LEE v. LEE

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Docket Number

S90A0450.

Attorney(S)

Homer Kennedy, Speros D. Homer, Jr., Charles M. Hall, for appellants. Guttshall Guttshall, A. P. Guttshall, for appellees.

Judges

SMITH, Presiding Justice.

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Smart Summary

Factual and Procedural Background

The case concerns the disposition of a $500,000 insurance policy on the life of A. G. Lee, Sr., which names Mrs. Lura Fernell Lee, the widow of A. G. Lee, Sr., as the sole beneficiary. The appellees, who are the children of A. G. Lee, Sr. and Mrs. Lee, contend that Mrs. Lee was named beneficiary due to inadvertence and that the policy proceeds were intended to be placed into an irrevocable trust for their benefit. The trial court ordered the appellant to transfer the insurance proceeds to the trustee of the irrevocable trust. The appellant appealed, challenging both the jurisdiction of the Superior Court and the trial court’s order regarding the insurance proceeds.

Legal Issues Presented

Whether the Superior Court had proper jurisdiction over the matter instead of the Probate Court of Bacon County.
Whether the trial court correctly implied a trust over the insurance policy proceeds in favor of the appellees and ordered the transfer of those proceeds to the irrevocable trust.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Gill v. Gill, 211 Ga. 567 (87 S.E.2d 389) (1955)	Superior courts have concurrent jurisdiction with probate courts regarding settlement of accounts and may interfere to prevent loss or injury to parties' interests.	Supported the Superior Court’s jurisdiction over the case despite Probate Court’s usual role.
Jones v. Head, 185 Ga. 857 (196 S.E. 725) (1938)	Equitable interference by superior courts is proper to fully protect parties’ rights when necessary.	Justified the Superior Court’s equitable jurisdiction to grant relief beyond probate court’s scope.
Aetna Life Ins. Co. v. Weekes, 241 Ga. 169, 171 (244 S.E.2d 46) (1978)	Definition and nature of implied trusts, including resulting and constructive trusts.	Provided legal framework for analyzing appellees’ claim of an implied trust over the insurance proceeds.
Freeman v. Saxton, 243 Ga. 571 (255 S.E.2d 28) (1979)	The burden of proof for a resulting trust is clear and convincing evidence.	Applied to evaluate the sufficiency of appellees’ evidence to establish a resulting trust.

Court's Reasoning and Analysis

The court first addressed the issue of jurisdiction, concluding that the Superior Court properly exercised its concurrent jurisdiction with the Probate Court under OCGA § 53-7-160. The Superior Court’s jurisdiction was appropriate because the parties sought equitable remedies such as specific performance, enforcement of an implied trust, and injunction, all beyond probate court’s authority. The court relied on precedent establishing that superior courts may intervene to prevent loss or injury to parties’ interests and protect their rights.

Regarding the substantive issue of ownership of the insurance proceeds, the court examined the appellees’ claim that the policy proceeds were intended to be held in an irrevocable trust for their benefit and that Mrs. Lee was named beneficiary by mistake. The court reviewed the legal standards for implied trusts under Georgia law, distinguishing resulting trusts (based on presumed intention) and constructive trusts (equitable remedies to prevent unjust enrichment).

The court emphasized that the party claiming a resulting trust must prove its existence by clear and convincing evidence. The appellees failed to meet this burden as the evidence did not corroborate their claim: the insurance policy explicitly named Mrs. Lee as beneficiary, the insurance agent’s testimony did not support the appellees’ contentions, and there was no clear and convincing evidence of the deceased’s intent to create a trust.

Similarly, the court rejected the constructive trust claim because there was no allegation or evidence of fraud, nor was it shown that it would be inequitable for Mrs. Lee to retain the proceeds. Consequently, the court held that Mrs. Lee is the legal owner of the insurance policy and its proceeds.

Therefore, the court reversed the trial court’s order requiring transfer of the proceeds to the trust and directed that the proceeds be returned to Mrs. Lee. The remainder of the trial court’s order was left intact for further proceedings.

Holding and Implications

Judgment affirmed in part and reversed in part.

The court affirmed the Superior Court’s jurisdiction but reversed the portion of the trial court’s order requiring the appellant to transfer the insurance proceeds to the irrevocable trust. Mrs. Lura Fernell Lee remains the legal owner and beneficiary of the $500,000 insurance policy and all proceeds therefrom. The direct effect is that the insurance proceeds must be returned to Mrs. Lee. No broader legal precedent was established beyond the resolution of the parties’ rights in this case.

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LEE et al. v. LEE et al.

SMITH, Presiding Justice.

The appellant, Mrs. Lura Fernell Lee, is the widow of A. G. Lee, Sr., and the mother of the appellees. This case concerns the disposition of a $500,000 insurance policy on the life of A. G. Lee, Sr., which names Mrs. Lee as the sole beneficiary. The appellees, children of A. G. Lee, Sr., and Mrs. Lee, maintain that Mrs. Lee was inadvertently named the beneficiary of the insurance policy. The appellees contend that the proceeds from this policy were intended to be placed into an irrevocable trust for their benefit as successors to Mr. Lee, Sr.'s estate. We affirm in part and reverse in part.

1. The appellant raises two allegations that necessitate our review. The first is that jurisdiction is proper in the Probate Court of Bacon County rather than the Superior Court. She is mistaken. OCGA § 53-7-160 grants superior courts concurrent jurisdiction with probate courts regarding the settlement of accounts of administrators or executors. Although superior courts are reluctant to interfere in the administration of estates, they may do so where there is a danger of loss or other injury to a party's interest, Gill v. Gill, 211 Ga. 567 ( 87 S.E.2d 389) (1955), or where equitable interference is necessary for the full protection of the rights of the parties in interest. Jones v. Head, 185 Ga. 857 ( 196 S.E. 725) (1938). Here, the parties alleged that they were in danger of loss contrary to their interests. Furthermore, the parties sought to enforce specific performance of an agreement, to imply a trust, and to enjoin a party. These equitable remedies are beyond the scope of the probate court. Only a superior court could grant the relief sought. Therefore, we find that the superior court properly exercised its concurrent jurisdiction.

2. The second issue stems from the trial court's order dated October 17, 1989. This order requires the appellant to transfer the proceeds from the insurance policy in dispute to the Citizens and Southern Trust Company, Trustee for the A. G. Lee, Sr., Irrevocable Trust.

The evidence is insufficient to support the appellees' claim of ownership of the proceeds. The appellees contend that it was the intention of their father, A. G. Lee, Sr., that the proceeds from the $500,000 insurance policy be placed into the Irrevocable Trust. Because of that alleged intention, the appellees ask this Court to uphold the trial court's implication of a trust and hold that Mrs. Lee was named beneficiary of the insurance policy only due to a mistake or clerical oversight. However, the evidence in the record fails to sufficiently support the appellees' contention.

In Georgia, implied trusts "are such as are inferred by law from the nature of the transaction or the conduct of the parties [cit.], and are either resulting or constructive." Aetna Life Ins. Co. v. Weekes, 241 Ga. 169, 171 ( 244 S.E.2d 46) (1978); OCGA §§ 53-12-26; 53-12-27. A resulting trust is based on the presumed intention of the parties, while a constructive trust is a remedial device created by a court of equity in order to prevent unjust enrichment. Bogert, Law of Trusts § 71 (4th ed.).

Under our law, it is the burden of the party claiming to be the beneficiary of a resulting trust to prove its existence by clear and convincing evidence. Freeman v. Saxton, 243 Ga. 571 ( 255 S.E.2d 28) (1979). The evidence offered by the appellees does not meet this standard. Instead, the record shows that the insurance policy named Mrs. Lee as beneficiary, that the testimony of the insurance agent who wrote the policy failed to corroborate the appellees' contention, and that the actions of A. G. Lee, Sr., prior to his death did not evidence a clear and convincing intent that the proceeds be held for the benefit of the appellees.

3. An award of the proceeds to the estate under a constructive trust theory must also fail. Under OCGA § 53-12-26 a constructive trust may be imposed where property has been acquired by fraud, or where, though not acquired by fraud it is against equity that it should be retained by the person who holds it. Here, there is no allegation that Mrs. Lee acquired the insurance policy through fraud. The issue then remains whether it is against equity for Mrs. Lee to retain the proceeds of the policy. As stated above, the record lacks sufficient evidence supporting the allegation that Mrs. Lee's ownership of the insurance policy and its proceeds is against equity.

This Court, thus, finds that appellant, Mrs. Lura Fernell Lee, was the beneficiary named in the insurance policy and is the legal owner of the $500,000 insurance policy plus all proceeds of every kind and nature therefrom. Therefore, paragraph four of the court order of October 17, 1989, is hereby reversed. It is directed that the amount of the policy plus all proceeds be returned to appellant upon receipt of the remittitur from this Court.

All other proceedings in this matter as set forth in the court's order of October 17, 1989, are to proceed as determined by the trial court.

Judgment affirmed in part and reversed in part. Clarke, C. J., Weltner, Bell, Hunt, Fletcher, JJ., and Chief Judge George H. Carley, concur; Benham, J., not participating.

DECIDED JULY 5, 1990 — RECONSIDERATION DENIED JULY 26, 1990.