Bloodworth v. Bloodworth

• Decision Date: 20 March 2003
• Docket Number: No. A03A0212.,A03A0212.
• Citation: Bloodworth v. Bloodworth, 260 Ga. App. 466, 579 S.E.2d 858 (Ga. App. 2003)
• Parties: BLOODWORTH et al. v. BLOODWORTH et al.
• Court: Georgia Court of Appeals

579 S.E.2d 858

260 Ga. App. 466

BLOODWORTH et al. v. BLOODWORTH et al.

No. A03A0212.

Court of Appeals of Georgia.

March 20, 2003.

Arnall, Golden & Gregory, Ronald C. Thomason, Blake E. Lisenby, Atlanta, for appellants. Walker, Hulberth, Gray, Byrd & Christy, Lawrence C. Walker, Jr., Perry, for appellees.

BLACKBURN, Presiding Judge.

James R. "Jerome" Bloodworth and Claud Hughes sued their siblings, Henry Bloodworth and Eva Roy Bloodworth Etheredge, in their capacity as the co-executors of their mother's estate for breach of fiduciary duty and constructive fraud in the sale of certain farm property to their brother, Stewart Bloodworth, at a price "grossly below the market value." Appellants sought rescission of the sale, or in the alternative, for damages. After a hearing, the trial court granted the defendants' motion for summary judgment.¹ For the reasons set forth below, we reverse.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.

(Citation omitted.) Matjoulis v. Integon Gen. Ins. Corp.²

Viewed in the light most favorable to the nonmovants, the evidence shows that the decedent, Gertie Bloodworth, was survived by eight children.³ Her will designated her oldest son and daughter, Henry and Eva Roy, as co-executors of her estate. Letters testamentary were issued on May 14, 2001. On May 23, Henry told Jerome that he could submit a bid for the family farm but that his bid had to be postmarked by May 26. Jerome testified that Henry told him that on June 2, a family meeting would occur to discuss the sale of the farm and open the bids. Jerome prepared a bid and sent it by certified mail to Henry. Jerome, the owner of property on both sides of the property, testified that he submitted a sealed bid of $429,001.99.

Prior to the June 2 meeting, the co-executors obtained an independent appraisal of the property by Robert Goodroe, a certified appraiser. In a professional appraisal dated May 28, 2001, Goodroe estimated the market value of the realty as $525,500 as of March 17, 2001. About two weeks earlier, on May 11, 2001, George Peake, on behalf of Tolleson Land & Timber, submitted an offer to the estate to purchase the entire tract for $335,057.40, with that offer to remain valid through June 11, 2001.⁴

As co-executors, Henry and Eva Roy conducted the family meeting on June 2. Henry knew, even before the meeting, that Jerome wanted to buy the farm. Jerome testified that Henry and Eva Roy indicated that they were not obligated to consider his bid and told him "we can do whatever we want to." Claud confirmed that at the meeting, Henry and Eva Roy "stated they could do whatever they wanted to do." Claud testified that both she and Jerome reminded Henry and Eva Roy that they had fiduciary responsibilities to the heirs. However, at the June 2 meeting, Henry handed Jerome back his bid, unopened. Frustrated at the impasse, Jerome left, and so too did Claud and another sister, Glynis Ellis, whereupon the meeting broke up.

On June 13, 2001, Jerome and Claud retained legal counsel. At Jerome's request, on June 13, their attorney, Robert R. Gunn II, contacted counsel for the estate. Gunn testified that he advised of the representation and asked "that no action be taken with respect to the sale of the family farm until at least Tuesday of the following week since I was going to be out of town at a State Bar function." Gunn testified that on June 13, he faxed the following letter to the estate's lawyer, Lawrence C. Walker, Jr.

Confirming our telephone conversation earlier today, it is my understanding that you know of no plans by the Executors of Mrs. Bloodworth's estate to transfer any of the property within the next few days and would not assist them in making such a transfer until you and I have conferred again by this coming Tuesday [June 19]. This firm will be representing Jerome Bloodworth concerning this matter, and it is Mr. Bloodworth's concern that the Executors may transfer the property to one of the other children of Mrs. Bloodworth for less than its full value in order to thwart our client's desire to acquire the property for a reasonable price.

Gunn advised that Jerome "stands ready, willing and able to participate in whatever process the Executors choose to sell the property." Gunn also asked for a meeting with the executors to discuss the sale of the property. He also warned that a transfer for less than its fair market value "may be a violation of the Executors' fiduciary duties."

Henry and Eva Roy told Stewart that Walker had notified them by letter that "Jerome was employing an attorney and that [Walker] had promised the attorney that he would do no legal work on the Gertie Bloodworth estate until the following Tuesday." Claiming that Jerome's "lawyer would throw a lis pendens" on the farm, Stewart suggested, "[y]ou all need to think what you can do." Then, notwithstanding the agreement between Gunn and Walker, Henry and Eva Roy proceeded to sell the farm to Stewart for $315,000 on Monday, June 18, using a different lawyer to handle the closing. Glynis testified that she did not think the executors acted properly and described their behavior as "sneaky." The day after the transaction, without disclosing the identity of the buyer, Henry wrote a note to Jerome, saying in part, "[w]e have sold the farm.... I am sorry you saw fit to withdraw your bid, that left us with (2) two bids." Henry added, "It was sold at a very fair market price for all of us." In a similar letter directed to their sisters, Eva Roy attempted to justify the sale without revealing the identity of the purchaser.

Glynis testified that prior to June 2, Stewart had told her, "if I ... tell Eva Roy and Henry that I want the farm, I'll get it." Stewart also told Glynis that he could not pay what the property was worth. Glynis testified that after their mother's death, Stewart asked her "if the family members were willing for a family member to get it at a reduced price." Glynis testified that at the June 2 meeting, when she suggested that Bobbe Dean Richardson, who is another sibling, and Claud be allowed to bid, Stewart said they could not bid because they had already heard the appraisal.⁵ Glynis testified that their mother had repeatedly expressed her desire that all eight children share in her estate equally. Glynis recalled her mother saying, "[i]f I only have one penny left, I want that one penny split in eight ways."

A month after the sale of the property, the Board of Tax Assessors of Houston County appraised this property at $476,300 for 2001 tax purposes, an amount which Jerome testified did not include timber worth approximately $50,000. Acting on behalf of the estate, on August 2, 2001, Eva Roy appealed the ad valorem tax appraisal. Afterward, the property was revalued for tax purposes at $414,150.

Unaware of the sale a day earlier, Gunn telephoned Walker on June 19 to request "a meeting be scheduled with the Executors ... as well as the other heirs, for the purpose of clearing the air." Gunn advised: "Jerome Bloodworth would like an opportunity to bid on the farm," and he cautioned that "[i]f the property is transferred for less than its fair market value, this would expose the Executors to a claim that they violated their fiduciary duties."

After learning about the sale, Jerome and Claud filed the underlying lawsuit in which they asserted they were denied the opportunity to submit bids for the farm. They alleged that Henry and Eva Roy "treated the subject as their own and conducted the sale of the property with little, if any, regard to their duties and obligations to the Estate of Ms. Bloodworth or the Plaintiffs and other beneficiaries." They accused Henry, Eva Roy, and Stewart of conspiracy and defrauding them

by agreeing to sell the property to Stewart Bloodworth for an amount grossly below the market value, by agreeing to unreasonably limit the number of bids solicited, by failing to follow any reasonable bidding process, by failing to consider the bid of Jerome Bloodworth, by failing to allow Claud Hughes to make a bid and in and by other means as will be shown at the trial of this case.

During the motion hearing on summary judgment, although readily acknowledging the fiduciary duty owed to their siblings, Henry and Eva Roy claimed they "exercised their duty diligently and cautiously" and "went beyond the call of duty." They pointed out that they had not been under any requirement to hold the June 2 meeting. Henry and Eva Roy asserted that they had honored their fiduciary duty to the other beneficiaries. The trial court apparently agreed and awarded judgment to Henry, Eva Roy, and Stewart.

1. Jerome and Claud contend that a jury should decide whether Henry and Eva Roy breached a fiduciary duty to act in the utmost good faith in administering the estate. They claim that the actions of the two co-executors did not comport with the powers derived from the decedent's will and that the co-executors exceeded or misused their authority, thereby breaching a fiduciary duty owed to the other heirs.

A codicil to the will states in pertinent part:

As to any real property owned by me at the time of my death, I desire and direct that it be appraised by an appraiser or appraisers (licensed or unlicensed), as deemed competent by my Co-Executors, as hereinafter named, as soon as my Co-Executors deem same to be feasible after my death, and that said real estate be thereafter, as soon as practical, sold at public or private sale, by bid, through a realtor, through negotiation, or otherwise, by my Co-Executors and with the net proceeds from the sale to be divided as provided for in Item IV above. My Co-

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