In re Estate of Storey
| Decision Date | 31 May 2011 |
| Docket Number | No. W2010-00819-COA-R3-CV,W2010-00819-COA-R3-CV |
| Parties | IN RE ESTATE OF ELOISE J. STOREY PEGGIE SHERRILL HUBER v. LAWRENCE G. YOHANEK, CPA, a/k/a LARRY G. YOHANEK, SHARRON S. YOHANEK, and JOHN GARY STOREY |
| Court | Tennessee Court of Appeals |
An Appeal from the Probate Court for Shelby County
This lawsuit was filed by the decedent's daughter against other family members alleging undue influence, conversion, breach of fiduciary duty, and civil conspiracy. After the decedent suffered a stroke, the family members, as attorney in fact and signatory on the decedent's bank accounts, made gifts from the decedent's assets to themselves and to other family members. After the decedent died, the plaintiff daughter filed this lawsuit, alleging that the defendant family members wrongfully depleted the decedent's assets during her lifetime so as to deprive the plaintiff of her specific bequest in the decedent's will. The defendants filed a motion for partial summary judgment on various grounds. The trial court granted in part and denied in part the defendants' motion finding, inter alia, that the plaintiff did not submit evidence to support several of her claims, and that several claims were barred by the statute of limitations. The Plaintiff now appeals. On appeal, we apply the Tennessee Supreme court's revised analytical framework for summary judgment motions, requiring the defendant movants to either conclusively establish facts supporting an affirmative defense or negate an essential element of the plaintiff's claim. Applying this standard, we affirm in part, reverse in part, and remand.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Probate Court is
Affirmed in Part, Reversed in Part, and Remanded
John D. Horne, Memphis, Tennessee, for the Plaintiff/Appellant, Peggie Sherrill Huber2
James M. Hivner, Memphis, Tennessee, for the Defendants/Appellees, Lawrence G. Yohanek, CPA a/k/a Larry G. Yohanek, Sharron S. Yohanek, and John Gary Storey
FACTS AND PROCEEDINGS BELOW
Background
John T. Storey ("Mr. Storey") and Decedent Eloise J. Storey ("Mrs. Storey") had three children, Plaintiff/Appellant Peggie Sherrill Huber ("Plaintiff"), Defendant/Appellee Sharron S. Yohanek ("Mrs. Yohanek"), and Defendant/Appellee John Gary Storey ("Mr. John G. Storey"). Mrs. Yohanek is married to Defendant/Appellee Lawrence G. Yohanek, a/k/a Larry Yohanek ("Mr. Yohanek"). Mr. Yohanek is a certified public accountant.
In the 1970s, Mr. and Mrs. Storey owned and operated a successful construction company known as S&E Construction Company. The construction company provided a good living for the Storeys, and they were financially comfortable enough to give substantial gifts of cash and other things from time to time to each of their children. At some point, the Storeys' son-in-law, Mr. Yohanek, became the accountant for the Storeys' construction company.
Mr. Storey died in November 1993. The construction company continued in business after his death, and Mr. Yohanek continued to assist Mrs. Storey with the company's finances.3Mr. Yohanek also advised Mrs. Storey in her personal financial affairs.
On May 6, 1998, Mrs. Storey executed a Durable Power of Attorney. It named her son-in-law, Mr. Yohanek, as her attorney in fact.
On the same date, Mrs. Storey executed her Last Will and Testament. It named Mr. Yohanek as the executor of the will. Generally, Mrs. Storey's will provided that all of her personal property would go to her children in equal shares, and that all notes evidencing outstanding loans to her children would be canceled. Under Mrs. Storey's will, the residual estate was to be divided into separate trusts of equal value for each of her children, with Mr. Yohanek to serve as trustee for the trusts.
In the will, Mrs. Storey also made specific bequests to her each of her three children. To Mrs. Yohanek, she bequeathed real property located in Panola County, Mississippi. To Mr. John G. Storey, she bequeathed real property in Tunica County, Mississippi, which was used as a fishing camp. To the Plaintiff, she bequeathed the cash sum of $150,000. The "specific bequest" section of the will included Mrs. Storey's comment that the distribution was her "effort at treating my children equally and I hope that they are pleased and satisfied with the division of my property."4
Several years later, in February and March 2001, Mrs. Storey suffered a massive stroke and other smaller strokes that left her physically disabled. The record indicates that, after the strokes, Mrs. Storey required 24-hour assistance with her physical needs. After this, pursuant to Mrs. Storey's power of attorney, Mr. Yohanek handled her finances and assets as her attorney in fact. At some point, Mrs. Yohanek became a co-signator on Mrs. Storey's checking account at First Tennessee Bank. Thus, both Mr. and Mrs. Yohanek were authorized to write checks from Mrs. Storey's bank account.
After Mrs Storey's stroke, Mr. Yohanek wrote numerous checks from Mrs. Storey's checking account. Some were checks written in the normal course of assisting Mrs. Storey with her financial affairs. Some were checks written to Mrs. Storey's three children - the Plaintiff, Mrs. Storey, and Mr. John G. Storey - and other relatives. During this time period, no objection was made by any of the three children to these distributions.
On March 4, 2006, Mrs. Storey died at the age of eighty. On March 30, 2006, Mr. Yohanek filed a petition in the Probate Court of Shelby County to admit to probate Mrs. Storey's Last Will and Testament. On that day, the trial court entered an order admitting the will to probate and, in accordance with the terms of the will, appointing Mr. Yohanek as the executor of the estate.
Several months later, on July 12, 2006, the Plaintiff filed a petition in the trial court below to require Mr. Yohanek to file an accounting and to remove Mr. Yohanek as the executor ofMrs. Storey's estate. In her petition, the Plaintiff alleged that, during Mrs. Storey's lifetime, Mr. Yohanek breached his fiduciary duty to Mrs. Storey by making unauthorized gifts from her assets to himself and to other family members, and also by using her VISA credit card for his own personal living expenses. Based on her allegations, the Plaintiff asked the trial court to temporarily remove Mr. Yohanek as the executor of the estate, and to appoint an independent executor until a hearing could be held on the Plaintiff's petition. The petition also sought "punitive damages" against Mr. Yohanek in the amount of $250,000. After a hearing, the Probate Court dismissed this first petition, finding that it alleged no grounds to remove Mr. Yohanek as executor, and that the relief requested against Mr. Yohanek had not been properly pled.
On June 4, 2007, Mr. Yohanek filed three sets of amended federal and state gift tax returns on behalf of the estate. Two reflected gifts made to the Yohaneks either by Mrs. Storey or on her behalf, and the third reflected a gift by Mrs. Storey to the Plaintiff. The first amended gift tax return for Mrs. Storey's estate was for 1999; it was filed in order to list a gift of $150,000 to Mrs. Yohanek that was not reported in Mrs. Storey's original 1999 tax return. The record indicates that in 1999 Mrs. Yohanek in fact wrote herself a check in this amount from Mrs. Storey's bank account to buy herself a house. The second amended tax return Mr. Yohanek filed was for 2003, listing gifts of jewelry made by Mrs. Storey or on Mrs. Storey's behalf to Mrs. Yohanek and the Yohanek children.
In addition, Mr. Yohanek filed an amended gift tax return for 2001, listing a gift allegedly made to the Plaintiff. The gift listed was not actually a direct gift, but rather was the value of a loan that was forgiven. In 1981, Mr. and Mrs. Storey loaned the Plaintiff $135,000 to buy a home. The Plaintiff made monthly payments on the note, but the payments did not cover the full amount of principal and interest due on the loan. In 2001, Mrs. Storey cancelled the note. The amended tax return filed by Mr. Yohanek valued the amount of the unpaid compounded interest and principal due on the Plaintiff's note over a twenty-year period at $652,000. The amended return showed that Mrs. Storey's estate was required to pay taxes, penalties, and interest on this gift of $49,384 to the IRS and $88,587 to the Tennessee Department of Revenue.
Lawsuit
On September 10, 2007, the Plaintiff filed the instant lawsuit as an adversarial proceeding under the docket number of the estate. The complaint was headed: "Complaint To Set Aside the Transfers Resulting From Undue Influence, Breach of Fiduciary Duty, And/OrConversion And For Damages Resulting From Tortious Interference With Inheritance."5 It named as defendants Mr. Yohanek, Mrs. Yohanek, and Mr. John G. Storey (collectively, "Defendants").
The complaint asserted claims against the Defendants in two capacities, first by the Plaintiff as a personal representative of the estate, and second by the Plaintiff as a beneficiary of Mrs. Storey's estate. In her capacity as the estate's personal representative, the Plaintiff sought damages based on theories of undue influence, breach of fiduciary duty, conversion, and civil conspiracy.6 She alleged that, after Mrs. Storey became incompetent and Mr. Yohanek began acting as her attorney in fact, the Defendants gave themselves unauthorized and/or excessive gifts out of Mrs. Storey's bank account and used Mrs. Storey's VISA credit card for their own benefit, not for the benefit of Mrs. Storey. She claimed that these gifts were disproportionate and inconsistent with Mrs. Storey's past patterns of giving, in which she treated her children equally. One particular gift noted in the petition was the $150,000 check that Mrs. Yohanek wrote to herself from Mrs. Storey's checking account in 1999,...
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