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Starcher v. Pappas

Supreme Court of West Virginia

November 7, 2017

LARRY V. STARCHER, Administrator CTA for the Estate of Arthur P. Scotchel; LOUIS A. SCOTCHEL, SR.; LOUIS A. SCOTCHEL, JR.; ARTHUR C. SCOTCHEL; and REBECCA SCOTCHEL, Plaintiffs Below, Petitioners,
v.
KEITH J. PAPPAS, OF WEST VIRGINIA Defendant Below, Respondent.
v.
KEITH J. PAPPAS, Defendant Below, Respondent.

         (Monongalia County No. 15-C-242)

          MEMORANDUM DECISION

         The petitioners herein and plaintiffs below, Larry V. Starcher,[1] Administrator CTA for the Estate of Arthur P. Scotchel; Louis A. Scotchel, Sr.; Louis A. Scotchel, Jr.; Arthur C. Scotchel; and Rebecca Scotchel ("Scotchel family beneficiaries"), by counsel Jacques R. Williams, appeal an order entered November 16, 2016, by the Circuit Court of Monongalia County. By that order, the circuit court dismissed an action against a previous administrator of the Estate of Arthur P. Scotchel, Keith J. Pappas ("Mr. Pappas"), respondent herein and defendant below, by counsel Carol P. Smith. On appeal to this Court, the Scotchel family beneficiaries contend that the circuit court erred in its application of Rule 201 of the West Virginia Rules of Evidence regarding judicial notice, misapplied Rule 12(b)(6) of the West Virginia Rules of Civil Procedure regarding dismissal, misapplied the doctrine of res judicata, and misapplied the statute of limitations.

         Upon our thorough and considered review of the assignments of error, the parties' arguments, the appendix record, and the pertinent authorities, we find that the circuit court committed no error in the dismissal of the action against Mr. Pappas. Consequently, we affirm the circuit court's November 16, 2016, order. Because this case does not present a new or substantial question of law, and for the reasons set forth herein, we find the issuance of a memorandum decision is appropriate pursuant to Rule 21(c) of the West Virginia Rules of Appellate Procedure.

         Arthur P. Scotchel, a Morgantown, West Virginia, businessman and the principal of Westover Realty, died on March 26, 2009. On April 8, 2009, Louis A. Scotchel, Sr., a nephew of the decedent, lodged the "Last Will and Testament of Arthur P. Scotchel," dated June 30, 2005 ("2005 Will"), with the Clerk of the County Commission for Monongalia County, West Virginia. Louis A. Scotchel, Sr., was named as the fiduciary in the 2005 Will.

         Later in the afternoon of April 8, 2009, John C. Scotchel, Jr., also a nephew of the deceased, presented the "Last Will and Testament of Arthur P. Scotchel," dated January 9, 2006 ("2006 Will"). The 2006 Will named John C. Scotchel, Jr., as the fiduciary. Louis A. Scotchel, Sr., returned the Letters of Administration he had earlier been given, as requested by the Clerk of the County Commission for Monongalia County. Thereafter, John C. Scotchel, Jr., was appointed Executor of the Estate of Arthur P. Scotchel ("the estate"). George Armistead, Esq., was assigned as the Fiduciary Commissioner. The essential difference in the two Wills was in the naming of the fiduciary and the amount of distribution to the named fiduciary. As to all other beneficiaries in either Will, the distribution was equal.

         Disputes over the handling of the estate and the management of Westover Realty began almost immediately. Complaints included concerns that real estate was not being maintained, bills and mortgage debt were not being paid, and banks were threatening foreclosure proceedings. The Scotchel family beneficiaries also disagreed with the manner in which John C. Scotchel, Jr., was handling the estate. Therefore, on July 17, 2009, they filed a complaint seeking injunctive relief in the form of removing John C. Scotchel, Jr., as Executor. Additionally, on July 22, 2009, the Scotchel family beneficiaries filed a petition with the Monongalia County Commission to remove John C. Scotchel, Jr., as Executor. The removal petition was referred to Fiduciary Commissioner Armistead. A few months later, in October 2009, the Scotchel family beneficiaries also filed a complaint contesting the 2006 Will on the grounds of lack of testamentary capacity and undue influence as allegedly committed by John C. Scotchel, Jr. The Scotchel family beneficiaries sought to invalidate the 2006 Will in favor of the 2005 Will.

         Fiduciary Commissioner Armistead made unsuccessful attempts at resolving the various disagreements among the Scotchel family beneficiaries. The record reflects that he spent almost forty hours conducting hearings, conferences, and conference calls in an effort to investigate the records, certify the facts, and resolve the disputes to no avail. Ultimately, Mr. Pappas was approached by Fiduciary Commissioner Armistead; John C. Scotchel, Jr.; and then-counsel to the Scotchel family beneficiaries to serve as Administrator CTA of the estate. After meetings and discussions, the Scotchel family beneficiaries agreed to the appointment of Mr. Pappas as Administrator CTA of the Estate. The agreement was memorialized with the signing of a Memorandum of Agreement dated April 5, 2010. The Memorandum of Agreement was prepared by counsel for the Scotchel family beneficiaries. Among other things, the Memorandum of Agreement provided that Mr. Pappas would be compensated for his services at the hourly rate of $175.00 and that paralegal time would be compensated at a rate of $65.00 per hour. Fiduciary Commissioner Armistead informed the Monongalia County Commission of the Memorandum of Agreement and recommended the appointment of Mr. Pappas. The Monongalia County Commission accepted the recommendation and appointed Mr. Pappas as Administrator CTA on April 21, 2010. Upon appointment, Mr. Pappas was substituted as a named party in the pending action for injunctive relief and the Will contest.

         The efforts of Mr. Pappas to garner the assets of the estate, conduct a property review, and profile the estate individually, as well as the finances of Westover Realty, proved to be challenging. There was financial disorganization, including a lack of financials, and missing banking records for various shell corporations, an absence of account ledgers, and an inability to determine what property was owned and, if owned, what property was encumbered. Deeds and titles were not maintained, rentals were not accounted for, leases were missing and tax documents could not be located. Further, investigation determined that there were some $400,000.00 worth of creditor claims against the estate and another $450,000.00 of claims against Westover Realty properties.

         Mr. Pappas filed the initial appraisal and accounting documents regarding the estate on September 8, 2011. Personal nonprobate real estate was valued at $85,900.00. The total value of the personal probate assets was $77,115.00. No objection to the first appraisal was made and it was confirmed by the Monongalia County Commission. However, the disputes among the Scotchel family beneficiaries continued. In November 2011, Mr. Pappas sought to withdraw as Administrator CTA, but the Scotchel family beneficiaries requested that he continue to serve. Fiduciary Commissioner Armistead expressed the view that he would not recommend relieving Mr. Pappas unless an attorney/accountant was found to replace him. Subsequent expressions of a desire to be relieved of his duties were met with similar expressions of reluctance by Fiduciary Commissioner Armistead.

         Second and third annual accountings also were filed by Mr. Pappas with the Monongalia County Commission. These accountings also were approved without objection. The unobjected to accountings report the billings of and payments to Mr. Pappas. During the course of the estate proceedings, Mr. Pappas sent itemized monthly statements to all heirs and to Fiduciary Commissioner Armistead for services performed from 2010 through 2014.

         By June 3, 2011, Mr. Pappas had billed $72,057.71 and was paid $50,000.00. On June 22, 2012, Mr. Pappas was paid an additional $12,500.00. These are the only payments made to Mr. Pappas for itemized services billed to the estate. Mr. Pappas' total itemized billing for work he performed for the estate amounted to $195,305.00.

         By February 2012, complaints were being made by Scotchel family beneficiaries about the fees of Mr. Pappas. On June 24, 2013, counsel for the Scotchel family heirs filed an ethics complaint asserting that Mr. Pappas' fees were excessive.

         In March 2014, the Will contest action was tried before a jury which found that the 2006 Will was the product of undue influence exerted by John C. Scotchel, Jr., over the decedent, resulting in the invalidation of the 2006 Will. The Scotchel family beneficiaries requested that Mr. Pappas be removed and Louis A. Scotchel, Sr., be appointed. The circuit court denied the motion and instructed the parties that the appointment and removal of an administrator was a probate matter that needed to go before the Monongalia County Commission.

         Louis A. Scotchel, Sr., requested the Monongalia County Commission to appoint him as executor under the 2005 Will. Mr. Pappas objected to the appointment on the grounds that Louis A. Scotchel, Sr., had filed various claims against the estate that amounted to a conflict of interest. Fiduciary Commissioner Armistead advised that Louis A. Scotchel, Sr., had a conflict of interest. Likewise, Phillip M. Magro, Esq., counsel for the Monongalia County Commission, agreed that a conflict of interest meant that Louis A. Scotchel, Sr., should not be appointed as a fiduciary of the estate. Mr. Starcher, who had testified as a family friend, also agreed that Louis A. Scotchel, Sr., had a conflict of interest.

         Mr. Pappas' request to be released of his duties was approved by the Monongalia County Commission on April 16, 2014. As requested, Mr. Pappas submitted a Fourth and Final Accounting on May 9, 2014. After being prevailed upon, Mr. Starcher took an oath and became the Administrator CTA of the estate on April 21, 2014. Mr. Starcher filed an objection to the Fourth and Final Accounting. However, he requested that the issues not be referred to the ...


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