Campbell v. Harmon

PRESENT: All the Justices

JERRY ALLEN CAMPBELL, EXECUTOR
OF THE ESTATE OF GORDON LITTLE
OPINION BY
v. Record No. 051410 JUSTICE G. STEVEN AGEE
April 21, 2006
D. GREGORY HARMON, TRUSTEE
OF THE MARGARET STEWART LITTLE
MARITAL TRUST, ET AL.

FROM THE CIRCUIT COURT OF FAUQUIER COUNTY
Jeffrey W. Parker, Judge

Jerry Allen Campbell, executor of the estate of Gordon

Little, appeals from a judgment of the Circuit Court of Fauquier

County, which held that he lacked standing to seek an accounting

from D. Gregory Harmon and Peter B. Valentine, trustees of The

Margaret Stewart Little Marital Trust (“Trustees”).1 At issue in

this appeal is whether the personal representative of the estate

of a decedent who was a lifetime beneficiary of a trust has

standing to seek an accounting from the trust fiduciaries. For

the reasons set forth below, we will affirm in part, and reverse

in part, the judgment of the trial court.

1
The Trustees are both certified public accountants who
served as full-time trustees not only for the Margaret Stewart
Little Marital Trust established by Mrs. Little, but also serve
as fiduciaries for other trusts established by her and the
Stewart family. The trust at issue in this case was created in
California and the Trustees reside there. However, no party
disputes that Virginia law controls the issues arising in the
case at bar.
 I. BACKGROUND AND PROCEEDINGS BELOW

Margaret Stewart Little, as part of a trust agreement

created during her lifetime, established the Margaret Stewart

Little Marital Trust (“the Marital Trust”) for the benefit of

her husband, Gordon Little, which took effect at her death in

1984. The following terms governed the Marital Trust’s

administration and distribution:

1. The Trustees shall pay to or for the benefit of
[Gordon Little], all of the trust net income, in
installments to be selected by the Trustees . . .
provided, however, that the Trustees shall pay to
[Gordon] not less than the sum of $3,000 per month
. . . .

In addition to the net income the Trustees may pay
to or for the benefit of [Gordon Little] as much of
the trust principal as the Trustees, in their
absolute discretion, deem necessary for his support
and health expenses, including, but not limited to,
medical, hospital, doctors, nursing, dental and
other health expenses.

Under the terms of the Marital Trust, Little was the sole

income beneficiary of that trust during his lifetime and payment

of the net trust income to him was a mandatory requirement of

the trust. The Marital Trust further provided that upon

Little’s death it would terminate and any remaining trust

property, “excluding undistributed income, [would] vest in and

be added to the Family Trust.”2 “The undistributed income held

2
Neither Gordon Little nor his estate was a beneficiary of,
had any interest in, or control of the Family Trust, which was
also created by Margaret Stewart Little.

2
by the Trustees as of the date of” Little’s death, however,

would “be paid to the personal representative of his estate for

the purposes of administration therein.” By its terms, the

Marital Trust qualified for the marital deduction on the United

States estate tax return of the estate of Margaret Stewart

Little, as a qualified terminable interest property trust under

Internal Revenue Code § 2056(b)(7).

From 1984 until his death in June 1999, Little received

certain distributions from the Trustees out of the Marital

Trust. The Trustees never rendered an accounting to Little

during his lifetime as to the discharge of their fiduciary

duties under the Marital Trust. The record does not indicate

Little formally requested an accounting. Following Little’s

death, his will was admitted to probate and Campbell qualified

as the executor of Little’s estate. A provision of Little’s

will provides: “I grant unto my Executor all rights and powers

set forth in Section 64.1-57 of the Code of Virginia.”

A disagreement arose between Campbell and the Trustees as

to the administration of the Marital Trust prior to Little’s

death and as to the disposition of certain tangible personal

property after Little’s death. In July 2000, Campbell filed a

bill of complaint to compel an accounting and other relief from

the Trustees. Citing the trial court’s authority to order an

accounting under Code § 8.01-31, Campbell sought to have the

3
Trustees account for two events: First, for tangible personal

property the Trustees “removed from Heritage Farm[3] following

the death of Gordon Little,” and, second, “for their

administration of the Margaret Stewart Little [Marital] Trust.”

Campbell asserted that the Trustees wrongfully removed tangible

personal property from Heritage Farm after Little’s death that

belonged to Little personally. Campbell further alleged that a

“full, complete and fair accounting by the Defendant Trustees

will show that moneys are due from the [Marital Trust] to the

Estate of Gordon Little.”

During a June 2, 2003 hearing, the trial court observed

that under Code § 8.01-31, Little would have been entitled to an

accounting from the Trustees during his lifetime for their

administration of the Marital Trust. However, the trial court

questioned whether Campbell, as executor of Little’s estate, now

had standing to compel an accounting. Campbell argued he

succeeded to Little’s Code § 8.01-31 right to an accounting by

virtue of the survival provisions of Code § 8.01-25. The

Trustees contended Code § 8.01-25 did not apply and that their

delivery of “financial statements” to Little during his lifetime

satisfied any obligation to account for administration of the

Marital Trust. Campbell disagreed and argued the “financial

3
Until his death, Little continued operating a thoroughbred
farm located in Fauquier County and known as Heritage Farm,

4
statements” did not constitute a fiduciary accounting under

Virginia law.

In a July 7, 2003 decree, the trial court found that the

“[f]inancial [s]tatements . . . did not constitute an

‘accounting’ for the years” for which they were prepared. No

appeal of this finding by the trial court was made and it now

constitutes the law of this case. Pollard & Bagby, Inc. v.

Pierce Arrow, L.L.C., 258 Va. 524, 527-28, 521 S.E.2d 761, 763

(1999). The trial court deferred a final ruling on whether

Campbell was entitled to an accounting from the Trustees in

order to “fully analyze and consider the authorities on whether

or not [Campbell] has ‘standing’ as Executor of the Estate of

Gordon Little under § 8.01-31 of the Code of Virginia to compel

such an accounting.” Both parties submitted written memoranda

addressing this issue.

After an unexplained delay, the trial court eventually

ruled by a final decree, dated April 6, 2005, in which it found:

[T]hat there is no right to an accounting under
Virginia Code Section 8.01-25; the right to an
accounting is generally provided for under Virginia
Code Section 8.01-31; the Will does not incorporate
Section 8.01-31 into the Executor’s powers and does
not direct that the Executor seek an accounting; and
the closest statute that might apply is 64.1-57(1)(n)
which does not apply because no trusts were created in
Gordon Little’s will.

which was an asset of the Marital Trust.

5
 Consequently, the trial court ordered that “Campbell as

Executor of the Estate of Gordon Little does not have standing

to seek an accounting and overrules his motion for an

accounting.” We awarded Campbell this appeal.

II. ANALYSIS

Campbell’s assignments of error posit a central question:

whether the trial court erred in ruling that an executor lacks

standing to maintain an action for an accounting from the

trustees of a trust of which the decedent was a beneficiary.

Campbell argues the trial court erred because as Little’s

executor, he succeeded to Little’s cause of action for an

accounting under Code § 8.01-31 by virtue of the survival

provisions of Code § 8.01-25. Campbell also argues an executor

has that right regardless of whether a decedent specifically

grants such a right to his fiduciary by will. Furthermore,

Campbell contends the incorporation of Code § 64.1-57 into

Little’s will does not affect his standing to compel an

accounting because it is one of the “other powers granted by

law” under the terms of the statute.

Campbell avers that at common law and under Code § 8.01-31,

a “beneficiary of a trust had the absolute right to judicially

require his Trustee, in a suit in equity, to render accountings

6
of his management of the Trust assets.”4 Campbell contends that

the standing to compel an accounting continues in the person of

a decedent’s personal representative because Code § 8.01-25

provides that “[e]very cause of action whether legal or

equitable, which is cognizable in the Commonwealth of Virginia,

shall survive . . . the death of the person in whose favor the

cause of action existed . . . .” In effect, Campbell argues he

stands in Little’s shoes in seeking to compel an accounting

under Code § 8.01-31 by virtue of his status as Little’s

executor. Campbell contends that construing Code § 8.01-25 as

the trial court has done renders the statute “meaningless”

because it bars a cause of action for an accounting from

surviving the decedent contrary to the plain language of the

statute.

The Trustees respond that although Code § 8.01-25 “on its

face appears to be rather broad, nothing in it confers standing

upon a personal representative to pursue every cause of action.”

To support this contention, the Trustees cite Code §§ 8.01-56,

8.01-57, 8.01-63, 8.01-173, 64.1-144, and 64.1-145, which

specifically provide that an individual or his “personal

representative” may bring or be subject to the particular causes

4
Code § 8.01-31 states: “An accounting in equity may be had
against any fiduciary or by one joint tenant, tenant in common,
or coparcener for receiving more than comes to his just share or

7
of action addressed in those statutes. Without citation to

authority, the Trustees assert that the presence of these

statutes would be superfluous if Code § 8.01-25 were intended to

“give standing to personal representatives to pursue every cause

of action.” They aver that Code § 8.01-25, notwithstanding its

language, should not be read to include every cause of action

existing in favor of a decedent at his death. The Trustees thus

conclude that a cause of action for an accounting does not

survive a beneficiary’s death under Code § 8.01-25 and is not

separately authorized under Code § 8.01-31 because that statute

does not expressly provide a cause of action for an accounting

to a personal representative.

The issue before the Court in this case is a matter of

statutory interpretation, a “pure question of law subject to de

novo review.” Crawford v. Haddock, 270 Va. 524, 528, 621 S.E.2d

127, 129 (2005) (quoting Horner v. Dep’t of Mental Health,

Mental Retardation, & Substance Abuse Servs., 268 Va. 187, 192,

597 S.E.2d 202, 204 (2004)). The question thus put before us is

whether the cause of action for an accounting existing in a

beneficiary under Code § 8.01-31 continues in his personal

representative by virtue of Code § 8.01-25 after the

beneficiary’s death. We agree with Campbell that such a cause

proportion, or against the personal representative of any such
party.”

8
of action does survive and is enforceable by the personal

representative of the decedent.5

“When interpreting statutes, courts must ascertain and give

effect to the legislature’s intention, which is to be deduced

from the words used, unless a literal interpretation would

result in a manifest absurdity.” Id. If the statute’s text is

“clear and unambiguous, courts may not interpret them in a way

that amounts to a holding that the legislature did not mean what

it actually has expressed. In other words, courts are bound by

the plain meaning of clear statutory language.” Id. (citing

Horner, 268 Va. at 192, 597 S.E.2d at 204); Woods v. Mendez, 265

Va. 68, 74-75, 574 S.E.2d 263, 266-67 (2003); Halifax Corp. v.

First Union Nat’l Bank, 262 Va. 91, 99-100, 546 S.E.2d 696, 701

(2001) (quoting Watkins v. Hall, 161 Va. 924, 930, 172 S.E. 445,

447 (1934)); see also Melanson v. Commonwealth, 261 Va. 178,

183, 539 S.E.2d 433, 435 (2001) (“The primary objective of

statutory construction is to ascertain and give effect to

legislative intent. The plain, obvious, and rational meaning of

a statute is to be preferred over any curious, narrow, or

strained construction.”).

5
No issue was raised by the parties or the trial court
contesting whether Little had a cause of action for an
accounting prior to his death. We will therefore assume,
without deciding, that a cause of action did accrue to Little by
virtue of the Trustees’ failure to account and that such failure

9
 Applying these principles to the statutes at issue in the

case at bar, we find that the text of Code §§ 8.01-25 and 8.01-

31 is clear and unambiguous. The language of Code § 8.01-25

reflects the General Assembly’s clear intent that: “Every cause

of action whether legal or equitable, which is cognizable in the

Commonwealth of Virginia, shall survive . . . the death of the

person in whose favor the cause of action existed . . . .”

(Emphasis added.) Assuming the trial court correctly found that

Little had a cause of action for an accounting from the Trustees

for their administration of the Marital Trust prior to his

death, that cause of action survives Little’s death under Code

§ 8.01-25 because it “existed” prior to his death. Contrast

Rutter v. Jones, Blechman, Woltz & Kelly, P.C., 264 Va. 310,

313-14, 568 S.E.2d 693, 694-95 (2002) (claim for legal

malpractice brought by decedent’s personal representative did

not survive because claim did not arise until after decedent’s

death).

Contrary to the Trustees’ assertion, the broad language

contained in Code § 8.01-25 making it applicable to “[e]very

cause of action” is not derogated by other statutes conferring

standing to personal representatives in particular situations.

Indeed, the Trustees’ position ignores situations where Code

was the necessary injury or damage by which a cause of action
accrued.

10
§ 8.01-25 would not apply to preserve a cause of action, but the

specific authorization to sue or be sued by a decedent’s

personal representative in other Code sections permits the

claim.

Code § 8.01-25 only applies to causes of action

“exist[ing]” prior to the decedent’s death and provides that a

“cause of action asserted by the decedent in his lifetime” for

personal injury does not “survive,” but rather can be amended as

a wrongful death action under Code § 8.01-56. Hendrix v.

Daugherty, 249 Va. 540, 542, 457 S.E.2d 71, 73 (1995); see also

Code §§ 8.01-63 and 8.01-57. Thus, Code § 8.01-56, as well as

§§ 8.01-57 and 8.01-63, for example, provide the basis for a

separate cause of action, wrongful death, which did not exist

during the decedent’s lifetime and thus could not be maintained

under the aegis of Code § 8.01-25.

Moreover, to adopt the Trustees’ position would render Code

§ 8.01-25 meaningless because the only causes of action that

would survive an individual’s death would be those where the

decedent’s personal representative is specifically granted

standing to bring an action by another statute. In effect, the

Trustees’ position as adopted by the trial court is a judicial

repeal of Code § 8.01-25. This result eviscerates the principle

well-established in our jurisprudence that when “the legislature

has used words of a plain and definite import[,] the courts

11
cannot put upon them a construction which amounts to holding the

legislature did not mean what it actually has expressed.”

Jenkins v. Director of the Va. Ctr. For Behavioral Rehab., 271

Va. 4, 10, 624 S.E.2d 452, 457 (2006); Barr v. Town & Country

Properties, 240 Va. 292, 295, 396 S.E.2d 672, 674 (1990);

Watkins, 161 Va. at 930, 172 S.E. at 447; see also Crawford, 270

Va. at 528, 621 S.E.2d at 129 (citing Horner, 268 Va. at 192,

597 S.E.2d at 204); Trent v. Clinchfield Coal Corp., 119 Va.

805, 811, 89 S.E. 921, 922-23 (1916) (judicial repeal of a

statute usurps legislative function).

Consequently, Little’s cause of action to compel an

accounting from the Trustees for the administration of the

Marital Trust under Code § 8.01-31 survives Little’s death

pursuant to Code § 8.01-25. Thus, Campbell, in his capacity as

executor of Little’s estate, has standing to bring an action to

compel an accounting by the Trustees for the administration of

the Marital Trust while Little was a beneficiary of that trust.

The fact that Little’s will does not expressly grant the

executor of his estate authority to pursue actions under Code

§ 8.01-31 does not alter our analysis. In Isbell v. Flippen,

185 Va. 977, 41 S.E.2d 31 (1947), the appellants argued “that

since the will . . . did not specifically authorize [the

personal representative] to do so, the executor had no right to

institute the present suit.” Id. at 981, 41 S.E.2d at 33.

12
Soundly rejecting this contention, the Court noted that it “is

so lacking in merit that it hardly needs discussion.” Id. The

Court then cited the statutory duty of personal representatives

to: “administer, well and truly, the whole personal estate of

his decedent.” Id. (quoting Code § 5377, now codified at

§ 64.1-139). Because “[o]ne of the primary obligations of the

personal representative is to collect the assets of the estate,”

the personal representative had not only the authority, but most

likely even the duty, to file suit to collect debts owed to the

decedent’s estate. Id. (“failure to proceed promptly with the

collection of assets due the decedent’s estate is negligence,

for which the personal representative may be liable”); see also

O’Brien v. O’Brien, 259 Va. 552, 557, 526 S.E.2d 1, 4 (2000).

Thus, Campbell’s power to seek an accounting under Code § 8.01-

31 is part of his fiduciary duty and authority as executor of

Little’s estate.

Similarly, Campbell’s standing to seek an accounting under

Code §§ 8.01-25 and 8.01-31 is unaffected by the clause in

Little’s will granting Campbell “all rights and powers set forth

in [Code §] 64.1-57.” The statutory powers incorporated into a

will by reference to Code § 64.1-57 are not the only powers

possessed by an executor. As the text of Code § 64.1-57 plainly

states: “The following powers, in addition to all other powers

granted by law, may be incorporated in whole or in part in any

13
will or trust instrument by reference to this section.”

(Emphasis added.) By incorporating the powers listed in Code

§ 64.1-57, a testator does not thereby exclude “all other powers

granted by law” from the executor. The right to compel an

accounting is such an “other power granted by law” as the

foregoing discussion of Code §§ 8.01-31 and 8.01-25 reflect.

Accordingly, the mere fact that Little’s will incorporates

Code § 64.1-57 and does not contain a specific grant of

authority to the executor to seek an accounting is no barrier to

Campbell exercising “all other powers granted by law.” The

trial court’s judgment was thus in error to hold that Campbell

lacked standing to compel an accounting from the Trustees as to

their administration of the Marital Trust prior to Little’s

death.

Having determined that Campbell, as Little’s executor, had

standing to compel an accounting by the Trustees, we must now

resolve whether that cause of action encompasses all the relief

requested in his Bill of Complaint. In that regard, Campbell

contends he has a right to an accounting to determine whether

Little “received all of the net income and other benefits due

him under the terms of the said Marital Trust.” For the reasons

set forth above, the Trustees can be required to so account as

to the administration of the Marital Trust through the time of

Little’s death. Thus, the Trustees, subject to any valid

14
defenses on the merits, none of which are before this Court,

must account to Campbell for their administration of the Marital

Trust during Little’s lifetime, including the computation and

distribution of the trust net income. This accounting would

include any undistributed income of the Marital Trust accrued as

of the date of Little’s death, as Little had a right to such

income up until that time. The trial court erred in ruling to

the contrary.

Campbell also contends he has a cause of action for an

accounting from the Trustees for their alleged removal of

tangible personal property purportedly belonging to Little from

Heritage Farm following Little’s death. Campbell does not

assert a basis for an accounting as to the tangible personal

property other than by nexus to his argument of the right by

survival under Code §§ 8.01-31 and 8.01-25. But Code § 8.01-25

cannot apply to authorize an accounting for the tangible

personal property because the statute only permits survival of

causes of action existing at the time of the decedent’s death.

Little clearly had no cause of action against the Trustees

during his lifetime for the alleged removal of property that

occurred after his death. As the executor’s powers are

derivative of Little’s, Campbell acquired no standing to compel

an accounting for the operation of the Marital Trust after the

date of Little’s death, when Little’s right to an accounting had

15
ceased. Code § 8.01-25 thus cannot be the basis for granting

Campbell standing to compel an accounting for the conversion of

tangible personal property that only occurred after Little’s

death. See Rutter, 264 Va. at 313-14, 568 S.E.2d at 694-95.

The trial court thus did not err in denying Campbell’s

request for an accounting as to the tangible personal property

alleged to have been removed by the Trustees.6

III. CONCLUSION

A decedent’s personal representative has standing under the

plain language of Code § 8.01-25 to maintain a cause of action

existing at the time of the decedent’s death, which includes the

right to compel an accounting under Code § 8.01-31 from the

trustees of a trust of which the decedent was a beneficiary.

Accordingly, the trial court erred in ruling that Campbell

lacked standing to compel an accounting by the Trustees for

their administration of the Marital Trust during Little’s

lifetime. However, because Little did not have a cause of

action during his lifetime to seek an accounting for tangible

personal property removed from Heritage Farm after his death,

the trial court did not err in adjudging that Campbell did not

6
The issue is not before us as to what rights, if any,
Campbell may assert under Code § 64.1-145 or otherwise as to the
claim for wrongfully removed tangible personal property and we
express no opinion in that regard.

16
have standing to seek an accounting by the Trustees for that

property.

Therefore, we will affirm the judgment of the trial court

denying the claim for an accounting of tangible personal

property removed from Heritage Farm, but will reverse the

judgment of the trial court regarding the claim for an

accounting by the Trustees for the administration of the Marital

Trust during Little’s lifetime. We will remand the case for

further proceedings consistent with this opinion.

Affirmed in part,
reversed in part,
and remanded.

17