In re Estate of Goubeaux , 2023 Ohio 647 ( 2023 )

[Cite as In re Estate of Goubeaux, 2023-Ohio-647.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
DARKE COUNTY
ESTATE OF :
LEONARD JOSEPH GOUBEAUX, :
aka LEONARD J. GOUBEAUX : C.A. No. 2022-CA-7
:
: Trial Court Case No. 20-1-034
:
: (Appeal from Common Pleas Court-
: Probate Division)
:
:
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OPINION
Rendered on March 3, 2023
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MARY E. WARRICK and WILFRID G. DUES, Attorneys for Appellants
SARAH G. WORLEY, Attorney for Appellee
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TUCKER, J.
{¶ 1} Four grandchildren of decedent Leonard J. Goubeaux appeal from the trial
court’s July 5, 2022 entry construing the decedent’s will to resolve a dispute regarding the
distribution of proceeds from the sale of the decedent’s Kentucky real estate.
{¶ 2} The grandchildren—Michael, Harrison, Jack, and Chase Detrick—first
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contend the trial court erred in declaring its July 5, 2022 entry to be an appealable order.
Although the grandchildren have appealed from the entry to protect their rights, they
assert that it does not qualify as a final order under R.C. 2505.02(B). Alternatively, if the
trial court’s July 5, 2022 entry is appealable, the grandchildren maintain that the trial court
erred in applying the doctrine of “deviation” to order the real-estate sale proceeds
distributed contrary to the terms of their grandfather’s will.
{¶ 3} We conclude that the trial court’s July 5, 2022 entry does not qualify as a final
order under R.C. 2505.02(B). Therefore, we lack jurisdiction to address the merits of the
entry, and the appeal must be dismissed.
I. Background
{¶ 4} Leonard Goubeaux died testate in November 2019. His will named his
children, Greg Goubeaux and Sandee Detrick, as co-executors. As relevant here, Item I
of the will provided for the payment of all debts of Leonard’s estate. Item II left a boat and
trailer to Sandee. Item III provided for real estate Leonard owned on Lake Cumberland in
Kentucky to be held in a trust for the benefit of Greg and Sandee for their lives. Greg and
Sandee also were to be trustees during their lives. Upon their death, Item III provided for
the use of the real estate to pass to Leonard’s grandchildren during their lives. Item III
additionally provided for the trust to terminate upon the occurrence of one of three events:
(1) the agreement of all the grandchildren to sell the real estate, (2) the death of the last
living grandchild, or (3) the existence of insufficient funds in the trust to pay the taxes and
other expenses of the real estate. Item III then provided: “Upon the termination of the
Trust, any proceeds remaining in said trust shall be divided equally among the
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grandchildren and their heirs per stirpes.” Finally, Item V of the will provided for “all of the
rest and residue” of Leonard’s real and personal property to be divided equally between
Greg and Sandee.
{¶ 5} Greg and Sandee began probating the will in January 2020. During the
course of those proceedings, they were required to sell the Lake Cumberland real estate
to satisfy a mortgage on the property and other debts. Greg and Sandee signed the sale
documents in their capacity as executors of Leonard’s estate. The sale occurred in
November 2020 and resulted in net proceeds of $190,722.55 to the estate. Thereafter, a
dispute arose regarding distribution of the proceeds. On several occasions, Greg,
Sandee, and the grandchildren attempted to resolve and settle their disagreement without
success. In November 2021, the parties’ respective counsel jointly asked the trial court to
schedule a pretrial conference and to provide direction regarding how to proceed. In a
December 2021 order, a magistrate acknowledged concerns about allegedly “ambiguous
language” in the will. The magistrate noted, however, that no complaint had been filed
raising any specific issues for the probate court to resolve. The magistrate declined to
schedule a hearing or provide any guidance in the absence of a motion or complaint
raising specific issues.
{¶ 6} The next two entries in the record are a March 2022 “pretrial brief” filed by
Greg and a May 2022 response filed by the grandchildren. In his filing, Greg argued that
the Lake Cumberland property never went into a trust. He claimed no trust was created
because he and Sandee were required to sell the real estate to satisfy Leonard’s debts.
Greg argued that the residuary clause in Item V of the will entitled him to one-half of the
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estate assets, including the net proceeds from the Lake Cumberland property.
Alternatively, assuming arguendo that a testamentary trust did exist and that it was funded
with the proceeds of the real-estate sale, Greg argued that he was entitled to funds equal
to a life-estate interest in the property.
{¶ 7} In their responsive brief, the grandchildren argued that the Lake Cumberland
property passed immediately into a trust upon Leonard’s death with title to the property
vesting in Greg and Sandee as trustees. The grandchildren argued that Greg and Sandee
necessarily sold the property in their capacity as both executors and as trustees. The
grandchildren also asserted that their own signatures had been obtained giving their
permission for the property to be sold. They argued that their signatures would have been
unnecessary if no trust existed. Finally, the grandchildren asserted that once the trust was
terminated and the real estate was sold, Item III of the will granted them the net proceeds
to be divided equally among themselves.
{¶ 8} In June 2022, while the foregoing briefs remained pending in the trial court,
the grandchildren filed a motion to have Greg removed as co-executor. They cited his
refusal to sign a final accounting that already had been signed by Sandee, their mother.
Greg opposed the motion, noting that his refusal to sign stemmed from the parties’ dispute
over disposition of the Lake Cumberland sale proceeds. Greg requested a hearing for the
trial court to construe the will.
{¶ 9} The next entry in the record is the trial court’s July 5, 2022 judgment entry.
The trial court found no need for a hearing. It noted that Leonard’s “plan for the Kentucky
property never came to pass” because it was sold to pay estate debts. The trial court
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found that “[a]ll parties (adult children and grandchildren) participated in the sale.” With
regard to the proceeds from the sale, the trial court reasoned:
Both briefs speak to the principle that the Court is to carry out the
intentions of the testator to the extent possible. Leonard J. Goubeaux’s
intent was for his land and cabin to be enjoyed by his children and
grandchildren. His planning and the specific terms of his trust never came
to pass due to circumstances out of his control. The debts of the estate
made it impossible to carry out the trust as intended.
Under the doctrine of deviation, a Court can direct or permit a
deviation from the terms of a trust where compliance is illegal or impossible,
or where owing to circumstances not known to the settlor and not
anticipated by him compliance would defeat or substantially impair the
accomplishment or purposes of the trust. Daloia v. Franciscan Health
(1997), 79 Ohio St.3d 98; Carnahan v. Johnson (1998), 127 Ohio App.3d
195. The Carnahan decision speaks to the principle that if trust assets are
liquidated, the sale proceeds are merely a substitute for the assets and
should be distributed as originally intended.
The intent of Leonard J. Goubeaux’s will was for his Kentucky
property to be enjoyed by his children and grandchildren, potentially for
decades to come. While that did not happen, it is more than obvious that
Leonard J. Goubeaux wanted the entire group of individuals to benefit from
the property. It would not be consistent with the will to completely exclude
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any party.
The Court finds that the appropriate solution is to award each party
its respective interest in the property as of the date of death of Leonard J.
Goubeaux. Life estate interests can be valued through guidance from the
Code of Federal Regulations and the Internal Revenue Service. Based
upon the said guidance and relevant I.R.S. actuarial tables, the life interest
for Greg K. Goubeaux would be 41.278 % (.41278), divided by 2 since the
life estate is shared with another individual. Thus, Greg K. Goubeaux’s
interest is 20.639 %. Similarly, Sandee Detrick’s interest is 40.313%
(.40313) divided by 2, or 20.1565%. The Court would then divide the
remainder among the four grandchildren (the valuations are explained
further in the exhibit attached to this Entry). The Court therefore finds that
the proceeds derived from the sale of assets in Item III of decedent’s will
shall be divided as follows:
Greg Goubeaux 20.639%
Sandy Detrick 20.1565%
Michael Detrick 14.801125%
Harrison Detrick 14.801125%
Jack Detrick 14.801125%
Chase Detrick 14.801125%
The Court will separately direct the deputy clerk to schedule a Status
Conference in 45-60 days. The time period is set forth so that any party can
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appeal this decision, if so desired. As such, no distribution shall be made
prior to the Status Conference unless the Court’s guidance resolves the
entire matter in which case the Court will approve final distribution upon the
written consent of all parties.
The Court will defer any ruling upon the Motion to Remove Co-
Executor pending the Status Conference.
July 5, 2022 Judgment Entry at 2-3.
{¶ 10} Shortly after the trial court’s ruling, the grandchildren moved for a hearing
to address various issues, and Greg moved for reconsideration of the trial court’s July 5,
2022 entry. For its part, the trial court filed a July 27, 2022 entry stating that it intended its
July 5, 2022 judgment entry “to be its final decision in this matter, and therefore a final
appealable order.” This appeal by the grandchildren followed.
II. Analysis
{¶ 11} We begin our analysis by noting that an appellate court has jurisdiction to
review only final orders or judgments of lower courts. Section 3(B)(2), Article IV, Ohio
Constitution; R.C. 2505.02. We have no jurisdiction to review an order or judgment that
is not final, and we must dismiss an appeal taken therefrom. Gen. Acc. Ins. Co. v. Ins.
Co. of N. Am., 44 Ohio St.3d 17, 20, 540 N.E.2d 266 (1989). Final orders are defined in
R.C. 2505.02(B).
{¶ 12} In their first assignment of error, the grandchildren challenge the trial court’s
determination that its July 5, 2022 entry is an appealable order. Although they have
appealed from the entry to protect their rights, they contend it is not a final order under
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R.C. 2505.02(B). The grandchildren claim the trial court’s entry does not satisfy any of
the definitions of a final order under the statute. They note that estate assets have not
been distributed and no final accounting has been filed. Finally, they point out that their
motion for a hearing to address unresolved issues remains pending along with their
motion to remove Greg as co-executor and Greg’s own motion for reconsideration, which
addresses the trial court’s calculation of the life-estate percentage to which he is entitled.
The grandchildren argue that any proposed distribution based on the trial court’s July 5,
2022 entry can be challenged by the filing of an exception after a final accounting.
{¶ 13} In response, Greg contends the trial court’s July 5, 2022 entry is a final order
pursuant to R.C. 2505.02(B)(2), which defines such an order as one “that affects a
substantial right made in a special proceeding[.]” He argues that probate-court matters
are “special proceedings,” that his entitlement to a distribution under the will is a
substantial right, and that the trial court’s entry affects the substantial right. On the last
issue, Greg contends the court-ordered division of life-estate interests and remainders
will be required in a final accounting. Therefore, he reasons that he will have no
opportunity to litigate the issue during the hearing on the final account. He also argues
that beneficiaries may spend the money after a distribution and prior to resolution of an
appeal.
{¶ 14} Upon review, we conclude that the July 5, 2022 entry from which the
grandchildren have appealed is not a final order under R.C. 2505.02(B). For present
purposes, we accept that proceedings in probate court generally qualify as “special
proceedings” under the statute. We also do not doubt that any rights granted under the
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decedent’s will qualify as “substantial rights.” The trial court’s order is not immediately
appealable, however, because it does not affect a substantial right.
{¶ 15} An order affects a substantial right only where an immediate appeal is
required to protect the right. Quesinberry v. Quesinberry, 2021-Ohio-4680, 185 N.E.3d
1136, ¶ 24 (2d Dist.). In other words, “[a]n order affecting a substantial right is one that, if
not immediately appealable, would foreclose appropriate relief in the future.” State v.
Zimpfer, 2d Dist. Montgomery No. 27705, 2018-Ohio-2430, ¶ 11, citing Bell v. Mt. Sinai
Med. Ctr., 67 Ohio St.3d 60, 63, 616 N.E.2d 181 (1993). “[T]he mere existence or
implication of a substantial right in a case is insufficient to create a final order.” Crown
Servs., Inc. v. Miami Valley Paper Tube Co., 162 Ohio St.3d 564, 2020-Ohio-4409, 166
N.E.3d 1115, ¶ 16, citing Bell at 63. The situation must be such that absent an immediate
appeal “the impact of the order upon the appellant’s legal rights cannot effectively be
examined by the appellate court and appropriate relief granted if warranted.” State v.
Chalender, 99 Ohio App.3d 4, 7, 649 N.E.2d 1254 (2d Dist.1994).
{¶ 16} Here the parties had two avenues available if they wanted to appeal
immediately from an order of the trial court construing the decedent’s will. First, R.C.
2107.46 authorizes a fiduciary or beneficiary to file a separate action in probate court to
obtain judicial guidance concerning a will, the property to be administered, or the rights
of the parties involved. Second, the same objective can be accomplished by filing a
separate declaratory-judgment action in probate court. See, e.g., Sessions v. Skelton,
163 Ohio St. 409, 414-15, 127 N.E.2d 378 (1955); 1 Baldwin’s Oh. Prac. Merrick-Rippner
Prob. L. § 44:2.
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{¶ 17} A final order construing a decedent’s will under either R.C. 2107.46 or the
declaratory-judgment act would dispose of that action and would have preclusive effect
in related probate proceedings. Tiedtke v. Tiedtke, 91 Ohio App. 442, 447-448, 108
N.E.2d 578 (6th Dist.1951), aff’d, 157 Ohio St. 554, 106 N.E.2d 637 (1952). Such an order
would be appealable immediately. Beyoglides v. Elmore, 2d Dist. Montgomery No. 24905,
2012-Ohio-3979, ¶ 11 (recognizing that a probate-court order construing a will in an action
filed under R.C. 2107.46 is a final order).
{¶ 18} In the present case, however, the parties did not proceed through a
separate action under R.C. 2107.46 or the declaratory-judgment act. Instead, they raised
their arguments about construction of the decedent’s will in the will-probate proceeding
itself. The trial court undoubtedly had authority to resolve the controversy in that context,
as R.C. 2101.24(A)(1)(k) vests a probate court with exclusive jurisdiction to construe wills.
But unlike an order construing a will under R.C. 2107.46 or the declaratory-judgment act,
the trial court’s July 5, 2022 entry is interlocutory because the probate action remains
pending with unresolved issues.
{¶ 19} Finally, we are unconvinced that the trial court’s interlocutory ruling
regarding disposition of the net proceeds from the Lake Cumberland property affects a
substantial right. Under Ohio law, assets from a testate decedent’s estate may be
distributed in at least three ways. First, an executor has discretion to make a distribution
at any time without a court order of distribution. In re Estate of Mason, 109 Ohio St.3d
532, 2006-Ohio-3256, 849 N.E.2d 998, ¶ 21, citing R.C. 2113.53(A). That appears
unlikely to happen here given the dispute between co-executors Greg and Sandee
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regarding proper distribution. Second, a beneficiary may file an application for an order
of distribution of estate assets. If a probate court makes a distribution pursuant to such
an application, the “order of distribution shall have the effect of a judgment” and “may be
reviewed upon appeal[.]” R.C. 2109.36. Finally, assets may be distributed in connection
with a final account, distribution, and closure of the estate. Under R.C. 2109.32(A),
“[e]very fiduciary’s account * * * shall be set for hearing before the probate court.” The
probate court “shall inquire into, consider, and determine all matters relative to the
account and the manner in which the fiduciary has executed the fiduciary’s trust * * * and
may order the account approved and settled or make any other order as the court
considers proper.” Id. Once again, “[t]he order of the probate court upon the settlement
of a fiduciary’s account shall have the effect of a judgment[.]” R.C. 2109.35; see also In
re Estate of Perry, 12th Dist. Butler No. 2007-03-061, 2008-Ohio-351, ¶ 47 (recognizing
that even rulings on exceptions to a fiduciary’s account are not immediately appealable
as future relief is not foreclosed because an appeal may be taken from a probate-court
order actually approving or settling an account).
{¶ 20} Here we discern no reason why an effective appeal cannot be taken from a
future distribution of assets, either pursuant to a court order on the application of a
beneficiary or in conjunction with a court-approved final account, distribution, and closure
of the estate. In either circumstance, Ohio law recognizes that the applicable order shall
have the effect of a judgment.
{¶ 21} Having determined that the trial court’s July 5, 2022 entry is not a final order
under R.C. 2505.02(B)(2) or any other portion of the statute, we sustain the
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grandchildren’s first assignment of error.
III. Conclusion
{¶ 22} The above-captioned appeal is dismissed for lack of an appealable order.
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EPLEY, J. and LEWIS, J., concur.