Sullivan v. Brown

792 S.E.2d 907, 418 S.C. 400, 2016 S.C. App. LEXIS 156
Court of Appeals of South Carolina·Decided June 15, 2016·No. Appellate Case No. 2013-002319; Opinion No. 5414·Published·Cited by 2 cases

Opinions

WILLIAMS, J.:

In this cross-appeal, Edward D. Sullivan (Appellant), the personal representative of Marion Milam Kay’s estate (the Estate), contests the circuit court’s decision to affirm the probate court’s order1 reducing Appellant’s compensation as well as denying Appellant’s request for reimbursement of certain fees and expenses in connection with the settlement of the Estate. Martha Milam Brown and Mary Leona Milam Moses (collectively “Respondents”), two beneficiaries of the Estate, cross-appeal, arguing the probate court improperly (1) awarded Appellant a fee equivalent to 10% of the Estate when Appellant acted in bad faith; (2) failed to require Appellant to pay all costs and attorney’s fees associated with the settling of the Estate; (3) failed to rule on certain beneficiaries’ prospec[406] tive entitlement to additional proceeds from the Estate should Respondents prevail on appeal; (4) limited Respondents’ counsel’s request for attorney’s fees; and (6) granted Appellant equitable relief when Appellant acted with unclean hands. We affirm in part, reverse in part, and remand.

FACTS

This appeal arises out of Appellant’s administration of the Estate of Marion Milam Kay who passed away on May 3, 2007. In her last will and testament, Kay appointed Appellant to serve as her personal representative (PR). As PR for the Estate, Appellant was charged with the responsibility of distributing Kay’s assets, and in turn, Kay’s will granted Appellant “reasonable compensation for the services rendered and reimbursement for reasonable expenses.” Pursuant to the terms of Kay’s will, her assets were distributed as follows: Lisbon Presbyterian Church received 26%; the Lisbon Presbyterian Cemetery Fund received 26%; the Presbyterian Home of South Carolina received 10%; her two step-grandchildren, Bart and Martha Heard, each received 10%; and Respondents each received 10%. Kay’s will also granted her neighbor, Charles Copeland, an eight-month option to purchase a one-half undivided interest in an adjoining 330-acre parcel (the Farm) at fair market value. The Estate, valued at $613,491, consisted primarily of Kay’s home (the Home) and the ten acres2 on which the Home was situated, as well as the Farm.

Prior to Appellant submitting a petition for settlement to the probate court, several issues arose in the administration of the Estate. Appellant stated Respondents, who owned the other one-half interest in the 330-acre parcel, were “bitterly disappointed” upon learning they did not inherit Kay’s entire one-half interest in the Farm. Respondents claimed Brown was entitled to an additional five acres—as promised prior to Kay’s death—and Kay did not have the right to devise her interest to anyone other than the heirs of W.H. Milam.3 Respondents’ claim to a portion of the Farm was at odds with [407] the option to purchase afforded to Copeland in Kay’s will. Further, Appellant discovered that the owners of the Farm granted to each other a “right of first refusal” in 1972, which created a potential conflict with Copeland’s option to purchase the Farm.

Because Kay bequeathed the Estate to numerous entities with varying interests, Appellant stated he had to determine the most equitable means of accommodating each beneficiary. According to Appellant, three of the residual beneficiaries, whose interests totaled 70% of the Estate, desired to receive their share of the Estate in cash rather than an interest in real estate. In an effort to sort out the competing claims, Appellant hired a surveyor and an appraiser and met several times with Copeland about exercising his option to purchase.

On May 2, 2008, approximately one year after Kay’s death, Appellant submitted a proposal to Respondents and Copeland, subject to the approval of all the beneficiaries and the probate court. In the proposal, Appellant recommended conveying five acres to Brown at no cost, conveying the 46.85 acres that adjoined Copeland’s land to Copeland at its appraised value, and offering the remainder of the Farm to Respondents at the appraised value. Appellant testified neither Brown nor Moses ever responded to this proposal. After a meeting with all the beneficiaries later that summer, Appellant drafted a second proposal and presented it to Respondents. Appellant stated Respondents again failed to respond or offer a counter-proposal, and at that time, Respondents retained counsel.

After twenty months passed, and without a resolution of the Estate, Appellant filed a partition and declaratory judgment action in circuit court on January 1, 2009. Appellant stated the purpose of filing this action was to determine the rights of the parties—arising out of Copeland’s option to purchase, the 1972 right of first refusal, and other claims made by Respondents— and to generally clear title to the property so the Estate could be settled. Appellant amended the complaint on March 4, 2009, at which time Respondents filed a counterclaim asserting a right to five acres. Litigation ensued, and the parties engaged in discovery. After fifteen months, the parties retained a mediator in an attempt to resolve the dispute.

[408] Just prior to mediation, Appellant reached an agreement with Rowland Milam, a relative of Respondents, to purchase the Estate’s one-half undivided interest in the Farm, the Home, and the Lot. The Estate was not responsible for any repairs or rollback taxes, and the property was sold using a quitclaim deed. The final purchase price was $867,000, approximately 94% of the 2007-2008 appraised value. All parties consented to the sale of the property. Appellant then made the final distribution of Kay’s personal effects and filed the proposal for distribution with the probate court on November 12, 2010.

Respondents requested a hearing, which took place on February 2, 2011, and February 21, 2011. At the hearings, the probate court received testimony and evidence from the parties but disallowed the introduction of an affidavit prepared by Appellant detailing his administration of the Estate and an affidavit from R. David Massey, Esquire, in support of Appellant’s request for compensation.

The court subsequently issued an order, finding Appellant “unnecessarily complicated the Estate by insisting on filing a partition action.” The court ruled Appellant should not have filed a partition/declaratory judgment action, but rather should have deeded out the Estate to the beneficiaries by a deed of distribution because it found “no necessity for a sale of the real estate.” Further, the probate court stated Appellant “unnecessarily complicated the Estate by converting an eight-month option to purchase the Estate’s one-half interest in its real estate into an indefinite right to purchase and by giving the option holder the right to buy only a portion of the property contrary to the Will.”

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Sullivan v. Brown, 792 S.E.2d 907, 418 S.C. 400, 2016 S.C. App. LEXIS 156 (S.C. Ct. App. 2016).

792 S.E.2d 907 (Sullivan v. Brown) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Sullivan v. Brown (In Re Estate of Kay)
816 S.E.2d 542 (Supreme Court of South Carolina, 2018)