Court Opinion

ID: 2792650
Source: CourtListenerOpinion
Date Created: 2015-04-10 11:04:47.821771+00
Date Added: 2024-06-11T11:29:01.893120
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                             AT JACKSON
                                 March 11, 2015 Session

 JOHN HOLMES PEACHER-RYAN, ET AL. v. HEIRS AT LAW OF RUTH
                 JAMES GAYLOR ET AL.

                    Appeal from the Probate Court for Shelby County
                     No. D-14371     Kathleen N. Gomes, Judge

                  No. W2013-02801-COA-R3-CV- Filed April 9, 2015

This is an appeal of the trial court‘s adoption of a special master‘s report. The trial court
referred the case to the special master for determination of the proper heirs of a residuary
trust. Because the procedure in the trial court failed to comply with the requirements of
Tennessee Rule of Civil Procedure 53, we vacate and remand.

       Tenn. R. App. 3 Appeal as of Right; Judgment of the Probate Court is
                            Vacated and Remanded

KENNY ARMSTRONG, J., delivered the opinion of the court, in which J. STEVEN
STAFFORD, P.J., W.S., and BRANDON O. GIBSON, J., joined.

Steven M. Markowitz, Memphis, Tennessee, for the appellants, Mary Jane Hardin, David
Ryan Hickel, Elizabeth Hickle Imes, James Edward Jeter, Jr., John Holmes Peacher-
Ryan, and Carolyn Gaylor Ryan.

Daniel Chain Shumaker, Memphis, Tennessee, for the appellees, Brenda Creech, Kay
Nabors Garrone, Nita Frances Krist, and Patsy Ruth Nelson; Blanchard Everett Tual,
Memphis, Tennessee, for the appellees Elizabeth Doughtery Dickinson, Ward Gaylor
Doughtery, and Mary Ann Gaylor Odom; Kenneth P. Jones, Memphis, Tennessee, for
appellee Elizabeth Ziarko; Edward Thomas Autry, Memphis, Tennessee, for appellee
Estate of Lillian Ruth James Gaylor; and Josh Graves, Hickory Valley, Tennessee,
appellee, pro se.

                                        OPINION

                                      I. Background
        William Arch Gaylor (―Testator‖) died September 12, 1983. Testator had no
children, but was survived by his wife, Lillian Ruth James Gaylor (―Mrs. Gaylor‖). The
Testator‘s will, which was admitted to probate on September 28, 1983, established two
trusts of equal value. The first trust, which Testator characterized as the ―marital share,‖
was bequeathed to Mrs. Gaylor and is not at issue in this appeal. Here, we are concerned
with the second trust, which Testator named the ―non-marital share (the remainder of my
estate)‖ (we will refer to this trust as the ―Residuary Trust‖). The Testator named
Elizabeth B. Ziarko, a lawyer, as his Trustee. Pursuant to Testator‘s will, the Trustee was
to pay the net income of the Residuary Trust to Mrs. Gaylor during her lifetime in regular
installments. Ms. Ziarko was further authorized to distribute any and all of the principal
of the Residuary Trust to Mrs. Gaylor for her care, support, and maintenance. Upon Mrs.
Gaylor‘s death, Testator devised whatever remained in the Residuary Trust to his nieces
and nephews in equal share. The nieces and nephews were specifically named in
Testator‘s will: Adelia Ryan Jeter, Marguerite Ryan Hickel, John Erle Ryan and Joseph
Arch Ryan.

       Mrs. Gaylor died testate on April 12, 2011; her will was admitted to probate on
July 29, 2011. Testator‘s nieces and nephews all predeceased Mrs. Gaylor, creating
uncertainty as to what persons are lawfully entitled to receive the distribution of the
assets of the Residuary Trust created by Testator.

       On July 10, 2012, John Holmes Peacher-Ryan, son of John Erle Ryan, and
Elizabeth Imes, daughter of Marguerite Ryan Hickel, filed a petition against Elizabeth
Ziarko, seeking an accounting, termination of the Residuary Trust, and full distribution of
the proceeds thereof. On July 13, 2012, Ms. Ziarko filed an answer to the petition.
Concurrent with her answer, Ms. Ziarko filed a counter-petition against the Heirs at Law
of Ruth James Gaylor, the Heirs at Law of William Arch Gaynor, and against Ellen Kaye
Montgomery Fields, in her capacity as the Executrix of the Estate of Lillian Ruth James
Gaylor. Ms. Ziarko filed an amendment to the counter-petition on September 7, 2012 to
discuss other potential heirs. Appellants are the children of Testator‘s named nieces and
nephews, namely Mary Jane Hardin, David Ryan Hickel, Elizabeth Hickel Imes, James
Edward Jeter, Jr. John Holmes Peacher-Ryan, and Carolyn Gaylor Ryan (together,
―Appellants‖). Appellees are the heirs at law of Lillian Ruth James Gaylor, namely Josh
Graves, Brenda Creech, Kay Nabors Garrone, Nita Frances Krist, Patsy Ruth Nelson,
Elizabeth Doughtery Dickinson, Ward Gaylor Doughtery, and Mary Ann Gaylor Odom,
along with the Estate of Lillian Ruth James Gaylor, and Elizabeth Ziarko (together,
―Appellees‖).1

1
 On August 25, 2014, Ms. Ziarko filed notice with this Court that she ―takes no position regarding what
persons are the proper beneficiaries of the proceeds of the Trust‖ and ―does not intend to file a brief or to
participate in oral argument.‖ Likewise, on December 1, 2014, Appellees Mary Ann Gaylor Odom, Ward
Gaylor Doughtery, and Elizabeth Doughtery Dickinson notified this Court that they, too, did not intend to
                                                     2
       On March 21, 2013, the trial court entered an order, wherein it appointed Joe M.
Duncan as Special Master.2 The order of referral indicated that ―[t]he single issue to be
submitted to the Master . . . is the determination of the rightful heirs of the Residuary
Trust (non-marital share) established under the Last Will and Testament of William Arch
Gaylor.‖ On September 10, 2013, the Special Master sent copies of his report to all
parties or his or her lawyer, along with a cover letter, stating only: ―Enclosed please find
a filed copy of the Report and Ruling of [the] Special Master in the above-referenced
matter.‖ The attached report is stamped ―Filed September 10, 2013.‖ In its report, the
Special Master concluded that the Residuary Trust

       would pass to [Testator‘s] heir at law determined as of the date of his death,
       and at that time, since he had no children or issue, his sole heir would have
       been his wife, Ruth. Since Ruth was the sole heir at law of [Testator] at his
       death, and since he died testate, the assets of the Residuary Trust should
       pass in accordance with the terms of Ruth‘s Last Will and Testament.

       On September 27, 2013, Ellen Kaye Montgomery Fields, as Executrix of the
Estate of Lillian Ruth James Gaylor, filed a motion to adopt the Special Master‘s report.
On October 4, 2013, John Holmes Peacher-Ryan filed a motion to quash hearing on Ms.
Fields‘ motion. Therein, Mr. Peacher-Ryan asserted that the Tennessee Rule of Civil
Procedure 53.04(2) ten-day period, within which a party may file any objection to the
Special Master‘s report, had not been triggered in the case because the clerk had not
mailed notice of the filing of the Special Master‘s report as required under Tennessee
Rule of Civil Procedure 53.04(1). On October 8, 2013, the trial court held a hearing on
these motions. By order of November 1, 2013, the trial court adopted the Special
Master‘s report verbatim and denied Mr. Peacher-Ryan‘s motion to quash.

                                             II. Issues

       Appellants raise the following issues in their brief:

       1.    May litigants rely on the plain language of Tennessee Rule of Civil
             Procedure 53.04(1) & (2) in computing the beginning of the 10 day
             period for filing objections to the master‘s report?

       2.    Is the record before the trial court and/or the record on appeal from the
             trial court‘s order granting Appelleee‘s motion to affirm the findings of

file a brief or to participate in oral argument.
2
  We note that the order of reference was entered by Judge Benham before his retirement. The case was
ultimately decided by Judge Gomes.
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           the special master insufficient as a matter of law to permit
           determination of the basis for the motion or the trial court‘s judgment?

      3.   Did the trial court err by affirming the report of the master on an
           outcome-determinative basis, i.e., who was entitled to the corpus of the
           decedent‘s estate, without making independent judicial inquiry?

      4.   Did both the master and the trial court fail to appreciate the evidence
           set forth in Mr. Gaylor‘s will that, taken together with the codicil,
           indicates his clear intention to leave the proceeds of the non-marital
           trust to ―his‖ rather than ―his wife‘s‖ relatives?

                                III. Standard of Review

      At the outset, we note that the issue regarding the rightful heirs of the Residuary
Trust was first heard by the Special Master, and the trial court adopted the Special
Master‘s findings and conclusions in toto. At the time the trial court referred the case to
the Special Master, none of the parties raise an issue regarding the trial court‘s
appointment of a special master to resolve the heir dispute. Nonetheless, we must
address that issue briefly because it affects our standard of review in this appeal.

       This Court has outlined the applicable standard of review where the trial court has
referred the matter on appeal to a special master:

      The standard of review in situations involving the findings of a special
      master is set forth in Tenn.Code Ann. § 27-1-113: ―Where there has been a
      concurrent finding of the master and chancellor, which under the principles
      now obtaining is binding on the appellate courts, the court of appeals shall
      not have the right to disturb such finding.‖

 Bradley v. Bradley, No. M2009–01234–COA–R3–CV, 2010 WL 2712533, at *6 (Tenn.
Ct. App. July 8, 2010). Under this standard, concurrent findings of fact by a special
master and a trial court are conclusive and cannot be overturned on appeal. Manis v.
Manis, 49 S.W.3d 295, 301 (Tenn. Ct. App. 2001). However, ―[t]his heightened standard
of review applies only to findings that are made by both the [s]pecial [m]aster and the
[trial court].‖ In re Estate of Ladd, 247 S.W.3d 628, 637 (Tenn. Ct. App. 2007). Thus,
―[t]he trial court‘s order referring certain matters to the Special Master, the Special
Master's report, and the trial court‘s order on the report affect our standard of review on
appeal.‖ Bradley, 2010 WL 2712533, at *6 (quoting Pruett v. Pruett, No. E2007–00349–
COA–R3–CV, 2008 WL 182236, at *4 (Tenn. Ct. App. Jan. 22, 2008); Dalton v. Dalton,
                                            4
No. W2006–00118–COA–R3–CV, 2006 WL 3804415, at *3 (Tenn. Ct. App. Dec. 28,
2006)). ―However, a concurrent finding is not conclusive where it is upon an issue not
properly referred to a special master, where it is based upon an error of law or a mixed
question of fact and law, or where it is not supported by any material evidence.‖ Bradley,
2010 WL 2712533, at *6 (citing Manis, 49 S.W.3d at 301).

       Because findings on issues not properly referred to a special master are not
binding on the appellate court, we must ascertain whether the trial court properly referred
the question of the proper heirs of the Residuary Trust to the special master. Under Rule
53 of the Tennessee Rules of Civil Procedure, trial courts have broad discretion in
choosing to submit a matter to a special master. Tenn. R. Civ. P. 53.01. ―The trial court,
however, may not refer all matters to the special master.‖ Vraney v. Medical Specialty
Clinic, P.C., No. W2012–02144–COA–R3–CV, 2013 WL 4806902, at *33 (Tenn. Ct.
App. Sept. 9, 2013). As the Vraney Court explained:

       The main issues of a controversy and the principles on which these issues
       are to be adjudicated must be determined by the trial court. Collateral,
       subordinate, and incidental issues and the ascertainment of ancillary facts
       are matters properly referred to a special master.

 Id. at *34 (internal citations omitted). In Vraney, this Court concluded that the trial court
did not abuse its discretion in referring the calculation of damages under the parties‘
contract to a special master because the damage calculation in that case was complex. Id.
at * 35. Under those circumstances, the matter was ―a proper subject‖ for referral to a
master. Id. at *35. We emphasized, however, that ―[t]he trial court did not place any
substantive legal issues in the Special Masters‘ purview.‖ Id. The same cannot be said of
the instant case.

       Here, the trial court‘s order appointing a special master characterizes the Special
Master‘s task as ―determination of the rightful heirs of the Residuary Trust.‖ The issue
referred to the Special Master was not collateral, subordinate or incidental; it was, in fact,
the primary question in the controversy before the trial court. Vraney, 2013 WL 4806902,
at *34. While the determination of a will contest with as many potential heirs as this case
has may be a complex endeavor, ―[m]ere inconvenience is not an acceptable basis for
such a referral‖ to a special master. Frazier v. Bridgestone/Firestone, Inc., 67 S.W.3d
782, 784 (Tenn. Workers‘ Comp. Panel Oct. 19, 2001). Therefore, because the issue
referred by the trial court to the Special Master was essentially a question of law and was
the primary issue in the case, we must conclude that the issue was ―not properly referred
to a special master.‖ Bradley, 2010 WL 2712533, at *6. Our normal course would be to
decline to apply the standard of review set forth in Tennessee Code Annotated Section
27-1-113, and instead review the trial court‘s conclusions on the issue of the proper heirs
                                              5
de novo on the record with no presumption of correctness. However, the lack of a
transcript of the proceedings before the Special Master in this case negates our ability to
conduct any meaningful review and further violates Tennessee Rule of Civil Procedure
53.
               IV. Compliance with Tennessee Rule of Civil Procedure 53

       Rule 53.04 of the Tennessee Rules of Civil Procedure clearly sets forth both a
special master‘s duties, as well as the trial court‘s, when a special master has been
appointed to assist in a non-jury trial:

      (1) Contents and Filing. The master shall prepare a report upon the matters
      submitted by the order of reference and, if required to make findings of fact
      and conclusions of law, the master shall set them forth in the report. The
      master shall file the report with the clerk of the court and, unless otherwise
      directed by the order of reference, shall file with it a transcript of the
      proceedings and of the evidence and the original exhibits. The clerk
      shall forthwith mail to all parties notice of the filing.

      (2) In Non-jury Actions. In an action to be tried without a jury the court
      shall act upon the report of the master. Within ten (10) days after being
      served with notice of the filing of the report, any party may serve written
      objections thereto upon the other parties. Application to the court for action
      upon the report and upon objections thereto shall be by motion and upon
      notice as prescribed in Rule 6.04. The court after hearing may adopt the
      report or may modify it or may reject it in whole or in part or may receive
      further evidence or may recommit it with instructions.

Tenn. R. Civ. P. 53.04 (emphases added). To the extent that our analysis requires us to
interpret the foregoing rule of civil procedure, our Supreme Court has instructed:

      Interpretation of the Tennessee Rules of Civil Procedure is a question of
      law, which we review de novo with no presumption of correctness. Lacy v.
      Cox, 152 S.W.3d 480, 483 (Tenn. 2004). The rules of statutory construction
      guide our interpretation of these rules. Thomas v. Oldfield, 279 S.W.3d
259, 261 (Tenn. 2009) (holding that ―[a]lthough the rules of civil procedure
      are not statutes, the same rules of statutory construction apply‖). Our
      primary interpretive objective is to effectuate the drafters‘ intent without
      broadening or restricting the intended scope of the rule. See Owens v. State,
      908 S.W.2d 923, 926 (Tenn. 1995). We achieve this objective by
      examining the text, and if the language is unambiguous, we simply apply
      the plain meaning of the words used. Garrison v. Bickford, 377 S.W.3d
6
          659, 663 (Tenn. 2012). Our duty is to enforce the rule as written. See
          Waldschmidt v. Reassure Am. Life Ins. Co., 271 S.W.3d 173, 176 (Tenn.
          2008).

Fair v. Cochran, 418 S.W.3d 542, 544 (Tenn. 2013).

                  A. No Transcript of the Hearing before the Special Master

        In this case, the trial court‘s order of reference does not relieve the Special Master
of the requirement to submit ―a transcript of the proceedings and of the evidence and the
original exhibits.‖ Tenn. R. Civ. P. 53.04(1). Rather, the referring order states only that
the Special Master ―shall have all power listed and shall follow all procedures listed
under Tenn. R. Civ. P. 53.‖ Nonetheless, the failure to file a transcript is not always
reversible error. For example, in In re Estate of Tipps, 907 S.W.2d 400 (Tenn. 1995), our
Supreme Court declined to reverse the judgment of the trial court that had approved and
adopted the master‘s report even though no transcript of the proceedings before the
master was filed. Id. at 403. That determination was made on the basis that: (1) findings
of fact by the master concurred in by the trial court are conclusive on appeal if supported
by any material evidence; and (2) the record included a detailed document setting out the
work done by the executor whose fees were reduced by the master. The Court found that
document ―when considered in conjunction with the briefs and arguments of counsel and
the other materials in the technical record . . . fully supports the result reached....‖ Id.

       The purpose of the requirement that the special master file a record of proceedings
is so that the trial court can review any evidence taken before the master and make
independent findings. Fillers v. Cash, No. 03A01-9705-CV-00186, 1997 WL 694948
(Tenn. Ct. App. Oct. 31, 1997) (no Tenn. R. App. P. 11 application filed). Whether the
trial court affirms, rejects, or modifies the master‘s report, there must be material
evidence in the record to support the court‘s findings. See Glen v. Gresham, 602 S.W.2d
256, 258 (Tenn. Ct. App. 1980). That evidence may be found in the transcript of
evidence taken before the master, if there is a transcript, or from additional proof taken
by the trial court in ruling on the master‘s report, or from proceedings held by the trial
court prior to referral to the master. Rimel v. Fulton, 564 S.W.2d 364 (Tenn. Ct. App.
1976). The master‘s failure to comply with Tenn. R. Civ. P. 53.04(1) by filing a transcript
or record of the proceedings before the master is harmless error if there is material
evidence in the record to support the master‘s report. In Re Estate of Tipps, 907 S.W.2d
at 403 (citing Glenn, 602 S.W.2d at 258).3 Here, we cannot conclude that the absence of

3
    As noted in 4 Nancy F. MacLean, Tennessee Practice: Rules of Civil Procedure § 53:6 (4th ed.):

          The issue of whether to preserve a record of the hearing before the master often arises
          when parties attempt to save the expense of a transcript. Lawyers and the master can
                                                    7
a transcript of the proceedings before the Special Master is harmless error because there
is no other material evidence on which we can determine the basis of the trial court‘s
adoption of the Special Master‘s ruling, or from which we can conclude that the trial
court made any independent review of the case before adopting the Special Master‘s
report.
                   B. Lack of Independent Review by the Trial Court

        As we have recognized:

        Tenn. R. Civ. P. 53.04(2) mandates action by the trial court. It provides that
        in a non-jury action the trial court ―shall act upon the report of the master.‖
        This rule requires the judgment of the trial court. The court cannot abdicate
        to the master its responsibility to make a decision on the issue in question.
        It must do more than ―rubber stamp‖ what the master has done. Should it
        decide to confirm the master's report, it must be satisfied, after exercising
        its independent judgment, that the master is correct in the decision he has
        made.

 Lakes Property Owners Ass'n, Inc. v. Tollison, No. 03A01-9402-CV-00038, 1994 WL
534480 (Tenn. Ct. App. Oct. 4, 1994). In ruling on the motion to quash, the trial court
states its only reason for adopting the Special Master‘s report: ―I have read the Clerk and
Master‘s [sic] Report, and I‘m going to—and I think it‘s very clear and concise, and I‘m
going to approve it.‖ This statement does not indicate the trial court‘s independent
review of the Special Master‘s findings; at most, it indicates a ―rubber stamp‖ of the
Master‘s report, which is not in keeping with the mandates of Rule 53.

       C. Clerk’s Failure to Mail Notice of Filing of the Special Master’s Report

        In addition to the lack of an independent review of the Special Master‘s report by
the trial court, and the lack of the required transcript of the hearing before the Special
Master, there is an additional issue here concerning compliance with Rule 53. As
discussed above, here, the Special Master did not follow the usual procedure, which
would require the master to submit his or her findings to the clerk. Under Tennessee
Rule of Civil Procedure 53.04(1), upon receipt of the master‘s report, ―[t]he clerk shall

        address the transcript expense and stipulate in a writing which is filed with the court, that
        (1) a record of the master hearing is waived and (2) the parties agree to accept the
        findings of the master as conclusive, final and binding upon the parties.

Id. (citing Tenn. R. Civ. P. 53.04(4)). Here, there is no indication that the parties stipulated or agreed that
a record of the Special Master‘s hearing was waived.

                                                      8
forthwith mail to all parties notice of the filing‖ (emphasis added). Typically, the use of
the word ―shall‖ in a rule or statute indicates that the action prescribed is mandatory
rather than discretionary. See Bellamy v. Cracker Barrel Old Country Store, Inc., 302
S.W.3d 278, 281 (Tenn. 2009) (―When ‗shall‘ is used in a statute or rule, the requirement
is mandatory.‖); Bolin v. Tenn. Farmer's Mut. Ins. Co., 614 S.W.2d 566, 569 (Tenn.
1981) (―The general rule is that the word ‗shall‘ ordinarily is construed to be mandatory
rather than merely directory.‖); Stubbs v. State, 393 S.W.2d 150, 154 (Tenn. 1965)
(noting that by using the word ―shall,‖ the General Assembly ―leaves no room for
discretion‖). Accordingly, Rule 53.04(1) requires the clerk, and no other party, to mail
the notice of filing of the special master‘s report. Because the clerk‘s duty is mandatory,
the fact that the Special Master mailed the parties a copy of his report (even if stamped
―filed‖) is not sufficient to satisfy Rule 53.04(1). Only the clerk may satisfy the rule.

        Under Tennessee Rule of Civil Procedure 53.04(2), it is the clerk‘s mailing of this
notice that triggers the start of the ten-day period during which a party may file an
objection to the master‘s report, i.e., ―[wi]thin ten (10) days after being served with
notice of the filing of the report,‖ a party ―may serve written objections . . . upon the
other parties.‖ There is no ambiguity in this language. It is clear that the clerk‘s service
of notice of the filing of the special master‘s report is the triggering event for the running
of the ten-day period within which to file an objection. Here, there is no indication that
the clerk complied with Tennessee Rule of Civil Procedure 53.04(1) by mailing notice of
the filing of the Special Master‘s report to the parties or their respective attorneys so as to
trigger the ten-day period under Tennessee Rule of Civil Procedure 53.04(2).
Accordingly, Appellants were never given an opportunity to make written objections to
the report prior to the trial court‘s adoption of it. This being the case, we conclude that
the trial court erred in failing to follow the procedure set forth in Rule 53.04.

                                       V. Conclusion

       For the foregoing reasons, we vacate the order of the trial court and remand the
case for such further proceedings as may be necessary and are consistent with this
opinion. Costs of the appeal are assessed against the Appellees, Brenda Creech, Kay
Nabors Garrone, Nita Frances Krist, Patsy Ruth Nelson, Elizabeth Doughtery Dickinson,
Ward Gaylor Doughtery, Mary Ann Gaylor Odom, and Josh Graves, for all of which
execution may issue if necessary.

                                                   _________________________________
                                                   KENNY ARMSTRONG, JUDGE

                                              9