The Delaware Court of Chancery Recommends Removal of Personal Representative for Breaching Fiduciary Duties
Wanamaker v. Wanamaker, C.A. No. 2019-0920-LM (February 5, 2024)
In Wannamaker, the decedents, Carl Wannamaker, Sr. (“Carl Sr.”) and Sarah Wannamaker (“Sarah”) (Sarah and Carl Sr. are collectively referred to hereafter as the “Decedents”) both died intestate one month from each other. As Carl Sr.’s surviving spouse, Sarah became the sole beneficiary of his estate under Delaware’s intestacy laws. Upon Sarah’s death, Delaware’s intestacy laws established that her children, Carl Wannamaker Jr. (“Carl Jr.”) and Sandra Wannamaker (“Sandra”) were the equal beneficiaries of her estate. In addition to being a beneficiary, Sandra was also appointed as the personal representative of the Decedents’ estates (collectively the “Estates”).
At the time of the Decedents’ deaths, they owned a family dwelling (the “Property”) and a collection of automobiles. The automobile collection consisted of eight vintage vehicles which included a 1996 Mercedes Benz, a 1958 Mercedes Benz 220S cabriolet, a 1975 Chevrolet Caprice, a 1935 Ford Model 31, a 1926 Form Model T, a 1982 Mercedes Benz 380SL Roadset, a 1993 Chevrolet Caprice, and a 1990 Ford F150.
Following the Decedents’ deaths, Sandra moved into the Property and began using it as her residence. While residing at the Property, there were issues with its sewage system that resulted in costly repairs. To pay for these repairs, Sandra sold several of the vehicles owned by the Estates. In addition to using the Property as her residence, Sandra retitled the 1996 Mercedes Benz to her sole name and began using the vehicle as her everyday car.
After learning of Sandra’s handling of the Estates’ assets, Carl Jr. filed a petition with the Delaware Chancery Court seeking the removal of Sandra as personal representative. The petition asserted that Sandra violated her fiduciary duties as personal representative and that the court should remove her from this position pursuant to 12 Del. C. § 1541(a). 12 Del. C. § 1541(a) provides that the Court of Chancery may remove a personal representative from their position if “an executor or administrator neglects official duties.”
When ruling on the petition, the Court of Chancery explained that a personal representative owes the estate the fiduciary duties of loyalty and care. In regard to the duty of loyalty, the court explained that a personal representative must act in the best interest of the estate. With respect to a personal representative’s duty of care, the court articulated that this duty is held to the standard of “ordinary care, prudence, skill and diligence, in carrying out the duties of a personal representative.”
The court ruled in favor of Carl Jr. finding that Sandra had violated the duties of loyalty and care. Specifically, the Court found that Sandra’s acts of converting the Property and the 1996 Mercedes to her own personal assets constituted a breach of the duty of loyalty as Sandra sought to further her interests at the expense of Carl Jr.’s interest in these assets. The court also found that Sandra violated the duty of care as she submitted inaccurate inventories, failed to submit accountings for the Estates, and did not maintain sufficient records evidencing the amounts or expenditures from estate accounts.
As a result of these findings, the court recommended that Sandra be removed as personal representative of the Estates and that her commission be reduced by 50%.
