Court Opinion

ID: 4396900
Source: CourtListenerOpinion
Date Created: 2019-05-15 15:05:05.27428+00
Date Added: 2024-06-11T14:52:12.014590
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                    No. 18-1506
                                Filed May 15, 2019

RICHARD ALAN KESSLER and RICHARD L. KESSLER,
     Plaintiffs-Appellants,

vs.

MERCEDES KESSLER, Individually and as Co-Executor of the Estate of
Charles L. Kessler, and TOM THOMPSON, as Co-Executor of the Estate of
Charles L. Kessler,
      Defendants-Appellees.
________________________________________________________________

      Appeal from the Iowa District Court for Jefferson County, Lucy J. Gamon,

Judge.

      Richard Alan Kessler appeals a district court ruling removing him as co-

executor of his late father’s estate. AFFIRMED.

      Paul A. Miller of Miller Law Office, Fairfield, for appellants.

      Gayla R. Harrison of Harrison, Moreland, Webber, Simplot, & Maxwell, P.C.,

Ottumwa, for appellees.

      Considered by Vaitheswaran, P.J., and Potterfield and Tabor, JJ.
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VAITHESWARAN, Presiding Judge.

       We must decide whether the district court abused its broad discretion in

removing a co-executor of a will.

I.     Background Facts and Proceedings

       Richard Alan Kessler was named co-executor of his father’s will. The will

bequeathed stock to a testamentary trust of which Kessler was a trustee.

However, a second codicil to the will removed certain stock from the trust.

According to an accountant, the stock sale proceeds were placed in an investment

account. Kessler’s father separately designated his wife sole beneficiary of the

account and executed a transfer-on-death beneficiary form granting her the assets

in the account.

       The will was admitted to probate. As co-executor, Kessler signed an oath

to “faithfully discharge the duties imposed by law.” See Iowa Code § 633.168

(2018).

       In time, Kessler and his son filed a petition to set aside the second codicil

and non-testamentary transfer of stock. They alleged, “There was no reasonable

grounds for the decedent to dramatically limit distributions to [them] through the

reduction to the . . . [t]estamentary [t]rust.” They further alleged Kessler’s father

lacked testamentary capacity and was subject to undue influence by his wife.

       The remaining co-executors petitioned for Kessler’s removal as co-

executor. They asserted Kessler had a duty to “make all reasonable efforts to

sustain” the validity of the will and his “action to contest the second codicil . . .

placed [him] in a conflict.” The district court scheduled an evidentiary hearing

solely on the removal petition, setting a separate trial on Kessler’s petition to set
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aside the second codicil and non-testamentary transfer. Following the hearing, the

court ordered Kessler’s removal as co-executor. The court reasoned in part:

       The Iowa Supreme Court has specifically determined that an
       executor’s duty to defend a will includes all codicils thereto.
               In this case, Richard Alan Kessler has chosen to attack the
       Second Codicil to the Will rather than to defend it. . . .
               If Mr. Kessler is successful in his claim that the Second Codicil
       should be invalidated, he stands to benefit substantially. . . .
               ....
               Richard Alan Kessler has committed himself to being one of
       the attackers. Certainly it is Plaintiff’s right to attack the Second
       Codicil, but this choice means that he is unable to perform his duty
       to make “all reasonable efforts to defend the will” in his role as Co-
       Executor. The Court concludes that Defendants’ argument comes
       down to one undeniable proposition: Plaintiff cannot be both an
       attacker and defender of the Second Codicil. As Defendants argue,
       Plaintiff has placed himself in a position of irreconcilable conflict. He
       has violated a fundamental duty of being a Co-Executor, and should
       be removed from that position.

(Citation omitted.) Kessler appealed.

II.    Standard of Review

       “The trial court has broad discretion in deciding whether to remove an

executor and trustee. We examine the record de novo to determine whether an

abuse of discretion can be found.” Estate of Randeris v. Randeris, 523 N.W.2d

600, 605–06 (Iowa Ct. App. 1994).

III.   Removal

       Kessler argues he “had a good faith belief that the second codicil” was

executed “during a period of incompetency” and he would have breached “his

fiduciary duty not to question” its validity. In his view, the court should have

considered whether his removal was in the estate’s best interests.

       We have no quarrel with Kessler’s decision to challenge the second codicil

and transfer-on-death beneficiary form. See Iowa Code § 633.308 (authorizing
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“[a]ny interested person [to] petition to set aside the probate of a will”). As the

district court stated, he raised “colorable” claims that would likely generate “solid

evidence on both sides of the question.” But Kessler’s claims for invalidation of

the codicil and beneficiary form were independent of his co-executors’ removal

petition. Estate of Randeris, 523 N.W.2d at 604 (“The issues involved in the

removal of an executor are unrelated to the issue of whether predeath transfers of

property by the decedent should be set aside.”). That petition is governed by Iowa

Code section 633.65, which allows a court to remove “any fiduciary” for a variety

of reasons, including when the fiduciary “failed to perform any duty imposed by

law.” A “conflict of interest may support removal.” Estate of Randeris, 523 N.W.2d

at 606.

       It is undisputed that Kessler was a fiduciary. See Iowa Code § 633.3(16)

(defining “executor” as “any person appointed by the court to administer the estate

of a testate decedent”), (17) (including an “executor” in the definition of “fiduciary”).

As a fiduciary executor, Kessler had an obligation to uphold the will. See Van

Gorden v. Lunt, 13 N.W.2d 341, 344 (Iowa 1944). His petition challenging the

second codicil sought to overturn the will.        As the district court determined,

Kessler’s decision to attack rather than defend the will posed a conflict of interest.

       The decedent’s long-time accountant testified as much, as did the attorney

who represented Kessler’s father. The attorney acknowledged situations in which an

executor may file claims against the estate but stated, when that happens, the

executor “must step down.” He continued, “[Kessler is] contesting a Codicil, and yet

as an executor his duty is to defend the decedent’s Will. So it’s like I’m defending but

I’m contesting. . . . He’s not on board to defend the Codicil that an executor is charged
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to do.” We conclude the district court did not abuse its discretion in granting the

removal petition.

       In reaching this conclusion, we have considered Kessler’s argument that he

acted in good faith. That principle finds its roots in a fee provision rather than the

removal statute. See Iowa Code § 633.315 (stating when executor “defends or

prosecutes any proceedings in good faith and with just cause, . . . that person shall

be allowed out of the estate necessary expenses and disbursements, including

reasonable attorney fees”). The provision is inapposite.

       We also have considered Kessler’s assertion that the court should have

made a determination of whether removal was in the estate’s best interests. Cf.

Harvey v. Leonard, 268 N.W.2d 504, 516 (Iowa 1978) (stating district courts have

wide latitude in deciding whether to remove a trustee and “have consistently

declined to so do unless such action is in the best interests of the trust and its

beneficiaries”). Although the court did not use the phrase, the court essentially

determined removal was in the estate’s best interests when it found “an

irreconcilable conflict” and the potential Kessler would gain “well over one million

dollars” if he succeeded in his challenge to the codicil.

       We affirm Kessler’s removal as co-executor.

       AFFIRMED.