In Re Estate of Virginia Spears
W2016-00599-COA-R3-CV
Tenn. Ct. App.Apr 17, 2017Background
- Virginia L. Spears died July 8, 2013, leaving a will naming her sons Marvin Ray Spears, II (Ray) as executor and Micah Britt Spears (Britt) and Ray to share the residuary estate equally.
- Ray admitted the will to probate and received letters testamentary; later petitioned (Sept. 22, 2015) to ratify several executor decisions concerning estate assets.
- Disputes concerned (1) a $250,000 promissory note Britt had executed in favor of their mother, (2) two life-insurance policies on Britt’s children with no beneficiaries named, and (3) three annuities titled in Ray’s name but allegedly funded with the decedent’s funds.
- At a Dec. 10, 2015 hearing, the brothers testified about debt forgiveness, ownership of the insurance policies, and the annuities; the probate court ruled Feb. 16, 2016 that the $250,000 debt was extinguished, the two life policies should be owned by the grandchildren, and directed transfer of the annuities to the estate and/or grandchildren.
- Ray appealed, challenging the debt-forgiveness finding, the transfer of insurance policies to the grandchildren, the probate court’s jurisdiction over annuities, and whether the court exceeded the pleadings scope.
Issues
| Issue | Plaintiff's Argument (Ray) | Defendant's Argument (Britt) | Held |
|---|---|---|---|
| 1. Whether $250,000 promissory note was forgiven | Debt remained unpaid and collectible by estate | Mother forgave the debt; debt extinguished | Affirmed: trial court did not err; credibility findings supported extinguishment |
| 2. Ownership of life-insurance policies on grandchildren (no beneficiary listed) | Policies should remain estate assets and be distributed under the will | Grandchildren should be named owners | Reversed: policies are estate assets (no authority to transfer ownership to grandchildren); cash value to be surrendered to estate and distributed per will |
| 3. Jurisdiction to adjudicate annuities titled in Ray’s name | Court lacked jurisdiction; no pleading sought relief re: annuities | Annuities are estate assets (funded with decedent’s money); Ray testified they belonged to estate | Affirmed in part, reversed in part: court could adjudicate annuities given Ray’s sworn admission they were estate assets; but all three annuities are estate assets — two should not have been directed to grandchildren |
| 4. Whether court exceeded pleadings scope / improperly considered character evidence | Court relied on improper/unchallenged "bad character" evidence beyond pleadings to decide ownership issues | Evidence was either waived (no objection) or irrelevant; many contested facts implicated credibility | Mostly rejected: any complained evidence was waived or irrelevant; error re: insurance policies was legal, not evidentiary, and reversed on legal grounds |
Key Cases Cited
- Ramsay v. Custer, 387 S.W.3d 566 (Tenn. Ct. App.) (standard of review: facts reviewed de novo with presumption of correctness)
- Watson v. Watson, 196 S.W.3d 695 (Tenn. Ct. App.) (preponderance required to overturn factual findings)
- Royal Ins. Co. v. Alliance Ins. Co., 690 S.W.2d 541 (Tenn. Ct. App.) (trial court best judge of witness credibility)
- Wells v. Tenn. Bd. of Regents, 9 S.W.3d 779 (Tenn.) (trial courts observe witness demeanor)
- Regions Bank v. Bric Constructors, LLC, 380 S.W.3d 740 (Tenn. Ct. App.) (appellate review of credibility requires clear and convincing evidence to overturn)
- In re Estate of Ledford, 419 S.W.3d 269 (Tenn. Ct. App.) (no presumption of correctness for legal conclusions)
- Skovron v. Third Nat’l Bank in Nashville, 509 S.W.2d 497 (Tenn. Ct. App.) (assets titled in decedent’s name are subject to testamentary disposition)
- Kelly v. Kelly, 445 S.W.3d 685 (Tenn.) (deference to trial court credibility findings)
- In re Estate of Armstrong, 859 S.W.2d 323 (Tenn. Ct. App.) (failure to object at trial waives evidentiary complaints on appeal)