contestants in a will contest. Appellant, the legitimated child of Decedent's deceased son, filed suit to set aside the settlement agreement based on allegations that the will contestants, including Appellant's half-siblings, i.e., Appellees, engaged in fraud and misrepresentation in an effort to exclude Appellant from her share of Decedent's estate. Because Appellant had knowledge of the will contest, chose not to participate in the will contest, and there is no evidence that the Appellees acted in bad faith or fraudulently, we conclude that the trial court did not err in refusing to order a share of the Decedent's estate to be distributed to Appellant. Affirmed and remanded.

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

          Robert W. Wilkinson, Oak Ridge, Tennessee, for the appellant, Sara Shannon Armes.

          David H. Dunaway, LaFollette, Tennessee, for the appellees, Susan Collins, Nancy Wilson, and Joe McCartt.

          Kenny Armstrong, J., delivered the opinion of the court, in which Charles D. Susano, Jr. and W. Neal McBrayer, JJ., joined.



         I. Background

         This is the second appeal of this case involving an agreement among the heirs of Vida Mae McCartt ("Decedent") regarding the distribution of assets of Decedent's estate. As set out in our first opinion, In re Estate of Vida Mae McCartt, No. E2014-02185-COA-R3-CV, 2015 WL 5635114 (Tenn. Ct. App. Sept. 25, 2015) ("McCartt I"), on February 2, 2012, Decedent died testate at the age of 102. McCartt I, . at *1. Decedent had five children: Betty Jane McCartt Newman, Mary Elizabeth McCartt Sanders, G.M. McCartt, A.K. McCartt, and J.D. McCartt, Sr. Id. When Decedent executed her will, on May 18, 1994, her son, A.K. McCartt, was deceased. Id. Decedent's will bequeathed $5, 000 each to A.K. McCartt's two children, Kelly McCartt and Ginger McCartt West. Id. To J.D. McCartt, Sr., who predeceased Decedent, but died after Decedent executed her will, Decedent bequeathed a mobile home and a truck. Id. The remainder of Decedent's property, including real estate holdings of more than $1, 000, 000, was divided evenly among her three surviving children. Id.

         On February 23, 2012, a will contest was filed by Decedent's five grandchildren: Kelly McCartt and Ginger McCartt West, children of the deceased A.K. McCartt; and Appellees, Susan Collins, Nancy Wilson, and Joe McCartt, the children of the deceased J.D. McCartt, Sr.. By their complaint, the grandchildren averred that the May 18, 1994 "instrument is not the Last Will and Testament of Vida Mae McCartt . . . because she was . . . of unsound mind at the time said paper was executed and she was incompetent to make a valid Will." The grandchildren further averred that Decedent was unduly influenced by G.M. McCartt. McCartt I, at *1. Thereafter, the parties participated in court-ordered mediation, which culminated in a September 24, 2012 agreement, resolving all issues among them. Id. at *2. On November 20, 2012, the trial court entered an order, which incorporated the parties' September 24, 2012 agreement. The November 20, 2012 order divided Decedent's real, personal, and residual property, awarding a one-fifth share to each of Decedent's three surviving children, one-fifth to the heirs of A.K. McCartt, and one-fifth to the heirs of J.D. McCartt, i.e., Appellees. The parties' September 24, 2012 agreement further provides that

if any claims are filed by individuals asserting an interest as an illegitimate child of J.D. McCartt, then the heirs of J.D. McCartt agree to indemnify and hold harmless all other heirs of Vida Mae McCartt from any claims which may be pursued by purported heirs at law of J.D. McCartt.

         On November 4, 2013, Appellant Sara Shannon Armes filed a complaint, alleging, in relevant part, that:

On February 23, 2012 a Complaint to Contest Will was filed with this honorable Court in behalf of several of the decedent's grandchildren. In the Complaint, it is asserted that J.D. McCartt, Sr., one of Vida Mae McCartt's children, predeceased his mother and left surviving him three (3) children, Susan Collins, Nancy Wilson, and Joe McCartt. In fact, J.D. McCartt had four (4) children, one of whom is Sara Shannon Armes.
Pursuant to Final Order dated December 7, 2004, in the matter styled In re: Estate of Joseph D. McCartt, docket number P-14-02, this honorable Court determined that Sara Hickman (now Sara Armes) is the daughter of Joseph D. McCartt. A copy of the Final Order is attached hereto and made a part hereof. Further, pursuant to Final Settlement of Administrator dated March 1, 2005, Sara Hickman (now Sara Armes) was entitled to a child's share of the residuary estate of her father, equal to that of Susan V. Collins, Joseph D. McCartt, Jr., and Nancy K. McCartt.
On November 20, 2012 an Agreed Order was entered in this cause of action which approved and incorporated a mediated agreement. This Agreement resolved the issues between the parties relative to the will contest and determined that the heirs of J.D. McCartt should receive a twenty percent (20%) interest in certain liquid assets . . . and certain specified real property from the Estate of Vida Mae McCartt, deceased. The heirs of J.D. McCartt are listed as Joe McCartt, Susan Collins, and Nancy Wilson.
Sara Shannon Armes avers that she, by law, should be included as an heir of J.D. McCartt and therefore entitled to one-fourth (1/4) of the distribution of assets passing to the heirs of J.D. McCartt.
Sara Shannon Armes further avers that Joe McCartt, Susan Collins, and Nancy Wilson have perpetrated a fraud on this honorable Court by asserting that J.D. McCartt had only three (3) heirs-at-law when each and every one of them knew that J.D. McCartt had four (4) heirs-at-law.
* * *
That upon a hearing in this cause, this Court determine that Sara Armes is entitled to receive an equal share of the distribution of assets passing to the heirs of J.D. McCartt from the estate of Vida Mae McCartt.
Further that the Court award damages to Petitioner as a result of the fraud of Joe McCartt, Susan Collins, and Nancy Wilson.

McCartt I, at *2-*3. Attached to the complaint was a copy of the December 8, 2004 final order of the Morgan County Chancery Court in the matter of J.D. McCartt's estate, stating:

This cause came to be heard ... upon the Petition for Elective Share filed by [Armes], the Answer filed in behalf of the estate [of J.D. McCartt, Sr.], the testimony of witnesses, [and] the Parentage Testing Report from Molecular Pathology Laboratory Network, Inc., a copy of which is attached hereto and made a part hereof, and the record as a whole from all of which the Court finds as follows:
Based on the proof introduced in this cause, the Court is of the opinion that [Armes] is the daughter of the decedent, J.D. McCartt.
The results of the DNA test referenced by the court's order established a 99.9586% probability that Armes is the daughter of J.D. McCartt, Sr.

McCartt I, at *3. In response to Ms. Armes' complaint, the Decedent's grandchildren filed a Tennessee Rule of Civil Procedure 12.02(6) motion to dismiss for failure to state a claim. As grounds for their motion, the grandchildren averred that:

The Complaint should be dismissed on the basis [of] Res Judicata. The original litigation is a will contest and an In Rem proceeding. A Final Order has been entered and it is a conclusive adjudication upon all heirs; and Sara Shannon Armes is bound[ ] by the ruling.
At best, any claim of Sara Shannon Armes is limited to the next of kin of J.D. McCartt and has no impact, whatsoever, and fails to state a claim as to any other heirs, other than Joe McCartt, Susan Collins and Nancy Wilson; and it fails to state a claim even as to those three heirs.

McCartt I, at *3. Betty Jane Newman and G.M. McCartt also filed a motion to dismiss, arguing that "Armes' lawsuit is in the nature of a lawsuit to contest the will; or more specifically the probation of the will, " and because "Armes did not join in the original lawsuit to contest the will, (which she should have under the law), she is bound by the ruling in the previous lawsuit, and her current petition must fail, and must be dismissed." Id. at *4.

         The trial court granted the respective motions to dismiss by order of October 28, 2014. In the order, the court states only that "the complaint is dismissed for failure to state a cause of action upon which relief can be granted." Ms. Armes appealed. Id. at *4. In McCartt I, this Court vacated the trial court's dismissal of Ms. Armes' complaint; specifically, we held that:

In this case, the record contains no indication of when Armes became aware of the will contest or the settlement agreement. Thus, in the current posture of the case, it is impossible to say whether Armes had the opportunity to make any conscious decision whether to "join the contestant, join the proponent, or stand aloof." More importantly, Petty observes that a settlement of a will contest must be done "in good faith, " and we believe that the allegations of the complaint raise a legitimate issue of whether the settling heirs acted in good faith.
Armes' complaint includes a claim that her siblings defrauded both her and the trial court by representing that J.D. McCartt had only three surviving children and heirs, and not four as Armes has alleged. Construing the complaint liberally, presuming all of Armes' factual allegations to be true and giving her the benefit of all reasonable inferences, her complaint alleges, in effect, that the settling heirs deliberately concealed Armes' existence and status as J.D. McCartt's heir, in order to purposely cut her out of the ...

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