An Ohio appeals court rules that executor and attorney's fees for administering an estate are entitled to priority over a mortgage lien only if the fees were incurred directly in connection with the sale of the real estate. Aranda v. Tammac Holdings Corp. (Ohio App. Ct., No. 08-CA-35, Sept. 11, 2009).
Diana Jenkins purchased property and granted Tammac Holdings Corp. a mortgage. After she died, her executor, Debbie Aranda, sought to sell the property to pay estate debts. Tammac asserted its mortgage lien. The trial court ordered the property sold, and Tammac purchased the property for less than its lien, obligating Tammac to pay only costs and fees.
Ms. Aranda moved for an order of distribution of the proceeds, seeking Tammac's payment of sale costs, executor fees, and attorney fees. Tammac objected to the executor and attorney fees, arguing Ms. Aranda was entitled to priority over its mortgage only for fees and expenses incurred directly in connection with the real estate sale. The trial court determined the executor fees and attorney's fees had priority over Tammac's lien. Tammac appealed.
The Ohio Court of Appeals reverses and remands, holding that while Ms. Aranda may be entitled to the full executor and attorney's fees for all of her work on behalf of the estate, "this compensation had priority over Tammac's mortgage only insofar as it was earned for services performed in connection with the sale."
For the full text of this decision in PDF, go to: https://www.supremecourt.ohio.gov/rod/docs/pdf/2/2009/2009-ohio-4781.pdf
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