Hartford Fire Ins. Co. v. Estate of Sanders
| Decision Date | 02 March 2017 |
| Docket Number | No. 2013, Sept. Term, 2015,2013, Sept. Term, 2015 |
| Citation | 232 Md.App. 24,155 A.3d 915 |
| Parties | HARTFORD FIRE INSURANCE COMPANY v. ESTATE OF Robert L. SANDERS |
| Court | Court of Special Appeals of Maryland |
John R. Francomano, III (Francomano & Francomano, on the brief), Townson, MD, for appellant.
Larry S. Gibson (Shapiro, Sher, Guinot & Sandler, on the brief), Baltimore, MD, for appellee.
Eyler, Deborah S., Kehoe, Shaw Geter, JJ.
This estate case is in the unusual posture of being on its third level of court review. Hartford Fire Insurance Company ("Hartford"), the appellant, is the surety on a $20,000 personal representative bond obtained by Vanessa Sims, the former personal representative of the Estate of Robert L. Sanders ("Estate"), the appellee. In a proceeding to which Hartford was not on notice, the Orphans' Court for Baltimore City entered an order finding that Sims had misappropriated $13,566.23 in Estate assets. When Sims failed to repay the Estate, Charleen Price, the present personal representative of the Estate, brought an action against the bond in that court. After a hearing in which Hartford participated, the orphans' court entered an order condemning the bond for $13,566.23.
Hartford appealed the orphans' court's judgment to the Circuit Court for Baltimore City. In a trial de novo , the court entered judgment condemning the bond for $3,256.96. The Estate obtained review of that judgment by a three-judge in banc panel of the circuit. The in banc court reversed the trial court and entered judgment against Hartford, condemning the bond for $13,566.23. After the in banc court denied a motion to alter or amend, Hartford noted this appeal.
On October 28, 2002, Robert L. Sanders died without a will. He had been a plaintiff in ongoing asbestos-related litigation that continued after his death. Princess Sanders, his infant daughter, was his sole heir. Charleen Price is Princess's mother.
Price opened a small estate to receive settlement payments in the asbestos-related litigation, which were expected to be made periodically for some time into the future.1 On April 14, 2003, the Orphans' Court for Baltimore City appointed Price and Vanessa Sims, Sanders's sister, co-personal representatives of the Estate. The Law Firm of Peter T. Angelos ("Angelos Firm") represented Sanders and, after his death, the Estate.
Eight years went by. On March 18, 2011, Sims filed a petition to remove Price as co-personal representative. By order of May 9, 2011, the orphans' court granted the petition and named Sims as the sole personal representative of the Estate. The record does not reveal the basis for Price's removal.
On March 18, 2013, at the suggestion of the Angelos Firm, Sims obtained from Hartford the $20,000 personal representative's bond central to this case. The bond was filed with the register of wills on March 20, 2013. Five months later, on August 28, 2013, the Angelos Firm filed a motion in the orphans' court to withdraw its appearance for the Estate. In support, it asserted that, on July 12, 2012, Sims had misappropriated $2,500 from the Estate and since then had repeatedly refused to return the funds to the Estate. The orphans' court granted the motion on September 3, 2013. Three days later, on September 6, 2013, Price filed a petition to remove Sims as personal representative.
Apparently with Sims's consent, the orphans' court issued an order on January 8, 2014, docketed the next day, removing her as personal representative and appointing Price as successor personal representative ("January 2014 Order"). The January 2014 Order stated that Sims "shall turn over to the Successor Personal Representative [Price], within five (5) days of the date of this order, all known assets, property, and records pertaining to [the] [E]state." Sims did not do so.
On May 22, 2014, Price filed a petition for the return of the Estate assets allegedly misappropriated by Sims. The orphans' court issued a show cause order directing Sims to appear on July 21, 2014, to account for the missing Estate funds. Hartford was not notified of the petition or the show cause order.
At the July 21, 2014 hearing, the court received evidence and found that Sims had misappropriated $13,566.23 from the Estate. It authorized Price to bring an action against the bond if Sims did not pay that sum to the Estate within 30 days. These rulings were memorialized in an order entered on July 28, 2014 ("the July 2014 Order"). Sims filed a timely motion for reconsideration, which was denied. She did not pay $13,566.23 to the Estate within the 30–day timeframe, or at all, and did not appeal the July 2014 Order.
On August 25, 2014, Price filed a petition to condemn the bond. Two days later, the orphans' court issued an order directing Hartford to show cause in writing why the petition should not be granted. The order was served on counsel for Hartford. Hartford responded and an evidentiary hearing on the petition to condemn the bond was scheduled and went forward on November 3, 2014. On November 10, 2014, the orphans' court entered an order finding that Sims had "misappropriated estate funds as stated in this Court's [July 2014 Order]"; condemning the bond for $13,566.23; authorizing Price to recover that sum from Hartford as surety; and entering judgment in favor of Hartford against Sims for that sum ("November 2014 Order").
Under section 12–502 of the Courts and Judicial Proceedings Article, Md. Code (1973, 2013 Repl. Vol.) ("CJP"), a final judgment of the orphans' court may be appealed to the circuit court.2 Such an appeal "shall be heard de novo by the circuit court[,]" CJP section 12–502(a)(1)(ii), and "shall be treated as if it were a new proceeding and as if there had never been a prior hearing or judgment by the orphans' court." Id. at § 12–502(a)(1)(iii). "The circuit court shall give judgment according to the equity of the matter." Id. at § 12–502(a)(1)(iv). To take an appeal to the circuit court, an "order for appeal" must be filed with the register of wills "within 30 days after the date of the final judgment [of the orphans' court] from which the appeal is taken." Id. at § 12–502(b)(1).
On November 20, 2014, Hartford noted a timely appeal of the orphans' court's November 2014 Order to the Circuit Court for Baltimore City. The circuit court held a trial de novo on January 27, 2015. The Estate took the position that the bond should be condemned for the full $13,566.23 misappropriated by Sims. Hartford took the position that the bond only could be condemned for sums misappropriated by Sims after the March 18, 2013 date of the bond and before Sims was removed as personal representative, and those sums were less than $13,566.23.
Without objection, the Estate moved into evidence copies of the orphans' court's May 9, 2011 Order removing Price as personal representative; the bond; the orphans' court's January 2014 Order removing Sims as personal representative; and the orphans' court's July 2014 Order finding that Sims had misappropriated $13,566.23 in assets from the Estate. It also introduced a spreadsheet, to which the parties had stipulated, showing the asbestos-related litigation payments made to the personal representative(s) of the Estate from March 29, 2004, to February 26, 2014. The gross settlements totaled $33,794, but after attorneys' fees and litigation costs were deducted, the net payments received by the Estate came to $22,106.20.3 The spreadsheet reflected that from March 18, 2013 (the date of the bond) to January 8, 2014 (the date Sims was removed as personal representative), three asbestos-related litigation net payments were made to Sims as personal representative: 1) $2,847.50, on June 10, 2013; 2) $237.93, on August 7, 2013; and 3) $171.53, on November 18, 2013.
Hartford called Sims as a witness. She identified a check she signed on July 19, 2013, for $2,847.50, on the Estate's bank account, payable to "Charleen Price for Princess Sanders, minor." ("July 2013 Check"). The "memo" line on the check reads "Pfizer Global Settlement Dist." The check is attached to an August 5, 2013 letter to Price from counsel with the Angelos Firm, stating that it "represents a distribution to [Princess] as the sole heir of" the Estate. The July 2013 Check with attached letter was moved into evidence without objection, and Sims then was asked, in vague terms, whether there also were checks written for $237 and $171 during the period from March 18, 2013, until January 8, 2014. She responded yes. (No such checks were produced or offered into evidence.)
On cross-examination, Sims was shown a document entitled "6thSupplemental Schedule—B" that was filed in the orphans' court on March 19, 2013. She acknowledged that she signed the document on March 5, 2013. In Paragraph 1, the document reports that the Estate has "Total Gross Assets" of $25,250.97, comprised of $10,971.72 in "Assets previously reported" and $14,279.25 in "Partial asbestos-related assets[.]" An attached addendum breaks down the "Partial Asbestos Related Settlements" by date and amount received, from November 2009 to December 2012.
In closing argument, the Estate's lawyer asserted that 1) the July 2014 Order of the orphans' court, establishing that Sims misappropriated $13,566.23 from the Estate, was a final judgment that was not timely challenged on appeal; 2) only the orphans' court's November 2014 Order condemning the bond for $13,566.23 was timely appealed and before the circuit court in the trial de novo ; and 3) the sole issue in the appeal from the November 2014 Order—the amount for which the bond would be condemned—was conclusively determined by the July 2014 Order. Therefore, the correct outcome was an affirmance of the orphans' court's November 2014 Order condemning the bond for $13,566.23.
Hartford's lawyer responded that the bond only could be condemned for the amount misappropriated by Sims...
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