In re Estate of Hammer

31 Fla. Supp. 2d 30
Circuit Court for the Judicial Circuits of Florida·Decided April 30, 1986·No. Case No. 85-2705 CP·Published

Opinion

OPINION OF THE COURT

EDWARD RODGERS, Circuit Judge.

THIS MATTER came before the Court on a Petition filed by Nancy Eilan, as Guardian of the Property of Irene Wicker Hammer, for a Petition to remove Dr. Armand Hammer and James Nemec as Co-Personal Representative of the Estate of Victor Hammer.

The Petition for Removal relies on several sections of F. S. . 733.504(5)(9) which states, inter alia, that a personal representative may be removed for,

“(5) The wasting or maladministration of the estate and . . .
(9) The holding or acquiring by personal representative of a conflicting or adverse interest against the estate that will or may adversely interfere with the administration of the estate as a whole.”

[31]*31The issues were different for the two Co-Personal Representatives. The issues as to Dr. Armand Hammer were:

(1) Whether the Co-Personal Representative failed to timely file an Inventory. (The Inventory has been filed.)

(2) That Dr. Hammer had filed claim against the estate and whether the size of the claim alone placed him in a conflict position.

(3) Whether the Personal Representative refused to fire one Beverly Marello thereby causing the estate unnecessary expenses.

(4) Whether Dr. Hammer used estate’s assets to pay Beverly Marello’s bills, and

(5) Whether Dr. Hammer confiscated arts works from the estate to place in Hammer’s Art Gallery.

As to the Co-Defendant, Attorney James Nemec, the primary objection seemed to have been that he abdicated his duties to the superior knowledge of Dr. Armand Hammer and therefore did not function with equal authority as Co-Personal Representative.

It appears from the testimony that Dr. Hammer does in fact have a separate lawsuit filed in another court of this circuit in which he claims that the decedent, Victor Hammer, signed several promissory notes promising to pay him $412,790.04 with interest at 12%; and a promissory note for $149,760.78 at 12%; and a promissory note for $39,163.36 at 12%; and a promissory note for $49,868.11 at 12%. The thrust then of the Petitioner’s complaint was to show to the Court that Dr. Hammer’s total efforts were directed towards the purpose of making sure there were sufficient liquid assets in the estate to satisy his claim should be prevail.

“The general rule of law is that simply a claim filed by a personal representative of that estate does not necessarily require his removal.” See Kolb v Levy, 104 So.2d 874.

In fact it is a well settled principle in Florida law that a creditor may be appointed as Personal Representative to open an estate where no one else seeks to have the estate opened and the creditor may open the estate for the purpose of filing his claim. In the instant case, the Court had attempted to remove any conflict by appointing a Guardian Ad Litem who now represents the estate as a Personal Representative defending that claim in another lawsuit. The Respondent also raises the question of conflict because of the Co-Personal Representative’s failure to distribute income to the beneficiaries also. One of the defenses is that there is an outstanding lawsuit for which the estate may be liable, [32]*32that being the claim of the Personal Representative. The Court fully agrees with the logic that if there are possible debts outstanding then, there should be no distribution of the assets of the estate until one is sure as to what the estate’s liabilities will be. In the instant case, if the claim is established by another Court to be a valid claim, it makes no difference as to who is the Personal Representative, the claim will have to be paid from estate assets.

Testimony indicated that, at one time, Dr. Hammer had suggested that the art works belonging to the estate be sold. There was testimony that the house in Connecticut should be put up for sale. There was testimony that the Personal Representatives had anticipated and did in fact sell some of the bonds.

As to the house in Connecticut, it was the testimony of the Personal Representative that the house was only used by Nancy Eilan when she was in the Connecticut area and was a non-income producing asset of the estate and if the estate needed money, it should be sold.

As for the bonds, the testimony was that some of the bonds were sold and in fact had been sold at a reasonable profit and some of the bonds were still in the estate.

The gist of the Petitioner’s dissatisfaction appears to be as to the claim, obviously, she does not feel that it is a valid claim. However this will be determined in another lawsuit. As to the Connecticut home, she obviously feels that it should remain a part of the estate’s assets and ultimately, as a beneficiary of the estate, the house would go to her. She takes a position as far as the sale of the house is concerned that the house should not be sold because there is sufficient liquid assets in the estate to take care of any claim which is filed. This is contrary to her allegations that Dr. Hammer is attempting to liquefy the estate so as to handle Dr. Hammer’s claims. The Court finds that the Personal Representative is duly obligated and charged with the responsibility of doing what is in the best interest for the estate, and has the total picture of the estate to consider.

One of the dissatisfactions also mentioned by the Petitioner was the failure of the Personal Representative to sell the stock held in the Occidental Corporation of which Armand Hammer is Chief Executive Officer. The attorney for the Petitioner urged the Co-Personal Representatives to get rid of the stock shortly after the estate was opened. Subsequently, testimony indicated that the stock did decrease in value, however, the Court was not aware of any expertise possessed by the attorney, who recommended that the Personal Representative sell the stock, which would qualify him as an expert in that area. Absence a [33]*33predicate for establishing an expert opinion, I see no reason that the Personal Representatives would rely upon his opinion. In fact, they might be in error to sell the stock upon the advice of someone who had no expertise in that area. While the failure to sell the stock may have caused an estate loss, the Court finds no evidence to show that such a policy decision was negligently made. Such an opinion can only be rooted in hindsight.

As to the charge, Mr. Nemec did not communicate with Dr. Hammer, the Court finds the parties did meet as often as was necessary to discuss the affairs of the estate. Dr. Hammer is generally known as a very wealthy man, is the Chief Executive Officer of Occidental Petroleum which is the twelfth largest corporation in the United States, and as a result, spends quite a bit of time in various other parts of the world. The Court would also mention, at this time, that it has been the Court’s observation since sitting as a Probate Court Judge that much of he work done by the Personal Representative is only what his lawyer has asked him to do. Very rarely does the Personal Representative in a probate case serve as much more than a fifth wheel in the total movement of the estate.

The Court finds no evidence to support the allegations against Mr. Nemec. As to the art works, it does appear that they had been sent to New York for the purpose of obtaining appraisals.

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In re Estate of Hammer, 31 Fla. Supp. 2d 30 (Fla. Super. Ct. 1986).

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Related

Kolb v. Levy
104 So. 2d 874 (District Court of Appeal of Florida, 1958)