June McGaha v. Suzanne McGaha ( 2022 )

RENDERED: SEPTEMBER 22, 2022
TO BE PUBLISHED
Supreme Court of Kentucky
2021-SC-0351-DG
JUNE MCGAHA AND MARK MCGAHA APPELLANTS
ON REVIEW FROM COURT OF APPEALS
NO. 2019-CA-1752
RUSSELL CIRCUIT COURT NO. 14-CI-00364
V.
SUZANNE MCGAHA AND CLIFFMAN MCGAHA APPELLEES
OPINION OF THE COURT BY CHIEF JUSTICE MINTON
REVERSING
Appellants bring this appeal to challenge a decision of the Court of
Appeals that reversed the circuit court’s order in a will-contest case denying
Appellees’ motion for leave to file an amended answer to assert a cross-claim
and dismissing the underlying case. The Court of Appeals remanded the
matter back to the circuit court for further proceedings, holding that the circuit
court erred in denying Appellees’ motion for leave to amend.
On discretionary review, we reverse the Court of Appeals’ decision for
failing as a reviewing court to give proper deference to the trial court’s decision
to deny Appellees leave to amend a pleading. In reaching this holding, we also
hold that the Court of Appeals erred when it found that the district court
lacked jurisdiction to probate the will at issue in this action. Accordingly, we
reverse the opinion of the Court of Appeals and reinstate the circuit court’s
order dismissing this action.
I. FACTS AND PROCEDURAL BACKGROUND
At the time of his death, Leon McGaha was married to June McGaha, his
second wife. Leon1 had three adult children from his first marriage, Mark,
Damon, and Suzanne McGaha, and a grandson, Cliffman “Cliff” McGaha.
In September 2013, Leon, who was in failing health, executed a Durable
Power of Attorney (DPOA) naming June and Mark his attorneys-in-fact.
According to some family members, Leon expressed a desire upon his passing
to divide his estate equally among his grown children.
On April 3, 2014, Leon executed a will nominating June and Mark as
co-executors of his estate. The will gave Leon’s tire business, including real
and personal property associated with it, to Mark. June was to receive the
residence and farm where she and Leon lived, a farm bank account, and some
personal property. The will bequeathed to Suzanne and Cliff part of the
proceeds from the sale of cattle and some personal property. And the will made
bequests for June’s children from a prior marriage. June, Mark, and Suzanne
shared equally under the will the division of the residual estate. Damon
received nothing under the will.
1 We refer to each member of the McGaha family by his or her first name for
clarity.
2
On April 4, 2014, the DPOA was recorded. That same day, June, acting
as Leon’s attorney-in-fact, conveyed the real property associated with the tire
business to Mark and Mark’s wife.
Leon died on April 7, 2014. In May 2014, the Russell District Court
entered an order probating Leon’s will and appointing June as executor of
Leon’s estate. The probate petition listed Mark and June as petitioners and
provided contact information for attorney Matthew DeHart. The petition was
not signed. June and Mark filed a fiduciary bond and filed an inventory and
appraisement of Leon’s estate.
In November 2014, Damon filed an action in Russell Circuit Court
challenging the validity of Leon’s will and asserting claims of undue influence
and breach of fiduciary duty by June and Mark. He also named other
defendants in the complaint, including Suzanne and Cliff. Damon contended
that the probate petition was defective because it was neither signed nor
verified, among other reasons. Damon requested a declaration that the will
was invalid, an accounting of estate assets, and the setting aside of certain
transactions.
Suzanne and Cliff filed a joint answer to the complaint. They asked the
trial court to protect their interests under the will and asked the trial court to
declare that they did not violate any provision of the will, including the no-
contest clause. The joint answer did not expressly assert any cross-claims or
counterclaims.
3
In 2017, Suzanne and Cliff filed a motion for partial summary judgment
against June and Mark. Specifically, the motion requested that the circuit
court set aside the transfer of the real estate related to the tire business and an
allegedly premature transfer of a tractor to Mark; asked the court to order
certain proceeds and personal property be returned to Leon’s estate; and
sought the aid of the court to require Mark to account for all profits and
receipts from the tire business since Leon’s death.
June and Mark responded to the motion for partial summary judgment,
arguing, among other things, that Suzanne and Cliff lacked standing to seek
relief because they had asserted no claims against June and Mark. Damon
also responded, indicating his agreement with the arguments Suzanne and
Cliff made in their motion. After a hearing, the circuit court denied the motion
as premature.
In August 2019, Damon settled his claims against June and Mark. A
notice of dismissal acknowledging the settlement was filed with the circuit
court by Damon’s counsel on August 1, 2019.2
On August 6, 2019, Suzanne filed a motion styled as a motion for leave
to amend her answer and to assert cross-claims and her objection to a
dismissal of the action. Cliff did not join Suzanne’s motion, but Suzanne
2 In its opinion below, the Court of Appeals acknowledged that there was no
dispute as to the filing of the notice of appeal but stated that it was neither provided
with a copy of the notice of dismissal nor did the notice appear in the record. The
notice of appeal appears in the record before this Court as Appendix 6 to Appellants’
principal brief.
4
stated in the motion that neither she nor Cliff consented to dismissal of the
action. An affidavit from Damon’s counsel was attached to Suzanne’s
supporting memorandum in which Damon’s counsel averred that counsel
signed a notice of dismissal based on representations from June and Mark’s
counsel that June and Mark would delay filing the notice of dismissal, pending
settlement negotiations with Suzanne and Cliff. In her tendered amended
answer, Suzanne alleged that June and Mark tortiously interfered with a valid
devise and breached fiduciary duties. She also sought a declaration that Leon
lacked testamentary capacity and that June and Mark exercised undue
influence.
After several hearings on Suzanne’s motion for leave to amend, the
circuit court took the matter under advisement without issuing any oral ruling.
Then, on November 7, 2019, the circuit court issued the following order:
Comes the Court on the defendant, Suzanne McGaha's, Motion to
Amend Answer and to add Crossclaim against the defendants,
June McGaha and Mark McGaha. The Court having read the
memorand[a] and briefs of the parties in support thereof and
against the motion, and the Court being sufficiently advised, it is
hereby ORDERED and ADJUDGED that Suzanne McGaha's
motion is hereby OVERRULED and consequently, as a result,
there are no other issues before the Court in this matter with the
plaintiff having settled his claim, and therefore, this action is
hereby DISMISSED AS SETTLED. This is a final and appealable
order and there is not just cause for delay.
Suzanne and Cliff appealed. Noting the “terse” nature of the circuit
court’s order, the Court of Appeals “presume[d] the trial court must have
concluded that the cross-claim [Suzanne] wished to assert via amended answer
was time-barred, given the five-year-plus age of the circuit court action.”
5
Importantly, the Court of Appeals concluded that the district court lacked
jurisdiction over the probate of Leon’s will because the probate petition was not
properly verified. Consequently, the Court of Appeals reasoned that the statute
of limitations had not begun to run on Suzanne potential claims so that the
trial court—presumably acting under the mistaken impression that Suzanne’s
claims were time barred—abused its discretion by denying Suzanne’s motion to
amend to assert her claims.
We granted June and Mark’s motion for discretionary review and this
matter is ripe for our review.
II. STANDARD OF REVIEW
Jurisdiction is a question of law that we review de novo.3 “Though CR4
15.01 provides that leave to amend “‘shall be freely given when justice so
requires,’ it is still discretionary with the trial court[.]”5 As such, we review the
trial court’s denial of a motion for leave to amend for abuse of discretion.6
Finally, when reviewing a motion to dismiss, “the pleadings should be
liberally construed in the light most favorable to the plaintiff, all allegations
being taken as true.”7 This eliminates the need for the trial court to make any
3 Commonwealth v. B.H., 548 S.W.3d 238, 242 (Ky. 2018).
4 Kentucky Rule of Civil Procedure.
5 Graves v. Winer, 351 S.W.2d 193, 197 (Ky. 1961) (quoting CR 15.01).
6 See id.; see also Bank One, Ky., N.A. v. Murphy, 52 S.W.3d 540, 550 n.5 (Ky.
2001) (Keller, J., concurring in part and dissenting in part); Bowling v. Commonwealth,
981 S.W.2d 545, 548 (Ky. 1998) (“A trial court's ruling on a motion to amend will not
be disturbed on appeal unless there has been a clear abuse of discretion.”).
7 Fox v. Grayson, 317 S.W.3d 1, 7 (Ky. 2010) (quoting Morgan v. Bird, 289
S.W.3d 222, 226 (Ky. App. 2009)).
6
findings of fact; “rather, the question is purely a matter of law. Stated another
way, the court must ask if the facts alleged in the complaint can be proved,
would the plaintiff be entitled to relief?”8 As such, a reviewing court owes no
deference to the trial court’s determination and reviews a motion to dismiss de
novo.9
III. ANALYSIS
This case raises three primary issues for this Court’s consideration: (1)
did the district court lack jurisdiction over the probate action because of the
alleged deficiencies with signatures and verification of the probate petition; (2)
did the circuit court abuse its discretion by denying Suzanne’s motion for leave
to amend her answer to add new claims; and (3) did the circuit court err in
dismissing this action? We address each issue in turn.
A. The Court of Appeals erred in concluding that the district court
lacked jurisdiction over the probate matter because of an alleged
defect with verification of the probate petition.
Jurisdiction may well be a word of too many meanings.10 At bottom,
“[j]urisdiction is power to declare the law, and when it ceases to exist, the only
function remaining to the court is that of announcing the fact and dismissing
the cause.”11
8 Id. (quoting James v. Wilson, 95 S.W.3d 875, 884 (Ky. App. 2002)).
9 Id.10 See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 90 (1998).
11 Id. (quoting Ex Parte McCardle, 7 Wall. 506, 514, 19 L. Ed. 264 (1868)).
7
KRS12 24A.120 gives the district court subject-matter jurisdiction in
certain civil and probate matters. KRS 24A.120 provides, in pertinent part:
District Court shall have exclusive jurisdiction in:
...
2) Matters involving probate, except matters contested in an
adversary proceeding. Such adversary proceeding shall be filed in
Circuit Court in accordance with the Kentucky Rules of Civil
Procedure and shall not be considered an appeal;
(3) Matters not provided for by statute to be commenced in Circuit
Court shall be deemed to be nonadversarial within the meaning of
subsection (2) of this section and therefore are within the
jurisdiction of the District Court[.]
As a result, district courts are statutorily empowered with “exclusive”
jurisdiction in non-adversarial probate matters.
Here, the Court of Appeals held that the district court lacked jurisdiction
to probate the will because the probate petition was unsigned and unverified.
Citing Kentucky Unemployment Insurance Commission v. Wilson13 for support,
the Court of Appeals concluded that strict compliance with the specific
statutory requirement for verification was necessary to invoke the district
court’s jurisdiction.14
But the Court of Appeals’ reliance on Wilson is an incongruous
application of this Court’s precedent regarding verification and its effect on
jurisdiction. In Wilson, this Court held that strict compliance with a statutory
12 Kentucky Revised Statutes.
13 528 S.W.3d 336 (Ky. 2017).
14 See id. at 339.
8
requirement for verification for a petition for judicial review was required to
invoke the circuit court’s jurisdiction to review an administrative ruling.15 But
that legal conclusion in Wilson is grounded on the premise that “there is no
appeal to the courts from an action of an administrative agency as a matter of
right.”16 “When grace to appeal is granted by statute, a strict compliance with
its terms is required.”17 So our holding in Wilson applies to review of
administrative rulings in which there is no appeal in the courts as a matter of
right. As a result, Wilson provides no support for the Court of Appeals’
conclusion that the district court lacked jurisdiction in a matter unrelated to
review of administrative appeals.
Relevant here, KRS 24A.120(2) grants district courts exclusive jurisdiction
in non-adversarial probate matters. And the same statute requires that
adversarial probate proceedings must be filed in the circuit court. So KRS
24A.120(2) grants district courts jurisdiction over non-adversarial probate
matters; it does not, however, extend legislative grace to appeal where an
appeal is otherwise not available as a matter of right.
It is true, of course, that KRS 394.145 requires that a verified petition be
filed by a person offering a will for probate. But lack of proper verification of
the probate petition did not divest the district court of subject-matter
15 See Wilson, 528 S.W.3d at 339.
16 Id. (internal alteration and citation omitted).
17 Id. (internal citation omitted).
9
jurisdiction to entertain the petition to probate the will. The district court had
subject-matter jurisdiction to probate the will under KRS 24A.120(2).
Nor did the alleged lack of proper verification divest the lower courts of
jurisdiction over this particular case. We have acknowledged “that the use of
the word ‘jurisdiction’ in this context is confusing.”18 In Spears v. Goodwine,19
we clarified that “[t]he deficiency [of an unverified complaint seeking judicial
review of an administrative order] has no effect on the circuit court's subject
matter jurisdiction.”20 Instead, a deficiency in the verification of a complaint
seeking judicial review of an administrative ruling leaves the “court without
jurisdiction in this particular case.”21
KRS 394.145 does not grant jurisdiction to the lower courts in probate
matters. KRS 24A.120(2) does. That is not to say that the missing verification
has no impact on lower courts’ consideration of a probate petition. Here, the
lower courts had jurisdiction to consider issues related to verification of the
probate petition. In fact, Damon raised this very issue—claiming that the
probate petition was defective because it was not properly verified. Again, KRS
24A.120(2) states that adversary proceedings involving probate matters “shall
be filed in Circuit Court in accordance with the Kentucky Rules of Civil
Procedure and shall not be considered an appeal.” As a result, the district
18 See Wilson, 528 S.W.3d at 339 n.2.
19 490 S.W.3d 347 (Ky. 2016).
20 Id. at 352.
21 Id. (citation omitted).
10
court had jurisdiction to probate the will at issue here and the circuit court
had jurisdiction to review the impact of the alleged ineffective verification of the
probate petition on the probate proceedings.22 Importantly, we note that
Damon properly filed this original action in circuit court to challenge the
district court’s decision to admit the will to probate.23
Ultimately, the Court of Appeals’ conclusion that the district court lacked
jurisdiction to probate Leon’s will was error. Indeed, the Russell District Court
had exclusive jurisdiction over any non-adversarial proceedings involving
probate. And the circuit court had jurisdiction over any adversarial
proceedings, including whether the probate petition was properly verified. As
such, we reverse the Court of Appeals’ holding that the district court lacked
jurisdiction in this matter based on the allegedly ineffective verification of the
probate petition.
B. The circuit court did not abuse its discretion by denying Suzanne’s
motion for leave to amend her answer to assert cross-claims.
We cannot conclude that the trial court clearly erred by denying
Suzanne’s motion to amend her answer. While it is true that leave to amend
22 See Vater v. Vater’s Adm’rs, 113 S.W.2d 1145, 1146 (Ky. 1938) (“There is a
rule of general application in this jurisdiction that an objection to a petition, answer,
or other pleading for want of verification should be by rule against the pleader to verify
and on his failure to do so to have it stricken.”). It is undisputed, however, that
neither Suzanne nor Cliff objected to the alleged lack of verification until Suzanne
attempted to amend her answer near the end of the proceedings in the trial court,
years after Damon first raised this issue in his complaint.
23 KRS 394.240(1).
11
“shall be freely given when justice so requires,”24 the decision on whether to
allow an amendment to an answer is within the trial court’s discretion.
Here, the Court of Appeals erred by failing to give appropriate deference
to the circuit court’s ruling. The Court of Appeals concluded that the circuit
court abused its discretion by denying Suzanne’s motion to amend because the
statute of limitations had not begun to run, the original probate petition being
defective. But in so doing, the Court of Appeals “presumed” to know—without
actually knowing—why the trial court denied Suzanne’s motion for leave to
amend and then proceeded to engage in its own de novo legal analysis
concerning denial of the motion for leave to amend.
Having concluded that the district court had jurisdiction over the probate
petition despite the alleged lack of proper verification, we must review the
circuit court’s denial of Suzanne’s motion for leave to amend for abuse of
discretion. “The test for abuse of discretion is whether the [ ] judge's decision
was arbitrary, unreasonable, unfair, or unsupported by sound legal
principles.”25
On this record, we cannot conclude that the circuit court clearly erred by
denying Suzanne’s motion for leave to amend her complaint. In 2014, Suzanne
and Cliff’s joint answer to Damon’s complaint expressly disclaimed any
challenge to Leon’s will, stated that they did not join Damon’s challenge, which
included a claim that the probate petition was defective because it was not
24 CR 15.01.
25 Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999).
12
properly verified, and did not assert any cross-claims or counterclaims.
Seemingly content to sit on their rights and allow Damon to prosecute the
alleged improper verification of the probate petition, it was years later, in 2017,
when Suzanne and Cliff moved for partial summary judgment. But neither
Suzanne nor Cliff had asserted any cross-claims or counterclaims against June
and Mark at that point. It was two years later, in 2019, and only after Damon
reached extrajudicial settlement of his claims against June and Mark, that
Suzanne sought to amend her initial answer to assert cross-claims that were
available to her when she filed her initial answer in 2014.
Of course, we acknowledge, as the Court of Appeals did, the circuit
court’s November 2019 order was bare-bones. Even so, the circuit court was
most familiar with the factual background and procedural history of this case.
So the circuit court was best positioned to determine whether an amendment
of Suzanne’s complaint served the interests of justice. On these facts, even if
we might have reached a different conclusion on de novo review, we cannot
conclude that the circuit court abused its discretion in denying Suzanne’s
motion to amend her answer to assert cross-claims.
C. Dismissal of this action was proper.
On de novo review, we hold that dismissal of this action was proper. The
circuit court’s November 2019 order ruled that this action was dismissed as
settled and noted that there were no other issues remaining before the court for
consideration. On August 2, 2019, Damon filed a notice of dismissal, which
stated, in relevant part, as follows:
13
The Plaintiff acknowledges that the above styled action has been
dismissed as settled and that this effectively rescinds the “Notice
of Action Pursuant to KRS 394.240(2)” filed in the office of the
Russell County Circuit Court Clerk on November 10, 2014[,] and
same being recorded in Miscellaneous Records Book 21, Page 63
and 64.
This is a notice that the previous filing is of no longer any force or
effect in regard to any of the parties herein set forth above.
CR 41.01 deals with voluntary dismissal of an action by the plaintiff.
Since Damon’s notice of dismissal was filed after the defendants answered his
complaint, the operative rule if CR 41.01(2), which states as follows:
(2) By order of court.
Except as provided in paragraph (1) of this rule, an action, or any
claim therein, shall not be dismissed at the plaintiff's instance save
upon order of the court and upon such terms and conditions as
the court deems proper. If a counterclaim has been pleaded by a
defendant prior to the service upon him of the plaintiff's motion to
dismiss, the action shall not be dismissed against the defendant's
objection unless the counterclaim can remain pending for
independent adjudication by the court. Unless otherwise specified
in the order, a dismissal under this section is without prejudice.
Here, dismissal of this action was proper because there were no active
claims before the circuit court for consideration once Damon settled his claims
against June and Mark. Again, Damon was the only plaintiff in this action as
of August 2, 2019. That is so because Suzanne and Cliff expressly disclaimed
any challenge to Leon’s will and chose not to assert any counterclaims or
cross-claims in their initial joint answer to Damon’s complaint. And Suzanne
did not file a motion to amend her answer to assert cross-claims until August
6, 2019. As such, once Damon settled his claims with June and Mark, there
14
were no remaining claims, counterclaims, or cross-claims for the circuit court
to consider.
It is of no moment that the circuit court denied Suzanne’s motion to
amend her answer to assert cross-claims in the same order that dismissed the
action. Again, we do not find that the circuit court’s denial of Suzanne’s
motion to amend constituted abuse of discretion. Ultimately, upon denying
Suzanne’s motion to amend her answer to assert cross-claims, the only claims
were those brought by Damon in his initial complaint, which had been
dismissed.
Nor does it matter that Damon’s counsel averred that he signed the
notice of dismissal based on representations from June and Mark’s counsel
that they would delay filing the notice pending settlement negotiations with
Suzanne and Cliff. Under CR 15.01, Suzanne was permitted to amend her
answer “only by leave of court or by written consent of the adverse party.”
Suzanne had neither. So, upon settlement of Damon’s claims, there was
nothing for the remaining parties to settle.
Finally, contrary to Suzanne’s characterizations, the claims she
attempted to bring in her amended answer were not already before the court in
her initial complaint. In their joint answer, Suzanne and Cliff asked the circuit
court to generally protect their legal interests and declare the parties’ rights
under the will. But these general recitations are insufficient to bring
adversarial claims under Leon’s will, especially where Suzanne and Cliff
initially explicitly disclaimed any challenge to the will. At bottom, in order to
15
advance the claims she now wishes to bring, Suzanne had to receive leave to
amend her answer.
We acknowledge that this may seem to be a harsh result, especially since
leave to amend should be freely given when justice so requires. But parties
who sit on their rights do so at their own peril. The cross-claims Suzanne
sought to assert in her amended answer were available to her when she filed
her first joint answer in 2014. Suzanne sought to amend her answer in 2019
and only after Damon filed a notice of dismissal with the circuit court. As
such, Suzanne’s delay in litigating her claims justifies both denial of her
motion for leave to amend and dismissal of the action generally.
In sum, once Damon’s claims against June and Mark were settled as
demonstrated by the notice, there were no active claims left in this action.
Upon denial of Suzanne’s later-filed motion to amend answer to assert cross-
claims, there were similarly no active issues for the circuit court to resolve. As
a result, dismissal without prejudice26 was appropriate under CR 41.01(2).
IV. CONCLUSION
After review, the district court properly exercised jurisdiction to probate
the will in this action despite an allegedly improper verification of the probate
petition and the circuit court had jurisdiction to consider adversarial claims
arising from the probate action. Furthermore, we conclude that the circuit
court did not abuse its discretion in denying Suzanne’s motion for leave to
26 CR 41.01(2) (“Unless otherwise specified in the order, a dismissal under this
section is without prejudice.”).
16
amend and assert cross-claims. Lastly, the circuit court properly dismissed
this action because no claims remained for the circuit court to resolve upon
settlement of Damon’s claims with June and Mark. As a result, we reverse the
decision of the Court of Appeals and reinstate the circuit court’s order
dismissing the action.
All sitting. All concur.
COUNSEL FOR APPELLANTS:
Matthew B. DeHart
COUNSEL FOR APPELLEES:
J. Robert Lyons, Jr.
Dinsmore & Shohl, LLP
17