Cook v. Barnard

• Court: Missouri Court of Appeals
• Writing for the Court: Harold L. Lowenstein
• Citation: Cook v. Barnard, 100 S.W.3d 924 (Mo. App. 2003)
• Decision Date: 08 April 2003
• Docket Number: No. WD 61122.,WD 61122.
• Parties: Terra Cook, Respondent Pro Se, v. Robert C. BARNARD, Personal Representative in the Estate of William Charles Barnard, Deceased, Appellant.

Page 924

100 S.W.3d 924

Terra Cook, Respondent Pro Se, v. Robert C. BARNARD, Personal Representative in the Estate of William Charles Barnard, Deceased, Appellant.

No. WD 61122.

Missouri Court of Appeals, Western District.

April 8, 2003.

Paul Francis Devine, Maryland Heights, MO, for Appellant.

Timothy C. Brady, Co-Counsel, Fulton, MO, Robert V. Krueger, Jr., Mexico, MO, for Respondent.

Before ULRICH, P.J., LOWENSTEIN and HOLLIGER, JJ.

HAROLD L. LOWENSTEIN, Judge.

Robert C. Barnard appeals his removal by the Probate Court of Callaway County, under Section 473.140, RSMo 2000, (all further statutory references are to RSMo 2000), as personal representative of his deceased brother's estate. The personal representative's removal was sought by the respondents, based on an auto accident involving the deceased in which one of the respondents received serious injuries and whose potential special damages would exceed the assets in the probate estate. Removal was predicated upon the appellant's failure to respond to their demand, as creditors, to inventory non-probate assets (joint and payable on death, bank accounts, and joint tenancy on a farm) owned by the deceased and the personal representative at the date of death. § 461.300 (The applicable portions of which are contained in the appendix to this opinion.) Appeal of the probate court's order is available under Section 472.160.1(9).¹ Finding none of the grounds contained in Section 473.140 upon which to justify removal, this court reverses the judgment.²

I. Facts

The facts here were not contested. William C. Barnard ("William") and Billy Cook were involved in a traffic accident that resulted in William's death in January 2001. Billy Cook, who suffered brain injury during the accident and his wife, Terra Cook, petitioned the probate division of the circuit court to order administration of William's estate and filed a personal injury action against the estate, in February 2001, seeking an amount of damages which would exceed the inventoried value of the estate.

Upon William's death, his brother Robert Barnard ("Robert or appellant") became the recipient of certificates of deposit ("CDs"), which were in Barnard's name with a payable-on-death designation in favor of Robert or in the joint names of William and Robert; and of real property the two held as joint tenants with rights of survivorship. The second amended inventory of William's estate estimated a net value at an amount less than the damages sought by the Cooks. Robert did not include the value of the bank account, CDs, and realty.

By letter, the Cooks demanded that Robert include these items in the inventory, citing Section 461.300, which, among other things, allows probate capture of non-probate assets to satisfy claims that probate assets cannot satisfy. Robert did not inventory the items. The Cooks then filed this petition for his removal under section 473.140. The Cooks argued (1) that Robert failed to list the non-probate assets in the inventory of estate assets though required to do so by Section 461.300; (2) that there was a "real and substantial controversy" whether the estate owned the unlisted items and that Robert's claim that he owned them was antagonistic to the interests of the estate; and (3) that, assuming Robert owned them, there was a conflict of interest because as administrator Robert would have an obligation to the estate's creditors to recover of the value of some (maybe all) of the unlisted items but as owner of these items he would want to retain their value.

Robert's answer to the Cook's petition for removal was ambiguous. In paragraph eight, Robert admitted paragraph seven of the Cook's petition, which claimed that "there exists a real and substantial controversy as to whether the [CDs] are assets subject to administration of the estate." But, in the same paragraph, Robert denied any obligation to inventory the CDs and, in paragraph six, he denied a duty to inventory the realty.

At the "short" hearing on the petition, the Cooks, who had the burden of proof to make a prima facia case under their Section 473.140 petition for removal, presented only documentary evidence of the factual claims underlying their reasons for removal of Robert. Appendix 2 to this opinion lists the six CD's and their ownership as well as title to the real estate. In addition, the appendix contains a chronology of the factual events is recounted. Robert did not present evidence. The trial court granted the Cooks' petition without providing any explanation of its decision.

II. Standard of Review

The judgment of trial court sitting as: fact-finder is normally affirmed unless it is not supported by substantial evidence, against the weight of the evidence, or misconstrues or misapplies the law. Murphy v. Carron 536 S.W.2d 30, 32 (Mo. banc 1976).

III. Analysis

The sole issue here is whether as a matter of law the language for removal under Section 473.140, "incapable or unsuitable to execute the trust reposed in him" is satisfied when the personal representative declines to include jointly held non probate assets in the inventory in order to satisfy tort claims. There are eight listed grounds for removing a personal representative:

If any personal representative becomes mentally incapacitated or is convicted of a felony or other infamous crime, or becomes an habitual drunkard, or in any manner incapable or unsuitable to execute the trust reposed in him, or fails to discharge his official duties, or wastes or mismanages the estate, or acts so as to endanger any corepresentative, or fails to answer any citation and attachment to make settlement, the court, upon its own motion, or upon complaint made by any [interested person] ... may revoke the letters granted.

§ 473.140. These grounds are exclusive, Tuchschmidt v. Tuchschmidt, 861 S.W.2d 741, 744 (Mo.App.1993), and apply to court-appointed administrators, like Robert, as well as personal representatives. § 472.010(26).

The Cooks' first argument is that Robert's decision to exclude the realty and CDs from the inventory of estate assets made him "incapable or unsuitable" to be personal representative because, supposedly, under Section 461.300(1)³ Robert had an obligation to include these assets in the inventory of estate assets. Whether Section 461.300(1) required Robert to include the non-probate assets is a question of statutory interpretation, a question of law reviewed de novo. Ochoa v. Ochoa, 71 S.W.3d 593, 595 (Mo. banc 2002). Section 461.300(1) does not require the personal representative to inventory non-probate assets. It is a rule of liability, not of ownership. It allows the estate to recover the value of non-probate assets, among other things, when the estate's assets (the probate assets) are inadequate to cover its debts here, potentially, the Cooks' tort suit. Section 461.300 does not compel Robert to inventory these items which, by the Cook's own petition and argument, are non-probate assets. Because a personal representative or administrator cannot be removed for failing to do something she (or he) has no obligation to do, In re Estate of Vester, 4 S.W.3d 575, 578 (Mo. App.1999), Robert's decision not to inventory the non-probate assets was not a grounds for removal.

The inventory statute only covers the decedent's property held at his death, § 473.233(1). None of the items the Cooks claim should have been inventoried were decedent's at his death. Non-probate transfers — of the bank account and CDs that passed to Robert — are not testamentary; nor do they pass by descent. See § 461.009 & § 461.005(7). See also In re Hoffmann, 23 S.W.3d 646, 648-49 (Mo. App.2000). They passed to Robert by operation of law. The realty (held as joint tenants with rights of survivorship), though technically not non-probate assets, § 461.005(7), was not decedent's property at his death; at his death, his interest was extinguished, leaving Robert with the fee simple absolute. Rushing v. S. Mo. Bank, 859 S.W.2d 211, 221 (Mo.App.1993). Inventorying these assets might have been an error justifying Robert's removal. See Tuchschmidt, 861 S.W.2d at 743-44.

The second argument, that there is a bona fide dispute about the ownership of the CDs, which creates a conflict of interest, is based on a false premise, that there is an ownership dispute. There is not: Robert owns the unlisted items. Davis v. Roberts does not help the Cooks. 206 Mo.App. 125, 226 S.W. 662 (1920). In Davis, an executor was removed under the forerunner of Section 473.140 for failing to inventory a note the executor claimed ownership of. Id. at 663. This court affirmed, opining that:

In a proceeding of this kind, it was not necessary to show that the estate was the owner of the property, but only to show, as the court found, that there was a real and substantial controversy as to the ownership of the note and that there was reasonable and probable cause to believe that the note belonged to the estate. A finding of this kind shows that the position of the executor and the estate is entirely antagonistic and that he ought not to be permitted to serve longer.

Id. at 664.

There is no reasonable dispute as to ownership. Nothing in the record indicates that the CDs, bank account, and realty were owned by the decedent at his death, nor any conduct indicating they were transferred to Robert because of fraud. By describing them as non-probate assets, the Cooks infer that the estate has no ownership interest in them. In Vol. 4A Missouri Practice, Probate and Surrogate Law Manual (2001), at page 623, the author, Judge Borron, in discussing the predecessor to Section 461.300, notes that this statute's purpose is to protect not only surviving family as well as to prevent transfers in fraud of creditors. There is nothing here to suggest the bank transactions from William or the real estate deed to William and Robert were inspired by any wrongdoing. As noted from the dates listed in the appendix to this...