In re Penland

• Court: Georgia Court of Appeals
• Writing for the Court: Gobeil, Judge.
• Citation: In re Penland, 357 Ga.App. 369, 850 S.E.2d 808 (Ga. App. 2020)
• Decision Date: 26 October 2020
• Docket Number: A20A0998
• Parties: IN RE ESTATE OF Jewel H. PENLAND.

357 Ga.App. 369

850 S.E.2d 808

IN RE ESTATE OF Jewel H. PENLAND.

A20A0998

Court of Appeals of Georgia.

October 26, 2020

Hodges McEachern & King, T. Kyle King, Christina A. Cason, for appellant.

Jones Cork, Cater C. Thompson, for appellee.

Gobeil, Judge.

James S. Ray, Sr., beneficiary and co-executor of the estate of his mother, Jewel H. Penland, appeals the probate court's order disinheriting Ray and his sister, Eloise R. Hadaway (also a beneficiary and co-executor of Penland's estate).¹ In relevant part, the probate court concluded that Ray violated the in terrorem clause in Penland's will by failing to make certain distributions as required under the will.² On appeal, Ray argues that the probate court erred by ruling that he violated the in terrorem clause because his objections to the specific bequests were made when he was acting in his capacity as fiduciary, rather than as beneficiary. Ray also contends that his actions did not violate the in terrorem clause because those actions did not amount to a contest of the probate of the will or an effort to break it. For the reasons explained more fully below, we reverse.

The record shows that Penland executed a will in 2005 and a codicil thereto in 2006. Penland named her three surviving children, Ray, Hadaway, and Dorothy Evans, as co-executors of her estate. Penland's fourth child, Clarence D. Ray ("Clarence"), predeceased her. Clarence was survived by his three children. Penland's will included several specific pecuniary bequests: $10,000 to Hadaway (Item III); $20,000 to Samuel Evans ("Samuel"), Evans's son (Item IV); and $20,000 to each of Clarence's children (Item V). The residue of the estate was to be divided between Hadaway, Ray, and Evans.³

Item XI of the will contained the following in terrorem clause:

Should any beneficiary contest or initiate proceedings to contest the validity of this Will or any provision herein or to prevent any provision herein from being carried out in accordance with its terms (whether or not in good faith and with probable cause), then all the benefits provided for such contesting beneficiary in this Will are revoked and annulled. Such benefits, if not a part of the residue of my estate, shall go over to and become a part of the residue of my estate. If such contesting beneficiary is a beneficiary under any Item of this Will which disposes of the residue of my estate, such contesting beneficiary shall cease to be a member of the class of beneficiaries to whom distributions are required or permitted to be made under such Item. Upon the final division and distribution of the property passing under such Item, the share to which such contesting beneficiary would otherwise have been entitled shall be held and distributed as if such contesting beneficiary had died immediately prior to such division without exercising any power of appointment which he or she might otherwise have had hereunder. Any generation-skipping transfer tax which might arise pursuant to this Item shall be paid from such share.

Item VI (d) of the will contained an equalization provision, which provided that, in dividing the residue, the co-executors

shall compute the value of assets passing outside of this will to each of my children, including U. S. Savings Bonds and Certificates of Deposit^{[4 ]} that are jointly titled in my name and one of my children's or grandchildren's names, and shall distribute from the assets passing under this will an amount to each child or grandchild sufficient to equalize the entitlement between each of my three surviving children or their descendants.

Following Penland's death in 2007, Hadaway admitted the 2005 will for probate, but did not admit the 2006 codicil. The probate court entered letters testamentary qualifying Hadaway, Ray, and Evans as executors of the estate. Ray and Evans filed a caveat to the will on the ground that Hadaway did not admit the codicil for probate. Hadaway and Samuel filed a caveat to the caveat, objecting to the admission of the codicil. And the will, without the codicil, was admitted to probate in common form. Ultimately, the codicil was admitted to probate in 2017.

In November 2007, Ray petitioned to remove Hadaway as co-executor. In the motion, which Ray filed in his capacity as beneficiary under the will, Ray asserted inter alia that Hadaway had "distributed personal assets from the [e]state without the knowledge or consent of the heirs and contrary to the intent of [Penland] as set forth in her Will" and would not allow the other co-executors to hire an attorney to "investigate and seek recovery if warranted of approximately $600,000.00 of U. S. Government Bonds that [Penland] desired to be included as a part of her probate estate but were retained by Hadaway and Hadaway's nephew, [Samuel]." Hadaway responded, and filed a counter petition for the removal of Ray and Evans as co-executors.

The parties were unable to agree to the payment of the bequests to Clarence's children. On April 22, 2008, Hadaway, in her capacity as co-executor, sought an order from the probate court to compel payment of the specific pecuniary bequests set forth in Items III, IV, and V of the will. According to Hadaway, Ray, as co-executor, refused to permit the bequests to be paid. In her motion, Hadaway acknowledged the pending caveat pertaining to the codicil, but she maintained that the codicil would not change any of the specific bequests. She further argued that the equalization provision is inapplicable to the bequests. In support of the motion, Hadaway maintained that "[a]ll debts of the estate have been paid and there are more than adequate funds remaining to the estate to pay any additional, future debts or administrative expenses" and "[t]here is no good reason why these specific pecuniary bequests cannot be paid at this time." Ray responded to the motion as "one of the named and qualified Co-Executors," and essentially sought to delay payment of the bequests until such time as "all of the Executors consider the complete financial condition of the Estate." Ray also sought an accounting of Penland's estate.

The probate court granted Hadaway's motion in part and ordered the estate to pay the bequests to Clarence's children. In its order, the probate court reasoned that because Clarence predeceased Penland, the equalization provision did not apply to the gifts to his children, but to the distribution of the residue of the estate. The court also found a lack of evidence that there were insufficient funds to pay the bequests.

Several years of litigation over the estate ensued. In September 2016, Ray and Hadaway agreed to voluntarily resign as executors of Penland's estate. Thereafter in October 2016, Ray filed a petition to recover the expenses he incurred in his capacity as co-executor.⁵

In 2018, Ray filed a motion to disinherit Hadaway and Samuel, arguing that they triggered the in terrorem clause by objecting to the admission of the codicil to probate. Hadaway filed a cross-motion to disinherit Ray, claiming that his objection to the payment of the bequests to Clarence's children also triggered the in terrorem clause. Following a hearing, the probate court entered an order on Ray's petition to recover expenses and granted both motions to disinherit. Specifically, the court found that Hadaway's failure to offer the codicil in connection with her petition to probate the will, coupled with Hadaway's and Samuel's motion to dismiss Ray's caveat that offered the codicil, triggered the in terrorem clause. As to Ray, the court found that his failure to pay the specific bequests to Clarence's three children, such failure necessitating a court order directing him to pay those bequests, triggered the in terrorem clause because it prevented a term of the will from being carried out. The instant appeal followed.

1. Ray first argues that the probate court erred by disinheriting him because his challenge to the distribution of the bequests

to Clarence's children was in his capacity as a...