Firm News
✩ Estate of Zeigler - Wrongful sale of estate asset by former executor; damages awards
Posted: January 21st, 2009 by Gaslowitz Frankel LLCThe will of an executor’s deceased grandmother left the grandmother’s house to a beneficiary. The executor did not want the beneficiary to receive the house, because the beneficiary’s husband had been convicted of murdering the grandmother’s husband, who was the executor’s grandfather. When the beneficiary petitioned for removal of the executor, the executor obtained a continuance. During the period of the continuance, the executor arranged for the house to be sold to her friend at a price under market value; she advanced her friend the full amount of the purchase price; her attorney prepared the closing documents, representing both buyer and seller in the transactions; and after the closing the executor deposited the sale proceeds in her personal bank account. When the probate court held a hearing on the executor’s removal, it heard evidence about the sale. The court ordered the executor removed and the property transferred back to the estate through a quitclaim deed. The probate court also awarded the beneficiary compensatory damages, general damages, punitive damages, and expenses of litigation and attorney fees. The executor and her attorney appealed.
The Court of Appeals upheld most of the damage awards. Georgia law allows a beneficiary to recover compensatory damages if an executor breaches her fiduciary duty. The beneficiary presented evidence concerning the rental value of the house, which authorized the court to award damages in the amount of the lost rent. Finding insufficient evidence of damages for the losses of other estate assets, however, the court reversed an award in connection with those assets. The court affirmed the award of general damages, because the executor had perpetrated a fraud in attempting a sham sale of the house, and the court affirmed the award of punitive damages, because there was clear and convincing evidence of the executor’s willful misconduct. Finally, the court affirmed the award of the beneficiary’s litigation expenses and attorney fees, based on several statutes, including O.C.G.A. § 53-12-193(a)(4), which allows recovery of such expenses incurred before both a trial court and an appeals court.
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