The Georgia Supreme Court handed down the probate case of Myers, Executor v. Myers, today.
In some ways, the case is an unremarkable example of an executor using an estate as a cash cow for his personal expenditures and, among other things, granting himself
$53,000 in executor's fees while so doing.
The case books are littered with such fact patterns. Perhaps the most important take-away from Myers is the holding that an executor may not continue to run a single-member-LLC business in the estate, when that LLC's operating agreement calls for its dissolution upon the death of a member.
This is particularly useful information for the estate practitioner, because nearly all form operating agreement forms call for exactly this. Yet, it is common enough for an executor to continue to run and fund an estate business for months after a decedent's death. According to the Supreme Court today, so doing may be grounds for the executor's removal.
Full text of the opinion follows after the "read more" break.
Myers v. Myers, 2015 Ga. LEXIS 502
Supreme Court of Georgia
July 6, 2015, Decided
 NAHMIAS, Justice.
James T. Myers, Sr. (Decedent) executed his last will and testament on
June 9, 2008, and died on September 29, 2012. He was survived by his wife and
two sons, James T. Myers, Jr. (Appellant) and Anthony Lee Myers (Appellee).
Appellant was appointed executor by the will. After a motion by Appellee and
a hearing, the probate court entered an order on August 1, 2014, finding that
Appellant had violated his fiduciary duty in numerous ways, removing him as
executor, and appointing a county administrator to replace him. Appellant filed
a timely notice of appeal to this Court. We affirm.
1. The will directs that Decedent's house be placed in trust as a life
estate for his wife, with the remainder to be divided between Appellant and
Appellee, who must pay equally for the house's maintenance. Except for certain
personal effects, the rest of Decedent's estate is divided evenly into separate
trusts for each son. The will names Appellant as the first choice for executor
and trustee and Appellee as the second choice. The probate court admitted the
will to probate in solemn form on November 15, 2012, and letters testamentary
were issued to Appellant that day. As executor, Appellant established  the trusts and began managing Buckshot Properties, LLC (Buckshot), a company
previously owned solely by Decedent, which is one of the estate's major assets.
During his time as executor, Appellant withdrew $63,401.05 in executor fees.
On October 7, 2013, Appellee filed a "Petition To Cite Executor To A
Settlement Of His Account And Further To Inquire Whether The Executor
Should Be Sanctioned, Including Removal, Due To Breach Of Fiduciary Duty,
Misconduct And/Or Mismanagement Of The Estate Assets." The petition
alleged, among other things, that Appellant had failed to provide complete
information about the estate, used estate funds to pay personal expenses, and
used a truck owned by the estate as his personal vehicle. The petition also
alleged that Appellant had a conflict of interest as executor of the estate because
he was operating a business on land owned by Buckshot without paying rent,
was using estate resources to fund Buckshot's expenses, and was paying
personal expenses from Buckshot's business account. In his answer to the
petition, Appellant sought to remove Appellee as a beneficiary under the will
based on a portion of the will's in terrorem clause that requires the removal of
a legatee  or devisee who unsuccessfully seeks the removal of a personal
Appellee then filed an amended petition "expressly withdraw[ing] his
request that the Executor be removed and for other sanctions and expressly
limit[ing] his Petition to request an accounting for the Executor." The amended
petition, however, repeated the original petition's allegations of breach of
fiduciary duty and conflict of interest. The probate court issued a scheduling
order, setting a hearing on the "Petitions to Cite Executor and Motion to
Remove Executor." Appellant filed a motion again requesting the removal of
Appellee as a devisee or legatee of the will, this time based on the will's
provisions requiring disinheritance of any beneficiary who "objects in any
manner to any action taken or proposed to be taken in good faith by my Personal
Representative" or who "claims entitlement to (or any interest in) any asset
alleged by my Personal Representative to belong to my Probate Estate." The
court then issued an amended scheduling order setting a hearing on the
"Petitions to Cite Executor, Motion to Remove Executor, and Motion to
Remove Devisee or Legatee."
The hearing was held on May 21, 2014. At the outset, Appellee 
acknowledged that his petition to remove Appellant as executor had been
withdrawn, but in his closing argument, he noted that although he had
withdrawn his original petition in the face of the threat of disinheritance, the
probate court still had "the authority to take action." Appellant admitted that he
was driving a truck belonging to the estate and that he used estate funds to pay
for maintenance on Decedent's house. Appellant also testified that he had
worked for Decedent at Buckshot and continued to run the business after
Decedent's death, including withdrawing funds from the estate for the company
and using money from the company to pay his personal bills.
On August 1, 2014, the probate court issued an order removing Appellant
as executor and appointing a county administrator, explaining: "[A]lthough
[Appellee] has not requested the Court remove the Executor, after hearing the
evidence presented at the hearing . . . the Court finds that good cause exists to
remove [Appellant]." The probate court concluded that Appellant had a conflict
of interest and had breached his fiduciary duty in numerous ways, including by
using the estate's truck, using estate funds to pay maintenance on the house, not  paying rent for his use of Buckshot's property, not keeping records of rent paid by other tenants to Buckshot, and using Buckshot's business checking account to pay personal bills. The court found that Appellant had overpaid himself by $53,066.70 in executor's fees and ordered him to repay that amount as well as $43,339.21 that Buckshot wrongfully received from the estate. The court
determined that Buckshot's operating agreement requires the company to be
dissolved upon Decedent's death, so Appellant was not permitted to use estate
funds to continue operating it. The court ordered that the new executor "begin
to wind up the affairs" of Buckshot.
On appeal, Appellant does not challenge the probate court's factual
findings, but he contends that his continued operation of Buckshot was proper,
that he lacked notice that the hearing could result in his removal as executor, and
that the court's appointment of a county administrator as executor was reversible
error. None of those contentions has merit. The probate court found that Appellant breached his fiduciary duty as executor in numerous ways, but he challenges only those rulings regarding his operation of Buckshot.
1 The probate court also froze the  estate's assets, ordered the appointment of a special co-trustee, denied Appellant's motion to remove Appellee as a beneficiary, and ordered Appellant to repay to the estate $8,000 in attorney fees. Appellant does not challenge these rulings.
(a) Appellant argues that his continued operation of Buckshot was
consistent with Decedent's intentions because, although the will does not
mention Buckshot, it gives the executor all of the powers set out in former
OCGA § 53-12-232, which included the power "to continue or participate in the
operation of any business or other enterprise, whatever its form or
organization."2 The will further provides that the executor "shall have . . . the
power to form, terminate, continue or participate in the operation of any
business enterprise including . . . a limited liability company," and authorizes the
executor to make investments, borrow, lease, make repairs, and "retain any real
estate interests, closely held securities or affiliated companies or business
interests, and to sell or dispose of such interests only after careful consideration
and after determining that sale or disposition is under the existing circumstances
in the best interests of" the beneficiaries. Appellant also  notes that OCGA § 14-11-506 provides that the executor of a deceased sole member of a limited
liability company "shall become a member of the limited liability company."
Under these statutes and will provisions, Appellant, as executor, took Decedent's place as the sole member of Buckshot, and he had all the powers
associated with that position. The problem for Appellant is that under the
unequivocal terms of Buckshot's operating agreement, the only things he could
do in that position involved dissolving the company. See OCGA § 14-11-305
(4) (A) (explaining that the duties of an LLC's member may be restricted by
provisions in a written operating agreement). The operating agreement names
Decedent as "the Member" of Buckshot, and it provides that "the death,
withdrawal, removal, bankruptcy, insolvency or incompetency of the Member"
dissolves the company. The duties of the successor member are clearly
expressed and strictly limited: "Upon the occurrence of any of the terminating
events . . . , the Company shall be dissolved,  the Member shall convert the
Company's assets into cash, and all such cash shall be applied and distributed
in the following order of priority . . . [by which assets remaining after paying
debts go to the Member]."
The record shows that as of the date of the hearing, which was nearly 18
months after Appellant became the estate's executor and Buckshot's successor
member, he had yet to follow this mandate of the operating agreement by taking
steps to effectuate the dissolution of the company. Instead, Appellant withdrew
$43,339.21 from the estate to continue operating Buckshot, including
$27,856.61 used to pay for a new fence and other improvements to Buckshot's
rental property and a $5,000.00 capital contribution to Buckshot. The trial court
as factfinder was authorized to conclude that, by failing to follow the operating
agreement and instead expending estate funds on an asset of the estate that
should be dissolved and liquidated, Appellant caused "unnecessary delay and
expense to the [e]state." In re Estate of Arnsdorff, 273 Ga. App. 612, 615 (615
SE2d 758) (2005). See also OCGA § 53-7-1 (a) (explaining that an executor "is
under a general duty to settle the estate as expeditiously and with as little
sacrifice of value as is reasonable under all of the circumstances"). 
Moreover, although Appellant argues that disregarding Buckshot's
operating agreement and spending estate funds on the company helped the estate
by improving the value of the business, his decisions regarding Buckshot were
tainted by an impermissible conflict of interest. While the estate was losing
money because of Buckshot, Appellant was personally benefitting from the
continued operation of the business by using Buckshot property rent-free and
using Buckshot funds to pay his personal bills. See Ringer v. Lockhart, 240 Ga.
82, 85 (239 SE2d 349) (1977) ("'An administrator or executor is a trustee invested with a solemn trust to manage the estate under his control to the best
advantage of those interested in it. . . . Nothing can be tolerated which comes
into conflict or competition with the interests and welfare of those interested in
the estate.'" (citation omitted)). See also Ray v. Nat. Health Investors, Inc., 280
Ga. App. 44, 51 (633 SE2d 388) (2006) (explaining that the broad grant of
powers to continue to participate in and operate a decedent's enterprises under
former OCGA § 53-12-232 do not excuse the executor from his fiduciary duty).
For these reasons, the expenditures Appellant made from the estate to
Buckshot were improper, and the trial court  did not err in requiring Appellant to repay to the estate the funds he paid to Buckshot and in requiring the new executor to begin winding up the company.
(b) Appellant also contends that he was entitled to a commission
on the money paid to or spent on behalf of Buckshot. Under OCGA § 53-6-60
(b) (1), if an executor's compensation is not specified in the will, he is entitled
to a "2 1/2 percent commission on all sums paid out by the personal
representative, either for debts, legacies, or distributive shares." The probate
court correctly concluded, however, that the money Appellant paid out to or for
Buckshot was not properly paid for "debts, legacies, or distributive shares" of
the estate, and so the court did not err in ordering Appellant to repay
commissions he took on those transactions. See Greenway v. Hamilton, 280 Ga.
652, 655-656 (631 SE2d 689) (2006) (affirming the probate's court order to the
executor to forfeit his commissions because "the probate court has the power to
require [an executor] to forfeit commissions and fees for breaching his fiduciary
3. Appellant next argues that despite his numerous breaches of
fiduciary duty (several of which are undisputed on appeal), he should not have
been removed as executor.  He points to OCGA § 53-7-55, which says in
Upon the petition of any person having an interest in the estate or whenever it appears to the probate court that good cause may exist to revoke the letters of a personal representative or impose other sanctions, the court shall cite the personal representative to answer to the charge. Upon investigation, the court may, in the court's discretion: (1) Revoke the personal representative's letters . . . .
See In re Estate of Zeigler, 259 Ga. App. 807, 809 (578 SE2d 807) (2003)
(explaining that § 53-7-55 requires that "the executor be given notice of the
charge and opportunity to answer"). Appellant claims that because Appellee
specifically withdrew his petition to remove Appellant as executor, Appellant
did not have notice of the charge against him and was not aware that the hearing
might lead to his removal.
However, although Appellee withdrew the formal request to remove
Appellant as executor made in his original petition, he made it clear that he did
so to avoid Appellant's invocation of the will's in terrorem clause. The
substance of Appellee's complaint remained unchanged; in his amended
petition, he again asserted, with the same detailed allegations, that Appellant "is
mismanaging and wasting Estate assets, is engaged in breaches  of his fiduciary duty[,] and may have direct conflicts of interest with the Estate." These charges, if proved, clearly would be grounds for the court to remove Appellant as
executor. At the hearing, which was described in the court's amended
scheduling order as a hearing on "Petitions to Cite Executor, Motion to Remove
Executor, and Motion to Remove Devisee or Legatee," the testimony focused
on these allegations of executor misconduct. And in closing argument,
Appellee's attorney reminded the court that it had the power to remove
Appellant as executor, saying that although Appellee had withdrawn his removal
request, the court still had "the authority to take action."
Appellant did not challenge the propriety of this suggestion, nor did he
dispute the court's authority to sua sponte remove Appellant as a result of the
hearing evidence. To the contrary, Appellant's attorney responded to the
removal issue directly, beginning his closing argument by saying:
There's not any evidence whatsoever presented . . . in this case that shows any wrongdoing by my client at all, period. [Appellee] can tiptoe around it all he wants. They are asking you to remove [Appellant] as executor. There's no question about  it.
Appellant's attorney then argued that Appellant had not committed any
wrongdoing; at no time did he argue that the court could not remove Appellant
because he lacked adequate notice of this possibility. Appellant's attorney
concluded his argument by saying, "at the end of the day there's absolutely no
reason, number one, to remove [Appellant]."
Appellant relies on Zeigler, where the Court of Appeals reversed the
removal of an executor because the petition being decided at the hearing alleged
only that the executor had not answered inquiries about the estate, and "[t]here
was no petition made to remove [the] executor, nor any indication that she might
be removed as executor." 259 Ga. App. at 809. In this case, by contrast,
Appellant was aware that Appellee wanted him removed and in fact repeatedly
argued that his potential removal was exactly what the hearing was about.
Appellant treated the hearing as his opportunity to answer the charges against
him that could result in his removal. He has not asserted that there is any
different or additional evidence he would have offered or argument he would
have made if the court had more explicitly directed him to answer why he
should not be removed. The court's removal of  Appellant as executor was the predictable consequence of its findings as to Appellee's charges. This
enumeration of error therefore fails.
4. Finally, Appellant contends that even if the probate court did not err
in removing him as executor, it erred in appointing a county administrator as his
successor instead of Appellee, because in the will Decedent
appoint[ed] the following to be my Personal Representative(s) in the order of priority in which their names appear: (1) JAMES THOMAS MYERS, JR. [Appellant] (2) ANTHONY LEE MYERS [Appellee]. If, for any reason, any Personal Representative(s) named above is unable or unwilling to serve, the next Successor Personal Representative(s) shall serve in the order of priority listed until the list has been exhausted.
Although once the court removed Appellant as the executor, the court may
have erred in not addressing the issue of Appellee being named in the will as the
successor executor, any such error is harmless. See OCGA § 9-11-61.3
Appellee has unequivocally represented to this Court, both in his brief and at
oral argument, that he will refuse to serve as executor. Thus, if we were to
remand the case for the probate court to appoint Appellee as the executor, it is
clear that Appellee would refuse, and then the court would be required to
appoint a county administrator to serve as the executor, just as it has already
done. See OCGA § 53-6-35 (a) ("The probate court of each county shall
appoint a county administrator whose duty shall be to take charge of all estates
unrepresented and not likely to be represented."). We will not prolong this
contentious family dispute simply to require the probate court to perform a futile
act and arrive at the same outcome.
Judgment affirmed. All the Justices concur.
Tanner Pittman, LLC is a West Georgia law firm that specializes in estate services, civil litigation, and legal transactions.
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