Larry v. Starcher, Administrator CTA v. Keith J. Pappas
16-1160
| W. Va. | Nov 7, 2017Background
- Decedent Arthur P. Scotchel died in 2009; two successive wills (2005 and 2006) led to competing fiduciaries and litigation over the estate and Westover Realty.
- Keith J. Pappas was appointed Administrator CTA in April 2010 pursuant to a Memorandum of Agreement; he billed ~$195,305 and received partial payments totaling $62,500; accountings were filed and confirmed without objection at various times.
- Family beneficiaries repeatedly complained about estate management, filed will-contest and removal proceedings, and raised fee/ethics complaints against Pappas; a disciplinary panel and this Court later dismissed charges against Pappas with no sanction.
- The beneficiaries filed an amended complaint in August 2015 against Pappas (and another, later dropped due to bankruptcy) alleging waste, breach of fiduciary duty, negligence, excessive fees, improper property sales, and improper payments to outside counsel.
- Pappas moved to dismiss (and alternatively for summary judgment), arguing statute of limitations, res judicata, and failure to state a claim; the circuit court granted dismissal with prejudice on November 16, 2016, and the Supreme Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Judicial notice of filings from other proceedings | Court erred in the weight and selection of outside pleadings and disciplinary records | Documents were properly noticed; parties were informed and did not object | Judicial notice proper for existence of filings (not truth); no error in application of Rule 201 |
| Appropriate procedural standard (12(b)(6) vs. summary judgment) | Dismissal was improper under 12(b)(6) | Motion was alternatively for summary judgment; parties and court treated it as such | Review is de novo; characterization as summary judgment appropriate given outside materials; dismissal with prejudice proper |
| Statute of limitations for waste and breach of fiduciary duty | Claims tolled by continuous representation doctrine or accrued at invoicing/collections within two years of filing | Claims accrued when fees/payments were made or when properties were sold; suit filed after limitations period | Claims barred by two-year limitations; continuous representation doctrine inapplicable to estate-administration context; dismissal affirmed |
| Claims for retention/payment of outside counsel | Retention/partial payment improper and actionable | Administrator had statutory duty/authority to pay administrative costs and retain counsel to protect estate | Plaintiffs did not pursue this point on appeal; circuit court reasoning (statutory authority/duty) unchallenged and dismissal sustained |
Key Cases Cited
- State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W. Va. 770 (appellate review of 12(b)(6) is de novo)
- Painter v. Peavy, 192 W. Va. 189 (summary judgment appellate review is de novo)
- Sprouse v. Clay Communication, Inc., 158 W. Va. 427 (dismissal under Rule 12(b)(6) bars refiling unless without prejudice)
- Keesecker v. Bird, 200 W. Va. 667 (action for waste governed by two-year statute of limitations)
- Dunn v. Rockwell, 225 W. Va. 43 (breach of fiduciary duty governed by two-year statute of limitations)
- Smith v. Stacy, 198 W. Va. 498 (adoption of continuous representation doctrine in attorney-malpractice context)
