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In re Estate of Kay

Supreme Court of South Carolina

May 23, 2018

In the Matter of the Estate of Marion M. Kay.
v.
Martha Brown and Mary Moses, Respondents-Petitioners. Edward D. Sullivan, as Personal Representative of the Estate of Marion M. Kay, Petitioner-Respondent, Appellate Case No. 2016-002337

          Appeal from Laurens County Donald B. Hocker, Probate Court Judge

         ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

          Heard March 7, 2018

          Daryl G. Hawkins, of the Law Office of Daryl G. Hawkins, LLC, of Columbia, for Petitioner/Respondent.

          John R. Ferguson, of Cox Ferguson & Wham, LLC, of Laurens, for Respondents/Petitioners.

          HEARN, JUSTICE

         This cross-appeal primarily concerns the amount of compensation owed to Petitioner/Respondent Edward Sullivan as personal representative (PR) of Marion Kay's estate. Sullivan filed a petition to settle the estate and sought probate court approval for his commissions as PR together with fees and costs. In response, Respondents/Petitioners Martha Brown and Mary Moses (Brown and Moses), cousins of the deceased and two of multiple beneficiaries under the will, challenged his compensation as excessive, and the probate court agreed, reducing Sullivan's commissions, disallowing certain fees and costs, and awarding attorney's fees to Brown and Moses. The circuit court affirmed, and both sides appealed. In a 2-1 opinion, the court of appeals affirmed in part and reversed in part. In re Estate of Kay, 418 S.C. 400, 792 S.E.2d 907 (Ct. App. 2016). We affirm in part, reverse in part, and remand to the probate court.

         STANDARD OF REVIEW

         A proceeding before the probate court may sound in equity or at law. In re Estate of Holden, 343 S.C. 267, 278, 539 S.E.2d 703, 709 (2000). Brown and Moses demanded a hearing to challenge Sullivan's compensation for his services in administering Kay's estate-an action in equity. Lee v. Lee, 251 S.C. 533, 534, 164 S.E.2d 308, 308 (1968) (holding an action for an accounting to determine whether the guardian received improper compensation was in equity). Ordinarily, an appellate court reviews cases in equity by finding facts in accordance with its own view of the preponderance of the evidence. Townes Assocs., Ltd. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976). However, an appellate court still affords a degree of deference to the trial court because it was in the best position to judge the witnesses' credibility. Lewis v. Lewis, 392 S.C. 381, 391, 709 S.E.2d 650, 655 (2011).

         A threshold issue in this case is the applicability of the "two-judge rule" to a decision of a probate judge which is affirmed by a circuit court judge. The majority of the court of appeals employed the two-judge rule in affirming, while the dissenting judge, then-Acting Judge Few, posited that the standard of review in an appeal from an equity case should not change simply because two judges have made the same factual determination, and would have applied a preponderance of the evidence standard of review in this case. We take this opportunity to clarify the appropriate standard of review in cases where the probate court's decision is affirmed by the circuit court.

         What has become known as the two-judge rule had its genesis in Townes, wherein the Supreme Court undertook to explain the applicable standards of appellate review in various types of cases. In Townes, a master made findings of fact and conclusions of law which were concurred in by the circuit court, and the Court stated that: "In an action in equity, tried first by a master or a special referee and concurred in by the judge, the findings of fact will not be disturbed on appeal unless found to be without evidentiary support or against the clear preponderance of the evidence." 266 S.C. at 86, 221 S.E.2d at 775-76.

         Both the court of appeals and this Court have applied the two-judge rule to probate cases where the circuit court judge has agreed with the decision of the probate court. See Geddings v. Geddings, 319 S.C. 213, 216, 460 S.E.2d 376, 378 (1995) (applying the two-judge rule where the circuit court affirmed the probate court's decision that a wife had not waived her right to invoke her elective share); Dean v. Kilgore, 313 S.C. 257, 260, 437 S.E.2d 154, 155 (Ct. App. 1993) ("Although Townes sets forth the two-judge rule for equity cases first tried by a master or special referee and subsequently affirmed or concurred in by the circuit court, we see no reason not to apply the same rule to an affirmance or concurrence of the circuit court with the probate court."). Relying on this precedent, a majority of the court of appeals held the two-judge rule applied.

         Under the framework set out in Townes, prior to our master in equity system, when circuit judges referred matters to special referees or masters to make findings of fact, the limited scope of appellate review over factual findings concurred in by two judges may have been appropriate. However, we hold today that the two-judge rule has no applicability to cases wherein the circuit court, sitting in a purely appellate capacity, as here, affirms the findings of a lower tribunal. Instead, the applicable standard of review is the same as in other equity matters, and the appellate courts of this state may take their own view of the preponderance of the evidence. Accordingly, we analyze this case through this broad lens.

         FACTUAL/PROCEDURAL BACKGROUND

         Marion Kay died on May 3, 2007, leaving a will that named Sullivan, her close friend and estate planning attorney, as personal representative. At the time of Kay's death, she owned a house, a ten acre parcel of land, and a one-half undivided interest in 330 acres (the Farm); the remaining one-half interest belonged to Brown and Moses. Kay left the residuary of her estate as follows: (1/4) to Lisbon Presbyterian Church, (1/4) to Lisbon Presbyterian Church Cemetery fund, and the remaining (1/2) to five beneficiaries who each received (1/10), consisting of Marla Elizabeth Heard, Bart Edward Heard, Brown, Moses, and the Presbyterian Home of

          South Carolina. Brown and Moses had believed Kay would leave them her interest in the Farm, but instead, they simply were named as (1/10) residuary beneficiaries.

         The will also granted an option to Kay's neighbor, Charles Copeland, to purchase the real estate within eight months of her death "at the fair market price on the date of my death, the decision of my PR regarding the fair market price to be final." (Copeland Option). Additionally, the will provided "reasonable compensation for [Sullivan's] services rendered and reimbursement for reasonable ...


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