In re Estate of Porter
100 N.E.3d 1080
| Ohio Ct. App. | 2017Background
- Decedent Calvert M. Porter died in 2003 owning real property at 1444 Moler Road. A purported will and an early sale were later held invalid.
- Andrea Porter was appointed co-administrator in 2004 and filed a fiduciary bond (later reduced to $40,000). A 2007 settlement conveyed the Moler Road property to Andrea (with part to Naser Saleh), but statutory probate procedures for transferring estate realty were not completed.
- Attorney Susan Wasserman obtained court-allowed fees; $49,875.73 remained unpaid when Andrea filed a final account in 2015 that listed the Moler Road interest as an estate asset but showed distributions to Andrea.
- Wasserman filed exceptions to the final account and obtained bankruptcy relief from stay to pursue probate remedies and rights against the surety.
- The magistrate found Andrea breached fiduciary duties by distributing estate assets while leaving Wasserman unpaid and recommended the surety be liable up to the bond amount. The probate court adopted and modified the magistrate's decision, ordered Andrea to reconvey the property to the estate for sale to pay debts, and held Western Surety potentially liable, remanding assessment of surety exposure until sale proceeds were known.
- Andrea appealed, arguing (1) the court erred in ordering reconveyance (invoking law-of-the-case and settlement approval) and (2) it was improper to hold her solely liable for unpaid attorney fees (also invoking bankruptcy protections and blaming Wasserman).
Issues
| Issue | Plaintiff's Argument (Andrea) | Defendant's Argument (Wasserman/Western Surety) | Held |
|---|---|---|---|
| Whether the probate court could void the 2007 settlement transfer and order reconveyance of Moler Rd. to the estate | The 2007 court-approved settlement established law of the case; probate lacked authority to invalidate that prior approval | The settlement did not satisfy required probate statutory procedures for transfer; prior approval did not excuse following probate sale/transfer statutes | Court upheld reconveyance: settlement approval did not eliminate statutory transfer requirements; law-of-the-case does not bar correction of legal error |
| Whether Andrea breached fiduciary duty by distributing estate assets while estate debts (Wasserman fees) remained unpaid, and whether Wasserman should share liability | Andrea says prior illegal acts by prior executor and court-approved settlement absolve her; Wasserman (or court approval) should be at least partly liable | Wasserman and probate court point to Andrea's final account showing distributions to her and unpaid fees; administrators who distribute assets leaving debts unpaid breach fiduciary duties | Court found Andrea breached fiduciary duty and refused to shift liability to Wasserman; ordered property reconveyed and sale to satisfy debts |
| Whether Andrea is protected by bankruptcy law from having to reconvey property or satisfy unpaid attorney fees | Bankruptcy discharge shields her from probate claims | Wasserman obtained relief from stay permitting probate court to resolve whether property is estate asset and to pursue surety rights; bankruptcy does not discharge debts from fraud/defalcation by a fiduciary | Court rejected Andrea's bankruptcy defense; bankruptcy did not bar probate from adjudicating estate assets or claims for fiduciary misconduct |
Key Cases Cited
- Corron v. Corron, 40 Ohio St.3d 75 (Ohio 1988) (probate courts are courts of limited jurisdiction; probate actions are limited to statutory authority)
- State ex rel. Keith v. Gaul, 147 Ohio St.3d 270 (Ohio 2016) (describing the law-of-the-case doctrine and its scope)
- State ex rel. Sladoje v. Belskis, 149 Ohio App.3d 190 (10th Dist. 2002) (probate courts must follow statutory procedures; an action inconsistent with statute may be void)