Beyer v. Morgan State University

BATTAGLIA, Judge. In the present matter, petitioner Janet Beyer (“Beyer”), the Personal Representative for the Estate of Betty Y. Keat (“Keat”), challenges the subject matter jurisdiction of the Circuit Court for Baltimore City on appeal, pursuant to Mary ³³⁸ land Code (1974, 1998 Repl.Vol.), Section 12-502(a) of the Courts and Judicial Proceedings Article, of two Orders of the Orphans’ Court allowing payment of attorney’s fees and extraordinary expenses out of the Estate. Petitioner further contends that the Circuit Court improperly vacated the Order of the Orphans’ Court allowing for the payment of attorney’s fees from the Estate based on an oral motion for summary judgment made by respondent Morgan State University (“MSU” or “University”) at the hearing on the appeal. For the reasons set forth below, we find that the Circuit Court of Baltimore City had subject matter jurisdiction to hear MSU’s appeal and properly granted summary judgment in favor of MSU, vacating the Order of the Orphans’ Court authorizing the payment of attorney’s fees.

I. Facts On January 12, 1996, Betty Keat met with an untimely death from gunshot wounds inflicted by members of the Baltimore City Police Department during an altercation in which she menacingly approached the officers, crying, “There’s no such thing as police in Baltimore City.” 1 Keat, who had been a professor at Morgan State University, executed a will on January 25, 1982, which stated, in part: [Tjhis is a final will and testament to dispose of my property, Betty Y. Keat, being of sound mind and body. ³³⁹ 1. House: to be sold. Proceeds to Morgan State University for repair of campus clocks. 2. Stocks, mutual funds, deferred compensation, pension.

Converted to cash for litigation costs, if necessary, to enforce precedent provision. Any surplus to be donated towards fund to rectify heating plant of Soper [LJibrary. 6. Books: on India: to Soper [LJibrary for special collection. 2 The house was her residence at 326 Taplow Road in Baltimore City. The will made various other distributions of Keat’s personal affects, such as her china, crystal, jewelry, and personal papers; it did not contain a residuary clause.

On January 18, 1996, Keat’s sister and sole heir at law, Janet Beyer, retained attorney Anton J.S. Keating (“Keating”) to file a survival action 3 against the Baltimore City Police officers who shot Keat. At the same time, Beyer made the ³⁴⁰ first of four payments of attorney’s fees to Keating. 4 On or about February 20, 1996, Keat’s will was admitted to probate and Beyer was appointed as Personal Representative of the Estate. Beyer engaged the services of a second attorney, David Allen (“Allen”), to handle the legal affairs associated with administering Keat’s Estate. On April 6, 1996, Allen notified University Counsel for MSU of Keat’s bequest, and informed the University that Keat’s relatives were conducting an investigation of the circumstances surrounding Keat’s death, which would require use of funds from the Estate to cover the costs of the investigation and any subsequent litigation arising out of it.

In response, on April 29, 1996, MSU informed Allen in writing: We acknowledge the intention to investigate the circumstances surrounding Ms. Keat’s death. However, we do not understand why you have suggested that costs associated with those efforts take precedence over the Morgan bequest. In accordance with § 8-105(b) of the Estates and Trusts Article (Order of payment) the Morgan bequest takes precedence. Moreover, the testator did not specify that funds from the estate be used for this purpose.

Neither Beyer nor Allen responded to the University’s letter. 5 Despite MSU’s expressed concern about the costs of litigation, the Personal Representative filed a survival action on October 3,1996. 6 ³⁴¹ On June 28, 1996, Beyer sold Keat’s house for $95,045.94 and failed to inform MSU of the sale. On August 13, 1997, after having not heard anything from the Personal Representative or her attorneys, MSU’s Office of General Counsel sent a letter to Allen inquiring as to the disposition of Keat’s house and the bequest of Keat’s books on India which were supposed to have been turned over to the Soper Library. Again, MSU received no response. On February 4, 1998, Beyer filed a Petition to Approve Expenditure of Extraordinary Expenses of Administration (“Expenses Petition”) in the Orphans’ Court for Baltimore City.

The Expenses Petition requested more than $13,000 for distribution to Beyer and her relatives to compensate them for expenditures associated with cleaning and repairing Keat’s house and property for sale. Although Allen was aware of communications from MSU’s Office of General Counsel, notice of the Expenses Petition was served on the Soper Library, rather than on MSU’s attorney. Thereafter, on March 30, 1998, Beyer filed a Petition for Attorney’s Fees (“Fees Petition”) with the Orphans’ Court for services performed by Keating in the survival action. Once again, counsel for MSU did not receive notice of the Petition because it had been mailed to the Soper Library.

On April 20, 1998, the Orphans’ Court approved Beyer’s Expenses Petition. On April 29, 1998, however, the Orphans’ Court delayed acting upon the Fees Petition pending receipt of a verification, a certificate of service to interested parties, a detailed list of services performed by Keating, and a first and final administration account of the Estate. Keating subsequently filed a Petition for an Extension for filing these requested documents with the Orphans’ Court on May 19,1998. On May 6, 1998, counsel for MSU entered his appearance in the Orphans’ Court when he learned about Beyer’s Expenses Petition and took exception thereto.

Beyer filed a motion to strike MSU’s exceptions on the basis that they were untimely filed and allegedly contained “inaccurate and false allegations.” ³⁴² On June 8, 1998, Keating filed another Fees Petition requesting $40,000 from the Estate, although the Personal Representative previously had paid Keating $30,000 for his services. The Orphans’ Court granted Keating an extension of time to provide the Court with the information it had requested in its April 29th Order. The Court also ordered Keating to provide his retainer agreement with the Personal Representative for his representation of the Estate in the survival action. 7 On July 2,1998, over two years after the sale, MSU learned that Keat’s house had been sold. MSU responded by immediately filing a Petition to Order Distribution of Property (“Petition for Distribution”) with the Orphans’ Court to facilitate its receipt of the bequest.

In the Petition for Distribution, MSU objected to Beyer’s failure to file a first and final administration account for the Estate and to the proposed payment of attorney’s fees for any litigation arising out of Keat’s death and requested that the Orphans’ Court stay any further expenditures from the Estate pending review by the court. 8 The Orphans’ Court scheduled a hearing on MSU’s Petition for Distribution for September 29,1998. On September 9, 1998, without notice to MSU or a hearing, the Orphans’ Court approved payment of $30,000 in attorney’s fees to Keating and allowed him to request additional payment for services rendered following the disposition of the survival ³⁴³ action. Thereafter, on September 11, 1998, the Orphans’ Court denied MSU’s exceptions to Beyer’s Expenses Petition without a hearing. MSU did not receive a copy of the September 11th Order until September 25, 1998.

On October 1, 1998, MSU sent a letter to the Chief-Judge of the Orphans’ Court for Baltimore City protesting the failure to receive notice of the petitions and the lack of hearings prior to the issuance of the Orphans’ Court’s Orders of September 9 and September 11, 1998. Counsel for MSU did not learn of the June 8, 1998 Fees Petition or September 9, 1998 Order approving of those fees until he appeared before the Orphans’ Court on September 29, 1998, for the hearing on the Petition for Distribution. Although MSU requested that the Orphans’ Court immediately remediate the situation, the Court declined to intervene. MSU then filed an appeal to the Circuit Court for Baltimore City pursuant to Maryland Code (1974, 1998 Repl.Vol.) Section 12-502 of the Courts and Judicial Proceedings Article 9 challenging the legitimacy of the Orphans’ Court’s Orders of September 9 and September 11, 1998.

MSU asserted that, despite filing pleadings in opposition to the payments of attorney’s fees and extraordinary expenses from the Estate, it never had been given the opportunity to be ³⁴⁴ heard on the merits of the issues underlying the Orphans’ Court’s Orders of September 9 and September 11, 1998. 10 MSU also alleged that Beyer breached her fiduciary duty “to settle and distribute the estate ... as expeditiously and with as little sacrifice of value as is reasonable under the circumstances,” as set forth in Maryland Code (1974, 2001 Repl.Vol.), Section 7-101(a) of the Estates and Trusts Article. The Circuit Court consolidated MSU’s appeal with the ongoing survival action brought by Beyer as Personal Representative of the Estate of Betty Y. Keat against members of the Baltimore City Police Department, which had been set for trial in February of 1999. In addition, the Circuit Court, acting sua sponte on January 15, 1999, appointed attorney Arthur Drager to serve as counsel to represent the interests of the Estate of Betty Y. Keat. On February 23, 1999, the jury returned a verdict in favor of the individually named police officers and the Baltimore City Police Department in the survival action.

The de novo hearing on MSU’s appeal was held in the Circuit Court for Baltimore City on February 24,1999. During the hearing, the following discourse took place: Court: I have given this case a great deal of thought, and this case makes me' feel extremely uncomfortable. I have really been in a dilemma as to how to deal with this. I have read Mr. Drager’s recommendation.

I read the [Attorney Grievance Comm’n v. Owrutsky, 322 Md. 334 , 587 A.2d 511 (1991)] case. I have real concerns about the propriety of conduct that I have seen throughout this matter, and I am extremely concerned. I am concerned about the Personal Representative making expenditures without the approval of the Orphans’ Court to almost half of the entire Estate, and approval of the Orphans’ Court was never even sought until more than two ³⁴⁵ years after some of the expenditures had been made. That gives me a great deal of concern.

I am concerned, because the original attorney for the Estate was put on notice as far back as April of '96 of an objection to a disbursement of attorney’s fees, and yet, this matter went to the Orphans’ Court on a petition filed twenty-three months later without a hearing in which there was an approval of the — of thirty thousand dollars, and ten thousand of it still has not been approved, which is all inconsistent with the estates and trusts article. I guess the biggest issue before me is what do we do today. You know, from — I don’t know what testimony or what evidence would even be necessary, because I don’t think there is a factual dispute concerning what was done by this Personal Representative. I don’t think it’s disputed at all that these disbursements were made.

I don’t think that there is a dispute that these disbursements were made prior to the approval of the Orphans’ Court. And quite frankly, the Orphans’ Court hasn’t even approved all of it. I am concerned about Morgan not even being put on notice after they filed an objection through the original attorney representing the Estate. And then for the Orphans’ Court to almost perfunctorily sign these orders really gives me some concern.... [T]his case makes me very uncomfortable when I read what I have read today.

In fact, forty thousand dollars was disbursed before the approval was ever even obtained, and even over objection, this disbursement was made without even having a hearing.... The court then raised the issue of a summary judgment motion: Court: ... motions for summary judgment can be filed at any time in a proceeding, and it can even be done orally. Mr. Davis: I would so move, your honor. Court: Mr. Briscoe, I will hear from you. ³⁴⁶ Mr. Briscoe: Well, I don’t think that Miss Beyer should be penalized— Court: I want you to tell me where there is a factual dispute concerning the times these disbursements were made — don’t cut me off, the amount of the disbursements that she took for herself, what the commissions would have been.

I want to know where there is a factual dispute regarding anything. Mr. Briscoe: I can’t see any factual disputes, your honor. * * * Court: I want to add to the facts that as late as July of 1998, the Personal Representative had not made a distribution, and then an order was entered petitioning to have such a distribution made. It was not until September of 1998 that the authorization by the Orphans’ Court was made in the amount of thirty thousand dollars. Now, I don’t see any factual dispute as to any of these— of the statements that I have made, and all of the distributions to Mr. Keating were made prior to or on or about June 24th of 1997, at least a year and three months before ... the final authorization, ...

And under the Estates and Trusts Article, and Section 7-601 and 602, approval is required before such a distribution can be made. So as a matter — with respect to the facts, I’d like to know if there is any issue or fact that is not correct. Mr. Briscoe: I can’t see that there is any issue of fact as far as stated.... The Circuit Court thereupon orally granted summary judgment in favor of MSU and the next day memorialized the decision, in which it stated: 1.

Janet Beyer, the Personal Representative, wrongfully expended estate funds in the amount of $40,000 for legal services to Anton J.S. Keating, Esquire, in violation of her fiduciary duty under Md. Estates & Trusts Art. § 7-101(a) and without prior court approval; and ³⁴⁷ 2. Janet Beyer, the Personal Representative, wrongfully expended estate funds in the amount of $13,309.58 for extraordinary expenses. Beyer filed a timely appeal in the Court of Special Appeals, wherein she challenged the subject matter jurisdiction of the Circuit Court to hear the appeal, arguing that the September 9 and September 11, 1998 Orders of the Orphans’ Court were not appealable orders, and asserting that the Circuit Court erred in vacating the Orders of the Orphans’ Court by granting summary judgment to MSU. See Beyer v. Morgan State University, 139 Md.App. 609, 613 , 779 A.2d 388, 390-91 (2001).

The Court of Special Appeals held that the Order granting Beyer’s Fees Petition on September 9, 1998, and the Order granting Beyer’s Expenses Petition on September 11, 1998, constituted final appealable judgments of the Orphans’ Court pursuant to Section 12-502(a) of the Courts and Judicial Proceedings Article, so that the Circuit Court had subject matter jurisdiction over MSU’s timely filed appeal. See id. at 632-33 , 779 A.2d at 401-02 ; Md.Code, § 12-502(a)(1). With regard to Beyer’s contention that the Circuit Court erred in vacating the Orders of the Orphans’ Court premised on MSU’s oral motion for summary judgment, the Court of Special Appeals concluded there was no genuine issue of material fact as to whether Beyer had used money from the Estate to pay the legal fees of the attorney working on the tort claim prior to receiving approval from the Orphans’ Court in violation of her fiduciary duties as Personal Representative of Betty Keat’s Estate. See Beyer, 139 Md.App. at 639 , 779 A.2d at 406 .

The intermediate appellate court did find, however, that the Circuit Court erred in failing to make evidentiary findings as to whether the expenses for which Petitioner sought payment approval were extraordinary expenses which could be paid from Estate funds because the evidence was in dispute. See id. at 641 , 779 A.2d at 407 . 11 Therefore, the Court of Special Appeals affirmed in part, and reversed in ³⁴⁸ part the Circuit Court’s grant of summary judgment, and remanded the matter for consideration of the legitimacy of the expenses approved by the Orphans’ Court in its Order of September 11,1998. We granted a petition for a writ of certiorari in this case, 367 Md. 86 , 785 A.2d 1290 (2001), to consider the following questions presented by Beyer, which we have rephrased: 1. Whether the Court of Special Appeals erred in finding that the Circuit Court for Baltimore City had subject matter jurisdiction over an appeal pursuant to Maryland Code, Section 12-502 of the Courts and Judicial Proceedings Article (1974, 1998 Repl.Vol.) about the September 9 and September 11,1998 Orders entered by the Orphans’ Court? 2.

Whether the Court of Special Appeals erred in affirming the Circuit Court’s decision to vacate the September 9, 1998 Order of the Orphans’ Court granting payment of attorney’s fees pursuant to an oral motion for summary judgment? 12 II. Discussion A. Subject Matter Jurisdiction of the Circuit Court Beyer argues that because MSU, an interested party to the Estate, did not receive notice of the Expenses and Fees Petitions pursuant to Section 7-502(a) of the Estates and Trusts Article, the subsequent order of the Orphans’ Court granting the petition was not a final judgment for purposes of triggering the appellate provisions of Section 12-502 of the Courts and Judicial Proceedings Article. Rather, Beyer contends that because MSU did not receive notice, its appellate ³⁴⁹ remedies were limited to challenging the order granting attorney’s fees under the procedures set forth in Section 7-502(b) of the Estates and Trusts Article and Maryland Rule 6-416(a)(5). 13 What Beyer is attempting to do is take advantage of her own failure to act appropriately as the Personal Representative by bolting the door to the Circuit Court to MSU; with this we do not agree. Our analysis begins with an examination and interpretation of Section 7-502 of the Estates and Trusts Article and related Maryland Rule 6-416, governing notice of proposed payments from the Estate to the Personal Representative or an attorney, as well as Section 12-502 of the Courts and Judicial Proceedings Article and related Maryland Rule 6-463 concerning appeals to the Circuit Court from judgments rendered in the Orphans’ Court.

The principal goal of statutory interpretation is to ascertain the legislative intent behind the enactment. See Ridge Heating, Air Conditioning & Plumbing, Inc. v. Brennen, 366 Md. 336, 349 , 783 A.2d 691, 699 (2001); Taylor v. NationsBank, N.A., 365 Md. 166, 181 , 776 A.2d 645, 654 (2001); Derry v. State, 358 Md. 325, 335 , 748 A.2d 478, 483 (2000); Oaks v. Connors, 339 Md. 24, 35 , 660 A.2d 423, 429 (1995). The statutory language serves as the primary source for determining legislative intent. See Marriott Employees Fed. Credit Union v. Motor Vehicle Admin., 346 Md. 437, 444-45 , 697 A.2d 455, 458 (1997); Tucker v. Fireman’s Fund Ins.

Co., 308 Md. 69, 73 , 517 A.2d 730, 731 (1986). Where the statutory language is clear and unambiguous, our inquiry is at an end. See Fister v. Allstate Life Ins. Co., 366 Md. 201, 212 , 783 A.2d 194, 200 (2001); Board of License Comm’rs for Charles County v. Toye, 354 Md. 116 , ³⁵⁰ 122, 729 A.2d 407, 410 (1999).

Where the statutory language is ambiguous, we read it within the context of the statutory scheme as a whole. See In re Mark M., 365 Md. 687, 711 , 782 A.2d 332, 346 (2001); Stanford v. Maryland Police Training & Correctional Comm’n, 346 Md. 374, 380 , 697 A.2d 424, 427 (1997). Thus, the provisions must be read from “a commonsensical perspective to avoid a farfetched interpretation.” Graves v. State, 364 Md. 329, 346 , 772 A.2d 1225, 1235 (2001). These principles applied to statutory interpretation are identical to those used to interpret the Maryland Rules.

See Pickett v. Sears, Roebuck & Co., 365 Md. 67, 78 , 775 A.2d 1218, 1224 (2001); Johnson v. State, 360 Md. 250, 265 , 757 A.2d 796, 804 (2000)(“If the words of. the rule are plain and unambiguous, our inquiry ordinarily ceases and we need not venture outside the text of the rule.”); Marsheck v. Bd. of Trustees of the Fire and Police Employees’ Retirement Sys. of Baltimore, 358 Md. 393, 402-03 , 749 A.2d 774, 779 (2000)(interpreting the Baltimore City Code and explaining that the Court need not look beyond the text when the words used are plain and unambiguous). When Beyer was appointed as Personal Representative of her sister’s Estate, she undertook to perform the following duties, as set forth in Maryland Code, Section 7-101 of the Estates and Trusts Article: (a) Fiduciary responsibility. — A personal representative is a fiduciary. He is under a general duty to settle and distribute the estate of the decedent in accordance with the terms of the will and the estates of decedents law as expeditiously and with as little sacrifice of value as is reasonable under the circumstances. He shall use the authority conferred upon him by the estates of decedents law, by the terms of the will, by orders in proceedings to which he is party, and by the equitable principles generally applicable to fiduciaries, fairly considering the interests of all interested persons and creditors.

(b) Time for distribution. — Unless the time of distribution is extended by order of court for good cause shown, the ³⁵¹ personal representative shall distribute all the assets of the estate of which he has taken possession or control within the time provided in § 7-805 for rendering his first account, (c) Exoneration for certain payments. — The personal representative does not incur any personal liability by his payment of claims or distribution of assets even if he does not consider claims for injuries to the person prosecuted under the provisions of § 8-103(e) or § 8-104, if at the time of payment or distribution: (1) He had no actual knowledge of the claim; and (2) The plaintiff had not filed on time his claim with the register. Thus, we must first determine whether Beyer in her capacity as Personal Representative for the Estate of Betty Y. Keat breached a fiduciary duty owed to the Estate by disbursing attorney’s fees for services rendered allegedly on behalf of the Estate prior to providing notice of such payment to MSU, an interested person, and prior to receiving approval by the Orphans’ Court for such expenditures. See Md.Code, § 7-502 of the Est. & Trusts Art. A Personal Representative owes a duty to the beneficiaries of a will to act in the best interests of the Estate. See Ferguson v. Cramer, 349 Md. 760, 769 , 709 A.2d 1279, 1283-84 (1998).

In fulfilling this duty, the Personal Representative is obligated to exhibit the following qualities: 1. The exercise of the care, skill and diligence of a reasonably prudent person dealing with his or her own property; 2. The exercise of good faith and loyalty to all the beneficiaries; 3. The lack of self-dealing; 4.

The exercise of reasonable watchfulness over investments; and 5. The maintenance of full, accurate and precise records. Kann v. Kann, 344 Md. 689, 708 , 690 A.2d 509, 518 (1997)(quoting A.J. Gibber, Gibber on Estate Administration, at 3-1 (3d ed.1991)). ³⁵² It is undisputed that neither Beyer acting in her capacity as Personal Representative of the Estate nor Allen or Briscoe as attorneys for the Estate, nor Keating filed the requisite Fees Petition for the work allegedly performed by Keating in the survival action prior to Keating’s receipt of payment of those fees. Nevertheless, Beyer reasons that, “[i]f the attorney’s fees would have been properly payable had preapproval payments not been made by [Beyer], then the breach of fiduciary duty resulted in no loss to the Estate.” We simply cannot accept Beyer’s no harm, no foul argument.

When filing a petition for attorney’s fees, the Personal Representative of an estate is required to give written notice to all interested persons. Such notice sets forth the amount requested from the estate and the basis for that request, and alerts interested persons that they may make a request for a hearing within 20 days of the notice being sent. See Md.Code, § 7-502(a) of the Est. & Trusts Art. As “[a] legatee in being, not fully paid” based on the bequest contained in Keat’s will, MSU qualified as an “interested person” for