Bennett v. Estate of James Kelly King ( 2022 )

THE STATE OF SOUTH CAROLINA
In The Supreme Court
Jacquelin S. Bennett and Kathleen S. Turner as Personal
Representatives of the Estate of Jacquelin K. Stevenson,
Petitioners,
v.
Estate of James Kelly King and Genevieve S. Felder,
Respondents.
Appellate Case No. 2020-000901
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
Appeal from Charleston County
Tamara C. Curry, Probate Court Judge
Opinion No. 28099
Heard October 13, 2021 – Filed June 15, 2022
REVERSED AND REMANDED
Daniel Scott Slotchiver, Stephen Michael Slotchiver, and
Andrew Joseph McCumber, all of Slotchiver & Slotchiver,
LLP, of Mount Pleasant, for Petitioners.
George R. McElveen, III, of McElveen & McElveen, of
Columbia, for Respondents.
JUSTICE HEARN: In this case we decide whether the broad powers granted to a
personal representative in a will extend to distributions under the will's residuary
clause, and whether the personal representatives' proposed distribution constituted a
breach of their fiduciary duty. The probate judge, the circuit court, and the court of
appeals all determined the broad powers did not govern distributions of the residual
estate. Also, the court of appeals affirmed the probate court's finding that the
personal representatives' conduct constituted a breach of fiduciary duty. We hold
the court of appeals erred and reverse.
FACTS AND PROCEDURAL HISTORY
This is a dispute between two daughters and a stepdaughter of the testatrix,
Jacquelin K. Stevenson, who died on September 17, 2007. She was survived by six
children: four from her marriage to Thomas Stevenson, a son by a former marriage,
and a stepdaughter.1 Thomas Stevenson predeceased her in 1988, leaving her as the
sole beneficiary of two trusts created by his will. The residual beneficiaries of the
two trusts were her children by Stevenson—two sons, Thomas Stevenson III and
Daniel Stevenson II, and two daughters, Kathleen Stevenson Turner and Jacquelin
Stevenson Bennett. She died with a Last Will and Testament dated October 21,
1996, which devised all real property in her estate to her four children by Stevenson
and made bequests of $400,000 to her son by her former marriage, James Kelly King,
and her stepdaughter, Genevieve Stevenson Felder.2 While the step-children were
left monetary bequests, the two daughters of the marriage received a house on
Wadmalaw Island, South Carolina, and the two sons of the marriage were left a home
located in Lake Summit, North Carolina. In addition to the Wadmalaw Island and
Lake Summit properties, the testatrix also owned two properties not mentioned in
the will: one lot on Edisto Island ("Bailey's Island") and another in Mount Pleasant
1
The testatrix married her second husband, Thomas Stevenson, when she was 24
years old, with each party bringing a child from a former marriage into the union.
2
Genevieve Felder, the Respondent, was 12 years old at the time of her father's
second marriage.
("Paradise Island"). 3 This dispute centers around the Lake Summit property, used
by the family as a vacation home and rental. 4
This litigation concerns only the two daughters of Thomas Stevenson by the
testatrix and his daughter by a former marriage. The testatrix's two sons by
Stevenson—Thomas and Daniel—stole millions from the estate while co-trustees
from 1996 to 2006, thereby forfeiting any rights they had to take under their mother's
will and leaving Jacquelin and Kathleen as the personal representatives.5 Her son
by a former marriage is not involved in this action because his interest in the
residuary estate was bought out by his two half-sisters and his stepsister.
The theft by Thomas and Daniel Stevenson left the estate with insufficient
monies remaining to fund the specific bequests of $400,000 each to the two
stepchildren of the marriage. Further, the bequest of the Lake Summit property to
the two sons failed, sending it to the residuary, and because no amendment by codicil
preceded the testatrix's demise, the after acquired properties of Bailey's Island and
Paradise Island passed through the residuary as well. The residuary clause provided
that "[a]ll the rest, residue and remainder of my property and estate . . . I give, devise
and bequeath to Kathleen S. Turner, Jacquelin S. Bennett, Thomas C. Stevenson, III,
Daniel R. Stevenson, James Kelly King, and Genevieve S. Felder in equal shares."
The probate court, the circuit court, and the court of appeals all interpreted this to
mean in equal ownership interests rather than equal monetary values.
Just as the language of the residuary clause is relevant to the resolution of this
dispute, so is section 10 of the will, which sets forth the powers of the personal
representatives and expressly states the testatrix's intention to give broad discretion
and flexibility to her personal representatives. Section 10.6 grants the personal
representatives power to make distributions, "[w]ithout the consent of any
beneficiary . . . in cash or in specific property, real or personal, or an undivided
3
The Lake Summit property had been in the family for decades while the Bailey's
Island and Paradise Island properties were acquired after the execution of the will.
4
At the time the property was acquired by the Stevensons, Petitioners were minor
children and Genevieve was 25 or 26 years old and married.
5
The facts related to Thomas and Daniel's theft can be found in this Court's
opinion in Bennett v. Carter, 421 S.C. 374, 378-79, 807 S.E.2d 197, 199-200
(2017).
interest, or partly in cash and partly in such property, . . . without making pro-rata
distributions of specific assets."
As personal representatives, Petitioners had the residuary properties
appraised. Bailey's Island appraised for $725,000; Lake Summit for $1,100,000;
and Paradise Island for $390,000. Petitioners then proposed a distribution of these
three properties, splitting the Lake Summit property between themselves and
allocating the remaining properties between the three parties, with Respondent
receiving the majority of the Bailey's Island property. The appraised values assigned
to the respective properties are not in dispute, nor is the fact that the proposed
distributions are of equal monetary value; rather, only the manner in which
Petitioners propose to allocate the properties is contested. Specifically, Respondent
objects to not receiving an equal share of the Lake Summit property.
Respondent argued before the probate court that the proposed distribution
was not fair and equitable, and that Petitioners, as personal representatives, were
required to consider certain intangibles in dividing the properties, such as the fact
that the Lake Summit property earned rental income and could be used, while the
Bailey's Island and Paradise Island properties were unimproved lots. Petitioners,
conversely, argued that these intangibles were taken into account in the appraisal of
the properties; that it was stipulated that the appraisal was correct; that the proposed
distribution was equal; and, that section 10.6 of the will afforded them broad powers
to distribute the assets of the estate.
In its order, the probate court ruled the three parties should each receive an
equal ownership interest in all three pieces of property. While the court noted
Petitioners' argument that the terms of the will gave them broad powers to distribute
the properties so that each received an equal monetary share, section 10.6 of the will
was not even mentioned in the order. Instead, the court relied on the residuary clause
and held that the language the property should be distributed "in equal shares" meant
each party should receive an equal ownership interest. In their motion to alter or
amend, Petitioners argued, inter alia, that the specific terms of section 10.6 of the
will afforded them broad discretionary powers to distribute the residuary assets of
the estate. In its order denying the motion to reconsider, the probate court again
relied on the language of the residuary clause and held that the testatrix's intent was
to distribute property passing through the residuary estate in equal ownership shares.
With respect to sections 10.1 and 10.6 of the will, the court held the broad powers
granted to the personal representatives therein applied only to distributions of a
specific asset and did not govern distributions under the residuary clause.
On appeal, the circuit court upheld the order of the probate court, accepting
Respondent's argument that notwithstanding the broad powers granted to the
personal representatives by the will, Petitioners were required to treat all
beneficiaries equitably and fairly and to include "non-economic considerations such
as sentimental value, utility, and other intangible factors" in their proposed
distribution. Specifically, the circuit court held that Petitioners' proposed
distribution "serves no apparent purpose other than to favor themselves, allowing
them to 'cherry pick' among the assets at the expense of the remaining beneficiary,
which fails the test of equity and good faith." The circuit court upheld the order of
the probate court on a breach of fiduciary duty by Petitioners.
Petitioners appealed to the court of appeals, which affirmed in an unpublished
opinion. Bennett v. Est. of James Kelly King, Op. No. 2019-UP-412 (S.C. Ct. App.
filed Dec. 31, 2019). The court of appeals held there was evidence in the record
that the personal representatives' proposed allocation of the residuary estate into
shares of equal monetary value "would be inequitable because there is no reasonable
purpose for their proposal." Additionally, the court of appeals held that "[a] plain
reading of the Will supports the probate court's contention that Article 10.6 referred
to the Will's grant of specific property, not the Residuary Estate." We granted
certiorari and now reverse.
ISSUE
Whether the court of appeals erred in affirming the probate court's decision to
reject the personal representative's proposal and instead dividing the Lake Summit
property in pro-rata ownership shares? 6
STANDARD OF REVIEW
Throughout this litigation, the parties have assumed this was an action at law
and that an "any evidence" standard of review controlled. However, an appellate
court is not bound by the parties' characterization of an action. Moreover, the circuit
court clearly reviewed this case de novo, making findings of fact based on its own
view of the evidence. Thereafter, the court of appeals viewed this as a will
construction case and applied the "any evidence" standard. We acknowledge that
ordinarily, an action to construe a will is an action at law, and appellate review is
6
Petitioners raise multiple issues on appeal, but we restate the dispositive issue into
a single question before the Court.
limited to correcting errors of law. Epworth Children's Home v. Beasley, 365 S.C.
157, 164, 616 S.E.2d 710, 714 (2005); Kemp v. Rawlings, 358 S.C. 28, 34, 594
S.E.2d 845, 848 (2004). However, an action for breach of fiduciary duty is either an
action at law or in equity depending on the remedy sought. Verenes v. Alvanos, 387
S.C. 11, 18, 690 S.E.2d 771, 774 (2010). In Verenes, we said:
Characterization of an action as equitable or legal depends on the
appellant's "main purpose" in bringing the action. The main purpose of
the action should generally be ascertained from the body of the
complaint. However, if necessary, resort may also be had to the prayer
for relief and any other facts and circumstances which throw light upon
the main purpose of the action.
Verenes, 387 S.C. at 16, 690 S.E.2d at 773 (citations omitted) (internal quotation
marks omitted); see also Bell v. Mackey, 191 S.C. 105, 119-20, 3 S.E.2d 816, 822
(1939) ("[T]he nature of the issues as raised by the pleadings or the pleadings and
proof, and character of relief sought under them, determines the character of an
action as legal or equitable."). Therefore, the law is clear that an action at law can
be transformed into an action in equity if the relief sought is equitable.
Discerning the correct standard of review in this case requires us to determine
whether Respondent's objection to the proposed distribution turns on the
construction of the will, or whether she merely prefers an alternate distribution in
the name of equity. We believe it is the latter. It is clear that Respondent did not
seek money damages but instead wanted a share in a specific piece of property. The
will needs no "construction" because it's meaning is clear. This is a proceeding to
determine whether the personal representatives have fulfilled their duty to distribute
property to devisees under a clearly worded will. The dispute is over the personal
representatives' distribution of specific residuary property, not over what the words
in the will mean. Further, before the probate court, Respondent argued "principles
of equity control" and likened this action to a partition action, which under our
jurisprudence, sounds in equity. Laughon v. O'Braitis, 360 S.C. 520, 524, 602 S.E.2d
108, 110 (Ct. App. 2004); see also Wolf v. Hayes, 161 S.C. 293, 294, 159 S.E. 620,
621 (1931); Windham v. Howell, 78 S.C. 187, 191, 59 S.E. 852, 853 (1907) ("It is
settled by many cases in this state that this [partition action] is an equity cause.").
Respondent's claim could also be viewed as similar to one seeking to impose a
constructive trust because she requests an order requiring Petitioners to deed the
properties in a manner that satisfies equity. Accordingly, we believe the correct
standard of review is de novo.
However, in the final analysis, the result we reach is not driven by the standard
of review, because under either the more limited "any evidence" standard or the more
generous de novo standard, Respondent's claims fail. 7 As we will explain more fully
below, all the courts which heard this matter erred by elevating one provision of the
will over another instead of construing them together, in harmony with one another,
and all their decisions were infected by a common error of law—that Section 10.6
of the will applied only to specific devises and not to the residuary clause.
Additionally, all of the courts essentially concluded that the proposed distribution
was not fair, and thus constituted a breach of fiduciary duty. Therefore, in this
particular case, the standard of review, while intellectually interesting, does not
matter. See generally McCall v. Finley, 294 S.C. 1, 4, 362 S.E.2d 26, 28 (Ct. App.
1987) ("Appellate courts recognize—or at least they should recognize—an
overriding rule of civil procedure which says: whatever doesn't make any difference,
doesn't matter.").
DISCUSSION
The touchstone of our analysis must begin with discerning the intention of the
testatrix. Our task is not to consider the will piecemeal, nor to elevate one provision
above another, but rather to give due weight to all the language in the will,
harmonizing the will's provisions with one another. Epworth Children's Home v.
7
We disagree with the dissent that we have abandoned the standard of review in will
construction cases. This case is before us in an odd posture, because the alleged
"breach" of fiduciary duty has not taken place. Under our case law, a plaintiff in a
breach of fiduciary duty action must prove (1) the existence of a fiduciary duty owed
to the plaintiff, (2) a breach of that fiduciary duty by the defendant, and (3) damages
proximately flowing from the breach. RFT Mgmt. Co. v. Tinsley & Adams L.L.P.,
399 S.C. 322, 335-36, 732 S.E.2d 166, 173 (2012). Here, the distribution proposed
by Petitioners was, by definition, a proposal, and the distribution has not
occurred. Instead, Respondent's plea is simply one (1) to enjoin an allegedly
inequitable distribution and (2) to order another, more equitable, distribution. That
plea sounds in equity. Overall, the standard of review will remain "any evidence"
in the vast majority of cases involving the construction of language in a will, but
here, because the language of the will is not in dispute and because Respondent
requests an award of a specific piece of property, we believe the tenets of Verenes
require us to use a de novo standard.
W.F. Beasley, 365 S.C. 157, 166, 616 S.E.2d 710, 715 (2005); Lemmon v. Wilson,
204 S.C. 50, 69, 28 S.E.2d 792, 800 (1944) ("An interpretation that fits into the
whole scheme or plan of the will is most apt to be the correct interpretation of the
intent of the testator."). Moreover, it is black letter law that when a portion of a will
is invalid, it does not invalidate other provisions. See 96 C.J.S. Wills § 964 (2021).
Therefore, simply because some bequests go through the residuary clause, section
10.6 remains in effect. Accordingly, the residuary clause of the will should not be
read in isolation nor should it be elevated above other provisions of the will. Section
10.6 of the will is equally important and must be honored.
Section 10.6 affords the personal representatives broad powers to carry out
the terms of the will. Specifically, that provision empowers the personal
representatives to make distributions under the will "without the consent of any
beneficiary" and "without making pro-rata distributions of specific assets." There is
nothing in the will nor in our jurisprudence that states these broad powers are limited
to specific bequests. Nevertheless, the probate court held section 10.6 governed only
the distribution of specific assets, and did not apply to the residuary estate. This
conclusion is exactly backwards. The personal representatives were bound to carry
out the specific bequests in the will and, despite the broad grant of authority in
section 10.6, they had no discretion to alter them. Rather than not applying to the
distribution of the residuary estate, it is clear this is precisely where those broad
powers could be exercised. Indeed, section 10.6 would be meaningless if the broad
powers of the personal representatives did not apply to the residuary estate. This
error of law by the probate court, affirmed by the circuit court and the court of
appeals, negated the intent of the testatrix to afford broad authority to the personal
representatives and infected the entire proceedings. Instead of elevating the
provisions of the residuary clause over section 10.6, the two sections of the will
should be harmonized. When that is done, it is clear the personal representatives
had the power to distribute the residuary estate, without the consent of any
beneficiary, and without making pro-rata distributions of specific assets. This is
precisely what they did, and absent a breach of fiduciary duty, their proposed
distribution should be upheld. 8
8
We also disagree with the court of appeals' conclusion that because title to the
property immediately vested upon the decedent's death, Felder already had title, and
therefore, the personal representatives were required to award her a pro-rata share of
the Lake Summit property. This conclusion ignores the fact that where title vests is
Nor can we accept the view that the probate court's finding of a breach of
fiduciary duty must be upheld under the limited standard of review posited by the
dissent. Even assuming the "any evidence" standard of review applied to this matter,
Respondent's claims fail. The probate court determined the proposed distribution
was not equitable, and the circuit court affirmed by improperly placing the burden
of proving the reasonableness of the proposed distribution on Petitioners, stating:
On its face, the proposed distribution scheme is not related to any
apparent reasonable purpose. The unequal distribution of Bailey's
Island can only be interpreted so as to allow the Personal
Representatives to retain Lake Summit for themselves and exclude
Respondent. The record is devoid of any assertion or explanation as to
what other purpose the proposed distribution scheme might serve, or
why it is in fact "reasonable."
The court of appeals agreed with the probate court that section 10.6 did not
apply to the residuary estate, stating that "[a] plain reading of the Will supports the
probate court's contention that [Section] 10.6 referred to the Will's grant of specific
property, not the Residuary Estate." While, like the probate and the circuit courts,
the court of appeals did not specify the precise fiduciary duty breached by
Petitioners, it nevertheless held "there is evidence in the record that the Personal
Representatives' proposed allocation of the Residuary Estate into shares of equal
monetary value would be inequitable because there is no reasonable purpose for their
proposal," thus perpetuating the error in reversing the burden of proof in this case.
subject to the personal representative's powers in administering the estate. See S.C.
Code Ann. § 62-3-101 (2022) (noting that in a testate matter, titled "devolves to the
persons to whom it is devised by his last will" subject to "the purposes of
administration, particularly the exercise of the powers of the personal
representative . . . ."). Additionally, the court of appeals erred in concluding the
parties' prior settlement agreement eliminated the personal representatives'
discretion under the will. Rather, the parties simply agreed that if they could not
reach an agreement as to the last remaining properties, they would return to the
probate court. This is exactly what occurred, as the personal representatives sought
approval of their proposed distribution. While Felder disagreed with the proposed
allocation, nothing in the agreement purported to nullify the provisions in the will,
including Section 10.6.
Even assuming there is at least some evidence supporting the probate court
and that the more limited standard of review applied—both of which we reject—that
finding would not be entitled to deference because it was infected by the error of law
that section 10.6 of the will applied only to specific bequests and not to the residuary
estate.9 Section 10.6, which should be given effect and harmonized with the other
provisions of the will, clearly affords the personal representatives broad authority to
make distributions of specific property without regard to the consent of the
beneficiary and without making pro-rata distributions. The burden was on
Respondent to show that the proposed distribution was unfair or inequitable, which
she did not do and likely could not do in light of her stipulation that the proposed
distribution was of equal monetary value. As beneficiary, she was entitled to nothing
more than a monetary equal distribution of the residual estate. We also note that the
behavior exhibited by personal representatives found to have breached their
fiduciary duty looks nothing like what we see here. See generally Turpin v. Lowther,
404 S.C. 581, 745 S.E.2d 397 (Ct. App. 2013) (finding a breach of fiduciary duties
where personal representative of estate secretly negotiated with third-party for the
purchase of property in which beneficiaries had an interest); Moore v. Benson, 390
S.C. 153, 163, 700 S.E.2d 273, 278-79 (Ct. App. 2010) (finding a breach of fiduciary
duty where trustee secretly looted her father's retirement account and used the funds
to purchase his real property). Conversely, where a personal representative acts in
good faith, the distribution to beneficiaries is likely to be upheld. See generally
Wheeler v. Est. of Green, 381 S.C. 548, 673 S.E.2d 836 (Ct. App. 2009) (holding
personal representative did not breach her fiduciary duty to beneficiaries by
accepting one offer for real estate rather than accepting a subsequent higher offer
containing contingencies).
9
We disagree with the dissent that it is incorrect to conclude that the probate court's
breach of fiduciary duty finding was infected by an error of law. While it is true that
the original probate court order did not mention section 10.6, Petitioners clearly
raised that provision to the probate court and subsequently filed a motion to
reconsider once the court failed to address it. Indeed, the original order's silence
regarding section 10.6 bolsters our position that the court erred because it failed to
address one of the key provisions in the will. Moreover, once the court actually
considered section 10.6 in an amended order, it did so erroneously by concluding
that provision did not apply.
We also cannot accept the argument that sentimental value and other
intangibles should be permitted to defeat the proposed distribution because this
would place an untenable burden on personal representatives and provide an
unworkable framework going forward. In the face of the broad authority granted to
the personal representatives by section 10.6, a beneficiary should not be heard to
object to a proposed distribution which is equal in terms of monetary value merely
because he or she does not like it and would prefer a different distribution.
Moreover, even if it were proper to consider the sentimental value and "other
intangibles" urged by Respondent, it is difficult to see how such an analysis would
benefit Respondent, who was an adult when the prized Lake Summit property was
even acquired. Petitioners, on the other hand, as children of the Stevenson marriage,
grew up spending summers at Lake Summit.
Therefore, we reverse the court of appeals and remand to the probate court to
approve the distribution proposed by the Petitioners.
REVERSED AND REMANDED.
BEATTY, C.J., FEW and JAMES, JJ., concur. KITTREDGE, J., dissenting in
a separate opinion.
JUSTICE KITTREDGE: As a practical matter, the entirety of this dispute
centers on who receives the Lake Summit vacation home and adjoining lots in
Henderson County, North Carolina. As a legal matter, many twists and turns are
encountered in answering the question. There is much I agree with in the Court's
majority decision. I agree with the majority that the Will did grant the personal
representatives broad authority to distribute the residuary estate and that, as the
majority acknowledges, "absent a breach of fiduciary duty, their proposed
distribution should be upheld." I respectfully dissent on the ultimate outcome
because, unlike the majority, I am firmly persuaded there is evidence to support the
probate court's finding that the personal representatives breached their fiduciary
duty. As a result, I would affirm the decision of the court of appeals as modified.
I.
Jacquelin K. Stevenson died in 2007. The testatrix's Will named her daughter,
Petitioner Kathleen S. Turner, and her son, Thomas Stevenson III, as co-personal
representatives of her estate. The Will named six beneficiaries—the testatrix's five
biological children and one stepchild. Petitioners and Respondent are half-sisters.
It was the intent of the testatrix for her two biological daughters, Petitioners Turner
and Jacquelin S. Bennett, to receive the Wadmalaw Island property, valued at
approximately $1.5 million. The other prized asset, the Lake Summit property,
was devised to the biological sons from her second marriage, Thomas and Daniel
Stevenson. The Lake Summit vacation home and adjoining lots were valued at
approximately $1.1 million. The testatrix's biological son from her first marriage,
James Kelly King, and her stepchild, Respondent Genevieve S. Felder, received
monetary bequests. Respondent Felder was bequeathed $400,000.
After the testatrix executed her Will, she acquired two additional unimproved
properties. These properties are known as the Bailey's Island property and the
Paradise Island property. Because these two properties were acquired after the
Will's execution, these properties passed pursuant to the residuary clause.
The testatrix's carefully crafted estate plan quickly went awry. As the majority
notes, sons Thomas and Daniel raided the estate and stole millions of dollars. Not
only was the testatrix's estate plan thwarted, her sons were ousted, which included
the removal of Thomas Stevenson III as a personal representative. Petitioner
Bennett was substituted as a co-personal representative.
Petitioners received the valuable Wadmalaw Island property. According to the
majority opinion, Respondent Felder did not receive her $400,000 bequest due to
the sons' looting of the estate. Moreover, because the sons were ousted, they were
prohibited from inheriting the Lake Summit property. The Lake Summit, Bailey's
Island, and Paradise Island properties passed through the residuary.
When the dust settled in the probate court, there were three beneficiaries—
Petitioners, who served as the personal representatives, and Respondent.
Petitioners, as the personal representatives, awarded themselves jointly the Lake
Summit property and awarded Respondent a greater share of the Bailey's Island
property to make up the difference. Petitioners also awarded themselves an
interest in the Bailey's Island and Paradise Island properties, splitting the Paradise
Island property equally between Petitioners and Respondent. It also appears
Petitioners proposed to pay Respondent an additional sum of money to, as they
contended, equalize the overall division.
Respondent argued that Petitioners' self-dealing, under these circumstances,
amounted to a breach of their fiduciary duty. The probate court agreed with
Respondent, finding Petitioners proposed division would breach their fiduciary
duty. As a result, the probate court ordered an equal distribution of all residuary
assets, including the Lake Summit property. On appeal, the circuit court and court
of appeals affirmed, determining that the finding of breach of fiduciary duty was
supported in the record. Bennett v. Estate of King, Op. No. 2019-UP-412 (S.C. Ct.
App. filed Dec. 31, 2019). I agree with that assessment.
II.
Before addressing the breach of fiduciary duty finding, I briefly note my agreement
with the majority opinion on the other issues. Of key significance are the broad
discretionary powers granted to the personal representatives by Article 10.6 of the
Will. This broad authority most assuredly extended to the residuary estate
distributions. In this regard, the personal representatives generally had the
authority to distribute the residuary assets as they saw fit, including a non-pro rata
distribution. This broad authority, however, had limits. The parameters of those
limits are defined by the fiduciary duty the law imposes on personal
representatives to act as fiduciaries for all beneficiaries. It is on the breach of
fiduciary duty issue, as well as the appropriate standard of review under which to
review that issue, where the majority and I part company.
A.
My first concern with the majority opinion is its haste to cast aside the "any
evidence" standard of review. Petitioners acknowledge in their brief that "[t]his
case involves the construction of a will[,] which is an action at law." See Epworth
Child.'s Home v. Beasley, 365 S.C. 157, 164, 616 S.E.2d 710, 714 (2005) ("An
action to construe a will is an action at law."); Kemp v. Rawlings, 358 S.C. 28, 34,
594 S.E.2d 845, 848 (2004) (same); NationsBank of S.C. v. Greenwood, 321 S.C.
386, 392, 468 S.E.2d 658, 662 (Ct. App. 1996) (stating a case involving the
construction of a will is an action at law). Respondent concurs with the "action at
law" characterization. Moreover, we are presented with a factual finding—breach
of fiduciary duty—in an action at law. As such, we are constrained by the "any
evidence" standard of review. See, e.g., In re Howard, 315 S.C. 356, 361, 434
S.E.2d 254, 257 (1993) ("If the proceeding in the probate court is in the nature of
an action at law, [an appellate] court may not disturb the probate court's findings of
fact unless a review of the record discloses there is no evidence to support them.");
In re Estate of Hicks, 284 S.C. 462, 464, 327 S.E.2d 345, 347 (1985) (reviewing
the record to determine "whether there is any evidence which reasonably supports
the factual findings of the judge" (citation omitted)).
The majority counters that, despite the parties' characterization of the action, this is
really an action in equity. As for the newly-asserted de novo standard of review,
the majority cites to Verenes v. Alvanos, 387 S.C. 11, 690 S.E.2d 771 (2010).
Verenes includes the familiar refrain that the characterization of an action as legal
or equitable depends on the "main purpose" of the action. Id. at 16, 690 S.E.2d at
773 (citation omitted). Verenes dealt with the construction of a charitable trust.
One party claimed the action was legal and requested a jury trial; the other party
resisted the jury trial request on the basis that the main purpose of the action was
equitable. The characterization of the action as legal or equitable was the disputed
issue on appeal. This Court noted that "[t]rusts have long and broadly been a field
for the jurisdiction of equity." Id. (quoting Epworth Orphanage v. Long, 199 S.C.
385, 389, 19 S.E.2d 481, 482 (1942)). The main purpose of the action was
determined to be equitable because the plaintiff sought equitable relief in the form
of restitution and disgorgement.
The majority finds the main purpose of this will contest is equitable because
Respondent "wanted a share in a specific piece of property." An action involving
the construction of a will frequently involves a hopeful beneficiary wanting a
specific piece of property, which has never before caused the Court to view the
action as one in equity. My view is in line with that of the parties and this Court's
prior decisions—this is a legal action to construe a will. Even the majority states
the "touchstone of our analysis must begin with discerning the intention of the
testatrix." In sum, I reject the majority's effort to revise the prior proceedings and
procedural history to avoid the mandated "any evidence" standard of review. I
choose to review the case on the basis of the question presented by Petitioners on
which we granted certiorari—whether there is any evidence to sustain the probate
court's finding that Petitioners breached their fiduciary duty to Respondent.
B.
I turn now to the breach of fiduciary duty finding. I disagree with the majority's
contention that a factual finding of breach of fiduciary duty is not entitled to
deference because that finding was infected by the probate court's error in not
applying Article 10.6 of the Will to afford Petitioners broad authority to distribute
the residuary estate. While I agree with the majority that the probate court erred in
refusing to apply Article 10.6 to the residuary estate, I view the finding of breach
of fiduciary duty as a separate finding of fact that is entitled to deference. In fact,
the timing of the finding indicates it must have been separate from the probate
court's analysis of the import of Article 10.6. Specifically, the probate court made
the breach of fiduciary duty finding in its original order, which the majority
acknowledges did not mention Article 10 of the Will. In fact, the error of law by
the probate court with respect to Article 10.6 did not occur until its order denying
Petitioners' motion to reconsider. Thus, the probate court's finding of breach of
fiduciary duty was unrelated to the error of law, for such error had not yet
occurred. 10
Contrary to the majority's assertion that all three lower courts committed this same
error of law, 11 the circuit court undoubtably recognized that Article 10.6 of the
10
Indeed, the probate court correctly acknowledged at the hearing before it that
Article 10.6 of the Will "gives [Petitioners] broad powers." As Petitioners pointed
out in their motion to reconsider, the probate court simply "disagree[d] that
Petitioners[] ha[d] the absolute discretion in dividing the property of the
[testatrix]." (Emphasis added.) The fallacy of Petitioners' argument lies in the fact
that their authority remained subject to fiduciary considerations.
11
I believe the fact that the three lower courts and now this Court have differing
interpretations of Article 10.6 further shows this case involves the construction of
the Will, rather than being a sheer equitable action to receive a share of a particular
Will applied to the residuary estate. Indeed, the circuit court noted, "There can be
no dispute that pursuant to the language of the 'Fiduciary Powers' section of the
[W]ill that the [p]ersonal [r]epresentatives enjoy broad discretion in making
distributions." Nonetheless, the circuit court found evidence supported the probate
court's factual finding that Petitioners' proposed distribution violated their fiduciary
duty to Respondent. As explained more fully below, I would agree with the circuit
court (and the court of appeals) that evidence in the record supports the probate
court's finding of breach of fiduciary duty.
III.
Petitioners, as personal representatives of the estate, owed a fiduciary duty to
Respondent as a beneficiary of the estate. See S.C. Code Ann. § 62-3-703(a)
(2022) (stating "[a] personal representative is a fiduciary"); see also Witherspoon v.
Stogner, 182 S.C. 413, 414, 189 S.E. 758, 759 (1937) ("That a fiduciary
relationship exists between each . . . beneficiary of an estate and the [personal
representative(s)] thereof is fundamental."); Turpin v. Lowther, 404 S.C. 581, 589,
745 S.E.2d 397, 401 (Ct. App. 2013) ("Pursuant to the probate code, a personal
representative owes a fiduciary duty to all beneficiaries of the estate."); Ex parte
Wheeler v. Estate of Green, 381 S.C. 548, 555, 673 S.E.2d 836, 840 (Ct. App.
2009) ("A personal representative is a fiduciary under this state's probate code.").
"A fiduciary relationship exists when one reposes special confidence in another[]
so that the latter, in equity and good conscience, is bound to act in good faith and
with due regard to the interests of the one reposing confidence." Ex parte Wheeler,
381 S.C. at 555, 673 S.E.2d at 840 (quoting O'Shea v. Lesser, 308 S.C. 10, 15, 416
S.E.2d 629, 631 (1992)); see also Duty, Black's Law Dictionary (11th ed. 2019)
(defining fiduciary duty as a "duty of utmost good faith, trust, confidence, and
candor owed by a fiduciary . . . to the beneficiary"). Importantly, a personal
representative must "use the authority conferred upon him . . . for the best interests
of [the] successors to the estate." S.C. Code Ann. § 62-3-703(a); see also Duty,
Black's Law Dictionary (stating a fiduciary owes "a duty to act with the highest
degree of honesty and loyalty toward [the beneficiary] and in the best interests of
the [beneficiary]").
piece of property, as the majority contends. See NationsBank of S.C., 321 S.C. at
392, 468 S.E.2d at 662 ("This case involves the construction of a will which is an
action at law.").
When a fiduciary is vested with authority to distribute assets of an estate, the
fiduciary is required to exercise that discretion fairly. 34 C.J.S. Executors and
Administrators § 651 n.2 (2009). Moreover, it is well settled that "anyone acting
in a fiduciary relationship shall not be permitted to make use of that relationship to
benefit his own personal interests." Lesesne v. Lesesne, 307 S.C. 67, 69, 413
S.E.2d 847, 848 (Ct. App. 1991). "Courts of equity will scrutinize with the most
zealous vigilance transactions between parties occupying confidential relations
toward each other and particularly any transaction between the parties by which
the dominant party secures any profit or advantage at the expense of the person
under his influence." Walbeck v. I'On Co., 426 S.C. 494, 517, 827 S.E.2d 348, 360
(Ct. App. 2019) (internal alteration marks omitted) (citation omitted).
"If the exercise of power concerning the estate is improper, the personal
representative is liable to interested persons for damage or loss resulting from
breach of his fiduciary duty to the same extent as a trustee of an express trust."
S.C. Code Ann. § 62-3-712 (2022). "To remedy a breach of trust that has occurred
or may occur, the court may: (1) compel the trustee to perform the trustee's duties;
(2) enjoin the trustee from committing a breach of trust; . . . [or] (9) . . . impose . . .
a constructive trust on trust property . . . ." S.C. Code Ann. § 62-7-1001(b) (2022)
(emphasis added). Therefore, a beneficiary may seek relief for a breach of
fiduciary duty that has not yet occurred but would result from a fiduciary's
proposed distribution scheme. 12
A.
In my judgment, the majority opinion rests primarily on its view that the proposed
distribution is stipulated to be of equal monetary value. Granted, the parties'
stipulation of equal monetary value has ostensible merit in the majority's quest to
reverse the probate court's finding. Nevertheless, we are not at liberty to decide the
appeal on the basis of our view of the preponderance of the evidence and are
constrained only to determine whether the probate court's finding of breach of
fiduciary duty is supported by any evidence in the record. Accordingly, I do not
construe the concession regarding the value of each property to be dispositive. Nor
12
In an attempt to justify its departure from the "any evidence" standard of review,
the majority highlights the fact that the proposed distribution has not yet occurred.
As clearly stated in section 62-7-1001, Respondent need not wait to suffer damages
to seek relief.
did the probate court. Nor did the circuit court on appeal. Nor did the court of
appeals.
Moreover, I believe Petitioners conceded their proposed distribution was not truly
equal. Assuming the accuracy of Petitioners' purported "equal value" distribution
of the residuary estate, I asked counsel at oral argument if Petitioners would agree
to flip the proposed division and allow Respondent to receive outright the Lake
Summit property. Petitioners' counsel summarily (and understandably) rejected
such a division. Rather than justify his response with the so-called equal value of
the distribution, counsel quickly transitioned to supporting Petitioners' preferred
distribution with the mantra that awarding the Lake Summit property to Petitioners
"honors the intent of the testatrix." Justice James later sought clarification:
Q: [Are you suggesting] the overarching intent of the testatrix was for
[Petitioners] Kathleen and Jacquelin to get all of Lake Summit?
Petitioners' Counsel: That is correct.
Petitioners' suggestion that they were merely carrying out the testatrix's intent in
awarding themselves the Lake Summit property is specious. As noted, the testatrix
intended to devise the Lake Summit property to her sons, but that plan was
defeated by the sons' looting of estate assets. Moreover, Petitioners originally filed
a proposal for distribution in the probate court in 2011, under which Petitioners
and Respondent would all have received approximately equal shares of the Lake
Summit property. It is unclear from the record what changed in the interim, but
Petitioners obviously had a change of heart.
Regardless, the claimed "equal value" argument could be dispositive under a de
novo standard of review, if that were the Court's desired result. But under an any
evidence standard of review, we are not permitted to myopically focus on the
evidence we find supports our desired outcome. Admittedly, the claimed "equal
value" argument is a factor to consider, but it is certainly not dispositive. Beyond
Petitioners' adamant refusal to flip the supposed equal distribution, 13 there are other
13
I point this out only to demonstrate that the supposedly equal distribution is not
truly equal. In no manner is this point intended to disparage Petitioners and their
excellent counsel. Like Petitioners, no reasonable person would agree to flip the
patently inequitable proposed distribution and give Respondent both the Lake
Summit property outright and a share of the other two properties.
considerations that illustrate the unequal and inequitable14 nature of Petitioners'
proposed distribution.
No one has challenged the obvious—the Lake Summit property is the prized asset.
The entire dispute is, after all, about who gets the Lake Summit property. It is
undisputed that the rental income from the Lake Summit property more than
covers all expenses associated with the property. Conversely, it is uncontested that
the Bailey's Island and Paradise Island properties are unimproved lots that produce
no income and have upkeep expenses that exceed $25,000 annually. Based on
Petitioners' distribution scheme, Respondent—who, according to the majority
opinion, did not receive the $400,000 bequest 15—is responsible for the lion's share
of those expenses. Moreover, while Petitioners awarded themselves a property
outright (the Lake Summit property), they did not reciprocate and similarly award
Respondent any property outright. Petitioners ensured themselves an ownership
interest in all the properties. Under these facts and circumstances, I have no
hesitation in finding evidence in the record to support the breach of fiduciary duty
finding and affirming the court of appeals on this issue. I find evidence supports
the probate court's determination that Petitioners' fiduciary duty precluded them
from using their position as personal representatives to benefit their own interests
to the detriment of Respondent.
In sum, I would affirm the court of appeals as modified, and I thus concur in part
and dissent in part.
14
Petitioners' brief acknowledges that "any Residuary Assets should pass in an
equitable manner."
15
While there were apparently insufficient funds to pay Respondent her $400,000
bequest, each Petitioner requested over $130,000 in personal representative fees.