Court Opinion

ID: 9908273
Source: CourtListenerOpinion
Date Created: 2023-12-08 15:06:12.725701+00
Date Added: 2024-06-11T12:49:06.209623
License: Public Domain

RENDERED: DECEMBER 1, 2023; 10:00 A.M.
                        NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals
                             NO. 2023-CA-0208-MR

DONALD J. SHARP                                                         APPELLANT

                  APPEAL FROM GREEN CIRCUIT COURT
v.              HONORABLE JUDY VANCE MURPHY, JUDGE
                        ACTION NO. 22-CI-00004

SAMUEL L. SHARP AND DOUGLAS
H. SHARP                                                                APPELLEES

                                    OPINION
                                   AFFIRMING

                                  ** ** ** ** **

BEFORE: ACREE, KAREM, AND LAMBERT, JUDGES.

KAREM, JUDGE: Donald Sharp (“Donald”) appeals the Green Circuit Court’s

order granting summary judgment to his brothers Samuel Sharp (“Samuel”) and

Douglas Sharp (“Douglas”) in Donald’s adversarial action regarding the

administration of their mother’s estate. Finding no error, we affirm.
              FACTUAL AND PROCEDURAL BACKGROUND

             Eleanor Sharp (“Eleanor”) died on April 1, 2020. Her surviving heirs

were her three (3) sons, Donald, Samuel, and Douglas. Eleanor’s Will, which she

executed in 1981, left all her property and residue to her husband, Claude L. Sharp,

Jr. If Claude predeceased her, she devised all her property to her three sons

equally.

             In August 2008, Eleanor and Samuel opened a Fifth Third Bank

Account with both Eleanor and Samuel listed as account owners (“Account

9442”). In March 2010, Eleanor and Samuel opened a Fifth Third Securities

Account (“Securities Account 2600”), with Eleanor and Samuel listed as owners.

             In early 2015, Eleanor and Samuel executed a Transfer on Death

Registration and Beneficiary Designation Form whereby they identified Eleanor as

the primary owner of Securities Account 2600, Samuel as joint owner, and

Douglas and Donald as the primary beneficiaries upon the death of the last account

owner.

             In October 2015 and November 2018, Donald contacted Fifth Third –

purportedly on Eleanor’s behalf – and attempted to change the ownership status of

Securities Account 2600. Additionally, Appellees produced evidence of large

amounts of money Eleanor had already given to Donald. For example:

             Q. So, Don, if the record reflects everything we went
             over shows and an amount, whether borrowed or given to

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             you from your mother, equates to $59,290.00, and I will
             be sure to check my math, too. Would you dispute that
             we have evidence or proof here today which you have
             acknowledged, whether it be your mother’s signature or
             your signature, of approximately $59,290.00 borrowed or
             received from your mother?

             A. No.

             Given concerns regarding the amount of money Eleanor gave to

Donald and Donald’s attempts to change the ownership of Securities Account

2600, Samuel and Eleanor opened a bank account at Fifth Third on July 9, 2018, in

Samuel’s name only (“Account 3004”). Fifth Third, led by specialist compliance

officer Eric Schlinger, also conducted an independent investigation to determine if

Eleanor desired to change the ownership status of Securities Account 2600.

             On December 5, 2018, Schlinger issued a formal correspondence to

Eleanor and Samuel setting forth his findings, stating:

             In researching this matter, we have spoken to both you
             and your son, Samuel Sharp, who is also a joint owner on
             this account. When we spoke to you (Eleanor Sharp)
             over the phone, you stated that you had not written any
             letter to us and that it was your desire to leave the
             account beneficiaries as is. In our conversation with
             Samuel, we learned that it was not you who wrote the
             letter and the account was created per your original
             intent. Finally, we note that you signed the attached
             account application where you attested to your
             understanding and [conformation] of the information
             provided therein, including the account registration type
             and beneficiary election.

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             Based upon our findings, Fifth Third Securities, Inc., will
             not re-register your account nor change your beneficiary
             election, per the request in the letter.

Thereafter, Eleanor took no action to change Securities Account 2600’s ownership

before her death in April 2020.

             On January 19, 2022, Donald filed this action under Kentucky

Revised Statute (“KRS”) 394.240, seeking to require Samuel and Douglas to

forward Eleanor’s estate all funds held by Fifth Third that originated from Eleanor.

Donald also requested an order disqualifying and removing Samuel and Douglas as

co-executors of Eleanor’s estate for alleged breaches of their fiduciary duties.

             On January 13, 2023, the circuit court entered a summary judgment,

finding no genuine issues of material fact existed regarding Donald’s asserted

claims. This appeal followed.

                                     ANALYSIS

             a. Standard of Review

             “The standard of review on appeal of a summary judgment is whether

the trial court correctly found that there were no genuine issues as to any material

fact and that the moving party was entitled to judgment as a matter of law.” Scifres

v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996) (citation omitted). “There is no

requirement that the appellate court defer to the trial court since factual findings

are not at issue.” Id. (citation omitted).

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             Additionally, “[t]he record must be viewed in a light most favorable to

the party opposing the motion for summary judgment and all doubts are to be

resolved in his favor.” Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d

476, 480 (Ky. 1991). Summary judgment “is only proper where the movant shows

that the adverse party could not prevail under any circumstances.” Id.

             b. Discussion

             On appeal, Donald asserts that Eleanor’s Will indicated her desire for

whatever funds and possessions she had at her passing be divided evenly between

her three sons.

             1. Securities Account 2600

             Donald’s primary argument on appeal is that the $106,275.68 Samuel

transferred from Securities Account 2600 into Account 3004 were funds belonging

to Eleanor’s estate. We disagree. Securities Account 2600 is governed by KRS

292.6507, which states that “[o]n death of a sole owner or the last to die of all

multiple owners, ownership of securities registered in beneficiary form passes to

the beneficiary or beneficiaries who survive all owners.” (Emphasis added.)

Moreover, the Kentucky Supreme Court has made it clear that such brokerage

accounts pass outside of probate, with ownership passing directly to the named

beneficiaries on the owner’s death. Estate of Mcvey v. Department of Revenue,

480 S.W.3d 233, 236 (Ky. 2015). Specifically, the Court reiterated the statutory

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language that any transfer “is effective by reason of the contract regarding the

registration between the owner and the registering entity and KRS 292.6501 to

292.6512 and is not testamentary.” KRS 292.6509; Id. (emphasis added).

             In this case, Eleanor and Samuel opened Securities Account 2600, a

joint account with the right of survivorship. Thus, upon Eleanor’s passing, the

ownership of Securities Account 2600 was transferred to Samuel as the account’s

remaining joint owner.

             Moreover, although the Transfer on Death Registration and

Beneficiary Designation Form named Donald and Douglas as beneficiaries, such

beneficiary designation was irrelevant until the last owner’s death. Stated

differently, despite Donald being named as a beneficiary of Securities Account

2600, he had no ownership interest in the account until the death of the last owner

of Securities Account 2600.

             Moreover, Donald acknowledged that a non-testamentary asset such

as Securities Account 2600 passed outside of probate:

             Q. And you had also acknowledged that being a joint
             owner of those accounts is a non-testamentary asset?

             A. Yes.

             Q. It passes outside of probate?

             A. Yes.

                                         -6-
             Thus, no genuine issue of material fact exists as to whether Securities

Account 2600 passed directly to Samuel – the named joint owner – on the death of

Eleanor and outside of probate. KRS 292.6507. Instead, the transfer is “effective

by reason of the contract regarding the registration between the owner and the

registering entity and KRS 292.6501 to 292.6512 and is not testamentary.” Estate

of McVey, 480 S.W.3d at 236.

             Additionally, no genuine issue of material fact exists regarding

whether Eleanor wanted to change the ownership or beneficiary status of Securities

Account 2600. Notably, after receipt of Fifth Third’s findings, Eleanor never took

action to change the ownership of Securities Account 2600 before her death.

Therefore, Eleanor and Samuel could transfer the funds as they desired, regardless

of the terms of Eleanor’s Will. Accordingly, the Appellees were entitled to

summary judgment as a matter of law, irrespective of whether any monies

remained in the account at Eleanor’s death.

             2. Account 9442 and Account 3004

             Donald further asserts that genuine issues of material fact exist

regarding Account 9442, which Eleanor and Samuel jointly owned, and Account

3004, which Samuel owned and into which the funds from Securities Account

2600 were transferred. Under KRS 391.315(1)(a), “[s]ums remaining on deposit at

the death of a party to a joint account belong to the surviving party or parties to the

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account as against the estate of the decedent unless there is clear and convincing

written evidence of a different intention at the time the account is created.”

(Emphasis added.) Thus, “[t]he statute . . . creates a rebuttable presumption that a

qualifying ‘joint account’ is a survivorship account.” Spencer v. Estate of Spencer,

313 S.W.3d 534, 541 (Ky. 2010).

             We agree with the Appellees that Donald has not provided clear and

convincing written evidence to overcome KRS 391.315(1)(a)’s presumption of

survivorship. Thus, upon Eleanor’s death, Samuel became the sole owner of

Account 9442. Additionally, because Eleanor and Samuel transferred the monies

in Securities Account 2600 to Account 3004 – owned solely by Samuel – the

funds’ ownership remained unchanged upon Eleanor’s death.

             Donald relies on KRS 391.310(1), which states that “[a] joint account

belongs, during the lifetime of all parties, to the parties in proportion to the net

contributions by each to the sums on deposit, unless there is clear and convincing

evidence of a different intent.” (Emphasis added.) However, this language only

applies to ownership during the parties’ lifetimes and not the transfer of ownership

upon the death of one of the parties. Indeed, “[w]e have no evidence in this record

that any of the joint accounts had any intention other than that the survivor take all

and that the transfer of the asset be non[-]testamentary.” Herren v. Cochran, 697

S.W.2d 149, 152 (Ky. App. 1985) (citation omitted).

                                           -8-
                              CONCLUSION

          For the foregoing reasons, we affirm the Green Circuit Court.

          ALL CONCUR.

BRIEFS FOR APPELLANT:                 BRIEF FOR APPELLEES:

Donald J. Sharp                       John A. Elder, IV
Greensburg, Kentucky                  Lebanon, Kentucky

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