Chaney v. Gray, WD

• Decision Date: 28 February 1995
• Docket Number: No. WD,WD
• Citation: 898 S.W.2d 577
• Parties: Marjorie Helen CHANEY, et al., Respondents, v. Virginia L. GRAY, et al., Appellants. 49172.
• Court: Missouri Court of Appeals

Page 577

898 S.W.2d 577

Marjorie Helen CHANEY, et al., Respondents, v. Virginia L. GRAY, et al., Appellants.

No. WD 49172.

Missouri Court of Appeals Western District.

Feb. 28, 1995.

Motion for Rehearing and/or Transfer to

Supreme Court Denied May 2, 1995.

Application to Transfer Denied June 20, 1995.

Alvin D. Shapiro, Kansas City, for appellants.

William M. Modrcin, Jr., Kansas City, for respondents.

Before HANNA, P.J., and BRECKENRIDGE and SMART, JJ.

HANNA, Presiding Judge.

This action involves a dispute over the ownership of certain assets originating from the condemnation proceeds of a family-owned farm in Jackson County, Missouri. The farm property was originally owned by Jess L. Gray, a Kansas resident, who died testate on November 10, 1966. Jess Gray was survived by his wife, Verda V. Gray, and their five adult children. The plaintiffs are the two daughters of Jess Gray, Marjorie Helen Chaney and Virginia Lee Soetaert, and the surviving spouses and children of two of Jess Gray's deceased sons, Vernon Harold Gray and Everett Woodrow Gray. The defendants are Virginia Gray, who is the surviving spouse of Leslie Paul Gray, also a deceased son of the testator, her children, and the administrator of Leslie Paul's estate in Kansas.

On January 30, 1967, the last will and testament of Jess Gray was admitted to probate in Jackson County for the purpose of determining title to the Missouri farm property. The will disposed of Jess Gray's property as follows:

Second: I give, bequeath and devise to my wife, Verda Virginia Gray, all my property, both real and personal, to use, possess and dispose of, including the power to mortgage or sell any of said property, for so long as she remains unmarried, or until the time of her death in the event she remains single, it being my intention that she have the full power of disposal of all of my said real and personal property, except upon the contingency of remarriage Third: In the event that my said wife should remarry it is my will and I so direct that whatever property shall remain undisposed of at the time of said remarriage shall be at said date of marriage divided as follows: An undivided half interest to my said wife and the remaining one half interest to my five children: Vernon Harold Gray, Everett Woodrow Gray, Virginia Lee Gray Soetaert, Lesley Paul Gray, and Marjorie Helen Chaney;

Fourth: It is further my will and I so direct that upon the death of my said wife any and all of my property both real and personal which shall remain undisposed of by her under said power of disposal set forth in paragraph Second hereof shall be and become the property of my said five children hereinbefore named in paragraph five in equal portions share and share alike; it being my intention herein to create in my said wife the full power to dispose of all my said property but that in the event that she shall not exercise said power said property shall pass upon her death to my said five children;

Fifth: I specifically bequeath to my son, Lesley Paul Gray all my farm implements, said farm implements being excepted from the provisions of paragraphs Second, Third and Fourth[.]

Leslie Paul Gray was named the executor of his father's estate. On December 19, 1967, the probate court entered its order entitled, "Final Settlement Approved; Finding and Decree of Succession; Order of Discharge," finding that the successors to Jess Gray's interest in the Missouri farm property under his will were his surviving spouse, Verda, and their five children, and assigning a "fee simple" interest. The estate was subsequently closed and no appeal was taken from the probate order.

In 1972, the farm property was condemned by Jackson County pursuant to a condemnation action instituted against Verda and the five children. As a result of this action, proceeds in the amount of $209,500 were awarded to Verda and the children as compensation for the taking of the farm property. This award was subsequently increased to $341,000, plus interest, and was paid to Verda and the children. Shortly thereafter, the children executed and filed a consent form allowing all of the proceeds to be paid solely to their mother. The record indicates that the proceeds were initially deposited by Verda in various bank accounts in her name alone. In 1980, Verda used approximately $100,000 of the proceeds to purchase an undivided one-half interest in certain real estate in Memphis, Tennessee. In 1982, Verda moved into a nursing home where she resided until her death.

Verda Gray died testate on January 1, 1989. She had not remarried at the time of her death. In February 1989, her will was admitted to probate in Jackson County and her son, Leslie Paul, served as the personal representative of the estate. Her will devised, inter alia, her one-half interest in the Tennessee real estate to her three surviving children, Leslie Paul, Virginia Soetaert and Marjorie Chaney, to be shared equally. In July 1989, the children of Everett and Vernon Gray (who are also plaintiffs in the present action) filed a petition to contest Verda's will, alleging undue influence by Leslie Paul because he had received a substantial portion of Verda's estate under her will. The trial court dismissed the action and the plaintiffs appealed but subsequently dismissed their appeal voluntarily.

The plaintiffs subsequently learned of the existence of bank accounts totalling nearly $300,000 as of Verda's death. At the time of Verda's death, Leslie Paul Gray's name had been added to several of his mother's accounts as a joint tenant with right of survivorship and those accounts passed by operation of law to Leslie Paul upon his mother's death. When Leslie Paul died testate in July 1991, these accounts either passed directly to his surviving spouse, Virginia Gray, as a joint tenant, or were closed and transferred to other accounts owned by Virginia Gray.

In December 1991, the plaintiffs brought this suit against Virginia Gray, (both individually and as the personal representative of Leslie Paul's estate) claiming they were entitled to a share of the accounts and other property as remaindermen under Jess Gray's will. In their petition, the plaintiffs alleged, inter alia, that Jess Gray's will gave his wife Verda, a life estate with a remainder to the five Gray children which vested on the date of their father's death. The plaintiffs claimed they were entitled to receive their interest in the life estate assets, including both real and personal property, which were traceable to the condemnation proceeds, upon the death of Verda. An accounting firm was hired to trace the condemnation proceeds from the time they were paid to Verda in the mid-1970s through 1993. The plaintiffs sought the imposition of a constructive trust on these assets.

A trial was held in August 1993. On February 16, 1994, the trial court entered a judgment in favor of the plaintiffs. Notwithstanding the 1967 probate order stating that the interest granted to Verda and the five children was "fee simple," the trial court interpreted Jess Gray's will and found that title to the farm property had passed to Verda as a life tenant with a remainder interest to the five children. The court based this finding on "the fact that the [probate] order lists the devisees of such real estate as Verda Gray and all five of the Gray children pursuant to paragraphs Second, Third and Fourth of decedent's will." The court concluded that as remaindermen, or their successors in interest, under Jess Gray's will, the plaintiffs were entitled to recover their 4/5 share of the total life estate assets. A constructive trust was imposed on all of the bank accounts and the real estate which were traceable to the proceeds, and a judgment was entered for the plaintiffs in the amount of $450,338.06. The plaintiffs subsequently filed a motion for assessment of costs for the accounting. Defendants filed a notice of appeal on March 16, 1994. On March 29, 1994, the trial court entered an order assessing one-half of the accountant's fees as costs against defendants. No appeal was taken from this subsequent order.

Defendants raise several points on appeal, the first of which is dispositive. However, we will also address defendants' challenge to the assessment of costs.

Our standard of review is well established. The judgment of the trial court will be sustained unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).

In their first point, the defendants claim that the trial court erred in construing the will of Jess Gray twenty-six years after the probate court's order had become final. Defendants argue that the final distribution order entered by the probate court in 1967, which assigned a "fee simple" interest in the farm property to Verda and the five children, was a conclusive determination of the parties' rights, title and interest in the property pursuant to § 473.617, RSMo 1986 of the Probate Code.

Section 473.617 provides, in pertinent part:

1. After the expiration of the time limit for the filing of claims, the executor ... shall file his final settlement and at the same time petition the court to decree the final distribution of the estate.

2. In its decree of final distribution, the court shall designate the persons to whom distribution is to be made, and the proportions or parts of the estate, or the amounts, to which to each is entitled under the will and the provisions of this law....

4. The decree of final distribution is a conclusive determination of the persons who are the successors in interest to the estate of the decedent and of the extent and character of their interests therein, subject only to the right of appeal and the right to reopen the decree. It operates as the final adjudication of the transfer of the right, title and interest of the decedent to the...