Cody Tackett and Toni Tackett Womble v. Amy Freedman, Special Administratrix of the Estate of John Z. Tackett, Jr. , 2022 Ark. App. 135 ( 2022 )


Menu:
  •                                  Cite as 
    2022 Ark. App. 135
    ARKANSAS COURT OF APPEALS
    DIVISION III
    No. CV-21-87
    Opinion Delivered March 16, 2022
    CODY TACKETT AND TONI
    TACKETT WOMBLE
    APPELLANTS APPEAL FROM THE SEVIER
    COUNTY CIRCUIT COURT
    V.                            [NO. 67PR-20-7]
    AMY FREEDMAN, SPECIAL              HONORABLE CHARLES A.
    ADMINISTRATRIX OF THE ESTATE       YEARGAN, JUDGE
    OF JOHN Z. TACKETT, JR.,
    DECEASED; MILLER-CLABORN OIL       AFFIRMED
    DISTRIBUTING COMPANY, INC.; AND
    MELISSA TACKETT
    APPELLEES
    MIKE MURPHY, Judge
    This is an interlocutory appeal from the November 23, 2020 Sevier County Circuit
    Court order approving the settlement of the creditor’s claim filed by separate appellee Miller-
    Claborn Oil Distributing Co., Inc. (“Miller-Claborn”), against the estate of John Z. Tackett,
    Jr. Appellants Cody Tackett and Toni Tackett Womble appeal, arguing that the circuit court
    erred in finding that the agreement was in the best interest of the estate. We affirm.
    John Tackett died intestate on August 4, 2019. He is survived by his spouse, Melissa
    Tackett, and two adult children, Cody Tackett and Toni Tackett Womble. Miller-Claborn is
    a commercial oil company authorized to do business in the state of Arkansas. It provided
    goods to John Tackett and his businesses but failed to receive payment therefrom. It
    originally sued John Tackett, among others associated with the businesses, in 2015 for breach
    of contract. On January 29, 2020, the owner of Miller-Claborn filed a petition for
    appointment of special administratrix of the estate in this case. Per the petition’s request,
    the circuit court appointed Amy Freedman as temporary administratrix. According to a
    motion filed by Freedman, Miller-Claborn filed a sixth amended complaint in its breach-of-
    contract case naming “Amy Freedman as the Administratrix of the Estate of John Z. Tackett,
    Jr.,” as a defendant after John’s death. The fifth amended complaint (which was incorporated
    with the sixth amended complaint) was attached to the motion. The complaint alleged in
    part,
    20. It was during the pendency of this litigation that Plaintiff learned of the
    abhorrent scheme devised by John Tackett, and which Cody Tackett joined once
    becoming of age, in an attempt to avoid making payments on their obligations and
    defraud creditors of payment that was rightfully owed to them. The scheme involved
    moving assets from one to the other of each of the named individual Defendants as
    well as the named Defendant corporations: TTC, which was filed with the Arkansas
    Secretary of State in 1990; RRSG, which was filed with the Arkansas Secretary of
    State in 2003; CST, which was filed with the Arkansas Secretary of State in 2011;
    S.W.A.T. which was filed with the Arkansas Secretary of State in 2012; Synergy which
    was filed with the Arkansas Secretary of State in 2014; and more recently discovered
    HWY. 71 Trucking, LLC, which was filed with the Arkansas Secretary of State in
    2012; and JZT’s HWY 71 Trucking, LLC, which was filed with the Arkansas Secretary
    of State in 2019. It should be noted that as of the date of this filing, the majority of
    these companies’ status has been revoked by the Arkansas Secretary of State for failure
    to pay their franchise tax.
    21. John Tackett’s daughter, Toni Womble, has recently testified as to the
    veracity of the allegations that John Tackett was involved in the above described
    scheme whereby he would shuffle assets through the above listed shell companies to
    avoid creditors. An example or examples of said transfers of assets involves John
    Tackett’s widow, Melissa Tackett, who joined in on this nefarious scheme by
    transferring assets to herself individually or some of the above listed companies.
    2
    On May 13, 2020, Melissa Tackett filed a petition for removal of special
    administratrix and nominated Centennial Bank to serve as personal representative. Miller-
    Claborn objected to this nomination. Cody and Toni filed a response to Melissa’s
    nomination claiming that Melissa was selling property belonging to John’s estate without
    authorization and requesting the court to appoint a general administrator at its discretion.
    On June 8, Melissa withdrew her petition, and Amy Freedman remained the administratrix.
    On July 13, Miller-Claborn filed a claim against the estate for $552,564.49. On
    October 30, Cody, in his personal capacity, filed a claim against the estate for $732,654.74.
    He alleged that John owned or controlled two entities—TTC, Inc., and Red River Sand and
    Gravel, Inc.—and that his father caused those entities to incur improper debts in the total
    amount of $1,456,777.20.1 Cody alleged that John had placed these corporations in Cody’s
    name, which indebted him. Cody claimed that he paid approximately half the debts owed
    from his personal capital but that the two corporations remain liable to him for $732,654.74.
    On November 20, 2020, the court conducted a hearing on the proposed settlement
    between Melissa Tackett, Highway 71 Trucking, Miller-Claborn, and the estate. The court
    heard arguments from counsel and no witnesses testified. The settlement letter presented to
    the court provided that the estate would pay Miller-Claborn $125,000 in addition to
    quitclaiming property to it. Melissa Tackett and Highway 71 Trucking would pay $250,000.
    In return, Miller-Claborn agreed to dismiss with prejudice all its claims against the parties.
    1
    These two entities are separate defendants in Miller-Claborn’s suit, and this amount
    includes the Miller-Claborn debt.
    3
    The attorneys acknowledged that there were not enough assets in the estate to cover
    both Miller-Claborn’s and Cody’s claims. The parties to the settlement argued this claim
    took precedence over Cody’s claim because his claim did not have the same authenticity or
    validity as the Miller-Claborn claim that had been fleshed out and litigated since 2015. 2 After
    hearing arguments from counsel, the court announced,
    [S]o I’m going to consider this as a request for the claim of Miller-Claborn to be
    approved. It’s been signed off by the attorney for the estate and the special
    administrator, and having no objections by Melissa Tackett, who is the widow, and is
    in agreement with that, I’m in favor of admitting the claim and that it be paid in
    accordance with the settlement record.
    On November 23, the court entered an order approving settlement incorporating the
    letter memorializing the settlement. Cody and Toni filed a notice of appeal that same day.
    This court reviews probate proceedings de novo on the record, but we will not reverse
    the decision of the circuit court unless it is clearly erroneous. Ashley v. Ashley, 
    2016 Ark. 161
    ,
    at 9, 
    489 S.W.3d 660
    , 666. This court will not overturn the circuit court’s factual
    determinations unless they are clearly erroneous. 
    Id.,
     427 S.W.3d at 21. However, no
    deference is given to the circuit court on matters of law. Id., 427 S.W.3d at 21.
    The circuit court’s approval of a settlement of claims is governed by Arkansas Code
    Annotated section 28-50-112 (Repl. 2012) which states,
    When a claim against the estate has been filed or suit thereon is pending, if it appears
    to be in the best interest of the estate and subject to the court’s authorization or
    2
    The circuit court scheduled a hearing on Cody’s creditor’s claim for December 29,
    2020; Cody filed for bankruptcy the day before the scheduled hearing. The court ultimately
    denied the claim.
    4
    approval, the creditor and personal representative may compromise the claim
    whether due or not due, absolute or contingent, liquidated or unliquidated.
    Cody and Toni first argue that there was insufficient evidence supporting the
    approval of the settlement agreement. They contend that only the arguments of counsel were
    presented at the approval hearing and that arguments of counsel are not evidence. They also
    assert that the court’s finding did not have an adequate foundation and was based on
    speculation and conjecture because Miller-Claborn’s pending lawsuit was undetermined,
    and the court did not have proper knowledge of the facts involved.
    The court had knowledge that Miller-Claborn had a pending suit against the estate
    for $552,564.49 that had been going on for five years. This claim was supported by an
    affidavit from the president of Miller-Claborn. The court was also aware of Cody’s claim filed
    eight days before the six-month notice-to-creditors deadline per Arkansas Code Annotated
    section 28-50-101(a)(1) (Repl. 2012). This claim was also supported by an affidavit. Further,
    the court had before it evidence that the settlement was accepted and approved by both the
    special administrator and John’s widow, Melissa. The court acknowledged that the estate was
    being sued for significantly more than the value of the assets in the probate estate. Presented
    with all this, the court found that Miller-Claborn’s offer to settle for $125,000 and the
    quitclaim to it of a piece of property was in the best interest of the estate. The settlement
    amount is less than what the estate was potentially liable for in the civil suit. Accordingly, we
    cannot say the court erred in approving the settlement.
    5
    Cody and Toni claim that it was not a foregone conclusion that the civil litigation
    would be unfavorable to them because there had been neither a jury trial nor a final order
    entered in the case. They cite Ashley v. Ashley, 
    2016 Ark. 161
    , 
    489 S.W.3d 660
    , to support
    their assertion that observed claims may not be based on speculation of how a court may rule
    and that a court must exercise extreme diligence in approving a settlement. In Ashley, the
    supreme court affirmed a court’s approval of a settlement agreement that found that the
    settlement was in the best interest of the estate of the decedent. In reaching this conclusion,
    however, the supreme court did not delve into the legitimacy of the pending claims, nor did
    it establish factors that should be taken into consideration. Instead, it determined that the
    settlement was in the best interest of the estate on the basis of specific facts of the case.
    Consequently, we are not persuaded by Cody and Toni’s assertion that the court erred
    because the outcome of the civil litigation is unknown.
    Next, Cody and Toni argue that the record does not support the conclusion that the
    settlement satisfied the best interest of the estate. They argue that the court’s approval was
    premature because Arkansas Code Annotated section 28-50-112 presupposes that the estate
    claims and assets are before the court, which was not the case here because Cody and Toni
    had a pending challenge to the inventory and accounting of the estate. However, they do not
    cite any supporting authority.
    As touched on above, this area of the law lacks factors or definitive guidelines that a
    circuit court should look to in determining whether a settlement is in the best interest of the
    estate. Therefore, we must rely on the plain language of the statute. Miller-Claborn presented
    6
    its claim to the personal representative of the estate in accordance with section 28-50-104
    (Repl. 2012); negotiated with the estate’s representative; reached a compromised settlement
    agreement; and presented it for approval to the circuit court. Additionally, the underlying
    claims were before the same court as the case at hand; thus, the court had five years of
    background experience with the underlying claims. The plain language of the statute does
    not support Cody and Toni’s contention that the approval was premature. Given this
    record, the circuit court did not clearly err in concluding that the settlement of this claim
    was in the best interest of the estate.3
    Affirmed.
    ABRAMSON and VIRDEN, JJ., agree.
    Arnold & Arnold, by: Stephen T. Arnold; and Robert S. Tschiemer, for appellants.
    Norton Wood Floyd, by: Marshall C. Wood and Richard J. Kroll, for separate appellee
    Miller-Claborn Oil Distributing Co., Inc.
    3
    In acknowledging the lack of caselaw in this area, the appellee suggests looking to
    the factors considered in bankruptcy law in approving proposed settlements. See In re Martin,
    
    212 B.R. 316
    , 319 (B.A.P. 8th Cir. 1997). While persuasive, it is unnecessary here given the
    facts at hand.
    7
    

Document Info

Citation Numbers: 2022 Ark. App. 135

Filed Date: 3/16/2022

Precedential Status: Precedential

Modified Date: 3/16/2022