25, 2017 Session
from the Probate Court for Shelby County No. D-5249 Karen D.
of decedent's estate appeals the judgment holding that
the executor did not breach his fiduciary duty in
administering the estate and the award of a fee to the
executor. Upon a thorough review of the record, we affirm the
decision of the Probate Court.
R. App. P. 3 Appeal as of Right; Judgment of the Probate
Patrick B. Mason and Steven C. Ebbers, Germantown, Tennessee,
for the appellant, Steven Ross Potter.
J. Mickiewicz, Collierville, Tennessee, for the appellee,
Richard H. Dinkins, J., delivered the opinion of the court,
in which Arnold B. Goldin and Kenny W. Armstrong, JJ.,
RICHARD H. DINKINS, JUDGE
parties to this appeal, Steven Potter and Carey Potter, are
the sons of Marjorie Ross Potter, who died a resident of
Memphis, Tennessee, on May 7, 2008. On June 19, 2008, Ms.
Potter's will was admitted to probate; Carey Potter was
appointed as the executor of her estate. Numerous
petitions relating to the administration of the estate were
filed by the parties over the course of several years. This
appeal involves the rulings on three of those petitions.
first petition at issue is a Petition for Executor Fee and
Expenses ("Petition for Fees"), filed on August 20,
2013, in which Carey Potter and his counsel requested an
award of fees for services performed in the administration of
the estate. The second petition is a Petition to Direct the
Executor to Distribute Undistributed Tangible Personal
Property and Provide Access to Duplicable Personal Property
("Petition to Distribute Property") filed on
October 22, 2013, by Steven Potter, in which he requested the
court to order Carey Potter to distribute certain family
photographs, quilts, and memorabilia to him. The third
petition, styled "Petition for Damages due to Executor,
Carey Potter's Breaches of Fiduciary Duty"
("Petition for Damages" herein), was filed on April
10, 2014; in this petition, Steven Potter alleged that Carey
Potter breached his fiduciary duty as Executor in numerous
ways and sought monetary damages.
3-4, 2015, the Probate Court held a hearing on the petitions.
On October 7 the Probate Court entered a thirty-seven page
Memorandum Opinion in which it made extensive findings of
fact and conclusions of law, including citations to the
record and hearing transcript, holding, inter alia,
that (1) Carey Potter did not breach his fiduciary duties,
(2) the claims raised in the Petition to Distribute Property
had been previously raised and resolved in an order entered
July 26, 2011, and, consequently, were barred by res
judicata, and (3) that Carey Potter was entitled to a
fee of $50, 000.
Potter appeals. He contends that the trial court abused its
discretion in failing to find that Carey Potter breached his
fiduciary duty, "ignoring the breaches of fiduciary
duty" and awarding Carey Potter a fee, by not granting
him damages based on Carey Potter's breach of fiduciary
duty, and by concluding that the Probate Court's July 26,
2011 Order had a res judicata effect on his Petition
to Distribute Property.
STANDARD OF REVIEW
court abuses its discretion when it fails to consider the
applicable law and relevant facts in reaching its decision.
Konvalinka v. Chattanooga-Hamilton Cnty. Hosp. Auth.
249 S.W.3d 346, 358 (Tenn. 2008). An abuse of discretion
occurs if a trial court causes an injustice to a party by
"(1) applying an incorrect legal standard, (2) reaching
an illogical or unreasonable decision, or (3) basing its
decision on a clearly erroneous assessment of the
evidence." Lee Med., Inc. v. Beecher, 312
S.W.3d 515, 524 (Tenn. 2010). Review of the trial court's
findings of fact is de novo upon the record,
accompanied by a presumption of correctness, unless the
preponderance of the evidence is otherwise. See
Tenn. R. App. P. 13(d); Kaplan v. Bugalla, 188
S.W.3d 632, 635 (Tenn. 2006). Review of the trial court's
conclusions of law is de novo with no presumption of
correctness afforded to the trial court's decision.
See Kaplan, 188 S.W.3d at 635.
Breach of Fiduciary Duty
Potter asserts that Carey Potter breached his fiduciary duty
by "(1) not making the required distribution on a timely
basis, (2) not handling tax matters properly as the fiduciary
of the estate, and (3) not distributing all of the
decedent's tangible personal property in a fair and
unbiased manner." Seventeen pages of the Probate
Court's Memorandum Opinion were devoted to resolving the
allegations that Carey Potter breached his fiduciary duty.
executor of an estate occupies a fiduciary position.
Mason v. Pearson, 668 S.W.2d 656, 663 (Tenn. Ct.
App. 1983). "As such, the executor must deal with the
beneficiaries in utmost good faith and 'exercise the same
degree of diligence and caution that reasonably prudent
business persons would employ in the management of their own
affairs.'" In re Estate of Ladd, 247 S.W.3d
628, 637 (Tenn. Ct. App. 2007) (quoting McFarlin v.
McFarlin, 785 S.W.2d 367, 369-70 (Tenn. Ct. App. 1990)).
[A]n executor who acts reasonably and in good faith while
carrying out his duties will be shielded from liability if
his judgment simply turned out to be wrong in light of
subsequent events . . . [a]n executor who fails to
competently, prudently, and reasonably discharge his duties
as required by law, however, finds no protection in his lack
of judgment as viewed in hindsight.
In re Estate of Ladd, 247 S.W.3d at 637 (citing 2
JACK W. ROBINSON, SR. & JEFF MOBLEY, PRITCHARD ON WILLS
AND ADMINISTRATION OF ESTATES § 734, at 328-29 (5th
ed.1994); McFarlin, 785 S.W.2d at 372. However,
"courts are cautious not to hold executors liable upon
slight grounds." In re Estate of Ladd, 247
S.W.3d at 637 (citing 2 PRITCHARD § 734, at 328).
"In order to recover for breach of fiduciary duty, a
plaintiff must establish: (1) a fiduciary relationship, (2)
breach of the resulting fiduciary duty, and (3) injury to the
plaintiff or benefit to the defendant as a result of that
breach." Ann Taylor Realtors, Inc. v. John N.
Sporup, et al., No. W2010-00188-COA-R3-CV, 2010 WL
4939967 at *3 (Tenn. Ct. App. Dec. 3, 2010) (citing 37 C.J.S.
Fraud § 15 (2008)).
i.Timeliness of ...