Third National Bank in Nashville v. Brown

691 S.W.2d 557, 1985 Tenn. App. LEXIS 3398
CourtCourt of Appeals of Tennessee
DecidedApril 11, 1985
StatusPublished
Cited by3 cases

This text of 691 S.W.2d 557 (Third National Bank in Nashville v. Brown) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Third National Bank in Nashville v. Brown, 691 S.W.2d 557, 1985 Tenn. App. LEXIS 3398 (Tenn. Ct. App. 1985).

Opinion

OPINION

TODD, Presiding Judge, Middle Section.

Third National Bank in Nashville, Trustee under the will of Nettie Turner Fite, deceased, filed this suit for instructions. From a summary judgment favoring the defendant, Dr. James S. Brown, Commissioner, the other defendants, Mullowney, Girtman and Fite, have appealed.

Dr. James S. Brown is Commissioner of the Tennessee Department of Mental Health and Mental Retardation, representing the interests of the State of Tennessee in the collection of a claim for care of a former inmate of an institution in his department.

Defendants, Mullowney, Girtman and Fite are the residuary beneficiaries of a trust created by the will of Nettie Turner [559]*559Fite. Said will provided that the trustee (plaintiff) should

use any part of the income therefor (sic) which the Trustee deems proper for the support and maintenance of our daughter Jeanette Fite throughout her entire life.

Encroachment upon the corpus was also authorized “if the trustee deems it necessary”.

From 1975 to 1980, Jeanette Fite was a resident of a state institution. During this period the trustee received statements from the institution for the care of the resident, but the trustee did not pay the bills because of the objections of the three residuary beneficiaries. Jeanette Fite died on September 20, 1983. At that time, the accumulated charges for her care were $67,793.68, and the trust assets amounted to approximately $95,000. The residuary beneficiaries continued to object to the payment of the charges, and the trustee filed this suit for instructions.

The State reduced its claim to $57,435.27, and the Chancellor ordered the trustee to pay this amount. As stated, the residuary beneficiaries appealed.

Appellants’ issues are as follows:

1. Did the Trial Court err in not requiring the State to file a claim against the Estate of Jeanette Fite, Deceased?
2. Did the Trial Court err in failing to hold that the Trustee lacked discretion to allow the postmortem claim of the State, no judicial action having been taken by the State during the lifetime of Jeanette Fite, deceased?
3. Did the Trial Court err in failing to hold that the beneficial interest of Jeanette Fite under the will of her mother ceased to exist upon the death of Jeanette Fite?
4. Did the Trial Court err in rewriting the terms of the will of Nettie Turner Fite in order to effectuate the intention of the Testatrix, where the intention was frustrated by the negligence of defendant Brown, a creditor?
5.Did the Trial Court err in applying the doctrine of Cy Pres?

Appellants argue that the State is not entitled to be paid because it failed to conform to applicable statutes. Prior to the enactment of Chapter 323, Public Acts of 1983, the applicable law was contained in TCA 33-402 and 403. Since the claim of the State arose in 1980 and prior years, it is insisted by the State that §§ 33-402 and 403 are applicable. Since Jeanette Fite did not die until 1983, appellants insist that the provisions of the new statute, Chapter 323, Public Acts of 1983, is applicable, especially section 32 thereof (TCA 33-4-110) which provides:

Claim against estate of patient, resident, or relative. — IF (l)(A)(i) A patient or resident or former patient or resident of a facility operated by the department dies, AND
(ii) The commissioner presents a claim for a sum unpaid and owing to the state on account of such patient or resident, OR
(B)(i) A responsible relative of a patient or resident of a facility operated by the department dies, AND
(ii) The commissioner presents a claim for a sum unpaid and owing to the state on account of such patient or resident, AND
(iii) The claim against the estate of the responsible relative is not for a charge incurred more than five (5) years prior to the death of the responsible relative,
THEN
(2) The claim shall be paid as a claim against the estate of the deceased person. [Acts 1983, ch. 323, § 32.]

The substance of this section is found in the former section 33-403. Therefore, it is immaterial whether the former statute or the present statute is applicable.

The clear intent of the statute is to provide a means of collection of claims due the State for institutional care. It was not intended to exclude other remedies.

Appellants cite Cox v. State, 222 Tenn. 606, 439 S.W.2d 267 (1969). In that case, [560]*560the Supreme Court affirmed a judgment in favor of the State and against the guardian of a non compos patient at a State Facility. Appellants argue that the success of the State in that case is tantamount to a ruling that claims of the State for keep of incompetents must be prosecuted in identically the same way. This is a non sequitur. The same opinion holds that delay or failure to pursue other remedies did not prevent the State from succeeding in that case.

Appellants assert that the State is not entitled to recover in the present case unless it sues or otherwise judicially seeks payment from the estate of the deceased as was done in the case of the estate of the incompetent in Cox. As stated, the State is not limited to the remedy pursued in Cox, but may pursue any available legal or equitable remedy.

It is true, as insisted by appellants, that the interest of Jeanette Fite in the subject trust ceased at the time of her death. So far as this record discloses, Jeanette Fite had no estate at her death, and there was no administration in which a claim might have been presented or prosecuted.

Appellants cite State ex rel. Eastern State Psychiatric Hospital vs. Estate of Rainey, Tenn.1973, 490 S.W.2d 530 wherein the estate of an indigent patient was held liable when it became the recipient of a “windfall” inheritance. The case is authority for the responsibility of an estate to the extent of its assets, but is not authority for denying the State access to trust funds set aside for the very purpose of furnishing the care furnished by the State.

Appellants cite the statute, TCA 30-2-307, requiring that claims be filed with the probate court wherein estates are being administered. This statute provides a condition for collecting from the estate. It does not bar the claimant from collecting from other legitimate sources.

The terms of the trust created an equitable fund devoted to payment for the care of Jeanette Fite during her life. So long as such fund remained undistributed, it remained subject to the orders of a court of equity in carrying out the purpose of the trust.

No merit is found in appellants’ first issue.

In support of their second issue, appellants argue that the Chancellor erred in finding that the power of the trustee survived the death of the cestui qui trust in respect to payment for her care prior to her death.

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Related

Noble v. Stubblefield
755 S.W.2d 454 (Court of Appeals of Tennessee, 1988)

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Bluebook (online)
691 S.W.2d 557, 1985 Tenn. App. LEXIS 3398, Counsel Stack Legal Research, https://law.counselstack.com/opinion/third-national-bank-in-nashville-v-brown-tennctapp-1985.