[Cite as In re Estate of Miller, 2016-Ohio-414.]
IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT ROSS COUNTY
ESTATE OF ROBERT B. MILLER, : Case No. 14CA3469 DECEASED : : DECISION AND JUDGMENT : ENTRY : Released: 01/29/16 _____________________________________________________________ APPEARANCES:
James L. Mann, Mann and Preston LLP, Chillicothe, Ohio, for Appellants.1
James K. Cutright, Cutright & Cutright LLC, Chillicothe, Ohio, for Appellee.2 _____________________________________________________________
McFarland, J.
{¶1} This is an appeal from a decision by the Probate Court of Ross
County, Ohio, denying as untimely a motion to disallow commissions paid
to a former executor. On appeal, Appellants, Robert M. Miller and Nancy
Lallier, co-executors of the estate of Robert B. Miller, contend that 1) the
probate court erred in holding that the motion to disallow commissions paid
to the former executor was untimely, and 2) the probate court erred in
denying the motion to disallow commissions paid to the former executor.
Because we find the trial court abused its discretion in denying the motion to
1 James Mann represents Appellants Robert M. Miller and Nancy Lallier, co-executors of the estate of Robert B. Miller. 2 James Cutright represents Appellee Ralph Hempfiling, the son of Marjorie C. Distelhorst, deceased, who was the prior executor of the estate of Robert B. Miller. Ross App. No. 14CA3469 2
disallow commissions based upon its determination that the motion was
untimely filed, we sustain Appellants’ first assignment of error. Further,
because the probate court did not address the merits of the motion to
disallow, but rather denied it as untimely filed, and in light of our disposition
of Appellants’ first assignment of error, we do not reach Appellants’ second
assignment of error. Accordingly, the decision the trial court is reversed and
this matter is remanded to the probate court for further proceedings
consistent with this opinion.
ASSIGNMENTS OF ERROR
“I. THE PROBATE COURT ERRED IN HOLDING THAT THE MOTION TO DISALLOW COMMISSIONS PAID TO THE FORMER EXECUTOR WAS UNTIMELY.
II. THE PROBATE COURT ERRED IN DENYING THE MOTION TO DISALLOW COMMISSIONS PAID TO THE FORMER EXECUTOR.”
FACTS AND LEGAL ANALYSIS
{¶2} In both of their assignments of error, Appellants challenge the
trial court’s denial of their motion to disallow commissions paid to the
former executor of their father’s estate, Marjorie Distelhorst, now deceased.
In their first assignment of error they contend the trial court erred in holding
that the motion to disallow was untimely filed. In their second assignment
of error they essentially contend that the trial court erred in denying their Ross App. No. 14CA3469 3
motion to disallow on the merits. However, as a review of the record,
including the trial court’s entry, indicates that the motion was denied based
upon the trial court’s determination that it was untimely, it does not appear
the trial court considered or denied the motion based upon the merits. As
such, we limit our review to whether the trial court erred in determining the
motion to disallow commissions was untimely filed.
{¶3} R.C. 2113.35 entitled “Fees” provides in section (A) that
executors and administrators shall be allowed fees based upon the amount of
all of the personal property that is received and accounted for by them and
upon the proceeds of real property that is sold. However, R.C. 2113.35(D)
provides as follows:
“If the probate court finds, after a hearing, that an executor or
administrator, in any respect, has not faithfully discharged the
duties as executor or administrator, the court may deny the
executor or administrator any compensation whatsoever or may
allow the executor or administrator the reduced compensation
that the court thinks proper.” (Emphasis added).
Thus, based upon a plain reading of the statutory language, a probate court’s
determination under R.C. 2113.35 reducing or denying a commission is
within its sound discretion and will not be reversed absent an abuse of that Ross App. No. 14CA3469 4
discretion. In the Estate of Debra K. Justice, 4th Dist. Pickaway No. 93CA2,
1993 WL 335010, *3 (internal citations omitted).
{¶4} An “abuse of discretion” implies that a court acted in “an
unreasonable, arbitrary, or unconscionable manner.” See, e .g., State ex rel.
Sartini v. Yost, 96 Ohio St.3d 37, 2002-Ohio-3317, 770 N.E.2d 584, ¶ 21;
State v. Herring, 94 Ohio St.3d 246, 255, 2002-Ohio-796, 762 N.E.2d 940;
Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
An abuse of discretion amounts to more than a mere error of law, but
instead, equates to a “perversity of will, passion, prejudice, partiality, or
moral delinquency.” Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619, 621,
614 N.E.2d 748 (1993). Furthermore, when applying the abuse of discretion
standard, we may not substitute our judgment for that of the trial court. See,
e.g., Berk v. Matthews, 53 Ohio St.3d 161, 169, 559 N.E.2d 1301 (1990).
{¶5} Here, a review of the record indicates that Marjorie Distelhorst
was the initial executor of the estate of Robert B. Miller. Distelhorst had co-
habitated with Miller for some time prior to his death and was granted in the
will a life estate in Miller’s residence and personal property. Because there
were not enough liquid assets in the estate to pay the debts of the estate,
Miller’s son, Robert K. Miller, Appellant herein, agreed to pay into the
estate $28,175.62 in order that debts could be paid without having to sell the Ross App. No. 14CA3469 5
residence. Both Appellants were named as the residuary beneficiaries of the
real property.
{¶6} The check written by Appellant Miller was paid through
Distelhorst’s attorney’s office. Although Distelhorst subsequently filed a
final account in her capacity as executor of the estate, indicating that the
mortgage on the residence had been paid, it was subsequently determined
after Distelhorst’s death that the mortgage was not paid. The final account
further indicated that Distelhorst had paid herself an executor’s fee in the
amount of $2,629.37. It was also discovered that funds remained in the
estate checking account despite the fact that the final account filed by
Distelhorst and approved by the court indicated the account had been closed.
Approximately two months after these discoveries were made, Appellants
filed, on August 26, 2011, a motion to reopen the estate of their father, as
well as a motion to be appointed as co-executors.
{¶7} The stated purposes of the motion were as follows: 1) to pursue
claims against the former executor; 2) to obtain control of the funds
remaining in the estate checking account; 3) to surcharge the former
executor; and 4) to pay debts that were not paid during the administration of
the estate. The memorandum filed in support of the motion alleged that the
money paid into the estate by Appellant Miller that was to be used to pay off Ross App.
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[Cite as In re Estate of Miller, 2016-Ohio-414.]
IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT ROSS COUNTY
ESTATE OF ROBERT B. MILLER, : Case No. 14CA3469 DECEASED : : DECISION AND JUDGMENT : ENTRY : Released: 01/29/16 _____________________________________________________________ APPEARANCES:
James L. Mann, Mann and Preston LLP, Chillicothe, Ohio, for Appellants.1
James K. Cutright, Cutright & Cutright LLC, Chillicothe, Ohio, for Appellee.2 _____________________________________________________________
McFarland, J.
{¶1} This is an appeal from a decision by the Probate Court of Ross
County, Ohio, denying as untimely a motion to disallow commissions paid
to a former executor. On appeal, Appellants, Robert M. Miller and Nancy
Lallier, co-executors of the estate of Robert B. Miller, contend that 1) the
probate court erred in holding that the motion to disallow commissions paid
to the former executor was untimely, and 2) the probate court erred in
denying the motion to disallow commissions paid to the former executor.
Because we find the trial court abused its discretion in denying the motion to
1 James Mann represents Appellants Robert M. Miller and Nancy Lallier, co-executors of the estate of Robert B. Miller. 2 James Cutright represents Appellee Ralph Hempfiling, the son of Marjorie C. Distelhorst, deceased, who was the prior executor of the estate of Robert B. Miller. Ross App. No. 14CA3469 2
disallow commissions based upon its determination that the motion was
untimely filed, we sustain Appellants’ first assignment of error. Further,
because the probate court did not address the merits of the motion to
disallow, but rather denied it as untimely filed, and in light of our disposition
of Appellants’ first assignment of error, we do not reach Appellants’ second
assignment of error. Accordingly, the decision the trial court is reversed and
this matter is remanded to the probate court for further proceedings
consistent with this opinion.
ASSIGNMENTS OF ERROR
“I. THE PROBATE COURT ERRED IN HOLDING THAT THE MOTION TO DISALLOW COMMISSIONS PAID TO THE FORMER EXECUTOR WAS UNTIMELY.
II. THE PROBATE COURT ERRED IN DENYING THE MOTION TO DISALLOW COMMISSIONS PAID TO THE FORMER EXECUTOR.”
FACTS AND LEGAL ANALYSIS
{¶2} In both of their assignments of error, Appellants challenge the
trial court’s denial of their motion to disallow commissions paid to the
former executor of their father’s estate, Marjorie Distelhorst, now deceased.
In their first assignment of error they contend the trial court erred in holding
that the motion to disallow was untimely filed. In their second assignment
of error they essentially contend that the trial court erred in denying their Ross App. No. 14CA3469 3
motion to disallow on the merits. However, as a review of the record,
including the trial court’s entry, indicates that the motion was denied based
upon the trial court’s determination that it was untimely, it does not appear
the trial court considered or denied the motion based upon the merits. As
such, we limit our review to whether the trial court erred in determining the
motion to disallow commissions was untimely filed.
{¶3} R.C. 2113.35 entitled “Fees” provides in section (A) that
executors and administrators shall be allowed fees based upon the amount of
all of the personal property that is received and accounted for by them and
upon the proceeds of real property that is sold. However, R.C. 2113.35(D)
provides as follows:
“If the probate court finds, after a hearing, that an executor or
administrator, in any respect, has not faithfully discharged the
duties as executor or administrator, the court may deny the
executor or administrator any compensation whatsoever or may
allow the executor or administrator the reduced compensation
that the court thinks proper.” (Emphasis added).
Thus, based upon a plain reading of the statutory language, a probate court’s
determination under R.C. 2113.35 reducing or denying a commission is
within its sound discretion and will not be reversed absent an abuse of that Ross App. No. 14CA3469 4
discretion. In the Estate of Debra K. Justice, 4th Dist. Pickaway No. 93CA2,
1993 WL 335010, *3 (internal citations omitted).
{¶4} An “abuse of discretion” implies that a court acted in “an
unreasonable, arbitrary, or unconscionable manner.” See, e .g., State ex rel.
Sartini v. Yost, 96 Ohio St.3d 37, 2002-Ohio-3317, 770 N.E.2d 584, ¶ 21;
State v. Herring, 94 Ohio St.3d 246, 255, 2002-Ohio-796, 762 N.E.2d 940;
Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
An abuse of discretion amounts to more than a mere error of law, but
instead, equates to a “perversity of will, passion, prejudice, partiality, or
moral delinquency.” Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619, 621,
614 N.E.2d 748 (1993). Furthermore, when applying the abuse of discretion
standard, we may not substitute our judgment for that of the trial court. See,
e.g., Berk v. Matthews, 53 Ohio St.3d 161, 169, 559 N.E.2d 1301 (1990).
{¶5} Here, a review of the record indicates that Marjorie Distelhorst
was the initial executor of the estate of Robert B. Miller. Distelhorst had co-
habitated with Miller for some time prior to his death and was granted in the
will a life estate in Miller’s residence and personal property. Because there
were not enough liquid assets in the estate to pay the debts of the estate,
Miller’s son, Robert K. Miller, Appellant herein, agreed to pay into the
estate $28,175.62 in order that debts could be paid without having to sell the Ross App. No. 14CA3469 5
residence. Both Appellants were named as the residuary beneficiaries of the
real property.
{¶6} The check written by Appellant Miller was paid through
Distelhorst’s attorney’s office. Although Distelhorst subsequently filed a
final account in her capacity as executor of the estate, indicating that the
mortgage on the residence had been paid, it was subsequently determined
after Distelhorst’s death that the mortgage was not paid. The final account
further indicated that Distelhorst had paid herself an executor’s fee in the
amount of $2,629.37. It was also discovered that funds remained in the
estate checking account despite the fact that the final account filed by
Distelhorst and approved by the court indicated the account had been closed.
Approximately two months after these discoveries were made, Appellants
filed, on August 26, 2011, a motion to reopen the estate of their father, as
well as a motion to be appointed as co-executors.
{¶7} The stated purposes of the motion were as follows: 1) to pursue
claims against the former executor; 2) to obtain control of the funds
remaining in the estate checking account; 3) to surcharge the former
executor; and 4) to pay debts that were not paid during the administration of
the estate. The memorandum filed in support of the motion alleged that the
money paid into the estate by Appellant Miller that was to be used to pay off Ross App. No. 14CA3469 6
the mortgage on the residence was not used for that purpose, but instead
$12,553.44 of the funds were transferred out of the estate checking and into
Distelhorst’s private account she held jointly with her son, Ralph Hempfling.
{¶8} A hearing was held on the motions on October 5, 2011.
Although Appellants were prepared to go forward with evidence in the form
of bank witnesses and exhibits in support of their motion, the trial court
stated on the record that it was “satisfied with [their] representations to grant
[their] request to re-open the Estate and to make the appointment” and “did
not see any need for evidence at this time[.]” At the close of the hearing the
trial court reopened the estate and appointed Appellants as co-fiduciaries.
For the next three years, there was little activity in the estate with the
exception of five status reports that were filed demonstrating efforts that
were being made to either bring claims against the Diselhorst estate or
against Ralph Hempfling directly, or both. The record indicates that an
estate was not initially opened for Distelhorst, and Appellants had requested
an estate be opened and an administrator be appointed. The last status report
that was filed, on May 5, 2014, requested that an “initial pretrial/scheduling
conference” be scheduled.
{¶9} Subsequently, on August 19, 2014, Appellants filed their motion
to disallow commissions paid to the prior executor. The motion was brought Ross App. No. 14CA3469 7
pursuant to R.C. 2113.35(D) and requested that the commission paid to
Distelhorst be denied on the grounds that she did not faithfully discharge her
duties as executor. After holding a hearing on the motion and ordering the
parties to submit briefs, the trial court denied the motion as untimely.
{¶10} The trial court relied on R.C. 2109.35 entitled “Effect of order
settling account; vacation of order” in reaching its decision, stating that the
prior settlement of the fiduciary’s account had the effect of a final judgment
and may only be vacated as provided by R.C. 2109.35, which in cases of
alleged fraud, must be filed within one year after the discovery of the
existence of fraud. The trial court reasoned that Appellant Miller and his
attorney became aware of Distelhorst’s actions in October of 2011, but did
not file their motion to disallow until August 19, 2014, almost three years
after the discovery.
{¶11} We conclude that the record before us, including the
circumstances which led to the reopening of the estate, demonstrate an abuse
of discretion on the part of the trial court in denying the motion to disallow
as untimely filed. Two of the stated purposes of the motion to reopen were
to pursue claims against the former executor and to surcharge the former
executor. Further, the record indicates that Appellants were prepared to go
forward with evidence immediately upon the filing of the motion to reopen, Ross App. No. 14CA3469 8
and would have but for the court’s disinclination to hear evidence at that
time. No other hearings were held prior to the hearing on the motion to
disallow commissions. It appears from the record that the motion to
disallow commissions was the next step in attempting to recover funds and
surcharge the executor.
{¶12} Further, R.C. 2113.35 contains no express time limit in which a
motion to disallow must be filed. The language of the statute seems to
contemplate that it would be filed prior to the executor actually being paid a
commission. However, in light of the unusual circumstances and procedural
posture of this case, that was not possible. Appellants filed a motion to
reopen their father’s estate within two months of their discovery of
Distelhorst’s actions, and alleged facts which, if proven, would demonstrate
the conversion of estate assets and the filing of a false account. Despite the
fact that Appellants’ initial motion was a motion to reopen, rather than a
motion to vacate pursuant to R.C. 2109.35, the motion put all parties and the
court on notice of the alleged actions of Distelhorst, the alleged problems
and inaccuracies of the final account and the intent to surcharge Distelhorst
for her conduct. See Trust U/W of A.J. Woltering, 1st Dist. Hamilton No. C-
970913, 1999 WL 163759, *3 (finding exceptions to prior account filed by
remainder beneficiaries satisfied the requirements of R.C. 2109.35 by Ross App. No. 14CA3469 9
providing court with notice that remaindermen challenged the propriety of
the actions of trustee and sought to have the court compel the trustee to
restore assets to the trust.). We further agree with Appellants that to hold
otherwise would be to put form over substance.
{¶13} As such and in light of the foregoing, we conclude that the
probate court abused its discretion in denying Appellants’ motion to
disallow as untimely filed. Accordingly, Appellants’ first assignment of
error is sustained, the decision of the probate court is reversed, and this
matter is remanded for further proceedings consistent with this opinion.
JUDGMENT REVERSED AND REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. Ross App. No. 14CA3469 10
Harsha, J., concurring in judgment only:
{¶14} I concur in judgment only on the first assignment of error and
would expressly overrule the second assignment of error as not being ripe
for review. Ross App. No. 14CA3469 11
Hoover, J., concurring in part and dissenting in part with opinion:
{¶15} I agree with the principal opinion that the appellant's first
assignment of error should be sustained and that the trial court erred in
holding that the motion to disallow commissions paid to the former executor
was untimely. However, I would also sustain the appellant's second
assignment of error rather than disregarding it.
{¶16} From review of the record, it appears that the appellants'
original motion which was captioned as "Motion to Reopen Estate and to
Appoint New Fiduciary" set forth that the appellants desired to reopen the
estate for the following purposes:
1) to pursue claims against the former executor, who is now deceased; 2) to
obtain control of the funds remaining in the estate checking account; 3) to
surcharge the former executor; and 4) to pay debts that were not paid during
the administration of the estate. The memorandum in support of the motion
clearly sets forth allegations that Ms. Distelhorst did not faithfully discharge
her fiduciary duties.
{¶17} Also from review of the record, as demonstrated by the status
report filed on December 6, 2013, a separate action was filed against Ms.
Distelhorst's son, Ralph D. Hempfling. A letter in the record indicates that
the appellants believed that Mr. Hempfling participated in Ms. Distelhorst's Ross App. No. 14CA3469 12
fraudulent conveyance. Appellants believed that Mr. Hempfling was liable
to reimburse them for the property that he had received by and through Ms.
Distelhorst.
{¶18} Since the separate action will or has dealt with the fraudulent
conveyance(s), this issue is not before us in this case. The sole issue before
this court presently is whether the "Motion to Disallow Commissions Paid to
the Prior Executor" should have been found to be untimely filed and denied.
{¶19} As the principal opinion states, R.C. 2113.35, which deals with
commissions, "contains no express time limit in which a motion to disallow
must be filed." The trial court simply had the issue before it whether or not
the commissions should be disallowed. I believe that it was improper for the
trial court to deny the motion to disallow the commissions based on the
motion being untimely filed since there is no express time limit to file a
motion to disallow commissions.
{¶20} Upon the filing of the motion to reopen the estate, the trial court
and the vested beneficiaries were placed on notice that allegations of fraud
were being made against Ms. Distelhorst. This filing was indeed done
within one year3 after the appellants discovered the alleged fraud. I believe
3 The lawsuit against Mr. Hempfling needed to be filed within four years of the discovery of the alleged fraud. R.C. 2305.09(C). The alleged fraud was purportedly discovered in October of 2011; and the separate lawsuit was filed against Mr. Hempfling sometime in 2013. No issues exist regarding statute of limitations with respect to the allegations of fraud against Mr. Hempfling. Ross App. No. 14CA3469 13
that without a resolution of the fraud issues in the separate lawsuit, that a
motion to vacate the prior fiduciary's account would not even be ripe for
consideration. Assuming arguendo that appellants were successful in
obtaining a judgment against Mr. Hempfling, and if the appellants could
collect on that judgment and then fund their father's estate with those
monies, only then would a new accounting need to be completed. And only
then would the consideration of vacating the prior accounting need to be at
issue.
{¶21} Therefore, I agree that the first assignment of error should be
sustained. However, I would also sustain the second assignment of error
instead of disregarding it since I believe that the probate court did err in
denying the motion to disallow commissions paid to the former executor. Ross App. No. 14CA3469 14
JUDGMENT ENTRY
It is ordered that the JUDGMENT BE REVERSED AND REMANDED FOR FURTHER PROCEEDINGS and that the Appellants recover of Appellee any costs herein.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Ross County Common Pleas Court, Probate Division, to carry this judgment into execution.
Any stay previously granted by this Court is hereby terminated as of the date of this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
Harsha, J.: Concurs in Judgment Only with Opinion. Hoover, J.: Concurs in Part and Dissents in Part with Opinion.
For the Court,
BY: _____________________________ Matthew W. McFarland, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment entry and the time period for further appeal commences from the date of filing with the clerk.