Williamson v. National Grange
| Decision Date | 05 December 2005 |
| Docket Number | No. 2287, September Term, 2004.,2287, September Term, 2004. |
| Citation | 166 Md. App. 150,887 A.2d 665 |
| Parties | Lynn C. WILLIAMSON, Successor Personal Representative of the estate of Agnes Smith Purnell v. NATIONAL GRANGE MUTUAL INSURANCE COMPANY. |
| Court | Court of Special Appeals of Maryland |
Edward Smith, Jr., Baltimore, for appellant.
Joel P. Williams (Niles, Barton & Wilmer, LLP, on brief), Baltimore, for appellee.
Panel EYLER, JAMES R., SHARER, WOODWARD, JJ.
In this case of first impression, we are asked to determine whether a nominal bond of a personal representative can be called upon to pay commissions to the personal representative as "debts due by the decedent, the Maryland inheritance tax, and court costs."
Appellant, Lynn C. Williamson, successor personal representative of the Estate of Agnes Smith Purnell, challenges the circuit court's (1) grant of appellee, National Grange Mutual Insurance Company's, motion for summary judgment, (2) affirmance of the orphans' court's June 22, 2004 order, and (3) denial and disallowance of appellant's claim upon the nominal bond. Appellant presents three questions for our review, which we have distilled into the following:1
Are personal representative's commissions debts due by the decedent?
Finding no error, we shall affirm the judgment of the circuit court.2
National Grange Mutual Insurance Company ("National Grange"), appellee, issued a $25,000 nominal bond of personal representative ("nominal bond"), dated January 6, 2001, on behalf of Nicole D. Quashie and James Lofton as co-personal representatives of the Estate of Agnes Smith Purnell.3 Ms. Purnell, by the terms of her will, excused her personal representatives of the obligation of posting a bond. Thus, the nominal bond was ordered by the orphans' court.4 The bond was in the following form:
NOMINAL BOND OF PERSONAL REPRESENTATIVE
As of this 5th day of January, 2001, NICOLE D. QUASHIE & JAMES LOFTON, personal representatives of the Estate of AGNES SMITH PURNELL — National Grange Mutual Ins. Co., as principal and surety are obligated to the State of Maryland in the sum of 25000 Dollars.
This obligation shall be void if the personal representative pays from the estate the debts due by the decedent, the Maryland inheritance tax, and court costs.
Thereafter, the bond form contained the signatures and address of Ms. Quashie, Mr. Lofton, and an agent, as attorney in fact for National Grange.
The coverage of the nominal bond was limited to the guarantee of payment of "the debts due by the decedent, the Maryland inheritance tax, and court costs."
The record discloses that James Lofton was relieved of his obligation as personal representative by the Orphans' Court on September 14, 2001, leaving Ms. Quashie as the remaining personal representative. Appellant asserts in her brief that Ms. Quashie absconded with assets of the estate, leaving the estate insolvent. Indeed, she repeatedly failed to comply with the orphans' court orders. As a result, she was removed as personal representative and appellant was appointed as special administrator/successor personal representative by the orphans' court on June 10, 2003.5
On March 5, 2004, appellant filed a first administration account, petition for attorney's fees, and petition for surety/bond company to reimburse the estate. The orphans' court, on March 16, 2004, issued an order requiring Martel and Associates, an insurance agency, to "honor the bond it issued and reimburse the Estate" in the amount of $25,000 "and turn over said funds" to appellant. Upon learning that the orphan's court had ordered Martel to "honor the bond it issued" and make payment of the full amount of the nominal bond, National Grange filed a motion to revise in the orphans' court on May 20, 2004. By order dated May 27, 2004, the orphans' court found mistakes and irregularities in its March 16th order. The court revised that order, in part, with directions that appellant provide notice and service of her claims to National Grange. No appeal of the orphans' court's revised order was taken.
Appellant filed a renewed petition to order the surety to reimburse the estate on May 30, 2004, itemizing two claims against the nominal bond: (1) a $6,780.80 credit card debt of the decedent to First Financial Federal Credit Union; and (2) appellant's claim for personal representative commissions in the amount of $12,593.18. On June 4, 2004, appellant submitted a third claim against the nominal bond for a debt of the decedent to the Greater Baltimore Medical Center, in the amount of $343.66. National Grange filed its partial opposition to appellant's renewed petition on June 21, 2004, objecting particularly to the request for payment of commissions. By order dated June 22, 2004, the orphans' court approved the claims against the nominal bond for the decedent's credit card and hospital bills, but denied appellant's commission claim, finding that it was "not a debt due by the decedent or otherwise covered by the Nominal Bond."
Appellant appealed the orphan's court's order to the Circuit Court for Baltimore County, pursuant to § 12-502 of the Courts & Judicial Proceedings Article ("CJ") of the Md.Code (2002 Repl.Vol.), on July 30, 2004. On September 29, 2004, National Grange filed a motion for summary judgment. At the de novo trial, pursuant to CJ § 12-502, the parties submitted stipulations in lieu of testimony, which included an agreement to the terms of the bond and the nature of appellant's claim against it.
The circuit court filed its order on November 30, 2004, which granted National Grange's motion for summary judgment; affirmed the orphans' court's June 22, 2004 rulings; and denied and disallowed appellant's claim for commissions on the nominal bond. This timely appeal followed.
Appellant's appeal to the circuit court was filed pursuant to CJ § 12-502, which provides in relevant part:
(a) In general; exception in Harford and Montgomery counties.(1)(i) Instead of a direct appeal to the Court of Special Appeals pursuant to § 12-501 of this subtitle, a party may appeal to the circuit court for the county from a final judgment of an orphans' court.
(ii) The appeal shall be heard de novo by the circuit court.
(iii) The de novo appeal shall be treated as if it were a new proceeding and as if there had never been a prior hearing or judgment by the orphans' court.
(iv) The circuit court shall give judgment according to the equity of the matter.
(Emphasis added).
This Court has interpreted the phrase "shall give judgment according to the equity of the matter," to mean that the "circuit court, in a trial de novo of an appeal from an orphans' court, may render judgment according to the evidence presented by the parties and decide the case as if the matter had never been adjudicated in the orphans' court." Mercantile-Safe Deposit & Trust Co. v. Hearn, 62 Md.App. 39, 46-47, 488 A.2d 202 (1985) (citing Estate of Soothcage v. King, 227 Md. 142, 176 A.2d 221 (1961)). The circuit court, however, may not disregard the applicable law. Hearn, supra, 62 Md.App. at 47, 488 A.2d 202.
Our review of the issues raised in this appeal, therefore, is pursuant to Md. Rule 8-131(c):
(c) Action tried without a jury. When an action has been tried without a jury, the appellate court will review the case on both the law and the evidence. It will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses.
Are personal representative's commissions debts due by the decedent?
An examination of the statutes and rules governing the issuance of a nominal bond, the plain language of the bond at issue, established secondary authority, and persuasive authority from other jurisdictions all demonstrate that a nominal bond cannot be called upon to pay a personal representative's commissions.
The need for a personal representative's bond is established in § 6-102 of the Estates and Trusts Article ("ET") of the Md.Code (2001 Repl.Vol.), which provides, in relevant part:
(a) When required. — Subject to the provisions of subsections (b) and (c) unless a bond is expressly excused by the will of the decedent or by the written waiver of all interested persons, every personal representative shall execute a bond to the State of Maryland for the benefit of all interested persons and creditors with a surety or sureties approved by the register [of wills].
* * *
(h) Form of bond generally. — (1) the bond shall be substantially in the following form: The condition of the above obligation is such, that if. .... shall well and truly perform the office of the personal representative of. .... late of. ...., deceased, according to law, and shall in all respects discharge the duties required of him by law as personal representative without any injury or damage to any person interested in the faithful performance of the office, then the above obligation shall be void[.]
As to a nominal bond, § 6-102 provides:
(b) When waived. — (1) Even if a personal representative is excused from giving bond, a bond shall be given in an amount which the register or the court considers sufficient to secure the payment of the debts and Maryland inheritance taxes payable by the personal representative. The bond shall be conditioned accordingly.
* * *
(h)(2) If the giving of a bond is excused or waived, the required nominal bond shall be substantially in the following form: The condition of the above obligation is such, that if. .... shall, as personal representative of. .... late of. ...., deceased, pay the debts due by the deceased and the Maryland inheritance tax payable by the personal representative, then the above obligation shall be void[.]
Maryland Rule 6-312(b)(2004) also discusses the nominal...
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