In Re Estate of Marjorie Ross Potter
W2016-01809-COA-R3-CV
| Tenn. Ct. App. | Oct 11, 2017Background
- Marjorie Ross Potter died in 2008; her will was probated and Carey Potter was appointed executor. Carey later died and his estate continued as party.
- Steven Potter (son/beneficiary) filed multiple petitions challenging administration: (1) Petition for Fees (executor sought $50,000), (2) Petition to Distribute Property (photographs, quilts, memorabilia), and (3) Petition for Damages alleging breaches of fiduciary duty.
- Probate Court held a multi-day hearing and issued a detailed memorandum concluding Carey did not breach fiduciary duties, that the 2011 order resolved personal-property disputes (res judicata), and awarding a $50,000 executor fee to Carey’s estate.
- Steven appealed, arguing the court erred in (a) failing to find breaches of fiduciary duty (timeliness of distributions, tax handling, unfair personal-property allocation), (b) denying damages, (c) holding the 2011 order barred his distribution claims, and (d) awarding the fee.
- The Court of Appeals reviewed factual findings de novo with a presumption of correctness and applied the abuse-of-discretion standard to discretionary rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether executor breached fiduciary duty by delaying monetary distributions | Steven: Carey withheld distributions over five years and thus breached duty | Carey: Withholding was reasonable due to ongoing litigation, ancillary administrations, counsel advice, and need to preserve funds | No breach — court found withholding reasonable and in good faith |
| Whether executor mishandled tax matters (Forms 1099, 1041, K-1 issues, IRS notice) | Steven: Executor’s tax filings caused a $100,000 IRS bill and other errors harming Steven | Carey: Any errors were minor or IRS mistakes; no economic harm to estate or Steven; filings were reasonable | No breach — no damages resulted; actions were reasonable and in good faith |
| Whether distribution of tangible personal property was unfair and subject to relitigation | Steven: 2013 petition raised unresolved personal-property claims (photos, quilts) | Carey: July 26, 2011 order resolved distribution; res judicata bars relitigation | Claims barred — 2011 order was final on distribution matters; res judicata applies |
| Whether awarding $50,000 executor fee was improper given alleged breaches | Steven: Fee unjustified because of alleged breaches and mismanagement | Carey: No breaches; services appropriate and fee reasonable | Fee affirmed — no breach found, court’s fee award not an abuse of discretion |
Key Cases Cited
- Konvalinka v. Chattanooga-Hamilton Cnty. Hosp. Auth., 249 S.W.3d 346 (Tenn. 2008) (abuse-of-discretion standard and trial-court obligations)
- Lee Med., Inc. v. Beecher, 312 S.W.3d 515 (Tenn. 2010) (framework for reviewing discretionary decisions: factual support, legal principles, acceptable range of dispositions)
- In re Estate of Ladd, 247 S.W.3d 628 (Tenn. Ct. App. 2007) (executor fiduciary duties; caution against holding executors liable on slight grounds)
- Jackson v. Smith, 387 S.W.3d 486 (Tenn. 2012) (elements and standard for res judicata/claim preclusion)