Estates of McKnight v. Bank of America, N.A.

277 S.W.3d 173, 372 Ark. 376, 2008 Ark. LEXIS 120
CourtSupreme Court of Arkansas
DecidedFebruary 21, 2008
Docket07-371
StatusPublished
Cited by10 cases

This text of 277 S.W.3d 173 (Estates of McKnight v. Bank of America, N.A.) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Estates of McKnight v. Bank of America, N.A., 277 S.W.3d 173, 372 Ark. 376, 2008 Ark. LEXIS 120 (Ark. 2008).

Opinion

Jim Hannah, Chief Justice.

The Estates of Jerome McKnight, Deonte McKnight, Angela Marshall, Stephanie McKnight, and Natasha Marshall appeal a September 11, 2006 order approving the accounting of Bank of America. The order terminated the McKnight-Marshall Discretionary Irrevocable Trust Agreement. Appellants were beneficiaries under this trust agreement. The order also released Bank of America as guardian of the estate 1 and from all liability arising from administration of the trust. Appellants allege that the probate court erred in failing to either grant their demand for a jury trial or grant a continuance until tort causes of action have been tried in circuit court, in approving the accounting and finding that there was no breach of a fiduciary duty, in granting the release of liability, and in failing to grant requested relief. We find no error and affirm. Our jurisdiction is pursuant to Ark. Sup. Ct. R. l-2(b)(l).

The facts giving rise to this case are set out at length in In re Estate of McKnight v. Bank of America, N.A., 372 Ark. 456, 277 S.W.3d 179 (2008), and they need not be restated here. In Estate of McKnight, this court held that because the Estate in that case failed to file an objection to the accounting filed by Bank of America on May 7, 2004, it waived any right to appeal from the approval of that accounting.

As we noted in Estate of McKnight, Ark. Code Ann. § 28-52-107(c) (Repl. 2004) provides for objections to accountings. In the present case, no objections were filed by the Estates of Jerome McKnight, Deonte McKnight, and Angela Marshall, and the probate court did not rule on their claims. The order appealed from lists only beneficiaries Stephanie McKnight and Natasha Marshall as parties to the order. The probate court’s letter opinion likewise references only Stephanie McKnight and Natasha Marshall. Now the Estates seek to avail themselves of this court’s appellate jurisdiction; that is, this court is asked to review an order or decree of a lower court. See Gwin v. Daniels, 357 Ark. 623, 184 S.W.3d 28 (2004). However, there is no order or decree as to the Estates of Jerome McKnight, Deonte McKnight, and Angela Marshall, and this court thus lacks jurisdiction to consider their claims of error in the probate court. Stephanie McKnight and Natasha Marshall objected and obtained a ruling on their claims; therefore, we may hear their appeal.

Stephanie and Natasha suffered injuries in the explosion and fire on June 11, 1987, that have required significant care over the ensuing years. As a part of the settlement of the total tort claims by all family members, Stephanie received an original interest of $411,513.32 in the settlement and Natasha received an original interest of $282,235.90. There were seven others in the family who also held an original interest in the settlement, and in settling, the parties entered into the McKnight-Marshall Discretionary Irrevocable Trust Agreement. Pursuant to that agreement, Stephanie McKnight and Natasha Marshall were identified as suffering permanent injuries. They were declared in the trust to be “severely disabled for the foreseeable future” requiring “continuing support, assistance and supervision, possibly for the rest of their lives. . . .” The purpose of the trust with respect to Stephanie and Natasha was to “provide a continuing conservation and enlargement of the funds provided ... to supplement all other financial and service benefits to which the Beneficiaries, or either of them, might be eligible as a result of her disability.” The Trust specifically provided that it was not intended to “excuse the obligation of the natural parents to provide for the Disabled Beneficiaries’ continuing maintenance and basic support in accordance with the laws of the state of Arkansas.” The Trust was to supplement the care Stephanie and Natasha received from their parents rather than to provide the basic support parents are expected to provide their children. However, the trust also provided that “nothing herein shall preclude the Trustee from purchasing those services and items which promote the Disabled Beneficiaries’ happiness, welfare and development.”

The administration of the Trust was problematic from the start. The investments of the trust funds were specifically dictated by the trust and greatly limited the trustee’s ability to manage the funds. The natural parents did not obtain employment and were extremely slow in obtaining governmental benefits to which Stephanie, Natasha, and other members of the family were entitled. The trust was drafted under the understanding that the parents would assume these obligations.

Right to a Jury Trial

Stephanie and Natasha first argue that the probate court erred when it denied their motion for a jury trial, or in the alternative, a stay until a separate tort action could be completed. They argued below that their right to a jury reached to “include all issues of tort arising out of, or incident to, Bank of America’s administration of the McKnight-Marshall Trust and/or Estate; including negligence, breach of fiduciary duty, conversion and outrage.” 2 The decision appealed from in the present case, however, is a probate order approving an accounting and releasing Bank of America as guardian of the estate. The order directed Bank of America to conclude the administration of the estate and close the Trust. Bank of America was also released within the probate proceeding from all liability arising from its and its predecessors’ administration of the estate. 3

This court has clearly stated that Arkansas Constitution art. 2, sec. 7 does not assure the right to a jury trial in all possible instances, but rather in those cases where the right to a jury trial existed when our constitution was framed. First Nat’l Bank v. Cruthis, 360 Ark. 528, 203 S.W.3d 88 (2005 (quoting Jones v. Reed, 267 Ark. 237, 248, 590 S.W.2d 6 (1979)). “An accounting is an equitable remedy. ...” A & P’s Hole-In-One, Inc. v. Moskop, 38 Ark. App. 234, 239, 832 S.W.2d 860, 863 (1992) (citing 1 Am. Jur. 2d Accounts & Accounting § 45 (1962)). The constitutional right to a jury trial does not extend to a case in equity. Southern Farm Bureau Cas. Ins. Co. v. Tallant, 362 Ark. 17, 207 S.W.3d 468 (2005). Therefore, Stephanie and Natasha had no right to a jury in the proceedings in probate court.

Further, this court long ago held that the question of an accounting may not be submitted to a jury as if it were “a suit for the recovery of money”:

A trial of exceptions by a jury in the probate court is not contemplated by law. The function of the county and probate courts in such matters is rather that of an auditor clothed with judicial power, or that of a master stating an account. It is not usually such work as juries can perform.

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Cite This Page — Counsel Stack

Bluebook (online)
277 S.W.3d 173, 372 Ark. 376, 2008 Ark. LEXIS 120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/estates-of-mcknight-v-bank-of-america-na-ark-2008.