Cynthia S. Barry v. Thomas A. Barry, III ( 2020 )

FOURTH DIVISION
DILLARD, P. J.,
RICKMAN and BROWN, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
October 30, 2020
In the Court of Appeals of Georgia
A20A0839. CYNTHIA S. BARRY v. THOMAS S. BARRY, III et
al.
RICKMAN, Judge.
Cynthia S. Barry filed a lawsuit purportedly to seek enforcement the Last Will
and Testament of Thomas A. Barry (“the Will”), her late father, and to seek an
accounting of the Barry Living Trust (“the Trust”), of which both she and her
siblings, Thomas S. Barry, III and Pamela G. Berndsen, are the beneficiaries.
Following an extensive evidentiary hearing, the trial court determined that Cynthia,1
a Florida lawyer, was not actually seeking enforcement of the Will or an accounting
of the Trust, but was instead engaging in vexatious litigation designed to contest the
authority granted to her brother, Thomas, as personal representative of the estate and
1
For the sake of clarity, this opinion will refer to the parties by their first
names.
trustee of the Trust. The trial court concluded that in so doing, Cynthia invoked the
in terrorem clauses contained in both the Will and the Trust and, consequently,
forfeited her beneficial interests derived from both. Because the trial court’s factual
findings are fully supported by the record and the court did not err in determining that
the in terrorem clauses were invoked, we affirm.
Upon appellate review of the trial court’s ruling, we will defer to its factual
findings and credibility determinations unless they are clearly erroneous. Fowler v.
Cox, 264 Ga. App. 880, 882 (592 SE2d 510) (2003); see also OCGA § 9-11-52 (a).
The clearly erroneous test is the same as the any evidence rule, meaning that the trial
court’s factual findings will not be disturbed if there is any evidence to support them.
See id. at 882-883. We review the trial court’s legal conclusions de novo. See
generally Rose v. Waldrip, 316 Ga. App. 812, 815 (1) (730 SE2d 529) (2012).
The record evidence, which includes the documentary and testimonial evidence
presented at the hearing and the trial court’s factual findings with respect to that
evidence, shows as follows. The parties’ father executed the Will in April 2012, and
named Thomas as the personal representative of the estate. He and the parties’
mother, Lillian V. Barry, first created the Trust in February 1994, and executed the
last amendment thereto in April 2012. The original Trust named both Thomas and
2
Cynthia as successor co-trustees in the event of their deaths; in March 2011, however,
their parents filed an amendment to the Trust removing Cynthia, leaving Thomas as
the sole successor trustee.
On October 17, 2011, the parties’ mother died. Two weeks after their mother’s
death, Cynthia contacted the law firm retained by her father to assist with the Trust
and inquired about declaring her father incompetent, noting that there was “much at
stake.”2 She also demanded privileged communications between the firm and her
father, to which she had no legal right. When the law firm declined to provide them,
she threatened the firm with litigation by demanding a copy of its malpractice
insurance coverage.3 The trial court declared Cynthia’s actions “unethical,
unprofessional[,] and by any standard[,] just plain wrong,” and the court concluded
that, even at that time, she “was trying to gain control of her father’s estate.”
2
The parties father lived for another four years after the death of his wife, and
there is no other allegation or record evidence of any kind to suggest that he was ever
incompetent.
3
The trial court noted that during the hearing, Cynthia denied having
threatened the law firm until she was confronted by the documented evidence, at
which time she changed her story. The trial court found that Cynthia’s actions in
trying to get her father declared incompetent and in threatening her father’s law firm
were consistent with her planning for future litigation with respect to his estate.
3
On November 9, 2015, the parties’ father died. The very next day, Cynthia sent
emails to both Thomas and Pamela, telling them to “Save your money.” She also sent
an email message to her niece, Pamela’s daughter, entitled “Your Mom:Brainwasher,”
and telling her, “Get ready to fight. You picked the wrong side.” Cynthia admitted at
the hearing that these messages were intended as threats of litigation.
Following their father’s death, Tomas, as personal representative and trustee,
prepared to distribute his father’s property in accordance with the Will and Trust. The
father dealt in precious metals, and the Will bequeathed the father’s Perth Mint
Certificates to his three children, to be equally divided among them, and placed the
rest of his property, real and personal, into the Trust (“the Trust Estate”). The Trust,
in turn, directed that the Trust Estate be divided into separate shares of equal market
value and distributed equally among the three children. The relevant assets in the
Trust Estate included the parents’ residence, a coin collection, Merrill Lynch stock,
and personal belongings contained in the home.4
4
Cynthia also insisted that their father had an additional $800,000 worth of
gold bullion/bars that he kept in his safe, and suggested that Pamela had stolen the
gold and destroyed evidence of it. Both Thomas and Pamela testified that they had
never seen or heard of the existence of any such gold, and the trial court concluded
that,
[Cynthia] sent multiple third party subpoenas and was given thousands
4
Significantly, the Trust provided that Thomas, as trustee, had the unfettered
discretion to value and distribute the assets of the Trust Estate:
[Thomas] shall have the power to make any distribution or payment in
kind or in cash or partly in kind and partly in cash and to cause any
share to be composed of cash, property, or undivided interests in
property different in kind from any other share, either pro rata or non pro
rata, without regard to differences in the tax basis of such property and
without the requirement of making any adjustment of the shares by
reason of any action taken pursuant hereto.
Any division, allocation, apportionment or valuation of the property to
distribute the assets to or among any of the trusts or beneficiaries shall
be made by [Thomas], and the good faith determination of [Thomas]
shall be binding and conclusive on all parties.
of pages of discovery and could still not provide a single shred of
evidence that $800,000.00 worth of gold bullion/bars existed except the
claim of [Cynthia]. It should also be noted that this was not mentioned
in [Cynthia’s] testimony on direct or in any of her expert’s testimony
either. The [trial court] sees this claim as what it is, a fictitious
declaration by [Cynthia] to use as an excuse why she deserved an
equitable accounting so quickly after her father’s death . . .
5
Thomas was granted the same authority with respect to the disposition of the
stocks held in the Trust estate:
[Thomas] shall have the power to acquire, grant or dispose of property,
including puts, calls and options (including options on stock owned by
the estate), for cash or on credit, including maintaining margin accounts
with brokers, at public or private sale, upon such terms and conditions
as the fiduciary may deem advisable; and to manage, develop, improve,
exchange, partition, change the character of, abandon property or any
interest therein, or otherwise deal with property.
At the time of his father’s death, Thomas lived in Maine, and was the primary
caregiver for his wife who had recently undergone a leg amputation.5 Because of the
distance, he did not have immediate access to the assets or financial records of his
father, and his father left no written inventory or prior accountings when he passed.
Nevertheless, Thomas sent Cynthia a letter on December 22, 2015, informing her that
he was beginning the process of gathering documentation in order to prepare a report
on the Trust Estate. Thomas relied on Pamela, who had lived with and cared for their
father for the last four years of his life, to locate and send him relevant documents and
5
Thomas was a paramedic and was permitted to care for his wife so that she
would need to attend only weekly rather than daily appointments with a nurse or a
doctor.
6
records. On January 27, 2016, less than 90 days after their father’s passing, Thomas
had prepared and provided to his siblings a preliminary accounting of all of the assets
and liabilities of the Trust Estate, and informed them that he planned to offer the Will
for probate “early next week.”
Thomas then attempted to hire two different local lawyers in their father’s
small town for the purpose of offering the Will for probate. Cynthia, however, had
already contacted each — but retained neither — and provided just enough
information to preclude them from representing Thomas and/or the Estate without
creating a conflict of interest. She then raised a conflict of interest with respect to
their representation, which she refused to waive; each attorney then declined to assist
Thomas. The trial court explicitly held that this was “a pre-emptive strike to preclude
the limited number of [a]ttorneys available” from being able to work on Thomas’s
behalf.
Meanwhile, Cynthia filed the instant lawsuit on February 26, 2016, less than
four months after their father’s death. The complaint alleged that Thomas “refuse[d]
to file the [W]ill” and “refused to provide adequate information about the specific
assets and liabilities of the [Trust].” She sought affirmative injunctive relief requiring
Thomas to file the Will; an equitable accounting of the Trust Estate; and affirmative
7
injunctive relief prohibiting Thomas from making any distributions from the Trust
Estate until the completion of the equitable accounting that she demanded.
Contrary to the allegations made in the complaint, the trial court concluded that
Cynthia, not Thomas, “delayed the filing of the [W]ill,” and noted that Thomas made
“significant strides to obtain financial information and notify the beneficiaries of
progress” in the less than four months between their father’s passing and the filing
of the lawsuit, despite him living out of state, him being the primary caregiver for his
wife, and it being the winter holiday season. Thomas had prepared the preliminary
accounting, listing all of the Trust Estate’s assets and liabilities, and assigned an
approximated value for each. Additionally, he had obtained a new appraisal on the
residence as of the date of his father’s death;6 provided an inventory of their father’s
coin collection; provided information regarding the Merrill Lynch stocks; and
contacted the life insurance and annuity companies with whom his father had
accounts to inform them of his father’s death, and provided information to the
contractual beneficiaries on how to obtain payment under the policies.
6
The appraisal Thomas used in the preliminary accounting was one his father
had obtained in 2012.
8
Thomas also continued to supply Cynthia with information and documentation
even after she filed the lawsuit, actively attempting to resolve the dispute without the
need for court intervention.
Once he located a local attorney who would assist him in probating the Will,
he attempted to distribute the Perth Mint Certificates equally between himself and his
siblings in accordance with its terms. Doing so required the establishment of three
separate accounts, one for each beneficiary. Despite Thomas having sent Cynthia the
paperwork and information and instructing her to open the necessary account,
Cynthia electively stalled the process, claiming she first “wanted ultimate resolution
of the case.”
Thomas also kept a detailed and running inventory of the Trust Estate and all
receipts and disbursements. He proposed a strategy to distribute the coin collection
that involved an in-kind distribution of the coins that could be evenly divided, and
then engaged a professional coin trader to value the remaining coins for an equitable
cash value distribution; although he was under no duty to do so, he sought Cynthia’s
input on the proposal. He obtained and then provided information on the Merrill
Lynch stock and again, although he was under no duty to do so, inquired as to
whether Cynthia would prefer an in-kind or cash value distribution of her stock.
9
Finally, he attempted to schedule a date and time to allow an opportunity for Cynthia
to walk through the home with himself and Pamela in order to identify what personal
belongings she wanted to take.
Cynthia, on the other hand, was steadfast in her claims that Thomas’s
accounting was inadequate, and persistently challenged his actions. Despite the fact
that Thomas had obtained a new appraisal on the residence after their father’s death,
Cynthia hired her own appraiser who assigned the home a greater value and insisted
Thomas’s was inaccurate. The trial court discounted Cynthia’s appraisal, which used
non-comparable homes and “seemed to have a singular purpose of valuing the home
of the estate as high as possible so that [Cynthia] would have a larger cash share of
the inheritance.” The trial court then concluded that Cynthia “used differences of
opinion between experts as to valuation of the home as a justification for her
complaint,” when in fact she was contesting the power granted to Thomas by the
provisions of the Trust.
Cynthia refused to respond to Thomas’s inquires seeking input related to his
proposed distribution of the coin collection. But she nevertheless contested his
authority to make an in-kind distribution and challenged his valuation of the
remaining coins despite the fact that he had engaged a professional coin dealer. The
10
trial court concluded, “[i]t seems that [Cynthia] is looking for any excuse to contest
decisions made by [Thomas]” and that “[t]he numerous contests are in direct conflict
with the plain language of the [T]rust.”
Cynthia refused to respond to Thomas’s inquiry as to whether she preferred an
in-kind or cash value distribution of the Merrill Lynch stock. After waiting more than
a year and receiving no response, he sold the stock, which had realized a gain of more
than $200,000 since the date of their father’s death. Cynthia claimed that Thomas
breached his fiduciary duty by selling, apparently because it continued to increase in
value. Noting that the plain language of the Trust gave Thomas the authority to sell
the stock, a fact which Cynthia admitted, the trial court concluded that “by claiming
damages based on this transaction and/or the lack of permission given,” she was
“contesting the provisions of this Trust.”
And finally, Thomas attempted to schedule a time for the three siblings to meet
at the house and divide the personal property. Cynthia refused to participate, and then
insisted that Thomas failed to provide her with an inventory of the home. As stated
by the trial court, “[Cynthia] was given an opportunity to literally walk through the
house and get what she wanted from it. She waived any right to object by her overt
inaction.”
11
At the conclusion of the hearing, the trial court held that Cynthia’s claims were
brought “with malice, without substantial justification, [and] in bad faith,” and were
“merely a pretext to substitute her opinion as beneficiary over that of the
determination of the Trustee.” The court continued,
While [Cynthia], who is a licensed . . . [a]ttorney, has carefully avoided
contesting the entirety of the [Will or Trust], she has clearly contested
several provisions in an effort to thwart [Thomas’s] administration of
the [T]rust and gain a personal advantage. She has contested his good
faith value regarding the house; she has contested [his] authority to take
possession of the coin collection without her being present; she has
contested [his] proposed in-kind division of bulk coins; she has
contested his proposed procedure to distribute the personal property in-
kind; she has contested his good faith valuation of miscellaneous coins;
she has contested his authority to liquidate investments . . .
...
[Cynthia] has not only contested the validity of the [Will and Trust,] but
has instituted a proceeding to prevent the provisions from being carried
out in accordance with their terms. . . . Making up claims and
misrepresenting the facts to try and fool the [trial court] into finding that
[Thomas] is [breaching] his fiduciary duty is directly contesting the
validity of [his] appointment as [Personal Representative and Trustee].”
12
The trial court concluded that by her actions, Cynthia invoked the in terrorem clauses
contained in both the Will and the Trust and, therefore, forfeited her beneficial
interests derived from both.
On appeal, Cynthia argues the trial court erred, and continues to insist that she
seeks nothing more than “an accounting of the [Trust].” The trial court did not err.
In terrorem clauses are valid and enforceable in Georgia, provided that the
disposition of the property upon a violation is otherwise clear. See OCGA §§ 53-4-68
(b);7 53-12-22 (b); see also Duncan v. Rawls, 345 Ga. App. 345, 348 (1) (a) (812
SE2d 647) (2018).
As Cynthia correctly asserts, a petition for accounting does not constitute a
contest to a will or a trust, because it first affirms the validity of those instruments “in
order to enforce a disposition of the estate in accordance with its terms.” Sinclair v.
Sinclair, 284 Ga. 500, 502 (2) (670 SE2d 59) (2008); see also Snook v. Sessoms, 256
7
Effective January 1, 2021, the statute was amended to comport with common
law and expressly provide that an in terrorem clause shall not be enforceable against
a person bringing an action for an accounting. Ga. L. 2020, Act 508, § 1-15; see
generally Sinclair v. Sinclair, 284 Ga. 500, 502-503 (2) (670 SE2d 59) (2008).The
amended statute also provides that an in terrorem clause shall not be enforceable
against a person bringing an action for the interpretation or enforcement of a will;
bringing an action for removal or for other relief against a personal representative; or
entering into a settlement agreement. See id.13
Ga. 482, 482 (350 SE2d 237) (1986) (“A beneficiary assuredly is empowered to
enforce the provisions of a trust, no matter the terms of any in terrorem clause.”)
(emphasis omitted.). See generally OCGA § 53-12-243 (a). However, neither the trial
court nor this Court is confined by the nomenclature used in any particular cause of
action, nor will we turn blind eye to one’s actual intent. See In re Estate of Johnson,
352 Ga. App. 164, 167 (834 SE2d 283) (2019) (holding that although the plaintiffs
contended that they sought only an interpretation of the will, their proposed
declaratory judgment action made it clear that their actual intent was to contest a
provision of the will and, thus, their action would trigger the in terrorem clause); see
also Sinclair v. Sinclair, 284 Ga. 500, 503 (2) (670 SE2d 59) (2008) (holding that “[a]
beneficiary assuredly is empowered to enforce the provisions of a will, no matter the
terms of any in terrorem clause,” but nevertheless recognizing that the beneficiary
“could conceivably choose to risk a forfeiture of his interest under the will by
requesting relief beyond that which is outlined in his complaint . . .”) (citation,
punctuation, and emphasis omitted). Giving deference to the trial court’s factual
findings, one need not go beyond the plain language of the provisions themselves to
conclude that Cynthia triggered the in terrorem clauses of both the Will and Trust.
(a) The Will contained the following provision:
14
If any beneficiary under this Will contests its validity or the validity of
any of its provisions, or institutes any proceeding to prevent this Will or
any of its provisions from being carried out in accordance with its terms,
whether or not in good faith and with probable cause, then all benefits
for such beneficiary in this Will are revoked and annulled and the
benefits which such beneficiary would have received shall go to the
residuary beneficiaries of this Will other than such contesting
beneficiary.
The trial court determined that by preemptively contacting local probate
lawyers for the purpose of creating a conflict of interest, Cynthia delayed Thomas’s
ability to offer the Will to probate. She then refused to complete the necessary
paperwork in order to allow him to equally distribute the Perth Mint Certificates in
accordance with the terms of the Will, all the while maintaining a frivolous lawsuit
as a pretext to challenge his authority as personal representative. The trial court did
not err in concluding that in doing so, Cynthia contested the validity of the Will’s
provisions and/or instituted a proceeding to prevent the Will from being carried out
in accordance with its terms. See OCGA § 53-4-68 (b); In re Estate of Johnson, 352
Ga. App. at 167. Cf. Norman v. Gober, 292 Ga. 351, 355 (737 SE2d 309) (2013)
(holding that although the caveat to a will was filed by a child, when “it appear[ed]
possible that one or more of the beneficiaries of the [w]ill sought to destroy it,” the
15
co-executors were entitled “to determine whether the caveat can and should be
attributed to other beneficiaries before distributing the assets from the estate” and, if
so, “whether the in terrorem clause [could] be applied” to those unnamed parties”).
(b) The Trust provided that,
If any person or entity, other than one of us [i.e., the parents], singularly,
or in conjunction with any other person or entity, directly or indirectly,
contests in any court the validity of this agreement, including any
amendments thereto, then the right of that person or entity to take any
interest in the trust property shall cease, and that person or entity shall
be deemed to have predeceased both of us.
The Trust gave Thomas alone the authority to value the Trust Estate, and
granted him the power to divide the interests “in kind or in cash” or any combination
thereof. It further directed that Thomas’s good faith decisions with regard to the
distributions “shall be binding and conclusive on all parties.”
Yet, as the trial court held, Cynthia filed a lawsuit pursuant to which she
repeatedly, relentlessly, and in bad faith contested Thomas’s actions made pursuant
to the authority granted him by the Trust. Indeed, the trial court determined that the
lawsuit “was manufactured by [Cynthia] as an attempt to become the trustee and have
her way instituted by [the trial court].” Faced with this evidence, the trial court did
16
not err in concluding that Cynthia, at least indirectly, contested the validity of those
provisions of the Trust that named Thomas trustee and granted him the authority to
value and divide the Trust. Because its findings in that regard are supported by the
record, the court did not err by holding that Cynthia invoked the in terrorem clause.
See OCGA § 53-12-22 (b). Cf. In re Estate of Johnson, 352 Ga. App. 164, 167 (834
SE2d 283) (2019).
For these reasons, we affirm the trial court’s holding that Cynthia forfeited her
beneficial interests derived from both the Will and the Trust. OCGA § 53-4-68 (b);
§ 53-12-22 (b).
Judgment affirmed. Dillard, P. J., and Brown, J., concur.
17