In re Mclemore, Nos. 2007–CA–02043–SCT

• Court: United States State Supreme Court of Mississippi
• Writing for the Court: EN BANC.
• Citation: 63 So.3d 468
• Parties: In Re: ESTATE OF William F. McLEMORE, Deceased: Gerald D. McLemorev.Dennis M. McLEMORE, Floyd Shannon McLemore, Jackie McLemore and Estate of Colleen H. McLemore.In Re: Jackie McLemore, Dennis Marshall McLemore, individually and as Co–Executors of the Estate of Colleen H. McLemore and Floyd Shannon McLemorev.Gerald D. McLemore, Executor of the Estate of William F. McLemore, Deceased, Gerald D. McLemore, Trustee of the William F. McLemore Living Trust, William F. McLemore Marital Trust and William F. McLemore Family Trust, and First Security Bank, Trustee of the William F. McLemore Marital Trust.
• Docket Number: 2009–CA–00784–SCT.,Nos. 2007–CA–02043–SCT
• Decision Date: 31 March 2011

63 So.3d 468

In Re: ESTATE OF William F. McLEMORE, Deceased: Gerald D. McLemore
v.
Dennis M. McLEMORE, Floyd Shannon McLemore, Jackie McLemore and Estate of Colleen H. McLemore.In Re: Jackie McLemore, Dennis Marshall McLemore, individually and as Co–Executors of the Estate of Colleen H. McLemore and Floyd Shannon McLemore
v.
Gerald D. McLemore, Executor of the Estate of William F. McLemore, Deceased, Gerald D. McLemore, Trustee of the William F. McLemore Living Trust, William F. McLemore Marital Trust and William F. McLemore Family Trust, and First Security Bank, Trustee of the William F. McLemore Marital Trust.

Nos. 2007–CA–02043–SCT

2009–CA–00784–SCT.

Supreme Court of Mississippi.

March 31, 2011.

[63 So.3d 473]

Aubrey Lee Brown, Jr., Ross Emerson Webster, attorneys for appellant in 2007–CA–02043–SCT.Aubrey Lee Brown, Jr., Ross Emerson Webster, attorneys for appellees in 2009–CA–00784–SCT.Steven W. Pittman, Hernando, Susan Elizabeth MacKenzie, Edward Thomas Autry, attorneys for appellees in 2007–CA–02043–SCT.Steven W. Pittman, Hernando, Susan Elizabeth MacKenzie, Edward Thomas Autry, attorneys for appellant in 2009–CA–00784–SCT.EN BANC.RANDOLPH, Justice, for the Court:

¶ 1. This case ¹ involves the administration of William F. McLemore's estate and trusts. William appointed his widow, Colleen McLemore, and son, Gerald McLemore, as coexecutors of his will and cotrustees of his trusts. Following William's death, very little was accomplished without strife and litigation, dividing the family. According to the chancellor, in the nearly nine years since William's death, this case has been “hotly litigated” with some “highly anxious moments.” Thirty-six volumes of record detail the conflicts, which included motions for removal of executors and trustees, motions to compel, motions for contempt, motions for sanctions, a cease-and-desist letter, last-minute filings, contentious practices by attorneys, a retaliatory motion, and claims of fraud.

¶ 2. Although the fitness of Gerald and Colleen to have continued as fiduciaries is hotly debated in the briefs, no party raised as an issue the chancellor's denial of all attempts to remove Gerald as executor.² Thus, the issue of retaining the same coexecutors and cotrustees is not before the Court and will not be discussed further.

¶ 3. William amassed a great deal of wealth, primarily represented by real-estate holdings in DeSoto County, Mississippi, and Shelby County, Tennessee. By the time he died on May 11, 2002, he had been married to Colleen for more than sixty-seven years. They had four sons, Gerald, Billy, Dennis, and Shannon. William and his sons worked together in various real-estate and farming operations. They were involved in many property transactions,

[63 So.3d 474]

including trading properties with each other. William gave and loaned money to his sons on numerous occasions over the years. A longstanding hostility existed among the sons. None of the others liked Gerald. The relationship between Gerald and Billy was especially poor. Both testified that they had not spoken to each other in fifteen years. In William's will and trusts, Gerald and Colleen were appointed coexecutors of the estate and cotrustees of the trusts. After William died, Colleen continued William's practice of providing money to their sons, particularly to Dennis and Shannon.

¶ 4. After cooperating initially, Gerald and Colleen disagreed over: (1) ownership of various properties; (2) loans/gifts to Dennis and Shannon; and (3) remuneration for rent-collection, building maintenance, and contracting with new tenants. At the suggestion of Billy and Dennis, Colleen retained an attorney to seek Gerald's removal as coexecutor and cotrustee. After initially attempting to act as a liaison and peacemaker, Shannon joined Billy and Dennis against Gerald. Their efforts to remove Gerald as executor did not succeed. When family tensions worsened, Colleen excluded Gerald as an heir to her estate and as a beneficiary of a trust she controlled. She named Billy and Dennis as her coexecutors. On January 21, 2007, after trial had begun, Colleen died. Her estate was substituted in her stead. Upon Colleen's death, Gerald became the sole executor and trustee of William's estate and trusts. Then his three brothers, a majority of the trust beneficiaries, voted to remove him as trustee. Following trial, Billy died, and Jackie McLemore, as personal representative of his estate, was substituted in his stead.

¶ 5. The conflict over the disposition of one parcel, known as the Elvis Ranch and Bank Building (“Elvis property”), was especially contentious. Part of this property was once owned by entertainer Elvis A. Presley. It represented a large share of the family's wealth. Colleen and William had contracted to sell the property in 2002 for $7,000,000, but the sale was never completed. Other sales opportunities occurred later; Gerald had a buyer, and his brothers had another buyer. The chancellor considered and approved various petitions for orders to confirm sales contracts and for authority to sell the property, but no sale had been consummated by the time of the chancellor's post-trial orders in October 2007.

¶ 6. The record of the second case is primarily comprised of billing records of the attorneys for Gerald and Colleen's estate. After trial, the chancellor awarded fees of approximately $420,000 to Edward T. Autry, the attorney for Colleen's estate, based in part on his affidavit that he and Colleen had operated under an oral agreement for attorney fees ranging from $175 to $350 per hour. Later, a written fee agreement (setting the hourly fee at $175), signed by Colleen and Autry, turned up in discovery in another case involving these parties. At that time, Gerald charged that Autry, as well as Billy and Dennis, had committed fraud upon the court by claiming not only that no written agreement had existed, but that Autry and his firm had never used written fee agreements. Autry retaliated by claiming that Gerald's attorney, Aubrey L. Brown, Jr., had committed fraud by continuing to operate under an old fee agreement and failing to complete a new agreement after Brown had changed firms.

FACTS AND PROCEDURAL HISTORY

¶ 7. William completed his will and trust documents in 1994. The will called for Colleen and Gerald to be appointed as William's personal representatives and for

[63 So.3d 475]

distribution of all of William's property to the William F. McLemore Living Trust. William was to be the sole trustee of the living trust until his death. Colleen and Gerald were to become trustees upon William's death. The living trust provided for the trustees to receive “fair and reasonable compensation for the services [they render as fiduciaries].” The trustees also were to be “reimbursed for the reasonable costs and expenses incurred in connection with [their] fiduciary duties.” The trustees were authorized “to employ attorneys ... and other such agents as [they] shall deem necessary or desirable.... [They] shall reasonably compensate those persons or entities....” There was no provision in the living trust for payments of compensation, reimbursement, or professional fees of the other beneficiaries who were not named trustees.

¶ 8. The living trust allowed for removal of trustees. After William's death, Colleen was authorized to remove any trustee for cause. After the death of both William and Colleen, a majority of the beneficiaries could remove a trustee without cause.

¶ 9. The living trust called for the distribution of all living-trust property into two separate trusts (marital and family) upon William's death. The marital trust was to receive all property, less $1,000,000 (“the smallest amount which, if allowed as a marital deduction, would result in the least possible federal estate tax being payable ...”). The family trust was to be funded by property valued at $1,000,000.

¶ 10. The trustees of the marital trust were to “pay to or apply for the benefit of [Colleen], at least annually during [her] lifetime, all of the net income from the Marital Trust.” Regarding Colleen's final expenses, the trustees of the marital trust “may, in [their] sole and absolute discretion, pay for the following expenses: ... Any inheritance, estate, or other death taxes payable by reason of [Colleen]'s death....” The same section of the living trust cautioned, “Without in any way limiting my Trustee's discretion, it is my desire that my Trustee not make any payments under this Section if those payments can be satisfied from [Colleen's assets] outside of the marital trust.” Upon Colleen's death, any remaining balance of the marital trust was to be divided into equal shares, one for each of the four sons.

¶ 11. The family trust was to be funded by property equaling $1,000,000 in value. The living trust granted Colleen “the limited testamentary power to appoint to or for the benefit of my descendants ... by a valid last will and testament ..., all or any portion of the principal and any ... income of the Family Trust.... [Colleen] may make distributions among my descendants in equal or unequal amounts....” (Emphasis added.)

¶ 12. The attorney who drafted the documents testified that William's intent was to transfer all his real property into the living trust, but this was never done. Thus, the living trust was not funded when William died. However, William's will stated, “If my revocable living trust is not in effect at my death for any reason whatsoever, then all of my property shall be disposed of under the terms of my revocable living trust as if it were in full force and effect on the date of my death.”

¶ 13. In his latter years, William continued to transact business and was involved in the lives of his sons. William collected the rent on his properties and made deposits to an account at BancorpSouth. Records were kept at an office located at the family's Greenriver Farms property. A secretary, Gloria McCarson, who worked for William...