Russell v. Russell

• Decision Date: 30 December 1999
• Citation: 758 So.2d 533
• Parties: Mary RUSSELL v. William Glenn RUSSELL et al.
• Court: Alabama Supreme Court

758 So.2d 533

Mary RUSSELL v. William Glenn RUSSELL et al.

1980350.

Supreme Court of Alabama.

December 30, 1999.

Donald M. Briskman of Briskman & Binion, Mobile; and Ian F. Gaston of Gaston & Gaston, Mobile, for appellant.

David L. Kane and Sandy G. Robinson of Cabaniss, Johnston, Gardner, Dumas & O'Neal, Mobile, for appellee Lois M. Peacock.

SEE, Justice.

This appeal was transferred to this Court by the Mobile Circuit Court. Mary Russell appealed to that court from a final judgment of the Mobile Probate Court dismissing her petition to declare void her husband's inter vivos transfer of his majority interest in a family business to a trust. Lois Peacock, the trustee of that trust, has moved to dismiss this appeal, arguing (1) that the circuit court was not the proper appellate court, and (2) that the circuit court did not have authority to transfer the appeal to this Court.

We hold that the circuit court was not the proper appellate court, but that the circuit court's transfer to this court was proper. We further hold that the probate court properly dismissed Mrs. Russell's petition. Therefore, we affirm the judgment of the probate court.

I.

John Thomas Russell died on March 15, 1995. He was survived by several children and by his wife, Mary Russell. Mr. Russell had executed two instruments designed to control and dispose of his estate. On April 14, 1994, Mr. Russell executed a revocable living-trust agreement. Mr. Russell appointed himself the initial trustee. The trust agreement provided that upon Mr. Russell's incapacity or death, Lois Peacock was to serve as successor trustee. Concurrent with the execution of the trust agreement, Mr. Russell transferred title to a personal checking account as well as his controlling interest (527 shares of common stock) in the family business, Dick Russell's, Inc., to the trustee.

The trust agreement directed the trustee to manage the stock in the family business according to specific guidelines. Specifically, the trust agreement provided: (1) that the trustee was to vote the stock for Mrs. Russell as chairman of the board of directors; (2) that for three years following Mr. Russell's death, the family business was to continue paying Mrs. Russell the same salary she was making at the time of Mr. Russell's death, and, after that, to pay her a minimum annual salary of $65,000 for as long as she lived; (3) that the family business was to provide major medical insurance coverage to Mrs. Russell at no cost to her, for as long as she lived; and (4) that when the corporation had annual pre-tax profits exceeding $90,000, it was to pay such excesses to the chairman of the board, officers, and key employees as determined by the board of directors. The terms of the family-trust document included no other provision for Mrs. Russell to receive income from the family trust. The terms of the family trust provided that the trust corpus would be distributed to five named beneficiaries at the later of: (1) a date 10 years after Mr. Russell's death, or (2) the date of death of the last to die of Mr. Russell and Mrs. Russell. Thus, no provision was made for Mrs. Russell to receive any portion of the trust corpus.

On December 5, 1994, Mr. Russell executed a will. The will named Mrs. Russell as executor of Mr. Russell's estate. By the will Mr. Russell (1) left his automobile to his son John Joseph Russell; (2) left all his other tangible property to Mrs. Russell; (3) left certain mineral rights in equal shares to all his children except Lois Peacock and John Joseph Russell; and (4) left the residue of his estate to Mrs. Russell. In July 1997, Mrs. Russell offered the will for probate in the Mobile Probate Court. The probate court admitted the will to probate on that day and issued letters testamentary to Mrs. Russell.

In December 1997, Mrs. Russell filed in the Mobile Probate Court a "Petition for Declaratory Judgment, Accounting, Injunctive and Other Relief," alleging that Mr. Russell had transferred "the bulk of his estate" to the trust in a fraudulent attempt to deprive Mrs. Russell of her "rights as a widow under the statutes of the State of Alabama." Peacock moved the probate court to dismiss the petition, arguing that it failed to state a claim upon which relief could be granted. The probate court ordered Mrs. Russell to amend her petition within 10 days to provide "a more definite statement of the issue as to fraud."

Mrs. Russell filed an amended petition, alleging: (1) that Mr. Russell's actions in transferring "assets constituting the bulk of his estate" to the trust had the effect of a testamentary disposition "while at the same time avoiding the requirements of the Probate Code governing such dispositions designed to protect surviving spouses;" and (2) that Mr. Russell's actions "were done fraudulently with the intent to deprive [Mrs. Russell] of her share of [Mr.] Russell's estate as a surviving spouse." The amended petition prayed that the "transfers and related actions be declared void ... and that the assets of the trust in question be returned to the estate of John Thomas Russell, deceased, for distribution under the terms of his Will." Peacock moved the probate court to dismiss Mrs. Russell's amended petition for failure to state a claim upon which relief could be granted. On March 25, 1998, the probate court granted that motion.

On April 9, 1998, Mrs. Russell filed a notice of appeal indicating that she was appealing the March 25 order to the Mobile Circuit Court. Peacock moved the circuit court to dismiss the appeal, arguing that because the probate court was exercising jurisdiction concurrent with that of the circuit court, pursuant to Act No. 91-131, Ala. Acts 1991, and because of the rule stated in Schroeder v. McWhite, 569 So.2d 316 (Ala.1990), an appeal from the probate court's ruling could be taken only to this Court. Mrs. Russell responded by arguing that her appeal to the circuit court was proper and that if the circuit court held otherwise, it should transfer her appeal to this Court. The circuit court held that it did not have jurisdiction over the appeal and transferred it to this Court. Peacock has moved this Court to dismiss the appeal, arguing that the transfer from the circuit court was invalid and that Mrs. Russell did not file a timely and proper notice of appeal to this Court.

II.

Peacock argues that the circuit court did not have jurisdiction of Mrs. Russell's appeal. Peacock relies on the reasoning in Schroeder and on Act No. 91-131 to support her argument.

Act No. 91-131¹ applies to counties with populations between 300,000 and 500,000. The Act applies to Mobile County and grants the Probate Court of Mobile County concurrent jurisdiction with the circuit court in the administration of decedents' estates and other kinds of estates. Section 1 of the Act (amending Act No. 974, Ala. Acts 1961 (Reg.Session), § 5) provides:

"[A]ppeals from the orders, judgments and decrees of such Probate Courts, relating to the administration of such estates, including decrees on partial settlements, lie to the Supreme Court within the time period prescribed in the Alabama Rules of Appellate Procedure from the entry of the order, judgment or decree. Such appeals shall be made in accordance with said appellate rules."

Act No. 91-131 amended § 7 of Act No. 974 to provide, in pertinent part:

"The jurisdiction conferred by this act on the Probate Courts, Probate Judges, and Chief Clerks of such counties is intended to be cumulative only, and it is not intended hereby to in any manner limit or restrict the jurisdiction of the Circuit Courts or the Probate Courts of such counties."

In Schroeder, this Court affirmed the Jefferson Circuit Court's order dismissing a party's appeal from an order of the probate court. 569 So.2d at 318. By a local act very similar to Act No. 91-131, the Legislature had granted the Jefferson Probate Court jurisdiction concurrent with the circuit court in the administration of decedents' estates. See Act No. 1144, 1971 Ala. Acts. In Schroeder, a party appealed from the probate court's denial of her motion for relief from its order requiring her to return substantial amounts of assets to the administrator of a decedent's estate. 569 So.2d at 318. This Court stated that the party's appeal would not lie to the circuit court, "for the obvious reason that the ruling on her motion was by the probate court acting in its exercise of jurisdiction concurrent with that of the circuit court." Id. at 318-19.

Peacock argues that the Mobile Probate Court was "acting in its exercise of jurisdiction concurrent with that of the circuit court" when it entered its order dismissing Mrs. Russell's petition. Therefore, she concludes, Mrs. Russell's appeal is due to be dismissed. However, in another case decided today, we have rejected the Schroeder rule. See Jett v. Carter, 758 So.2d 526 (Ala.1999).

Mrs. Russell argues that that portion of Act No. 91-131 (amending Act No. 974, § 5), providing that appeals from the probate court lie to the Supreme Court, is neither mandatory nor exclusive. Mrs. Russell also argues that that portion amending § 7 of Act No. 974, by its terms, states that the Act grants additional jurisdiction to the probate court, but does not remove any jurisdiction either from the probate court or from the circuit court. Thus, she asserts, Act No. 91-131 does not deprive the circuit court of its jurisdiction to hear appeals from final judgments of the probate court under Ala.Code 1975, § 12-22-20, which provides that "[a]n appeal lies to the circuit court or Supreme Court from any final decree of the probate court, or from any final judgment, order or decree of the probate judge." Accordingly, Mrs. Russell concludes that when the probate judge entered this order, she had the option of appealing to the circuit court or to this Court, pursuant to § 12-22-20.

Mrs. Russell's argument, however, fails to recognize that § 12-22-20, which...