Opinion
No. COA10-774
Filed 5 April 2011 This case not for publication
Appeal by petitioner and respondents from order entered 16 February 2010 by Judge William Z. Wood Jr. in Forsyth County Superior Court. Heard in the Court of Appeals 13 December 2010.
Wells Jenkins Lucas Jenkins PLLC, by Gordon W. Jenkins, attorney for petitioner-appellant/cross-appellee. Womble Carlyle Sandridge Rice, PLLC, by Elizabeth K. Arias, attorney for respondents-appellees/cross-appellants.
Forsyth County No. 07 E 920.
Earl F. Slick, a resident of Winston-Salem, North Carolina, died on 13 May 2007. During his life, Mr. Slick operated various businesses out of the offices of Slick Enterprises, Inc., located in Winston-Salem, North Carolina. Upon his death, he left a Last Will and Testament dated 9 April 2002, a First Codicil thereto dated 25 April 2003, and a Second Codicil thereto dated 6 September 2005 (collectively, "the Will"). The Will named four individuals as co-executors of Mr. Slick's estate: his daughter, respondent Phyllis S. Cowell; petitioner M. Caroline Gamble; John L.W. Garrou; and John C. Kerr. However, the Will makes no provision for executors' commissions. On 21 September 2007, Mr. Garrou resigned from his position as co-executor. According to petitioner's brief, Mr. Kerr renounced his right to serve as co-executor and had no involvement with the settlement of Mr. Slick's estate. At issue in this case is the commission awarded petitioner for her service as a co-executor.
Petitioner, formally a Vice President of Slick Enterprises, Inc., was terminated from her employment with the corporation by Ms. Cowell on 21 October 2008 and asked to resign as a co-executor of Mr. Slick's estate. On 6 April 2009, petitioner filed a Petition to Resign as Executor and a Petition for Commissions with the Forsyth County Clerk of Court, requesting a commission in the amount of $142,221.85. On 20 April 2009, Mrs. Jane Pierce Slick, Mr. Slick's widow, and Ms. Cowell, in her capacity as a co-executor of the Estate of Earl F. Slick and trustee of the Earl F. Slick Revocable Trust, respondents, filed a Response to Petition to Resign as Executor and a Response to Petition for Commissions. Respondents requested that the clerk accept petitioner's resignation, but that he "deny [her] request for additional commissions for serving as a Co-Executor of the Estate" because "[she] ha[d] already been paid in the amount of $233,333 for serving as a Co-Executor." The matter was heard by Assistant Clerk of Superior Court Brice Murphy upon affidavits with attached exhibits. On 28 May 2009, Mr. Murphy entered orders allowing petitioner to resign as co-executor and awarding her $71,000.00 in commissions. Both petitioner and respondents appealed. The superior court remanded the matter to the clerk for entry of findings of fact and conclusions of law supporting the award. On 30 October 2009, Mr. Murphy entered a second order containing findings of fact and conclusions of law.
Petitioner and respondents again appealed to the superior court, which entered an order in which it stated that after "reviewing the Order of Commissions, the Court determines that the findings of fact are supported by the evidence, the conclusions of law are supported by the findings of fact[], and the order is consistent with the conclusions of law and applicable law." The superior court affirmed the clerk's award of commissions to petitioner in the amount of $71,000.00. Petitioner and respondents appeal to this Court.
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If a testator's will contains no provision regarding commissions, the right of a personal representative to a commission is controlled by statute. See N.C. Gen. Stat. § 28A-23-3(g) (2009) ("[The commission provided for by N.C.G.S. § 28A-23-3(a)] does not apply if the testator's will specifies a stipulated amount or method or standard for determining the compensation for the services rendered by the personal representative" or if the will provides that the representative is to receive "reasonable compensation" and the beneficiaries whose shares are affected consent in writing to an amount constituting "reasonable compensation."); In re Ledbetter, 235 N.C. 642, 643, 70 S.E.2d 667, 668 (1952). N.C.G.S. § 28A-23-3 provides in relevant part that,
(a) Personal representatives, collectors or public administrators shall be entitled to commissions to be fixed in the discretion of the clerk of superior court not to exceed five percent (5%) upon the amounts of receipts, including the value of all personal property when received, and upon the expenditures made in accordance with law. In determining the maximum commissions allowable under this subsection, the clerk of superior court may take into consideration fees paid by the estate for professional services performed in the ordinary course of administering the estate, including services performed by attorneys and accountants. However, the clerk is not required to reduce the maximum commissions allowed by the aggregate fees paid to professionals on a dollar-for-dollar basis.
(b) In determining the amount of the commissions, both upon personal property received and upon expenditures made, the clerk of superior court shall consider the time, responsibility, trouble and skill involved in the management of the estate.
N.C. Gen. Stat. § 28A-23-3(a)-(b). "The allowance of a commission to an executor is a matter within the original jurisdiction of the Clerk of Superior Court" and "the Clerk alone has the discretion to fix an executor's compensation." In re Estate of Longest, 74 N.C. App. 386, 393-94, 328 S.E.2d 804, 809, motion to dismiss allowed and disc. review denied, 314 N.C. 330, 333 S.E.2d 488 (1985) (holding that, under N.C.G.S. § 28A-23-3, "an executor has no right to fix and determine the compensation to be received by him" (internal quotation marks omitted)); see Wachovia Bank Trust Co. v. Waddell, 237 N.C. 342, 345, 75 S.E.2d 151, 153 (1953); Matthews v. Watkins, 91 N.C. App. 640, 651, 373 S.E.2d 133, 140 (1988) (holding that, by approving a percentage for commissions, "the clerk fixed the fee as required in Longest"). Petitioner and respondents agree that because the Will is silent as to the matter of commissions, the clerk had discretion in this case to award commissions in accordance with N.C.G.S. § 28A-23-3.
Petitioner contends, however, that the clerk failed to consider "the time, responsibility, trouble and skill involved in the management of the estate" as required by N.C.G.S. § 28A-23-3(b) and instead, improperly based his award on his finding that the estate had already expended approximately four million dollars for professional services related to the administration of the estate. Petitioner argues that she oversaw, directed, and coordinated the administration of Mr. Slick's estate, which was an enormous task, as evidenced by the amounts expended on fees for professional services. Thus, she contends the award of only $71,000.00 as her commission was an abuse of discretion. We are not persuaded.
The clerk's order states that "M. Caroline Gamble served as Co-Executor from June 4, 2007 to May 28, 2009 when an order was signed allowing her resignation"; that "her service for the estate include[d] filing with her Co-Executors a 90-Day Inventory and a First Annual Account"; and that "at the time of her resignation the estate remains open and additional work remains." Thus, the order demonstrates that in determining the amount of commissions to award petitioner, the clerk considered the duration of her service as a co-executor, the specific tasks she completed, and that additional work is required to complete the administration of the estate. We believe the order demonstrates that the clerk considered "the time, responsibility, trouble and skill involved in the management of the estate" as was required by N.C.G.S. § 28A-23-3(b) in determining to award her $71,000.00.
Furthermore, the clerk properly considered amounts expended for services rendered by other professionals in this case. N.C.G.S. § 28A-23-3 expressly states that the clerk "may take into consideration fees paid by the estate for professional services performed in the ordinary course of administering the estate, including services performed by attorneys and accountants." N.C. Gen. Stat. § 28A-23-3(a). "However, the clerk is not required to reduce the maximum commissions allowed by the aggregate fees paid to professionals on a dollar-for-dollar basis." Id. The clerk's order states that "testimony was presented . . . that additional fees claimed on the Federal Inheritance Tax return for professional services totaled more than four million dollars." By considering amounts expended on other professionals in this case, the clerk complied with N.C.G.S. § 28A-23-3, and petitioner's assertion to the contrary is wholly without merit.
In their appeal, respondents contend that, because they agreed to increase petitioner's yearly salary from about $324,000.00 to about $500,000.00 following Mr. Slick's death, petitioner had already been compensated for her services as a co-executor of the estate. Respondents contend that they and petitioner entered into a binding contract and that the clerk therefore lacked authority to award her a commission. We disagree.
The testimony regarding whether petitioner's increase in pay was given in consideration for her duties as co-executor of the estate is clearly disputed. Petitioner testified before the clerk that she did not "agree to not take an executors' commission." She testified that, following Mr. Slick's death, she became responsible for "running Slick Enterprises on a day-to-day basis" and, after Mr. Garrou gave his notice of resignation, she became responsible for his day-to-day duties as well. She testified that after speaking with Ms. Cowell about these increased responsibilities, she was given a $175,000.00 yearly salary increase, bringing her total yearly salary from about $324,000.00 to about $500,000.00. On the other hand, respondents claim that petitioner's pay increase was in consideration for her duties as a co-executor of Mr. Slick's estate. They contend that petitioner's yearly salary increase of $175,000.00, which resulted in petitioner receiving a total of $233,333.00 more than she otherwise would have received during the sixteen-month period she administered the estate, was compensation for her service as a co-executor. In her affidavit and testimony before the clerk, Ms. Cowell stated that she and petitioner agreed to the salary increase due to the additional work that would be required of petitioner to handle Mr. Slick's estate.
An award of commissions to an executor "requires exercise of judicial discretion and judgment by the clerk." In re Green, 9 N.C. App. 326, 328, 176 S.E.2d 19, 20 (1970). Respondents do not challenge any of the clerk's findings in this case nor do they contend the clerk failed to make adequate findings. Those findings, as previously discussed, demonstrate that the clerk complied with N.C.G.S. § 28A-23-3 by considering the specific tasks completed by petitioner in administering Mr. Slick's estate as well as the expense to the estate for other professional services. Thus, the clerk's order resolved the disputed issue of whether petitioner's increased compensation following Mr. Slick's death foreclosed her entitlement to a commission under N.C.G.S. § 28A-23-3. See id. at 328-29, 176 S.E.2d at 21 (affirming the superior court's order where respondent took no exception to any of the clerk's findings related to commissions, and the facts found supported the conclusions of law).
Affirmed.
Judges McGEE and ERVIN concur.
Report per Rule 30(e).