In Re: Estate of Hazel Williams Helm

• Court: Court of Appeals of Georgia
• Decided: July 10, 2014
• Docket: A14A0627
• Status: Published

Opinion

SECOND DIVISION ANDREWS, P. J., MCFADDEN and RAY, JJ.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/

July 10, 2014

In the Court of Appeals of Georgia A14A0627. IN RE: ESTATE OF HAZEL WILLIAMS HELMS.

RAY, Judge.

Jan Helms Rowell, beneficiary under the will of her late mother, Hazel

Williams Helms (“the decedent”), appeals the probate court’s order settling the

decedent’s estate. She also appeals from the probate court’s denial of her motion to

make or amend findings of fact and conclusions of law and her motion for new trial.

For the reasons that follow, we vacate in part, affirm in part, and remand the case with

direction.

The relevant facts are as follows. The decedent died testate on November 4,

2007. A copy of the will, dated May 25, 1999, is not in the appellate record. However,

the record shows that the four beneficiaries under the will are: Jan Helms Rowell,

Charles Helms, III (“Helms”), Bryan Helms, and Hollis Helms Erikson. Under the terms of the will, Rowell was to receive 50 percent of the residue, Charles Helms, III

was to receive 25 percent of the residue and Bryan Helms and Hollis Helms Erikson

were each to receive 12 ½ percent of the residue. During the period between

November 2007 through July 2011, the estate remained unrepresented while Rowell

and Helms litigated the issue of who should serve as personal representative. In July

2011, both Rowell and Helms renounced their rights to serve as executor, and the

probate court appointed Ann J. Herrera to serve as administrator with will annexed

(the “Administrator”).

The Administrator filed a petition in the probate court for Final Settlement of

Accounts and Approval of Distribution Plan (the “Plan”) pursuant to OCGA § 53-7-

62.1 In addition to a distribution of the estate’s assets, a part of the Plan set forth in

the petition consisted of a resolution of disputes and claims against Rowell. Helms,

Bryan Helms and Hollis Helms Erikson each consented to the Administrator’s

1 OCGA § 53-7-62 (a) states, in relevant part, that “[a]ny person interested as an heir or beneficiary of an estate or the probate court may, after the expiration of six months from the granting of letters, cite the personal representative to appear before the probate court for a settlement of accounts. Alternatively, . . . the personal representative may cite all the heirs or beneficiaries . . . to be present at the settlement of the personal representative’s accounts by the court. The settlement shall be conclusive upon the personal representative and upon all the heirs or beneficiaries[.]”

2 petition, but Rowell did not. Rowell responded to the Administrator’s petition with

an alternative proposal.

A hearing was held before the probate court. See OCGA § 53-7-63 (the probate

court is authorized to hear evidence on disputed issues and “make a final settlement

between the personal representative and the heirs or beneficiaries”). In its order

adopting the Administrator’s proposed Plan, the probate court noted that Rowell’s 50

percent share of the estate’s remaining assets (after administrative expenses) totaled

$364,934.46. However, the Plan also reduced the assets to be received by Rowell

“based on [her] previous actions regarding estate assets and the cost to the estate.” By

adopting the Plan, the probate court authorized the Administrator to distribute to

Rowell, inter alia, the estate’s 50 percent interest in a duplex home, which interest the

Administrator valued at $185,755, all furniture located in the duplex valued at

$15,995, title to two vehicles valued at $1,500 and stock valued at $100,000. The

amount of distribution to Rowell corresponded to an approximately $61,684

reduction in her in 50 percent testamentary share.

1. Rowell challenges the probate court’s factual findings concerning the

amount by which her 50 percent testamentary share was reduced. She claims that the

3 probate court erred by adopting the Plan without evidence to support the $61,684

reduction in her testamentary share. We agree.

On appellate review, we will not set aside the probate court’s factual findings unless they are clearly erroneous, deferring to the court’s opportunity to judge the credibility of the witnesses. The clearly erroneous test is the same as the “any evidence” rule. Thus, where the probate court’s findings of fact are supported by any evidence, they will be upheld on appeal.

(Footnotes omitted.) In re Estate of Long, 307 Ga. App. 896, 898 (2) (706 SE2d 704)

(2011).

Consistent with the testimony adduced at the hearing, the probate court found

that during the four years between her mother’s death and the probate court’s

appointment of the Administrator, “Rowell acted as a fiduciary without court

appointment [and] collected assets belonging to [d]ecedent . . . prior to [d]ecedent’s

death.” More specifically, the probate court found that Rowell “received

approximately $125,000.00 from the sale of an easement belonging to [d]ecedent;

collected $14,500.00 in rental receipts from the [d]uplex; and received dividends

from the Coca-Cola Stock” and placed these funds in accounts over which she

maintained exclusive possession and control. It further found that Rowell “had used

4 estate funds to pay expenses related to non-probate assets as well as her own personal

and family expenses.. . . [and] did not pay taxes, leaving the estate responsible for

payment of overdue taxes plus penalties and interest.” The Administrator testified

that, following the Administrator’s appointment, Rowell transferred only $1,540 to

the estate.

The Administrator further testified that Helms had provided her with

documentation, with “backup and the checks,” of $26,400 estate funds that were

spent by Rowell on non-estate or partially non-estate expenses.2 The Adminsitrator

elected, however, not to pursue a forensic accounting to determine what Rowell had

done with the estate funds. Apart from the $26,400, there was a lack of testimony as

to Rowell’s use of estate funds or as to the cost to estate of Rowell’s acts or

omissions. Nor did the probate court make any finding, apart from the expenditure of

the $26,400, as to the cost to the estate of Rowell’s actions.

2 Consistent with the Administrator’s testimony, the probate court found that the evidence of Rowell’s expenditures of estate funds on non-probate assets “included $7,400.00 for Rabun County Property; $1,500.00 in personal expenses; $10,000.00 for the Rockdale County Enterprises, LP and $7,500.00 in expenses related to the Duplex.” For purposes of this appeal, Rowell does not challenge the competency of the Administrator to testify as to Rowell’s expenditure of the $26,400.

5 At the commencement of the hearing, Rowell’s counsel argued that at issue

was $172,000 in funds which had been deposited into a joint checking account.

Counsel argued that Rowell had paid estate expenses out of that account, and that,

acting as an executor “de facto,” Rowell had acted appropriately with respect to the

funds. Counsel then proposed that Rowell pay for an accounting and represented that

“we welcome an audit.” However, Rowell did not present any evidence at the hearing

as to how she spent the estate funds that had been in her possession.

In her petition, the Administrator claimed that the Plan was fair and reasonable

and in accordance with the intent and provisions of the decedent’s will.3 See In re

Estate of Nesbit, 299 Ga. App. 496, 499-500 (1) (682 SE2d 641) (2009) (probate

court was authorized to make a final settlement between personal representative and

the beneficiaries and it did so, “concluding based on the evidence presented that the

proposed distribution plan was fair and reasonable”). It is undisputed, however, that

the decedent intended for Rowell to receive half of the estate and that the

Administrator proposes to distribute less than half of the value of the remainder to

Rowell. Thus, absent something more, the intentional distribution of less than half of

3 Rowell acknowledged the Administrator’s power to settle the estate, but objected to the fairness and reasonableness of the distribution under the Plan.

6 the estate’s value to Rowell cannot be consistent with the decedent’s intent and the

duty of the personal representative “to act in the best interests of all persons who are

interested in the estate and with due regard for their respective rights.” OCGA § 53-7-

1 (a). Compare Harp v. Pryor, 276 Ga. 478, 479 (578 SE2d 424) (2003) (noting that

“[i]n most cases, distributions in kind from different classes of property that result in

equal beneficiaries receiving equal value would not show a violation of the executor’s

duty”).

The Administrator did not identify, either below or on appeal, how she arrived

at the amount of the specific reduction in Rowell’s share contemplated by the Plan.

Rather, she argues that there was no legal requirement that she “present the specific

dollar-by-dollar calculation for the reduction made to [Rowell’s] share,” and that the

reduction was consistent with the exercise of her discretion to make adjustments to

the share of a beneficiary. It is undisputed that the decedent’s will incorporated the

provisions of former OCGA § 53-12-232. Thereunder, the Administrator is

authorized “[t]o compromise, adjust, arbitrate, bring or defend actions on, abandon,

or otherwise deal with and settle claims in favor of or against the estate or trust as the

7 fiduciary shall deem advisable[.]” OCGA § 53-12-232 (23) (1999).4 Although it

appears that the decedent had vested the Administrator with discretion in pursuing

claims on behalf of estate, it does not follow that the Administrator could arbitrarily

choose an amount by which the value of Rowell’s distributive share should be

adjusted based upon a possible claim against Rowell by the estate or other

beneficiaries.

The probate court also found, however, that the Administrator proposed to

reduce the amount distributed to Rowell based on Rowell’s previous actions

regarding estate assets and the cost to the estate. In the context of an action under

OCGA § 53-7-62, the probate court may “hear evidence upon any contested

question.” OCGA § 53-7-63. Thus, to the extent that the evidence showed that Rowell

had converted estate funds or expended estate funds on non-estate assets, such that

those monies were no longer available for distribution, or had otherwise damaged the

estate, the probate could would have had a basis for reducing the value of Rowell’s

4 Chapter 12 of Title 53 of the Official Code of Georgia Annotated was repealed in 2010 and a new Chapter 12 was enacted. See Ga. L. 2010, p. 579. Under current OCGA § 53-12-263 (d) (1), “[a] provision in any will or trust instrument which incorporates powers by citation to . . . former Code Section . . . 53-12-232 . . . which were in effect at the time the trust was created and which was valid under the law in existence at the time the will was signed by the testator . . . shall be effective notwithstanding the subsequent repeal of such statute.”

8 distributive share. See, e. g., Fowler v. Cox, 264 Ga. App. 880, 887 (1) (a) (vi) (592

SE2d 510) (2003) (probate court’s reduction of net estate distributed to executrix “did

no more than correct for breaches of fiduciary duty”). However, the Administrator

presented no evidence which showed that Rowell’s actions had cost or otherwise

damaged the estate in the amount of $61,684. The Administrator suggests that

inasmuch as Rowell came into possession of estate funds and “paid Estate bills at her

own discretion with no oversight,” it was Rowell’s burden to show that she had acted

appropriately with estate funds. However, the Administrator elected not to file any

legal action for an accounting against Rowell,5 nor did the probate court order Rowell

to make an accounting. See OCGA § 24-14-1 (2012)6 (“The burden of proof generally

lies upon the party who is asserting or affirming a fact and to the existence of whose

case or defense the proof of such fact is essential”); Peterson v. Willbanks, 157 Ga.

382, 387 (121 SE 326) (1924) (as the action was not for an accounting, the burden of

5 Nor does it appear that Helms and the other beneficiaries, who consented to the Plan, pursued any separate claim against Rowell for damages. See OCGA § 53-6- 2 (providing that a person who intermeddles with or converts property of a decedent whose estate is unrepresented is liable to beneficiaries for double the value of the property so possessed or converted). 6 The hearing before the probate court was held in October 2012, before the January 1, 2013, effective date of the new evidence code.

9 showing the fact at issue was on parties asserting it). Thus, we agree with Rowell that

the probate court erred in authorizing the reduction in the value of her distributive

share by $61,684, and we vacate the probate court’s order in part and remand the case

for a determination of the appropriate amount, if any, of such reduction. See In re

Estate of Knapp, 326 Ga. App. 486, 492 (756 SE2d 716) (2014) (vacating probate

court’s order and remanding the case where the probate court failed to make findings

sufficient to disallow appellant from taking his share of the estates); In re Estate of

Long, supra, at 901 (3) (remanding case for the probate court to determine whether,

and in what amount, beneficiaries owed money to the estate).

2. Rowell also asserts that the probate court erred in accepting the

Administrator’s valuation of the duplex property. We disagree.

The Plan contemplated that Rowell receive the estate’s one-half interest in the

duplex property. The Plan valued that interest at $185,755, which is approximately

half of the duplex’s insurance replacement value of $371,511. In its order, the trial

court found that the Administrator based her valuation on the insurance replacement

value and accepted the Plan’s valuation. Rowell presented the testimony of a

residential appraiser who opined that the value of the duplex was $235,000, and that,

taking into account the limited marketability of a half-interest in the property, the

10 value of the estate’s interest in the duplex was $100,000.7 In its order, the probate

court found Rowell’s expert witness to be not credible because he valued the one-half

interest without knowledge that Rowell and Helms were co-trustees of a trust that was

the other 50 percent owner of the duplex and because the comparable sales utilized

by the appraiser were “almost non-existent.”

Rowell argues that the trial court erred because the Plan’s valuation was

inconsistent with the Administrator’s testimony that she had intended to value the

duplex between the tax values and the insurance replacement cost. She further

contends that the Administrator’s opinion of value was speculative and an insufficient

basis for the trial court’s approval of the Plan.

Pertinent to this dispute, under former OCGA § 53-12-232 (27) (1999) the

fiduciary is authorized:

To make distribution of capital assets of the estate or trust in kind or in cash, or partially in kind and partially in cash, in divided or undivided interests, as the fiduciary finds to be most practicable and for the best interests of the distributees, and the fiduciary may distribute types of assets differently among the distributees; and to determine the value of

7 A lower valuation of the real estate would have benefitted Rowell because, as the Administrator acknowledged, Rowell would have then received additional cash or stock.

11 capital assets for the purpose of making distribution thereof if and when there are more than one distributee thereof, which determination shall be binding upon the distributees unless clearly capricious, erroneous, and inequitable.

Further, “[t]he courts will not ordinarily interpose to restrain the execution of a

power, except where abuse of discretion, bad faith, or fraud is shown, or where the

power is attempted to be exercised in a manner different from that authorized by the

donor.” (Citation and punctuation omitted.) Cates v. Cates, 217 Ga. 626, 632 (3) (124

SE2d 375) (1962).

The Administrator testified at some length about her valuation of the duplex.

Her direct testimony showed that she considered the tax valuation of the duplex as

demonstrating that the value of the property had decreased over time following the

death of the decedent, and that she considered it “disingenuous” for Rowell to have

controlled the property during that time and then have asked for “it at its lowest

value.” Although she also indicated on cross-examination that she had intended to

value the property “somewhere” between the insurance replacement value and the tax

value, we are unpersuaded that the probate court was required thereby to reject the

valuation assigned to the property under the Plan. Rather, the evidence showed that

the value assigned to the Estate’s interest in the duplex corresponded to half of the

12 insurance replacement value of the property, and Rowell’s questioning of her own

expert indicated that replacement cost was a possible approach for the valuation of

property. Accordingly, we conclude that the probate court was not required to find

the Administrator’s determination of value to be capricious, erroneous, and

inequitable, and it did not err in accepting the Administrator’s valuation. See Cates,

supra at 633-634 (3) (finding that executors were not shown to have acted

capriciously, in bad faith, or fraudulently in relying on a third party to value real

estate for purposes of distribution).

3. Rowell further claims that the probate court erred in refusing to hear

testimony from Rowell regarding her accounting of estate assets, in denying her post-

judgment motion to amend its findings of fact and conclusions of law, and in denying

her motion for new trial. In light of our findings in Divisions 1 and 2, supra, these

claims of error are moot.

Judgment affirmed in part, vacated in part, and case remanded with direction.

Andrews, P. J., and McFadden, J., concur.