Ex Parte Cannon
| Decision Date | 23 June 2009 |
| Docket Number | No. 4570.,4570. |
| Citation | 685 S.E.2d 814 |
| Court | South Carolina Court of Appeals |
| Parties | Ex Parte David G. CANNON, Appellant, Ex Parte Georgia Attorney General's Office; South Carolina Attorney General's Office; Terry Brown, Romunzo Brown, Forlando Brown, Darren Lumar; M&T Bank; Tommie Rae Hynie Brown; Stephen L. Slotchiver, the GAL of James Brown, II; Larry Brown, Daryl Brown (individually and on behalf of his minor children Lindsey Delores Brown and Janise Vanisha Brown), Vanisha Brown; Deanna J. Brown Thomas (individually and on behalf of her minor child Jackson Brown-Lewis), Yamma N. Brown Lumar (individually and on behalf of her minor children Sydney Lumar and Carrington Lumar), Tonya Brown; Robert L. Buchanan, Jr., and Adele J. Pope, as Special Administrators; Albert Dallas and Alfred A. Bradley, as Personal Representatives of the Estate of James Brown, a/k/a James Joseph Brown, Respondents, In re The Estate of James Brown, a/k/a James Joseph Brown, Respondent. |
Jan L. Warner, of Columbia, for Appellant.
Adele J. Pope, of Columbia, Albert P. Shahid, Jr., of Charleston, Assistant Attorney General C. Havird Jones, Jr., of Columbia, David Bell, of Augusta, Senior Assistant Attorney General Grace Lewis, of Atlanta, James D. Bailey, of Aiken, Louis Levenson, of Atlanta, Robert L. Buchanan, Jr., of Aiken, Robert Rosen, of Charleston, Ronald A. Maxwell, of Aiken, Stanley G. Jackson, of Aiken, Stephen H. Brown, of Charleston, Tressa T. Hayes, of West Columbia, for Respondents.
David Cannon appeals the circuit court's order finding him in contempt of court and imposing a sanction of a six-month imprisonment sentence with the ability to purge the confinement upon the payment of specified fees and a fine. We affirm in part, reverse in part, and remand.
On August 1, 2000, James Brown signed an irrevocable trust agreement (the Trust) and a last will and testament (the Will). Cannon, Albert Dallas, and Alfred Bradley were named trustees of the Trust. Brown died on December 25, 2006, and the probate court appointed Cannon, Dallas, and Bradley as personal representatives of Brown's Estate (the Estate).
In January 2007, a petition for the removal of the personal representatives was filed in the probate court, alleging issues with the manner in which Cannon, Dallas, and Bradley handled both the Estate and the Trust. The case was removed to the circuit court on the probate court's own motion, and a hearing on the matter was held on February 9, 2007. The circuit court subsequently issued an order allowing for the appointment of limited Special Administrators (the SAs) for monitoring purposes. Robert Buchanan, Jr., and Adele J. Pope were appointed as the SAs. The order also limited the authority of Cannon, Dallas, and Bradley regarding the Estate and the Trust.
The circuit court granted the SAs access to files, books, and records of the Estate and the Trust in June 2007. Upon reviewing the Trust's checkbook, the SAs discovered a $900,000 check payable to an account at M & T Bank (M & T) had been incorrectly deposited in the Trust's checking account. The entire $900,000 was removed from the Trust's account between August 1 and December 28, 2006. The SAs alleged Cannon, rather than Dallas or Bradley, was responsible for the transactions associated with the deposit and removal of the funds.
Because of the misappropriation, the SAs filed a motion seeking removal of one or more of the personal representatives and/or trustees. A hearing on the matter was held on August 10, 2007, and Cannon voluntarily submitted his resignation as personal representative, trustee, and fiduciary to the Estate and the Trust. Following the hearing, the circuit court issued an order immediately relinquishing Cannon's "signatory authority on all transactions, accounts, contracts, checks and/or instruments or undertakings of any kind for James Brown, the Estate, the Brown Entities, and the Brown Trusts." Cannon was ordered to pay the Estate $350,000 and to provide a full accounting to the SAs of all records related to the Estate and the Trust. Cannon paid the $350,000 that same day.
The circuit court held another hearing on September 24, 2007, and issued an order on October 2, 2007. In this order, the circuit court found Cannon in contempt for failing to account to the SAs. The circuit court scheduled a later hearing to determine the willfulness of Cannon's actions in failing to account.
In an effort to recoup funds owed to the Estate, the circuit court additionally ordered Cannon to pay the Estate $373,000 in the October 2, 2007 order. This sum was found to be the remaining amount owed from the misappropriated $900,000. The circuit court also ordered Cannon to pay $30,000 as a deposit towards claims related to attorneys' fees and costs.
Subsequently, a hearing was held on November 15 and 20, 2007, to determine both the willfulness of Cannon's failure to account and whether Cannon had paid the Estate $373,000 and $30,000 as mandated by the circuit court's October 2, 2007 order. At the hearing, Cannon testified he paid the $30,000 but did not have the ability to pay the $373,000. Cannon also stated he participated in the amendment of tax returns for James Brown Enterprises Corporation (the Corporation) after his resignation and the circuit court's August 10, 2007 order relinquishing all of his authority, including his signatory authority.
On December 18, 2007, the circuit court issued an order finding Cannon in contempt of court for failing to pay the Estate $373,000 and for failing to relinquish all of his authority; he was not, however, found to be in willful contempt for failing to account. Cannon was ordered to be imprisoned for a period of six months, but Cannon could "purge himself of this confinement by the payment of the aforementioned $373,000, the payment into court of $50,000.00 to be applied towards the payment of attorneys' fees as incurred by the various parties, and the payment of a fine of $10,000.00." Cannon had until "January 25, 2008[,] to completely purge himself."
Cannon filed a motion to reconsider, which the circuit court denied. This appeal followed.
Personal jurisdiction may be waived, but subject matter jurisdiction may not be waived. Eaddy v. Eaddy, 283 S.C. 582, 584, 324 S.E.2d 70, 72 (1984). Lack of subject matter jurisdiction can be raised at any time, even for the first time on appeal, by a party or by the court. Lake v. Reeder Constr. Co., 330 S.C. 242, 248, 498 S.E.2d 650, 653-54 (Ct.App.1998).
Cannon argues the circuit court lacked subject matter jurisdiction to issue any orders regarding his acts as trustee of the Trust. Specifically, Cannon argues section 62-7-201 of the South Carolina Code (2009) does not provide the circuit court with subject matter jurisdiction over internal trust matters. We disagree.
"Subject matter jurisdiction is the power to hear and determine cases of the general class to which the proceedings in question belong." Majors v. S.C. Sec. Comm'n, 373 S.C. 153, 159, 644 S.E.2d 710, 713 (2007). "The jurisdiction of a court over the subject matter of a proceeding is determined by the Constitution, the laws of the state, and is fundamental." Peterson v. Peterson, 333 S.C. 538, 547, 510 S.E.2d 426, 431 (Ct.App.1998).
When construing a statute, the cardinal rule is to ascertain the intent of the legislature. Georgia-Carolina Bail Bonds, Inc. v. County of Aiken, 354 S.C. 18, 22, 579 S.E.2d 334, 336 (Ct.App.2003). "A statute should be given a reasonable and practical construction consistent with the purpose and policy expressed in the statute." Id. at 22-23, 579 S.E.2d at 336. "All rules of statutory construction are subservient to the one that legislative intent must prevail if it can be reasonably discovered in the language used and that language must be construed in the light of the intended purpose of the statute." Id. at 23, 579 S.E.2d at 336.
"The legislature's intent should be ascertained primarily from the plain language of the statute." Id. If, however, the language of the statute gives rise to doubt or uncertainty as to legislative intent, the construing court looks to the statute's language as a whole in light of its manifest purpose. Id. at 25, 579 S.E.2d at 337-38. The construing court may additionally look to the legislative history when determining the legislative intent. State v. Byrd, 267 S.C. 87, 92, 226 S.E.2d 244, 247 (1976).
In determining whether the circuit court possessed subject matter jurisdiction in the instant matter, we must first examine the statutes Cannon argues give the probate court exclusive jurisdiction. The South Carolina Probate Code grants the probate court "exclusive jurisdiction of proceedings initiated by interested parties concerning the internal affairs of trusts." § 62-7-201(a). This exclusive jurisdiction, however, is subject to section 62-1-302(c), which states, "The probate court has jurisdiction to hear and determine issues relating to paternity, common-law marriage, and interpretation of marital agreements in connection with estate, trust, guardianship, and conservatorship actions pending before it, concurrent with that of the family court...." S.C.Code Ann. § 62-1-302(c) (2009).
Section 62-7-201(a) specifically deals with the internal affairs of trusts and grants exclusive jurisdiction to the probate court in those proceedings. Section 62-7-201(a) also states, however, that the probate court's exclusive jurisdiction is "[s]ubject to the provisions of [s]ection 62-1-302(c)," meaning there is one instance when this exclusive jurisdiction may be taken away from the probate court. Section 62-1-302(c), on the other hand, has no language divesting the probate court of exclusive jurisdiction. Rather than divesting the probate court of...
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