Court Opinion

ID: 4349883
Source: CourtListenerOpinion
Date Created: 2018-12-12 20:31:11.227303+00
Date Added: 2024-06-11T14:49:16.172631
License: Public Domain

[Cite as In re Estate of Hamad, 2018-Ohio-4980.]

STATE OF OHIO                    )                      IN THE COURT OF APPEALS
                                 )ss:                   NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT                 )

IN RE: THE ESTATE OF CHARLES W.                         C.A. No.     29002
HAMAD

                                                        APPEAL FROM JUDGMENT
                                                        ENTERED IN THE
                                                        COURT OF COMMON PLEAS
                                                        COUNTY OF SUMMIT, OHIO
                                                        CASE No.   2014 ES 00876

                                DECISION AND JOURNAL ENTRY

Dated: December 12, 2018

        SCHAFER, Presiding Judge.

        {¶1}    Appellant, Charles B. Hamad (“Charles”), appeals from a judgment of the

Summit County Court of Common Pleas, Probate Division, that removed him as executor of the

estate of his late father, Charles W. Hamad (“Decedent”). This Court affirms the judgment

insofar as it removed Charles as executor.

                                                   I.

        {¶2}    Charles is the oldest child of Decedent, who died on August 21, 2014.             This

estate case has a long and contentious history, primarily involving disputes between Charles and

some of Decedent’s other beneficiaries. This Court will limit its review of the facts to those

directly relevant to this appeal.

        {¶3}    Decedent had executed a will that was filed in this probate case shortly after his

death. No one has disputed the validity of the will. The will designated Charles as the executor

of the estate and provided for several beneficiaries, including all six of Decedent’s children.
                                                  2

       {¶4}    Among other things, the will provided that Hamad Tire, Inc., a business owned by

Decedent, would be divided between three of his sons: Charles, Michael, and Nicholas. The will

further provided that several parcels of Decedent’s real property, on which Hamad Tire operated

its businesses, would be transferred into a trust created by Decedent prior to his death.

       {¶5}    Although Charles and some of the other beneficiaries would later dispute which

of two trusts controlled, they agreed that, prior to his death, Decedent executed a valid trust, and

that the trust became the owner of real estate upon which Hamad Tire operated its business.

There was also no dispute that, as part of Decedent’s estate plan, Hamad Tire was required to

pay monthly rent to the trust for the company’s use of the properties. The trust provided that the

rental income would be divided equally between Decedent’s six children. The most significant

difference between the two trusts was the amount of monthly rent to be paid by Hamad Tire:

$3750 or $12,000. Although Charles asserts on appeal that the trusts were not admitted into

evidence, no one disputed at the hearing that the trust documents were already in the record as

attachments to motions that had been filed during this case.

       {¶6}    An earlier dispute between the parties involved the will’s provision to transfer

ownership interest of Hamad Tire to three of Decedent’s sons. Ultimately, two years after

Decedent’s death, Charles purchased his two brothers’ interests in Hamad Tire for $300,000

each. The source of the $600,000 to buy his brothers’ interests in Hamad Tire is not clear from

the record, but there was evidence that Charles obtained all or part of the money from Hamad

Tire and/or by re-mortgaging the real estate that was transferred into the trust.

       {¶7}    Other disputes arose between Charles and his siblings. Of significance here,

Charles had become the sole owner of Hamad Tire. The transfer of ownership of the company is

not challenged on appeal. That transaction remained relevant, however, because the trustee and
                                                  3

other beneficiaries repeatedly asserted that the role of Charles as the owner of Hamad Tire

conflicted with his role as executor of Decedent’s estate. Notably, Hamad Tire had not paid any

rent to the trust and Charles, as executor, had taken no steps to collect the rent on behalf of the

estate.

          {¶8}   The matter ultimately proceeded to a hearing on a motion to remove Charles as

executor and to strike the final accounting of the estate. The primary issue at the hearing

concerned the rent that had not been collected by the trust or distributed to the siblings, which

was potentially in excess of $300,000 by that time.

          {¶9}   Following a hearing, the probate court removed Charles as executor and refused

to accept the final accounting of the estate because it failed to account for the rent that should

have been paid to the trust. The court appointed a disinterested administrator “to make an

independent analysis of the Estate and its debtors and pursue any litigation she deems

reasonable.” Charles appeals and raises two assignments of error.

                                                 II.

                                       Assignment of Error I

          The trial court erred and abused its discretion in removing [Charles] as the
          Executor of [Decedent’s] estate.

          {¶10} Charles asserts that the trial court erred in removing him as executor. The probate

court has broad discretion in its decision to remove an executor. In re Estate of Wilkerson, 9th

Dist. Summit No. 22049, 2005-Ohio-159, ¶ 10. An abuse-of-discretion review grants deference

to the trial court’s judgment. State v. Morris, 132 Ohio St.3d 337, 2012-Ohio-2407, ¶ 14. This

Court will reverse the trial court’s judgment to remove an executor only when it is

“unreasonable, arbitrary, or unconscionable.” See Blakemore v. Blakemore, 5 Ohio St.3d 217,

219 (1983).
                                                 4

           {¶11} This Court is not persuaded by Charles’s argument that the trial court lacked

discretion to remove him as executor because it had no statutory authority to do so. R.C.

2113.18(A) authorized the probate court to remove Charles as the executor “if there are unsettled

claims existing between the executor * * * and the estate that the court thinks may be the subject

of controversy or litigation between the executor * * * and the estate or persons interested in the

estate.”

           {¶12} Charles mistakenly relies on a prior decision of this Court, In re Estate of Von

Meyer, 9th Dist. Lorain No. 16CA010980, 2017-Ohio-5839, asserting that it established a high

evidentiary burden for the removal of an executor under this statutory provision. The Von Meyer

case involved an appeal from a probate judgment that denied the surviving spouse’s motion to

remove the executor of his late wife’s estate. Id. at ¶ 1. This Court held on appeal that the trial

court did not abuse its discretion by refusing to remove the executor under R.C. 2113.18(A). Id.

at ¶ 10. The decision did not set an evidentiary standard but instead emphasized the broad

discretion afforded the probate court in determining whether to remove a fiduciary under R.C.

2113.18(A).

           {¶13} Charles has failed to establish that the trial court abused its discretion by

removing him as executor in this case. Although the appellate briefs complicate this appeal by

rehashing the many disputes that have arisen in this case, the basic facts relevant to this issue are

not complex or disputed. At the time of the hearing on the removal of Charles as executor, the

two primary assets in the estate were Decedent’s business, Hamad Tire, and the real estate on

which Hamad Tire operated its businesses, which had been transferred to the trust.

           {¶14} Charles had become the sole owner of Hamad Tire. In addition to evidence to

suggest that Charles may have further encumbered Hamad Tire and/or the trust properties to
                                                 5

serve his own interest as the owner of Hamad Tire, no one disputed that Hamad Tire had paid no

rent to the trust. As the trial court noted at the hearing, the trust should have been receiving a

substantial amount of monthly rent from Hamad Tire that had not been paid.

       {¶15} As executor of the estate, Charles had the responsibility to safeguard all of

Decedent’s assets, including real estate and the trust. See R.C. 2113.31. He was required to

manage and protect the value of the real estate that was ultimately transferred into the trust,

which included collecting any rents owed on the real estate and “at intervals not to exceed twelve

months, pay over to the heirs * * * their share of the net rents[.]” R.C. 2113.311(E) and (F).

       {¶16} Regardless of which trust controlled, the sibling beneficiaries should have been

receiving distributions of rental income from the trust, but, years after Decedent’s death, the trust

had collected no rental income to distribute.        As the sole owner of Hamad Tire, Charles

financially benefitted from the company’s failure to pay any rent to the trust.

       {¶17} Given that the other beneficiaries and trustee of the trust had been litigating with

Charles over the unpaid rental income for nearly four years, the trial court could reasonably

conclude that there were unsettled claims between Charles and the estate that could become the

subject of litigation between Charles and “persons interested in the estate.”             See R.C.

2113.18(A); R.C. 2113.22. Charles has failed to demonstrate that the trial court abused its

discretion by removing him as executor pursuant to R.C. 2113.18(A). The first assignment of

error is overruled.

                                      Assignment of Error II

       The trial court erred and abused its discretion in its appointment of an
       administrator.

       {¶18} This Court reached the merits of Charles’s first assignment of error because an

order removing a fiduciary is a final, appealable order. In re Estate of Nardiello, 10th Dist.
                                                  6

Franklin No. 01AP-281, 2001 WL 1327178, * 3 (Oct. 30, 2001); see also In re Estate of

Howard, 9th Dist. Lorain No. 05CA008730, 2006-Ohio-2176 (reaching the merits but not

explicitly addressing the finality of the judgment). This Court lacks jurisdiction to address his

second assignment of error, however, because the appointment of an administrator is not final or

appealable. In re Estate of Thomas, 9th Dist. Summit No. 27177, 2014-Ohio-3481, ¶ 9-10. We

decline to address this assigned error for that reason.

                                                 III.

       {¶19} Appellant’s first assignment of error is overruled. This Court did not address his

second assignment of error because that aspect of the trial court’s order is not final or appealable.

The judgment of the Summit County Court of Common Pleas, Probate Division, is affirmed.

                                                                                Judgment affirmed.

       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.
                                           7

      Costs taxed to Appellant.

                                               JULIE A. SCHAFER
                                               FOR THE COURT

CARR, J.
CALLAHAN, J.
CONCUR.

APPEARANCES:

THOMAS C. LOEPP, Attorney at Law, for Appellant.

JOHN RAMBACHER and MICHAEL KAHLENBERG, Attorneys at Law, for Appellee.

STEVEN HOBSON, II, Attorney at Law, for Appellee.

RICHARD HARRIS, III, Attorney at Law, for Appellee.

JACQUELINE MAHLAND and ROBERT MAGUIRE, Attorneys at Law, for Appellee.