McNeil v. Hester, No. 97-CA-00048-SCT
| Decision Date | 10 February 2000 |
| Docket Number | No. 97-CA-01107-SCT, No. 97-CA-01469-SCT., No. 97-CA-00048-SCT |
| Citation | 753 So.2d 1057 |
| Parties | Harold G. McNEIL v. Linda L. HESTER and Terry O. Hester as Executors of the Estate of Nelbert P. Hester, Deceased and Individually. |
| Court | Mississippi Supreme Court |
Hal H.H. McClanahan, III, Columbus, Roger K. Rutledge, Attorneys for Appellant.
Phil R. Hinton, Corinth, Attorney for Appellees.
BEFORE SULLIVAN, P.J., SMITH AND MILLS, JJ.
SMITH, Justice, for the Court:
¶ 1. This appeal arises from a dispute between the co-executors, Terry Hester and Linda Hester, and a devisee, Harold McNeil, of the estate of Nelbert P. Hester regarding the ownership of certificates of deposit held jointly by Nelbert Hester and the co-executors at the time of Nelbert Hester's death. The case is appealed by McNeil from the order of the Chancery Court of Tishomingo County, Mississippi, denying McNeil's request for an accounting, for removal of the co-executors, for payment of all principal and interest accrued on the certificates of deposit, and for attorneys' fees. Consolidated with the appeal from the chancellor's denial of the requested relief are the appeals from the chancellor's denial of McNeil's motion to correct the record and from the chancellor's denial of McNeil's motion to vacate the chancellor's order authorizing the closing of the estate and discharging the co-executors.
STATEMENT OF FACTS
¶ 2. Nelbert P. Hester resided on a farm in Tishomingo County with his three sisters, Grace Hester, Hettie Hester, and Reba Hester. None had children. Reba Hester was disabled and required the care of her siblings. Grace died in 1985, and on May 13, 1986, and Nelbert and Hettie began planning their estates so that Reba would be taken care of if Nelbert and Hettie died before Reba. In 1986, Nelbert and Hettie executed mirroring wills. According to the wills, the entire estate was left to co-executors Terry Hester and Linda Hester, nephew and niece, respectively, of Nelbert and Hettie, for the benefit of Reba. The wills also provide that if Reba predeceased Nelbert, which she did, Terry and Linda were to divide the proceeds of the estate equally between thirteen devisees. The will waives any requirement of an accounting. Terry and Linda are among the thirteen devisees, as is the Appellant, Harold McNeil.
¶ 3. Between 1985 and Hettie's death in November 1990, Nelbert and Hettie created numerous certificates of deposit with Iuka Guaranty Bank, Bank of Red Bay, Alabama, and People's Bank. Some of the certificates of deposit were payable to Nelbert or Hettie, some were payable to Nelbert or Hettie or Linda, some were payable to Nelbert or Hettie or Terry, and one was payable to Nelbert or Linda or Terry. Nelbert and Hettie also placed Terry and Linda on their checking account and safe deposit box, both at the Iuka Guaranty Bank. Neither Terry nor Linda opened the safe deposit box until after Nelbert's death, and neither wrote checks on the checking account until after Nelbert's death.
¶ 4. At the time of Hettie's death in November 1990, the following certicates of deposit existed:
¶ 5. Days after Hettie's death, Nelbert renewed the certificates of deposit at Iuka Guaranty Bank. The two certificates of deposit at the Bank of Red Bay remained, as did the certificate of deposit at Peoples Bank. In 1992, Nelbert renewed the certificates of deposit at Iuka Guaranty Bank into No. 20269 in the amount of $58,437.71; No. 20270 in the amount of $55,132.25; No. 20271 in the amount of $58,437.71; and No. 20272 in the amount of $55,132.24, all in the name of Nelbert or Terry or Linda. Also in 1992, Nelbert created certificate of deposit number 20308 at Southbank, Iuka Mississippi, in the amount of $29,000.00 and in the name of Nelbert, Terry or Linda; and certificate of deposit number 14870 at the Bank of Red Bay in the amount of $27,296.57 and in the name of Nelbert or Linda.
¶ 6. As of November 1992, the value of the certificates of deposit totaled approximately $365,000. Both Terry and Linda testified that Nelbert never consulted them regarding his financial affairs and that neither had knowledge of the certificates of deposit until they opened the safe deposit box after Nelbert's death.
¶ 7. Reba passed away in February of 1993, and Nelbert died days later on March 1, 1993. At Nelbert's death, the estate consisted of Nelbert's checking account, which contained roughly $10,000; Nelbert's car; personal and household items; and the family farm. The crux of the dispute at hand concerns whether the jointly payable certificates of deposit pass with Nelbert's estate. Terry and Linda maintain that they are the owners of the certificates of deposit. Harold McNeil appeals, inter alia, the chancellor's refusal to declare a constructive trust of the certificates of deposit and the interest accrued thereon.
¶ 8. Upon learning of Nelbert's death, Terry and Linda opened the safe deposit box to which Nelbert had given them keys. In the box, they found Nelbert's will as well as the certificates of deposit. Prior Nelbert's funeral, Terry and Linda consulted attorney Barry Finch about the administration of the will. Based on their consultation with Finch, Terry and Linda believed the estate consisted only of the farm and house, household items, and car—not the certificates of deposit. Terry read the will to the devisees the day of Nelbert's funeral. On March 9, 1993, the Honorable John C. Ross, Chancellor of the Chancery Court of Tishomingo County, Mississippi, granted the Petition for Letters Testamentary filed by Terry and Linda, and the will was admitted to probate.
¶ 9. Finch died in May 1993, and the co-executors proceeded without benefit of counsel from May 1993 until May 1994. Terry and Linda used Nelbert's checking account, a non-interest bearing account, to hold estate funds until they opened an estate account in May 1994. In June 1993, Terry and Linda conducted two private sales of household and personal items. Proceeds from the sales totaled $9,568.25, which Linda deposited in the joint checking account.
¶ 10. On January 6, 1994, Terry and Linda created a certificate of deposit in the amount of $46,074.16 and in the name of the Nelbert's estate. The money for certificate of deposit came from the Southbank certificate of deposit created by Nelbert and from the checking account. Terry and Linda testified that they created the certificate of deposit with the intent to give the other devisees a gift from the proceeds of the certificates of deposit which, they believe, they own. However, the two testified that they later discovered that by making a gift they would incur tax penalties, so they renewed the certificate of deposit on July 7, 1994, but only in their own names. Linda testified that at the time the certificate of deposit was created, she and Terry believed that the entire amount taken from the checking account, $17,000, consisted of their own personal funds. They later realized, however, that about $4,000 of the $17,000 belonged to the estate. Linda testified that any co-mingling of funds was corrected, and the money was returned to the estate.
¶ 11. In April 1994, Terry and Linda called a meeting of devisees to discuss the sale of the farm. At the meeting, Terry announced that there was approximately $390,000 in joint certificates of deposit. Terry testified that he did not, at that time, consider the money to be part of the estate. Montez Hannon, a devisee present at the meeting, testified that she understood Terry's announcement to mean that the certificates of deposit were part of Nelbert's estate. Harold McNeil, also present, testified that he just assumed the amount would be divided, but that Terry never stated that the certificates of deposit belong to the estate.
¶ 12. The farm was sold in May 1994. The attorney who handled the closing recommended to Terry and Linda that they set up an estate account. It was not until May 1994 that Terry and Linda actually obtained legal counsel, and at that time a separate estate account was established. The proceeds from the farm sale, totaling $150,250, were deposited in the estate account and then distributed.
¶ 13. In June of 1994, Terry and Linda deposited $105,991.91 in the estate account. The source of this money was the proceeds from three of the certificates of deposit at the Bank of Red Bay. Terry and Linda testified that it was, again, their intent to distribute to devisees as a gift, but that they decided against making the gift because of the tax that they would incur. Terry and Linda then removed the money from the estate account and put it back in the joint account at Red Bay. That same day, they cashed the jointly held certificates of deposit at the Bank of Red Bay. Linda deposited her check in a certificate of deposit, payable to Terry or Linda, in the Federal Credit Union in Memphis, Tennessee, for $75,637.39. Terry...
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