Title: Stoltz v. Friday

State: arkansas

Issuer: Arkansas Supreme Court

Document:

J. Michael STOLTZ, as Special Administrator
of the Estate of James Patrick Stoltz,
Deceased v. Nancy Elizabeth FRIDAY, et al.

94-1235                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered July 15, 1996


1.   Judgment -- summary judgment -- standard of review. -- The
     standard for review of a summary judgment is whether the
     evidentiary items presented by the moving party in support of
     the motion left a question of material fact unanswered and, if
     not, whether the moving party is entitled to judgment as a
     matter of law; the appellate court views all proof in the
     light most favorable to the party opposing the motion,
     resolving all doubts and inferences against the moving party;
     the supreme court held in the present case that, even assuming
     that the facts alleged in the complaint were true, appellee
     law firm was entitled to summary judgment as a matter of law
     on all of the claims properly advanced by appellant as special
     administrator of the decedent's estate.

2.   Limitation of actions -- appellant's action against appellee
     law firm barred -- when statute begins to run for malpractice.
     -- The supreme court held that the statute of limitations
     barred appellant's action against appellee law firm and its
     attorneys; the applicable statute of limitations for legal
     malpractice is the three-year period provided in Ark. Code
     Ann.  16-56-105 (1987); the statute of limitations for fraud
     and breach of fiduciary duty actions is also three years under
     Ark. Code Ann.  16-56-105; the statute of limitations
     applicable to malpractice actions begins to run, in the
     absence of concealment of the wrong, when the negligence
     occurs, and not when it is discovered.

3.   Limitation of actions -- attorney's acts during probate of
     estate -- separate and distinct transactions -- traditional
     limitations rule upheld. -- The supreme court, noting that the
     probate of an estate can last for a number of years and that
     the acts complained of in the present case concerned separate
     and distinct transactions that occurred over the course of ten
     years, distinguished the probate of an estate from a business
     reorganization (in which the statute of limitations had been
     held not to commence until the date of the last act performed
     by an attorney) and declined to adopt an alternative to the
     traditional limitations rule; even if the tolling agreements
     were effective, the general statute of limitations had run
     with respect to all claims asserted by appellant except one.

4.   Limitation of actions -- dispute over running of statute
     irrelevant with respect to appellant's claim. -- Where
     appellant represented only the decedent's estate, not the
     heirs or trust beneficiaries, and had not demonstrated any
     injury to the estate resulting from the transfer of certain
     stock to the stock trust, the supreme court concluded that the
     dispute over the running of the statute of limitations was
     irrelevant with respect to appellant's claim.

5.   Pleading -- amendments -- trial court vested with broad
     discretion in allowing or denying -- trial court did not abuse
     discretion. -- The trial court is vested with broad discretion
     in allowing or denying amendments to pleadings; where
     appellant's amended complaint was filed nearly one year after
     the original complaint was filed; where appellee law firm's
     motion for summary judgment was pending; and where the trial
     court's ruling on the motion for summary judgment would also
     have been dispositive of the claims asserted in the amended
     complaint, the supreme court could not say that the trial
     court abused its discretion in striking appellant's amended
     complaint.

6.   Motions -- motion to dismiss -- trial court did not err in
     granting appellee bank's motion -- statute of limitations had
     run -- estate not damaged by inaction of bank. -- The trial
     court did not err in granting appellee bank's motion to
     dismiss where appellee bank stated that it had been named as
     trustee of the residuary trust but had never been contacted to
     serve in that capacity, had never accepted the role of
     trustee, and would decline to serve if so requested; where the
     beneficiaries had notice of the bank's repudiation of the
     trust; where appellee bank was sued more than five years after
     its answer, and the statute of limitations had run with
     respect to any action against appellee bank in this instance;
     where the trust beneficiaries were not parties to the action,
     and the estate was in no way damaged by the inaction of the
     bank; and where only the individual beneficiaries of the trust
     could claim damages resulting from the mismanagement of trust
     funds or the breach of the trustee's fiduciary duty.


     Appeal from Pulaski Circuit Court; David Bogard, Judge;
affirmed.
     Davidson Law Firm, Ltd., by: Charles Darwin Davidson and
Charles Phillip Boyd, Jr., for appellant.
     Huckabay, Munson, Rowlett & Tilley, P.A., by:  Mike Huckabay
and Beverly A. Rowlett, for appellees.
     
     Andree Layton Roaf, Justice.*ADVREP*SC12*








J. MICHAEL STOLTZ, AS SPECIAL
ADMINISTRATOR OF THE ESTATE OF
JAMES PATRICK STOLTZ, DECEASED,
                    APPELLANT,

V.

NANCY ELIZABETH FRIDAY, ET AL.,
                    APPELLEE,




July 15, 1996

94-1235


APPEAL FROM THE PULASKI COUNTY
CIRCUIT COURT,
NO. 93-2813,
HON. DAVID BOGARD, JUDGE,




AFFIRMED.

              Andree Layton Roaf, Associate Justice


     The appellant, J. Michael Stoltz, as special administrator,
sued the appellees, Friday, Eldredge, & Clark, certain of its
partners, and First Commercial Bank, for negligence and breach of
fiduciary duty in connection with the probate of the estate of
James Patrick Stoltz.  The Friday firm provided legal services in
connection with the probate of the estate; the bank was designated
trustee of a trust created under the will of the decedent.  The
trial court entered summary judgment in favor of Friday, Eldredge,
& Clark and the individual attorneys and granted First Commercial
Bank's motion to dismiss.  In this appeal, the special
administrator contends that the trial court erred in granting the
motions for summary judgment and dismissal and in granting the
Friday firm's motion to strike an amended complaint.  We find no
error and affirm.   
     J.P. Stoltz (Stoltz) died on December 18, 1977, at the age of
53.  His will was prepared by the Friday firm and was executed on
May 9, 1977.  Stoltz's heirs were his wife, Judy, whom he married
in 1974 after the execution of an antenuptial agreement prepared by
the Friday firm, nine children from a previous marriage, and two
sisters and their husbands.  J. Stephen Stoltz (Stephen), the
oldest son, was named executor in the will.
     The primary asset of the estate was Polyvend, Inc., a metal-
stamping company established by Stoltz.  Additionally, in 1976,
Stoltz had obtained two life insurance policies with a face value
of $2,000,000 from First Pyramid Life Insurance Company (First
Pyramid).  Stoltz's will provided that after certain specific
bequests, the majority of his estate would be placed in two trusts. 
The stock of Polyvend was to be placed in a "stock trust" of which
Stephen was the sole beneficiary and trustee.  The corpus of this
trust, Polyvend, was to be distributed to Stephen if he was
successful in operating the company for ten years.  The remaining
estate assets were to be placed in a "residuary trust" for the
benefit of the other eight Stoltz children and other named trust
beneficiaries.  The residuary trust would also receive one half of
the proceeds from any sale of Polyvend if it were sold within ten
years of the establishment of the stock trust.  The will named
First Commercial Bank (First Commercial) as trustee of the
residuary trust.
     Stoltz's will was filed for probate on January 4, 1978. 
Stephen was appointed as executor, and the Friday firm served as
his attorneys.  Stephen applied for and received the $2,000,000 in
life insurance proceeds in his individual capacity on January 19,
1978.     
     In 1987, certain of the residuary trust beneficiaries,
including J. Michael Stoltz (Michael), became concerned about the
lack of progress being made in the probate of the estate and the
fact that no distributions had been made to them in nearly ten
years.  They hired an attorney who filed a petition in September
1987 seeking to remove Stephen as executor of the estate.  In
connection with the prosecution of this petition, the heirs
obtained copies of the estate files being maintained by the Friday
firm and discovered, among other matters, that the estate had a
potential claim to the life insurance proceeds paid in 1978 to
Stephen and that the Friday firm had advised Stephen upon his
appointment in January 1978 about potential conflicts of interest
involved in his service as executor of the estate.  In June 1988,
the Friday firm was replaced as attorneys for the estate; however,
Stephen continued to serve as executor.      
     A number of lawsuits have been filed in connection with the
handling of this estate.  Three are relevant to this appeal.  In
October 1988, six of the residuary trust beneficiaries, including
Michael, filed suit in Faulkner County Chancery Court against
Stephen, alleging that he breached his fiduciary duty to them while
serving as executor of the estate and acting as trustee of the
residuary trust created for their benefit.  That action was
concluded in June 1993 with the execution of a settlement agreement
which released Stephen from liability both individually and as
executor of the estate.  On April 20, 1989, some of the same
residuary trust beneficiaries filed suit in Pulaski County Circuit
Court against First Pyramid for negligence, breach of contract, bad
faith, and fraudulent concealment in connection with the payment of
the $2,000,000 in insurance benefits to Stephen, rather than to the
estate.  Michael was appointed special administrator on January 30,
1990, for the limited purpose of pursuing this action against First
Pyramid, and he was substituted as plaintiff.  The jury award to
the special administrator of $3,666,666 was reversed on appeal,
based on the running of the statute of limitations on an action to
recover on a life insurance policy.  First Pyramid Life Ins. Co. v.
Stoltz, 311 Ark. 313,