Decedent’s assets properly listed, COA finds

Summary

• Missouri Court of Appeals affirmed estate inventory ruling in Hughes case
• Court found no credible evidence of missing or withheld estate assets
• Dispute centered on cattle ownership and oral agreement with decedent
• Appellate court rejected claims due to lack of preserved arguments and evidence

A circuit court did not err when it found that all assets belonging to a decedent were properly listed on the inventories filed by her personal representative and that no credible evidence existed the representative failed to refuse to deliver any estate assets, the Western District Court of Appeals ruled on April 21.

Sue Ann Hughes passed away on April 3, 2021. She was survived by three children: Charles Edwards Jr., Melanie L. Edwards and Christopher W. Hughes.

During her lifetime, mother lived in Chariton County and owned agricultural real property. Hughes also resided in Chariton County, while his siblings lived out of state.

Hughes purchased cattle after his college graduation, which he raised on his mother’s farm property.

In 2001 or 2002, mother incurred income tax liability from investments requiring her to make quarterly estimated income tax payments. She and Hughes discussed having her purchase cattle and depreciate them on her income tax returns to lessen her income tax liability.

Hughes testified at trial that he and his mother reached an oral agreement that she would borrow money at a bank to purchase cattle, which she would claim as a depreciation expense. Hughes would provide all the labor, feed and care for the cows and handle the sales of the cows’ offspring.

The sales proceeds would either be sufficient to pay the loan payment or if not, Hughes would pay the bank himself. Any excess funds would be retained by Hughes as compensation for the care and expenses of raising the calves.

Mother purchased cattle twice in 2003 and a third time in 2006. By the time of her death, Hughes testified that all of the cows she had purchased had died, not having been sold or replaced. However, she and Hughes continued to identify some of Hughes’ cattle as mother’s to document they were securing her loans.

When Hughes submitted inventories as mother’s personal representative that did not list any cattle, his sister objected.

The trial court sided with Hughes and Edwards appealed.

Judge Gary D. Witt affirmed in an opinion joined by Judges Mark D. Pfeiffer and Edward R. Ardini.

Edwards argued that the trial court applied the wrong burden of proof, and failed to shift the burden to Hughes after Edwards made a prima facie case.

But her argument was multifarious, alleging two distinct errors, and she did not present the alleged errors to the trial court for its consideration, the court said.

Although Edwards argued that her proposed findings of fact and conclusions of law contained the correct standard the trial court should have used, the court pointed out that she had three months to alert the trial court to the fact that she believed Hughes’s submission declared the wrong legal standard and failed to do so. Nor did she file any post-trial motions, the court added.

Turning to Edwards’s challenge to the trial court’s judgment for Hughes, the court rejected her position that there was no substantial evidence showing that mother’s cattle were transferred to Hughes during her life.

“This point ignores that the trial court’s judgment found that prior to Mother’s death, ‘by 2010, all of the cows purchased by [Mother] had died having not been sold or replaced,’” the court wrote. “There was no finding in the judgment that Mother made a transfer of any cattle to Hughes during her lifetime, accordingly, no ‘substantial evidence showing that [Mother’s] cattle were transferred [to Hughes] during her life’ was required to support the judgment.”

Edwards also argued that there was not substantial evidence to support the oral agreement between mother and Hughes that the court found.

As a non-party to the contract, Edwards could not object to its validity on the statute of frauds, and as both mother and Hughes fully performed their duties under the contract — mother purchased the cows, and Hughes raised and sold the calves — the court found “clear, cogent, and convincing evidence as to its existence.”

Nor was the court persuaded that any agreement between mother and Hughes would have been illegal and thus void.

“Edwards does not establish how the agreement, as found by the trial court, would have been illegal,” the court said. “Edwards appears to be alleging that there was some illegality after 2010, where Mother was taking tax deductions for and securing the loan with cattle she may no longer have owned. The trial court vaguely acknowledged this possibility, stating that it was making ‘no findings regarding the propriety of [Hughes’s] and [Mother’s] agreement with their bank.’ Any activity by Mother and Hughes later in Mother’s life, even if it had possibly been illegal, and any dealings between Mother and her bank, do not invalidate the contract as the trial court found it to have existed at the time of its execution.”

The finding that mother owned no cattle at the date of her death was not against the weight of the evidence, the court found, as Edwards focused on mother’s 2010 tax returns, and not the finding that as of her death in 2021, mother had no ownership interest in any cows, bulls, calves or other livestock.

“Despite some possibly questionable accounting, the trial court found Hughes’s testimony, which was part of Edwards’s case in chief, to be credible, and he testified that Mother owned no cattle at the time of her death,” the court said.

Finally, the court rejected Edward’s attempt to rely on judicial estoppel that Hughes could not receive excess proceeds from the sale of the calves after he previously stated under oath that mother owned the cattle.

As she provided no dates, citations to record or specifics about when Hughes made such statements, the court found her conclusory argument insufficient and affirmed the trial court.

Keytesville attorney Dale L. Linneman, who represented Hughes, said “sticking with the facts” was the recipe for success.

“Sometimes you wish you could file a motion for a change of facts, but that’s not available,” he joked. “But we told the story the way it was, for better or worse, and the court recognized that some of the decisions made may not have been the brightest.”

Theodore D. Dearing of Riezman Berger in St. Louis, who represented Edwards, said he was “disappointed” in the decision, which serves as a reminder that “it is extraordinarily difficult to win against the weight of the evidence standard on appeal.”

Keytesville attorney Dale L. Linneman, who represented Hughes, did not respond to a request for comment.

The case is Estate of Hughes v. Hughes, No. WD87892.