Last month, the Virginia Supreme Court handed down a new ruling that confirms that circuit courts lack the authority to delegate final authority to approve accountings to the Commissioner of Accounts. While this ruling (in Moni Henderson v. Stephanie P. Cook, Trustee and Conservator for Thomas E. Noojin, Record No. 180772) doesn’t necessarily break new legal ground, it does provide a helpful overview of the law relating to the process by which the Commissioner of Accounts reviews accountings subject to the circuit court’s final review of the accountings.
In Henderson, the Virginia Supreme Court reviewed an appeal from a ruling of the circuit court whereby the circuit court judge directed a trustee to file a final accounting with the Commissioner of Accounts, after which the approval of the final accounting by the Commissioner “shall be an approval by this court and the beneficiaries, subject to specific written objections so provided . . . .” Why would a circuit court judge direct the accounting to proceed in that fashion? A footnote in the opinion appears to provide the answer: the judge issued the order on December 29, 2017 and retired at the end of 2017. The clear implication is that the judge didn’t want to burden his successor with having to rule on any exceptions taken to the Commissioner’s report on the final accounting.
The trust beneficiary filed objections to the proposed final accounting with the Commissioner of Accounts, and the Commissioner approved the final accounting over those objections. Barred from a hearing before the circuit court due to the circuit court’s ruling, after some procedural maneuvers, the trust beneficiary appealed to the Virginia Supreme Court.
The Virginia Supreme Court analyzed the language of numerous sections in Title 64.2, with a special focus on 64.2-1212, which provides, in relevant part, that if exceptions are filed in the circuit court to a report of the Commissioner of Accounts, the circuit court “shall examine such exceptions that have been timely filed . . . [and] shall certify in the order that it has made a personal examination of the exceptions.” The Court held that the “plain language of Code § 64.2-1212(B) demonstrates that the General Assembly intended that the order of proceedings begin with the Commissioner and end with the circuit court.” The Court reversed the circuit court for having done the opposite in this case, in having “erroneously delegated final approval of the accountings to the Commissioner without a certification that it had made a personal examination of the exceptions” (internal quotations omitted).
It seems unlikely that this issue will regularly reoccur, due both to the Court’s clear ruling, and also to the unusual procedural posture of the matter at the circuit court (with the trial judge on the brink of retirement and apparently wanting to spare his successor from having to step into the matter). Nonetheless, the holding in Henderson provides a welcome reminder for estate litigators that the circuit court must issue the final approval to accountings, and it lacks the authority to delegate that authority to the Commissioner of Accounts.