Riley v. Barkley (In re Estate of Riley), 2 CA-CV 2017-0090
| Decision Date | 28 February 2018 |
| Docket Number | No. 2 CA-CV 2017-0090,2 CA-CV 2017-0090 |
| Parties | IN RE THE ESTATE OF MARY A. RILEY, DECEASED. R.J. RILEY, REGINA M. RILEY, F. MARTIN RILEY, NEYSA KALIL, NORA J. SIMONS, CECELIA RILEY, JUDE S. RILEY, LORETTA LACORTE, AND JULIA RILEY, Objectors/Appellants, v. JOHN D. BARKLEY, Successor Personal Representative/Appellee. |
| Court | Arizona Court of Appeals |
THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
NOT FOR PUBLICATION
See Ariz. R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f).
Appeal from the Superior Court in Pima County
The Honorable Sarah R. Simmons, Judge
AFFIRMED
Jonathan W. Reich, P.C., Tucson
By Jonathan Reich
Counsel for Objectors/Appellants
Miller, Pitt, Feldman & McAnally, P.C., Tucson
By Gerald Maltz
and
Mesch, Clark & Rothschild, P.C., Tucson
By J. Emery Barker
Judge Espinosa authored the decision of the Court, in which Presiding Judge Vásquez and Judge Eppich concurred.
¶1 Appellants R.J. Riley, Regina M. Riley, F. Martin Riley, Neysa Kalil, Nora J. Simons, Cecelia Riley, Jude S. Riley, Loretta LaCorte, and Julia Riley (known in these proceedings as the Objectors), are heirs to the estate of Mary Riley. They challenge the probate court's denial of their request to remove the successor personal representative, John Barkley, and to disqualify Barkley's attorney, and its denial of their motion for a new trial on the disqualification issue or sanctions for disclosure violations. They also contest the amount of attorney fees the court awarded them after granting their motion to dismiss Barkley's petition for instructions. For the following reasons, we affirm.
¶2 For purposes of this appeal, we relate only a portion of the lengthy history of this case, which dates back to 1996, when Mary Riley died. Her will designated her thirteen children as the beneficiaries of her estate. Two of the heirs, Joseph Riley and Mary Benge, were appointed co-personal representatives of the estate, but they resigned in July 2006 and John Barkley was appointed successor personal representative.1 Barkley objected to accountings filed by the former personal representatives andsought a surcharge from them. A mediation held in March 2009 produced a settlement agreement between Barkley, on behalf of the estate, and Joseph Riley and Mary Benge.
¶3 The probate court approved the settlement after a hearing on the merits, concluding it was reasonable and entered into in good faith. The Objectors, however, appealed that ruling, and our supreme court ultimately held in their favor, determining that because A.R.S. § 14-3952 requires the signatures of all beneficiaries whose interests are affected by such an agreement, the probate court's approval of the settlement pursuant to that statute did not bind the Objectors. See In re Estate of Riley, 231 Ariz. 330, ¶¶ 6, 13 (2013). Nevertheless, the supreme court's opinion also noted that the settlement was not "void for all purposes" and suggested a number of alternative ways Barkley could have entered the settlement without court approval or could "invoke the jurisdiction of the [probate] court . . . to resolve questions concerning the estate or its administration." Id. ¶¶ 15, 17, quoting A.R.S. § 14-3704.
¶4 On remand to the probate court, Barkley filed a "petition for instructions" under A.R.S. §§ 14-3704 and 14-3105, which the supreme court had referred to in its decision, see Riley, 231 Ariz. 330, ¶ 15, and again asked the probate court to approve the settlement agreement. In response, the Objectors filed a cross-petition for removal of Barkley as personal representative of the estate pursuant to A.R.S. § 14-3611 and disqualification of his attorney, Emery Barker, pursuant to Rule 42, Ariz. R. Sup. Ct., ER 1.9(a), alleging a conflict of interest.
¶5 After a two-day trial on the Objectors' cross-petition in April and May 2014, the probate court denied their requests to remove Barkley and disqualify his attorney, and granted Barkley's application for his attorney fees and costs to be paid by the estate. The Objectors' appeal of that ruling was dismissed by this court for lack of jurisdiction because the probate court's ruling did not resolve Barkley's petition for instructions or contain the requisite language under Rule 54(b), Ariz. R. Civ. P., to make the entry of judgment on fewer than all claims a final, appealable order. See In re Estate of Riley, No. 2 CA-CV 2014-0145, ¶¶ 5-6, 12 (Ariz. App. May 29, 2015) (mem. decision).
¶6 The Objectors returned to the probate court and filed a motion to dismiss Barkley's petition for instructions, which the court granted. The Objectors appealed that order. This court suspended the appeal upon the Objectors' request to permit them to seek an order with finality languagerequired by Rule 54(c), Ariz. R. Civ. P., but dismissed the appeal after no such order was obtained. At that point, the Objectors filed a motion for a new trial on their cross-petition and for sanctions "based upon misconduct of [Barkley] for failing to disclose important documents." Following a hearing, the probate court denied that motion.
¶7 The probate court ultimately entered a final judgment in April 2017 pursuant to Rule 54(c), encompassing the dismissal of Barkley's petition for instructions, the denial of the Objectors' cross-petition, and the denial of the Objectors' motion for new trial and for sanctions. The Objectors again appealed; we have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(9).
¶8 We first address the Objectors' contention that the probate court erred in denying their cross-petition to remove Barkley as personal representative of the estate. Specifically, they argue Barkley's petition for instructions approving the settlement agreement following the supreme court's opinion was "harmful to the Estate" and suggest the petition was a breach of Barkley's fiduciary duties. They also claim the probate court did not "properly consider and weigh the evidence," "erred in failing to make sufficient findings and conclusions" under Miller v. Board of Supervisors of Pinal County, 175 Ariz. 296 (1993), and the findings and conclusions the court did make are "clearly erroneous" for "ignor[ing] undisputed evidence" supporting Barkley's removal.
¶9 "A person interested in the estate may petition for removal of a personal representative for cause at any time," and cause includes "[i]f removal would be in the best interests of the estate" and "[i]f it is shown that the personal representative has disregarded an order of the court, . . . has mismanaged the estate or has failed to perform any duty pertaining to that office." A.R.S. § 14-3611(A), (B)(1), (3). We will affirm the probate court's removal decision "so long as there is evidence to support the trial judge's findings." In re Estate of Newman, 219 Ariz. 260, ¶¶ 38-40 (App. 2008). "Even if [the petitioners] did present substantial evidence in [their] favor on every material dispute, . . . [we will not] reweigh the facts or . . . second-guess the credibility determinations of the judge who had the opportunity to evaluate the witnesses' demeanor and make informed credibility determinations." Id. ¶ 40 (internal quotation marks omitted).
¶10 During the two-day trial on the cross-petition for removal of Barkley and disqualification of his counsel, the probate court heard testimony from several witnesses, including an expert who testified that Barkley and Barker were advancing the settlement agreement only to "shield" themselves and were not acting in the best interests of the estate. He also testified the Objectors had a "hostile" relationship with Barkley and his continuation as personal representative was not in the best interests of the estate. Although the expert maintained it was "inappropriate" for Barkley to seek court approval of the settlement through the petition for instructions, he agreed it was not a breach of his fiduciary duty to seek approval of the findings of fact and conclusions of law the probate court made prior to the supreme court's issuance of its opinion. He also acknowledged that the court's opinion suggested the settlement bound its signatories and Barkley could enter it without court approval, but he continued to assert that this suggested the only reason Barkley was seeking approval was "the liability shield."
¶11 The probate court, however, also heard testimony from another expert, who opined that Barkley had not breached any fiduciary duties and did not have a conflict of interest. That expert disagreed with the first expert's conclusions regarding the supreme court's opinion, explaining, He further testified that "hostility would not be a cause for removal alone," hostility by some of the beneficiaries is "fairly common" in family dispute cases, and in any event, he was "not aware of any hostility on the part of the Personal Representative or his counsel." Moreover, bringing in a new personal representative "would be very time consuming and costly" to the estate because a new representative "has to be brought up to speed to continue matters." He also opined that although he agreed Barkley had a duty to do a cost-benefit analysis regarding the settlement, Barkley did not have a new duty to investigate Joseph Riley after the case was returned to the probate court from the supreme court.
¶12 In its under-advisement ruling on the cross-petition, the probate court identified several duties of personal representatives but concluded it "[could not] find . . . the actions of the Personal Representative in attempting to settle the estate and obtain court approval of that settlement to be a breach of any duty to the estate."...
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