## Facts

- Charles H. Hines died in 1981, devising a life estate in a family home to his wife Ruth, with the remainder to their three children in equal shares as tenants in common.
- Charles’s son William, named personal representative, did not probate the will and later died, leaving his one-third remainder interest to his children, Caryn and Gary, equally.
- Ruth died in December 1992, ending the life estate and making the remainder interests possessory.
- Caryn petitioned for and received appointment as personal representative of Charles’s estate.
- Family members initially agreed to obtain appraisals (fair market and fair rental value), make needed repairs, and sell the property with proceeds distributed under the will; the property appraised at about $75,000 and required substantial repairs.
- Marjorie Burke (a remainderman) sought to buy the home and signed a contract for $70,000 “as is,” with the estate paying $3,000 toward closing costs, contingent on financing; the purchase did not close.
- In June 1994, Caryn (as personal representative) and Gary contracted to purchase the property for $70,000 with the estate paying $3,000 toward closing costs; Caryn signed as both seller (for the estate) and purchaser.
- Caryn completed the insider sale without prior court approval and without the informed consent (and allegedly without the knowledge) of other beneficiaries.
- Marjorie and her daughter Tanya Hall sued to remove Caryn and to void the sale, alleging breach of fiduciary duty through self-dealing and nondisclosure.

## Issues

1. Whether a personal representative breaches fiduciary duties by selling estate property to herself (and an insider) without prior court approval or the informed consent of the beneficiaries.
2. Whether such a self-dealing sale is voidable at the beneficiaries’ request even if the price appears consistent with fair market value.
3. Whether summary judgment and rescission (voiding the sale) are proper remedies for an unauthorized self-dealing transaction by a personal representative.

## Decision

- The District of Columbia Court of Appeals affirmed summary judgment for the beneficiaries.
- The court held that Caryn, as personal representative, breached her fiduciary duty by purchasing estate property for herself (and her brother) without court approval or informed beneficiary consent.
- The court upheld voiding the sale as an appropriate remedy; the transaction was voidable at the beneficiaries’ election.
- The court rejected the argument that a seemingly fair price or difficulties finding third-party buyers cured the conflict of interest.

## Legal Principles

- A personal representative is a fiduciary owing duties of loyalty, good faith, and full disclosure to the estate and its beneficiaries.
- A fiduciary generally may not be on both sides of a transaction involving estate property; self-dealing is prohibited absent prior judicial authorization or fully informed consent by all interested beneficiaries.
- Unauthorized self-dealing transactions are voidable at the request of beneficiaries, regardless of whether the consideration appears fair.
- Fairness of price does not eliminate the conflict; the rule targets the divided loyalty and the risk of abuse inherent when the fiduciary acts as both seller and buyer.

## Conclusion

The court enforced strict loyalty rules in estate administration by affirming rescission of a personal representative’s insider purchase of estate property made without court approval or informed beneficiary consent, holding the sale voidable despite evidence suggesting the price was near market value.


In re Estate of Hines, 715 A.2d 116 (D.C. 1998)