Case Title: IN THE MATTER OF THE ESTATE OF BLEEKER

Citation: 

Docket Number: 102936

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2007-09-18T00:00:00Z

Document:
IN THE MATTER OF THE ESTATE OF BLEEKER  IN THE MATTER OF THE ESTATE OF BLEEKER 2007 OK 68 168 P.3d 774 Case Number: 102936 Decided: 09/18/2007 THE SUPREME COURT OF THE STATE OF OKLAHOMA IN THE MATTER OF THE ESTATE OF JOSEPH ODELL BLEEKER, Deceased, ILENE McGEHEE, former Administratrix of the Estate of Joseph Odell Bleeker, Deceased, Appellant, v. ARVEST TRUST COMPANY, Personal Representative of the Estate of Joseph Odell Bleeker, Deceased, C. D. BLEEKER, CONNIE DALE and LAVENA DALE, Appellees. ON CERTIORARI TO THE COURT OF CIVIL APPEALS, DIV. IV ¶0 While serving as administratrix an estate's beneficiary (under the regime of intestate succession) brought an intra-probate proceeding THE COURT OF CIVIL APPEALS' OPINION IS VACATED; THE TRIAL COURT'S ORDER IS REVERSED AND THE CAUSE REMANDED FOR FURTHER PROCEEDINGS TO BE CONSISTENT WITH TODAY'S PRONOUNCEMENT. Jerry L. Colclazier, Colclazier & Associates, Seminole, Oklahoma, for Appellant B. C. Harris, Shawnee, Oklahoma, for Appellee Arvest Trust Company Rob L. Pyron, M. Bradley Carter, Seminole, Oklahoma, for Appellees C. D. Bleeker, Connie Dale and Lavena Dale OPALA, J. ¶1 The dispositive first-impression question on certiorari is whether the American common law settled in the last century and half, which in circumscribed circumstances allows persons other than the estate's fiduciary to bring litigation for recovery of estate assets, should be adopted in Oklahoma. We answer in the affirmative and reverse the contrary trial court's ruling. I THE ANATOMY OF LITIGATION ¶2 Joseph Odell Bleeker (decedent) died intestate on 3 February 2004. His aunt, Ilene McGehee (McGehee), petitioned seven months later for letters of administration.3 On 27 September 2004 the trial court appointed McGehee administratrix4 and determined the beneficiaries (under the regime of intestate succession) to be McGehee, Lavena Dale, C. D. Bleeker and Adrian Dale (aunts and uncles of the decedent). McGehee was later removed as administratrix and Arvest Trust Company (Arvest) appointed successor personal representative.5 ¶3 The litigation phase here under consideration was initiated by McGehee's post-removal quest for leave to prosecute as beneficiary a claim on behalf of the estate against appellees (Lavena Dale, C.D. Bleeker and Connie Dale) ¶4 On 8 March 2005 appellees moved to replace McGehee as administratrix because she had failed to post a bond, timely notify creditors, file an inventory and complete tax returns. They asserted the claim of over $11,000 for an attorney's fee was excessive. McGehee responded that she had been unable to find a surety willing to post the bond, that the failure timely to file the various estate papers was inadvertent and partly caused by appellees' conduct and that the request for counsel-fee award was not excessive. McGehee explained the primary focus of her activities had been to identify and locate estate assets. Her lawyer had taken a number of depositions in an effort to recover missing estate personalty. ¶5 Before the trial court ruled on appellees' removal motion, McGehee filed an "ancillary" petition ¶6 The trial court removed McGehee as administratrix and appointed Arvest as the estate's personal representative. It directed Arvest to examine the evidence and to make an independent decision on whether the estate should press the claim against appellees. Arvest's report to the court states that, upon a review of the evidence, the probability of recovering cash from appellees was too remote to justify the expenditure of estate funds for its pursuit. ¶7 McGehee then moved to enter the pending intra-probate proceeding on the court's non-jury trial docket. She argued that as an estate's beneficiary she has standing to pursue a claim to collect missing estate assets when the estate's court-appointed fiduciary manager refuses to so do. According to McGehee her petition stated a prima facie case of embezzlement or alienation of property by the appellees within the meaning of ¶8 The trial court denied McGehee's motion for leave to prosecute. It dismissed the pending intra-probate proceeding for want of a proper party plaintiff. II THE PARTIES' ARGUMENTS ON CERTIORARI ¶9 McGehee asserts the dispositive issue in this case is one of first impression - whether an estate beneficiary has standing to seek leave to pursue an action to collect estate assets when the estate's court-appointed fiduciary manager refuses to do so. She argues, based on jurisprudence garnered from other states, the American common law affords her an opportunity to prosecute such claim. She urges that nearly every state that has addressed the issue has held that when, for any reason, a legal estate representative elects not to press a claim, the beneficiaries may seek leave to maintain their own action to recover the assets to be pursued for the benefit of the estate. ¶10 Appellees counter that, in the absence of a statute permitting a beneficiary to sue, the decision either to or not to pursue a claim on behalf of the estate lies solely within the province of the personal representative. They assert the trial court's denial of McGehee's quest to prosecute the claim against them was based on several factors. According to appellees the trial court took into account that (l) the former administratrix had spent nearly $12,000 of estate funds on trying to prove they had taken money from the estate and were withholding the removed funds; (2) McGehee was removed as administrator for failing to fulfill her statutory duties and (3) the new personal representative had examined the facts and decided not to pursue the claim. They urge the trial court's decision, based on "good evidence and sound discretion," is not tainted by abuse of discretion or failure to weigh critical facts. Appellees assert that McGehee lost her chance to pursue the claim qua administratrix and should not now be allowed to continue her quest "at the expense" of the estate and of other beneficiaries. They emphasize the record does not afford a sufficient factual basis for the relief McGehee seeks. According to appellees, there is no statutory right of a beneficiary to pursue a claim for the estate and this case does not tender the "right platform" for the court to create the right sought to be asserted. ¶11 Arvest claims the only money known to have been in the lock boxes is $220,000, which the appellees (C. D. Bleeker and Lavena Dale) delivered to the personal representative. According to Arvest, while the circumstances under which the appellees acquired access to the decedent's travel trailer and lock boxes as well as their subsequent actions may form a foundation for some claim, they cannot justify further expenditure of estate funds to pursue an action. III STANDARD OF REVIEW ¶12 Probate proceedings are regarded as matters of equitable cognizance. IV THE PROBATE DIVISION OF A DISTRICT COURT MAY GRANT LEAVE TO AN ESTATE'S BENEFICIARY TO PROSECUTE AN ACTION ON BEHALF OF THE ESTATE A. The American Common Law Recognizes Exceptions to the General Rule That Estate Beneficiaries May Not Prosecute Actions for the Recovery of Personalty Belonging to the Estate ¶13 As a general rule, beneficiaries of an estate may not themselves prosecute an action to recover personalty belonging to the decedent. The claim must be brought by the personal representative.17 This is so because title to an intestate's personal property ordinarily vests in the personal representative of the estate for the benefit of the beneficiaries and creditors.18 Several states have developed common-law jurisprudence which recognizes certain exceptions to the general rule of ancient vintage which may be invoked when some conduct by the personal representative - such as fraud, collusion19 or refusal to act20 - makes it necessary for beneficiaries to bring their own suit for the protection of an interest in the estate that would otherwise be lost. While probate is governed by statutory procedure,21 substantive law in aid of probate's legal mission of capturing and distributing a deceased person's estate continues to be governed by common-law developments.22 The common law, which stands legislatively declared to be a constituent part of this State's body of law,23 need not be drawn exclusively from English precedent, but may also be fashioned by utilizing other sources, including legal norms taken from common-law jurisprudence of sister states.24 Today's Ratio Decidendi ¶14 This court has not had an opportunity to deal with the question whether the probate division may grant leave to a beneficiary to prosecute an action on behalf of the estate. Although court-appointed fiduciary managers in probate proceedings have broad statutory authority to bring all actions necessary to collect assets, preserve and protect the estate, ¶15 The trial court's blanket denial - as a matter of law - of McGehee's request for leave to prosecute a claim for the estate is erroneous. It rests on an assumed absence of Oklahoma authority for a beneficiary to pursue an action on behalf of the estate. We hence reverse the trial court's order and remand the cause with certain directions to be explained and detailed later in this opinion. V GUIDANCE TO THE TRIAL COURT FOR PROCEEDINGS TO BE CONDUCTED ON REMAND A. The Procedure To Be Followed In Post-Remand Proceedings ¶16 The trial court treated McGehee's post-removal motion to set the case for a non-jury trial ¶17 If in post-remand stages of this case McGehee should desire to re-press her request for leave to prosecute, she must file new paperwork. She should present to the court a formal application, acting in her capacity as an estate beneficiary, for leave to prosecute on behalf of the estate a claim for the recovery of missing estate assets. If, after an adversary proceeding, leave is granted, McGehee must then file a petition qua court-authorized beneficiary plaintiff stating for the estate the claim upon which her action is founded. B. Fact Issues Raised At Nisi Prius But Not There Resolved ¶18 Today's pronouncement settles but one legal issue - that of whether American common-law exceptions, which allows persons other than the court-appointed fiduciary manager of the estate to pursue litigation in circumscribed circumstances for recovery of estate assets, should be recognized in Oklahoma as part of this State's common-law development. The trial court's order made no findings of fact or conclusions of law on any fact issues that were raised by the parties' paperwork. If McGehee pursues on remand her quest for leave to prosecute, the trial court should consider all of the now-unanswered questions that will be raised and must inquire into the circumstances before deciding whether they warrant granting McGehee the leave she seeks. ¶19 1. Whether Arvest's Report to the Court Was Supported By Proof That Could Afford A Basis For The Claim's Denial ¶20 Except for its conclusory terms, Arvest's report to the court, by which the representative declined to prosecute a claim against the appellees, gave no basis or explanation for Arvest's view that the probability of recovering estate assets was not sufficient to warrant the expenditure of estate funds to pursue the claim. ¶21 2. Whether The Former Administratrix Offered To Prosecute The Claim At Her Own Expense ¶22 The trial court failed to consider whether certain statements in McGehee's motion ¶23 Even if the likelihood of recovering any missing estate assets were too remote to warrant the expenditure of estate funds for their pursuit, in light of statements in McGehee's brief, the trial court should ascertain whether she made a commitment to prosecute the claim entirely at her own expense. ¶24 3. Whether McGehee's Quest For Leave To Prosecute The Claim Came Within Recognized Common-law Exceptions To The General Rule ¶25 Because the trial court ruled that McGehee's quest for leave to file a lawsuit as beneficiary sought permission to prosecute a claim that is deemed unauthorized by Oklahoma law, it did not address the issue whether she came within recognized American common-law exceptions. ¶26 The parties are on remand entitled to an adversarial evidentiary hearing antecedent to any judicial resolution of fact and law issues raised by Arvest's report as well as those by McGehee's application. Due process requires that both litigants be afforded an opportunity to present evidence in support of the request for and in opposition to McGehee's quest for leave to file a lawsuit on behalf of the estate. ¶27 From this record we are convinced that McGehee had no opportunity to establish her claim for leave to bring an action on behalf of the estate under long-recognized exceptions adopted today, which have been developed by the American common law. VI SUMMARY ¶28 We adopt today as Oklahoma's unwritten law the American common-law rule that allows, in certain circumscribed circumstances, persons other than the court-appointed fiduciary of a decedent's estate leave to pursue litigation for the recovery of estate assets. ¶29 If on remand the applicant-beneficiary should desire to seek leave to prosecute a claim on behalf of the estate, she must be given an opportunity to establish her fitness for leave by showing that she comes within recognized American common-law exceptions. ¶30 Both parties are entitled on remand to an adversarial evidentiary hearing that would afford them an opportunity for judicial resolution of the issues of fact and law that came to be tendered by the personal representative as well as by the former administratrix' application. ¶31 On certiorari previously granted to the former administratrix who sought leave to prosecute a claim for the estate, the Court of Civil Appeals' opinion is vacated; the trial court's order is reversed and the cause is remanded for further proceedings to be consistent with today's pronouncement. ¶32 WINCHESTER, C.J., EDMONDSON, V.C.J., HARGRAVE, OPALA, KAUGER, WATT, TAYLOR, COLBERT, JJ., concur FOOT