Last term of the the Georgia Court of Appeals brought us a case that makes clear a procedural point, albeit an important one for creditors of an estate.
When suing a represented estate on a debt, one may require the filing of an inventory or accounting if one can show that a waiver of that requirement works an injury to the creditor.
It is not enough, though, to show only the potential for injury. If you have only that, you're left with ordinary discovery rules in probate litigation.
Full text of the case follows the "read more" below.
713 S.E.2d 464Court of Appeals of Georgia.In re ESTATE OF Isaac WILLIS.No. A11A0401.June 30, 2011.DILLARD, Judge.*377 New Falls Corporation (“New Falls”) appeals the Probate Court of Fulton County's denial of its petition to require the executors of the estate of Isaac Willis to file an inventory and returns pursuant to OCGA §§ 53–7–33 and 53–7–69. New Falls argues that the probate court erred by denying this petition because it made an adequate showing of injury, such that the probate court should require the filing of an inventory by the estate. For the reasons set forth infra, we affirm the probate court's denial of New Falls's petition.The record shows that prior to the death of Isaac Willis, New Falls filed suit in the State Court of Fulton County in March 2005 to collect on promissory notes issued to Willis by Wachovia Bank, which were later assigned to New Falls. The original principal amounts of the promissory notes, issued in 2001 and 2002, were $300,000, $150,000, and $500,000, respectively. After Willis allegedly defaulted on these notes, New Falls filed suit to recover the principal amount owed on each note, plus interest and attorney fees.Willis died on August 7, 2007, while the litigation on the promissory notes was still pending. His sons, who were the named executors of his estate, petitioned to have their father's will probated in solemn form. The will, dated November 29, 1999, included a provision relieving the estate's executors from the duty “to make or file any reports, annual or other returns, or inventory, inventories or appraisals ... to any court.”Thereafter, New Falls substituted the estate's executors as parties in the State Court lawsuit against Willis, and at this point, the executors' counsel indicated to New Falls that the estate did not have sufficient assets to pay the entirety of the alleged debt. New Falls then sought verification of this claim and received “[unsworn and unverified] information concerning the assets and other debts of the estate,” but claims that this information was “insufficient” to allow it to properly evaluate the estate's settlement proposal. Accordingly, New Falls filed a petition with the probate court in January 2010, requesting that the court direct the executors to file an inventory and return.The probate court denied New Falls's petition in March 2010, holding that it failed to make a “proper showing that would cause the probate court to require [the executors] to file inventory and *378 returns.” This appeal by New Falls follows.At the outset, we note that Georgia law requires executors to file inventories of a decedent's property and annual returns.1 Nevertheless, a testator may, by will, dispense with these requirements, “provided the same does not work any injury to creditors or persons other than beneficiaries under the will.”2 As a creditor of Isaac Willis, New Falls claims that his will's dispensation of these requirements will work an injury, and as such, the probate court should have required the executors to file inventories and returns to assist its settlement evaluations. Specifically, New Falls claims that (1) it requires the information to properly negotiate a settlement with the estate and (2) obtaining the information through post-judgment discovery would further deplete the estate's (allegedly) limited resources.In making this argument, New Falls relies on OCGA §§ 53–7–33 and 53–7–69, neither of which provides for a cause of action.3 The function of the sentences at issue in these two statutory provisions is simply to note that the testator's ability to dispense with filing requirements does not make the executor unaccountable when a creditor or nonbeneficiary **466 will be injured by the executor's exemption from filing inventories or annual returns.4 Further, New Falls has not even alleged that it has suffered an injury.5 Instead, New *379 Falls has alleged only the potential for injury, which is not enough to compel an accounting.6 Thus, New Falls must obtain (or should have obtained) the information it seeks through normal discovery or other available means.7Accordingly, for the foregoing reasons, we affirm the probate court's denial of New Falls's petition.8Judgment affirmed.SMITH, P.J., and MIKELL, J., concur.
Tanner Pittman, LLC is a West Georgia law firm that specializes in estate services, civil litigation, and legal transactions.
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