Judge Rose grants partial summary judgement against Callaway in Durham estate case
Atlantic Superior Court Judge Paul Rose has granted a petitioner’s motion for partial summary judgment against Claxton attorney William E. Callaway, Jr., in a civil case that dates back more than four years.
The case file is massive, measuring more than two feet high, thousands of pages long, and includes 14 transcripts. A civil case court docket, tracking related court filings and proceedings, covers 26 pages and counting.
Issues before the court stem from a suit first filed in Tattnall Superior Court in early January 2014, by Lucinda Durham Willard, alleging that Callaway had failed to honor requests for reports and accounting of his handling of the estate of Lucinda Willards’ mother, Marjorie H. Durham, who died on May 3, 2009.
According to the original suit, which also listed heirs Wallace Bryant Durham, Hugh Lee Durham, and Lawrence Cody Durham (as administrator of the estate of Lawrence H. Durham) among the respondents, Callaway continued to pay himself a trustee’s fee and his law partner’s legal fees for more than four years after the trust terminated.
At some point shortly after Lucinda Willard brought the action, the other heirs aligned with her and pursued the claims together solely against Callaway.
On April 13, 2000, Marjorie Durham executed an irrevocable trust naming Callaway the trustee, while listing herself as the donor and beneficiary.
Mrs. Durham’s estate then included substantial holdings in land and timber in Long County. For purposes of creating the trust agreement, the properties were divided and identified as Trust Tract A and Trust Tract B, each consisting of several thousand acres.
In the years between the establishment of the irrevocable trust in 2000 and Mrs. Durham’s death in 2009, Callaway was entitled to $35,000 per year and expenses for the management of his client’s trust. Court filings and correspondence indicate that there wasn’t a lot of money available to provide for Mrs. Durham’s care and other expenses during some nine years before her death, and debts in the form of bank loans – secured by property in the trust – had accumulated during that time.
Callaway, the trustee, was authorized to act in his sole discretion by selling all or “…any part of the trust estate for purposes of management, investment or reinvestment and/or for making payments therefrom for any of the foregoing purposes of providing income to (Mrs. Durham) as beneficiary and/or to pay medical and hospital expenses, and the fees and expenses of administration of the trust…”
The agreement further stated that loans made upon the assets of the trust, for various purposes including loan repayments and the donor’s care, should be done in a manner that would preserve equal value of Trust Tracts A and B.
Although the trust agreement stipulated that it would terminate upon Mrs. Durham’s death, and that the assets were to be distributed to her heirs, the plaintiffs allege that Callaway continued to pay himself and embroil the estate in ‘unnecessary’ litigation for more than four years.
Mrs. Durham’s care was costly during the nearly nine years before her death, and little cash was available for her living expenses. The estate holdings provided the security necessary for debts that existed when the trust was created, as well as for additional loans obtained during Callaway’s management of the trust – both before and after her passing.
On April 29 of this year Judge Rose granted the petitioners’ motion for partial summary judgment, ruling that Callaway lacked authority to take a number of actions concerning the Trust after its termination on May 3, 2009.
“As a matter of law, Respondent Callaway was unauthorized to engage in Trust transactions after the termination of the Trust, specifically including but not limited to (a) paying himself a trustee’s fee after the termination of the Trust; (b) paying his attorney’s fees and costs from Trust assets after the termination of the Trust; (c) encumbering or selling Trust assets after the termination of the Trust; (d) giving Trust property to Lawrence Durham or to his Estate or giving Trust property to a third party on Lawrence Durham’s behalf or on behalf of his Estate after the termination of the Trust; (e) incurring additional Trust debt after termination of the Trust; (f) entering into contracts on behalf of the Trust after termination of the Trust; and (g) paying third parties with Trust assets after termination of the Trust.”
Judge Rose’s ruling also notes that Callaway’s administration of the estate should have ended on or before May 3, 2012 – 36 months after Mrs. Durham’s death – but the attorney continued to pay himself a trustee’s fee beyond that date, including more than $70,000 in payments recorded in December 2012, December 2013, and October and December of 2014.
According to the motion for partial summary judgment, Callaway paid himself $35,000 in 2014 while a motion to enjoin him from making those payments was pending before the Court.
Callaway has appealed the court’s ruling for summary judgment.
In late May, following the court’s order granting the motion for summary judgment, Judge Rose granted petitioner Lucinda Durham Willard’s motion that Callaway post a supersedeas bond totaling $186,657.55 – an amount that covers transactions executed after the trust’s termination, including interest and costs of appeals.
Although Callaway filed an appeal of the court’s order on June 25, asking that the bond be set at $27,500, Judge Rose entered an order four days later that Callaway must post a bond in the amount of his original order ($186,657.55).
The assets of the estate have not yet been distributed to the heirs, and Callaway is still recognized as the trustee – at least until further action is taken by the court.
Callaway has practiced law in Evans County for more than 40 years. He currently serves as attorney for the City of Claxton.
By Mickey Peace Enterprise Publisher firstname.lastname@example.org