IMO the Estate of James L. Simmons, Sr.

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
ABIGAIL M. LEGROW
MASTER IN CHANCERY NEW CASTLE COUNTY COURTHOUSE
500 NORTH KING STREET, SUITE 11400
WILMINGTON, DE 19801-3734
Submitted: November 18, 2015
Final Report: February 11, 2016
John H. Williams, Jr., Esquire
Law Office of John Williams, P.A.
1225 N. King Street, Suite 700
Wilmington, DE 19801
Ms. Karen P. DeRamus
134 Killoran Drive
New Castle, DE 19720
Ms. Renee D. Simmons
810 E. Basin Road
New Castle, DE 19720
Ms. Pamela A. Cottingham
157 Whitburn Place
Newark, DE 19702
Re: IMO the Estate of James L. Simmons, Sr.;
Simmons v. DeRamus, et al.
C.A. No. 9965-ML
Dear Parties and Counsel:
The petitioner, who is the executor of the captioned estate, filed this action
to require the beneficiaries of the estate to (1) repay certain amounts allegedly paid
to them in error by the executor and (2) execute a deed conveying to the executor
the beneficiaries’ interest in the decedent’s real estate. The executor contends the
C.A. No. 9965-ML
February 11, 2016
Page 2
defendant beneficiaries received more than they were entitled to receive from the
estate because the executor mistakenly treated as estate assets funds from a jointly
titled bank account. The executor also contends that a portion of the payment to
the beneficiaries was made to purchase their interest in the decedent’s real property
and that the beneficiaries therefore should be required to execute a deed
documenting that conveyance. The beneficiaries filed a counterclaim asserting that
the funds in the jointly titled account should be distributed to all the residuary
beneficiaries and that the executor has not fully distributed the estate assets. This
is my final report after trial.
BACKGROUND
The decedent, James L. Simmons, Sr. (the “Decedent”), died on October 20,
2011. The Decedent’s last will and testament left the residue of his estate in equal
shares to his six children: James L. Simmons, Jr. (“James”),1 Richard E. Simmons
(“Richard”), Renee D. Simmons (“Renee”), Karen P. DeRamus (“Karen”), Pamela
A. Simmons (“Pamela”), and Anna D. Simmons (“Anna”).2 The will named James
as executor of the Decedent’s estate, and James was granted letters testamentary on
November 14, 2011.3
1
Because several parties share the same last name, I use first names for the sake of clarity. No
disrespect is intended.
2
Plaintiff’s Exhibit (“PX”) D.
3
PX D, K.
C.A. No. 9965-ML
February 11, 2016
Page 3
At the time of his death, the Decedent had the following assets: (1) a home
located at 437 Robinson Drive, Wilmington DE 19801 (the “Property”), (2) a
checking account at Citizens Bank, with a date of death balance of $1,578.06 (the
“Checking Account”), (3) a savings account at PNC Bank in the name of the
Decedent and Richard, with a date of death balance of $113,209.69 (the “PNC
Savings”), (4) a savings account at Citizens Bank in the name of the Decedent and
James, with a date of death balance of $101,166.56 (the “Citizens Savings”), and
(5) a Buick LaCrosse sedan.4 The Decedent also had a life insurance policy
naming Richard as the beneficiary. According to an appraisal obtained by James,
the Property was valued at $38,000 as of November 28, 2011.5 The Decedent’s car
was worth $14,025.00. On the inventory filed with the Register of Wills, no value
was attributed to the personal property in the Decedent’s home. The respondents,
who are Karen, Renee, and Pamela, have not challenged the appraisal of the
Property or the value attributed to the car.
The record reflects that the PNC Savings was jointly titled to “[the
Decedent] or Richard,” while the Citizens Savings was jointly titled to the
Decedent and James.6 The Decedent created both accounts in 1976 and asked
James and Richard to sign paperwork related to the account on which they were
4
PX C (Amended Inventory dated May 16, 2012).
5
PX B.
6
PX I, H.
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February 11, 2016
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listed as account holders. The Decedent told James about the Citizens Savings
when it was opened but did not say anything else about it in the three decades
before his death. The Decedent did not tell Richard about the PNC Savings or
even explain to Richard the purpose of the paperwork he signed. Thirteen years
later, the Decedent executed his will leaving his estate in equal shares to his
children.
Neither James nor Richard made deposits to the savings accounts during the
Decedent’s lifetime, nor did they withdraw any funds from the accounts before the
Decedent’s death. The account agreement for the Citizens Savings indicates that
the bank presumes that “any joint account established with us is a joint tenancy
with right of survivorship.”7 The agreement goes on to explain the meaning of a
survivorship account.8
James did not initially retain counsel to advise him regarding the
administration of the estate. Failing to realize the potential significance of the
jointly held accounts, James listed the Citizens Savings as an estate asset on the
inventory he filed pro se with the Register of Wills (the “Initial Inventory”). James
also paid the Decedent’s funeral expenses and certain other estate expenses from
the Citizens Savings. In December 2011, believing that the administration of the
7
PX J.
8
Id.
C.A. No. 9965-ML
February 11, 2016
Page 5
estate nearly was completed, James distributed what he believed to be the net
estate assets to the six beneficiaries. Each of the respondents received a check for
$22,270.83, representing one-sixth of the remaining balancing in the Citizens
Savings Account, one-sixth of the value of the Property, and one-sixth of the value
of the Decedent’s car.9
A dispute then arose between the siblings regarding their obligation, if any,
to execute deeds transferring the property to James. As a result, James sought the
advice of counsel, who discovered that the two savings accounts were jointly titled.
James, with the assistance of counsel, then filed an amended inventory dated May
16, 2012 (the “Amended Inventory”).10 The Amended Inventory listed both
savings accounts as jointly owned property passing to the surviving owner upon
the Decedent’s death. James simultaneously filed a first and final accounting (the
“Accounting”).11 The Accounting listed total estate assets of $15,603.06 and total
estate expenses of $15,577.04.12 Put differently, the savings accounts were listed
on the Amended Inventory, but were not treated as estate assets because they were
survivorship accounts passing to James or Richard upon the Decedent’s death.
9
Anna received the Decedent’s car in lieu of some of the cash to which she otherwise was
entitled.
10
PX C. James first filed an amended inventory dated January 31, 2012, which did not list the
PNC Savings. RX 1. I believe that this error arose because James, or at least his counsel, was
not aware of the PNC Savings. References herein to the “Amended Inventory” refer to the May
16, 2012 inventory, which was the last inventory filed for the estate.
11
PX F.
12
Id.
C.A. No. 9965-ML
February 11, 2016
Page 6
Notice of the Accounting was sent to all beneficiaries on June 14, 2012.13
None of the beneficiaries filed exceptions within the three month period indicated
on the notice and required by 12 Del. C. 2302(d). Shortly after the three month
period expired, Karen sent letters to the Register of Wills posing various questions
and objections regarding the estate’s administration. On October 12, 2012, Karen,
Pamela, and Renee filed an action against Richard regarding the PNC Savings (the
“PNC Action”). 14
In the PNC Action, Karen, Pamela, and Renee alleged that the Decedent
titled the PNC Savings jointly with Richard with the intent that Richard would
distribute those funds to the Decedent’s children in accordance with his will. The
parties proceeded to take discovery, after which a stipulation of dismissal was filed
with, and granted by, the Court.15 The parties to the PNC Action agreed to
dismissal of the claims with prejudice.
James filed this action on September 2, 2014, seeking repayment of the
funds paid to respondents from the Citizens Savings and seeking an order requiring
the respondents to execute a deed conveying to James their interest in the Property.
The respondents answered the complaint and also filed a counterclaim, alleging, in
13
PX N. The estate expenses included funeral expenses, debts of the Decedent, and attorneys’
fees.
14
DeRamus v. Simmons, 2014 WL 589376, at *1 (Del. Ch. Feb. 14, 2014) (ORDER).
15
PX L.
C.A. No. 9965-ML
February 11, 2016
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essence, that James had not properly administered the estate because he failed to
distribute certain estate assets, including the PNC Savings, the life insurance, the
Checking Account, the remaining funds in the Citizens Savings, and the
Decedent’s personal property. The counterclaims were filed before the
respondents stipulated to the dismissal of their claims in the PNC Action.
Trial in this action was held on November 18, 2015. During trial, James
testified, along with Richard. The respondents called only one witness, Claudette
Thomas, who was a friend of the Decedent. According to Claudette, she attended a
gathering with the family in the early 1990s and heard the Decedent state that “Jr.”
(i.e., James) was the boss and he was supposed to take care of the girls. Claudette
never discussed with the Decedent his assets or anything specific about his estate
plans.
ANALYSIS
The parties seek resolution of a number of distinct, but related, issues
regarding the administration of the Decedent’s estate. James claims that, because
the PNC Savings and the Citizens Savings were survivorship accounts, they were
not estate assets. For that reason, James takes the position that the debts in the
estate almost completely consumed the estate assets and that the Decedent’s only
remaining assets were the Property and the personal property contained therein,
along with a few dollars left in the Checking Account. James therefore contends
C.A. No. 9965-ML
February 11, 2016
Page 8
that the respondents received well more than they were entitled to in the December
2011 distribution and that the Court should enter judgment in favor of James in the
amount of the overpayment. James also contends that the respondents agreed to
sell James their share of the Property and were paid for the same, and the Court
therefore should order the respondents to execute a deed conveying their interests
to James. Finally, James asks the Court to shift his attorneys’ fees and costs to the
respondents.
The respondents, on the other hand, contend that both the PNC Savings and
the Citizens Savings were assets of the estate and should have been distributed to
the beneficiaries. The respondents contend that James has not fully distributed the
estate assets, and they seek an order of this Court requiring him to do so. As they
did in the PNC Action, the respondents maintain that James was named as a joint
owner on the Citizens Savings because the Decedent wanted to protect the funds
from his daughters’ husbands and boyfriends, but the Decedent always intended
James to distribute the balance in accordance with the will.
The primary issue to be resolved in this case is the proper treatment of the
two savings accounts, because most of the remaining issues are dependent on the
Court’s determination regarding those accounts. James argues that the respondents
are collaterally estopped from disputing the issue of ownership of the PNC
Savings, since that issue was resolved by the stipulated dismissal, with prejudice,
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of the PNC Action. In other words, James argues that the dismissal with prejudice
of the PNC Action bars the respondents from attempting to re-litigate that issue in
a subsequent case. I agree. In the PNC Action, the respondents alleged, as they do
here, that the PNC Savings was a mere convenience account, established as such
by the Decedent to protect the funds from interference by the respondents’
husbands or boyfriends. By stipulating to the dismissal of that action with
prejudice, the respondents are estopped from raising that issue in this action.16
As to the Citizens Savings, the respondents again allege, in essence, that the
Decedent intended to create a “convenience account,” rather than a true joint
tenancy with a right of survivorship.17 In support of that argument, the respondents
point out that the Decedent never indicated James could use the account, and the
Decedent’s statements suggested that he titled the account jointly to protect the
funds from being dissipated by influential people in the respondents’ lives. The
respondents’ argument that this was a convenience account is supported by the
16
“Where a question of fact essential to the judgment is litigated and determined by a valid and
final judgment, the determination is conclusive between the same parties in a subsequent case on
a different cause of action. In such situation, a party is estopped from relitigating the issue again
in a subsequent case.” Tyndall v. Tyndall, 238 A.2d 343, 346 (Del. 1968); see also, Messick v.
Star Enter., 655 A.2d 1209, 1211 (Del. 1995) (quoting Taylor v. State, 402 A.2d 373, 375 (Del.
1979)).
17
The respondents did not actually use the term “convenience account,” but that is the essence of
their argument. Pleadings filed by self-represented litigants are judged by a less stringent
standard than those filed by attorneys. Johnson v. State, 442 A.2d 1362, 1364 (Del. 1982); see
also, infra note 22.
C.A. No. 9965-ML
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record, but that cannot overcome the language in the account agreement that
governed the Citizens Savings.
The account agreement unambiguously provided that joint accounts would
be treated as survivorship accounts and explained the effect of such treatment.18
Although a joint tenancy is not favored under Delaware law, if the account
agreement or bank form associated with the account unambiguously demonstrates
an intent to create a joint tenancy, this Court may not inquire further into extrinsic
evidence regarding a depositor’s intention in creating the account.19 In Walsh v.
Bailey, the Delaware Supreme Court held that an account agreement that both
specifically referred to a joint tenancy and explained the consequences that flow
from that relationship was unambiguous in its meaning.20 Absent clear and
convincing evidence of mistake on the part of the depositor, the Court may not
vary the terms of the agreement by inquiring into extrinsic evidence of the parties’
intent.
Walsh and its progeny resolve the question of legal title to the funds in the
Citizens Savings, but those cases do not bar equitable claims to the funds.21
Although respondents do not articulate their argument as such, they substantively
18
PX J.
19
Walsh v. Bailey, 197 A.2d 331, 333 (Del. 1964); see also, Messersmith v. Del. Trust Co., 215
A.2d 721, 722-23 (Del. Ch. 1965).
20
197 A.2d at 332-33.
21
Dillon v. Dillon, 1987 WL 11282, at *3 (Del. Ch. May 19, 1987) (Allen, C.); Messersmith, 215
A.2d at 724.
C.A. No. 9965-ML
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argue that even if legal title to the funds in the Citizens Savings passed to James,
he held those funds in trust to distribute in accordance with the terms of the
Decedent’s will.22 This Court has used its equitable powers to impose a resulting
trust in similar circumstances, namely where: (1) a depositor created a joint
account for purposes of convenience; (2) the depositor subsequently executed a
will; and (3) the will would be nearly meaningless if the jointly held property did
not constitute part of the estate.23 That is the case here.
At the time of his death, the Decedent held assets valued at approximately
$270,000. The two joint accounts constituted approximately 80 percent of those
assets. The Decedent’s will reflects an intent to distribute his assets equally among
his children. In fact, James’ actions in treating the Citizens Savings as an estate
asset on the Initial Inventory reflect James’ understanding of that intent. If a
resulting trust is not imposed on the Citizens Savings, the Decedent would have
benefited James in gross disproportion to the other beneficiaries, effectively
leaving most of his children a mere token of his total assets. In my view, following
22
Court of Chancery Rule 8 makes clear that a party need not plead a particular theory or “cause
of action” in support of a claim. Rather, it is enough that a party plead (1) a short and plain
statement of the claim showing that the pleader is entitled to relief and (2) a demand for
judgment for the relief sought. Ct. Ch. R. 8(a); see 5 Charles A. Wright & Arthur R. Miller,
Federal Practice and Procedure (Civil) §§ 1216, 1219 (3d ed. 2015). The respondents have done
this by alleging that James did not properly distribute the Decedent’s assets and that they are
entitled to more than James contends was owed to them. This Court’s rules also make clear that
pleadings shall be construed so as to achieve “substantial justice.” Ct. Ch. R. 8(f).
23
In re Estate of Waller, 1993 WL 1500994, at *3 (Del. Ch. May 25, 1993); Dillon, 1987 WL
11282, at *3-4.
C.A. No. 9965-ML
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the precedent established in Dillon and Waller, James became the trustee of a
resulting trust for the Citizens Savings and should be required to distribute those
assets to the Decedent’s intended beneficiaries.24 Although the funds in the
Citizens Savings are not estate assets, they are held in a resulting trust for the
beneficiaries named in the Decedent’s will.
Having resolved the issue of the joint accounts, I next turn to proper
distribution of the estate, which addresses both the respondents’ counterclaims and
James’ claim that the respondents should repay a portion of their distribution. As
neither the PNC Savings nor the Citizens Savings were assets of the estate, the
Accounting is accurate. The flip side of that conclusion, however, is that the three
month statutory period to challenge an accounting does not bar the respondents’
counterclaim regarding the Citizens Savings, because those funds were not estate
assets and should not have been reflected on the Accounting.25 The remaining
estate assets, namely the Checking Account and the car, were consumed by estate
debts. The Property was not an asset of the estate, but rather passed directly to the
six children upon the Decedent’s death. Therefore, there was only $26.02 left in
24
Were the issue before me, I likely would reach the same conclusion regarding the PNC
Savings, i.e., that Richard was the trustee over a resulting trust for that account. Because that
issue is barred from reconsideration by principles of estoppel, however, and because Richard is
not a party to this action, I do not believe this Court can issue any order respecting the PNC
Savings.
25
12 Del. C. § 2302(d) establishes a three month period in which to take exceptions to an estate
accounting.
C.A. No. 9965-ML
February 11, 2016
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the estate to distribute to the beneficiaries.26 As trustee of the resulting trust,
however, James also was required to distribute the Citizens Savings funds in
accordance with the Decedent’s will. Each of the respondents therefore was
entitled to a distribution of $16,865.39, representing a one-sixth share of the
Citizens Savings ($16,861.09)27 and one-sixth of the remaining assets in the estate
($4.30).
James paid each respondent $22,270.83, so the respondents are not entitled
to any additional funds and James is entitled to an order requiring the respondents
to repay the amount of the overpayment. James contends that the additional funds
were to purchase the respondents’ interest in the Property. If that was the case,
however, James did not pay enough, because each respondent was entitled to
$6,333.33 for her interest in the Property, totaling $23,198.72. Because James did
not completely pay the respondents for their interest in the Property, I do not
believe this Court should enter an order requiring the respondents to execute a deed
transferring their interests to James. Rather, this Court should enter an order
requiring each respondent to repay to James $5,405.44.
26
PX F.
27
James may argue that he used some of the funds in the Citizens Savings to pay the debts of the
estate. That may be true, but not determinative, because there were other assets in the estate,
namely the car and the Checking Account, from which the debts could have been satisfied. By
choosing to use the funds in the Citizens Savings to pay estate debts, James effectively purchased
for himself the Decedent’s car. That he later transferred title to the car to Anna cannot affect the
other beneficiaries’ claim to the funds held in the resulting trust.
C.A. No. 9965-ML
February 11, 2016
Page 14
Under Delaware law, title to the Property passed to the Decedent’s six
children upon his death. If the parties cannot negotiate a resolution regarding title
to the Property, any of the owners are free to file a partition action. If James’
judgments against the respondents are not satisfied before partition, any remaining
balance could be satisfied from the proceeds of a partition sale.
Two remaining issues require resolution. First, James conceded at trial that
the Decedent’s personal property remains in the estate and must be distributed to
the six beneficiaries named in the will. As the respondents raised that issue in their
counterclaim, this Court’s order should reflect that the respondents are entitled to a
portion of the personal property. Second, James’ contention that this Court should
shift attorneys’ fees to the respondents is baseless. James did not articulate any
theory for shifting fees in this case, and I can think of none. I therefore
recommend that the Court deny James’ claim for attorneys’ fees.
C.A. No. 9965-ML
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CONCLUSION
For the foregoing reasons, I recommend that the Court enter an order (1)
requiring each respondent to repay to James $5,405.44, (2) requiring James to
distribute the Decedent’s remaining personal property, and (3) denying James’
claims regarding title to the Property and attorneys’ fees. This is my final report
and exceptions may be taken in accordance with Court of Chancery Rule 144.
Sincerely,
/s/ Abigail M. LeGrow
Master in Chancery