Kentucky Court Report - SCOKY & COAKY

Jury's determination of testamentary capacity when voiding will was res judicata on capacity (but not on undue influence) for will executed 16 days earlier: ROTHWELL V. SINGLETON (COA 6/6/2008)

ROTHWELL V. SINGLETON
WILLS AND ESTATES:  Testamentary capacity and res judicata
2007-CA-001348
PUBLISHED:  REVERSING AND REMANDING
PANEL:  THOMPSON PRESIDING; KELLER, GRAVES CONCUR
LINCOLN COUNTY
DATE RENDERED: 6/6/2008

This published Court of Appeals will contest case involves the usual issues of capacity and undue influence. What makes this one of some interest is the fact that it involved a Will dated December 12, 1999 and that, in an earlier action, a jury was asked to consider a will dated December 28, 1999. The jury determined and the court held that the decedent had capacity on December 28th but that will was void because it was the result of undue influence. The question before the court in the case at bar was whether the determination of capacity as of December 28th was res judicata as to the question of capacity on December 12th of the same year. The trial court held that it was, but the Court of Appeals reversed and held that the only issue at hand was capacity as of December 12. The Court of Appeals indicated that “[on remand, the appellant will have an onerous burden.” The Court did not indicate whether the will’s proponent would be able to inform the about the testator’s capacity on December 28th.

Digested by Jim Worthington

Wrongful death settlement without any earnings impairment treated as personal injury settlement going to heir and not statutory beneficiaries: SMITH v. MCCURDY (COA 3/28/2008)

SMITH V. MCCURDY
PROBATE: Wrongful death proceeds versus personal injury action and distribution of the proceeds; Wrongful death settlement without any earnings impairment treated as personal injury settlement going to heir and not statutory beneficiaries
2007-CA-001239
PUBLISHED: AFFIRMING
PANEL:  MOORE PRESIDING; WINE, BUCKINGHAM CONCUR
MARSHALL COUNTY
DATE RENDERED: 3/28/2008

This appeal involved a most unfortunate dispute between two sisters regarding the proceeds of a settlement reached in a federal lawsuit filed based on allegations of maltreatment of their deceased mother in a nursing home.  At the heart of the appeal was the characterization of the settlement with the nursing home as a wrongful death action or a personal injury action since the beneficiaries for the former are statutorily defined and would have included both sisters equally but if a personal injury action then the sole beneficiary under the will would receive all of the proceeds!

Diana Smith and Denica McCurdy are sisters. Their mother, Thelma Nanney, was a resident of Britthaven Nursing Home from July 17 1998 until June 1, 2001. Thelma was described in the pleadings as “morbidly obese and generally unable to care for personal needs. Diana later learned that her mother left a Last Will and Testament naming Denica as sole beneficiary. Accordingly,the probate court named Denica as executrix of Thelma ’s estate.  Denica as personal representative of Thelma ’s estate did file suit in Marshall Circuit Court against Britthaven Nursing Home Incorporated and twenty unknown defendants. Diana was not a party to that action and as a potential beneficiary under a wrongful death action under typical circumstances could not intervene.

Diana first filed in district court which had no jurisdiction, and then filed suit in the circuit court arguing that the settlement in the federal action having released all claims, which Diana asserts necessarily includes the wrongful death claim having joined with the personal injury action that pursuant to KRS 411.130 Diana is entitled to a portion of the settlement.

Diana argues that because Denica filed a wrongful death cause of action in the federal lawsuit in conjunction with a survival action for personal injuries Thelma allegedly sustained while at Britthaven then all proceeds derived from the federal settlement should be distributed to Thelma ’s heirs in accordance with KRS 411.130(2), rather than passing through Thelma ’s estate.

Diana is not a beneficiary under Thelma ’s will. If she cannot establish that KRS 411.130(2) governs the distribution of the settlement proceeds, the proceeds will pass through the estate. She will receive nothing.

Notwithstanding Diana ’s insistence that the only controversy is the legal issue of whether KRS 411.130 controls when pursuant to KRS 411.133 both a wrongful death action and a survival action are brought in a complaint i.e. once pled they are forever joined for purposes of a generic settlement the COA did agree with the circuit court that there was an issue regarding whether the federal action was pursued and settled as a wrongful death matter.

Diana failed to file anything to rebut or contradict the Notice of Disallowance of Claim.

The subject of the lawsuit in Federal District Court was a survival claim mainly concentrating on the gross negligence of Britthaven in their failure to properly care for Ms.Nanney, which resulted in her pain, suffering, emotional distress, humiliation and feelings of abandonment. There were no proceeds allocated for wrongful death in the confidential settlement of the Federal Court lawsuit.

To defeat summary judgment Diana was compelled to present affirmative evidence to contradict these evidentiary averments by Denica to create a genuine issue of material fact.  Diana failed to do so apparently having relied solely on her theory that the matter involved only a legal issue.

Under existing Kentucky law damages for a wrongful death claim are based on the destruction to the decedent ’s power to labor and earn money.

This result is well illustrated in Turfway Park Racing Ass ’n v.Griffin 834 S.W.2d 667 671 (Ky.1992) holding that “damages flow naturally from the wrongful death of a person unless there is evidence from which the jury could reasonably believe that the decedent possessed no power to earn money.”  A wrongful death claim brought under the facts of the underlying federal action would not be recoverable i.e.it would have no monetary value. Accordingly, this undisputed fact supports a finding that the settlement was not based upon a wrongful death claim.

Consequently, we conclude the circuit court reached the correct decision regarding the federal wrongful death claim and settlement.

We conclude that KRS 411.133 only omits the prior obligation to elect remedies and now allows wrongful death claims and survival actions to be jointly pled.  Obviously, this cannot eliminate the inherent necessity for the elements of either causes of action to be met for a recovery.

While Denica pled a cause of action for wrongful death this is permitted under KRS 411.133.  But as is undisputed under the facts of this case there is not a factual basis for a recovery under a wrongful death theory pursuant to existing Kentucky law.

Consequently, there is no merit to an argument regarding how proceeds for a non-existent recovery should be distributed.

Such an argument is academic at best and not legitimately before this Court. Affirmed.

By Michael Stevens

Failure to revive action within one year results in dismissal and attempt to amend complaint fails: FRANK v. THE ESTATE OFJOHN ENDERIE (COA 3/21/2008)

FRANK v. THE ESTATE OF JOHN ENDERIE
CIVIL PROCEDURE:  Failure to revive cause of action and no duty on defense counsel to open estate
2006-CA-001106   
PUBLISHED: AFFIRMING
PANEL:  NICKELL PRESIDING; CAPERTON, TAYLOR CONCUR
COUNTY: JEFFERSON
DATE RENDERED: 3/21/2008

Court of Appeals affirms dismissal of action for failure to revive within one year of the death of the alleged tortfeasor.

During the pendency of this auto-collision case, the alleged tortfeasor died. Within a few weeks and at a pretrial conference in January 2005, his defense counsel advised the court and plaintiff's counsel of her client's death and that she was unaware of an estate having been opened. Trial was set for July 12, 2005, but did not go forward; various motions were argued, including a motion to dismiss for failure to revive. Defense counsel submitted copies of the death certificate, obituary, and a letter from the decedent's brother noting that, since the decedent was insolvent at the time of death, no estate was opened. Plaintiff's counsel candidly admitted that he had forgotten that the alleged tortfeasor had died (he had even prepared his cross-examination). He said he anticipated that the family would open an estate, but since they didn't, he would petition probate court to have the public administrator appointed. The trial court granted plaintiff time to file the probate petition and amended its complaint, denying the motion to dismiss and setting a new pretrial conference for October 10, 2005.

Later on July 12, 2005, plaintiff's counsel emailed defense counsel asking for next of kin information for the probate petition. Defense counsel responded that she didn't know, but that she would "try" to reach the decedent's brother. Six weeks later, plaintiff's counsel asked for the same information and received essentially the same reply. In further emails, defense counsel noted that most of what plaintiff's counsel needed was included in the obituary. At the October 10, 2005, pretrial conference, plaintiff's counsel noted no problems whatsoever and merely got a trial date from the court. On December 15, 2005, plaintiff's counsel finally petitioned the probate court, but since he did not have the next of kin's addresses required for notification, the probate court continued the petition until January 2006 to allow proper notice. Although the one-year statute of limitations on reviver was to run on December 26, 2005, plaintiff's counsel did not request an expedited hearing. Plaintiff's counsel obtained the addresses, made proper notification and the public administrator was appointed in January 2006. Instead of filing a motion to substitute the administrator, plaintiff's counsel filed a motion to amend the complaint.

Defense counsel filed another motion to dismiss and co-counsel took over for plaintiff. Co-counsel alleged that defense counsel had acted nefariously in her dealings with initial plaintiff''s counsel. Also, co-counsel argued that initial counsel felt ethically barred from contacting the family directly as they were represented and/or controlled by the defense.

CA held that defense counsel owed no duty to plaintiff's counsel, that plaintiff's counsel failed to review his own file and take appropriate steps. Further, defense counsel did not intentionally mislead counsel; she only noted that she would "try" to get information out of professional courtesy - she had no duty to do so. Also, counsel's claims of not contacting the family out of ethical concerns are belied by the fact that counsel did, in fact, try to contact the presumably family to determine if defense counsel had contacted them.

By John Hamlet

Will which excluded illegitimate children upheld: CAREY v. JAYNES (COA 3/21/2008)

CAREY v. JAYNES
PROBATE:   Will which excluded illegitimate children upheld
2007-CA-000148
PUBLISHED: AFFIRMING
PANEL: COMBS PRESIDING; DIXON, KNOPF CONCUR
COUNTY: MADISON
DATE RENDERED: 4/10/2008

This case involved the attempt of an illegitimate child to obtain a share of her father’s estate. A court had determined paternity and the father had paid child support to the plaintiff’s mother. However, his will left his estate to his “children” and defined that term as the “lawful blood descendants in the first degree of the parent designated.”

Under Kentucky law, the term “children” refers to legitimate and not illegitimate children. Marquette v. Marquette’s Ex’rs, 227 S.W. 157 (Ky. App. 1921). Furthermore, “[t]he law in Kentucky has always held that the word lawful in this context means legitimate or born of a lawful marriage.” Black v. Cartmell, 49 Ky. 188 (1849) (emphasis in original). Although the Court noted that the law regarding the rights of illegitimate heirs has changed for persons dying intestate, the testator was free to make his will as he saw fit.

By James Worthington

Status of brokerage account on death - tenancy in common vs. joint account with right of survivorship and prenup: ESTATE OF CHARLES SPENCER V. SPENCER (COA 2/15/2008)

ESTATE OF CHARLES SPENCER V. SPENCER
ESTATES:  Status of brokerage account on death - tenancy in common vs. joint account with right of survivorship and prenup 
2007-CA-000277
PUBLISHED: REVERSING AND REMANDING
PANEL:  THOMPSON PRESIDING; NICKELL, VANMETER CONCUR
COUNTY: MCCRACKEN
DATE RENDERED: 2/15/2008

Despite having signed a prenuptial agreement, the husband retitled his brokerage account in his and his wife's name after they married. After he died, the widow claimed that the account was a joint account that passed by survivorship. The executor of his estate, however, claimed that the prenuptial agreement controlled. The Court of Appeals held that the couple owned the account as tenants in common. Therefore, the estate was entitled to the deceased husband's one-half interest in the account. The widow also retained her one-half interest in the account.

Along the way, the court noted that under Kentucky common law, the conjunctive "and" in an account title creates a tenancy in common. This result is in opposition to the majority of states, in which "and" creates a tenancy by the entirety. The Kentucky legislature has deliberately avoided bringing us in line with that majority view. However, KRS 391.315 does address certain multiple party accounts and directs that those accounts do pass by law to the survivor. The Court of Appeals, however, held that a brokerage account was not subject to KRS 391.315. Thus, the Court applied common law to reach the result that the brokerage account in the case at bar was owned by the couple as tenants in common. All in all, the case provides a nice review of an important area of law given the increasing prevalence of non-probate assets.

Jim Worthington

Probate jurisdiction dispute betweenc circuit and probate courts over adversary proceeding: HALE V. MOORE (COA 1/4/2008)

HALE V. MOORE
PROBATE:  Adversary proceedings (district vs. circuit court jurisdiction issues); Fees for executrix and attorney (same person)
2005-CA-001895
TO BE PUBLISHED: AFFIRMING IN PART, REVERSING IN PART, AND REMANDING WITH DIRECTION
PANEL: NICKELL PRESIDING; HOWARD, TAYLOR CONCUR
COUNTY: SHELBY
DATE RENDERED: 01/04/2008

This case involves the classic jurisdictional dispute between District and Circuit Courts. The Court of Appeals applied Lee v. Porter, 598 S.W.2d 465 (Ky. App. 1980), and held that once an adversary proceeding (an estate settlement suit) was filed in Circuit Court, that court alone had jurisdiction over the case. With that procedural question out of the way, the Court of Appeals addressed two substantive issues.

The Court first held that where the residuary estate passed to both charitable and non-charitable beneficiaries, the non-charitable beneficiaries were not spared the effect of the estate and inheritance taxes. The Court reached this holding by applying Kentucky law calling for apportionment of the tax burden in the absence of contrary language. However, the Court of Appeals' opinion was misguided in this holding. The Court applied Kentucky law because the Will was that of a Kentucky resident. The Will, however, included a residuary clause that funded a Trust, which was governed by Pennsylvania law. Pennsylvania law would have reached a different result on the apportionment issue, but the Court of Appeals ignored the distinction between the Will and the Trust and merged the two into an Estate, which it governed by Kentucky law.

The Court next held that the executrix's fee was too high. Again, this part of the opinion is troubling because the Court reached this holding by conflating the Will and the Trust. Although the executrix's fee was governed by KRS 395.150, the Trustee fee should not have been. At this point, the case has been remanded to the Circuit Court. But, the law of the case is that the executrix's fee is too high. It seems that it would be more appropriate for the executrix to have an opportunity to effect a clear allocation of the fee between the Will and the Trust (and actually some other entities that are involved) on remand. Hopefully, a Petition for Rehearing or a review by the Court of Appeals will clarify that issue so that the Circuit Court can meaningfully address the issues on remand.

James Worthington

Probate Jurisdiction in District Court and guardian removal: HALL V. COYLE (COA 11/2/2007)

HALL V. COYLE
PROBATE:  GUARDIANSHIP REMOVAL AND EXCLUSIVE JURISDICTION IN DISTRICT COURT 
2007-CA-001441
PUBLISHED; OPINION AND ORDER DENY
PANEL: DIXON PRESIDING; TAYLOR, VANMETER CONCUR
COUNTY: WASHINGTON
DATE RENDERED: 11/02/2007

COA denied movants motion for discretionary review of an Opinion and Order of the Washington Circuit Court affirming an order of the Washington District Court, which removed Hugh Donat Hall as co-guardian for his mother, Amelia Jane Hall.

The circuit court determined that the matter at bench did not involve probate and that the district court's jurisdiction was provided by KRS 387.520(1).  The circuit court found additional support in KRS 24A.120(3), which provides that matters not provided for by statute to be commenced in Circuit Court shall be deemed to be nonadversarial within the meaning of subsection (2) of this section and therefore are within the jurisdiction of the District Court.

COA agreed with the  circuit court that, even if KRS 24A.120(2) applied, the removal of a guardian would be construed as nonadversarial under KRS 24A.120(3) since no statute grants a circuit court jurisdiction to remove a guardian.

The district court's subject matter jurisdiction was then briefly reviewed by the COA which noted that pursuant to Section 113 of the Constitution of Kentucky, a district court has jurisdiction as provided by the General Assembly. In the case of guardianship proceedings, which are entirely separate from probate proceedings and are controlled by their own separate statutes, the General Assembly has clearly provided jurisdiction to district courts. The statute that is relevant to this discussion is KRS 387.520(1), which provides the District Courts shall have exclusive jurisdiction over all proceedings involving a determination of partial disability or disability, the modification of orders, the appointment and removal of guardians and conservators, and the management and settlement of their accounts.

Given this plain language,  the Washington Circuit Court correctly determined that the Washington District Court had subject matter jurisdiction over the motion to remove Hugh Donat Hall as co-guardian for his mother. Further, since the General Assembly has vested district courts with exclusive original jurisdiction in those removal matters, it is immaterial whether the removal proceedings below could have been construed as adversarial within the meaning of KRS 24A.120.

In view of the foregoing, COA concluded that movants have shown no entitlement to a second appeal on those issues.

Digested by Michael Stevens

Constructive Knowedge of Will: BENNETT V . NICHOLAS (COA 9/7/2007)

BENNETT V . NICHOLAS
TORTS: WRONGFUL DEATH ACTION
PROBATE: CONSTRUCTIVE KNOWLEDGE OF WILL
2006-CA-001467
PUBLISHED: REVERSING AND REMANDING
PANEL: HOWARD, PRESIDING; ACREE & LAMBERT CONCUR
COUNTY: MCCRACKER
DATE RENDERED: 09/07/2007

CA reverses and remands TC dismissal of malpractice claims.

Decedent's nephew was appointed as the administrator of her estate and then filed a wrongful-death action against the appellees. Appellees deposed decedent's former husband and discovered that she had a valid will appointing husband as Executor. Appellees moved to dismiss  the complaint; Appellant sought leave to have will probated and husband appointed Executor and substituted as personal representative for litigation purposes. TC granted motion to dismiss.

First, the dismissal was actually an entry of SJ against the personal representative and must be reviewed as such. Second, CA holds that Kentucky law is clear that appointment of nephew was a valid, voidable, NOT VOID, order, and that all actions taken, including filing suit, were valid. While there was absolutely no evidence, as appellees suggest, that nephew knew of the will prior to seeking appointment, such knowledge would be immaterial regardless. The motion to allow the will to be probated and the new personal representative to be substituted should have been granted; summary judgment was improper. Reversed and remanded.

Digested by John E. Hamlet.

Workers Comp Black Lung Reopening: BOLIN ESTATE V. T&T MINING (SC 8/23/2007)

BOLIN ESTATE V. T&T MINING
WORKERS COMPENSATION: Reopening of Pneumoconiosis claim
2006-SC-000787-WC.pdf
PUBLISHED: AFFIRMING (OPINION OF THE COURT)
FROM COURT OF APPEALS
DATE RENDERED: 08/23/2007

The Court affirmed the ALJ’s finding that additional exposure is required after an award of benefits for black lung, in order to reopen the award for a progression of the disease.

Digested by Peter Naake
Priddy, Cutler, Miller & Meade

ESTATE EXPENSES & INTESTACY: SANDERS V. SMITH (COA 8/17/2007)

SANDERS V. SMITH
WILLS, ESTATES, PROBATE:  EXPENSES AND INTESTACY
2006-CA-000444
PUBLISHED: AFFIRMING
PANEL:  PAISLEY PRESIDING; THOMPSON, VANMETER CONCUR
COUNTY: PIKE
DATE RENDERED: 8/17/2007

On appeal, Ellis and Sue Sanders argue that the judgment is palpably erroneous because it ignores their inherited interest under KRS 391.010, which provides that real estate belonging to an intestate decedent descends to his or her father and mother (assuming that the decedent had no children and after payment of the dower share).

Under KRS 391.030(1), the personal property of an intestate decedent is distributed only after the “payment of funeral expenses, charges of administration, and debts[.]” Real property belonging to an intestate decedent descends directly to the heirs pursuant to KRS 391.010, with one important qualification: if it shall appear that the personal estate is insufficient for the payment of all debts, the court may order the real property descended or devised to the heirs or devisees who may be parties to the action, or so much thereof as shall be necessary, to be sold for the payment of the residue of such debts. KRS 395.515.

In other words, the debts of the estate must be satisfied before the intestate shares are distributed. The Pike Circuit Court did not err in ordering the debts of the estate to be paid prior to distributing the remainder of the estate to Bobby and the appellants.

As a cautionary tale, this opinion started with the following admonition and warning brief writers:

We note as a preliminary matter that the appellants’ brief fails to satisfy Kentucky Rules of Civil Procedure (CR) 76.12(4)(iv), which requires a statement of the case consisting of a chronological summary of facts and procedural events necessary to an understanding of the issues presented by the appeal, with ample reference to the record, and CR 76.12(v), which requires that the argument contain ample supportive reference to the record.

Given the serious deficiencies of appellants' brief, we would be justified in ordering the brief stricken. See Robbins v. Robbins, 849 S.W.2d 571, 572 (Ky.App. 1993), citing CR 76.12(8)(a). Rather than imposing such a severe sanction, however, we elect instead to dispose of this appeal based solely upon the contents of the parties’ briefs.

Digested by Michael Stevens