Charles v. Neely

• Decision Date: 27 February 2013
• Docket Number: No. W2012-01252-COA-R3-CV,W2012-01252-COA-R3-CV
• Parties: CHERYL O. CHARLES v. GISSELLE CARTER NEELY
• Court: Tennessee Court of Appeals

CHERYL O. CHARLES v. GISSELLE CARTER NEELY

No. W2012-01252-COA-R3-CV

COURT OF APPEALS OF TENNESSEE AT JACKSON

December 13, 2012 Session

Filed February 27, 2013

Appeal from the Chancery Court of Shelby County

No. CH-11147211

Arnold B. Goldin, Chancellor

This case involves an alleged agreement about funds distributed from a reopened estate. The decedent father died years ago, leaving three daughters and an estranged wife. The father's estate was probated and closed. Long afterward, the petitioner daughter discovered unclaimed funds in the father's name held by the State. Another daughter, the executrix of the father's estate, reopened the father's estate. Finding no claims against the estate, the probate court distributed the funds to the executrix, in accordance with the father's will, and closed the estate. The daughter who discovered the unclaimed funds filed the instant petition in chancery court, asserting that the sisters had agreed that the funds would be split among them in accordance with their mother's will. Based on the probate court's adjudication of the father's reopened estate, the chancery court granted summary judgment in favor of the executrix daughter, holding that res judicata barred the chancery court action. We affirm the grant of summary judgment as to allegations in the chancery court petition that the probate court should have distributed the funds differently. We reverse the grant of summary judgment as to the remainder of the chancery court petition, finding that the petition also asserts claims based on an alleged separate oral agreement among the sisters, and hold that the respondent executrix sister has not conclusively established the defense of res judicata as to these remaining claims.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court is Affirmed

in Part, Reversed in Part, and Remanded

HOLLY M. KIRBY, J., delivered the opinion of the Court, in which ALAN E. HIGHERS, P.J., W.S., and DAVID R. FARMER, J., joined.

Petitioner/Appellant Cheryl O. Charles, Memphis, Tennessee, self-represented

Kathleen N. Gomes, Memphis, Tennessee for Respondent/Appellee, Gisselle Carter Neely

OPINION

FACTS AND PROCEEDINGS BELOW

This case arises out of a family dispute.¹ George N. Carter ("Father") died testate in September 1994. He was survived by his wife, Evelyn Carter ("Mother"). Father was also survived by three daughters: Respondent/Appellee Gisselle Carter Neely ("Neely"); Petitioner/Appellant Cheryl O. Charles ("Charles"); and Jacquelyn Carter, who is not a party to this action.

Father's will was admitted to probate in the Probate Court of Shelby County, Tennessee in October 1994. At the time of Father's death, he and Mother were separated; Mother was excluded from Father's will. The will designated daughter Neely as executrix of Father's estate. The will provided that daughters Cheryl Charles and Jacquelyn Carter would receive $2,000 each. Neely was named as the sole beneficiary in the will's residuary clause. The property in Father's estate was distributed in accordance with his will. In December 1995, the Probate Court issued an order discharging Neely as executrix and closing the estate.

A couple of years later, in 1997, Mother died. Mother's will appointed daughter Charles as executrix of her estate, and left all real and tangible property to Charles. Under Mother's will, her residuary estate was divided into fourths, with a fourth to each of the three daughters and the remaining fourth to be divided among Mother's grandchildren. Although Mother left a will, for reasons that do not appear in the record, no estate was opened for her.

Apparently, prior to her death, Mother received documents informing her that Father had owned several shares of FedEx stock that needed to be transferred. The documents indicated that effectuation of the stock transfer required a "certified copy of the court appointment of the Estate Representative" within 60 days of the transfer request, as well as "a signature ofthe Estate Representative." The stock transfer was not completed² and after Mother's death the documents with the instructions were placed in a box with some of Mother's other possessions and forgotten.

Years later, in 2011, Charles happened on the FedEx stock transfer documents. According to Charles, when she discovered the stock transfer documents, she contacted FedEx and was informed that the unclaimed shares had been sold and the proceeds turned over to the State of Tennessee Treasury Department's Division of Unclaimed Property ("State"). The State confirmed to Charles that it was holding the funds in question. The State's documents listed Father's name under the "original owner's name" for the FedEx shares at issue, with no additional beneficiary. Charles claims that she was told that, in view of the amount of the funds being held by the State, the probate estate would have to be re-opened.

With this information about the FedEx stock proceeds in hand, Charles claims, she contacted her sisters, Jacquelyn Carter and executrix Neely. Charles contends that the sisters discussed opening an estate for Mother, but decided that "[M]other's estate did not warrant [a] probate filing." Charles asserts that the three sisters then decided that "since my father's will had been probated, [Neely] would file for the funds and distribute them according to [Mother's] will . . . ."

Thereafter, executrix Neely filed a petition to re-open Father's estate.³ On June 7, 2011, the Probate Court entered an order re-opening Father's probate, for the express purpose of addressing the funds being held by the State.

The record next reflects an order entered by the Probate Court on October 4, 2011. The order states that Neely "made a diligent search for all creditors, . . . [and] provided notice to them," but "[n]o claims were filed against the Estate." The order stated further that Neely had "distributed the Estate according to the terms of [Father's will]." The order closed Father's re-opened estate and discharged Neely as executrix and personal representative. Therefore, under the will, the funds were determined to be part of Father's estate and distributed to Neely, as the residuary beneficiary under Father's will. Charles did not receive any of the funds that were distributed.

On September 8, 2011, Charles, representing herself, filed a petition against Neely in the Chancery Court of Shelby County. In the petition, Charles recited that she found the documents on the FedEx stock, learned that the proceeds from the sale of the stock werebeing held by the State, and was informed that the funds would have to be distributed through probate. Upon learning this, the petition alleged, "I [Charles] contacted my sisters and it was decided that since my father's will had been probated, the defendant (Gisselle Neely) would file for the funds and distribute them according to my mother's will - one fourth to each of her three daughters and one fourth split between her two grandsons." The petition asserted that Charles gathered the documentation on the funds and sent it to sister Jacquelyn Carter, to be forwarded to Neely. After initially leading Charles to believe that she would receive a check with her portion of the proceeds, Charles's petition asserted, Charles was then told that Neely "decided to give the funds to charity." As relief, Charles's petition requested $7,500 as reimbursement for her work to secure the funds and "the one fourth portion of the funds as originally agreed."

In February 2012, Neely filed a motion to dismiss for failure to state a claim or for summary judgment. In the motion, Neely contended that the funds were properly distributed to her as the residual beneficiary of Father's estate. Neely noted that Father's re-opened estate was closed on October 4, 2011 pursuant to Probate Court order.

In response to Neely's motion, Charles claimed that Neely:

. . . entered into a good faith agreement employing me to secure information and the documentation necessary to receive unclaimed funds of [Father]. It was agreed that when the funds were received, [Neely], Jacquelyn Carter and [Charles] would each receive a one third portion of the funds ($25,000) to be paid. After [Neely] received and cashed the check, she breached the contract and refused to disburse the funds. [Neely] indicated that the funds would be sent FEDEX and then informed me through text messages from my sister, Jacquelyn Carter, that she would not disburse the funds as agreed.

In reply, Neely denied Charles's allegations, and argued in the alternative that Charles lacked standing to file the petition because Charles was never formally appointed to be the personal representative for Mother's estate.

In April 2012, after considering the parties' arguments and the record as a whole, the trial court entered an order granting summary judgment in favor of Neely. The trial court held:

1. As a matter of law, the proceeds held by the [State] were the assets of the Estate of [Father] and, thus, properly passed to [Neely] as the residual beneficiary of his estate.

2. The matter was properly handled and resolved in the Shelby County Probate Court and, as such, res judicata applies, and this Court has no jurisdiction over this matter.

From this order, Charles now appeals.⁴

ISSUES ON APPEAL AND STANDARD OF REVIEW

On appeal, Charles raises several issues, stated as follows:

Whether the [trial court] erred in granting Defendant's Motion for Summary Judgment without information provided by the discovery documents withheld by the defendant and the plaintiff's evidenti[ary] documents that were brought to the hearing for court submission and to be consider[ed].

Whether the Defendant should be sanctioned for deliberately withholding crucial evidence from the court and the Plaintiff.

Whether a default judgment should have been entered by the [trial court] due to [Neely's] failure to timely respond to two subpoenas.⁵

Whether Plaintiff should be compensated based on completion of the

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