Jones v. Balentine, CA
| Decision Date | 24 November 1993 |
| Docket Number | No. CA,CA |
| Citation | 866 S.W.2d 829,44 Ark.App. 62 |
| Court | Arkansas Court of Appeals |
| Parties | Ruth I. JONES, Appellant, v. Gary BALENTINE, Individually and as Administrator of the Estate of Otto Everett Balentine Deceased; Larry Balentine; and Inez Balentine, Appellees. 93-30. |
Randy Coleman, Little Rock, for appellant.
Henry Hodges, Little Rock, for Gary Balentine, Larry Balentine and Inez Balentine Wright.
Lindsey & Jennings, Little Rock, for Gary Balentine as Adm'r.
Appellant, Ruth Jones, has appealed from the Pulaski County Probate and Chancery Courts' decision (in two consolidated actions) affirming the validity of a purported family settlement agreement into which appellant entered with her nephews, appellees Larry Balentine and Gary Balentine, and their mother, appellee Inez Balentine, the widow of appellant's predeceased brother, Roscoe Balentine, who died in 1990. The family settlement agreement at issue purported to settle the estate of appellant's brother, Otto Balentine, who died intestate on April 26, 1991. Appellant has also appealed from the denial of her petition to remove Gary as administrator of Otto's estate. Appellant is a resident of Baltimore, Maryland, and appellees live in North Little Rock. The parties met with an attorney, Richard Hatfield, in May 1991 and signed an agreement later that day which equally distributed Otto's estate among appellant and appellees. Without this agreement, Inez would not have been entitled to a share of Otto's estate.
The next day, the administration of Otto's estate was opened in the Pulaski County Probate Court, and waivers of inventory, accounting, and notice signed by appellant were filed. An order appointing Gary as administrator of the estate was entered, and letters of administration were issued to him. A week later, Gary made a partial distribution of $340,000.00 in cash without first obtaining the probate court's approval. In this partial distribution, each party received $85,000.00.
In June 1991, appellant revoked her waivers. She unsuccessfully sought to rescind the agreement and refused to sign some quitclaim deeds in connection with the agreement. In August 1991, appellant filed a petition to remove Gary as administrator, citing the unapproved partial distribution of $340,000.00. In response, Gary admitted that he had not petitioned the probate court for approval but stated that he had relied upon the family settlement agreement in making the partial distribution. Attached to his response was a copy of the family settlement agreement, which stated:
Agreement made by and between Inez Balentine, Ruth Jones, Gary Balentine and
Larry Balentine.
which we, as the persons who are entitled to the property, agree to
distribute as follows.
Property Recipient
House located at 1410 Willow Street Inez Balentine
All stock and ownership in Tac"A"Taco Inez Balentine
1979 Lincoln Inez Balentine
1973 Ford LTD Inez Balentine
House and lot located at 1412 Willow Ave. 1/4 each
Cash including C.D.s and checking owning 1/4 each
approximately $363,000, less payment of
administration expenses and debts
Building and lot located at 1720 W. Long Split 1/4 each, after Veva Brant
17th Street, No. Little Rock ceases to occupy it in
accordance with the contract
with her
4 lots in Pinecrest Cemetery 1/3 each to Ruth Jones, Gary
Balentine and Larry Balentine
Personal Property Distributed by agreement
checking account.
In August 1991, appellant filed a complaint against Gary, individually and as administrator of the estate, Larry, and Inez, in the Pulaski County Chancery Court to rescind the agreement on the grounds of undue influence and appellees' breach of their confidential and fiduciary relationships with appellant. Later, Gary filed an inventory listing the value of the personal property at $369,616.00 and the real property at $59,500.00 as of the date of the decedent's death. Gary also filed a petition for authority to reimburse Inez for expenses of the estate which she had paid. These expenses included insurance, utilities, maintenance, and repair bills for the real property. The probate court granted reimbursement to Inez in the amount of $5,415.95 in August 1992.
The cases were consolidated for trial. In her proposed findings of fact, appellant asked the chancery court to grant her oral motion to amend the pleadings to conform to the evidence to include the issues of lack of consideration; failure to include an interested, non-consenting, and necessary person (appellant's spouse) in the agreement; and mutual mistake of fact. Appellant also requested that the court find the purported family settlement agreement to be an executory contract requiring consideration. The court upheld the family settlement agreement and found that, pursuant to this agreement, the proper people had received the money and, therefore, the distribution was not grounds for Gary's removal as administrator. The trial judge stated that, although Gary may not have done everything he should have done to keep the estate's assets properly maintained, he had relied upon his mother to maintain the estate's assets. In her conclusions of law, she held that Gary's actions as administrator did not rise to the level of malfeasance or mismanagement, as required by Ark.Code Ann. § 28-48-105 (1987), to justify his removal.
In her findings of fact and conclusions of law, the chancellor found that, as Otto's surviving sibling, under the Arkansas law of descent and distribution, appellant would have been legally entitled to an undivided one-half interest in his estate; Otto's nephews, Larry and Gary, would have been each entitled to an undivided one-fourth interest. As widow of the decedent's brother, Inez would have been entitled to no interest in the estate.
The chancellor also found that no confidential relationship existed between appellant and appellees. She noted that appellant had not seen appellees for several years before Otto's death. She also found that appellant had threatened to engage in litigation with her brothers in the past; she had no close relationship with her nephews; and she had only a slightly closer relationship with Inez. The chancellor further found that Gary had no fiduciary duty to appellant at the time the agreement was executed because he had not yet been appointed personal representative of the estate. Additionally, the chancellor found no evidence of undue influence on the part of appellees. She found that appellant was competent, could act for herself, and could protect her own interests in legal transactions. She found that appellant did not appear to be unduly upset and was not so incapacitated by her grief that she was unable to make a rational decision about the agreement. The chancellor found that, although appellees had a better understanding of Otto's assets, there was no evidence that they made any misrepresentations to appellant and that she was fully informed of the estate's assets. The chancellor found that Mr. Hatfield had informed appellant and appellees of their legal rights under Arkansas law and advised each of them that they were entitled to have separate counsel before entering into the agreement.
The chancellor also found appellees' and Mr. Hatfield's testimony to be truthful. With regard to appellant's veracity, however, she stated:
17. The Court is not convinced that Ms. Jones is a totally truthful witness and feels she is not an accurate witness. The most that the Court can give her is that Mr. Hatfield said and explained certain things to her which she didn't catch. Parts of her testimony lead the Court to believe she doesn't always tell the complete truth on the first question. While not characterizing or trying to brand the Plaintiff as a liar, the Court does not credit all of her testimony and believes she testifies in ways that put a more favorable light on circumstances than an objective viewer would give them. The Court does not see all the situations she described in precisely the same light as she does.
In her conclusions of law, the chancellor expressed the general principle that family settlement agreements are favored in the law and will not be set aside except for very strong and cogent reasons and that only nominal consideration is required to support such agreements.
In her first point on appeal, appellant argues that the agreement is void for lack of consideration; she argues that the rules of law applicable to family settlement agreements do not apply here because this is not a "family" settlement agreement. Appellant argues that, because Inez was not an heir and had no legal interest in Otto's estate under the Arkansas laws of descent and distribution, Inez was an "outsider" to the estate. Appellant cites 15A C.J.S. Compromise and Settlement § 9, at 201 (1967), which states: "The doctrine that the settlement of family disputes affords sufficient consideration for a compromise applies only between parties in interest, and will not sustain an agreement between a party in interest and an outsider not to create trouble in the family." Appellant argues that the Arkansas cases dealing with family settlements uniformly involve agreements among heirs-at-law, widows, devisees, parents, siblings, children, and pretermitted children; she argues that Inez, the widowed sister-in-law of Otto, is not an interested party in his estate and is, therefore, an "outsider." According to appellant, Inez's status as an "outsider" prevents...
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