YIVO Institute for Jewish Research v. Zaleski

• Decision Date: 11 May 2005
• Docket Number: No. 56,56
• Citation: 386 Md. 654,874 A.2d 411
• Parties: YIVO INSTITUTE FOR JEWISH RESEARCH v. PAUL ZALESKI, Personal Representative of the Estate of Jan Karski, et al.
• Court: Maryland Court of Appeals

874 A.2d 411

386 Md. 654

YIVO INSTITUTE FOR JEWISH RESEARCH v. PAUL ZALESKI, Personal Representative of the Estate of Jan Karski, et al.

No. 56, September Term, 2004.

Court of Appeals of Maryland.

May 11, 2005.

Philip L. O'Donoghue (Tanya C. Bernstein, Furey, Doolan & Abell, LLP, Chevy Chase, MD, on brief), for petitioner.

Charles H. Fleischer (Oppenheimer, Fleischer & Quiggle, P.C., Deborah G. Matthews, Robert E. Ward & Associates, P.C., Bethesda, Jane Moretz Edmisten, Jane Moretz-Edmisten & Associates, P.C., Washington, DC, on brief), for respondents.

Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA and GREENE, JJ.

GREENE, J.

In this case we are asked to revise the Maryland law of ademption by satisfaction and require that a testator's intention to adeem a legacy can be proven only by a writing made contemporaneous with an inter vivos gift. Petitioner, in its attempt to persuade us to change the law, relies in part on the assertion that the doctrine of ademption is in conflict with Md.Code (2001), § 3-106 of the Estates & Trusts Article, the Restatement (Third) of the Law of Property (Wills and Other Donative Transfers) § 5.4 (1999), and the Uniform Probate Code § 2-609 (amended 1990). In addition, petitioner assails the decision of the intermediate appellate court, YIVO Institute for Jewish Research v. Zaleski, 156 Md.App. 527, 847 A.2d 510 (2004), and contends that the Court of Special Appeals misapplied the law of ademption in its review of the decision of the Orphans' Court. For reasons to follow in this opinion, we decline the invitation to rewrite the law of ademption and affirm the judgment of the intermediate appellate court.

On September 25, 2002, the Orphans' Court for Montgomery County¹ denied petitioner's, the YIVO Institute for Jewish Research ("YIVO"), request to receive distribution of a bequest in the Will of Jan Karski ("Dr. Karski"). The Orphans' Court concluded that Dr. Karski's inter vivos gifts to YIVO were intended by Dr. Karski as a fulfillment of the legacy under his will. The petition was opposed by respondents, the personal representative of Dr. Karski's estate and two residuary legatees under Dr. Karski's Will—the American Center of Polish Culture and the Kosciusko Foundation. YIVO appealed to the Court of Special Appeals seeking reversal of the decision of the Orphans' Court.

YIVO argued in the Court of Special Appeals, as they do here, that the specific bequest to YIVO in the will was not adeemed by the lifetime gifts.² YIVO also contends that the Orphans' Court erred in admitting the testimony of Dr. Hanna Kaya Ploss ("Dr. Ploss") as to oral statements made by Dr. Karski after satisfaction of Dr. Karski's pledge to YIVO. The intermediate appellate court affirmed the decision of the Orphans' Court stating that the Orphans' Court was not clearly erroneous in its conclusion that Dr. Karski intended for his bequest to YIVO to act only as security for his obligation to the organization. It also affirmed the admission of Dr. Ploss's testimony deferring to the trial court's evidentiary rulings and factual findings. YIVO, 156 Md.App. 527, 847 A.2d 510.

By petition for writ of certiorari to this Court, YIVO challenges the judgment of the Court of Special Appeals asserting that the lower courts erred in failing to require written evidence of intent to adeem, misapplied the presumptions of prior case law regarding ademption by satisfaction, and improperly admitted and/or credited Dr. Ploss's testimony. We granted certiorari to consider YIVO's contentions. YIVO v. Zaleski, 382 Md. 688, 856 A.2d 724 (2004).

Background

Dr. Karski was a hero of the Polish underground during World War II. He reported to Allied powers on the events transpiring in Poland until he was captured by the Nazis.³ During his confinement he was tortured and suffered greatly. After attempting suicide to avoid disclosures that could have endangered the underground movement, Dr. Karski was taken to a Nazi-controlled hospital in critical condition. He was rescued from the hospital by members of the underground movement. Several lives were lost during the rescue effort and one rescuer, Zofia Hanuszkiewicz ("Zofia"), spent several years in a German prison camp for her involvement.

After the war, Dr. Karski emigrated to the United States and settled in Chevy Chase, Maryland. Dr. Karski remained committed to Polish culture until his death, developing ties with several Polish organizations, including The Kosciusko Foundation ("Foundation") and The American Center of Polish Culture ("Center"). He spent much of his life attempting to mend the relationship between Jewish and non-Jewish Poles which had been fractured by events occurring in Poland during WW II. Following the death of his wife, Pola Nirenska, Dr. Karski developed a plan to memorialize both of them by creating an award to acknowledge Jewish authors of Polish origin.⁴ In 1992, Dr. Karski entered into an agreement with YIVO to establish an endowment fund to provide an annual award of $5,000 to authors whose works focused on or otherwise described contributions to Polish culture and Polish science by Poles of Jewish origin. Dr. Karski formalized his pledge in a letter dated November 25, 1992 ("Letter Agreement"). The Letter Agreement provided, in pertinent part:

The endowment will consist of a gift of $100,000.00 in cash to be made by me to YIVO in my will, or in cash and/or marketable securities of the same total market value during my lifetime.

A second letter, identical to the November 25, 1992, letter, was signed February 25, 1993. It is unclear from the record, however, why the second letter was executed.

On October 25, 1993, eight months after writing the second Letter Agreement, Dr. Karski executed his will. Article SECOND of the will provides:

I hereby give and bequeath to YIVO — Institute for Jewish Research (tax exempt organization Dr. Lucjan Dobroszycki and Dr. Ludwik Seidenman)—all my shares of Northern States Power (N.St.Pw.) of which 400 share certificates are located in Riggs National Bank, Friendship Branch (4249 block of Wisconsin Avenue), Safe Deposit Box 240, and the rest approximately 1,780 shares, is held by Northern States Power as automatic reinvestment. All these shares (approximately 2,180) should be transferred (not sold) to YIVO.

At the time the will was executed, Northern States Power Company shares had a value of about $100,000. At the time of Dr. Karski's death the shares were worth $113, 527.64.

In addition, pursuant to the Third Clause of the will, stock in two other utilities, New York State Gas & Electric and Ohio Edison, was left to the Washington Performing Arts Society ("WPAS"). Most of the remaining estate was bequeathed in equal shares to the Foundation, the Center, three of Dr. Karski's elderly relatives in Poland, and Zofia, the woman who had helped rescue him from the hands of the Nazis.

During the period November 28, 1995, to January 22, 1996, Dr. Karski made a series of lifetime gifts of utility stocks to YIVO consisting of 1,809 shares of New York State Electric & Gas Corporation, 2,300 shares of Ohio Edison Company, and cash.⁵ The value of these stock gifts totaled $99,997.69. On February 7, 1996, Dr. Karski made a further gift of $2.31, bringing the total value of the gifts to YIVO to exactly $100,000. Dr. Karski did not amend his will to reflect the inter vivos transfer of utility stock and cash to YIVO.

Dr. Karski died on July 12, 2000. At that time, the shares of Northern States Power Company remained an asset of his estate. Paul Zaleski, who qualified as personal representative, denied YIVO's request for payment of the bequest on the basis that Dr. Karski's earlier gift satisfied the legacy. As a result, YIVO filed a Petition for Order Directing Distribution of Specific Bequest.

The Orphans' Court conducted an evidentiary hearing and rendered an oral opinion finding that Dr. Karski intended for his lifetime gifts to YIVO to satisfy the legacy under the will. Following the entry of final judgment, YIVO appealed to the Court of Special Appeals which affirmed the judgment of the Orphans' Court. We granted YIVO's petition for a writ of certiorari.

Standard of Review

The standard of review in this action is summarized in Maryland Rule 8-131:

(c) Action tried without a jury. When an action has been tried without a jury, the appellate court will review the case on both the law and the evidence. It will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses.

Md. Rule 8-131 (2005).

We recently discussed our review pursuant to Md. Rule 8-131. We said:

"[T]he appellate court will review the case on both the law and the evidence. It will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses." The deference shown to the trial court's factual findings under the clearly erroneous standard does not, of course, apply to legal conclusions. When the trial court's [decision] "involves an interpretation and application of Maryland statutory and case law, our Court must determine whether the lower court's conclusions are legally correct under a de novo standard of review."

Nesbit v. Government Employees Insurance Company, 382 Md. 65, 72, 854 A.2d 879, 883 (2004) (internal citations omitted). If there is any competent material evidence to support the factual findings of the trial court, those findings cannot be held to be clearly erroneous. Solomon v. Solomon, 383 Md. 176, 202, 857 A.2d 1109, 1123 (2004). Furthermore, an appellate court may affirm a trial court's decision on any ground adequately shown by the record even though the ground was not relied upon by the trial court or the parties. Offutt v. Montgomery Co. Bd....