Stoltz v. Friday

926 S.W.2d 438, 325 Ark. 399, 1996 Ark. LEXIS 426
CourtSupreme Court of Arkansas
DecidedJuly 15, 1996
Docket94-1235
StatusPublished
Cited by21 cases

This text of 926 S.W.2d 438 (Stoltz v. Friday) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stoltz v. Friday, 926 S.W.2d 438, 325 Ark. 399, 1996 Ark. LEXIS 426 (Ark. 1996).

Opinion

ANDREE LAYTON Roaf, Justice.

The appellant, J. Michael Stoltz, as special administrator, sued the appellees, Friday, Eldredge, & Clark, certain of its partners, and First Commercial Bank, for negligence and breach of fiduciary duty in connection with the probate of the estate of James Patrick Stoltz. The Friday firm provided legal services in connection with the probate of the estate; the bank was designated trustee of a trust created under the will of the decedent. The trial court entered summary judgment in favor of Friday, Eldredge, & Clark and the individual attorneys and granted First Commercial Bank’s motion to dismiss. In this appeal, the special administrator contends that the trial court erred in granting the motions for summary judgment and dismissal and in granting the Friday firm’s motion to strike an amended complaint. We find no error and affirm.

J.P. Stoltz (Stoltz) died on December 18, 1977, at the age of 53. His will was prepared by the Friday firm and was executed on May 9, 1977. Stoltz’s heirs were his wife, Judy, whom he married in 1974 after the execution of an antenuptial agreement prepared by the Friday firm, nine children from a previous marriage, and two sisters and their husbands. J. Stephen Stoltz (Stephen), the oldest son, was named executor in the will.

The primary asset of the estate was Polyvend, Inc., a metal-stamping company established by Stoltz. Additionally, in 1976, Stoltz had obtained two life insurance policies with a face value of $2,000,000 from First Pyramid Life Insurance Company (First Pyramid). Stoltz’s will provided that after certain specific bequests, the majority of his estate would be placed in two trusts. The stock of Polyvend was to be placed in a “stock trust” of which Stephen was the sole beneficiary and trustee. The corpus of this trust, Polyvend, was to be distributed to Stephen if he was successful in operating the company for ten years. The remaining estate assets were to be placed in a “residuary trust” for the benefit of the other eight Stoltz children and other named trust beneficiaries. The residuary trust would also receive one half of the proceeds from any sale of Polyvend if it were sold within ten years of the establishment of the stock trust. The will named First Commercial Bank (First Commercial) as trustee of the residuary trust.

Stoltz’s will was filed for probate on January 4, 1978. Stephen was appointed as executor, and the Friday firm served as his attorneys. Stephen applied for and received the $2,000,000 in fife insurance proceeds in his individual capacity on January 19, 1978.

In 1987, certain of the residuary trust beneficiaries, including J. Michael Stoltz (Michael), became concerned about the lack of progress being made in the probate of the estate and the fact that no distributions had been made to them in nearly ten years. They hired an attorney who filed a petition in September 1987 seeking to remove Stephen as executor of the estate. In connection with the prosecution of this petition, the heirs obtained copies of the estate files being maintained by the Friday firm and discovered, among other matters, that the estate had a potential claim to the life insurance proceeds paid in 1978 to Stephen and that the Friday firm had advised Stephen upon his appointment in January 1978 about potential conflicts of interest involved in his service as executor of the estate. In June 1988, the Friday firm was replaced as attorneys for the estate; however, Stephen continued to serve as executor.

A number of lawsuits have been filed in connection with the handling of this estate. Three are relevant to this appeal. In October 1988, six of the residuary trust beneficiaries, including Michael, filed suit in Faulkner County Chancery Court against Stephen, alleging that he breached his fiduciary duty to them while serving as executor of the estate and acting as trustee of the residuary trust created for their benefit. That action was concluded in June 1993 with the execution of a setdement agreement which released Stephen from liability both individually and as executor of the estate. On April 20, 1989, some of the same residuary trust beneficiaries filed suit in Pulaski County Circuit Court against First Pyramid for negligence, breach of contract, bad faith, and fraudulent concealment in connection with the payment of the $2,000,000 in insurance benefits to Stephen, rather than to the estate. Michael was appointed special administrator on January 30, 1990, for the limited purpose of pursuing this action against First Pyramid, and he was substituted as plaintiff. The jury award to the special administrator of $3,666,666 was reversed on appeal, based on the running of the statute of limitations on an action to recover on a life insurance policy. First Pyramid Life Ins. Co. v. Stoltz, 311 Ark. 313, 843 S.W.2d 842, cert. denied, 114 S. Ct. 290 (1992). While the case against First Pyramid was pending, the Friday firm attorneys agreed to allow the statute of limitations to be tolled against them as of January 9, 1990, in a tolling agreement signed on behalf of Michael, both individually and as special administrator, and other of the trust beneficiaries.

On May 3, 1993, Michael, as special administrator, filed the action against the Friday firm which gives rise to the present appeal. His complaint asserted that the Friday firm and certain of its partners served as attorneys for the estate until June 30, 1988, and that they breached their fiduciary obligation to the estate, the heirs, and the trustees of the trusts created by the will of the deceased when they jointly represented entities with conflicting interests for a period of approximately ten years. These entities included Stephen, both in his individual capacity and as executor of the estate; First National Bank of Little Rock, both as the largest creditor of the estate and as the trustee of a trust created by the will of the decedent; First Pyramid; Polyvend Corporation, the largest asset of the estate; and Diversified Financial Services, Inc., the insurance agency which sold the First Pyramid life insurance policies to Stoltz.

The special administrator further contended that the estate suffered damages and loss of assets as a result of the undisclosed conflicts and the actions of the Friday firm, including: (a) the wrongful payment of $2,000,000 in life insurance proceeds to Stephen, (b) an over payment to the surviving spouse, despite a binding antenuptial agreement drafted by the Friday firm to prevent Stephen’s removal as executor, (c) the making of personal loans to pay the estate’s debts by heirs of the estate in order to avoid an otherwise necessary sale of Polyvend, which would have benefited the residuary trust heirs, (d) transactions which avoided funding the stock trust as directed by the will, but which artificially commenced the running of the ten-year term of the stock trust to the benefit of Stephen, (e) repayment of voluntary personal loans to the executor with virtually all of the residuary assets of the estate, and (f) the transferring of assets other than Polyvend stock to the stock trust.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Simon Pockrus v. Kristy Pockrus
2026 Ark. App. 31 (Court of Appeals of Arkansas, 2026)
In Re Estate of Smith
2020 Ark. App. 113 (Court of Appeals of Arkansas, 2020)
Margaret Ellis v. Roger Thompson and Frances Thompson
2019 Ark. App. 579 (Court of Appeals of Arkansas, 2019)
Orintas v. Point Lookout Property Owners Ass'n Board of Directors
2015 Ark. App. 648 (Court of Appeals of Arkansas, 2015)
English v. Robbins
2014 Ark. 511 (Supreme Court of Arkansas, 2014)
Rice v. Ragsdale
292 S.W.3d 856 (Court of Appeals of Arkansas, 2009)
Wilkins v. US BANK, NAT. ASS'N
514 F. Supp. 2d 1120 (W.D. Arkansas, 2007)
Wilkins v. U.S. Bank, National Ass'n
514 F. Supp. 2d 1120 (W.D. Arkansas, 2007)
Williams v. Brushy Island Public Water Authority
243 S.W.3d 903 (Supreme Court of Arkansas, 2006)
Williams v. BRUSH ISLAND PUBLIC WATER AUTHORITY
243 S.W.3d 903 (Supreme Court of Arkansas, 2006)
Trice v. Trice
210 S.W.3d 147 (Court of Appeals of Arkansas, 2005)
Smith v. Sidney Moncrief Pontiac, Buick, GMC Co.
120 S.W.3d 525 (Supreme Court of Arkansas, 2003)
Davenport v. Lee
72 S.W.3d 85 (Supreme Court of Arkansas, 2002)
In Re NWFX, Inc.
267 B.R. 118 (W.D. Arkansas, 2001)
Ultracuts Ltd. v. Wal-Mart Stores, Inc.
33 S.W.3d 128 (Supreme Court of Arkansas, 2000)
Ultracuts Ltd. v. Wal-Mart Stores, Inc.
16 S.W.3d 265 (Court of Appeals of Arkansas, 2000)
Gibson v. Herring
975 S.W.2d 860 (Court of Appeals of Arkansas, 1998)
Smothers v. Clouette
934 S.W.2d 923 (Supreme Court of Arkansas, 1996)

Cite This Page — Counsel Stack

Bluebook (online)
926 S.W.2d 438, 325 Ark. 399, 1996 Ark. LEXIS 426, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stoltz-v-friday-ark-1996.