Will of McCaffrey v. Fortenberry

• Citation: 592 So.2d 52
• Decision Date: 11 December 1991
• Docket Number: No. 07-CA-59358,07-CA-59358
• Parties: In the Matter of the Last WILL and Testament Of J.L. McCAFFREY, Sr., Deceased, v. Davis T. FORTENBERRY, Executor.
• Court: United States State Supreme Court of Mississippi

Page 52

592 So.2d 52

In the Matter of the Last WILL and Testament Of J.L.

McCAFFREY, Sr., Deceased, v. Davis T. FORTENBERRY, Executor.

No. 07-CA-59358.

Supreme Court of Mississippi.

Dec. 11, 1991.

Jolly W. Matthews, III, Ingram, Matthews & Stroud, Hattiesburg, for appellant.

Larry O. Norris, Hattiesburg, for appellee.

EN BANC.

DAN M. LEE, Presiding Justice, for the Court:

This is an appeal from the Forrest County Chancery Court wherein the chancellor Mr. J.L. McCaffrey, Sr., died testate on May 2, 1977, leaving his wife, Elma B. McCaffrey, as the sole beneficiary of his estate. Mr. Davis T. Fortenberry was Mr. McCaffrey's son-in-law, and he served as Mr. McCaffrey's personal attorney for several years prior to his marriage to the McCaffrey's eldest daughter. Furthermore, Mr. Fortenberry drafted J.L. McCaffrey's last will in which he was named as the executor of McCaffrey's estate. This will waived the statutory requirement of posting an executor's bond and the filing of annual accountings. Nevertheless, Fortenberry posted a bond in the amount of $50,000.00 and filed a First Annual Account one year after the estate was opened.

accepted the final accounting of the estate of J.L. McCaffrey, Sr. The appellants are the beneficiaries of Mrs. Elma B. McCaffrey's will, the now deceased widow of J.L. McCaffrey, Sr.

Mrs. Elma B. McCaffrey died on September 26, 1986, almost nine years following the death of her husband. Mr. Fortenberry was also named as the executor in her last will which he also drafted. After a court challenge, the details of which are not specified in this record, Mr. Fortenberry was removed as the executor of Mrs. McCaffrey's estate, and her son, J.L. McCaffrey, Jr., was appointed as administrator d.b.n.c.t.a.

As the administrator d.b.n.c.t.a. of his mother's estate, McCaffrey, Jr., filed a petition asking the court to order Fortenberry to file a final accounting and an inventory in the estate of J.L. McCaffrey, Sr. The court issued the order, and in May of 1987, ten years after the death of Mr. McCaffrey, Davis T. Fortenberry filed a final account and an inventory. J.L. McCaffrey, Jr., promptly filed a Response Objecting to the Final Account in which he asked the court to disallow all vouchers for attorney's fees in the amount of $90,360.00 which represented the sum of unapproved fees that Fortenberry withdrew from the estate over a seven and a half (7 1/2) year period. Subsequent to the objection filed by McCaffrey, Jr., Mr. Fortenberry filed an answer and three corrections and amendments to this final accounting.

The matter was set for trial on the objections to the final accounting and was heard in the Forrest County Chancery Court on October 5-6, 1987. Chancellor Howard L. Patterson, Jr. entered an order accepting Fortenberry's final accounting and overruled all objections filed by McCaffrey, Jr., including the request to disallow $90,360.00 in unapproved attorney's fees. Chancellor Patterson's order also included an authorization for Fortenberry to distribute the assets and close the estate of J.L. McCaffrey, Sr., almost eleven years after his death. Mr. J.L. McCaffrey, Jr., along with other children of J.L. and Elma B. McCaffrey, who are the beneficiaries under Mrs. Elma McCaffrey's will, have pursued this appeal from this decision by Chancellor Patterson which they deem to be adverse to their interests.

After a thorough review of the record, briefs of the parties and arguments before this Court, we affirm that part of the chancellor's order accepting the final accounting, as amended, by the executor in the estate of J.L. McCaffrey, Sr. However, we reverse as to the chancellor's failure to surcharge Davis T. Fortenberry $90,360.00, an amount which represents the unauthorized attorney's fees which Fortenberry withdrew from the estate without prior court approval.

The appellants have assigned thirteen errors for our review which are as follows.

I. Was the presumption of undue influence by Davis T. Fortenberry, executor and attorney, over Mrs. Elma B. McCaffrey, rebutted?

II. Should attorney's fees of $32,500.00, which were authorized by the Chancery Court, be surcharged with interest to Davis T. Fortenberry for his failure to follow the Rules and Statutes as required and for his maladministration of the estate?

III. Should $90,360.00 that Fortenberry took from the estate as "partial attorney's fees," which were not authorized by the court, be surcharged with interest to him?

IV. Whether Fortenberry's failure to marshal and account for the rental income belonging to the estate constituted maladministration.

V. Whether Fortenberry's failure to collect, inventory and account for notes belonging to the estate constituted maladministration.

VI. Whether Fortenberry's failure to obtain court approval for attorney's fees paid out of the estate for other attorneys constituted maladministration.

VII. Whether Fortenberry's failure to use the proceeds of court authorized sales of real property to pay debts, taxes and administrative expenses of the estate constituted maladministration.

VIII. Whether Fortenberry's failure to obtain court authority for the sale of real property of the estate constituted maladministration.

IX. Whether Fortenberry's failure to file annual accountings for more than nine years constituted maladministration.

X. Whether Fortenberry's failure to file an inventory of assets of the estate for a period of more than ten years constituted maladministration.

XI. Whether Fortenberry's failure to marshal and protect the assets of the estate constituted maladministration.

XII. Whether Fortenberry's failure to file estate fiduciary income tax returns constituted maladministration.

XIII. Whether Fortenberry's receipt of a diamond stick pin and a shotgun belonging to the estate constituted a transfer which should be voided and the property returned to the estate.

We conclude that all issues raised by the appellants can be consolidated and addressed more effectively under three categories.

I. CONFIDENTIAL RELATIONSHIP AND THE PRESUMPTION OF UNDUE INFLUENCE.

II. THE PAYMENT OF UNAPPROVED ATTORNEY'S FEES BY THE EXECUTOR OF AN ESTATE.

III. THE EXECUTOR'S MALADMINISTRATION OF THE ESTATE FOR HIS FAILURE TO FOLLOW CHANCERY COURT RULES AND STATE LAW.

FACTS

The grounds for this suit rest with what the appellants perceive as the maladministration by Davis T. Fortenberry of the estate of J.L. McCaffrey, Sr. Mr. Fortenberry was Mr. McCaffrey's son-in-law, and he was both the executor and the attorney for Mr. McCaffrey's estate. Furthermore, it was Fortenberry who drafted Mr. McCaffrey's will. Likewise, Mr. Fortenberry drafted Mrs. McCaffrey's will and was also named as the executor in her will.

Mr. Fortenberry served as Mr. McCaffrey's personal attorney for several years prior to his marriage to the McCaffrey's daughter, and he was more familiar with Mr. McCaffrey's business than anyone else. The McCaffrey estate consisted of more than eighty parcels of rental property, a grocery store, a mobile home park, stocks and bonds, notes and accounts receivable and various other assets which earned investment income for the estate. These assets were scattered over south Mississippi in several counties but were located primarily in Forrest County in the Hattiesburg area. At the time of Mr. McCaffrey's death in 1977 and for several years following his death, the estate was experiencing serious cash flow problems. The uncontradicted testimony was that the estate was approximately $700,000.00 in debt in the 1977-1978 time period. Fortenberry testified that management of the estate was a full time job and that it demanded ninety percent of his time during the first six years.

Mrs. Elma B. McCaffrey was the sole beneficiary of her husband's estate. Although Mrs. McCaffrey had little formal education, she was described as an astute businesswoman who was very intelligent. During the last four to five years of her life, Mrs. McCaffrey was hospitalized several times. In the summer of 1986, her condition was considered terminal. For the last three to four months of her life, Mrs. McCaffrey lived with her daughter and son-in-law, the Fortenberrys, and they provided Although Mr. McCaffrey's will waived an executor's bond, Fortenberry nonetheless posted a bond in the amount of $50,000.00 when he filed the petition to probate. Additionally, Mr. McCaffrey's will waived any requirement of an accounting by his executor. However, Fortenberry filed a "First Annual Account" in May of 1978. Mr. Fortenberry stated that after he compiled the first accounting, he presented it to Mrs. McCaffrey for her review and signature. She inquired into the need for the report, and when she learned that the document would be a matter of public record, she asked Fortenberry not to file any further accountings. Mrs. McCaffrey was a private, secretive person and did not want her business to be a matter of public record. Suffice it to say that Fortenberry respected the wishes of his mother-in-law, and he filed no further accountings until he was required to file by court order nine years later in May of 1987. Fortenberry also filed an inventory when he was ordered to do so by the court in May of 1987.

around-the-clock care for her. However, she was very rational up until the last nine days of her life.

Mr. Fortenberry began his administration of this large estate in the proper manner by filing a first annual accounting and seeking court approval for expenditures. The general docket sheets from the Forrest County Chancery Court reveal that Fortenberry was filing petitions for approval in numerous, routine matters throughout this nine year period between the deaths of Mr. and Mrs. McCaffrey. Fortenberry sought approval for authority to enter into leases; authority to settle an eminent domain action; various petitions to sell realty, and renew notes; petitions to assign and execute oil and mineral leases; petitions to enter into...