In re Estate of Mullins

643 S.E.2d 599, 182 N.C. App. 667, 2007 N.C. App. LEXIS 798
CourtCourt of Appeals of North Carolina
DecidedApril 17, 2007
DocketNo. COA06-468.
StatusPublished
Cited by17 cases

This text of 643 S.E.2d 599 (In re Estate of Mullins) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Estate of Mullins, 643 S.E.2d 599, 182 N.C. App. 667, 2007 N.C. App. LEXIS 798 (N.C. Ct. App. 2007).

Opinion

TYSON, Judge.

Diane and Jacques Geitner (collectively, "petitioners") appeal from order entered affirming the Clerk of Superior Court's order setting aside an Assistant Clerk's prior order reopening the Estate of Phillip A. Mullins, III. We affirm.

I. Background

Balfour Menzies ("Menzies"), P.G. Menzies, and W.B. Shuford founded Southern Hosiery Mills, Inc. ("SHM") in approximately 1945. Menzies obtained ownership of virtually all of SHM's stock. Menzies had two daughters, Diane Geitner ("Diane") and Martha Mullins ("Martha"). Menzies transferred most of his stock in SHM, in equal parts, to Diane and Martha.

Diane married Jacques Geitner. Diane is the Secretary, a director, and a shareholder of SHM. Jacques Geitner is a director and shareholder of SHM. Petitioners own, or are the beneficiaries of, approximately 49% of SHM's common stock.

Martha ("respondent") married Phillip A. Mullins, III ("testator") and bore two children, Virginia Shehan and Peter Menzies ("the children"). Respondent and her children are also shareholders and directors of SHM. Testator served as a director of SHM until Charles Snipes ("Snipes") replaced him in 2003. Testator also served as President and General Manager of SHM until his death on 25 May 2004. Respondent qualified as executrix of testator's estate.

In December 2000, petitioners filed suit against several defendants including testator and SHM. Petitioners asserted claims for: (1) judicial dissolution; (2) breach of fiduciary duty; (3) conversion and misappropriation; (4) usurpation of a corporate opportunity; (5) civil conspiracy; (6) unjust enrichment; (7) unfair and deceptive trade practices; (8) accounting; (9) judicial removal of testator as director; and (10) breach of shareholders' agreement. The complaint included individual claims for monetary relief against testator.

On 1 June 2002, the parties to that lawsuit entered into an interim settlement agreement. Petitioners agreed to voluntarily dismiss all claims without prejudice. The parties also entered into an agreement which purported to toll the statute of limitation's period applicable to petitioners' claims.

The parties attempted but were unable to resolve their disputes. On 21 May 2004, petitioners' attorney wrote a demand letter to SHM's attorney:

Over the course of an unknown number of years, [testator], President of [SHM], has received various moneys from [SHM], including salary, bonuses, and benefits. As an officer of [SHM], any compensation or other payment to [testator] must be approved by a majority of disinterested directors of [SHM]. No such approval has been provided as to an unknown number of payments, including but not limited to a bonus paid to [testator] in 2003 and pay increases and bonuses paid for at least the ten years preceding 2003. [Petitioners] demand that [SHM] take immediate steps to recover all payments and benefits provided to [testator] that were not approved by a majority of the disinterested directors of [SHM].

This letter also stated: "In the event this demand is not met, [petitioners] will institute an action on behalf of [SHM] to recover all amounts improperly paid to [testator]." A copy of this demand letter was sent to Richard Vinroot, Esq. ("Attorney Vinroot") who represented testator, respondent, and SHM. Four days later, on 25 May 2004, testator died.

On 26 May 2004, petitioners filed a declaratory judgment action against testator, respondent, and the children. Petitioners sought a declaratory ruling that the votes of the "Mullins Shareholders do not count in determining matters related to [testator] or members of his immediate family, and that the votes of [petitioners] do count regarding such matters." This action did not assert monetary claims against testator or the Estate.

*601Petitioners never served this complaint on testator, testator's estate, respondent, or the children.

Respondent qualified as executrix of testator's estate and opened the Estate in the Office of the Catawba County Clerk of Superior Court. The Clerk issued letters testamentary. Beginning on 18 June 2004, respondent published in the Hickory Daily Record a statutory general notice to all creditors once a week for four consecutive weeks. This statutory general notice notified all existing and potential creditors to present any claim against testator's estate on or before 18 September 2004. Petitioners did not file a claim against testator's estate at any time on or before 18 September 2004. On 12 January 2005, the Clerk of Superior Court ordered testator's estate closed.

On 13 January 2005, petitioners filed an amended complaint and sought monetary relief against testator's estate in addition to petitioners' declaratory judgment claim. An alias and pluries summons was issued on 13 January 2005.

On 4 May 2005, petitioners petitioned the Catawba County Clerk of Superior Court to reopen testator's estate. On petitioners' ex parte motion, an Assistant Clerk initially reopened the Estate and found that "[n]ecessary act(s) remain unperformed by the Personal Representative." Respondent requested a hearing before the Clerk of Superior Court and objected to testator's estate being reopened.

On 9 June 2005, the Clerk conducted a formal hearing to determine whether testator's estate would remain closed. The Clerk heard arguments from both parties and considered the briefs and record evidence. In an order filed on 16 June 2005, the Clerk found that the order that reopened testator's estate was "improvidently and inappropriately entered" and entered an order setting aside the reopening the Estate.

On 21 June 2005, petitioners appealed the Clerk's order to the Catawba County Superior Court. Petitioners alleged: (1) the Clerk's order did not meet the procedural requirements of N.C. Gen.Stat. § 1-301.3(b) and (2) respondent had knowledge of petitioners' claim against testator's estate, but failed to provide them personal notice.

The superior court heard petitioners' appeal on 10 October 2005 and entered an order on 2 November 2005 affirming the Clerk of Superior Court's order setting aside the reopening of the estate. Petitioners appeal.

II. Issues

Petitioners contend the Superior Court erred in affirming the Clerk of Superior Court's order that set aside the reopening the Estate and argue: (1) the Clerk's order did not contain findings of fact or conclusions of law required by N.C. Gen.Stat. § 1-301.3(b) and (2) not reopening the Estate is contrary to the evidence presented and North Carolina General Statutes, Chapter 28A.

III. Standard of Review

This Court has stated both the Superior Court's standard of review and this Court's standard of review on probate proceedings:

On appeal to the Superior Court of an order of the Clerk in matters of probate, the trial court judge sits as an appellate court. When the order or judgment appealed from does contain specific findings of fact or conclusions to which an appropriate exception has been taken, the role of the trial judge on appeal is to apply the whole record test. In doing so, the trial judge reviews the Clerk's findings and may either affirm, reverse, or modify them. If there is evidence to support the findings of the Clerk, the judge must affirm.

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Cite This Page — Counsel Stack

Bluebook (online)
643 S.E.2d 599, 182 N.C. App. 667, 2007 N.C. App. LEXIS 798, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-estate-of-mullins-ncctapp-2007.