Livesay v. Carolina First Bank

• Decision Date: 06 October 2009
• Docket Number: No. COA09-111.,COA09-111.
• Citation: 683 S.E.2d 453
• Parties: Brenda LIVESAY, Trustee of the Ronald Livesay and Brenda Livesay Family Trust dated March 26, 1998, Brenda Livesay, Guardian ad Litem for Candice Livesay and Ron Livesay, Jr., and Brenda Livesay, Individually, Plaintiffs, v. CAROLINA FIRST BANK, Safeco Corporation, First National Insurance Company of America, and E.K. Morley, Administrator CTA of the Estate of Ronald B. Livesay, Deceased, Defendants.
• Court: North Carolina Court of Appeals

683 S.E.2d 453

Brenda LIVESAY, Trustee of the Ronald Livesay and Brenda Livesay Family Trust dated March 26, 1998, Brenda Livesay, Guardian ad Litem for Candice Livesay and Ron Livesay, Jr., and Brenda Livesay, Individually, Plaintiffs, v. CAROLINA FIRST BANK, Safeco Corporation, First National Insurance Company of America, and E.K. Morley, Administrator CTA of the Estate of Ronald B. Livesay, Deceased, Defendants.

No. COA09-111.

Court of Appeals of North Carolina.

October 6, 2009.

Appeal by plaintiff from an order entered 9 October 2008 by Judge Mark E. Powell in the Henderson County Superior Court. Heard in the Court of Appeals 20 August 2009.

Gary A. Dodd and Charles Brewer, Asheville, for plaintiff.

Russell McLean III, Waynesville, for plaintiff as Guardian Ad Litem for Candace Livesay and Ron Livesay, Jr.

Smith Moore Leatherwood, L.L.P., by James G. Exum, Jr., Allison O. Van Laningham, and L. Cooper Harrell, Greensboro, for defendant E.K. Morley.

BRYANT, Judge.

On 7 August 2008, plaintiff Brenda Livesay, acting individually and in her capacity as trustee and guardian ad litem, filed a declaratory judgment action against Carolina First Bank, Safeco Corporation, First National Insurance Company of America and E.K. Morley, administrator CTA of the Estate of Ronald B. Livesay, deceased. On 21 August 2008, Morley moved to dismiss under Rule 12(b), arguing that plaintiff lacked standing and that the superior court lacked subject matter jurisdiction. On 9 October 2008, the trial court granted the motion, stating that it "lack[ed] jurisdiction of the subject matter." Plaintiff appeals. For the reasons discussed below, we affirm.

Facts

Plaintiff's husband, Ronald B. Livesay, died 1 July 2005 and on 30 December of that year, plaintiff filed a declaratory judgment action in the Henderson County Superior Court against Carolina First Bank, Safeco Corporation, and First National Insurance Company of America ("the other defendants"). Plaintiff asked the trial court to construe the terms of the Livesay Family Trust, interpret various relevant state statutes, and determine whether the trust was revocable and therefore reachable by creditors of Mr. Livesay's estate. Morley was thereafter appointed administrator CTA of the estate and, in July 2006, he intervened as a defendant in the 2005 action. On 6 June 2007, Morley and the other defendants moved for partial summary judgment. The trial court granted the motion, and plaintiff appealed. This Court unanimously affirmed, holding that the trust was reachable by the estate's creditors to the extent necessary to satisfy the estate's debts. Livesay v. Carolina First Bank, 192 N.C.App. 234, 665 S.E.2d 158 (2008) ("Livesay I"). Plaintiff's petition for discretionary review of that decision is pending in the North Carolina Supreme Court.

On 26 February 2008, prior to our decision in Livesay I, Morley, as Administrator CTA of the estate, moved for a preliminary injunction in the Henderson County Superior Court to restrain plaintiff from making any expenditures or withdrawals from the Livesay Family Trust until all issues related to the administration of the estate were resolved. After the trial court denied the motion for preliminary injunction, the other defendants appealed and we affirmed. Livesay v. Carolina First Bank, ___ N.C.App. ___, 673 S.E.2d 883 (2009) (unpublished).

During the appeal of the 2005 action, Morley continued to administer the estate, and on 19 June 2008, he filed a motion with the clerk of court for confirmation of creditors' claims and for judicial determination of inadequacy of the estate's assets. In response, plaintiff filed the declaratory judgment action from which the current appeal arises.

Analysis

Plaintiff's sole assignment of error is that the trial court erred in granting Morley's motion to dismiss because the trial court had subject matter jurisdiction pursuant to Rule 57 and the Uniform Declaratory Judgment Act. We disagree.

The standard of review for an order granting a motion to dismiss for lack of subject matter jurisdiction is de novo. Fuller v. Easley, 145 N.C.App. 391, 395, 553 S.E.2d 43, 46 (2001).

The General Assembly has specified that

[t]he clerk of superior court of each county, ex officio judge of probate, shall have jurisdiction of the administration, settlement, and distribution of estates of decedents including, but not limited to, the following:

(1) Probate of wills;

(2) Granting of letters testamentary and of administration, or other proper letters of authority for the administration of estates.

N.C. Gen.Stat. § 28A-2-1 (2009). It is well-settled that the clerk of court is "given exclusive original jurisdiction in the administration of decedents' estates except in cases where the clerk is disqualified to act." In re Estate of Longest, 74 N.C.App. 386, 390, 328 S.E.2d 804, 807 (citing In re Estate of Adamee, 291 N.C. 386, 398, 230 S.E.2d 541, 549 (1976)), cert. denied and appeal dismissed, 314 N.C. 330, 333 S.E.2d 488 (1985). Thus, Morley contends that the trial court correctly dismissed plaintiff's declaratory judgment action since it concerned the administration, settlement, and distribution of an estate and was thus in the exclusive original jurisdiction of the clerk.

In contrast, plaintiff argues that her declaratory judgment action in the superior court is authorized by N.C. Gen.Stat. § 1-255, which provides

[a]ny person interested as or through an executor, administrator, trustee, guardian or other fiduciary, creditor, devisee, legatee, heir, next of kin, or cestui que trust, in the administration of a trust, or of the estate of a decedent, an infant, lunatic, or insolvent, may have a declaration of rights or legal relations in respect thereto:

(1) To ascertain any class of creditors, devisees, legatees, heirs, next of kin or others; or

(2) To direct the executors, administrators, or trustees to do or abstain from doing any particular act in their fiduciary capacity; or

(3) To determine any question arising in the administration of the estate or trust, including questions of construction of wills and other writings.

(4) To determine the apportionment of the federal estate tax, interest and penalties under the provisions of Article 27 of Chapter 28A.

N.C.G.S. § 1-255 (2009). While the language of these statutes appears somewhat contradictory, our case law reveals a clear division between estate-related issues which are properly brought in the superior court and those which are part of the standard administration of an estate and therefore outside the superior court's subject matter jurisdiction.

In In re Jacobs, the defendant contested transfer of his case to the civil docket because the clerk of court has exclusive and original jurisdiction of all probate matters. 91 N.C.App. 138, 141, 370 S.E.2d 860, 863, disc. review denied, 323 N.C. 476, 373 S.E.2d 863 (1988). We noted that

our courts distinguish cases which `arise from' the administration of an estate from those which are `a part of' the administration and settlement of an...