# FILED

October 3, 199 7 Cecil W. Crowson Ap pellate Cou rt Clerk WHITNEY STEGALL, ) ) Rutherford County Probate Plaintiff /Ap pellee ) No Case Nu mber ) VS. ) Ap peal No. 01A 01-9704-PB-001 47 ) DOTTIE LOU PRYOR, BENTON M. ) MASON, JR., HUGH BURTON ) MA SON, WILLIA M E. MASON, JR., ) TAYLOR S. MASON, and ) BOB S. MASON, ) ) Defendants/Ap pellees ) ) KI RK LAN D A. MAS ON , T IM OT HY A. ) MA SON, JILL M ASO N QUIGG, ) EDWARD C. MA

SON, and ) CHRISTOPHER C. MASON, ) ) Defendants/Appellants )

IN THE COU RT OF A PPEA LS OF TENN ESSEE MIDDLE SECTION AT N ASHVILLE APPEA L FROM THE PROBA TE COURT OF RUTHERFORD COUNTY AT MURFREE SBORO, TEN NESSEE HON. TOM E. GRAY , CHANCELLOR, 18TH JUDICIA L DISTRICT AT GALLA TIN, SITTING BY

INTERCH AN GE Darrell L. West Richard F. LaRoche, Sr. 144 Second Avenue, North 107 North Mapl e Street The Pilcher Bui lding, Sui te 300 Murfreesboro, TN 37133-1648 Nashvil le, TN 37201 and and Jerry S cott Dan E. Huffstutter John Kea 144 Second Avenue, North Scott & Kea The Pilcher Bui lding, Sui te 333 P. O. Box 1216 Nashvil le, TN 37201 Murfreesboro, TN 37133-1216 ATTORNEYS FOR ATTORNEYS FOR DEFEN DANTS/

APPELLA NTS DOTTIE LOU PRYOR, ET. AL., DEFENDANTS/A PPELLEES Val Sanford Julie C. M urphy Gullett, Sanford, Rob inson & Martin 230 Fourth Avenue North, 3r d Floor P. O. Box 1988 88 Nashvil le, TN 37219-8888 ATTORNEYS FOR WHITNEY STEGALL, ADMINISTRATORC.T.A. OF THE ESTATE OF V. R. MASON PLAINTIFF/APPELLEE AF FIRMED A ND REMA NDED

WILLIAM H. INMAN, SENIO R JUDGE CONCUR: HENRY F . TODD, PRESID ING JUDGE, MIDDLE SECTION WILLIAM C. KOCH, JR., J UDGE2

WHITNEY STEGALL, ) ) Rutherford County Probate Plaintiff /Ap pellee ) No Case Nu mber ) VS. ) Ap peal No. 01A 01-9704-PB-001 47 ) DOTTIE LOU PRYOR, BENTON M. ) MASON, JR., HUGH BURTON ) MA SON, WILLIA M E. MASON, JR., ) TAYLOR S. MASON, and ) BOB S. MASON, ) ) Defendants/Ap pellees ) ) KI RK LAN D A. MAS ON , T IM OT HY A. ) MA SON, JILL M ASO N QUIGG, ) EDWARD C. MA

SON, and ) CHRISTOPHER C. MASON, ) ) Defendants/Appellants )



### O P I N I O N V. R. Mason died testate on Octobe r 29, 1995. The executor, Richard F. LaRoche, Jr., propounded the wil l for probate; i n the ease of langua ge it prov ided for the paymentof debts an d taxes an d created a tr ust for a family cemetery, w ith the remainder to pas s under the law s of intestate succession. The decedent’s heirs are the children and grandchildren of his f ather’s siblings. Reference the caption of this Opinion: Dott ie Lou Pryor; B enton M. Mason, Jr.; Hugh Burton Mason; William E. Mason, Jr.; Taylor S. Mason; Dirkland A. Mason; Timothy A. Mason; Jill Mason Quig g; Edwar d C. Mason; and Christopher C. Mason. As tenants in common, the appellants ow n 21 percent of the estate per stirpes ; the appellees ow n 79 percent per stirpes

. The decedent owned two tracts of real proper ty, consi sting of a 1.6 ac re tract and

a 160 acre trac

t. The post-mortem appr aisal of the larger tract , with attendant death tax consequences, brought about the admitted i nsolvency of the estate since the personal property was not sufficient to pay the estat e and inheritance taxes. Compelled by this c ircumstance, t he exe cutor filed a recitative petition in the Probate Court alleging that both tracts of the real esta te should be sold. Theexecutor then resign ed, and Whitney Stegall w as appointed Admini strator C. T.A.1 T o a dv ise the co ur t wh eth er the tra ct m igh t ad va nta ge ou sly b e s old at p riva te s ale or b y a publi c, j udici al sal e.

2 Alt hough i n the r ecord, the t ranscri pts do not refl ect t hat i t was f ormally int roduced i n evi dence. The parti es tr eat i t as hav ing be en int roduced and con sider ed by the Court . So wi ll we. 3 By Order entere d on July 16 , 1996 the court found and decreed that the personalty

was ins ufficient to pay the costs of administrat ion and the taxes and directed the Administrator

C.T.A. to sell the 1.6 acre tr act; to establish a nd endow the pr ivate

ceme tery; and, after investigation, to repo rt his re commendation relati ve to the disposition of the 160 acre trac t. 1 On August 5, 1996 a Limited Power of Attorney 2 was executed by al l of the heirs,

nam ing Mr. Steg all as their attorney in fact “to act for us . . . in any and all busine ss, financial, legal and other matters that af fect that certain parcel of real property .

. . of 160.74 acres.” The Power of Attorney specifically authorized Mr. Stegall (1) t o borr ow the necessaryfunds with w hich to pay estate and inheri ta nc e taxes, ( 2) to execu te a mortgage on the real estate as securit y for the pay ment of the loan, and (3) to sell the real estate “upon such terms as said attorney may deem prope r subject to our said attorney utiliz ing the follow ing methodsof offe ring the real property for sale: (a) from the date hereof [Aug ust 5, 1996] until Sept ember 30, 1996 solicit offers to sell [si c] the real pr operty from private developers and all other interested per

sons, employi ng such private and public forums as our said a ttor ney

may deem appr

opri ate t o sel l th e re al p rope rty ; (b ) fro m October 1, 1996 until April, 1997 utilized [sic] the professional services of a re al estate broker by enter ing into a r eal estate li sting contr

ac t, an d finallyif necessary

to sell th e real est ate; (c) after April 1, 1997 sell the real estate by absolute auction; (4) . . . ; (5) . . . ; (6) To allow any of the undersigned th e rig ht to match any offer to purchase the real propert y which our attorney in fact would pr opose to accept, subje ct to said undersigned individ ual’s rig ht of refusal being limit ed to ten c alen dar d ays from the date our sai d attorney i n fact notifies us of the offer to purch ase the real proper

ty [emphases ad ded].” The Power of A ttor ney th en pr ovide s tha t it “m ay not be te rmin ated excep t by . . . a majority of the undesigned giving said attorney written notice of termina tion.” The prescribed procedureswere followed by Mr. Steg all, as attor ney-in-fact , who employed a rea l esta te age nt, t he Pa rks Gr oup , to s ell th e pro pert y. Of fers were received, one of which was from W eston Retail Properties. Mr. Steg all, as Admini strator C.T.A., filed a motion seek ing the approval of the Court “to execute a pu rchase and sale3 A h ea rin g w as he ld o n th e m otio n g ivin g ris e to this O rd er , bu t the re is n o tr an sc rip t of it in the r ecord. In accor dance wit h establ ished l aw, we t herefor e tr eat t his Order as havi ng been ent ered pursuantto and ful ly

support ed by the ev idence.

4 If t he Power of Attorn ey was pr operl y t erminated, as urged by the appe ll ees, t he appel lant s’ case must fai l f or t hat r eason. Butthe i ssue is not cr ucial to a r esolut ion ofthe case. 4 agreement.”We note the careful language em ployed; approval of a sale is not sought. On November 13, 1996, the Court entered an Order 3 directingthe Administrator C.T.A. to execute the purchase and sale agreement and to require an increase i n the amount of earnest money. Although not incorporated i n the Order, t he Chancellor directed Mr. Steg all to gi ve noti ce t o the heirs and to honor the ten day period

men tion ed in the P ower o f At torn ey. The heirs were appr opri atel y noti fie d by Mr. Stega ll, ac ting i n his dual capa city. On Novem ber 1 4, 19 96 [t he da y f ollow ing the judi cial direc tion to the Administrator

C.T.A. to execute the Purchas e and Sale Agreement], the appel l ants tendered an offer identical to the Weston offer to the real est ate agent. This action wa s followed by the deliv ery of an instrument dated November 18, 1996 executed by the appellees[exceptingBob S. Mason] owning 66 percent of the intere st, which purported to te rmin ate t he Po wer of Atto rney. 4 In his capacit

y asAdministrator

C.T.A. Mr. Stegall, on December 10, 1996 filed another motion in the Probate Court reci ting that none of the heirs was financially able to make a bona fide matchi ng order and should not be al lowed to‘speculate’ because time was of the ess ence, and that he was in receipt of another off er for the tract which should be accepted and approved. This offer from Pirtl e, which w as his second offer,

was $2,591,000.00; the offer from Weston was $2, 566,700.0 0, th e latter allegedly mat ched by the appe llan t hei rs pu rsua nt to the p rovisi on of the P ower o f At torn ey. Aplenary hearing was had on this motion. The Administrator C.T.A. recommended th at the Pirtle offer be approved; th e appellant heir s objected, in sisting that since they

had ‘matched’ the Weston offer and had tendered earnest money, no further offers or bi ds could be cons idered. The trial cour

t the reafter r endered a judgment reiterati ng that the est ate was insolvent; that the Administrator C.T.A. had brought the property ‘back into the estate’; that when the hei rs matched theWeston offer the matter was thereup on reopened; and5

that the best interests of the estate must be considered , which r equired t he consummation of the sal e to Pirtle, whose offer was the best and hi ghest recei ved. The five ‘appellant heirs ’ appeal, a nd pr esen t the se iss ues f or revi ew en haec verba: 1. Whether the Purchaser Heirs had a

cont ractual ri ght to purchase the real property which i s the subject of this action on terms approved by the tr ial court on November 5, 1996, b yvirtue of the Purc haser He irs’ exercise of a righ t of firs t refusal purchase option prev iously g ranted and agreed to by the all of the heir

s of V. R. Mason , which r ightof refusal was reaffirmed by the t rial court on November 5, 1996. 2. Whether the tri al court erre d in holding that the Purchas er Heirs’ exercise of theirright of first refusal pur

chase option, pursuantto the trial court’s N ov em ber 5, 1996 rul ing, had the effect of opening up the s ubject propert y to p u rchase offers from third parties. 3. Whether the trial court erred i n holding that the Purcha se r He irs’ right of first refusal was lost by virtue of a purporte d revocatio n of a Limited Power ofAttorney w hich contained the right of first refusal, whic h revocatio n was executed by some of the other heirs aft er the Purchaser He irs had executed thei r right of first refusal purchase option. 4. Whether the trial court erre d (i) in fin ding that the Purchaser Heirs were “s peculating” in their pur

chase of the subject

real prop erty; and (ii) in refusing to perm it a sale to the Purchaser

Heirs on the basis of such perceiv ed speculation. At the outset, we observe that although the ap pellants f il ed no motion or othe r pleadi ng, we deduce from the entire reco rd, includi ng argument, that the reli ef they seek is specific perfor mance, i.e., that the Administrator C.T.A. should jud icially be required to convey the 160 acres to them, and that they sh ould be allowed to purchase th e prop erty. Ou r review is de novo

on the record of the trial court, acco mpanied wit h a presumption of correctness unless the evidence otherwis e preponderates. R ULE 13(d) Tenn. R. App. P. There is no presumption of the correctness of the decision of the trial court on a question of law. NCN B Na t’l Bank v. Thra ilkill, 856 S.W.2d 150 (Tenn. Ct. App. 1993). The thrust of the appellants’ argument is that when they ‘matche d’ the Weston offerthe matter was at an end and the attor ney-in-fact should be directed to convey the property t o them.5 There was unre butted testimony offered that the purch aser heirs - the appellants - were m er ely speculat ing, and coul d not ar range t he requi sit e fi nancing. The Court so f ound. We do not dwell on thi s issue since i t i s present ly ir rel evant to a r esolut ion ofthe case. Obviousl y, ifthey did not have the requisite funds or cred it worthi ness they could not, and thus d id not, match the offer. 6 It is not disput ed that they ‘ matched’ the Weston offer to the extent they tendered the required earn est money; 5 neither is it disputed that the Administr

ator C.T.A. was authorized to execute the Purchase and Sale agreement, but no agreeme nt was in fact executed; neither is it disputed that the trial j udge oral ly instr uc ted the Administr ator C.T.A. to advise the he ir s in accordan ce with t he ten day pr ovision of thePower of Atto rney. So far as the record reveals, the appell ants made no att empt to match the Pirtle offer. We agree with the argument that it is a fundamental rule of prop erty law thatreal property passes direc

tly to hei rs at law

or to devisees. Crook v. C rook, 345 S.W.2d 679 (Tenn. 1961 ). But there are exceptions to this rule, one be ing that the real estate is subject to the debts of thedecedent if the pers onal property is in suffici ent to p ay th em. The personal repr

esentative may

sell the real estate to pay estate oblig ati ons i f authorized by

the wil l, and if not, he must institutelegal pr oceedings to accomplish that purpose. Crook, supr

a. Our view of the case does not require us to consider the implications inherent in the language “ brought back into the estate.” We are content to hold that w hen the estate was adjudicated to be insolvent, essentially by agreement of the parties, it remained at all times and for all purposes subj ect to the jur isdiction of theProbate Court. Tenn. Code Ann. § 30-2-402, et seq. Moreover , we note that the Order of Nov

ember 13, 1996 merely authorized the Administr ator C.T.A. to execute an agreement

; it did not auth orize him to approve a sale. The heirs were allowed t o submit amatching offer, but this fact did not vest in them an in alienable ri ght. Any sale r emained subject t o judicial approval, and even then, an approved s ale is not compl ete until it has been confirm ed bythe court wh ich ordered t he sale. Tenn. Marble & Brick Co. v. Young, 163 S.W.2d 71 (Tenn. 1942). We st ruggle with the implied issue of whether the Po wer of Attorney is enforceable. The estate had been adjudicated insolvent , and the heirs had no r ight to interfere with or oustthe jurisdi ction of the Cour t, which was concer ned with thesale of7

the land and not the title interests of the heirs. But our resolution n eed not rest on t he nebulous val idity of thePower of A ttor ney; to the contrar y, we may assume its

validit y at least to the ex

tent it does not infringe upon t he prerogati ve of the Probate Court to deal with insolvent estates. The lan gua ge o f t he Po we r of Attorney is interesting. The attorney-in-fact is authorized “to allow

any of the unders igned to match any offer,” w hich we i nt erpret to

m ean that di scret ion is repos ed in h im to allow any heir to match an offer which h e would propose to accept. Even so , we rei terate that the authori ty of the Administrator C.T.A. is absol utely subj ect to the super ior rig ht of the Probate Cour t. As we havehereto for e obs erve d, there is no evidence i n this recor d that the appellants‘matched’ the offer of Pi rtle whi ch was, pr ima facie, th e high est offer, and analysis proved it to be the highest and best of fer. The Administrat or C.T.A. was clearly obligated to present all three offers to the C ourt; he could not, as attorney-in-fact, bind the estate to the acceptanceof any offer. In neit her capacity could he us urp t he authority of the Probate Cour t. It should be noted that the Power of Attorney granted no right of first refusal as that term is commonl y understood. The language employed - “ to allo w a ny of the undersigned the right to match any offer”- does not g ive a ri ght t o purchase, and no Order was en tered so providing. Fina lly, the granti ng of specific perfor mance lies w ithin the sound discretion of the Court under the peculiar facts , T. J. Moss T ie Co. v. H

ill, 235 S.W .2d 587 (Tenn. 195 1); Johnson v. Browder, 207 S.W.2d 1 (Tenn. 1947) , and the appellants offered no evidence whateve r upon this poi nt. W hile the issue of specif icperformance wa s never di re ctlypropounded to the Pr obate Court, the thrust of the appell ants’ argument on appeal i s d i r e c t e d t o t h i s i s s u e

. We find no abuse ofdiscretion on the part of the tr ial court in declini ng to hold that the appel lants ha d a contractual right to purchase the prop erty. The judgment is aff irmed at the costs of the appellants.8 __________________ _____________

_ W illiam H. I nman, Senior Ju dge CONCUR:

______________________________________ Henry F. Todd, PresidingJudge, Mi ddle Section

______________________________________ W illiam C. K och, Jr., Judge