[Cite as In re Estate of Kahn, 2014-Ohio-4721.]
COURT OF APPEALS
GUERNSEY COUNTY, OHIO
FIFTH APPELLATE DISTRICT
IN RE: ESTATE OF HARRY KAHN : JUDGES:
:
: Hon. Sheila G. Farmer, P.J.
: Hon. Patricia A. Delaney, J.
: Hon. Craig R. Baldwin, J.
:
:
: Case No. 13-CA-33
:
: OPINION
CHARACTER OF PROCEEDING: Appeal from the Guernsey County
Court of Common Pleas, Probate
Division, Case No. 75-PE-36062
JUDGMENT: Affirmed
DATE OF JUDGMENT: October 22, 2014
APPEARANCES:
For Plaintiff-Appellee Jadco Energy, Inc. For Defendant-Appellant Norman Kahn
OWEN J. RARRIC SHAWN J. ORGAN
DEAN A. SWIFT DOUGLAS R. COLE
MATTHEW W. ONEST GERROD L. BEDE
ALETHA M. CARVER Organ Cole & Stock LLP
Krugliak, Wilkins, Griffiths & Dougherty Co., 1335 Dublin Road, Suite 104D
L.P.A. Columbus, OH 43215
4775 Munson Street NW/PO Box 36963
Canton, OH 44735-6963
Guernsey County, Case No. 13-CA-33 2
Baldwin, J.
{¶1} Appellant Norman Kahn appeals from the December 4, 2013 Judgment
Entry of the Guernsey County Court of Common Pleas, Probate Division, denying his
Motion to Reopen the Estate of Harry Kahn.
STATEMENT OF THE FACTS AND CASE
{¶2} In May of 1969, Harry and Libbie Kahn, who were husband and wife,
entered into an oil and gas lease with B.L. Lawrence related to approximately 700 acres
in Guernsey County. The lease provided that the Kahns were entitled to royalties on the
“1/8 part of all oil produced … and [the] 1/8 part of gas sold from said premises…” The
lease stated that it would remain in effect “so long as oil and gas are produced in paying
quantities in any wells…”
{¶3} In 1973, the Kahns sold the surface rights to their property to Salt Fork
Campgrounds, Inc., but excepted “certain oil and gas lease from Harry and Libbie Kahn
to B. L. Lawrence, dated May 21, 1969, and partially assigned to Chief Drilling, Inc. by
assignment dated May 24, 1969, and certain oil and gas lease from Harry and Libbie
Kahn to Rabco, Inc. as recorded in Volume 52, Page 447, Lease Records of Guernsey
County, Ohio.”
{¶4} Two of the three oil and gas wells that have been drilled on the Kahn
property in accordance with the lease are still producing.
{¶5} In 1975, Harry Kahn passed away and on October 30, 1975, an estate
was opened in Guernsey County Probate Court. Harry Kahn, in his Last Will and
Testament, had left one-half of all his property, real, personal or mixed to his wife,
Libbie Kahn, and had left one-quarter each to his sons, appellant and Nathaniel Kahn.
Guernsey County, Case No. 13-CA-33 3
{¶6} In 2003, Nathaniel Kahn died and appellant, pursuant to terms of
Nathaniel Kahn’s Last Will and Testament, inherited all of his property, whether real,
personal or mixed. After Libbie Kahn, appellant’s mother, died in 2003, appellant, who
was the sole surviving beneficiary of the Estate of Harry Kahn, owned all of the
undistributed assets of such estate.
{¶7} As memorialized in a Judgment Entry filed in Guernsey County Probate
Court of February 7, 2007, the Probate Court authorized the transfer of the Kahn
estate’s interest in Kahn No. 1 and Kahn No. 2 wells to Jadco Energy, Inc. and ordered
the Administrator of the Estate to execute a Bill of Sale to Jadco Energy, Inc for “1/8th of
8/8ths overriding [royalty] interest in Kahn No. 1 and Kahn No. 2 wells.” A Nunc Pro
Tunc Judgment Entry was filed on February 15, 2007 stating that the Administrator was
to execute a Bill of Sale for 11.25% overriding royalty interest in the two wells to Jadco
Energy, Inc. On or about March 20, 2007, the Bill of Sale was executed and assigned
“11.25% overriding royalty interest in Kahn No. 1 and Kahn No. 2 wells” to Jadco
Energy, Inc.
{¶8} Thereafter, on December 10, 2007, an Entry closing the Estate of Harry
Kahn was filed in the Guernsey County Probate Court. The Entry stated that the estate
“has been fully and lawfully administered, and the assets have been distributed…”
{¶9} On October 23, 2013, appellant filed a Motion to Reopen the Estate of
Harry Kahn and for Leave to File Declaratory Judgment Action Instanter. Appellant, in
his motion, alleged that the Estate had not sold all of its royalty interest in oil and gas
wells on the property containing Kahn No. 1 and Kahn No. 2 wells and that it did not sell
its interest in any subsequently drilled wells. Appellant alleged that the Kahn property
Guernsey County, Case No. 13-CA-33 4
and the oil and gas rights relating to it were the subject of a lawsuit filed in the Civil
Division of the Guernsey County Court of Common Pleas, and that he was allowed to
intervene in such action to assert his interest in the overriding royalty interest retained
by the Estate after the sale to Jadco. Appellant further noted that the trial court, in the
civil case, had indicated that appellant should file a declaratory judgment action in the
Probate Court to determine what contingent interest, if any, appellant may have in the
royalty rights from the Estate.
{¶10} Appellant, in his motion in the Probate Court, stated that “[i]n order to
proceed in the underlying civil case, [appellant] seeks to reopen the Estate to pursue
declaratory judgment that: (1) the Estate sold only its 11.25% overriding interest in Kahn
No. 1 and No. 2 wells to Jadco; and (2) the remainder of the Estate passes to
[appellant], as the sole surviving beneficiary of the Estate.” Jadco Energy opposed
appellant’s motion.
{¶11} The trial court, via a Judgment Entry filed on December 4, 2013, denied
appellant’s motion, holding that did not have jurisdiction to reopen a closed estate that
had been fully administered. The trial court stated that it did not have jurisdiction to
consider a declaratory judgment action after the estate had been closed.
{¶12} Appellant now raises the following assignments of error on appeal:
{¶13} THE PROBATE COURT COMMITTED LEGAL ERROR WHEN IT
DETERMINED THAT IT LACKED THE POWER TO REOPEN AN ESTATE TO
CLARIFY THE APPROPRIATE HANDLING OF AN ESTATE ASSET THAT HAD NOT
BEEN ADDRESSED OR DISTRIBUTED DURING THE PROBATE COURT’S
ADMINISTRATION AND SETTLING OF THE ESTATE.
Guernsey County, Case No. 13-CA-33 5
{¶14} THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT REFUSED TO
CONSIDER THE MERITS OF NORMAN KAHN’S DECLARATORY JUDGMENT
ACTION ADDRESSING THE DISPOSITION OF A VALUABLE ESTATE ASSET THAT
HAD NOT BEEN DISTRIBUTED DURING THE ADMINISTRATION OF THE ESTATE
BASED ON A LEGAL ERROR THAT THE PROBATE COURT MADE REGARDING
THE SCOPE OF THE PROBATE COURT’S JURISDICTION.
I, II
{¶15} Appellant, in his two assignments of error, argues that the court erred in
denying his Motion to Reopen the Estate of Harry Kahn and for Leave to File
Declaratory Judgment Action Instanter.
{¶16} As an initial matter, we note that “the denial of a motion to reopen an
estate can effectively deny the right of the heirs to receive estate assets. Consequently,
an order denying a motion to reopen an estate is a final order under R.C. 2505.02(B)(1)
and is therefore capable of immediate review.” In re Chapman, 8th Dist. No. 78296,
2001 WL 703871, 2 (Jun 21, 2001).
{¶17} R.C. 2109.35 states, in relevant part, as follows:
The order of the probate court upon the settlement of a
fiduciary's account shall have the effect of a judgment and may be
vacated only as follows:
The order may be vacated for fraud, upon motion of any
person affected by the order or upon the court's own order, if the
motion is filed or order is made within one year after discovery of
the existence of the fraud. Any person who is subject to any legal
Guernsey County, Case No. 13-CA-33 6
disability may file the motion at any time within one year after the
removal of the legal disability or within one year after the person
discovers the existence of the fraud, whichever is later, or the
person's guardian or a successor guardian may do so during the
period of the legal disability. If the death of any person occurs
during the period within which the person could have filed the
motion, the person's administrator or executor may file it within one
year after the person's death.
The order may be vacated for good cause shown, other than
fraud, upon motion of any person affected by the order who was not
a party to the proceeding in which the order was made and who
had no knowledge of the proceeding in time to appear in it;
provided that, if the account settled by the order is included and
specified in the notice to that person of the proceeding in which a
subsequent account is settled, the right of that person to vacate the
order shall terminate upon the settlement of the subsequent
account. A person affected by an order settling an account shall be
considered to have been a party to the proceeding in which the
order was made if that person was served with notice of the hearing
on the account in accordance with section 2109.33 of the Revised
Code, waived that notice, consented to the approval of the account,
filed exceptions to the account, or is bound by section 2109.34 of
the Revised Code; but no person in being who is under legal
Guernsey County, Case No. 13-CA-33 7
disability at the time of that proceeding shall be considered to have
been a party to that proceeding unless the person was represented
in it as provided in section 2111.23 of the Revised Code. Neither
the fiduciary nor the fiduciary's surety shall incur any liability as a
result of the vacation of an order settling an account in accordance
with this division, if the motion to vacate the order is filed more than
three years following the settlement of the fiduciary's account
showing complete distribution of assets; but the three-year period
shall not affect the liability of any heir, devisee, or distributee either
before or after the expiration of that period.
The order may be vacated for good cause shown upon
motion of the fiduciary, if the motion is filed prior to the settlement of
the account showing that the fiduciary has fully discharged his trust.
A motion to vacate an order settling an account shall set
forth the items of the account with respect to which complaint is
made and the reasons for complaining of those items. The person
filing a motion to vacate an order settling an account or another
person the court may designate shall cause notice of the hearing
on the motion to be served upon all interested parties who may be
adversely affected by an order of the court granting the motion.
An order settling an account shall not be vacated unless the
court determines that there is good cause for doing so, and the
burden of proving good cause shall be upon the complaining party.
Guernsey County, Case No. 13-CA-33 8
{¶18} Pursuant to R.C. 2901.35, the court is not required to vacate an order
even if all of the requirements in the statute have been met. In re Estate of Keeler, 111
Ohio App.3d 657, 676 N.E.2d 1220 (10th Dist. 1996). The decision whether to grant a
motion to reopen an estate is within the discretion of a probate court. Wanamaker v.
Davis, 2nd Dist. Greene No.2005-CA-151, 2007-Ohio-4340, ¶ 34. An abuse of
discretion “implies that the [trial] court's attitude is unreasonable, arbitrary, or
unconscionable“ Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140
(1983).
{¶19} Appellant, in his Motion to Reopen, did not allege any of the above
grounds as a reason for reopening the estate of his father. Appellant did allege fraud
and, as a beneficiary of Harry Kahn’s estate, was a party to the Probate proceeding.
Moreover, appellant did not file his motion prior to the settlement of the final account.
{¶20} Appellant, in his brief, cites to In re Rubenstein’s Estate, 46 Ohio Law Abs
91, 68 N.E.2d 668 (2nd Dist. 1943) in support of his argument that the court erred in
denying his Motion to Reopen. In the Rubenstein’s case, an undistributed certificate of
deposit remained in the executor’s possession after she filed her first and final account.
After the State of Ohio took over the savings and loan that had issued the same, the
executrix did not file a proof of claim on the certificate. The probate Court permitted the
decedent’s estate to be reopened in order to compel the executrix to file a proof of claim
for the certificate.
{¶21} In affirming the decision of the Probate Court, the court, in Rubenstein,
held, in relevant part, as follows:
Guernsey County, Case No. 13-CA-33 9
It would seem obvious that if the certificate was at any time
an asset of the estate, and the executrix apparently so considered it
when she listed it as an asset in her inventory, then it should be
distributed to the proper parties, and so long as it is in her hands as
executrix the estate is not closed. It is probable that the executrix,
before filing her first account, could have made a distribution of this
item, but it appears that this was not done. The executrix still holds
it.
{¶22} Id at 670-671.
{¶23} In contrast in the case sub judice, there were no identified estate assets in
the executor’s inventory that were not distributed. Moreover, as noted by appellee,
appellant in this matter is not seeking to reopen the estate to distribute an asset
belonging to the estate, but rather is seeking to reopen the estate to determine “whether
the overriding royalty interest in subsequently drilled wells should be designated an
estate asset.”
{¶24} Appellant, in his brief, further argues that the trial court had jurisdiction to
reopen the Estate in order to clarify its prior orders via a declaratory judgment action.
Appellant notes that in In re Estate of Smith, 3rd Dist. Seneca No. 13-02-37, 2003-Ohio-
1910, the Court held that the Probate Court had the power to reopen an estate to clarify
a prior judgment in order to resolve an ambiguity in the will as to when the valuation of a
farm, which was part of residue of the estate, would arise for purposes of provisions in
the will requiring the residue of the estate to be divided equally and for the son to
receive the farm.
Guernsey County, Case No. 13-CA-33 10
{¶25} However, in this case, appellant is not seeking clarification. Rather,
appellant is specifically seeking a determination by the Probate Court with respect to
ownership of a royalty interest in subsequently drilled wells.
{¶26} Finally, appellant argues that the trial court determined that it lacked
jurisdiction based on a misreading of the law. Appellant contends that the trial court
should first have determined whether or not to reopen the Estate before concluding that
it lacked jurisdiction to hear appellant’s declaratory judgment action. Appellant notes
that case law holds that a Probate Court cannot consider a declaratory judgment action
while an estate is closed “but these cases do not suggest that the Court lacks
jurisdiction to reopen the estate, and thereafter address the declaratory judgment
action…”
{¶27} However, we concur with appellee that the court’s decision that the estate
had been fully administered and would remain closed “implicitly held that [a]ppellant had
failed to demonstrate a sufficient reason to reopen the estate.” We further find that
appellant failed to establish any valid grounds for reopening the Estate.
{¶28} Based on the foregoing, we find that the trial court did not abuse its
discretion in denying appellant’s Motion to Reopen the Estate of Harry Kahn and for
Leave to File Declaratory Judgment Action Instanter. The trial court’s decision was not
arbitrary, unconscionable or unreasonable.
{¶29} Appellant’s two assignments of error are, therefore, overruled.
Guernsey County, Case No. 13-CA-33 11
{¶30} Accordingly, the judgment of the Guernsey County Court of Common
Pleas, Probate Division is affirmed.
By: Baldwin, J.
Farmer, P.J. and
Delaney, J. concur.