In re Estate of Hamad , 2018 Ohio 4980 ( 2018 )

[Cite as In re Estate of Hamad, 2018-Ohio-4980.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
IN RE: THE ESTATE OF CHARLES W. C.A. No. 29002
HAMAD
APPEAL FROM JUDGMENT
ENTERED IN THE
COURT OF COMMON PLEAS
COUNTY OF SUMMIT, OHIO
CASE No. 2014 ES 00876
DECISION AND JOURNAL ENTRY
Dated: December 12, 2018
SCHAFER, Presiding Judge.
{¶1} Appellant, Charles B. Hamad (“Charles”), appeals from a judgment of the
Summit County Court of Common Pleas, Probate Division, that removed him as executor of the
estate of his late father, Charles W. Hamad (“Decedent”). This Court affirms the judgment
insofar as it removed Charles as executor.
I.
{¶2} Charles is the oldest child of Decedent, who died on August 21, 2014. This
estate case has a long and contentious history, primarily involving disputes between Charles and
some of Decedent’s other beneficiaries. This Court will limit its review of the facts to those
directly relevant to this appeal.
{¶3} Decedent had executed a will that was filed in this probate case shortly after his
death. No one has disputed the validity of the will. The will designated Charles as the executor
of the estate and provided for several beneficiaries, including all six of Decedent’s children.
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{¶4} Among other things, the will provided that Hamad Tire, Inc., a business owned by
Decedent, would be divided between three of his sons: Charles, Michael, and Nicholas. The will
further provided that several parcels of Decedent’s real property, on which Hamad Tire operated
its businesses, would be transferred into a trust created by Decedent prior to his death.
{¶5} Although Charles and some of the other beneficiaries would later dispute which
of two trusts controlled, they agreed that, prior to his death, Decedent executed a valid trust, and
that the trust became the owner of real estate upon which Hamad Tire operated its business.
There was also no dispute that, as part of Decedent’s estate plan, Hamad Tire was required to
pay monthly rent to the trust for the company’s use of the properties. The trust provided that the
rental income would be divided equally between Decedent’s six children. The most significant
difference between the two trusts was the amount of monthly rent to be paid by Hamad Tire:
$3750 or $12,000. Although Charles asserts on appeal that the trusts were not admitted into
evidence, no one disputed at the hearing that the trust documents were already in the record as
attachments to motions that had been filed during this case.
{¶6} An earlier dispute between the parties involved the will’s provision to transfer
ownership interest of Hamad Tire to three of Decedent’s sons. Ultimately, two years after
Decedent’s death, Charles purchased his two brothers’ interests in Hamad Tire for $300,000
each. The source of the $600,000 to buy his brothers’ interests in Hamad Tire is not clear from
the record, but there was evidence that Charles obtained all or part of the money from Hamad
Tire and/or by re-mortgaging the real estate that was transferred into the trust.
{¶7} Other disputes arose between Charles and his siblings. Of significance here,
Charles had become the sole owner of Hamad Tire. The transfer of ownership of the company is
not challenged on appeal. That transaction remained relevant, however, because the trustee and
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other beneficiaries repeatedly asserted that the role of Charles as the owner of Hamad Tire
conflicted with his role as executor of Decedent’s estate. Notably, Hamad Tire had not paid any
rent to the trust and Charles, as executor, had taken no steps to collect the rent on behalf of the
estate.
{¶8} The matter ultimately proceeded to a hearing on a motion to remove Charles as
executor and to strike the final accounting of the estate. The primary issue at the hearing
concerned the rent that had not been collected by the trust or distributed to the siblings, which
was potentially in excess of $300,000 by that time.
{¶9} Following a hearing, the probate court removed Charles as executor and refused
to accept the final accounting of the estate because it failed to account for the rent that should
have been paid to the trust. The court appointed a disinterested administrator “to make an
independent analysis of the Estate and its debtors and pursue any litigation she deems
reasonable.” Charles appeals and raises two assignments of error.
II.
Assignment of Error I
The trial court erred and abused its discretion in removing [Charles] as the
Executor of [Decedent’s] estate.
{¶10} Charles asserts that the trial court erred in removing him as executor. The probate
court has broad discretion in its decision to remove an executor. In re Estate of Wilkerson, 9th
Dist. Summit No. 22049, 2005-Ohio-159, ¶ 10. An abuse-of-discretion review grants deference
to the trial court’s judgment. State v. Morris, 132 Ohio St.3d 337, 2012-Ohio-2407, ¶ 14. This
Court will reverse the trial court’s judgment to remove an executor only when it is
“unreasonable, arbitrary, or unconscionable.” See Blakemore v. Blakemore, 5 Ohio St.3d 217,
219 (1983).
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{¶11} This Court is not persuaded by Charles’s argument that the trial court lacked
discretion to remove him as executor because it had no statutory authority to do so. R.C.
2113.18(A) authorized the probate court to remove Charles as the executor “if there are unsettled
claims existing between the executor * * * and the estate that the court thinks may be the subject
of controversy or litigation between the executor * * * and the estate or persons interested in the
estate.”
{¶12} Charles mistakenly relies on a prior decision of this Court, In re Estate of Von
Meyer, 9th Dist. Lorain No. 16CA010980, 2017-Ohio-5839, asserting that it established a high
evidentiary burden for the removal of an executor under this statutory provision. The Von Meyer
case involved an appeal from a probate judgment that denied the surviving spouse’s motion to
remove the executor of his late wife’s estate. Id. at ¶ 1. This Court held on appeal that the trial
court did not abuse its discretion by refusing to remove the executor under R.C. 2113.18(A). Id.
at ¶ 10. The decision did not set an evidentiary standard but instead emphasized the broad
discretion afforded the probate court in determining whether to remove a fiduciary under R.C.
2113.18(A).
{¶13} Charles has failed to establish that the trial court abused its discretion by
removing him as executor in this case. Although the appellate briefs complicate this appeal by
rehashing the many disputes that have arisen in this case, the basic facts relevant to this issue are
not complex or disputed. At the time of the hearing on the removal of Charles as executor, the
two primary assets in the estate were Decedent’s business, Hamad Tire, and the real estate on
which Hamad Tire operated its businesses, which had been transferred to the trust.
{¶14} Charles had become the sole owner of Hamad Tire. In addition to evidence to
suggest that Charles may have further encumbered Hamad Tire and/or the trust properties to
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serve his own interest as the owner of Hamad Tire, no one disputed that Hamad Tire had paid no
rent to the trust. As the trial court noted at the hearing, the trust should have been receiving a
substantial amount of monthly rent from Hamad Tire that had not been paid.
{¶15} As executor of the estate, Charles had the responsibility to safeguard all of
Decedent’s assets, including real estate and the trust. See R.C. 2113.31. He was required to
manage and protect the value of the real estate that was ultimately transferred into the trust,
which included collecting any rents owed on the real estate and “at intervals not to exceed twelve
months, pay over to the heirs * * * their share of the net rents[.]” R.C. 2113.311(E) and (F).
{¶16} Regardless of which trust controlled, the sibling beneficiaries should have been
receiving distributions of rental income from the trust, but, years after Decedent’s death, the trust
had collected no rental income to distribute. As the sole owner of Hamad Tire, Charles
financially benefitted from the company’s failure to pay any rent to the trust.
{¶17} Given that the other beneficiaries and trustee of the trust had been litigating with
Charles over the unpaid rental income for nearly four years, the trial court could reasonably
conclude that there were unsettled claims between Charles and the estate that could become the
subject of litigation between Charles and “persons interested in the estate.” See R.C.
2113.18(A); R.C. 2113.22. Charles has failed to demonstrate that the trial court abused its
discretion by removing him as executor pursuant to R.C. 2113.18(A). The first assignment of
error is overruled.
Assignment of Error II
The trial court erred and abused its discretion in its appointment of an
administrator.
{¶18} This Court reached the merits of Charles’s first assignment of error because an
order removing a fiduciary is a final, appealable order. In re Estate of Nardiello, 10th Dist.
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Franklin No. 01AP-281, 2001 WL 1327178, * 3 (Oct. 30, 2001); see also In re Estate of
Howard, 9th Dist. Lorain No. 05CA008730, 2006-Ohio-2176 (reaching the merits but not
explicitly addressing the finality of the judgment). This Court lacks jurisdiction to address his
second assignment of error, however, because the appointment of an administrator is not final or
appealable. In re Estate of Thomas, 9th Dist. Summit No. 27177, 2014-Ohio-3481, ¶ 9-10. We
decline to address this assigned error for that reason.
III.
{¶19} Appellant’s first assignment of error is overruled. This Court did not address his
second assignment of error because that aspect of the trial court’s order is not final or appealable.
The judgment of the Summit County Court of Common Pleas, Probate Division, is affirmed.
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
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Costs taxed to Appellant.
JULIE A. SCHAFER
FOR THE COURT
CARR, J.
CALLAHAN, J.
CONCUR.
APPEARANCES:
THOMAS C. LOEPP, Attorney at Law, for Appellant.
JOHN RAMBACHER and MICHAEL KAHLENBERG, Attorneys at Law, for Appellee.
STEVEN HOBSON, II, Attorney at Law, for Appellee.
RICHARD HARRIS, III, Attorney at Law, for Appellee.
JACQUELINE MAHLAND and ROBERT MAGUIRE, Attorneys at Law, for Appellee.