In re Thompson

636 S.W.3d 1

IN RE ESTATE OF B. Ray THOMPSON, Jr. and In re Estate of Juanne Jennings Thompson

No. E2019-01364-COA-R3-CV

No. E2019-01365-COA-R3-CV

Court of Appeals of Tennessee, Eastern Section, AT KNOXVILLE.

January 27, 2021 Session

FILED April 6, 2021

Steven A. Riley and Keane A. Barger, Nashville, Tennessee, for the appellant, Nicole Diane Mattina Thompson.

Ronald T. Hill and Rameen J. Nasrollahi, Knoxville, Tennessee, for the appellees, Adella Sands Thompson and Rebekah Lee-Isla Thompson Palmer.

Daryl R. Fansler, Knoxville, Tennessee, for the appellee, Catherine Vance Thompson.

Kristi M. Davis, J., delivered the opinion of the court, in which John W. McClarty and Thomas R. Frierson, II, JJ., joined.

Kristi M. Davis, J.

This consolidated appeal arises from a dispute among various children and grandchildren of B. Ray Thompson, Jr. ("B. Ray Jr.") and Juanne Jennings Thompson ("Juanne" or together, "Decedents"),¹ over the estates of both B. Ray Jr. and Juanne. When three of the Decedents’ children obtained a court order sealing the records for both estates, a different faction of the family filed petitions to intervene in the estate actions and to unseal the records. The Chancery Court for Knox County (the "trial court") denied the petitions for intervention and left several documents under seal. This appeal followed. We hold that the trial court abused its discretion. The judgment of the trial court is reversed, and the case remanded for further proceedings.

I. FACTUAL AND PROCEDURAL BACKGROUND

Decedents have five children and ten grandchildren. The five children are Catherine Vance Thompson ("CVT"), Adella Sands Thompson ("AST"), Rebekah Thompson Palmer ("RTP"), Sarah Thompson ("ST"), and B. Ray Thompson, III ("B. Ray III"). In 2009, Decedents established a trust for the benefit of their ten grandchildren, which purportedly consists of different sub-trusts benefitting each grandchild. This trust is referred to as the "G-10 Trust." During their lifetimes, both Decedents also established their own revocable living trusts, which are referred to as, respectively, the B. Ray Thompson, Jr. Revocable Living Trust (the "B. Ray Jr. Trust") and the Juanne Jennings Thompson Revocable Living Trust (the "Juanne Trust"). The G-10 Trust is separate from both the B. Ray Jr. Trust and the Juanne Trust, although the G-10 Trust is a beneficiary of both.

B. Ray Jr. died testate on June 29, 2017. Juanne, family friend Albert Huddleston ("AH"), and AST were named as co-executors of B. Ray Jr.’s estate.² Per his will, the residue of B. Ray Jr.’s estate was to flow to the B. Ray Jr. Trust. CVT, AST, RTP, and AH were all initially co-trustees of the B. Ray Jr. Trust. B. Ray Jr.’s will was submitted for probate in the trial court on July 20, 2017. On August 4, 2017 Juanne filed a pleading titled "Petition to Set Aside Homestead, Exempt Property, Year's Support, and Elective Share, and Spouse's Election to Include in Decedent's Estate Certain Property" ("Petition to Set Aside") in the trial court. This petition alleged, inter alia , that while alive, B. Ray Jr. made numerous fraudulent transfers to the B. Ray Jr. Trust as a means of depriving Juanne of her elective share of the Decedents’ substantial estate. Before Juanne's petition could be heard, however, Juanne passed away on October 4, 2017. Juanne died testate, and her will also provided that the residue of her estate was to pass to the Juanne Trust. CVT, AST, RTP, and AH were the initial co-executors of Juanne's estate, and Juanne's will was also submitted for probate in the trial court. CVT, AST, and RTP also serve as co-trustees of the Juanne Trust.³

B. Ray Jr. and Juanne were not in agreement regarding the disposition of their estate, and the Petition to Set Aside was the culmination of that disagreement. However, in early 2018, all parties involved in administering Decedents’ respective estates and trusts reached an agreement regarding Juanne's claims against B. Ray Jr.’s estate and sought approval from the trial court for said agreement. The motion for approval, the settlement agreement, and the attached exhibits are referred to collectively herein as the "Consent Agreement." Shortly after settlement was reached, on March 22, 2018, the parties moved the trial court for an order to file documents under seal in B. Ray Jr.’s estate action.⁴ The parties asked for an order providing that any documents "containing financial information, or otherwise relating to the financial interests of [Decedents] ... be filed with the Court under seal and maintained as confidential by the parties and their counsel[.]" The parties also requested that hearings be closed to the public, that the trial court's rulings addressing any financial information also be sealed, and that any transcripts or portions thereof relating to Decedents’ financial information filed with the court be filed under seal and maintained as confidential by the parties. The motion cited Tennessee Rule of Civil Procedure 26.03 and alleged that good cause existed for such an order because "information relating to the Decedents’ financial interests and their trusts and estates constitute matters of no legitimate public interest and the Parties’ right to privacy ... is appropriately protected by [the trial court]."

The trial court entered an order on March 22, 2018, granting the parties’ motion and effectively sealing the court's record and closing any hearings to the public. Shortly thereafter, a final order (the "Final Judgment") resolving the fraud allegations was entered and placed under seal.

Meanwhile, a dispute arose between daughters CVT, AST, and RTP (hereinafter referred to as "Appellees"),⁵ and AH regarding Juanne's estate. This dispute led to Appellees filing, on December 11, 2018, a petition to remove AH as co-executor of Juanne's estate ("Petition for Removal"). On December 12, 2018, the trial court entered an agreed order in Juanne's estate action providing that all parties "agree that the [Petition for Removal] should be placed under seal until further Order of the Court." This order also provided that "all subsequent pleadings related thereto shall be filed under seal pending further Orders of the Court." Accordingly, the answer and counterclaim to the Petition for Removal were also filed under seal, as was the answer to the counterclaim (collectively, the "Removal Documents").⁶

In the meantime, a different faction of Decedents’ children and grandchildren became interested in Decedents’ estate actions. After learning that the court records in both estates were effectively sealed, B. Ray III and his daughter, Nicole Thompson ("NT" or "Appellant"), ST, and two of ST's children (collectively, "Intervenors") filed petitions to intervene in both B. Ray Jr.’s and Juanne's estate cases on May 22, 2019. In both petitions, the movants sought intervention and modification of the current protective orders so as to give Intervenors access to the sealed documents. Alternatively, Intervenors asked that all documents in the record be unsealed. Intervenors asserted that the trial court should only seal documents for a "compelling" reason and that the general financial privacy of Decedents and the parties did not meet that standard.

Appellees adamantly opposed intervention but agreed that the trust instruments for both the B. Ray Jr. Trust and the Juanne Trust should be released to Intervenors’ counsel, as well as the corporate co-trustee of the G-10 Trust, to ensure the G-10 Trust was appropriately funded as a beneficiary of the Decedents’ other respective trusts. An agreed order allowing disclosure of the trust instruments to Intervenors’ counsel was entered on July 2, 2019.

A hearing on both petitions for intervention was held on July 9, 2019. The trial court denied the request for intervention and refused to unseal any court records. The trial court found that Intervenors "do not qualify under Tenn. R. Civ. P. 24.01 for Intervention as of Right" and that "Permissive Intervention pursuant to Tenn. R. Civ. P. 24.02 would cause undue delay and would prejudice the adjudication of the rights of the original parties." Intervenors appealed to this Court, and we consolidated the appeals. Before the appeal could proceed, however, we issued an order explaining that the trial court failed to follow the correct procedure in sealing its record and expounding on the circumstances under which documents may remain under seal in this Court. We explained in pertinent part:

For a document to be filed under seal in the appellate court pursuant to subdivision (b), the trial court must have made an individualized determination that the particular document should have been filed under seal. A document will not be filed under seal in this court based solely on the stipulation of the parties or on a party's designation of the document as confidential pursuant to a protective order.

Tenn. Ct. App. R. 15(b)(ii).

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The [trial court's] Protective Order merely states that the parties "moved" the court and showed "good cause" for the granting of the Protective Order. The Protective Order fails to justify sealing any specific document or information filed with the clerk of the court. The designation of what would be treated as confidential was not based upon an individualized determination made by the trial court. More specifically, the Protective Order does not satisfy the more rigorous requirements to seal court records that are within the purview of "public records," meaning the information and documents on file with the clerk of the court.

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Accordingly, the clerk of this court shall return the record to the trial court to afford each party the opportunity to identify the specific documents and information that party seeks to file under seal along with a statement of the relevant facts and authorities on which they rely. Any party opposing or supporting the motion shall have the opportunity to file a response. Thereafter, and to the extent the trial court

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