Trusts & Estates – Wills – Executors’ Authority – Real Property – Mortgages

RL Regi North Carolina, LLC v. Estate of Moser (Lawyers Weekly No. 12-07-0882, 17 pp.) (Linda M. McGee, J.) Appealed from Union County Superior Court (W. Erwin Spainhour, J.) N.C. App.  Full-text opinion.

Holding: Although the decedent’s will granted its co-executors broad powers, the will’s co-executors lacked the authority to have the estate guarantee a loan that was borrowed for the purpose of developing raw land owned by the decedent’s company.

We affirm summary judgment for defendants.

In their capacity as co-executors of the decedent’s will, Richard Hutaff and Thomas Moyer guaranteed a loan that was intended to allow the estate to begin development of a tract of land owned by the decedent’s real estate company. The company defaulted on the loan, and the plaintiff-bank foreclosed. The foreclosure sale left a balance owing on the loan, and the bank seeks to have the estate fulfill its guaranty of the loan.

The purpose of the decedent’s will was not to keep the estate open indefinitely. The purpose of the will was to make various specific gifts and then to give the remainder of the decedent’s property to a trust.

In the absence of any provisions in the will to the contrary, the co-executors were under a general duty to settle the estate as expeditiously as was reasonable under the circumstances. G.S. § 28A-13-2.

While the provisions of the decedent’s trust agreement do appear to contemplate the carrying on of the decedent’s business, we interpret those provisions as authorizing the trustee of the trust to carry on the decedent’s business and not the co-executors of the estate. Hutaff and Moyer signed the guaranty in their capacities as co-executors of the estate and not in their capacities as trustees of the trust. The trust was not involved in the signing of the guaranty.

Thus, we find the trust agreement and the provisions therein not to be relevant to our determination of Hutaff’s and Moyer’s authority as co-executors of the estate. As co-executors, Hutaff and Moyer were authorized to act only “to carry out the purposes” of the will, and they were also under a “general duty to settle [the estate] … as expeditiously … as [was] reasonable under all of the circumstances.” § 28A-13-2. We therefore conclude that the will did not authorize Hutaff and Moyer to sign the guaranty on behalf of the estate.

Affirmed.