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In re Estate of Lloyd

Court of Appeals of Tennessee, Knoxville

January 8, 2020

IN RE ESTATE OF GLADYS YARBORO LLOYD

          Session April 15, 2019

          Appeal from the Chancery Court for Knox County No. 76389-2 Robert E. Lee Davies, Senior Judge.

         In this probate proceeding, the trial court applied the no contest provision of the will to prevent the beneficiary from inheriting under the will, holding that certain actions and issues raised by the beneficiary triggered the provision. The court also imposed sanctions pursuant to Rule 11.03 of the Tennessee Rules of Civil Procedure against the disinherited beneficiary and her attorney for filing an improper lien on real property of the decedent and in refusing to remove the lien, thereby requiring the estate to seek judicial relief. The beneficiary and her attorney appeal the application of the no contest clause and the imposition of sanctions. Upon our review, we discern no error warranting reversal and accordingly, affirm the judgments of the trial court.

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

          Paul Emmet Kaufman, Atlanta, Georgia, for the appellant, Yarboro Ann Sallee.

          Wynne du M. Caffey-Knight and John Towers Rice, Knoxville, Tennessee, for the appellee, Brian Krebs.

          Brown F. Lloyd, Knoxville, Tennessee, Pro Se. [1]

          Richard H. Dinkins, J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and Thomas R. Frierson, II, J., joined.

          OPINION

          RICHARD H. DINKINS, JUDGE.

         Gladys Yarboro Lloyd died on May 14, 2015, in Knoxville, Tennessee, at the age of 83; she was survived by her husband, Brown Lloyd, and two daughters from a previous marriage, Yarboro Ann Sallee and Yancey Krebs. Ms. Lloyd died testate, and her will named her husband as Personal Representative and her son-in-law, Brian Krebs, as successor Personal Representative. On May 19, 2015, Mr. Lloyd executed an affidavit declining to serve as Personal Representative and consenting to the appointment of Mr. Krebs; on June 8, Mr. Krebs filed a petition to admit the will to probate, and the will was duly admitted and letters testamentary issued to him on June 9.

         On October 30, 2015, Ms. Sallee, who is an attorney and proceeded pro se, filed a pleading which consisted of three motions; one was entitled "Motion for Full Accounting by Executor of All Financial Matters Including the Matter of the Million Dollar Appeal of Benefits My Mother Owned of Over One Million Dollars", one entitled "Motion for Quantum Meruit Payment for Work Performed by Attorney Sallee for Three Years in Benefits Million Dollar Case", and one entitled "Motion to Compel the Production of All Materials and Files Related to the Motions." The Personal Representative responded to the motions on February 2, 2016; pertinent to the issues raised in this appeal, the response states:

         RESPONSE TO MOTION FOR FULL ACCOUNTING

3. The Movant is not, in her individual capacity, a beneficiary under the Will. The Movant is the beneficiary of demonstrative bequests of personal effects pursuant to a writing left by the Decedent in accordance with Article I, Paragraph C of the Will, a copy of which was filed with the Court along the original Will. The Personal Representative intends to comply with wishes of the Decedent as set forth in this writing. Accordingly, the Movant lacks standing to request said accounting.
4. Further, as to the issue of the Movant's entitlement to an accounting, the Personal Representative notes that: (i) the Movant is the beneficiary of a trust which is merely the recipient of a specific devise of real property under Article I, Paragraph A of the Will, (ii) said specifically devised real estate is part of the probate estate pursuant to the fifth paragraph of Article II, (iii) the decedent was survived by her husband, Brown F. Lloyd, and accordingly the sole beneficiary of the Decedent's residuary estate under Paragraph III, Paragraph A, is a trust of which the decedent's husband is the current beneficiary.

         RESPONSE TO MOTION FOR QUANTUM MERUIT

1. The Motion as filed does not constitute a valid claim against the Decedent's estate under T.C.A. §30-2-307 as it does not include an itemized statement of account, copy of the written instrument or certified judgment or decree as required by TC.A. §30-2-307(b), does not appear to have been filed in triplicate as required by T.C.A. §30-2-307(c) and as a purported claim is void ab initio.
2. A copy of the Notice to Creditors was provided to the Movant on November 17, 2015 via both certified mail return receipt requested (which was returned as unclaimed) and regular U.S. Mail, a copy of which is attached as Exhibit B. To date, no claim has been filed, and the time for filing a valid claim pursuant to T.C.A. §30-2-307 has passed. Accordingly, any claim which might subsequently be filed against the Estate by the Movant on quantum merit or any other matter on any grounds is time barred.

         Over the next eight months, Ms. Sallee filed more than ten similar pleadings, most of which contained multiple motions illustrating her dissatisfaction with the administration of her mother's estate and prayers for relief of various sorts.[2], [3] On June 24, 2016, the Estate filed a motion seeking a declaratory judgment as to whether Ms. Sallee's conduct constituted an attack on the validity of the Will, thereby triggering the forfeiture clause at Article VI, paragraph 7 of the will, and resulting in the loss of her inheritance.[4] On December 2, 2016, the trial court entered an order stating that "upon the agreement of all parties concerned and the entire record as a whole, the heir, Yarboro Ann Sallee hereby withdraws all Motions heretofore filed."

         The trial court held a hearing on the Estate's motion on March 21, 2017, and entered an order on April 6, holding that "[t]he actions of Yarboro Ann Sallee were a contest or attack on the validity of the Will of Gladys Yarboro Lloyd" and that "[t]hese multiple attacks were not made in good faith or with reasonable justification." The trial court invoked the clause and excluded Ms. Sallee from receiving any disposition under the will. Ms. Sallee moved to alter or amend the order, asserting that she had not challenged the validity of the will and "would have had a good faith basis to challenge the validity of the will had she chosen to." The court granted the motion to "allow Ms. Sallee to give testimony in order to explain her intent for the pleadings which she filed in this case . . . so that the Court can make a further determination regarding the requirement of good faith and probable cause." An evidentiary hearing was held on September 8, at which Ms. Sallee testified, and the court entered an order on September 25 affirming the April 6 order.[5], [6]

         On July 12, 2017, Ms. Sallee and her counsel, Paul Kaufman, recorded a lien against property located at 112 Pratt Lane, Oak Ridge, which was owned by Ms. Lloyd at her death, to secure payment of Ms. Sallee's quantum meruit claim for services rendered in the life insurance benefits matter referenced in the October 30, 2015 pleading. The Personal Representative moved to require Ms. Sallee to release the lien; at an August 15, 2017 hearing, the court granted the motion and, on its own initiative, found that sanctions should be imposed pursuant to Rule 11.03 of the Tennessee Rules of Civil Procedure against Ms. Sallee and Mr. Kaufman for filing an improper lien. An order was entered on August 31, nunc pro tunc to August 15, memorializing the oral ruling and directing the Personal Representative's attorneys to file affidavits of their time and expenses related to getting the lien released and to serve those affidavits on Mr. Kaufman, "who may show cause for why sanctions should not be awarded in that amount." The court designated the order as a final order pursuant to Rule 54.02, and Ms. Sallee and Mr. Kaufman filed a notice of appeal on September 14.[7]

         After the attorneys filed their affidavits, the court entered an order on September 21, awarding a judgment in the amount of $16, 529.09 against Mr. Kaufman and Ms. Sallee for attorneys fees incurred by the estate. On March 27, 2018, Ms. Sallee and Mr. Kaufman filed a motion pursuant to Rule 60.02(2) and (5) to set aside the sanctions, which the court granted in order to permit Mr. Kaufman to make arguments "which he failed to make prior to the entry of the order on September 25 [sic], 2017." By order entered May 15, 2018, the trial court reaffirmed the August 24, 2017 order awarding sanctions. Ms. Sallee and Mr. Kaufman filed a notice appealing this order, which was docketed as No. E2018-00993-COA-R3-CV. The trial court subsequently entered an order staying all efforts to execute the judgment regarding the Rule 11 sanctions pending this appeal. By order entered August 27, 2018, this Court consolidated appeals Nos. E2017-02563 and E2018-00993.

         In their brief on appeal, Appellants state fifteen issues for resolution.[8] The arguments in their brief do not address all fifteen issues, and most of the statements made in the argument section of the brief are not supported by reference to the record or citation to legal authority. From our review of the briefs of the parties as well as the record we discern two dispositive issues: whether the trial court erred in its construction and application of the no contest clause in the will, and whether the imposition of sanctions was proper.[9]

         II. Analysis

         A. The No Contest Clause

         In Winningham v. Winningham, our Supreme Court acknowledged that, while a forfeiture clause in a will is not void, it will not be enforced where the will contest is undertaken in good faith:

This Court has recognized that a forfeiture provision in a will is not void as against public policy. Tate v. Camp, 147 Tenn. 137, 149, 245 S.W. 839, 842 (1922); Thompson v. Gaut, 82 Tenn. 310, 314 (1884). However, it has been the rule since Tate v. Camp, that a forfeiture provision will not be enforced where a contest is pursued "in good faith and upon probable cause." After considering decisions from other jurisdictions, the Court in Tate v. Camp approved the following from South Norwalk Trust Co. v. St. John, 92 Conn. 168, 101 A. 961, 963 (1917), "'Where the contest has not been made in good faith, and upon probable cause and reasonable justification, the forfeiture should be given full operative effect. Where the contrary appears, the legatee ought not to forfeit his legacy.'" Tate v. Camp, 147 Tenn. at 155-56, 245 S.W. at 844.

966 S.W.2d 48, 51 (Tenn. 1998). Thus, we begin by examining the actions of Ms. Sallee to determine whether the evidence supports the trial court's holding that those actions effectively initiated a will contest and whether the actions were pursued in good faith and upon probable cause and reasonable justification. Our review of the court's factual determinations is de novo upon the record, accompanied by a presumption of correctness of those findings, unless the preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d); Bogan v. Bogan, 60 S.W.3d 721, 727 (Tenn. 2001). We review the court's conclusions of law de novo without affording any presumption of correctness to those conclusions. In re Estate of Milam, 181 S.W.3d 344, 353 (Tenn. Ct. App. 200) (citing In re Estate of Vincent, 98 S.W.3d 146, 148 (Tenn. 2003)).

         The Personal Representative sought to have the court determine whether Ms. Sallee's filings of "approximately twenty-six motions and/or petitions" "have constituted an attack on the validity of the Will such as to trigger forfeiture of her inheritance under the in terrorem clause under the Will."

         In the April 6, 2017 order, the trial court stated the factual basis of its holding that Ms. Sallee's conduct constituted a will contest thusly:

The issue is whether the pleadings filed by Ms. Sallee amount to either a direct or an indirect attack upon the validity of the Will which therefore triggers the no-contest provision.
In this case, Ms. Sallee has requested the Court to remove both the executor and the alternate executor, and instead appoint her as executor of Ms. Lloyd's Will. She has made the same request regarding the trustees. She has requested the Court to find both the personal representative and the Estate's attorney in contempt. She has requested the immediate payment of all funds and personal items to which she claims she is entitled, even though she is only the beneficiary of a testamentary trust which has not yet been funded, and not a beneficiary under the Will. Finally, Ms. Sallee produced a quitclaim deed purportedly executed by Ms. Lloyd transferring all of the interest in the property at 112 Pratt Lane in Anderson County to her.
The Court finds that the above actions by Ms. Sallee amount to, at a minimum, indirect attacks upon the validity of her mother's Will. In particular, Ms. Sallee requested the Court to award her the entire interest in 112 Pratt Lane pursuant to the quitclaim deed, which is completely inconsistent with the Will which devises said property forty percent (40%) to Yancy Krebs and sixty percent (60%) to the Yarboro Sallee Trust. No person can take any beneficial interest in a will, and at the same time set up any right or claim of their own, even if well founded, which would defeat, or in any way prevent, the full effect and operation of every part of the will. Duncan v. Peebles, 192 S.W.2d 235, 241 (Tenn. Ct. App. 1945). The pleadings filed by Ms. Sallee requesting the Court to award her the entire interest in the property at 112 Pratt Lane and to grant her immediate possession of said property was an intentional election to claim a complete interest in the 112 Pratt Lane property under the purported quitclaim deed, rather than as a beneficiary of the testamentary trust (60%) under the Will. Thus, Ms. Sallee knowingly chose to challenge or contest the validity of this section of the Will.
Ms. Sallee also contested the Will by filing vexatious pleadings. She requested the removal of the executors and the trustees and appointing herself instead. She asked the Court to enjoin the Estate from any disbursement of funds. She petitioned the Court to require the Estate to provide her with funds to hire her own attorney. She asked the Court to order the immediate payment of all funds which she claimed were owed to her, including rent, and she filed a motion to hold the personal representative in contempt. All of these actions fly in the face of the intended purpose of the no-contest clause in Ms. Lloyd's Will, which was to guard against vexatious litigation, Smithsonian Institution v. Meech, supra at 402, and to exclude from her bounty those beneficiaries who unsuccessfully sought to thwart her testamentary wishes. Lytle v. Zebold, 357 S.W.2d 20, 21 (Ark. 1962).
Having found that the actions of Yarboro Sallee have triggered the no-contest provision of her mother's Will, the Court then must determine whether the pleadings filed by Ms. Sallee were done in good faith and with probable cause or reasonable justification. Tate v. Camp, supra. With regard to the quitclaim deed produced by Ms. Sallee purportedly transferring the property at 112 Pratt Lane to her, the Estate in its separate complaint, points out the following undisputed facts:
1. The deed was never recorded with the Register of Deeds for Anderson County;
2. The name of the grantor on the quitclaim deed does not match the name of the owner of record of the realty;
3. The quitclaim deed lacks the identity of the preparer of the document;
4. The notarization on the deed is a jurat, not an acknowledgement, which is required by Tenn. Code Ann. § 66-5-106.
In open Court on March 21, 2017, Ms. Sallee, through her new attorney, Mr. Yuiil stated Ms. Sallee was withdrawing her claim based upon the quitclaim deed. The Court notes that Ms. Sallee's change of position is directly contra to the legal position she took in her Answer to the Complaint filed on October 4, 2016, to clear the cloud upon the title filed by the Estate in the Chancery Court of Anderson County, Tennessee, Docket No. 16CH8283. The actions by Ms. Sallee are clearly distinguishable from the actions of Ms. Winningham in Winningham v. Winningham, supra.

         This Court finds there is not a scintilla of good faith or reasonable justification in any of the above pleadings filed by Ms. Sallee.

         We address first matters related to Ms. Sallee's claims to the Pratt Lane property, following which we will address the conduct of the litigation.

         1. The Pratt Lane Property

         With respect to the quitclaim deed upon which Ms. Sallee relied to argue that she owned the property at 112 Pratt Lane, the Personal Representative asserted:

The real property located at 112 Pratt Lane consists of two parcels: Tract One acquired by Ms. Sallee's parents "William E. Sallee and wife, Yarboro Barnette Sallee" in 1957 and Tract Two acquired by "William E. Sallee and his wife, Yarboro B. Sallee" in 1960. In connection with the Sallees' divorce, the Decedent quitclaimed Tract One and Tract Two to her ex-husband William E. Sallee by separate deeds in 1986, copies of which deeds are of record in Warranty Deed Book N, Series 16 at Page 451 and Warranty Deed Book N, Series 16 at Page 454 in the Register's Office of Anderson County, Tennessee. On June 10, 2010, the Decedent purchased Tract One and Tract Two from the Estate of her deceased ex-husband William Edgar Sallee, Sr., both of which were transferred to her via a Personal Representative's Deed of record in Deed Book 1523, Pages 1229-1232 in the Register's Office of Anderson County, Tennessee. Copies of all referenced deeds are attached as collective Exhibit A.
The unrecorded Quitclaim Deed filed by Ms. Sallee (the property description of which includes only Tract One), was allegedly signed by the Decedent on July 16, 2009, a date upon ...

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