Estate of Gardner, Matter of

Citation114 N.M. 793,1992 NMCA 122,845 P.2d 1247
Decision Date30 October 1992
Docket NumberNo. 12748,12748
PartiesIn the Matter of the ESTATE OF Elizabeth Dycus GARDNER, Deceased. Lindsey GARDNER, Dave Gardner, and Duane Gardner, Petitioners-Appellees, v. Jeanne W. GHOLSON, Personal Representative, Respondent-Appellant.
CourtCourt of Appeals of New Mexico
OPINION

APODACA, Judge.

Jeanne W. Gholson (Gholson), the personal representative of the estate of her mother, Elizabeth Dycus Gardner (decedent), appeals a judgment of the district court rendered under the Probate Code, NMSA 1978, Secs. 45-1-101 to 45-7-401 (Repl.Pamp.1989 & Cum.Supp.1992), ordering a redistribution of the estate. She makes eight arguments on appeal, which we consolidate as five issues: whether (1) Section 45-2-608 applies to the facts of this case; (2) petitioners' claims were untimely filed; (3) substantial evidence supports the district court's findings of breach of fiduciary duty; (4) clear and convincing evidence supports the district court's findings and conclusions regarding fraud; and (5) the district court erred in granting attorney fees to petitioners while denying them to Gholson. Not persuaded by Gholson's argument on any of these issues, we affirm the district court's ruling.

BACKGROUND

Decedent died March 19, 1989, survived by her three daughters from her first marriage, Gholson, Avon Magee, and Paula Westbrook, as well as by her three grandchildren, Lindsey, Duane, and Dave Gardner (collectively referred to as petitioners). Petitioners were the children of decedent's son by her second marriage, Thomas Gardner. Thomas Gardner was married to Sandra Gardner, who was granted legal and physical custody of petitioners after she and Thomas Gardner divorced in 1977.

Thomas Gardner and his half-sisters had been told that Thomas Gardner would inherit the Otto Amsden Place, an eight-acre tract in Farmington, New Mexico (the Amsden property), and the half-sisters would inherit a 300-acre ranch in Archer County, Texas (the Archer property). Decedent's will devised the Amsden property to Thomas Gardner and, should Thomas Gardner predecease his mother, to his surviving children in equal shares. Decedent's will devised the residue of her estate and the Archer property to her daughters in equal shares.

Decedent suffered a stroke ten years before her death. At that time, she owned both the Archer and Amsden properties. After her stroke, decedent was adjudged incompetent and Gholson was named guardian of her estate. The order naming Gholson "guardian" granted her the power to manage and control the Amsden property, which was rental property, and "the authority to deposit money in the account at Farmington National Bank and also to withdraw funds from the same account to pay the necessary [hospitalization] expenses * * * of Elizabeth Dycus Gardner and pay the reasonable expenses of the rental property." The district court later granted Gholson the additional authority to "sell any real estate interest owned by Elizabeth Dycus Gardner with all sums in excess of the monthly requirements to be placed in a guardianship and trust account."

On October 22, 1980, pursuant to this authority, Gholson sold the Amsden property for $116,006.00. Additionally, during the time decedent was incompetent and before her death, Gholson exercised her authority as "guardian" of her mother's estate to invest her mother's money, collect her social security payments, collect the royalties under the oil and gas leases, collect on grazing leases, acquire certificates of deposit with her mother's money, sell personal property owned by her mother, employ attorneys on her mother's behalf, employ persons to prepare income tax returns for her mother and submit the returns, and enter into oil, gas and grazing leases for the Archer property on her mother's behalf.

Petitioners argued below, as they do now on appeal, that Thomas Gardner, at all times, vehemently opposed Gholson's decision to sell the Amsden property and never agreed to the sale. He died on January 26, 1983. At no time were petitioners or Sandra Gardner, their mother, asked if they would waive their rights under the will, nor did they agree to do so.

On April 20, 1989, Gholson filed an Application For Informal Probate of Will and For Informal Appointment of Personal Representative with the district court. In that application, Gholson stated that petitioners were heirs and devisees of the decedent and included their addresses. The petition was granted on May 1, 1989. On May 9, 1989, Gholson filed a Notice of Informal Appointment of Personal Representative, which stated that "[t]his notice is being sent to those heirs and devisees who have or may have had some interest in the estate of the decedent who died intestate." This notice was not sent to petitioners until June 26, 1989.

When Sandra Gardner and Dave Gardner attended decedent's funeral, Gholson told them that petitioners were not named in the will and that, because Thomas Gardner was dead, his share went to his half-sisters. Gholson also told Sandra Gardner and Dave Gardner that the half-sisters would give petitioners $30,000.00 because petitioners were left out of the will. On May 24, 1989, in a telephone conversation, Gholson asked Sandra Gardner if she had received a copy of the will. When Sandra Gardner told her she had not, Gholson said that a copy would be sent. Gholson also told Sandra Gardner that Paula Westbrook did not want to give $10,000.00 to petitioners because she needed new dentures. Therefore, petitioners would receive only a $20,000.00 gift rather than the $30,000.00 earlier promised. Gholson did not correct these statements at any time.

On June 26, 1989, Gholson and Avon Magee, signing as "custodians for Elizabeth Gardner," distributed $130,004.04 of estate funds. Paula Westbrook received $43,286.04; Sandra, $20,000.00; Avon Magee, $33,359.00; and Gholson, $33,359.00. Gholson did not apply to the district court or receive approval from the court to distribute the cash in this manner. That same day, Gholson told Sandra Gardner that the $20,000.00 check gifted to petitioners would be mailed that day. She also asked Sandra Gardner if she had received a copy of the will and, upon learning that Sandra Gardner had not, told her again that a copy would be sent. Sandra Gardner distributed the $20,000.00 in equal shares to petitioners. On July 17, 1989, Gholson filed in the district court an inventory and appraisal that did not include the Archer property or its grazing leases and that stated that decedent had $129,221.07 in cash at her death.

When petitioners received the Notice of Informal Appointment of Personal Representative, which stated they might have some interest in decedent's "intestate" estate, they were confused and curious because they had been told they were not mentioned in the will. Because of her suspicions, Sandra Gardner obtained a copy of the will from the court. Petitioners filed their claims on July 31, 1989. Gholson disallowed the claims on August 4, 1989, on the basis that they were not timely under Section 45-3-806.

On October 3, 1989, petitioners filed petitions for allowance of their claim and for Gholson's removal as the personal representative. In the petition to remove Gholson as personal representative, petitioners requested that she be held liable for damage or loss to the estate pursuant to Section 45-3-712. Gholson moved to enforce disallowance of the claims. In an affidavit attached to the motion, she erroneously reported the estate's income. The royalties reported for each year were too low, the grazing lease income was not included, and the net sales price for the Amsden property and other real estate sold was not reported.

In opening argument at the district court hearing, petitioners' counsel requested the right to recover reasonable attorney fees. Gholson's counsel waived opening argument, did not object to attorney fees being at issue, and did not object to the evidence underlying the right to receive attorney fees. On July 16, 1990, petitioners' counsel submitted an affidavit of attorney fees.

On July 19, 1990, the district court ordered Paula Westbrook, Avon Magee, and Gholson to return to Gholson, as personal representative, the amounts disbursed from the estate with interest and, if they should fail to return the monies by August 15, 1990, Gholson was individually liable. The court further ordered Gholson to distribute $32,002.00 from the estate to each plaintiff by September 15, 1990. Gholson was also ordered to account to the court for the estate's cash assets and to pay her own attorney fees. The court also ordered that petitioners were entitled to their reasonable attorney fees. On July 30, 1990, that portion of the judgment granting specific attorney fees was held in abeyance until Gholson's objection to the proposed judgment could be heard.

Gholson submitted an accounting to the district court on September 13, 1990. The accounting stated that $110,099.67 had been returned to her as personal representative in accordance with the court's order. Interest of $98.63 was reported. Gholson's amended accounting, filed November 1, 1990, reported $6,872.87 in interest. Gholson did not distribute any money to petitioners.

On October 9, 1990, the district court ordered the estate to pay petitioners' reasonable attorney fees of $21,056.00 and costs of $3,144.00. If the estate had insufficient funds to pay these amounts, Gholson was ordered to pay individually. The court also signed a writ of execution for $120,206.00 plus 15% interest from September 15, 1990, on petitioners' behalf against the account held in the name of the estate at the bank Gholson named as holding the...

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