In re Cook
| Decision Date | 27 September 2017 |
| Docket Number | No. 51,586–CA,51,586–CA |
| Citation | 244 So.3d 686 |
| Parties | SUCCESSION OF Joseph Robert COOK |
| Court | Court of Appeal of Louisiana — District of US |
COOK, YANCEY, KING & GALLOWAY, By: Bernard S. Johnson, Shreveport, Counsel for Appellant
GOLD, WEEMS, BRUSER, SUES & RUNDELL, By: B. Gene Taylor, III, Bradley L. Drell, Alexandria, ROBINSON & WILLIAMS, LLC, By: John M. RobinsonCounsel for Appellee
Before BROWN, MOORE, and STONE, JJ.
Elizabeth Dianne Cook, the former executrix of the succession of her father, Joseph Robert Cook, appeals a partial summary judgment that ordered her to return $161,005 to the estate and to pay a statutory 20% penalty for her failure to return the money when first ordered. Finding genuine issues of material fact, we reverse and remand.
Joseph Cook died on January 18, 2013. Five days later, January 23, his daughter, Dianne, filed a petition to probate a will he executed in July 2012. This will left all his property to Dianne. Dianne filed a petition for possession on February 27, and the 26th Judicial District Court granted her a judgment of possession on March 1, 2013. Before and after obtaining the judgment of possession, Dianne began disposing of succession assets, largely to pay off her personal debts.
On August 30, 2013, Joseph Cook's other two children, Robert and David Cook ("the petitioners"), filed a petition to annul the 2012 will on grounds of undue influence. They proffered an earlier will, executed in 1998, in which Joseph Cook had left his estate to all three children in equal portions. The matter proceeded to trial, after which the district court found that Dianne had indeed exerted undue influence over her elderly, feeble father. The court rendered judgment on September 2, 2014, annulling the 2012 will, and a second judgment, on December 9, 2014, vacating the judgment of possession. Dianne appealed devolutively.
Meanwhile, the petitioners filed a rule to show cause for return of succession property or for an accounting; as part of discovery, they took Dianne's deposition in March 2015. At this time she admitted having disposed of or mortgaged virtually all succession assets. The court ordered her to return all succession property by April 30, 2015, and to provide an accounting for all succession assets; she provided neither. The petitioners then filed the instant petition for contempt, return of succession property, and a money judgment, which they estimated at $240,000.
On March 30, 2016, this court rendered its opinion in Succession of Cook , 50,111 (La. App. 2 Cir. 3/30/116), 189 So.3d 409 (on rehearing), affirming the finding of undue influence and the nullity of the 2012 will. The Supreme Court unanimously denied writs, 2016-0795 (La. 6/17/16), 192 So.3d 768.
On September 12, 2016, the petitioners filed this motion for partial summary judgment regarding Dianne's conversion of succession funds. They itemized five assets (a 2004 mobile home, a Citizens National Bank account, a fraternal death benefit, Joseph Cook's 50% interest in Kelzan LLC, and various movable fixtures) and, using the values submitted in Dianne's detailed descriptive list, demanded the total of $171,875. They also demanded, for the first time, the statutory penalty of 20% per annum for failing to place succession funds in an estate account, as required by La. C. C. P. art. 3222. They calculated the penalty—three years at 20% per annum—at $109,864.58.
Dianne opposed the motion, urging there were material facts as to the values of the assets. She acknowledged her duty to account for succession funds, but urged that she spent much of them on succession expenses, on the decedent's funeral, and on (unsuccessfully) defending the 2012 will against the petitioners' challenge. She claimed that after the setoff of legitimate expenses, she needed to account for only $95,639.72. She also argued the penalty could not apply because she took all her actions under color of the judgment of possession; hence, she had acted "in accordance with law," as permitted by Art. 3222. In support, she filed her own affidavit setting out the various expenses and asserting the mobile home was worth only $30,000, not the $40,000 she initially declared in the detailed descriptive list.
The petitioners responded that there is no right of compensation (or "setoff") if one of the obligations is to return a thing of which the owner was unjustly dispossessed, La. C.C. art. 1894, and that amounts owed to a succession must be paid in full before any equalizing payment is made, Succession of Comberrel , 2012-1589 (La. App. 4 Cir. 6/12/13), 119 So.3d 897.
At a hearing on November 7, 2016, the petitioners argued that using the reduced value of the mobile home and making a minor adjustment to the funeral expenses, the unaccounted funds came to $161,005.00. Dianne admitted that she never deposited any estate funds in a succession account, but argued that this failure did not cause the loss; she did everything legally, under the judgment of possession, and she was entitled to setoff for various expenses. The district court found that setoff did not apply to succession funds, citing Comberrel , supra , and Succession of Songne , 94-1198 (La. App. 3 Cir. 11/2/95), 664 So.2d 556, writ denied , 95-2877 (La. 2/2/96), 666 So.2d 1101. It granted partial summary judgment for $161,005, reserved Dianne's reimbursement claims, and assessed the 20% per annum penalty of Art. 3222.
The court held a final hearing, on January 9, 2017, on designating the judgment an appealable partial final judgment, La. C. C. P. art. 1915. The court reiterated that the partial summary judgment covered only the uncontested amount, and certified it as immediately appealable.
Dianne has appealed, raising two assignments of error.
The motion for summary judgment is a procedural device used when there is no genuine issue of material fact for all or part of the relief prayed for by a litigant. Schultz v. Guoth , 2010-0343 (La. 1/19/11), 57 So.3d 1002 ; Samaha v. Rau , 2007-1726 (La. 2/26/08), 977 So.2d 880. After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law. La. C. C. P. art. 966 A(3). The summary judgment procedure is designed to secure the just, speedy, and inexpensive determination of every action, except certain domestic actions; the procedure is favored and shall be construed to accomplish these ends. La. C. C. P. art. 966 A(2). A grant of summary judgment is reviewed de novo, with the appellate court applying the same criteria that govern the district court's decision to grant or deny, namely, whether there is any genuine issue of material fact and whether the mover is entitled to judgment as a matter of law. Rodgers v. State Farm Mutual Auto. Ins. , 2015-0868 (La. 6/30/15), 168 So.3d 375.
Even with its favored status, summary judgment is rarely appropriate in cases requiring a judicial determination of subjective facts such as intent, motive, malice, good faith, or knowledge. Phipps v. Schupp , 2009-2037 (La. 7/6/10), 45 So.3d 593 ; Monroe Surgical Hosp. LLC v. St. Francis Med. Ctr. Inc. , 49,600 (La. App. 2 Cir. 8/21/14), 147 So.3d 1234, writ denied , 2014-1991 (La. 11/21/14), 160 So.3d 975. It is particularly inappropriate when the imposition of a statutory penalty depends on a finding that the litigant acted in bad faith or her conduct was arbitrary, capricious or without probable cause. Merwin v. Spears , 2012-0946 (La. 6/22/12), 90 So.3d 1041.
A succession representative is a fiduciary with respect to the succession, and has the duty of collecting, preserving and managing the property of the succession in accordance with law. La. C. C. P. art. 3191 A. A succession representative is deemed to have possession of all property of the succession and shall enforce all obligations in its favor. La. C. C. P. art. 3211. Among the specific functions of the succession representative is the deposit of succession funds, stated in La. C. C. P. art. 3222 :
The imposition of the 20% per annum penalty under this article is discretionary, not mandatory. Succession of Hess , 205 So.2d 74 (La. App. 4 Cir. 1967), writ ref'd , 251 La. 862, 206 So.2d 712 (1968).
By her first assignment of error, Dianne urges the court abused its discretion in imposing the 20% per annum penalty under Art. 3222. She submits that the article prohibits her from using the succession assets "except in accordance with law," and urges that by virtue of the judgment of possession, which placed her in possession of the estate, all her actions were "in accordance with law" when she took them. She also contends that the summary judgment evidence does not clearly establish that she took any assets during the 32 days (January 28 through March 1, 2013) that she was succession representative. Finally, she suggests that her actions did not harm the estate in any way, thus distinguishing her situation from the clear case of penalty in Succession of Raziano , 538 So.2d 1136 (La. App. 5 Cir.), writ denied , 541 So.2d 874 (1989).
The petitioners respond that it is no defense under Art. 3222 that the succession representative "honestly...
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