In re Cross

1

IN RE CONSERVATORSHIP OF ANNETTE H. CROSS

No. W2021-00835-COA-R3-CV

Court of Appeals of Tennessee, Jackson

January 19, 2023

Session October 19, 2022

Appeal from the Probate Court for Shelby County No. C-2645 Karen D Webster, Judge

In a previous appeal, this Court affirmed the probate court's order granting summary judgment to the defendants on two separate grounds - res judicata and the statute of limitations. On remand, the appellant filed a Rule 60 motion seeking to set aside the same order granting summary judgment to the defendants on the basis that a recent order from a circuit court necessitated that the probate court's summary judgment order be "voided and set aside." The probate court denied the motion. The appellant appeals. We affirm and remand.

Tenn R. App. P. 3 Appeal as of Right; Judgment of the Probate Court Affirmed and Remanded

Andre C. Wharton, Memphis, Tennessee, for the appellant, Estate of Barbara Pinson.

Allan J. Wade and Brandy S. Parrish, Memphis, Tennessee, for the appellee, Teresa Gibbs.

Richard S. Townley and James A. Crislip, Jr., Memphis, Tennessee, for the appellee, Cleveland Gibbs.

CARMA DENNIS MCGEE, J., delivered the opinion of the court, in which ARNOLD B. GOLDIN and KENNY W. ARMSTRONG, JJ., joined.

MEMORANDUM OPINION ^[1]

CARMA DENNIS MCGEE, JUDGE

I. FACTS &PROCEDURAL HISTORY

This appeal arises from a long-running family dispute involving three sisters, two of whom are now deceased. The technical record for the case at bar spans over twenty years, beginning in the year 2000. The record consists of twenty volumes. This is the third appeal to this Court. During the first appeal in 2009, we noted the trial court's observation that there was a "long history of contentiousness involving the Conservatorship of Annette H. Cross[.]" In re Conservatorship of Cross, No. W2008-02122-COA-R3-CV, 2009 WL 3230911, at *5 (Tenn. Ct. App. Oct. 8, 2009). That observation is even more true today. We will attempt to condense the relevant facts and procedural history as pertinent to the issues on appeal. Bear with us.

The three sisters at issue were Annette Cross, Teresa Gibbs, and Barbara Pinson.^[2]When their mother died in 1998, her will left her real property to a trust. The will appointed Teresa to serve as trustee of the trust. The purpose of the trust was to provide supplemental care for Annette, who was disabled, but the trust was to be operated "at the full discretion of the Trustee." Upon the death of Annette, the trust would terminate, and the remaining principal of the trust would be distributed one-third to Teresa; one-third to Barbara; and one-third to any children of Annette.

A conservatorship was established for Annette, beginning this litigation, in 2000. In 2001, Teresa (already trustee of the trust) was appointed as conservator of the person for Annette, and another individual was appointed as the conservator of her estate. In 2005, Teresa, acting as trustee of the trust, conveyed the real property that was owned by the trust to her son, Cleveland Gibbs, for a stated consideration of $78,000. On May 22, 2009, Cleveland initiated a second lawsuit by filing a detainer warrant in general sessions court, seeking possession of the real property that had been conveyed to him and seeking to remove the third sister, Barbara, along with her daughter, from the property.

Shortly thereafter, on August 17, 2009, the conservator for the estate of Annette filed a petition in the case at bar (the conservatorship proceeding), seeking to set aside the deed to Cleveland and remove Teresa as trustee. The petition alleged that Teresa had conveyed the property in 2005 as trustee without informing the conservator of the estate, for a price much less than its previously appraised value. On August 28, 2009, Barbara and her daughter filed a motion in the general sessions detainer action, through counsel, seeking to remove that case from general sessions court to probate court, noting that the conservator of the estate for Annette had filed a petition to set aside the deed to the subject property in probate court. Thus, Barbara and her daughter argued that "ownership of the subject property is contested" and sought removal to probate court. However, the general sessions court denied the motion for removal. The general sessions court ultimately entered a judgment in favor of Cleveland for possession of the property. The general sessions judgment was then appealed to circuit court. On June 4, 2010, the circuit court entered a final judgment in favor of Cleveland and against Barbara and her daughter for possession of the property as well as damages in the sum of $38,815.81.

In yet another proceeding, on December 15, 2010, the probate court appointed a conservator for Barbara upon finding that she was a "partially disabled adult." The order appointing the conservator for Barbara stated that she was a residuary beneficiary of a trust established by her mother and that the trustee, Teresa, had conveyed the trust property to her son in 2005. The order appointed a conservator of the estate, Ruby R. Wharton, and authorized her to "take appropriate action as to the conveyance of the property" as she deemed necessary.

On April 29, 2011, the newly appointed conservator for the estate of Barbara filed a motion to intervene in this case (the conservatorship proceeding for Annette), in which the petition had been filed seeking to set aside the deed. The probate court granted the petition to intervene in October 2011. The conservator for the estate of Barbara then filed a separate petition, in January 2012, seeking to set aside the 2005 deed and compel a trust accounting. The petition alleged that Teresa had sold the trust property to her son in a "bargain sale" in a "scheme to defraud the trust." The conservator for the estate of Barbara also filed a Rule 60 motion in circuit court, seeking to set aside the circuit court judgment against Barbara, but that motion went unresolved.

Annette died on February 12, 2012, leaving no children. Barbara died on October 13, 2012. It appears that this case was dormant for several years thereafter. In December 2017, Teresa filed a motion for summary judgment. She claimed that she sold the property to Cleveland in her "full authority and discretion" for a reasonable price in the best interest of the life beneficiary, Annette. Additionally, she argued that no proceeding was commenced to challenge the sale as a breach of trust within the one-year statute of limitations provided by Tennessee Code Annotated section 35-15-1005. Cleveland Gibbs filed a separate motion for summary judgment, incorporating by reference both the facts and the legal arguments made by Teresa regarding the statute of limitations. Alternatively, however, he argued that the current petition to set aside the deed was barred by res judicata because the issues alleged should have been raised in the previous detainer action involving the same parties and the same property. Thus, Cleveland argued that the present petition was barred both by the statute of limitations and by res judicata. Barbara's estate filed a response, maintaining that the 2005 conveyance was a fraudulent conveyance and invalid.^[3] On May 30, 2018, the probate court entered an order granting summary judgment to both defendants, Teresa and Cleveland. Initially, the court stated that Teresa "was the duly nominated and acting Trustee" of the trust and that she was given "full discretion" to handle trust property. The court stated that these undisputed facts negated an essential element of the petitioner's claim and supported a finding that Teresa "did not blatantly breach her fiduciary duty as Trustee" by selling the property to her son Cleveland. "Additionally," the court continued, it found no genuine issue of material fact with respect to whether the action was barred by the statute of limitations. The court found that the undisputed facts showed that Barbara, her attorneys, and her conservator all had actual notice of the 2005 conveyance to Cleveland in 2009 and 2010. Based on these undisputed facts, the court found that the petition to set aside the deed, filed in this action in 2012, was barred by the one-year statute of limitations found in Tennessee Code Annotated section 35-15-1005. As such, the trial court found that both respondents were entitled to summary judgment on the basis that the action was barred by the statute of limitations. Finally, the trial court further found that the current petition was barred by the doctrine of res judicata because the primary issue in this case involved the lawful ownership of the property, which was an issue that could have been addressed in the detainer action involving the same parties or their privies. The trial court granted summary judgment to both defendants on this basis as well. Barbara's estate was ordered to pay attorney fees under Tennessee Code Annotated section 35-15-1004(a).

Barbara's estate appealed to this Court. On October 9, 2020, this Court issued an opinion affirming the trial court on all issues. See In re Conservatorship of Cross, No W2018-01179-COA-R3-CV, 2020 WL 6018759 (Tenn. Ct. App. Oct. 9, 2020). Regarding the statute of limitations, we concluded that Barbara had sufficient information regarding her potential claim, or to know that additional inquiry was necessary, at the earliest in November 2005 when Teresa sold the property to Cleveland, or at least by May 2009 when Cleveland filed the detainer action against Barbara, or at the latest when Barbara's legal counsel filed a motion to remove the matter to probate court in August 2009. Id. at *7. Therefore, we explained, the 2012 petition filed in this action came too late. Id. We also affirmed the finding of res...