GOODMAN (PHILIP J) VS. GOODMAN (EVELYN K), ET AL.Annotate this Case
RENDERED: SEPTEMBER 12, 2008; 2:00 P.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
PHILIP J. GOODMAN
ON DISCRETONARY REVIEW FROM FAYETTE CIRCUIT COURT
HONORABLE KIMBERLY N. BUNNELL, JUDGE
ACTION NO. 07-XX-00001
EVELYN K. GOODMAN, EXECUTRIX
OF THE ESTATE OF LAWRENCE I. GOODMAN,
AND STEVEN A. GOODMAN
VACATING AND REMANDING
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BEFORE: COMBS, CHIEF JUDGE; DIXON AND LAMBERT, JUDGES.
COMBS, CHIEF JUDGE: We granted discretionary review in this probate matter.
The appellant contends that the Fayette Circuit Court erred in reversing an order of
the district court concerning the estate of his late father. The district court refused
to accept a proposed informal settlement of the estate of Lawrence I. Goodman.
After our review of the record and the arguments of counsel, we are persuaded that
the district court’s order requiring a formal settlement of the estate was not a final
and appealable order. Consequently, we vacate the order of the circuit court and
remand with directions to dismiss the appeal.
Lawrence Goodman died on February 20, 2004, at the age of 88 while
residing in Lexington, Kentucky. Among his survivors were his spouse, Evelyn
Kossoff Goodman, and two sons, Steven A. Goodman and Philip Jay Goodman.
Lawrence’s estate plan had been executed in January 2002. It included a revocable
trust agreement that provided for the disposition of the bulk of his assets and a
pour-over will that funded the inter vivos trust. Evelyn was to be appointed trustee
and personal representative of Lawrence’s estate. Pursuant to the estate plan,
nearly all of Lawrence’s assets were to be distributed to her.
The trust agreement provided that sons Steven and Philip were to
receive the contents of specific safety-deposit boxes held by the trust at
Lawrence’s death. The agreement also provided that if a beneficiary of the trust
contested the probate of the will or brought any action against the trustee, he or she
would be deemed to have predeceased Lawrence for purposes of distribution of the
After Lawrence died, his will was submitted to the probate division of
the Fayette District Court, and Evelyn was duly appointed as Executrix. Evelyn
filed two sworn inventories with the district court attesting to the contents and
value of Lawrence’s probate estate. Her second, amended inventory was filed after
the contents of Lawrence’s safety-deposit boxes were appraised.
As Executrix, Evelyn also investigated several claims made by Philip
against his brother, Steven, and against his late father. Evelyn rejected these
claims, and Philip declined to file an action against his father’s estate.1
On November 21, 2006, Evelyn submitted a proposed informal
settlement of Lawrence’s estate. The proposed settlement included Evelyn’s sworn
statement indicating that the estate was solvent; that all legal claims and debts had
been paid; that no inheritance, estate, or death taxes were required to be paid; and
that all court costs had been paid. Evelyn’s proposed settlement provided the name
of her attorney and the amount of the attorney’s fee. The proposed settlement was
accompanied by a verified waiver of the requirements for formal settlement of the
estate executed by Evelyn in her individual capacity and as trustee of Lawrence’s
revocable trust. These documents were submitted to the court pursuant to the
provisions of Kentucky Revised Statutes (KRS) 395.605. That statute compels a
district court to accept from a fiduciary an informal settlement of a decedent’s
estate where all of the beneficiaries of the estate have executed a waiver of the
requirements for a formal settlement of the fiduciary’s accounts.
On December 8, 2006, Philip filed a written objection to the court’s
acceptance of the proposed informal settlement of Lawrence’s estate. Philip
contended that he was a beneficiary of his father’s estate and indicated that he
Philip did file an action in Fayette Circuit Court against his brother, Steven; Steven’s wife,
Julie; and Steven’s law firm. 05-CI-01229. However, the action was ultimately dismissed by the
trial court. The dismissal was affirmed by this court in July 2006. 2005-CA-001273-MR.
would not waive a formal settlement of the fiduciary’s accounts.2 Philip sought a
formal settlement in order to insure that “there has been no wrongdoing and no
undervaluation of assets which could result in a boomerang of potential tax
liability in the future if such wrongdoings are uncovered.”
On December 22, 2006, the Fayette District Court declined to accept
the proposed informal settlement of the estate. However, the court suggested that
Evelyn appeal its decision rather than undertaking a formal settlement of the estate.
On January 19, 2007, Evelyn, as fiduciary of the estate, filed a timely notice of
appeal to the Fayette Circuit Court.
On appeal, Evelyn contended that the district court had erred by
failing to apply the plain meaning of the provisions of KRS 395.605 requiring the
court to accept a fiduciary’s informal settlement where all beneficiaries agreed to
waive the requirements of formal settlement. She argued that the statute was
intended to govern the administration of decedents’ estates and not distributions
anticipated by the terms of inter vivos trusts. Evelyn noted her role as the fiduciary
of the estate, the only legatee, the sole representative of the inter vivos trust, and
the beneficiary of the residuary of the estate. Therefore, she contended that the
district court was required to accept her properly supported proposed settlement of
Philip disagreed and argued that the district court had not erred by
rejecting Evelyn’s proposed informal settlement of his father’s estate. He
We reserve comment – as has the district court so far – about whether Philip’s legal challenge
to the settlement would serve to disqualify him as an heir under the terms of the will.
contended that consistent with the provisions of KRS 395.605, his “beneficial
ownership interest” in a portion of Lawrence’s trust assets made him an indirect
beneficiary of Lawrence’s estate, thus entitling him to demand a formal settlement
of the fiduciary’s accounts.
Following oral argument, the Fayette Circuit Court concluded that
Evelyn’s proposed settlement and verified waiver of the requirements for a formal
settlement of the estate were sufficient to satisfy the provisions of KRS 395.605.
On June 12, 2007, the Fayette Circuit Court entered an order reversing the district
court’s decision not to accept the proposed informal settlement. In an order
entered on July 20, 2007, the circuit court directed the district court to accept
Evelyn’s proposed informal final settlement of the estate. This court granted
discretionary review on November 16, 2007.
At the outset, we must consider Philip’s contention that the Fayette
District Court’s order was not a final order and that, therefore, the circuit court
lacked subject matter jurisdiction to consider the issues presented by Evelyn’s
appeal. After our review, we agree that the order lacked the requisite finality to
render it appealable.
Probate proceedings vest exclusive jurisdiction in the district court to
oversee the administration and settlement of estates. KRS 24A.120. A direct
appeal may be taken from the district court to the circuit court from any final
action of the district court. KRS 23A.080(1).
“A final or appealable judgment is a final order adjudicating all the
rights of all the parties in an action or proceedings, or a judgment made final under
Rule 54.02.” Kentucky Rules of Civil Procedure (CR) 54.01. A final and
appealable order has also been defined as one which “operates to divest some right
in such a manner as to put it out of the power of the court making the order . . . to
place the parties in their original condition.” Murty Bros. Sales, Inc. v. Preston,
716 S.W.2d 239, 241 (Ky. 1986). No authority – by way of statute or civil rule –
authorizes an appeal of a district court to a circuit court. The suggestion of the
district court that Evelyn file the appeal in circuit court was erroneous as it was
recommending an interlocutory action and as well as an impermissible advisory
On behalf of the estate, Evelyn argues that preparation of a formal
settlement would be unduly burdensome, time consuming, expensive, and
essentially irrelevant to Philip’s interest under the terms of the trust. Evelyn
contends that the district court’s order effectively ended the probate proceedings by
requiring her to file a formal settlement of the estate. Thus, she construes the
overall effect of the order as amounting to de facto finality.
In this case, the district court declined to accept Evelyn’s proposed
informal settlement of the estate. Consequently, the estate remained open and the
court’s jurisdiction over the matter was extant and continuing. The court’s
decision to reject the proposed informal settlement did not finally adjudicate all the
issues related to the probate of the estate. Instead, by its very terms, it
contemplated the entry of additional orders by the court. As observed earlier in
this opinion, Philip’s eligibility as an heir could logically be the subject of other
It is true that Kentucky’s appellate courts have carved out a variety of
exceptions to the finality rule. However, none of those exceptions is relevant to
these proceedings. It has consistently been argued that the potential burden of the
inconvenience and costs of litigation should operate to justify immediate review of
an otherwise non-final order. Our courts have addressed and rejected that
contention. National Gypsum Co. v. Corns, 736 S.W.2d 325 (Ky. 1987). In
Fayette County Farm Bureau Federation v. Martin, 758 S.W.2d 713 (Ky.App.
1988), the appellant contended that requiring it to arbitrate pursuant to the trial
court’s order and only later permitting it to litigate that issue on appeal would be a
tremendous waste of time and money – especially if error were found in the order
compelling arbitration. Nonetheless, this court held that a trial court’s decision to
compel arbitration was not a final and appealable order.
We can find no precedent or authority to allow immediate review of
the non-final order in the case before us. The decision of the Fayette District Court
not to accept Evelyn’s proposed informal settlement did not deprive the estate of a
right that could not be later restored. Evelyn reserves the right to appeal any final
order. Under specific circumstances, review of district court rulings would be
directly available through an original proceeding for relief in the nature of
mandamus or prohibition in the circuit court. However, such was not the
procedure or the relief sought in this case.
We hold that the Fayette Circuit Court lacked jurisdiction over the
non-final order of the district court. Therefore, we vacate the circuit court’s order
of July 20, 2007, that directed the district court to accept the informal final
settlement of Lawrence’s estate. We remand the matter to the circuit court with
directions that the appeal be dismissed.
BRIEFS FOR APPELLANT:
Katherine K. Yunker
Jack R. Cunningham
BRIEF FOR APPELLEE EVELYN K.
C. Cliff Stidham
Lynn C. Stidham
Richard J. Dieffenbach
BRIEF FOR APPELLEE STEVEN A.
Richard G. Segal