John Randolph Cherry, the Executor of the Estate of Rebecca Wight Cherry Sims, upon his mother’s death was substituted as defendant in the action for specific performance and damages brought by Coast House, Ltd./Sandease, Ltd. “Joint Venture” against her. On March 1, 1991, the Joint Venture obtained a judgment of $3,800,000 against the Estate. This gave the Estate a legal malpractice action against Moreton Rolleston, Jr., whose conduct caused the damages to the Joint Venture while he represented Mrs. Sims. On September 17, 1991, in settlement and satisfaction of the judgment, the Estate and the Joint Venture entered into a letter settlement agreement and promissory note, which transferred certain Estate assets, both real and intangible, to the Joint Venture to partially satisfy the note and pledged sufficient net proceeds from any malpractice action recovery to pay the principal and interest on the balance of the note; any balance of the net proceeds after satisfaction of the note was to be retained by the Estate. The letter settlement agreement permitted the Estate to retain and distribute to the heirs, the four Cherry sons, two properties in Cherokee County, the interest in the Wight Family Partnership, tangible personal property of the mother, and the limited liquid assets of the deceased. On April 7, 1995, the Estate obtained a judgment against Rolleston for $5,200,000; however, after a number of appeals and actions for fraudulent conveyance, it took until January of 1998 for receipt of the first recovery, i.e., $1,125,500 paid by the errors and omissions carrier St. Paul Insurance Company, and until 2000 for receipt of the second and third recoveries through collection actions. The settlement agreement and note when construed together are ambiguous as to whether the Executor received his commission on any recovery before the net proceeds or whether he waived his commission on any net proceeds and whether the proceeds of the malpractice action were assigned only as security for payment of the note or as a general assignment giving the Joint Venture all right, title, and interest in all the net proceeds. The Executor sought an order approving an interim payment of his statutory Executor’s Commission, covering nine legal actions in three counties, federal bankruptcy court, and countless appeals and moved for summary judgment; the Joint Venture filed a cross-motion for summary judgment. On August 9, 2002, in a final order, the Probate Court of Fulton County held that the Estate had assigned the net proceeds of the litigation to the Joint Venture and that the Executor had waived his statutory commission. Finding legal error as to each legal determination, we reverse.
1. The Estate contends that the Probate Court erred, because the Executor’s commissions are a priority administrative expense entitled to payment prior to a secured creditor’s claims to “net proceeds” of sums recovered by the Estate on the legal malpractice action against Rolleston. We agree.
