Old Nat. Bank of Martinsburg v. Hendricks

• Decision Date: 05 July 1989
• Docket Number: 18139,Nos. 17980,s. 17980
• Citation: 383 S.E.2d 502,181 W.Va. 537
• Court: West Virginia Supreme Court
• Parties: The OLD NATIONAL BANK OF MARTINSBURG, as Committee for Evelyn E.M. Hendricks v. Evelyn E.M. HENDRICKS, an Incompetent, D. Ewell Hendricks, Gilbert L. Hendricks, Sarah Ann Anderson, and Evelyn Elizabeth Reinhart. The OLD NATIONAL BANK OF MARTINSBURG, as Committee for Evelyn E.M. Hendricks, an Incompetent v. Evelyn E.M. HENDRICKS, an Incompetent, D. Ewell Hendricks, Gilbert Hendricks, Sarah Ann Anderson, Evelyn H. Reinhart, and Richard K. Dowse, Intervenor Below.

Page 502

383 S.E.2d 502

181 W.Va. 537

The OLD NATIONAL BANK OF MARTINSBURG, as Committee for

Evelyn E.M. Hendricks v. Evelyn E.M. HENDRICKS, an Incompetent, D. Ewell Hendricks, Gilbert L. Hendricks, Sarah Ann Anderson, and Evelyn Elizabeth Reinhart.

The OLD NATIONAL BANK OF MARTINSBURG, as Committee for

Evelyn E.M. Hendricks, an Incompetent v. Evelyn E.M. HENDRICKS, an Incompetent, D. Ewell Hendricks, Gilbert Hendricks, Sarah Ann Anderson, Evelyn H.

Reinhart, and Richard K. Dowse, Intervenor Below.

Nos. 17980, 18139.

Supreme Court of Appeals of West Virginia.

July 5, 1989.

Syllabus by the Court

1. "Whether a sale of land shall be confirmed or the property again offered for sale, upon the filing of an upset bid, depends upon circumstances of the particular case, and the action of the trial court thereon will not be disturbed on appeal unless plainly wrong." Syl. pt. 2, State v. Hatfield, 136 W.Va. 342, 67 S.E.2d 529 (1951).

2. "As a general rule each litigant bears his or her own attorney's fees absent a contrary rule of court or express statutory or contractual authority for reimbursement." Syl. pt. 2, Sally-Mike Properties v. Yokum, 179 W.Va. 48, 365 S.E.2d 246 (1986).

3. W.Va.Code, 27-11-4 [1974] creates a fiduciary relationship between a committee, appointed to manage the estate of an incompetent, and the incompetent, for whom the committee is appointed.

4. When the sales price of an incompetent's real estate is increased, beyond that obtained by the committee, to its fair market value, through the efforts of an interested person, then that interested person is entitled to attorney's fees, pursuant to W.Va.Code, 37-1-15 [1959], based upon the efforts to increase the sales price, in an amount which is reasonable and just. In that situation, attorney's fees awardable pursuant to W.Va.Code, 37-1-15 [1959] shall be charged against the compensation of the committee and not against the estate itself.

Melody H. Gaidrich, Braun A. Hamstead, Hamstead & Manion, Gaidrich & Feuchtenberger, Charles Town, William A. O'Brien, Martinsburg, for Evelyn E.M. Hendricks.

Lacy I. Rice, Jr., Michael B. Keller, Martinsburg, for Nat. Bank of Martinsburg.

F. Samuel Bryer, Nichols & Skinner, Robert D. Aitcheson, Charles Town, for Richard K. Dowse.

Evelyn Elizabeth Reinhart, Shapsburg, Md., pro se.

McHUGH, Justice:

These cases are before the Court upon appeals from the Circuit Court of Jefferson County. In No. 17980, the appellants, Gilbert L. Hendricks and Sarah Ann Anderson, seek reversal of the circuit court's judgment denying reimbursement for expenses and attorney's fees. In No. 18139, the appellants, Evelyn E.M. Hendricks, an incompetent, D. Ewell Hendricks, and Evelyn H. Reinhart, seek reversal of the circuit court's judgment refusing to consider a certain offer to purchase property.

This Court has reviewed the petitions, all matters of record, and briefs of the parties. We are of the opinion that the judgment of the circuit court should be reversed and remanded in No. 17980 and affirmed in No. 18139.

I

In May, 1985, the Berkeley County Commission appointed the Old National Bank of Martinsburg (hereinafter "the Bank") as the committee for Evelyn E.M. Hendricks, an incompetent, upon the petition of her son, D. Ewell Hendricks.

On January 31, 1986, the committee petitioned the Circuit Court of Jefferson County to sell a 158-acre farm owned by Evelyn E.M. Hendricks. The sale was necessary to meet outstanding bills and obligations amounting to $31,000. The petition requested that the committee be permitted to sell the land to D. Ewell Hendricks for $176,400, the amount at which it was appraised. In a proceeding before the circuit court on April 15, 1986, two of the other three children of Evelyn E.M. Hendricks, Gilbert L. Hendricks and Sarah Ann Anderson, objected to this proposed sale, and agreed to loan $35,000, interest free, to satisfy the outstanding debts and obligations of Evelyn E.M. Hendricks. Furthermore, Gilbert L. Hendricks and Sarah Ann Anderson tendered another appraisal of the land in the amount of $255,000.

The circuit court authorized the committee to accept the $35,000 loan in order to avoid an immediate sale. The circuit court also stayed the sale of the property until July 3, 1986, allowing time for higher offers to purchase to be received on the property.

Between April 15 and July 3, 1986, Gilbert L. Hendricks and Sarah Ann Anderson contacted real estate agents and potential purchasers. Despite efforts by D. Ewell Hendricks and the Bank, Gilbert L. Hendricks and Sarah Ann Anderson refused to divulge to their brother, D. Ewell Hendricks, any information on the potential offers.

At the July 3, 1986 hearing, the highest offer was $282,500, offered by Richard K. Dowse. Less a $10,000 realty commission, Dowse's offer would net $272,500 to the estate. The circuit court allowed others to submit offers, even after Dowse's offer was made known. D. Ewell Hendricks submitted an offer of only $200,000, but maintained that it was in the best interest of Evelyn E.M. Hendricks to keep the farm in the family, a desire she often expressed. The circuit court rejected D. Ewell Hendricks' offer, accepting instead, Dowse's offer, which would have netted the most for the estate.

The circuit court's July 3, 1986 order allowed a period until July 17, 1986 for the transaction to be consummated. This order further stated that confirmation would be considered on July 17, 1986. The circuit court's July 3, 1986 order also authorized $35,000 from the proceeds to be repaid to Gilbert L. Hendricks and Sarah Ann Anderson, as reimbursement for their loan.

At the hearing on July 3, 1986, Gilbert L. Hendricks and Sarah Ann Anderson requested that they be awarded attorney's fees pursuant to W.Va.Code, 37-1-15 [1959]. ¹ This motion was denied by the circuit court as not being timely. On July 17, 1986, Dowse paid $282,500 and received a deed from the committee, thus, consummating the transaction.

On December 31, 1986, D. Ewell Hendricks tendered an offer of $290,000. The circuit court rejected that offer and entered an order, belatedly presented, that confirmed the sale to Dowse.

II

Evelyn E.M. Hendricks, D. Ewell Hendricks, and Evelyn H. Reinhart, the appellants in No. 18139, contend that the circuit court committed reversible error by refusing to accept the December 31, 1986 offer of D. Ewell Hendricks. The appellants maintain that such offer, for $290,000, should have been accepted because it would have netted $17,500 more than Dowse's offer and furthered the desire of Evelyn E.M. Hendricks to keep the farm in the family. Furthermore, the appellants maintain that the sale to Dowse was not confirmed at the time the $290,000 was offered.

Chapter 27, article 11 of the W.Va.Code deals with, inter alia, the appointment, powers, and duties of committees, including a committee's authority to dispose of the property of an incompetent. Specifically, W.Va.Code, 27-11-5 [1974] provides:

If the personal estate of such person be insufficient for the discharge of his debts, or i[f] such estate or the residue thereof after payment of the debts, and the rents and profits of his real estate, be insufficient for his maintenance and that of his family, if any, the committee of such person may proceed, as provided in article one, chapter thirty-seven of this code, to obtain authority to mortgage, lease or sell so much of the real estate of such person as may be necessary for the purposes aforesaid, or any of them, setting forth in the petition the particulars and the amount of the estate, real and personal, the application which may have been made of any personal estate, and an account of the debts and demands existing against the estate.

Because the outstanding bills and obligations of Evelyn E.M. Hendricks amounted to $31,000, the Bank, as committee, petitioned to sell the 158-acre farm pursuant to W.Va.Code, 37-1-11 [1971].

W.Va.Code, 37-1-13 [1931], provides, in part:

If it be clearly shown by the petition, exhibits, and evidence adduced, that the interest of the minor or insane person or convict will be promoted by the sale, lease or encumbrance by mortgage or trust deed, and the court be of opinion that the rights of no person will be affected thereby, it may order such estate, or any part thereof, to be sold, leased, or encumbered by mortgage or trust deed; and in such manner and on such terms and in such parcels as may be deemed most beneficial to the minor or insane person or convict[.]

W.Va.Code, 37-1-16 [1931] provides, in part: "Whenever a sale, lease, mortgage or trust deed is ordered as herein provided, the court shall order the proceedings under such sale, lease, mortgage or trust deed, to be reported for confirmation[.]"

The circuit court, in its order following the December 31, 1986 hearing, held that the sale of the farm to Dowse was "de facto confirmed by Mr. Dowse's compliance with the specific conditions of sale as set out in [the court's] Order of July 3, 1986."

In syllabus point 2 of State v. Hatfield, 136 W.Va. 342, 67 S.E.2d 529 (1951), this Court stated: "Whether a sale of land shall be confirmed or the property again offered for sale, upon the filing of an upset bid, depends upon circumstances of the particular case, and the action of the trial court thereon will not be disturbed on appeal unless plainly wrong." See also Tudor v. Tudor, 171 W.Va. 135, 136 n. 2, 298 S.E.2d 108, 109 n. 2 (1982).

In Hatfield, this Court admonished trial courts to be cautious in the consideration of upset bids.

The trial court should, of course, exercise extreme caution in considering upset bids received from persons who were present and participated in the bidding at the previous sale, with a view toward preventing any abuse of the practice of receiving upset bids, or in any way delaying the progress of the litigation.

136 W.Va. at 347, 67 S.E.2d at 532 (emphasis supplied).

Similarly, the Supreme Court of Appeals of...