Pitt's Estate, In re

• Decision Date: 10 September 1965
• Docket Number: CA-CIV,Nos. 1,s. 1
• Parties: In the Matter of the ESTATE of Julie H. PITT, Deceased. A. C. KALKBRENNER, individually and as Special Administrator of the Estate of Julie H Pitt, Deceased, and Anchor Casualty Co., a corporation, Appellants, v. Guy ANDERSON, Executor of the Estate of Julie H. Pitt, Deceased, Appellee. FIRST NATIONAL BANK OF ARIZONA, Appellant, v. ESTATE of Julie H. PITT, Deceased, Appellee. * 46, 1 53.
• Court: Arizona Court of Appeals

Page 471

405 P.2d 471

1 Ariz.App. 533

In the Matter of the ESTATE of Julie H. PITT, Deceased.

A. C. KALKBRENNER, individually and as Special Administrator of the Estate of Julie H Pitt, Deceased, and Anchor Casualty Co., a corporation, Appellants, v. Guy ANDERSON, Executor of the Estate of Julie H. Pitt, Deceased, Appellee.

FIRST NATIONAL BANK OF ARIZONA, Appellant, v. ESTATE of Julie H. PITT, Deceased, Appellee. ^*

Nos. 1 CA-CIV 46, 1 CA-CIV 53.

Court of Appeals of Arizona.

Sept. 10, 1965.

Moore, Romley, Kaplan, Robbins & Green, by Kenneth J. Sherk, Phoenix, for appellants.

Jennings, Strouss, Salmon & Trask, by Ozell M. Trask, Phoenix, for appellees.

DONOFRIO, Judge.

This is a consolidated appeal of two cases involving substantially the same parties but totally different questions of law. For the sake of convenience we shall treat each separately in the opinion. The first case is an appeal by a Special Administrator and his surety from a judgment of the Superior Court of Maricopa County, disallowing certain expenditures for which the Special Administrator sought credit in his final account, surcharging him, and denying him the amounts requested to be allowed as Special Administrator's compensation and attorney's fees.

Julie H. Pitt died testate leaving as her heir at law, A. C. Kalkbrenner, Appellant, and as the principal beneficiary of her Will, Guy Anderson, Appellee. Prior to the time of her death, her estate had been administered by Appellee in the capacity of Guardian. Upon Mrs. Pitt's death, Guy Anderson, named Executor in her Will, petitioned the Superior Court to admit the will to probate. Kalkbrenner opposed the petition, alleging as grounds that decedent's signature to her purported will had been obtained by Anderson by means of undue influence. At the trial of the Will contest, the jury rendered a verdict for the contestant, and the Will was not admitted to probate.

On appeal the case was reversed and our Supreme Court held:

'Upon Anderson's denial that he influenced or attempted to influence Mrs. Pitt in the disposition of her property, any presumption of undue influence disappeared. It was thereafter incumbent upon the contestant to prove it by clear and convincing evidence. The verdict of the jury is supported by nothing beyond speculation, suspicion and bottomless inference.

'The judgment of the lower court is reversed, and the case remanded with instructions to admit the will to probate.' In re Pitt's Estate, 88 Ariz. 312, 318, 356 P.2d 408, 412 (1960).

Shortly after the jury rendered its verdict and before the disposition of the case on appeal, Kalkbrenner was appointed Special Administrator of the decedent's estate in a proceedings held without notice to Anderson. The Superior Court denied Anderson's subsequent petition to have Kalkbrenner replaced as administrator by a disinterested person pending the appeal.

Kalkbrenner opposed Anderson's final account as Guardian of Mrs. Pitt's Estate. After a six day hearing, the Court approved Anderson's account but allowed him approximately $22,000.00 less than he had requested for fees and reimbursement of expenditures alleged to have been made on decedent's behalf.

After the successful appeal and following the appointment of Anderson as Executor of the Will, Kalkbrenner made his final accounting as Special Administrator, which Anderson opposed. At the conclusion of the hearing, the Superior Court made findings and granted the judgment from which the appeal now considered was taken.

In the Findings of Fact, the trial court found that Mrs. Pitt's estate consisted principally of securities contained in her safety deposit box, the house in which she had resided, and a number of promissory notes secured by First Mortgages. The trial court found that Kalkbrenner deposited interest and dividends in a bank account as they were collected, purchased time deposit certificates, and rented the Pitt house to his son for a few months at $60.00 per month and thereafter occupied it himself, rent free, for a period of 28 months. It further found that Kalkbrenner did not file the necessary periodic accounts of his administration, failed to deliver the asssets of the estate of Anderson until the latter had served him with an Order to Show Cause, and neglected to file State and Federal Income Tax Returns on behalf of the estate or to pay said taxes when they fell due, thereby subjecting the estate to possible penalties exceeding $1,300.00 and to actual penalties of $449.31. The trial court also found that Kalkbrenner had failed to pay local property taxes on the estate, and had neglected to reinvest United States Bonds when they fell due and ceased to bear interest. Other findings of fact were that the attorney for the estate did not perform or have Kalkbrenner perform the obligations in which he defaulted, and that such default caused the estate to incur additional accounting expenses, that Kalkbrenner did not secure the approval of the Court prior to making disbursements of estate funds, and that Kalkbrenner expended estate funds upon the Pitt residence for his own convenience as occupant without securing Court approval therefor.

As conclusions of law, the trial court found that under A.R.S. § 14-376 the entire special administration had been unnecessary, that as a consequence Kalkbrenner was entitled to receive neither fees nor compensation for his services nor attorney's fees, except fees on the basis of 'quantum meruit' for services performed of actual advantage to the estate, and that no benefit was conferred on the estate in resisting the final account of Guy Anderson as Guardian, or in defending the appeal of the Will contest, or defending appellant's final account as Special Administrator. Kalkbrenner and his attorney were each allowed $1,000.00 for their services. No attorney fees were allowed for the litigation attending the final account of Kalkbrenner as Special Administrator. Kalkbrenner was surcharged $60.00 per month for 28 months as the reasonable value of occupying the Pitt house for that period of time, and disbursements in the total sum of $3,392.30 were disallowed in his accounting. Most of said disbursements were made for the purpose of maintaining and improving the Pitt house. The Special Administrator was further surcharged $449.31 for tax penalties incurred.

Kalkbrenner, on this appeal contends that the trial court erred in disallowing $1,840.97 for repairs and improvements made to decedent's house, surcharging him for the occupancy of the house, and denying him normal fees and attorney's fees for his services to the estate.

In deciding this case on appeal, we are asked to review many factual determinations of the trial court. It is the law in this jurisdiction that findings of the trial court on a question of fact may not be disturbed on appeal if there is reasonable evidence in the record to sustain them. In re Wagner's Estate, 75 Ariz. 135, 252 P.2d 789 (1953); In re Taylor's Estate, 56 Ariz. 211, 106 P.2d 492 (1940).

Neither party nor this Court has succeeded in finding any Arizona case controlling the matter of surcharging Appellant for the rental value of Mrs. Pitt's house during the period he occupied it. Both parties have cited cases from other jurisdictions in which the decision of the courts to surcharge a personal representative for his occupancy of estate property has been based upon a determination by the trier of fact whether such occupancy was for the purpose of preserving the trust estate or for the private advantage of the personal representative. Since the facts of the cases cited differed from those of the case before us, we deem it unnecessary to discuss them. However, it is necessary to set forth a few principles governing special administrators. It is the policy of the law to keep the administration of decedents' estates in the hands of regularly appointed administrators and executors and to rely on special administrators only in cases of emergency and for a limited time. Vaught v. Struble, 65 Idaho 26, 139 P.2d 456, 148 A.L.R. 269 (1943).

Statutes vary in the authority granted a special administrator, but the cases generally provide, which we declare to be the rule in Arizona, that his powers are to be strictly construed; that his authority must be found in the statutes and in the orders of the probate court. Cobbell v. Crawford, 120 S.W.2d 1085 (1938) (Tex.Civ.App.); Little v. Gavin, 244 Ala. 156, 12 So.2d 549.

A.R.S. § 14-443 provides:

'The special administrator shall collect and preserve for the executor or administrator the personal property of decedent, take charge and management of, enter upon and preserve from damage, waste and injury, the real property and for such purposes may commence and maintain, or defend, actions and proceedings as an administrator.'

The order of the court appointing appellant Kalkbrenner provided that:

'He be and he hereby is authorized to collect and take charge of the estate of said deceased * * * and to exercise such other powers as may be necessary for the preservation of said estate.'

Kalkbrenner obtained no previous order or subsequent approval for the repairs, improvements or occupancy of the house.

Appellant cites In re Moore's Estate, 88 Cal. 1, 25 P. 915 (1891) for the proposition that prior approval is not indispensable. This was a case where the special administrator had exceeded the sum fixed by the court to be expended in repairing the property of the estate. The court therein said and which we cite with approval:

'If it becomes necessary during his management to make any repairs, his expenditures therefor must be sanctioned by the court appointing him, either by previous order or by subsequent approval, before he can reimburse himself from the funds of the estate. A prudent person would obtain from the court an order therefor before making such repairs, but it is not an indispensable requisite that he should do so. If he is willing to forgo...