In re JOBE ESTATE
Docket No. 97929.Michigan Court of Appeals.
Decided January 20, 1988.Patrick J. McDonald, for claimant Norma Ray.
Robert L. Martin and Donald R. Chisholm, for the personal representative, Robert E. Jobe.
Before: HOOD, P.J., and SAWYER and T.E. JACKSON,[*] JJ.
PER CURIAM.
This appeal centers on a dispute over the distribution of the assets of the estate between the deceased's daughter, claimant, and the deceased's son, the personal representative. Decedent died intestate, leaving the two parties as heirs at law. The primary asset of the estate was the proceeds of a personal injury suit, which the estate settled after decedent's death for a net amount of over $100,000.
On October 24, 1984, claimant executed an agreement to accept $10,000 as her share of the estate. The fact that claimant was to receive a smaller share of the estate than her brother apparently arises out of the fact that her brother spent a great deal of time caring for his mother in her final years.
*776 After the personal representative submitted his final accounting of the estate to the probate court, claimant filed an objection, arguing that her agreement to accept $10,000 as her share of the estate was invalid. Claimant sought a full one-half share of the estate. The probate court ruled that the agreement was enforceable and allowed the final accounting. Claimant was awarded her $10,000 and the residue of the estate went to her brother. Claimant now appeals and we affirm.
I
Claimant argues that the burden of proof for invalidating an agreement to change the distribution of an estate rests on the person relying on the agreement. Claimant, however, is incorrect. Although the fiduciary does have the burden of sustaining and establishing the correctness of his account, where the exceptions to the account are of an affirmative nature, such as fraud, negligence or bad faith, the burden of sustaining those exceptions rests on the contestant. In re LaFreniere's Estate, 316 Mich. 285, 290-291; 25 NW2d 252 (1946).
Claimant's attack on the agreement is affirmative in nature, namely, that the agreement was procured through undue influence. Accordingly, the burden rested with her to establish the basis for invalidating the agreement. The trial court's findings that she entered into the agreement voluntarily, freely and with full knowledge of the consequences indicates that the trial court concluded that claimant did not meet her burden. We cannot say that the trial court's conclusion was clearly erroneous. MCR 2.613(C).
II
Next, claimant argues that MCL 700.216(7); *777 MSA 27.5216(7), which allows for agreements to change the distribution of the estate from that provided for by a will or the laws of intestacy, applies only to agreements between heirs and not to agreements between an heir and a personal representative. The flaw in claimant's argument is that her brother's status as personal representative is irrelevant to the validity of the agreement to change the distribution of the assets of the estate from that provided for by the laws of intestacy.
Robert Jobe has two roles in this case, one as personal representative and one as an heir at law. The agreement which was executed providing for claimant's reduced share in the estate was a matter between claimant and her brother as heirs of their mother. The fact that Robert Jobe was also the personal representative of the estate is relevant only in that the agreement would affect how he would discharge his duties as personal representative in distributing the estate's assets. Whether he was the personal representative, or claimant was, or a third party was, does not affect the fact that the agreement was one between heirs concerning the distribution of the estate.[1]
III
Finally, we combine the party's final two issues for discussion. In essence, claimant argues that the personal representative violated his fiduciary duty and engaged in self-dealings by entering into the agreement with claimant concerning her reduced share in the estate. We disagree.
First of all, we are not convinced that the agreement *778 involves Robert Jobe's status as the personal representative of the estate. Rather, as discussed above, we believe that he was acting in his role as heir. Second, we believe it somewhat attenuated to call his entering into the agreement a form of self-dealing. Rather, self-dealing concerns itself with a sale or encumbrance of property to the personal representative. See MCL 700.345; MSA 27.5345. That is, a breach of the fiduciary duty in this regard normally arises where the personal representative drains the assets of the estate to his benefit by engaging in a transaction with the estate at other than fair market value.
In the case at bar, Robert Jobe did not engage in a transaction with the estate by entering into the agreement. Rather, he engaged in a transaction with claimant as an heir, not as a personal representative. However, even assuming that MCL 700.345; MSA 27.5345 is applicable, it provides no basis for reversing the trial court. That statute explicitly allows for self-dealing where there is fair disclosure and consent. The trial court found that claimant voluntarily entered into the agreement after a fair disclosure of the assets of the estate. We cannot say that the trial court's conclusion was clearly erroneous. MCR 2.613(C). Accordingly, the personal representative's involvement in the agreement, even if it constituted self-dealing, was in accordance with the requirements of the statute.
Affirmed. The personal representative may tax costs.
NOTES
[*] Recorder's Court judge, sitting on the Court of Appeals by assignment.
[1] We note that we also concur in the trial court's reasoning and conclusion that it was sufficient that the agreement was signed only by the party seeking to invalidate the agreement, namely claimant.