McGlaughlin v. Farren (In re Estate of Farren)

• Decision Date: 19 January 2016
• Docket Number: C.A. No. 8714–MA, C.A. No. 9385–MA
• Citation: 131 A.3d 817
• Parties: In re: Estate of Bennie P. Farren Patricia A. McGlaughlin, as Successor Trustee of The Hercules Living Trust and Beneficiary of The Hercules Living Trust, Petitioner, v. Andrew P. Farren, as Executor of the Estate of Bennie P. Farren under the Will of Bennie P. Farren, and in His Individual Capacity, Respondent.
• Court: Court of Chancery of Delaware

131 A.3d 817

In re: Estate of Bennie P. FarrenPatricia A. McGlaughlin, as Successor Trustee of The Hercules Living Trust and Beneficiary of The Hercules Living Trust, Petitioner,

v.Andrew P. Farren, as Executor of the Estate of Bennie P. Farren under the Will of Bennie P. Farren, and in His Individual Capacity, Respondent.

C.A. No. 8714–MA

C.A. No. 9385–MA

Court of Chancery of Delaware.

Date Submitted: October 23, 2015

Date Decided: January 19, 2016

A. Dean Betts, The Betts Law Firm, P.A., Georgetown, Delaware; Counsel for Patricia A. McGlaughlin.

Richard E. Berl, Jr., Berl & Feinberg, Lewes, Delaware; Counsel for Andrew P. Farren.

OPINION

LASTER

, Vice Chancellor.

Andrew P. Farren is the executor for the estate of his father, Bennie P. Farren (the "Estate").¹ Under Bennie's will, after the payment of his funeral expenses and the other debts of his Estate, he bequeathed his former residence and other assets to a trust. The terms of the trust contemplated that Patricia A. McGlaughlin could live in Bennie's former residence for the rest of her life.

Rebecca W. Courson is Andrew's biological mother and Bennie's ex-wife. She filed a claim against the Estate based on a child support order entered by a Florida court in 1986 and modified in 1987. The total amount of her claim was $228,459.47, consisting of $24,300 in missed payments plus compound interest on the amounts due.

Andrew accepted his mother's claim as a valid debt of the Estate. His decision meant that the value of the Estate's debts exceeded its liquid assets, so he filed a petition to sell Bennie's former residence to raise additional funds. If his petition is granted, then McGlaughlin will not be able to continue living in Bennie's former residence. At the age of 77, she would have to leave the place she has called home for nineteen years.

McGlaughlin objected to Andrew's decision and opposes his petition. She contends that Courson first had to register the Florida court's orders with the Delaware Family Court, then have the Family Court determine the amount of the arrearage. Only then, she says, could Courson have made a claim against the Estate. In this case, because the deadline for filing claims against the Estate has passed, Courson loses out. With her claim foreclosed, the Estate has sufficient liquid assets to pay its debts, and there is no need to sell the property.

In addition to opposing Andrew's petition, McGlaughlin filed a petition of her own. She seeks to remove Andrew as executor, contending that by accepting his mother's claim, Andrew breached the fiduciary duties that he owes to the Estate and its beneficiaries.

The parties cross-moved for summary judgment on their respective petitions. This decision grants Andrew's motion in part, holding that the Florida orders constituted a final judgment entitled to full faith and credit under the United States Constitution. Although Courson had the option to register the orders with the Family Court and have that court calculate the amount due under the orders, she was not required to follow that course as a prerequisite to asserting a claim against the Estate.

Otherwise, Andrew's motion is denied. Andrew has not provided an affidavit calculating the amount of interest due on the arrearage in accordance with Florida law. Until he does so, this court cannot determine the amount of the Estate's debts. Moreover, a trial is necessary so that the court can hear evidence, consider the equities involved in ordering a sale of a residence, and potentially craft a more tailored form of relief.

McGlaughlin's motion for summary judgment is denied. There is evidence which might suggest that Andrew favored his mother by accepting her claim and by requesting security, but the evidence is not sufficient to support judgment as a matter of law. A trial is necessary to weigh the evidence and evaluate Andrew's credibility.

I. FACTUAL BACKGROUND

The facts are drawn from the affidavits and supporting documents that the parties submitted in connection with their motions for summary judgment. For Andrew's motion, the factual record is evaluated in McGlaughlin's favor. For McGlaughlin's motions, the factual record is evaluated in Andrew's favor.

A. Bennie's Family History

Bennie and Courson were married, then separated in the late 1970s. During the marriage, they had two sons: Troy, born on August 5, 1969, and Andrew, born on July 23, 1974. After the separation, Bennie did not have any meaningful involvement in his sons' lives.

In the mid–1980s, Bennie developed a relationship with McGlaughlin. They never married, but they lived together for nearly thirty years. In 1997, they moved into a house at 161 Lakeside Drive in Laurel, Delaware (the "Residence"). Bennie bought the Residence and held title in his own name. During his relationship with McGlaughlin, Bennie became close to her grandson, Jared Smith.

B. Bennie's Child Support Obligations

By order dated July 29, 1986, the Circuit Court of the Ninth Judicial Circuit in and for Osceola County, Florida (the "Florida Court") required that Bennie pay Courson child support in the amount of $750 per month until Troy turned eighteen. The Florida Court required that from then on, Bennie pay Courson child support in the amount of $375 per month until Andrew turned eighteen. The first support payment was due on August 1, 1986. The order is titled "Final Order of Custody and Support" in o. 6 (the "Child Support Order"). The Child Support Order also directed Bennie to pay an award of legal fees to Dana H. Hankins, Courson's attorney, in the amount of $9,500.

By order dated January 29, 1987, the Florida Court modified the terms of the Child Support Order (the "Modification Order"). The Modification Order reduced Bennie's on-going support obligation to $300 per month, effective as of February 1, 1987, and continuing until further order of the Florida Court.

Bennie did not satisfy his obligations under the Child Support Order or the Modification Order. By order dated May 15, 1987, the Florida Court held Bennie in contempt for "willfully failing and refusing to obey" its orders and imposed a sanction of 364 days in jail. When the Florida Court issued its orders, Bennie lived in Delaware. McGlaughlin testified in deposition that Bennie knew about the orders, but that he never returned to Florida and did not serve any jail time.

In 1990, Bennie declared bankruptcy. As part of that proceeding, the amount Bennie owed Hankins was reduced to $4,254.13. The proceeding did not alter Bennie's child support obligations.

Although Bennie did not comply fully with the Child Support Order, he did make some child support payments. McGlaughlin submitted a Florida Court document titled "Family Law Case History" and dated February 9, 2015. It provides a history of the child support payments that Bennie made and reflects (i) a payment of $3,300 on December 31, 1985, (ii) payments of $300 on January 9, 1986, February 7, 1986, March 11, 1986, April 7, 1986, June 3, 1986, and June 13, 1986, (iii) a payment of $178 on November 12, 1986, and (iv) an "adjustment" of $178 on August 27, 2013. The Family Law Case History reflects total arrears of $24,122.

C. Bennie's Death And The Administration Of The Estate

Bennie died on September 12, 2012. His last will and testament (the "Will") named Ronald Farren, his brother, as his executor with Andrew named as the successor executor. For unknown reasons, Ronald declined to serve. Andrew took on the role, and the Sussex County Register of Wills granted him letters testamentary on October 3, 2012.

In his Will, after the payment of the debts of his Estate, Bennie bequeathed all of his assets, including the Residence, to the Hercules Living Trust (the "Trust"). The terms of the Trust permitted McGlaughlin to live in the Residence for the rest of her life, rent free, with the Trust funding the monthly expenses for the Residence. After McGlaughlin died, ownership of the Residence would pass to Smith. The Trust's other assets would pass to Troy and Andrew. McGlaughlin currently serves as the trustee of the Trust.

After funeral costs, taxes, and administrative expenses, the Estate had approximately $27,000 in net liquid assets plus title to the Residence. On December 4, 2012, Hankins filed a claim against the Estate for $4,254.13 plus interest, representing the legal fees that she had been awarded in the Child Support Order as modified in Bennie's bankruptcy proceeding. On January 2, 2013, Andrew rejected the claim, believing that Hankins would not pursue it. He was right. Hankins dropped the matter.

On February 4, 2013, Courson filed a claim for $228,459.47 (the "Arrearage Claim"). The total amount comprised child support arrearages of $24,300 plus compound interest on the missed payments totaling $204,159.47 through December 31, 2012.

To support the claim, Courson provided the Child Support Order, a table showing the statutory interest rates applicable under Florida law from 1981 through 2013, and a document from the Florida Court called an arrearage affidavit. Under Florida law, an arrearage affidavit presumptively establishes the amount due under a child support order. Courson submitted an arrearage affidavit dated January 18, 2013, which identified an arrearage of $24,300 (the "January Affidavit"). Although it did not refer to the Child Support Order or the Modification Order explicitly, the January Affidavit bore the same case number as the child support action. Courson also submitted a schedule prepared by a certified public accountant which calculated the amount of interest due using Florida's statutory interest rates. Courson did not submit a copy of the Modification Order, but her accountant's schedule accurately reflected the modified amount.

By letter dated February 15, 2013, Andrew informed McGlaughlin that he intended to accept the Arrearage Claim on behalf of the Estate unless McGlaughlin agreed to fund all of the costs that the Estate would incur in disputing it. McGlaughlin responded by...