In re ESTATE OF JOHN J. BURNETTE
Session September 13, 2017
from the Chancery Court for Hamilton County No. 99-P-649
Jeffrey M. Atherton, Chancellor
appeal involves a successor estate administrator's
attempt to collect his attorney's fees from a prior
administrator. John G. McDougal, the prior administrator,
gave his co-administrator, John D. Burnette (Burnette), a
check representing the proceeds from the sale of the
decedent's real estate. Instead of depositing the check
in a Tennessee bank as instructed, Burnette took the check to
Florida and deposited it in a bank account there. Afterward,
Burnette refused to communicate or cooperate with McDougal.
The trial court held that McDougal breached his fiduciary
duty to the estate and beneficiaries, and awarded the
successor administrator a judgment of $5, 523.28. We hold
that the undisputed facts establish no negligence or
malfeasance on McDougal's part that warrant an award of
attorney's fees. Accordingly, we reverse the judgment of
the trial court.
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
Court Reversed; Case Remanded
Ortwein, Red Bank, Tennessee, for the appellant, John G.
Marie Davenport, Chattanooga, Tennessee, for the appellee, G.
Charles D. Susano, Jr., J., delivered the opinion of the
court, in which John W. McClarty and Thomas R. Frierson, II,
CHARLES D. SUSANO, JR., JUDGE
Burnette died intestate on September 19, 1999. His estate was
probated in Hamilton County. McDougal and the decedent's
son, Burnette, were appointed co-administrators. With the
trial court's permission, they sold decedent's real
property on May 1, 2000. The net proceeds from the sale
approximated $39, 419. McDougal testified that the check was
made out to the estate. He stated that it was designated
"for deposit only." McDougal gave the check to
co-administrator Burnette, with instructions to deposit it in
an estate account with American National Bank in Chattanooga.
Instead, Burnette took the check to Florida, where he
resided, and deposited it in a bank account there. McDougal
instructed Burnette that the funds were required to be
deposited in the estate account in Tennessee, and asked him
to transfer the money. McDougal testified that although
Burnette initially agreed, he never made the transfer.
Burnette thereafter hired an attorney, who instructed
McDougal that any communication with Burnette should come
through the attorney.
February 2000, decedent's widow filed for an elective
share, a year's support, homestead, exempt property, and
other relief. On June 12, 2000, the trial court awarded her,
among other things, $5, 000 for homestead rights and $13, 380
for a year's support. When the payment from the estate
was not forthcoming, she filed a motion for contempt against
the co-administrators. Following a hearing, the trial court
entered an order on August 2, 2001, stating in pertinent part
Upon representation of co-administrator's, John D.
Burnette, counsel to the Court that John D. Burnette would
not be attending said Show Cause hearing and upon further
representation that the funds to pay said Judgment [to the
widow] as stated in the May 3, 2000, Master's Report had
been transferred to Florida where co-administrator John D.
Burnette resides, and that said funds were no longer
available, the Court found that the administrators of the
estate shall be found in contempt. Further, upon oral Motion
administrator John McDougal, to remove co-administrator John
D. Burnette as co-administrator of the estate, the Court
found that Motion to be well taken. It is, therefore,
ORDERED that John D. Burnette is hereby removed as
administrator of the estate of John Jay Burnette and John
McDougal shall solely continue as administrator of this
estate. It is, further, ORDERED that the
administrators of the estate shall be held in contempt of the
Court with further penalties, if any, to be determined at a
later hearing of this Court.
(Capitalization and striking out in original.) The above
language with a line through it is struck through by a
handwritten line in the trial court's order. No
explanation is provided in the record as to who struck the
language, nor the intent of the trial court, if it was the
one who edited the order.
next document in the record following this order is a notice
issued by the Clerk & Master on April 6, 2004,
instructing McDougal to file a settlement of the estate by
April 27, 2004. McDougal responded with a "motion for
instructions" in which he alleged that Burnette
absconded with the proceeds of the sale of decedent's
real estate and thereafter refused to communicate with
McDougal. McDougal stated that he tried to have criminal
charges brought against Burnette, to no avail. At this point,
the estate had no remaining assets other than the proceeds
from the real estate sale. McDougal asked the court to
"give instructions as to the next possible move for the
attorney for the estate or allow [him] to close the estate
with what has been passed out."
August 24, 2006, the trial court entered an order removing
McDougal as administrator and appointing G. Michael Luhowiak
as successor administrator. Over four years later, on October
5, 2010, Luhowiak filed a motion for extension of time to
file a settlement of the estate. The motion states that
"[t]he Successor Administrator would show that an equity
action has been commenced against the previous Administrator,
John McDougal, and that action is still pending." There
are no pleadings from that separate action in the record
before us. McDougal testified that the successor
administrator sued him for breach of his duty as
administrator of the estate. It is undisputed that Luhowiak
voluntarily nonsuited that separate action. On November 3,
2011, Luhowiak requested another extension of time to settle
the estate, which the trial court granted.
April 29, 2013, Luhowiak filed a motion requesting the trial
court to grant him a judgment in the amount of $5, 523.28
against McDougal for attorney's fees charged by Luhowiak
in settling the estate. The court referred the matter to the
Clerk & Master, who, after a hearing, found that McDougal
breached his fiduciary duty as administrator. On October 3,
2014, the trial court entered an order confirming the
C&M's report and entering judgment against McDougal.
McDougal appealed. This Court "vacate[d] the trial
court's judgment because the court failed to hold a
hearing and failed to independently assess the merits of the
master's report." In re Estate of Burnette,
No. E2014-02522-COA-R3-CV, 2016 WL 626041, at *1 (Tenn. Ct.
App., filed Feb. 16, 2016). On remand, the trial court
conducted an independent review and again confirmed the
C&M's report. The court entered judgment against
McDougal for attorney's fees charged by Luhowiak in the
amount of $5, 523.28. McDougal again filed a timely notice of
issue on appeal is whether the trial court erred in holding
McDougal, the original administrator, liable for the
attorney's fees charged by the successor administrator of
Tenn. Code Ann. § 27-1-113 (Supp. 2015), our standard of
review is affected by the trial court's referral of all
or part of a case to a special master. "A concurrent
finding of a master and chancellor is conclusive on appeal,
except where it is upon an issue not proper to be referred,
where it is based on an error of law or a mixed question of
fact and law, or where it is not supported by any material
evidence." In re Estate of Ladd, 247 S.W.3d
628, 636 (Tenn. Ct. App. 2007) (citing Coates v.
Thompson, 713 S.W.2d 83, 84 (Tenn. Ct. App. 1986)).
"We must affirm such a concurrent finding if there is
any material evidence to support it." In re
Conservatorship of Duke, No. M2015-00023-COA-R3-CV, 2015
WL 5306125, at *6 (Tenn. Ct. App. M.S., filed Sept. 3, 2015)
(citing Archer v. Archer, 907 S.W.2d 412, 415 (Tenn.
Ct. App. 1995); Tenn. R. App. P. 13(d)).
finding of a clerk and master is not concurrent with the
trial court, we review the trial court's finding of fact
de novo with a presumption of correctness unless the evidence
preponderates against it. Estate of Ladd, 247 S.W.3d
at 637 (citing Tenn. R. App. 13(d)). The trial court's
conclusions of law are also reviewed de novo, but are
accorded no such presumption. In re Estate of
Bennett, No. E2004-02007-COA-R3-CV, 2005 WL 2333597, at
*2 (Tenn. Ct. App., filed Sept. 23, 2005) (quoting
Southern Constructors, Inc. v. Loudon Cnty. Bd. of
Educ., 58 S.W.3d 706, 710 (Tenn. 2001)). We review a
trial court's award of attorney's fees under the
abuse of discretion standard. Taylor v. Fezell, 158
S.W.3d 352, 359 (Tenn. 2005) (quoting Aaron v.
Aaron, 909 S.W.2d 408, 411 (Tenn. 1995)).
well established that "[a]n executor of an estate
occupies a fiduciary position" and owes certain duties
to the estate and the beneficiaries. Estate of Ladd,