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In re Estate of Merriott

Court of Appeals of Missouri, Western District, First Division

August 19, 2014

IN THE ESTATE OF SHIRLEY J. MERRIOTT, Deceased, CITIZENS-FARMERS BANK OF COLE CAMP, Appellant,
v.
THOMAS SIDNEY MERRIOTT, TIMOTHY SCOTT MERRIOTT and TAMRA SUE MERRIOTT WILSON, Respondents

APPEAL FROM THE CIRCUIT COURT OF MORGAN COUNTY. THE HONORABLE KEVIN P. SCHEHR, JUDGE.

Kenneth O. McCutcheon, Jr., Versailles, MO and Richard L. Rollings, Jr., Camdenton, MO, for appellant.

Tomas S. Merriott, Timothy Scott Merriott, and Tamra S. Merriott Wilson, Respondents Pro se, for respondent.

BEFORE DIVISION ONE: MARK D. PFEIFFER, PRESIDING JUDGE, LISA WHITE HARDWICK AND KAREN KING MITCHELL, JUDGES. ALL CONCUR.

OPINION

Page 260

Lisa White Hardwick, Judge.

Citizens-Farmers Bank of Cole Camp (" Appellant" ) appeals from the probate court's judgment in an action for accounting pursuant to Section 461.300, RSMo Cum. Supp. 2013,[1] against Thomas Merriott, Timothy Merriott, and Tamra Merriott Wilson (collectively, " Respondents" ), who are the children and heirs of Shirley Merriott (" Merriott" ). Appellant had filed the action for accounting to allow Merriott's estate to recover the value of all nonprobate transfers that Merriott had made to Respondents in order to discharge Appellant's unpaid claim against the estate.

On appeal, Appellant contends the probate court misapplied the law regarding the proper remedy for an accounting action under Section 461.300 when it ordered Respondents to sell Merriott's residence and give Appellant any sales proceeds remaining after the mortgage was paid. Appellant further contends the court erred in valuing the residence at the time of trial instead of at the time it was transferred to Respondents and in assigning a value to the residence that was not supported by substantial evidence. Because (1) the proper remedy under Section 461.300 was a money judgment in favor of Merriott's estate and against Respondents for the value of the recoverable transfers to the extent necessary to discharge Appellant's claim against the estate; and (2) the court should have determined the value of Merriott's residence at the time of her death instead of at the time of trial, we reverse and remand this case to the probate court for further proceedings.

Factual and Procedural History

Merriott died on March 5, 2008. Shortly after Merriott's death, the personal representative of her estate filed an " Affidavit to Establish Title of Distributees of Decedent Where Total Estate is Less Than $40,000." The affidavit listed real and personal property valued at $16,497.59, and Respondents were named as the distributees of the property. The probate court executed the certificate of clerk portion of the affidavit, which indicated that each of the Respondents was to receive an undivided one-third interest in the estate property.

In March 2009, Appellant filed a claim against Merriott's estate for $370,479.38, which it alleged was the unpaid balance plus accrued interest on loans that Merriott and her husband[2] had obtained from Appellant. These loans included one unsecured promissory note and several promissory notes secured by rental properties owned by Merriott and her husband. Contemporaneously, Appellant also filed a petition to require administration of the estate. In its petition, Appellant alleged that, as a creditor, it was a person interested in the estate. Appellant further alleged that substantial assets passed to Respondents and that those assets were subject to its claim under the provisions of Section 461.300. This statute provides that recipients of nonprobate and other transfers outside of the administration of a decedent's estate are liable to account for the value of such transfers to the extent necessary to discharge statutory allowances and claims that remain unpaid after application of the decedent's estate. § 461.300.1. The probate court sustained Appellant's petition to require administration of Merriott's estate and appointed Thomas Merriott as personal representative.

Page 261

In July 2009, Appellant filed a demand for the personal representative of Merriott's estate to bring an action under Section 461.300 against the recipients of transfers of her property. In the demand, Appellant alleged that substantial assets had been transferred to Respondents under Missouri's nonprobate laws and that the transfers were subject to an action for accounting under Section 461.300.[3] Appellant asked that the personal representative commence such an action.

In August 2009, Appellant foreclosed on the rental properties that secured Merriott's loans. After the foreclosure sales, the total amount of the deficiencies on the notes was $159,827.20.

After Thomas Merriott, as personal representative of the estate, failed to file an action for accounting under Section 461.300, Appellant filed such an action. Appellant alleged that Respondents had received Merriott's personal property, her three bank accounts via a transfer on death designation, and her residence and rental property via beneficiary deeds. Appellant asked that the court enter judgment requiring each of the Respondents to deliver " all assets or a sufficient portion thereof on a pro rata basis to the extent determined by the Court to be necessary to discharge" Appellant's claim against Merriott's estate.

The probate court removed Thomas Merriott as personal representative of the estate and appointed the Morgan County Public Administrator to serve as personal representative. In October 2011, the court held a hearing. Following the hearing, the court ordered Respondents to make an accounting[4] to the personal representative " as to all property received by them through non-probate transfers."

In February 2012, Appellant filed a motion for judgment on its petition for accounting under Section 461.300. In the motion, Appellant alleged that Respondents had a total of $60,762.99 in nonprobate assets, which consisted of the remaining proceeds from the sale of real and personal property after expenses were paid, funds from Merriott's Edward Jones account and three bank accounts, and $34,000 in equity on Merriott's residence. Appellant requested that the court enter a money judgment in favor of Merriott's estate and against Respondents for the entire $60,762.99 to discharge Appellant's claim against the estate.

In April 2012, Respondents filed their accounting, or detailed financial and transactional information, regarding the nonprobate transfers. Respondents asserted that they had received income and assets totaling $32,365.05 and expenses totaling $22,267.91. They stated that, after deducting the expenses from the income and assets, they used the remaining funds to pay off the loan on Merriott's residence. Respondents further stated ...


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