In re Cornett

• Decision Date: 23 October 2020
• Docket Number: A20A0856
• Citation: 850 S.E.2d 790,357 Ga.App. 310
• Parties: IN RE ESTATE OF George Thomas CORNETT, Jr.
• Court: Georgia Court of Appeals

357 Ga.App. 310

850 S.E.2d 790

IN RE ESTATE OF George Thomas CORNETT, Jr.

A20A0856

Court of Appeals of Georgia.

October 23, 2020

Alston & Bird, Daniel F. Diffley, M. Ashley Miller, for appellant.

Johnson Marlowe, Spence Johnson, Christopher S. Fairchild ; Stillman Welch, T. Brandon Welch, for appellees.

Reese, Presiding Judge.

At the time of his death on November 25, 2015, George Thomas Cornett, Jr. ("Tom") was married to Sarah Cornett ("Sarah") and had five surviving adult children. Sarah appeals from an order of the Probate Court of Hall County, removing her as executor of Tom's estate (the "Estate") and ordering her to return certain estate assets and to pay certain funds back to the estate. On appeal, Sarah argues that the probate court erred in exercising jurisdiction over the removal petition because identical issues were first pending in superior court, erred in denying her right to a jury trial, and erred in removing her as executor without a factual basis to do so and in contradiction of Tom's Last Will and Testament (the "Will"). The Appellees, Tom's surviving adult children and the only child of a daughter who predeceased Tom, filed in this Court a motion to dismiss the jurisdictional claim of error. For the reasons set forth infra, we deny the Appellees’ motion to dismiss and affirm the probate court's judgment.

In January 2016, the probate court admitted the Will to probate. In November 2016, the probate court discharged the original executor of the Estate, appointed Sarah as successor executor, and issued letters testamentary to her.

On February 5, 2018, the Appellees filed a verified Petition for Accounting and Settlement of Accounts ("Petition for Accounting") in the probate court. In the Petition for Accounting, the Appellees alleged that they "ha[d] conveyed to [Sarah] questions and concerns regarding the administration of the Estate and the handling of its assets, and they ha[d] repeatedly requested specific information and documents regarding the Estate and its assets." However, "[Sarah] refuse[d] to settle the Estate or produce the requested documentation regarding the management and administration of the Estate's assets, which ... led to additional concerns of [the Appellees]." The Appellees requested an order pursuant to OCGA § 53-7-62 citing Sarah to appear before the probate court for an accounting and settlement of accounts and to produce a list of documents substantiating certain expenditures.

Three days later, the probate court issued a citation, ordering Sarah to produce to the court within thirty days of being served all records and evidence related to the administration of the Estate since her appointment as executor. Sarah answered and filed a very limited accounting, which showed questionable expenditures.

In July 2018, the probate court held a hearing, at which Sarah was extensively cross-examined. Giving deference to the probate court's opportunity to judge Sarah's credibility at the hearing,¹ the transcript reveals that Sarah failed to provide answers or additional information regarding the Estate. For example, Sarah could not explain what work had been done on behalf of the Estate to justify paying the law firm of Alston & Bird, LLP, over $92,000. She also had not collected on promissory notes owed to the estate by her son, Gregg Gordon ("Gregg"), or Appellee George Thomas Cornett III ("Tommy"),² other than to allow Gregg to assume Tommy's loan pursuant to unknown terms.

Accordingly, at the conclusion of the hearing, the probate court found Sarah in contempt and gave her 30 days to comply — "to file every single detail[,]" including providing copies of all bills for professional services, with said bills being specific enough to determine what work was done and to prove its necessity to the Estate. In its citation issued a week after the hearing, the probate court noted that it was "unclear what [Sarah had] paid and what the original Executor [had] paid[,]" and that it was "unclear how much Gregg owe[d] the estate[.]’’ The probate court added:

[I]t is important to note that [Sarah] could not recall the hourly fee she pa[id] her attorney, Mr. [Benjamin] White of Alston [&] Bird; who represent[ed the family business] GTO2000[,] or Gregg; why she met with Mr. White with [her sons] Blair [Gordon] and Gregg[ ]; why she needed to pay $92,000 to Alston [&] Bird (or even if that is the amount she ha[d] paid); the value of [the family business,] GTO2000[, Inc.,] that she paid [an accounting firm] to calculate; and most notably, her former last names, as well as many other answers to questions she was asked.

The probate court found further that the Estate had paid a $100,000 debt on real property owned by Sarah personally, which Sarah acknowledged at the hearing was a "mistake" that she had not corrected. Further, "[Sarah had] paid 2017 taxes with estate funds on all real estate owned by [Sarah] personally because she fe[lt] the estate and trust [were] one so she [was] entitled to the funds remaining in the estate not yet placed in the trust."

On July 3, 2019, almost a year after the hearing, the Appellees filed a Petition for Removal of Executor and Appointment of Successor ("Petition for Removal"), in which they requested the probate court to revoke Sarah's letters testamentary and find her unfit to serve as executor of the Estate or the trustee of any trust created under the Will. The probate court issued a citation to Sarah to appear and show cause why the requested relief should not be granted.

Sarah filed an objection to the probate court's jurisdiction under the "first-filed rule," as she had filed a complaint for a declaratory judgment in superior court four months earlier, in March 2019. Sarah also filed an answer to the Petition for Removal, in which she demanded a jury trial.

The probate court held a second hearing on August 21, 2019. At the hearing, the probate court first addressed the jurisdictional issue. The probate court acknowledged that it lacked jurisdiction to remove a trustee, but pointed out that Sarah had a fiduciary duty until she was discharged as executor and the estate was closed. The court recalled Sarah's nonresponsiveness to questions at the first hearing, and noted that there was no way at that time "to decide if there was money missing[ or] to decide what had happened." The probate court found that the Petition for Accounting was still properly before it, and that it was too late to request a jury trial or discovery as to that petition. The court added that it was not dealing with the Appellees’ Petition for Removal, but emphasized that it needed no such petition before it to remove an executor.

The Appellees then cross-examined Sarah with regard to the information that had been recently provided. Even when confronted with the transcript from the prior hearing, Sarah denied having called the payoff of the mortgage "a mistake" that she would repay. Sarah acknowledged that there was originally $374,128 in the Estate, which had decreased to $234,634 by the time she was appointed as successor executor. Less than $5,000 remained in the Estate when Sarah transferred the balance to the trust in early 2019.

The accounting Sarah provided prior to the second hearing reflected payments to Alston & Bird from Estate funds of over $150,000 (including the $92,694 paid as of the prior hearing) for work that the probate court found did not benefit the Estate. As the probate court found, "Sarah used estate funds to pay her attorney's fees before ever being appointed Executor while making plans [to] oust the original executor and take control."

The probate court entered a detailed order on the Petition for Accounting. In reciting the procedural history, the probate court noted that the Appellees had filed a Petition for Removal, but that "[t]hat Petition has yet to be considered ... and is not the subject of the present order." After making findings of fact discussed more fully below, the probate court ordered Sarah, removed as executor for breaching her fiduciary duty, to return all assets that had been deposited into a trust back into the Estate, to repay all fees and commissions she had taken as executor, and to repay various expenditures (including, inter alia, the $100,724 loan on real property, $89,779.58 in attorney fees through the accounting period as well as any subsequent fees that were not for work necessary for the estate, and $7,030 in accountant fees). This appeal followed.

We review a probate court's order removing an executor for abuse of discretion.³ "[T]he relevant question in reviewing a removal order is whether the trial court had grounds to conclude that there was ‘good cause’ for the removal. We will not set aside the trial court's findings of fact unless the findings are clearly erroneous."⁴ With these guiding principles in mind, we turn now to Sarah's claims of error.

1. Sarah argues that the probate court lacked jurisdiction under the first-filed rule and because superior courts have exclusive jurisdiction over trusts. "Jurisdiction is a question of law to which appellate courts apply a de novo standard of review."⁵

As an initial matter, we agree with Sarah⁶ that the superior court's recent dismissal of her declaratory judgment action does not render this claim of error moot. Accordingly, we deny the Appellees’ motion to dismiss.

However, we hold that the probate court properly exercised jurisdiction. OCGA § 15-9-30 (a) provides in part:

Probate courts have authority, unless otherwise provided by law , to exercise original, exclusive, and general jurisdiction of the following subject matters: (1) The probate of wills; (2) The granting of letters testamentary and of administration and the repeal or revocation of the same; (3) All controversies in relation to the right of executorship or administration; [and] (4) The sale and disposition of the property belonging to, and the distribution of, deceased persons’ estates[.]⁷

(a) Sarah first contends that ...