In re Estate of Faldon
2016 Ohio 7337
| Ohio Ct. App. | 2016Background
- Nancy Faldon executed a will leaving her residuary estate to the Salvation Army entities in Milan and Vermilion, Ohio; if those entities ceased, the Executor could designate similar local charities.
- G. Reeves (attorney) served as Executor; Faldon died Nov. 2012; the will was probated Nov. 16, 2012.
- Reeves moved to distribute the residual estate to the Community Foundation of Lorain County (LCF) to administer an endowment earmarked for the two local Salvation Army service units; the probate court granted the motion Sept. 9, 2013.
- Notices and filings were served to various Salvation Army addresses (including national HQ in New York); Salvation Army personnel participated in meetings about the arrangement in Sept–Nov. 2013 and began receiving distributions in 2015.
- Final accounting was filed Dec. 18, 2013 and the estate was closed Jan. 21, 2014 (Reeves received executor fees; LCF received ~ $1.5M). Salvation Army waited until July 9, 2015 to move to reopen the estate and vacate the distribution and final-account orders.
- The probate court denied the motions; on appeal the Sixth District affirmed, holding (inter alia) notice and statutory requirements were satisfied, the judgments were not void, and Salvation Army’s claims were barred by laches and related doctrines.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether orders are void for lack of due process and thus not subject to laches | Salvation Army: did not get proper/timely notice of distribution and final account; due process violated, so orders void ab initio | Reeves/LCF: notice reasonably calculated under circumstances; Salvation Army had actual/constructive notice and participated in events | Court: Due process satisfied; judgments not void; Salvation Army had notice and opportunity to be heard |
| Whether motions to reopen/vacate final account could be granted for good cause under R.C. 2109.35 | Salvation Army: good cause exists because distribution diverted funds to an entity not named in will and notice was defective | Reeves/LCF: no good cause — Salvation Army was served with notice of the account hearing and was a party able to appear; distribution honored testator's intent | Court: No good cause — Salvation Army was served under R.C. 2109.33/2109.35 and thus bound by account settlement |
| Whether Executor breached fiduciary duty by diverting funds and failing to give proper notice | Salvation Army: Reeves failed to send notice to the specific New York address and diverted funds to LCF (in which she had ties), breaching duty | Reeves/LCF: Executor fulfilled duties, complied with statutory and will requirements, and distributions advanced testator’s intent; any objections were delayed | Court: No breach — duties satisfied; alternatively claims barred by laches/res judicata due to long delay and participation |
Key Cases Cited
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (1983) (abuse of discretion standard)
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (notice must be reasonably calculated to apprise interested parties)
- Palazzi v. Estate of Gardner, 32 Ohio St.3d 169 (1987) (applying Mullane to probate notice requirements)
- Stevens v. National City Bank, 45 Ohio St.3d 276 (1989) (laches can bar relief even within statutory limitations when delay prejudices other party)
- In re Estate of Cullen, 118 Ohio App.3d 256 (1997) (void judgments for lack of due process may be vacated)
- In re Estate of Gray, 162 Ohio St. 384 (1955) (one against whom a void judgment has been rendered will not be estopped by laches)
- Fletcher v. Stanton, 124 N.E.2d 495 (Ohio C.P. 1952) (final account judgments are binding absent statutory grounds to vacate)