In Re The Estate of Jesse L. McCants, Sr. ( 2020 )

04/03/2020
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
Assigned on Briefs January 2, 2020
IN RE THE ESTATE OF JESSE L. MCCANTS, SR.
Appeal from the Chancery Court for Hamilton County
No. 13-P-610 Jeffrey M. Atherton, Chancellor
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No. E2019-01159-COA-R3-CV
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This is the second appeal arising from probate proceedings involving the estate of Jesse
McCants, Sr. The first appeal concerned the accuracy of the personal representative’s
final accounting. The trial court determined that some expenses identified by the
personal representative should not be allowed. This Court affirmed in part, reversed in
part, and remanded “for the entry of a modified order consistent with this Opinion and for
such further proceedings as may be necessary and consistent with our direction herein.”
The primary issue in this appeal is whether the trial court properly followed our
instructions on remand. We conclude that the trial court did so; therefore, we affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which FRANK D.
CLEMENT, JR., P.J., M.S., and ARNOLD B. GOLDIN, J., joined.
Samuel J. Gowin, Chattanooga, Tennessee, for the appellant, Janella L. McCants.
Jesse L. McCants, Jr., Jacinta (McGavock) Anderson, and Jerel L. McCants, appellees.1
OPINION
I.
On August 13, 2013, Jesse McCants, Sr. (decedent) passed away. Decedent’s will
provided for the distribution of his property to his wife and four children. Decedent’s
wife predeceased him, so the children were the only surviving beneficiaries. Janella
McCants, one of decedent’s daughters, was appointed to be the personal representative of
the estate.
1
Appellees did not file a brief in this appeal.
In September 2014, Ms. McCants filed a final accounting, which identified various
expenses associated with the estate’s checking account. It proposed to distribute the
remainder of the estate’s funds to the beneficiaries. Decedent’s other children excepted
to the final accounting. One of their concerns was that Ms. McCants sought a credit for
expenses related to the maintenance of a residence on Cordelia Lane (the Cordelia Lane
residence), where Ms. McCants resided following decedent’s death. At the time of
decedent’s death, the Cordelia Lane residence was titled in the name of McCants
Development Company, Inc. Decedent was the sole shareholder. In March 2014, the
corporation transferred the Cordelia Lane residence to the estate. In April 2014, the
estate transferred the property to decedent’s children by an executor’s deed.
The trial court referred the matter to the clerk and master. According to the clerk
and master’s July 2017 report, more than $14,000 of expenses identified in the final
accounting should not be allowed. Many of those expenses related to the maintenance of
the Cordelia Lane residence.
After a hearing, the trial court reduced the amount of disallowed expenses to
$6,527.55. Relying on Tenn. Code Ann. § 30-2-323, the court ruled that $6,087 in
expenses relating to the maintenance of the Cordelia Lane residence should be disallowed
because they were incurred more than four months after the death of decedent.2 The
court also ruled that a few other expenses should be disallowed. Ms. McCants appealed
the trial court’s ruling that expenses relating to the maintenance of the Cordelia Lane
residence should be disallowed.
This Court affirmed in part and reversed in part. In re Estate of McCants, No.
E2017-02327-COA-R3-CV, 2018 WL 3217697 (Tenn. Ct. App., filed July 2, 2018).
First, we determined that the trial court erred by disallowing some of the expenses
associated with the Cordelia Lane residence. Id. at *5. We held that “Ms. McCants acted
properly to preserve and maintain the residence while it was owned by the estate until
2
Tenn. Code Ann. § 30-2-323 provides:
Unless contrary to the decedent’s will, the personal representative of the
estate is authorized, but not required, to advance or to pay as an expense
of administration for a period of up to four (4) months after the
decedent’s death the reasonable costs of routine upkeep of any real
property passing under the will of the decedent or by intestate
succession. These authorized expenditures, which may be made in the
personal representative’s discretion, shall include those for utility
services, day-to-day maintenance, lawn service, and insurance premiums
but shall not include mortgage note payments, real estate taxes, major
repairs or other extraordinary expenses. None of the foregoing
limitations shall apply to any real property that is actually part of the
probate estate being administered.
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title was later transferred to the children beneficiaries.” Id. (emphasis in original). We
explained that the four-month period identified in Tenn. Code Ann. § 30-2-323 was
inapplicable because the real property at issue was “part of the probate estate being
administered.” See Tenn. Code Ann. § 30-2-323 (“None of the foregoing limitations
shall apply to any real property that is actually part of the probate estate being
administered.”).
We also stated the following:
Notwithstanding our conclusion with respect to this issue and
the trial court’s misapplication of the four-month period in
Tennessee Code Annotated section 30-2-323, many of the
expenses disallowed by the trial court should not ultimately
be disturbed. Although Ms. McCants certainly had the
authority to preserve the Cordelia Lane residence with funds
of the estate during the period of time that it was titled in the
name of the estate, it should be noted that many of the
expenses at issue were incurred when the residence was
owned by McCants Development Company, Inc. Indeed,
while the decedent’s interest in that corporation was certainly
a part of the estate, the Cordelia Lane residence was, for a
period of time following the Decedent’s death, owned by the
corporation itself and not the estate. We would not dispute
that Ms. McCants was permitted during this time to act as any
other shareholder with respect to the decedent’s shares in
McCants Development Company, Inc., including voting,
selling, or buying shares, see 2 Jack W. Robinson, Sr., et al.,
Pritchard on the Law of Wills and Administration of Estates §
631 (6th ed. 2007), but this right to exercise shareholder
rights did not, in our view, allow Ms. McCants to access the
estate’s assets in relation to the corporation’s assets. For this
reason, we find no error in the trial court’s disallowance of
the expenses that Ms. McCants incurred while the residence
was not an asset of the estate.
Id. at *6. Our “conclusion” paragraph summarized our decision and included the
following remand instructions:
In light of the foregoing discussion, we conclude that the trial
court’s order should be reversed in part, affirmed in part, and
modified consistent with our discussion herein. The expenses
for the Cordelia Lane residence that were incurred during the
period that the residence was titled in the name of the estate
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were reasonably paid out of the estate account. Although the
disallowance of these expenses was in error, we take no issue
with the rest of the expenses disallowed by the trial court.
The case is remanded to the trial court for the entry of a
modified order consistent with this Opinion and for such
further proceedings as may be necessary and consistent with
our direction herein.
Id.
On remand, the trial court referred the case to the clerk and master. In her May 6,
2019 report, the clerk and master found that $17,662.30 of expenses were allowable,
including $585.78 of expenses associated with the Cordelia Lane residence while the
property was an asset of the estate. On the other hand, the clerk and master determined
that $11,234.42 of expenses should be disallowed, including $10,747.29 of expenses
associated with the Cordelia Lane residence before the property became an asset of the
estate. Although the $10,747.29 of expenses associated with the Cordelia Lane residence
were allowed under the trial court’s previous order, the clerk and master concluded that
the Court of Appeals’ opinion dictated the opposite result.
Ms. McCants filed an objection to the clerk and master’s May 6, 2019 report.
According to Ms. McCants, the trial court’s only duty on remand was to enter a modified
order that allowed the $585.78 of expenses spent on the Cordelia Lane residence while
the property was an asset of the estate. Ms. McCants argued that “[t]here is no
instruction [in the Court of Appeals’ opinion] to go back thru the accounting to find other
expenses that can be redetermined [sic] to be unapproved.”
After a hearing, the trial court entered an order confirming the clerk and master’s
May 6, 2019 report. The court stated, in relevant part:
Upon review of the Court of Appeals opinion, the Court
agrees with the findings and recommendations in the Master’s
Report. The Court of Appeals specifically stated that Ms.
McCants’ rights as shareholder did not allow her to use Estate
assets for the corporation, namely, the Property. Ms.
McCants could only use Estate funds to maintain Estate
property. As the Property was only Estate property from
March 26, 2014, through April 14, 2014, the Estate funds can
only recover the Property for this twenty-day period. The
Court finds the Master’s Report properly found a total of
$11,234.42 in unapproved expenses.
(Emphasis in original.)
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The court also rejected Ms. McCants’ alternative argument that “the total
unapproved amount should be assessed against the beneficiaries equally and not Ms.
McCants individually.” The court explained:
Pursuant to T.C.A. § 30-2-612, this Court “may compel the
personal representative to pay into the office of the clerk the
balance found against the personal representative . . .” In
affirming the recommendation in the Master’s Report that
there is a total of $11,234.42 in unapproved expenses, the
Court has the power to assess this total against Ms. McCants
as the personal representative. The Court finds that Ms.
McCants improperly spent Estate funds on property that was
not in the Estate. As such, those Estate funds must be
brought back into the Estate account before distributions to
the beneficiaries. This ruling, however, does not impact Ms.
McCants’ ability to address these expenses in the pending
litigation in Hamilton County Chancery Court Part 1, as the
other litigation is not the subject of this Order.
Following the entry of this order, Ms. McCants timely filed a notice of appeal.
II.
Ms. McCants raises two issues for our review, which we have slightly restated:
Whether the trial court exceeded the scope of its authority on
remand by disallowing expenses associated with the Cordelia
Lane residence that were previously allowed.
If the trial court did not exceed the scope of its authority on
remand, did the court err by ordering Ms. McCants to pay the
entire cost of disallowed expenses associated with the
Cordelia Lane residence?
III.
“The construction of a mandate issued by an appellate court presents a question of
law.” 5 Am. Jur. 2d Appellate Review § 685 (February 2020 Update) (footnote omitted);
cf. In re Fisk Univ., 392 S.W.3d 582, 588-89 (Tenn. Ct. App. 2011). We review
questions of law de novo without affording a presumption of correctness to the
conclusions of the trial court. Brooks v. Bd. of Prof’l Responsibility, 578 S.W.3d 421,
424 (Tenn. 2019) (citations omitted).
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IV.
A.
The first issue is whether the trial court exceeded the scope of its authority on
remand by disallowing expenses associated with the Cordelia Lane residence that were
previously allowed. The scope of a trial court’s authority on remand is well-established:
After a case has been appealed, a trial court does not
reacquire jurisdiction over the case until it receives a mandate
from the appellate court.3 Once the mandate reinvests the
trial court’s jurisdiction over a case, the case stands in the
same posture it did before the appeal except insofar as the
trial court’s judgment has been changed or modified by the
appellate court. Raht v. Southern Ry., 215 Tenn. 485, 497,
387 S.W.2d 781, 786 (1965). The appellate court’s opinion
becomes the law of the case, Gill v. Godwin, 59 Tenn. App.
582, 786, 442 S.W.2d 661, 662-63 (1967), foreclosing and
excluding any complaint, constitutional or otherwise, as to the
issues addressed and decided in the appellate court’s opinion.
Cook v. McCullough, 735 S.W.2d 464, 469 (Tenn. Ct. App.
1987). Thus, the trial court does not have the authority to
modify or revise the appellate court’s opinion, McDade v.
McDade, 487 S.W.2d 659, 663 (Tenn. Ct. App. 1972), or to
expand the proceedings beyond the remand order. Cook v.
McCullough, 735 S.W.2d at 470. The trial court’s sole
responsibility is to carefully comply with directions in the
appellate court’s opinion. Raht v. Southern Ry., 215 Tenn. at
497-98, 387 S.W.2d at 786-87.
Earls v. Earls, No. M1999-00035-COA-R3-CV, 2001 WL 504905, at *3 (Tenn. Ct.
App., filed May 14, 2001).
In her brief, Ms. McCants argues that the trial court exceeded the scope of its
authority on remand because this Court did not remand for “a complete review of the
accounting, only for a consideration of the expenses disallowed while the real property
was titled to the Estate.” To support this interpretation of our remand instructions, Ms.
McCants emphasizes the following language in our previous opinion:
3
According to Tenn. R. App. P. 42(a), a mandate consists of certified copies of the appellate
court’s judgment, any order as to costs or instructions as to interest, and the appellate court’s opinion.
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The expenses for the Cordelia Lane residence that were
incurred during the period that the residence was titled in the
name of the estate were reasonably paid out of the estate
account. Although the disallowance of these expenses was in
error, we take no issue with the rest of the expenses
disallowed by the trial court. The case is remanded to the
trial court for the entry of a modified order consistent with
this Opinion and for such further proceedings as may be
necessary and consistent with our direction herein.
(Emphasis added by appellant.)
We respectfully disagree with Ms. McCants’ narrow characterization of our
remand instructions. Focusing on the underlined portion of the above-quoted text is
misleading. The very next word of that sentence makes all the difference: “we take no
issue with the rest of the expenses disallowed by the trial court.” (Emphasis added).
Notice, we did not say that “we take no issue with the rest of the expenses allowed by the
trial court.” On the contrary, our opinion makes clear that expenses associated with the
Cordelia Lane property before the property became an asset of the estate should not have
been allowed.
The trial court was well within its authority to consider our entire opinion when
entering a modified order on remand:
To interpret and enforce a mandate, a trial court should refer
not only to the mandate itself, but also to the opinion of the
appellate court. The appellate court’s mandate is not to be
read and applied in a vacuum; the appellate court’s opinion is
part of the mandate and must be used in interpreting the
mandate, particularly if a mandate from the appellate court is
unclear on remand, or if specific directions are not given by a
reviewing court to the trial court on remand. In this way, the
court may examine the rationale of an appellate opinion in
order to discern the meaning of language in the court’s
mandate.
5 Am. Jur. 2d Appellate Review § 685 (footnotes omitted).
Ms. McCants is correct that “[w]here the appellate court’s mandate contains
express instructions that direct the trial court to take a specified action, the trial court has
no authority to deviate from those instructions.” 5 Am. Jur. 2d Appellate Review § 687;
see also Earls, 2001 WL 504905, at *3. However, “[a] remand may take one of several
forms. It may dictate the course of further proceedings, it may be made for a specific
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purpose, or it may be open and general.” Consumer Advocate Div. ex rel. Tenn.
Consumers v. Tenn. Reg. Auth., No. M199902151COAR12CV, 2000 WL 13794, at *1
(Tenn. Ct. App., filed Jan. 10, 2000) (internal citations omitted).
Where the remanding court does not give specific
instructions, the trial court on remand is required to examine
the appellate court’s decision and determine what further
proceedings would be proper and consistent with the opinion.
Thus, a court on remand may be required to take actions not
specified in the mandate, but which are necessary to
effectuate the appellate court’s decision.
5 Am. Jur. 2d Appellate Review § 688 (footnote omitted). This is especially true when
an appellate court remands “for further proceedings consistent with this opinion.” See id.
at § 699 (noting that, in such cases, “the scope of a remand order must be determined by
reference to the analysis contained in the appellate court’s opinion.”).
In the mandate of our previous opinion, we remanded the case “for the entry of a
modified order consistent with this Opinion and for such further proceedings as may be
necessary and consistent with our direction herein.” (Emphasis added.) The trial court
was well within its authority to consider our entire opinion when entering a modified
order on remand.
B.
Like the trial court, we also reject Ms. McCants’ alternative argument that all of
the beneficiaries should equally share the cost of the disallowed expenses. The trial court
properly noted that it has the authority to “compel the personal representative to pay into
the office of the clerk the balance found against the personal representative[.]” Tenn.
Code Ann. § 30-6-612. The only issue is whether Ms. McCants, as the personal
representative, is entitled to a credit for the expenses in dispute. Although this issue was
resolved by our previous opinion, Ms. McCants continues to argue that she should not be
solely responsible for the disallowed expenses because she acted in good faith.
Importantly, however, personal representatives are only “entitled . . . to payment from the
estate for reasonable expenses incurred in good faith for the exclusive and necessary
benefit of the estate.” In re Estate of Wallace, 829 S.W.2d 696, 700-01 (Tenn. Ct. App.
1992) (emphasis added). Although Ms. McCants may have acted in good faith by
maintaining the Cordelia Lane residence with estate funds, her actions were not “for the
exclusive and necessary benefit of the estate” when the property was owned by McCants
Development Company, Inc.
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V.
The judgment of the trial court is affirmed. The case is remanded for enforcement
of the trial court’s judgment. Costs on appeal are taxed against the appellant, Janella L.
McCants.
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CHARLES D. SUSANO, JR., JUDGE
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