The Court of Appeals of Tennessee holds that a beneficiary forfeited his rights under the will’s terms by stopping the majority beneficiaries’ plan. In the Estate of Penniman (Tenn. Ct. App. No. M2023-00075-COA-R3-CV, September 6, 2024).
Successful musician Richard Wayne Penniman, known as Little Richard, created a will bequeathing the rights to his royalties to nine beneficiaries. The beneficiaries included his brother Peyton Penniman and his sister Freka Merrell. Along with his longtime attorney William Sobel, he also named them as co-personal representatives.
In the section titled Special Provision for Rights to Publicity, the will provided that the personal representatives could only distribute the estate after the majority of beneficiaries agreed upon a plan for managing the publicity rights. It required the personal representatives to adopt any plan favored by the majority of beneficiaries. The section further provided that any beneficiary who prevented the plan’s implementation would lose their publicity rights share.
After the testator’s death, Primary Wave Entertainment presented the beneficiaries with an offer to purchase the intellectual property and publicity rights. Five out of nine beneficiaries voted to accept the offer, pending further negotiations by an attorney. They agreed that the attorney should attempt to negotiate a more advantageous arrangement, but they had resolved to accept whatever better terms the negotiations produced.
Mr. Peyton Penniman was among the minority in opposition to the deal. He expressed concerns that the rights were worth more than what Primary Wave was offering to pay. Following the second offer from Primary Wave, Mr. Penniman sent an email to Mr. Sobel, copying the beneficiaries and their attorney as well as at least one employee of Primary Wave. The email listed Mr. Penniman’s grievances, raised concerns of elder abuse and racism, and threatened informing the public.
The next day, Primary Wave responded by withdrawing their offer, indicating they did not want to get involved with a family dispute. Since the withdrawal, the beneficiaries did not receive a comparable or better offer from any entity looking to purchase the rights.
The majority beneficiaries sought to remove Mr. Penniman as a publicity rights beneficiary and as a personal representative. The trial court found that Mr. Penniman’s actions prevented the sale, triggering his removal as a publicity rights beneficiary under the Special Provision for Rights to Publicity. The court removed him as a personal representative, finding that his interference with the offer was a breach of fiduciary duty. It also awarded the majority beneficiaries attorney fees. Mr. Penniman appealed.
The appellate court considers whether the trial court erred in removing Mr. Penniman as a publicity rights beneficiary and personal representative. It also considers whether the majority beneficiaries are entitled to attorney fees.
The court has jurisdiction to review Mr. Penniman’s removal as co-executor. As the facts are the same for the executor and publicity rights beneficiaries issues, efficiency presents good cause for jurisdiction. The facts on the record are sufficient to resolve the appeal.
Mr. Penniman argued that the majority beneficiaries’ agreement to accept Primary Wave’s offer was not specific enough to be a plan under the will. However, the will’s plain language does not support this argument. The will references “any plan,” and its meaning is not specific. Deciding to accept Primary Wave’s best offer was enough to be a plan per the will. After the majority of beneficiaries reached an agreement, the will did not contemplate safeguards for the personal representative to exercise discretion. Rather, the personal representative had to follow the majority’s plan.
The provision triggering his removal as publicity rights beneficiary was not an in terrorem clause, which removes beneficiaries for contesting a will, as the provision did not refer to a contest, but rather an interference with the plan. Since it was not an in terrorem clause, the court did not have to consider whether Mr. Penniman acted in good faith or had a reasonable justification for his actions.
The trial court did not abuse its discretion by finding that Mr. Penniman forfeited his publicity rights. The record supports the conclusion that he stood in the way of the majority beneficiaries’ plan.
With respect to his role as co-executor, he did not act with the requisite reasonable care, skill, and caution when he included a member of Primary Wave on his email. Preventing a plan he did not agree with constitutes a serious breach of trust under Tenn. Code Ann. § 35-15-706(b).
In the interest of justice and equity, the appellate court affirms the award of attorney fees.
The Tennessee appellate court concludes that the lower court did not abuse its discretion in removing Mr. Penniman as a publicity rights beneficiary and co-personal representative. He forfeited his right to publicity benefits under the will when he stopped the majority beneficiaries’ plan, and his decision to include Primary Wave on the email was not reasonable for a personal representative.
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