In re Goubeaux

2023-Ohio-647

ESTATE OF LEONARD JOSEPH GOUBEAUX, aka LEONARD J. GOUBEAUX

C. A. No. 2022-CA-7

Court of Appeals of Ohio, Second District, Darke

March 3, 2023

(Appeal from Common Pleas Court-Probate Division Trial Court Case No. 20-1-034)

MARY E. WARRICK and WILFRID G. DUES, Attorneys for Appellants

SARAH G. WORLEY, Attorney for Appellee

OPINION

TUCKER, J.

{¶ 1} Four grandchildren of decedent Leonard J Goubeaux appeal from the trial court's July 5, 2022 entry construing the decedent's will to resolve a dispute regarding the distribution of proceeds from the sale of the decedent's Kentucky real estate.

{¶ 2} The grandchildren-Michael, Harrison, Jack, and Chase Detrick-first contend the trial court erred in declaring its July 5, 2022 entry to be an appealable order. Although the grandchildren have appealed from the entry to protect their rights, they assert that it does not qualify as a final order under R.C. 2505.02(B). Alternatively, if the trial court's July 5, 2022 entry is appealable, the grandchildren maintain that the trial court erred in applying the doctrine of "deviation" to order the real-estate sale proceeds distributed contrary to the terms of their grandfather's will.

{¶ 3} We conclude that the trial court's July 5, 2022 entry does not qualify as a final order under R.C. 2505.02(B). Therefore, we lack jurisdiction to address the merits of the entry, and the appeal must be dismissed.

I. Background

{¶ 4} Leonard Goubeaux died testate in November 2019. His will named his children, Greg Goubeaux and Sandee Detrick, as co-executors. As relevant here, Item I of the will provided for the payment of all debts of Leonard's estate. Item II left a boat and trailer to Sandee. Item III provided for real estate Leonard owned on Lake Cumberland in Kentucky to be held in a trust for the benefit of Greg and Sandee for their lives. Greg and Sandee also were to be trustees during their lives. Upon their death, Item III provided for the use of the real estate to pass to Leonard's grandchildren during their lives. Item III additionally provided for the trust to terminate upon the occurrence of one of three events: (1) the agreement of all the grandchildren to sell the real estate, (2) the death of the last living grandchild, or (3) the existence of insufficient funds in the trust to pay the taxes and other expenses of the real estate. Item III then provided: "Upon the termination of the Trust, any proceeds remaining in said trust shall be divided equally among the grandchildren and their heirs per stirpes." Finally, Item V of the will provided for "all of the rest and residue" of Leonard's real and personal property to be divided equally between Greg and Sandee.

{¶ 5} Greg and Sandee began probating the will in January 2020. During the course of those proceedings, they were required to sell the Lake Cumberland real estate to satisfy a mortgage on the property and other debts. Greg and Sandee signed the sale documents in their capacity as executors of Leonard's estate. The sale occurred in November 2020 and resulted in net proceeds of $190,722.55 to the estate. Thereafter, a dispute arose regarding distribution of the proceeds. On several occasions, Greg, Sandee, and the grandchildren attempted to resolve and settle their disagreement without success. In November 2021, the parties' respective counsel jointly asked the trial court to schedule a pretrial conference and to provide direction regarding how to proceed. In a December 2021 order, a magistrate acknowledged concerns about allegedly "ambiguous language" in the will. The magistrate noted, however, that no complaint had been filed raising any specific issues for the probate court to resolve. The magistrate declined to schedule a hearing or provide any guidance in the absence of a motion or complaint raising specific issues.

{¶ 6} The next two entries in the record are a March 2022 "pretrial brief" filed by Greg and a May 2022 response filed by the grandchildren. In his filing, Greg argued that the Lake Cumberland property never went into a trust. He claimed no trust was created because he and Sandee were required to sell the real estate to satisfy Leonard's debts. Greg argued that the residuary clause in Item V of the will entitled him to one-half of the estate assets, including the net proceeds from the Lake Cumberland property. Alternatively, assuming arguendo that a testamentary trust did exist and that it was funded with the proceeds of the real-estate sale, Greg argued that he was entitled to funds equal to a life-estate interest in the property.

{¶ 7} In their responsive brief, the grandchildren argued that the Lake Cumberland property passed immediately into a trust upon Leonard's death with title to the property vesting in Greg and Sandee as trustees. The grandchildren argued that Greg and Sandee necessarily sold the property in their capacity as both executors and as trustees. The grandchildren also asserted that their own signatures had been obtained giving their permission for the property to be sold. They argued that their signatures would have been unnecessary if no trust existed. Finally, the grandchildren asserted that once the trust was terminated and the real estate was sold, Item III of the will granted them the net proceeds to be divided equally among themselves.

{¶ 8} In June 2022, while the foregoing briefs remained pending in the trial court, the grandchildren filed a motion to have Greg removed as co-executor. They cited his refusal to sign a final accounting that already had been signed by Sandee, their mother. Greg opposed the motion, noting that his refusal to sign stemmed from the parties' dispute over disposition of the Lake Cumberland sale proceeds. Greg requested a hearing for the trial court to construe the will.

{¶ 9} The next entry in the record is the trial court's July 5, 2022 judgment entry. The trial court found no need for a hearing. It noted that Leonard's "plan for the Kentucky property never came to pass" because it was sold to pay estate debts. The trial court found that "[a]ll parties (adult children and grandchildren) participated in the sale." With regard to the proceeds from the sale, the trial court reasoned:

Both briefs speak to the principle that the Court is to carry out the intentions of the testator to the extent possible. Leonard J. Goubeaux's intent was for his land and cabin to be enjoyed by his children and grandchildren. His planning and the specific terms of his trust never came to pass due to circumstances out of his control. The debts of the estate made it impossible to carry out the trust as intended.

Under the doctrine of deviation, a Court can direct or permit a deviation from the terms of a trust where compliance is illegal or impossible, or where owing to circumstances not known to the settlor and not anticipated by him compliance would defeat or substantially impair the accomplishment or purposes of the trust. Daloia v. Franciscan Health (1997), 79 Ohio St.3d 98; Carnahan v. Johnson (1998), 127 Ohio App.3d 195. The Carnahan decision speaks to the principle that if trust assets are liquidated, the sale proceeds are merely a substitute for the assets and should be distributed as originally intended.

The intent of Leonard J. Goubeaux's will was for his Kentucky property to be enjoyed by his children and grandchildren, potentially for decades to come. While that did not happen, it is more than obvious that Leonard J. Goubeaux wanted the entire group of individuals to benefit from the property. It would not be consistent with the will to completely exclude any party.

The Court finds that the appropriate solution is to award each party its respective interest in the property as of the date of death of Leonard J. Goubeaux. Life estate interests can be valued through guidance from the Code of Federal Regulations and the Internal Revenue Service. Based upon the said guidance and relevant I.R.S. actuarial tables, the life interest for Greg K. Goubeaux would be 41.278 % (.41278), divided by 2 since the life estate is shared with another individual. Thus, Greg K. Goubeaux's interest is 20.639 %. Similarly, Sandee Detrick's interest is 40.313% (.40313) divided by 2, or 20.1565%. The Court would then divide the remainder among the four grandchildren (the valuations are explained further in the exhibit attached to this Entry). The Court therefore finds that the proceeds derived from the sale of assets in Item III of decedent's will shall be divided as follows:

Greg Goubeaux 20.639%

Sandy Detrick 20.1565%

Michael Detrick 14.801125%

Harrison Detrick 14.801125%

Jack Detrick 14.801125%

Chase Detrick 14.801125%

The Court will separately direct the deputy clerk to schedule a Status Conference in 45-60 days. The time period is set forth so that any party can appeal this decision, if so desired. As such, no distribution shall be made prior to the Status Conference unless the Court's guidance resolves the entire matter in which case the Court will approve final distribution upon the written consent of all parties.

The Court will defer any ruling upon the Motion to Remove Co-Executor pending the Status Conference.

July 5, 2022 Judgment Entry at 2-3.

{¶ 10} Shortly after the trial court's ruling, the grandchildren moved for a hearing to address various issues, and Greg moved for reconsideration of the trial court's July 5, 2022 entry. For its part, the trial court filed a July 27, 2022 entry stating that it intended its July 5, 2022 judgment entry "to be its final decision in this matter, and therefore a final appealable order." This appeal by the grandchildren followed.

II. Analysis

{¶ 11} We begin our analysis by noting that an appellate court has jurisdiction to review only final orders or...