Court Opinion

ID: 2698701
Source: CourtListenerOpinion
Date Created: 2014-08-04 17:54:07.206283+00
Date Added: 2024-06-11T12:51:12.507258
License: Public Domain

[Cite as Gallagher v. Estate of Stepfield, 2013-Ohio-3113.]

                                        COURT OF APPEALS
                                       STARK COUNTY, OHIO
                                    FIFTH APPELLATE DISTRICT

PATRICIA S. GALLAGHER                                         JUDGES:
                                                              Hon. W. Scott Gwin, P.J.
        Plaintiff-Appellant                                   Hon. William B. Hoffman, J.
                                                              Hon. Patricia A. Delaney, J.
-vs-
                                                              Case No. 2012CA00191
ESTATE OF JEANNE STEPFIELD

        Defendant-Appellee                                    OPINION

CHARACTER OF PROCEEDING:                                Appeal from the Stark County Court of
                                                        Common Pleas, Probate Division, Case No.
                                                        201837

JUDGMENT:                                               Affirmed

DATE OF JUDGMENT ENTRY:                                 July 15, 2013

APPEARANCES:

For Defendant-Appellee                                  For Plaintiff-Appellant

JOHN D. CLARK                                           CHARLES A. KENNEDY
ALETHA M. CARVER                                        Kennedy, Cicconetti, Knowlton
Krugliak, Wilkins, Griffiths                            & Buytendyk, L.P.A.
& Dougherty Co., L.P.A.                                 558 North Market Street
4775 Munson Street, N.W.                                Wooster, Ohio 44691
P.O. Box 36963
Canton, Ohio 44735-6963
Stark County, Case No. 2012CA00191                                                   2

Hoffman, J.

       {¶1}   Plaintiff-appellant Patricia S. Gallagher appeals the June 22, 2012

Judgment Entry entered by the Stark County Court of Common Pleas, Probate Division,

which overruled her Objections to Apportionment of Estate Taxes and Exceptions to

Account. Defendant-appellee is Sandra S. Brockman, Executor of the Estate of Jeanne

Stepfield.

                          STATEMENT OF THE FACTS AND CASE

       {¶2}   Jeanne P. Stepfield ("Decedent"), mother of Appellant Patricia S.

Gallagher ("Gallagher") and Appellee Sandra S. Brockman ("Brockman"), died on

November 29, 2007. Decedent's Will was admitted to probate on December 12, 2007.

The probate court appointed Brockman as Executrix on January 28, 2008.

       {¶3}   Decedent's Will provided, in relevant part:

                               One Bequest/Devise to Daughter

              I do give and bequeath any and all of the shares of stock which I

       may own at the time of my decease in Brenn-Field Nursing Center, Inc.,

       hereby intending to give and bequeath all my right, title and interest in

       facility known as Brenn-Field Nursing Center, Inc. to my daughter Sandra

       a. [sic] Brockman to be hers absolutely and forever.

              I do give, devise and bequest to my daughter, Sandra A.

       Brockman, any and all real estate which I may own at the time of my

       decease located in both the City of Orrville and in the Township of Green,

       Wayne County, Ohio to be hers absolutely and forever specifically

       including by not limited to the following described real estate or any part
Stark County, Case No. 2012CA00191                                                   3

     thereof remain in the even [sic] any portion of said real estate has been

     sold prior to my decease:

            A. 13.471 acres located in * * *Township of Green, Wayne county

     [sic], Ohio together with all structures and improvements thereon, if any,

     subject to any encumbrances due thereon.

            B.    46.5501 acres located in* * * Township of Green, Wayne

     County, Ohio together with all structures and improvements thereon, if

     any, subject to any encumbrances due thereon.

            C. Lot Nos. 2628 and 2629 located in [sic] Lynn Drive in the City of

     Orrville,   Wayne   County,   Ohio   together   with   all   structures   and

     improvements thereon, if any, subject to any encumbrances due thereon.

            D. Lot Nos. 2626 and 2627 located on Lynn Drive in the City of

     Orrville,   Wayne   County,   Ohio   together   with   all   structures   and

     improvements thereon, subject to any encumbrances due thereon.

            E. Lot No. 2542 located on Lynn Drive in the City of Orrville, Wayne

     County, Ohio together with all structures and improvements thereon,

     subject to any encumbrances due thereon.

            In making this bequest/devise, I hereby direct that all state and

     federal taxes together with costs of administration attributable to same

     shall be a charge against said bequest/devise. The same shall also be

     the beneficiary of any legislation granting tax relief to any family-owned

     business.
Stark County, Case No. 2012CA00191                                                    4

                                      TWO. Residue

              All the rest, residue and remainder of my property, real and

       personal, of every kinds [sic], nature and description wheresoever situated

       and whenever by me acquired, of which I may die seized or possessed,

       including any property which I may have the power to dispose of by will, I

       do give, devise and bequeath to my daughters Sandra S. Brockman and

       Patricia S. Gallagher, share and share alike, to be theirs absolutely and

       forever.

       {¶4}   Brockman filed the final account on December 23, 2011, which valued

Decedent’s gross estate at $9,111,356.00 for federal estate tax purposes. Gallagher's

portion of the estate was valued at $904,808.96. Brockman filed a correspondence on

January 9, 2012, which itemized the expenses, including a federal tax of $3,036,802,

and a state tax of $576,252.13. Brockman assessed 10% of the federal and state taxes

against Gallagher's share of the estate.

       {¶5}   On January 20, 2012, Gallagher filed exceptions to the Ohio state tax

return. On January 24, 2012, Gallagher also filed exceptions to the final account, again

raising the apportionment issue. In Exception No. 1, which is the gravaman of this

appeal, Gallagher asserted she "[was] not responsible for Federal and State of Ohio

Estate Taxes or any part thereof: Executor assessed ten percent (10%) of such taxes to

Patricia S. Gallagher's share of the estate in error."

       {¶6}   Gallagher also filed a concealment action against Brockman on April 27,

2012. The concealment action is not relevant to this appeal.
Stark County, Case No. 2012CA00191                                                      5

       {¶7}   The probate court ordered the parties to brief their respective positions on

the apportionment issue.      Via Judgment Entry filed June 22, 2012, the trial court

overruled Gallagher’s Exception No. 1 to the Final Account. The trial court found, based

upon the language in the specific bequest, Brockman was required to pay 100% of any

tax associated with the property left to her under the specific bequest. The trial court

determined, because the Will provided Brockman and Gallagher were to share equally

in the residuary estate, pursuant to R.C. 2113.86(B), each sister was required to pay

50% of any tax associated with the property under the residuary clause. The trial court

withheld ruling on Gallagher’s remaining Exceptions pending the resolution of the

concealment action.

       {¶8}   It is from the June 22, 2012 Judgment Entry Gallagher appeals, assigning

as error:

       {¶9}   “I. THE PROBATE COURT ERRED AS A MATTER OF LAW WHEN IT

HELD THAT THE FEDERAL AND STATE OF OHIO ESTATE TAXES WERE TO BE

APPORTIONED 90% - 10% AGAINST THE CLEAR INTENT OF TESTATOR

EXPRESSED IN THE WILL.”

                                                I

       {¶10} R.C. 2113.86, which governs the apportionment of federal and state

estate taxes, provides, in relevant part:

              (A) Unless a will or another governing instrument otherwise

       provides, and except as otherwise provided in this section, a tax shall be

       apportioned equitably in accordance with the provisions of this section
Stark County, Case No. 2012CA00191                                                     6

      among all persons interested in an estate in proportion to the value of the

      interest of each person as determined for estate tax purposes.

             (B) Except as otherwise provided in this division, any tax that is

      apportioned against a gift made in a clause of a will other than a residuary

      clause or in a provision of an inter vivos trust other than a residuary

      provision, shall be reapportioned to the residue of the estate or trust. It

      shall be charged in the same manner as a general administration

      expense.

      {¶11} Any intent on the part of a testator or settlor that estate taxes are to be

paid in a manner contrary to the apportionment method set forth in R.C. 2113.86 must

be clearly expressed in the will. PNC Bank, Ohio, N.A. v. Roy, 152 Ohio App.3d 439,

2003-Ohio-1542, 788 N.E.2d 650. This contrary intent “must be clear, specific, and

unambiguous.” Matthews v. Swallen, 1st App. No. C–940443, 1995 WL 621305. The

settlor or testator's intent is determined by the language of the testamentary documents.

Carr v. Stradley, 52 Ohio St.2d 220, 6 O.O.3d 469, 371 N.E.2d 540 (1977).

      {¶12} In construing the provisions of a will, “[e]very phrase must be given its

ordinary meaning, and the courts cannot add to or detract from the language used by

the testatrix.” Wittenberg Univ. v. Waterworth, 13 Ohio App.3d 452, 454 (1984).

      {¶13} In the Will, Decedent made a specific bequest to Brockman. The specific

bequest provided:

             In making this bequest/devise, I hereby direct that all state and

      federal taxes together with costs of administration attributable to same

      shall be a charge against said bequest/devise. The same shall also be
Stark County, Case No. 2012CA00191                                                     7

       the beneficiary of any legislation granting tax relief to any family-owned

       business.

       {¶14} We find the placement of this instruction within the provision for the

specific bequest as well as the language used therein evidence Decedent’s intent

Brockman pay all of the taxes and costs of administration associated with the specific

bequest from the monies she received from the specific bequest. The words “[i]n

making this bequest/devise, I hereby direct” indicates the language which follows

pertains to the specific bequest to Brockman. The use of the qualifier, “attributable to

the same”, provides guidance as to what is to be paid and from where such is to be

paid. We agree with the trial court Decedent expressly intended for all state and federal

taxes and the costs of administration associated with the specific bequest be charged

against the specific bequest to Brockman.

       {¶15} Conversely, the language set forth in the specific bequest does not affect

any state and federal estate taxes owed based upon the value of the assets passing

under the residuary estate as well as the costs of administration relative thereto. Those

taxes and costs are to be paid by the beneficiaries of the residuary estate in proportion

to their distribution.   The Will provides Brockman and Gallagher equally share the

residuary estate; therefore, the sisters are equally responsible for the taxes and costs

associated with the residuary estate.

       {¶16} Based upon the foregoing, we find the trial court did not err in its

apportionment of taxes 90% to Brockman and 10% to Gallagher, as the order conforms

to the wishes of Decedent as stated in the Will.
Stark County, Case No. 2012CA00191                                            8

       {¶17} Gallagher’s sole assignment of error is overruled.

       {¶18} The judgment of the Stark County Court of Common Pleas, Probate

Division is affirmed.

By: Hoffman, J.

Gwin, P.J. and

Delaney, J. concur

                                            ___________________________________
                                            HON. WILLIAM B. HOFFMAN

                                            ___________________________________
                                            HON. W. SCOTT GWIN

                                            ___________________________________
                                            HON. PATRICIA A. DELANEY
Stark County, Case No. 2012CA00191                                                9

              IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO
                         FIFTH APPELLATE DISTRICT

PATRICIA S. GALLAGHER                     :
                                          :
       Plaintiff-Appellant                :
                                          :
-vs-                                      :         JUDGMENT ENTRY
                                          :
ESTATE OF JEANNE STEPFIELD                :
                                          :
       Defendant-Appellee                 :         Case No. 2012CA00191

       For the reasons stated in our accompanying Opinion, the judgment by the Stark

County Court of Common Pleas, Probate Division is affirmed. Costs to Appellant.

                                          ___________________________________
                                          HON. WILLIAM B. HOFFMAN

                                          ___________________________________
                                          HON. W. SCOTT GWIN

                                          ___________________________________
                                          HON. PATRICIA A. DELANEY