In re Estate of Johnson
| Decision Date | 26 May 2021 |
| Docket Number | No. M2020-00472-COA-R3-CV,M2020-00472-COA-R3-CV |
| Parties | IN RE ESTATE OF MARGIE ANN JOHNSON |
| Court | Tennessee Court of Appeals |
Appeal from the Chancery Court for Sumner County
Louis W. Oliver, Chancellor
After the trial court found that a scrivener's error mistakenly listed the incorrect grantee on a warranty deed, it reformed the deed to list the correct grantee. Discerning no error, we affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed and Remanded
KENNY ARMSTRONG, J., delivered the opinion of the court, in which J. STEVEN STAFFORD, P.J., W.S. and ARNOLD B. GOLDIN, J., joined.
Grayson Smith Cannon, Gallatin, Tennessee, for the appellant, Laura Johnson Hamilton.
Philip C. Kelly, Gallatin, Tennessee, for the appellee, Gwynn K. Smith.1
OPINIONOn July 30, 1996, Margie Ann Johnson ("Decedent") and her husband, William (together with Decedent, the "Johnsons"), created the Johnson Joint Revocable Living Trust Agreement (the "Trust"), for the administration, investment, and distribution of their property. Decedent and her husband were both trustors and trustees of the Trust. The Trust named the youngest of the Johnsons' daughters, Kathryn Ann Hobdy ("Successor Trustee"), as Successor Trustee. The Johnsons' marital residence, located at 119 BiggsRoad (the "Biggs Road Property") was the only asset placed into the Trust. The Johnsons transferred their interest in the Biggs Road Property to the Trust via quitclaim deed, which they executed concurrent with the creation of the Trust in 1996.
On February 7, 2000, the Johnsons executed a "Restatement" of the Trust (the "Restatement"), Article VII, "Distribution After Death of Both Trustors." Under the Restatement, upon the death of both Decedent and her husband, the entire Trust would be distributed equally to Carolyn Lanise Akin, Ms. Hobdy, and Nathan Wade Johnson. Ms. Akin was one of the Johnsons' daughters, and Nathan Johnson is the son of Appellant Laura Hamilton, the Johnsons' estranged daughter. The Restatement explicitly provided that there was no provision made for distribution of the Trust to Appellant. The Restatement was recorded in the Sumner County Register's Office.
Mr. Johnson died on June 10, 2000. Thereafter, on September 11, 2002, Decedent executed a First Amendment to the Restatement (the "First Amendment"). The First Amendment deleted the "Distribution After Death of Both Trustors" provision and replaced it with a new provision that was triggered upon Decedent's death. The new provision named Ms. Hobdy and Nathan Johnson as income beneficiaries of the Trust during their lifetimes and distributed the remaining corpus to the Sunset School of Preaching (later renamed the Sunset International Bible Institute) upon Ms. Hobdy's and Nathan Johnson's deaths. The First Amendment was recorded in the Sumner County Register's Office.
Several years later, Decedent became incapacitated due to dementia and was unable to manage her personal affairs. On January 17, 2012, Ms. Hobdy petitioned the Chancery Court for Sumner County (the "Conservatorship Court") for conservatorship over Decedent. When Ms. Hobdy filed the petition, Decedent was residing in an assisted living facility. Attached as an exhibit to her petition was Ms. Hobdy's proposed property management plan (the "Plan") for Decedent's property. The Plan outlined the known assets and debts of Decedent as well as Decedent's monthly income and expenses. The Plan also suggested leasing out the Biggs Road Property to help pay for Decedent's care.
On January 19, 2012, the Conservatorship Court appointed a guardian ad litem ("GAL") for Decedent. On February 15, 2012, the GAL filed his report in which he concluded that Decedent required a conservatorship. Included in the report was mention of the Trust and the fact that "the only property placed into the [T]rust was the real property located at 119 Biggs Road . . . ." The GAL also recommended that the Conservatorship Court adopt the Plan so that Ms. Hobdy could rent the Biggs Road Property to pay for Decedent's care.
On February 28, 2012, the Conservatorship Court appointed Ms. Hobdy as Conservator over Decedent (the "Conservatorship") and adopted the Plan. Thereafter, Ms. Hobdy requested permission from the Conservatorship Court to sell the Biggs RoadProperty and to use the proceeds to purchase a replacement dwelling for Decedent at 334 Jackson Road (the "Jackson Road Property"). The Jackson Road Property was next door to Ms. Hobdy's residence and, although Decedent was already receiving around-the-clock care, moving Decedent closer to Ms. Hobdy would allow Ms. Hobdy to provide additional care for Decedent. On May 20, 2013, the Conservatorship Court entered an order granting Ms. Hobdy permission to sell the Biggs Road Property and to purchase the Jackson Road Property on Decedent's behalf.
On November 27, 2013, Ms. Hobdy closed on both the sale of the Biggs Road Property and the purchase of the Jackson Road Property. The warranty deed for the Biggs Road Property listed the grantor as "Kathryn Ann Hobdy, Successor Trustee of the Johnson Joint Revocable Living Trust Agreement dated 7/30/1996 and as Conservator of Margie Ann Johnson." A different title company facilitated the closing on the purchase of the Jackson Road Property, and the warranty deed for that property conveyed title to grantee "Kathryn Johnson Hobdy, Conservator for Margie Ann Johnson" rather than to Ms. Hobdy as Successor Trustee of the Trust. On August 5, 2014, Ms. Hobdy filed a motion in the Conservatorship proceeding requesting permission to take out a home equity loan on the Jackson Road Property to help pay for Decedent's care. On August 12, 2014, an order was entered granting Ms. Hobdy's request.
Decedent died intestate on March 31, 2015 with her three daughters, Ms. Hobdy, Ms. Akin, and Appellant, as intestate heirs. On May 17, 2016, Ms. Hobdy filed a petition for letters of administration in the Chancery Court for Sumner County (the "trial court"), requesting, in part, that the trial court appoint Appellee Gwynn K. Smith, Ms. Hobdy's counsel during the Conservatorship proceedings, to serve as Administratrix of Decedent's estate. The petition also alleged, for the first time, that the Jackson Road Property was inadvertently conveyed to Ms. Hobdy as Conservator of Decedent rather than as Successor Trustee of the Trust. On May 31, 2016, the Estate of Margie Ann Johnson was admitted to probate for intestate administration, and Appellee was appointed Administratrix. During the estate's administration, Ms. Akin died, leaving her daughter, Ellen Akin Odle, as her only heir. Subsequently, Ms. Odle was substituted as a party to the lawsuit.
On June 30, 2016, Appellee filed a petition to determine ownership of real estate. Specifically, Appellee asked the trial court to determine whether the Jackson Road Property belonged to Decedent's estate or whether it was an asset of the Trust. On October 12, 2018, Appellant filed a motion for accounting and an answer to the petition to determine ownership of real estate. In her answer, Appellant alleged that the sale of the Biggs Road Property and the purchase of the Jackson Road Property were authorized under the Conservatorship Court's order and were, therefore, accomplished only under Ms. Hobdy's authority as Decedent's Conservator. Accordingly, Appellant averred that the Jackson Road Property did not belong to the Trust but was instead part of Decedent's estate.
On November 30, 2018, Appellee filed a "petition for judicial reformation of deedor to divest real property out of estate of the deceased and into trust" (the "petition for judicial reformation"). Specifically, Appellee alleged that the deed for the Jackson Road Property "incorrectly listed Kathryn Johnson Hobdy only as Conservator for Margie Ann Johnson rather than conveying the property to her as Successor Trustee of [the Trust]," which was a mistake by the draftsman. On January 18, 2019, Appellant filed an answer opposing the petition. Appellant alleged that "the clear intention of the [Conservatorship Court] was to treat the property as property of [Decedent] subject to court administration and not subject to any Trust which may have been established in the past."
On February 12, 2020, the trial court heard Appellee's petition. Although neither party called witnesses, the trial court requested to hear testimony from Ms. Hobdy.2 On February 19, 2020, the trial court entered an order finding, in pertinent part, that the closing attorney for the Jackson Road Property mistakenly titled the property in Ms. Hobdy's name as Conservator, rather than as Successor Trustee of the Trust. Accordingly, the trial court reformed the deed as follows: "Title to the [Jackson Road Property] be divested out of Kathryn Johnson Hobdy, Conservator for Margie Ann Johnson, and vested in Kathryn Johnson Hobdy, Successor Trustee of the [Trust]." Appellant appeals.
Appellant lists two issues for review, which we restate as follows:
We review a non-jury case "de novo upon the record with a presumption of correctness as to the findings of fact, unless the preponderance of the evidence is otherwise." Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn. 2000) (citing Tenn. R. App. P. 13(d)). The trial court's conclusions of law are reviewed de novo and "are accorded no presumption of correctness." Brunswick Acceptance Co., LLC v. MEJ, LLC, 292 S.W.3d 638, 642 (Tenn. 2008).
Appellee's Filing of the Petition for Judicial Reformation
Appellant's first issue for review concerns whether Appellee had authority to bring the petition for judicial...
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