Pollock v. Phillips (In re Phillips)

523 B.R. 846

In re Joy Marie PHILLIPS, Debtor.Tiffany Pollock, Personal Representative of the Estate of Frederick E. Phillips, Deceased, Plaintiff,

v.Joy Marie Phillips, Defendant.

Bankruptcy No. 13–12959–M.

Adversary No. 14–01006–M.

United States Bankruptcy Court, N.D. Oklahoma.

Signed Dec. 23, 2014.

Mark D. Lyons, Lyons & Clark, Inc., Tulsa, OK, for Plaintiff.

L. Michele Nelson, L. Michele Nelson, P.C., Tulsa, OK, for Defendant.

TERRENCE L. MICHAEL, Chief Judge.

MEMORANDUM OPINION

Complex problems can have simple solutions. Moreover, what appears complicated at first blush is not always so. In this adversary proceeding, the parties have made various and sundry accusations of fraud, misconduct, and other misdealings. The allegations of malfeasance have not been limited to the parties; counsel have taken their best shots at each other as well. However, when one separates the vitriol from the facts, the matter becomes much simpler. So simple, in fact, that summary judgment becomes a real possibility. The sole question before the Court is whether, under Oklahoma law, a probate estate must file a separate action to recover money or property that the probate estate claims to be the rightful owner of, and, if so, whether the probate estate is governed by the same statute of limitations that govern other civil litigants. The following findings of fact and conclusions of law are made pursuant to Federal Rule of Bankruptcy Procedure 7052.

Jurisdiction

This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b), and venue is proper pursuant to 28 U.S.C. § 1409.¹ Reference to the Court of this matter is proper pursuant to 28 U.S.C. § 157(a). The issues presented in this matter are core proceedings contemplated by 28 U.S.C. § 157(b)(2)(I).

Summary Judgment Standard

This matter is before the Court pursuant to the Motion for Summary Judgment (“Defendant's Motion”) ² filed by Joy M. Phillips; Plaintiff's Response ³ thereto filed by Tiffany Pollock, Personal Representative of the Estate of Frederick E. Phillips; and Defendant's Reply.⁴ Summary judgment is available “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” ⁵ “[W]here the moving party has the burden-the plaintiff on a claim for relief or the defendant on an affirmative defense-his showing must be sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party” ⁶ It is well established that

[a]t the summary judgment stage, facts must be viewed in the light most favorable to the nonmoving party only if there is a “genuine” dispute as to those facts. Fed. Rule Civ. Proc. 56(c). As we have emphasized, “[w]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.... Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’ ” Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586–587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (footnote omitted). “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment.⁷

The United States Court of Appeals for the Tenth Circuit has recognized the ruling in Scott v. Harris in Price–Cornelison v. Brooks.⁸

Overview

This is a battle between the probate estate of Frederick E. Phillips, represented by Tiffany Pollock, its personal representative (“Pollock” or “Plaintiff”) and Joy Phillips (“Ms. Phillips” or “Defendant”), the widow of Frederick E. Phillips. At issue are five antique cars, or, in the alternative, their value. Pollock claims the cars are property of the probate estate, while Ms. Phillips claims them as her separate property. Pollock has known of Ms. Phillips's claim to the cars since August 31, 2011, and has never filed an action against Ms. Phillips to recover the vehicles or the proceeds of their sale. All Pollock has done is file a motion in the probate court asking that judgment be entered against Ms. Phillips for the value she received from the sale of the vehicles.

After the motion was filed, Ms. Phillips sought relief under Chapter 7 of the United States Bankruptcy Code. The probate estate claims to be owed the value of the vehicles, and contends that its claims are non-dischargeable under § 523(a)(4) and (6). The parties have litigated fiercely to date. Both have filed motions for summary judgment. As part of the motion for summary judgment filed by Ms. Phillips, she argues that the statute of limitations has run on any claim the probate estate had or may have had against her, and that, as a result, no issue of dischargeability exists before this Court. Should Ms. Phillips prevail on this issue, all other matters raised by the parties fall by the wayside.

Findings of Fact⁹

The Probate Case

Frederick E. Phillips (“Mr.Phillips”) died a resident of Tulsa County, Oklahoma on June 8, 2011.¹⁰ His estate is being probated in the Tulsa County District Court, Case No. PB–2011–372 (the “Probate Case” or “Probate Court”).¹¹ Defendantis the surviving spouse of Mr. Phillips, and they were married at the time of his death.¹² On June 13, 2011, Defendant was appointed as special administrator of the Estate of Mr. Phillips (the “Probate Estate”) pursuant to Letters of Special Administrator issued by the court in the Probate Case.¹³ On July 21, 2011, Defendant declined to serve as the personal administrator of the Probate Estate. ¹⁴ On that same date, Pollock, daughter of Mr. Phillips, was issued Letters of Administration appointing her personal administrator of the Probate Estate.¹⁵

Prior to his death, Mr. Phillips and/or Defendant were in possession of five motor vehicles (the “Vehicles”).¹⁶ Pollock admits that she is not aware of, or in possession of, a certificate of title issued to Mr. Phillips for any of the Vehicles.¹⁷ On or about May 9, 2011, the Vehicles, which were owned solely by the Defendant and which were never titled in the name of Mr. Phillips, were sold to Fred Lemons, owner of Tri V Auto Sales, by endorsement of the Defendant's Certificates of Title to Tri V Auto Sales and delivery on her behalf by Mr. Phillips, as her husband and her agent.¹⁸ On or about August 31, 2011, Pollock and her attorney came into possession of a letter from Rod Baker dated August 30, 2011 (the “Rod Baker Letter”). The Rod Baker Letter advised Pollock that the Vehicles had previously been sold and the proceeds had previously been delivered to Defendant by Fred Lemons.¹⁹

After receipt of the Rod Baker Letter, the only action taken by Pollock prior to the filing of this adversary proceeding was the filing of a “Motion to Require Former Special Administrator to Disgorge and Repay the Estate Funds She Received and Final Account and Petition for Order Allowing Final Account, Determination of Heirship, and Distribution” (the “Probate Disgorgement Motion”) in the Probate Case on October 11, 2013, which sought to surcharge the Defendant's distribution and/or disgorge the funds she received from the sale of the Vehicles.²⁰ One of the allegations made by Pollock in the Probate Disgorgement Motion is that Defendant, in her capacity as special administrator of the Probate Estate, filed a “Preliminary Inventory and Application to Amend Inventory” (the “Inventory”) on August 16, 2011, and that leave to amend the Inventory was granted by the Probate Court on September 29, 2011.²¹ The contents of the Inventory are not part of the record before this Court. Pollock has never filed a separate civil action against the Defendant to recover the Vehicles or their value prior to the filing of this adversary proceeding.²²

The Bankruptcy Case and the Adversary Proceeding

On December 23, 2013, Defendant filed an original petition for relief under Chapter 7 of the United States Bankruptcy Code.²³ Pollock, as personal representative of the Probate Estate, filed this adversary proceeding against Ms. Phillips on February 10, 2014. In this adversary proceeding, Pollock alleges that 1) the Vehicles were property of the Probate Estate; 2) Defendant sold the Vehicles while acting as special administrator of the Probate Estate and retained the funds for her own benefit; 3) Defendant's failure to file an accounting in the Probate Case and failure to turn over the Vehicles or their proceeds to Pollock was a violation of Defendant's fiduciary duty as a special administrator; and 4) such sale and failure to remit proceeds was a wilful and malicious injury to the Probate Estate. Defendant alleges that the Vehicles were her own personal property and never part of the Probate Estate. She argues that she had no obligation to account for the proceeds in the Probate Case, and therefore cannot be found in violation of any fiduciary duty for failing to do so. Defendant argues, in the alternative, that even if Pollock had a valid claim, she waited too long to press her case in a competent court of law. Defendant has consistently asserted an affirmative defense that Pollock's claims are time-barred under Oklahoma law. Defendant now seeks summary judgment on this issue.

Conclusions of Law

Authority of a Probate Court Under Oklahoma Law

In Oklahoma, “[p]robate actions are strictly statutory and the district court in such proceedings has limited jurisdiction as prescribed by statute.” ²⁴Section 1 of title 58 of the Oklahoma...