in-re-the-estate-of-harold-l-jenkins-hugh-c-carden-and-donald-w-garis ( 1998 )

IN RE: ESTATE OF HAROLD L. )
JENKINS, Deceased, )
)
HUGH C. CARDEN and DONALD ) Appeal No.
W. GARIS as Co-Executors of the ) 01A01-9709-CH-00500
HAROLD L. JENKINS Estate, )
)
VS.
Plaintiffs/Appellees, )
)
)
FILED
)
JONI L. JENKINS and KATHY L. ) May 6, 1998
JENKINS, )
) Sumner Probate Cecil W. Crowson
Defendants/Appellants. ) No. 93P-30 Appellate Court Clerk
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
APPEAL FROM THE CHANCERY PROBATE COURT OF SUMNER COUNTY
AT HENDERSONVILLE, TENNESSEE
HONORABLE THOMAS E. GRAY, CHANCELLOR
Denty Cheatham, BPR #3993
Rose Palermo, BPR #3330
CHEATHAM & PALERMO
43 Music Square West
Nashville, Tennessee 37203
ATTORNEYS FOR PLAINTIFFS/APPELLEES
Charles W. McElroy
BOULT, CUMMINGS, CONNERS & BERRY, PLC
414 Union Street, Suite 1600
P.O. Box 198062
Nashville, Tennessee 37219
ATTORNEY FOR DEFENDANTS/APPELLANTS
MODIFIED IN PART, AFFIRMED IN PART,
REVERSED IN PART, REMANDED.
HENRY F. TODD
PRESIDING JUDGE, MIDDLE SECTION
CONCURS:
BEN H. CANTRELL, JUDGE
CONCURS IN SEPARATE OPINION:
WILLIAM C. KOCH, JR., JUDGE
IN RE: ESTATE OF HAROLD L. )
JENKINS, Deceased, )
)
HUGH C. CARDEN and DONALD ) Appeal No.
W. GARIS as Co-Executors of the ) 01A01-9709-CH-00500
HAROLD L. JENKINS Estate, )
)
Plaintiffs/Appellees, )
)
VS. )
)
JONI L. JENKINS and KATHY L. )
JENKINS, )
) Sumner Probate
Defendants/Appellants. ) No. 93P-30
OPINION
This is yet another chapter in the administration of the estate of Harold L. Jenkins, a
popular entertainer whose stage name was “Conway Twitty.” The executors initiated the present
proceeding to resolve disputed rights of three devises in respect to the collection from them of
certain charges appearing on the records of the deceased. The Probate Court resolved the issues
in favor of the executors, and two of the devises appealed.
The complaint of the executors alleged in pertinent substance:
During the lifetime of the late Harold L. Jenkins, he paid certain salaries to his adult
children, Michael Jenkins, Kathy Jenkins, Joni Jenkins, and Jimmy Jenkins, and in
addition, from time to time after they reached their majority, he made various payments on
debts owed by them, or directly to them, to allow them to purchase certain items or pay
certain expenses.
Harold L. Jenkins requested his employees who kept his books and records to keep
an account of all of these payments made by him to or for his adult children. Occasionally
one of the children would make a payment, reducing the balance owed on that child’s
account, and occasionally charges would be made against the accounts for rent owed by
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them on their homes at Twitty City, when such rent was not deducted from the salaries he
paid to them. Each of these accounts of his adult children was listed as an “loan
receivable” account on Mr. Jenkins’ personal books and records, which were kept as part
of the records of his business proprietorship known as Twitty Enterprises.
The Internal Revenue Service requires that interest be imputed and income tax paid
on the interest, by a parent, if the child owes the parent a debt of more than $10,000.00.
Interest upon such debts of his children was reported and income tax was paid thereon by
deceased.
Although the late Harold Jenkins never proposed that any legal action be taken
against his adult children to collect these accounts, on more than one occasion he told
Laurie Thompson Tucker, his accountant, that if there was any unpaid balance on these
accounts at this death, the amount would be taken out of that child’s inheritance.
At the time of Mr. Jenkins’ death Kathy Jenkins owed her father $59,620.00,
according to her “loans receivable account” maintained by her father’s bookkeepers and
accountants. The “loans receivable” account of Joni Jenkins showed a debt of $4,311.00
owed by her to her father.
The appellants answered denying any indebtedness to the estate asserting that the benefits
received from deceased were gifts, and pleading the statute of limitations.
The Probate Judge heard the evidence without a jury and filed a memorandum stating:
The late Mr. Jenkins was a generous and kind person
to his children and to his employees. He allowed charges for
personal expenses to be made to his business by his children
and other employees and the children’s spouses; his business
paid the expenses and charged the child or other employees or
child’s spouse on an account maintained to keep a record of
such transactions.
----
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Similarly, during part of this time Kathy Jenkins was
married to and lived at Twitty City with Bruce Harris and
Gary Seybold, and the entries on her account reflect that
during those marriages Mr. Seybold and Mr. Harris received
some payments which were charged to the account of Kathy
Jenkins, and they made some payments to reduce the unpaid
balance shown on her account.
----
The testimony of Kathy and Joni Jenkins regarding the
accounts is not credible. They knew that they made charges
and that a record was being kept and that they were expected
to make repayment. They knew when their father was not
expecting repayment. Joni knew that no repayment was
expected for some hospital expenses incurred by her and paid
by her father. Kathy knew that her father did not expect
repayment for some clothes purchased by her when she was
working on a career in the music industry.
The credibility of Mickey Jenkins, former spouse of
the deceased and the mother of Joni, Kathy and Jimmy
Jenkins was impeached as to her testimony concerning the
furnishings of the condominiums and that she did not know
that her children, Kathy, Joni or Jimmy, were indebted to the
late Harold L. Jenkins.
----
Twitty City was constructed in the early 1980's in
Sumner County, Tennessee. As a part of the complex there
were condominiums owned by Harold L. Jenkins d/b/a
Conway Twitty Enterprises. After construction of Twitty
City, each of Harold L. Jenkins’ children, Michael, Joni,
Kathy and Jimmy, rented a condominium from their father
and each was an employee of Conway Twitty Enterprises.
Each child paid rent on his/her condominium; each child was
due and received a salary and from time to time, generally at
Christmas, each received a bonus.
Charges to Conway Twitty Enterprises for personal
expenses were at times made by Michael, Joni, Kathy or
Jimmy. Other employees at times made a charge to Conway
Twitty Enterprises for a personal expense.
At the direction of Harold L. Jenkins, an account was
maintained in the name of each child, employee, as a record
of continuing transactions between the child, employee, and
their father’s business Twitty Enterprises. These continuing
transactions ended with the death of Harold L. Jenkins.
The Court finds these accounts were mutual as
contemplated by T.C.A. 28-3-112, and that the time for the
running of the statute of limitations is computed from the date
of the last item since there is no showing in this cause that an
individual account was liquidated and a balance struck.
----
Mutual agreement may never have been expressed, but
it was clearly implied. Checks were accepted as loans;
charges for personal expenses to Conway Twitty Enterprises
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were made by Kathy and Joni Jenkins. Repayment and
reimbursement were made by Kathy and Joni Jenkins.
A contractual obligation was created between Conway
Twitty Enterprises and Kathy and Joni Jenkins.
Harold L. Jenkins, deceased, did at times make gifts
to his children. However, the accounts before the Court were
not gifts.
----
No evidence was presented that Kathy Jenkins or Joni
Jenkins consented or gave permission for a spouse to bind
either of them on the accounts maintained by Conway Twitty
Enterprises. No evidence was presented that Jimmy Jenkins
expressly consented to his wife being an agent for him.
Examination of Exhibit I, the account for Kathy
Jenkins, reveals a Bruce Harris balance of $850.00 carried
forward to the account of Kathy Jenkins. Bruce Harris is
former spouse of Kathy Jenkins. This $850.00 is deducted
from the $59,619.66 shown as owed by Kathy Jenkins to
leave her a balance of $58,769.66.
From the unpaid balance of $4,311.38 ascribed to Joni
Jenkins, the Court deducts the $2,000.00 shown debited to
Chris Prater, former spouse of Joni Jenkins, on the 24th day
of June, 1983. The back up document for the $2,000.00 debit
is a copy of a check for $2,000.00 made payable to the order
of Chris Prater and endorsed by him. The memo on the check
shows “loan”. (See Exhibit 2.) The balance owed by Joni
Jenkins is $2,311.38.
The judgment of the Probate Court states:
1. Judgment is entered in favor of the estate of
Harold L. Jenkins, deceased, against Kathy Jenkins in the
amount of FIFTY-EIGHT THOUSAND SEVEN HUNDRED
SIXTY-NINE DOLLARS AND SIXTY-SIX CENTS
($58,769.66) for which execution may issue, if necessary.
2. Judgment is entered in favor of the estate of
Harold L. Jenkins, deceased, against Joni Jenkins in the
amount of TWO THOUSAND THREE HUNDRED
ELEVEN DOLLARS AND THIRTY-EIGHT CENTS
($2,311.38).
The appellants present the following issues:
1. Whether the trial court erred in finding
enforceable obligations on behalf of the appellants to
reimburse the estate for debts allegedly incurred during the
decedent’s lifetime in the absence of evidence of mutual
assent?
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2. Whether the evidence preponderates against
the trial court’s finding of an obligation to repay any sums
that may have been advanced to the appellants during the
decedent’s lifetime?
3. Whether the trial court erred in finding
appellant Kathy Jenkins liable for payments made for the
benefit of others, in the absence of a written agreement
undertaking to answer for the debts of such persons?
4. Whether the evidence clearly preponderates
against the trial court’s finding that the only witnesses with
direct knowledge of the transactions comprising the claims in
this case was not credible.
5. Whether the evidence preponderates against
the trial court’s finding of mutual accounts so as to avoid the
application of the statute of limitations to bar recovery of all
or a part of the alleged obligations, to the extent they were
otherwise shown to exist?
The executors state a single issue as follows:
1. Where at his death a father had paid salaries
and rented homes to his four adult children for several years,
through his business; and he had also maintained business
accounts of transactions with each child which showed
balances due him, which only his two daughters disputed; did
the probate court err in entering a judgment on the accounts
in favor of the father’s estate, against the daughters?
It appears from the record that the amounts which the executors seek to recover from the
children of deceased do not exceed the amount of distribution to which each of them is entitled.
As a result, this action may be based upon the law of advancements.
An advancement is an irrevocable gift by a parent in anticipation of the child’s share in
the parent’s estate. Jones v. Jones, 163 Tenn. 237, 43 S.W.2d 205 (1931).
In the present case, this Court has experienced some difficulty in locating trustworthy
evidence of the advancements asserted by the executors. T.C.A. § 24-1-203 reads as follows:
Transactions with decedent or ward. - In actions or
proceedings by or against executors, administrators, or
guardians, in which judgments may be rendered for or against
them, neither party shall be allowed to testify against the other
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as to any transaction with or statement by the testator,
intestate, or ward, unless called to testify thereto by the
opposite party. Provided, if a corporation be a party, this
disqualification shall extend to its officers of every grade and
its directors.
The failure to object may constitute a waiver of the exclusion. Rose v. Stalcup, Tenn.
App. 1987, 731 S.W.2d 541.
The executors offered in evidence copies of partial summaries of account ledgers
maintained in the office of the business of deceased.
TRE - Rule 803(6) allows the admission of:
(6) Records of Regularly Conducted Activity. - A
memorandum, report, record, or data compilation in any form
of acts, events, conditions, opinions, or diagnoses made at or
near the time by or from information transmitted by a person
with knowledge and a business duty to record or transmit if
kept in the course of a regularly conducted business activity
and if it was the regular practice of that business activity to
make the memorandum, report, record, or data compilation,
all as shown by the testimony of the custodian or other
qualified witness, unless the source of information or the
method or circumstances of preparation indicate lack of
trustworthiness. The term “business” as used on this
paragraph includes every kind of business, institution,
association, profession, occupation, and calling, whether or
not conducted for profit.
TRE Rule 1006 provides:
Rule 1006. Summaries. - The contents of voluminous
writings, recordings, or photographs which cannot
conveniently be examined in court may be presented in the
form of a chart, summary or calculation. The originals or
duplicates shall be made available for examination or
copying, or both, by other parties at reasonable times and
places. The court may order that they be produced in court.
There is evidence that the “source of information or method or circumstances of
preparation indicate lack of trustworthiness.”
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This appeal presents a melange of legal questions against a background of uncertain
facts.
The deceased was an affluent entertainer with complicated business and family
arrangements. For his business dealings he had a “controller” and an accountant who became
the executors of his estate. They undertook to keep an accurate record of his business affairs
with limited and sketchy information received from transactions involving business funds and
such personal transactions as the deceased, or others reported to them orally. The controller
admitted that he could not certify that the records kept under his supervision regarding the
financial relations of deceased with his children were complete or completely accurate.
The true facts as to what the intent of the deceased may have been as to classification of
his gifts as advancements or loans, are obscured by the hearsay evidence rule and the “Dead
Man’s Statute.”
Whatever new law might be declared regarding the evasion of the effect of the dead
man’s statute by use of “business records” is rendered inconclusive by the loose and nebulous
dealings and record keeping of deceased and his children.
The record relied upon by the executors simply fails to qualify as competent evidence
because preponderance of the evidence in this record shows that:
“[T]he source of information or method or circumstances of
preparation indicate lack of trustworthiness.”
The record shows that the deceased set an “allowance” for the furnishings, special
fixtures and decoration of the condominiums which he built and rented to his children and that
expenses incurred by each child in excess of the allowance was charged to that child. However,
the record also shows that a substantial part of the improvements charged to the children
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remained in place when the children were evicted, and the sale price was enhanced by such
improvements.
With two exceptions, there is no evidence that any of the heirs of deceased ever agreed
with the father or his executors upon any particular amount of debt to deceased.
During cross-examination of Kathy L. Jenkins, she and her counsel admitted that she
owed her father $1,524.16. Another child, Jimmy Jenkins, offered no defense to the $3,279.25
claim against him, and did not participate in this appeal.
For the foregoing reasons, the judgment against Kathy Jenkins is reduced to $1,524.16;
the judgment against Jimmy Jenkins in the amount of $3,279.25 is affirmed; and the judgments
against the remaining defendants are reversed and vacated. Upon remand, the Trial Court is
directed to equitably re-assess the costs accrued in that court. The costs on appeal are assessed
against the executors to be paid out of the funds of the estate. The cause is remanded for further
proceedings in conformity with this opinion.
MODIFIED IN PART, AFFIRMED IN PART,
REVERSED IN PART, REMANDED.
_________________________________
HENRY F. TODD
PRESIDING JUDGE, MIDDLE SECTION
CONCUR:
____________________________
BEN H. CANTRELL, JUDGE
CONCURS IN SEPARATE OPINION:
WILLIAM C. KOCH, JR., JUDGE
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