Nethken v. Peerless Insurance Co.

978 A.2d 603, 2009 D.C. App. LEXIS 356
CourtDistrict of Columbia Court of Appeals
DecidedAugust 20, 2009
DocketNos. 06-PR-1599, 06-PR-1600
StatusPublished
Cited by1 cases

This text of 978 A.2d 603 (Nethken v. Peerless Insurance Co.) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nethken v. Peerless Insurance Co., 978 A.2d 603, 2009 D.C. App. LEXIS 356 (D.C. 2009).

Opinion

KRAMER, Associate Judge:

Appellants/cross-appellees, nieces and nephews of Mary Nethken (“Mary”), prevailed in their suit against appellee/cross-appellant Peerless Insurance Company (“Peerless”) to i'eeover on the surety bond Peerless issued to the administrator of her estate. They contend that assets of Mary’s estate that were due them were distributed to others. In its cross-appeal, Peerless challenges that judgment, arguing that the trial court erred in determining that the administrator of Mary’s Nethken’s estate had committed fraud, in refusing to dismiss the action as untimely, in holding Peerless liable and in making other evidentiary and procedural rulings. The prevailing appellants/cross-appellees argue that the trial court erred in failing to award them prejudgment interest and legal expenses. We reverse the judgment below on the ground that fraud was not established by clear and convincing evidence and that the claim is, therefore, time-barred.

I. Factual Background

Mary was born on May 30, 1906, to Truman Nethken and Blanche Ballusie. Prior to Mary’s birth, Truman had had two children with Zada May Day: Frank M. Nethken and Denise Nethken. After Mary was born, her mother, Blanche Bal-lusie, married Frank Warner, Sr. and had three children with him: Frank Warner, Jr. (“Warner”), William Warner, Sr., and Masie Warner. Therefore, Mary had five half-siblings.

Mary died intestate in Washington, D.C. on September 27, 1979. She had never married and had no children. Mary was predeceased by her half-sister, Masie Warner, who left no children, and her half-brother, William Warner, Sr., who left four children: William, Jr., Glenn, James, and Ellen.

In December 1979, Warner, Mary’s half-brother, filed a Petition for Letters of Administration for Mary’s estate in Superior Court, which stated that Mary had died intestate leaving only himself as sole heir and next-of-kin, and that the estate was worth $30,000 in stocks and bonds and $750 in household goods. On December 19, 1979, the Superior Court appointed Warner as administrator of Mary’s estate and ordered him to file a surety bond in the amount of $2,000. Pursuant to the order, Warner filed a bond issued by Peerless in the amount of $2,000. The Petition for Letters of Administration was later amended to include as heirs the four children of William Warner, Sr. It is unclear whether Warner was aware of the existence of his brother William’s children at the time that he filed the original Petition for Letters of Administration. The Amended Petition valued the decedent’s estate at over $500,000. As a result, the court ordered Warner to file an additional undertaking of $290,000. He proceeded to [605]*605increase his surety bond with Peerless to a total amount of $292,000.

Warner’s attorney, John Green, Jr., carried out a nationwide search for Mary’s heirs. In a petition to the court requesting attorneys’ fees, Green stated that

this was the estate of a recluse spinster who had almost no contact with any of her relatives. She died on [sic] an efficiency apartment with over two (2) tons of loose papers in no apparent order laying around. She had several years earlier given the name of the administrator as her next of kin to a police neighborhood inquiry. The administrator had not seen the decedent for over 20 years. The administrator had no knowledge of decedent’s holdings and vague recollection of some relatives in New England. Our office conducted a nationwide search using motor vehicle driving records, state death records and funeral information and was finally able to reconstruct the line of sucession [sic] and locate all heirs.

In 1979, Warner, Frank M. Nethken, and Frank K. Nethken, the son of Frank M. Nethken, had all lived in Cumberland, Maryland, a city of approximately 20,000 people. Frank K. Nethken served as may- or of Cumberland from 1978-1982, and he testified at trial that his campaign was widely covered by the local media. Frank M. Nethken and Frank K. Nethken were both listed in the Allegany County Telephone Directory.

In August 1981, Warner filed an Affidavit of Relationships, declaring that he had made a “deligent [sic] search to locate all the heirs at law,” and found as heirs only himself and the four children of his brother, William Warner, Sr. On August 11, 1981, Warner filed his First and Final

Account of Mary Nethken’s estate, reporting total assets of $878,968.04. The court approved the final account on January 10, 1983, which gave roughly half of the estate to Warner and half to the four children of his brother William.

Warner died on March 29, 1988. Frank M. Nethken died on June 7, 1985. Although the exact date is unclear, it appears that Denise. Nethken died sometime between 1983 and 2004.

On December 22, 2004, Frank K. Neth-ken, Roy Nethken, Ranee Nethken, and Shirley Nethken Smeltzer, the children of Frank M. Nethken, and Patricia Hartsfield Schmertzler, the daughter of Denise Neth-ken (“the Nethkens”), filed suit against Warner’s estate,1 Liberty Mutual, which purchased Peerless before this suit was filed, and the children of William Warner, Sr.2 for fraud, seeking damages in the amount of Mary’s estate that they would have received had Warner disclosed their existence during the probate proceeding.

The trial court found that the Nethkens had not discovered that they were entitled to a share of Mary’s estate until 2004, and that before 2004, they had no reason to know of their relationship with Mary. The evidence suggests that neither Frank K. Nethken nor Denise Nethken knew that they had a half-sister named Mary. Ranee Nethken testified at trial that in 2004, he learned from a television show of a website called “missingmoney.com,” which allows users to search for unclaimed property. Roy Nethken searched the website, which listed Mary as having unclaimed property in D.C. The Nethkens then investigated and confirmed their relationship to Mary.

After a bench trial, the court concluded that Warner had committed fraud in not [606]*606disclosing Frank M. Nethken and Denise Nethken as heirs, that Peerless was jointly and severally liable on the bond issued to Warner, and that the Nethkens’ claims were, therefore, not barred by the statute of limitations. The court ordered the successor personal representative to file an Amended Affidavit of Relationships to reflect Mary’s hems as Frank M. Nethken, Denise Nethken, Frank Warner, Jr., and the children of William Warner, Sr.; file a Restated Account showing the correct distributions in accordance with the Amended Affidavit of Relationships; and determine the distributive share of each Appellant. To the extent that sufficient funds were not in the estate, judgment was ordered to be entered jointly and severally against the estate of Warner and Peerless, up to $292,000.

II. Legal Discussion

Because the trial below was a bench trial, the court’s findings of fact will be set aside only if clearly erroneous or without evidentiary support. D.C.Code § 17-305(a) (2001); see Bingham v. Goldberg, Marchesauo, Kohlman, Inc., 637 A.2d 81, 89 (D.C.1994). Our review of the trial court’s legal conclusions, however, is de novo. Davis v. United States,

Related

In Re Estate of Nethken
978 A.2d 603 (District of Columbia Court of Appeals, 2009)

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Bluebook (online)
978 A.2d 603, 2009 D.C. App. LEXIS 356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nethken-v-peerless-insurance-co-dc-2009.