Crosland v. Patrick
| Decision Date | 15 September 2020 |
| Docket Number | No. COA19-713,COA19-713 |
| Citation | 849 S.E.2d 80 |
| Parties | Judith E. CROSLAND, Petitioner, v. Bailey PATRICK, Jr., as Executor of the Estate of John Crosland, Jr., Respondent. |
| Court | North Carolina Court of Appeals |
Shumaker, Loop & Kendrick, LLP, by Lynn R. Chandler and Lucas D. Garber, Charlotte, for petitioner-appellant.
Alexander Ricks PLLC, by Roy H. Michaux, Jr., for respondent-appellee.
Essex Richards, P.A., by Jonathan E. Buchan, Jr., for intervenor.
Where specific allegations, which could establish the presence of a genuine factual dispute are barred by the Dead Man's Statute, no genuine issues of material fact exist and summary judgment is proper. Additionally, where the statute of limitations for a contract and fraud claim is three years, the statute of limitations bars any claim of fraud, duress, or undue influence after three years. Here, the prenuptial agreement was signed and executed thirty-seven years prior to this Petition for Elective Share , and the statute of limitation bars any challenge. Moreover, the alleged unilateral revocation of the prenuptial agreement argued in the pleadings has no legal significance. The trial court properly granted Respondent's motion for summary judgement.
John Crosland, Jr. ("Husband") died testate on 2 August 2015. His Last Will and Testament was executed on 7 August 2013 and admitted to probate 13 August 2015. Judith E. Crosland ("Wife"), as the surviving spouse, filed a Petition for Elective Share on 15 October 2015. She requested the trial court determine if the value of property passing to her under Husband's estate plan was less than fifty percent of his estate as provided by N.C.G.S. § 30-3.1.
On 5 November 2015, Respondent, Bailey Patrick, Jr. ("Executor"), as Executor of Husband's estate, filed a notice of transfer to Superior Court to determine all issues relating to or arising out of the Petition for Elective Share , and seeking a declaratory judgment that the prenuptial agreement dated and signed on 3 February 1978 ("the Agreement") was in all respects valid and enforceable. Executor argued the Agreement, if valid, would bar any claim for an elective share sought by Wife. Executor also sought a stay pending a determination as to whether the Agreement barred Wife's right to pursue an elective share.
Wife claims Husband first presented the Agreement to her on 3 February 1978, the night before their wedding. In her deposition, Wife testified she did not feel she had a choice regarding whether to sign the Agreement because she believed the wedding would not go forward unless she signed it. Both Husband and Wife signed the Agreement on 3 February 1978; their signatures were acknowledged before a Notary Public that same day.
Wife filed a reply to Executor's counterclaim for declaratory judgment ("the Reply") on 8 December 2015, which asserted the Agreement was invalid and unenforceable based upon allegations it was signed under duress, it was procured without adequate disclosure of material financial information, and it had been "revoked" by Husband during his lifetime. The Reply included the following:
Wife died 16 October 2018. On 11 January 2019, Branch Banking & Trust Company ("BB&T"), as Executor for Wife's estate, was substituted as Petitioner.
On 27 March 2019, Executor moved for summary judgment pursuant to Rules 7 and 56 of the North Carolina Rules of Civil Procedure and for dismissal of the Petition for Elective Share under N.C.G.S. § 30-3.1. On 23 April 2019, Wife filed a cross-motion for summary judgment declaring the Agreement void (or alternatively voidable) and unenforceable.
An order was entered 24 May 2019 granting Executor's Motion for Summary Judgment and denying Wife's cross-motion for summary judgment. Wife appealed.
Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the [R]ecord shows that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law. When considering a motion for summary judgment, the trial judge must view the presented evidence in a light most favorable to the nonmoving party. If the movant demonstrates the absence of a genuine issue of material fact, the burden shifts to the nonmovant to present specific facts which establish the presence of a genuine factual dispute for trial.
In re Will of Jones , 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (internal citations and quotation marks omitted).
Our standard of review for decisions regarding N.C.G.S. § 8C-1, Rule 601(c), commonly known as the Dead Man's Statute, is also de novo. In re Will of Baitschora , 207 N.C. App. 174, 181, 700 S.E.2d 50, 55-56 (2010).
"The North Carolina ‘Dead Man's Statute,’ formerly N.C.G.S. § 8-51 and now codified in Rule 601(c) of the Rules of Evidence, N.C.G.S. § 8C-1, Rule 601(c), has traditionally prohibited testimony involving both ‘transactions’ and ‘communications’ by individuals who would potentially benefit from the alleged statements of a deceased individual." In re Will of Lamparter , 348 N.C. 45, 49, 497 S.E.2d 692, 694 (1998). The Dead Man's Statute, as now codified, is "applicable only to oral communications between the party interested in the event and the deceased." Id.
Although a person interested in the event of the action is disqualified, his interest must be a direct legal or pecuniary interest in the outcome of the litigation. The key word in this phrase is legal, the cases as a whole showing that the ultimate test [in determining an interested party] is whether the legal rights of the witness will be affected one way or the other by the judgment in the case.
Rape v. Lyerly , 287 N.C. 601, 622, 215 S.E.2d 737, 750 (1975) (internal quotation marks omitted). "The purpose of [the Dead Man's Statute] is to exclude evidence of statements made by deceased persons, since those persons are not available to respond." Estate of Redden ex rel. Morley v. Redden , 194 N.C. App. 806, 808, 670 S.E.2d 586, 588 (2009) (internal quotation marks omitted).
The crux of this case rests upon whether or not the Agreement is valid and enforceable, and accordingly, whether Executor's motion for summary judgment was properly granted. On appeal, Wife argues the Agreement was void ab initio and unenforceable as a matter of law because Husband, allegedly, failed to provide her with financial disclosure and because the Agreement was, allegedly, revoked and destroyed.
To support her claim that the Agreement was void ab initio , Wife argues Husband failed to disclose his financial status as is mandated in Tiryakian . Tiryakian v. Tiryakian , 91 N.C. App. 128, 370 S.E.2d 852 (1988). There are circumstances where "absent any voluntary waiver, especially considering the confidential relationship between prospective spouses, the failure to fully disclose one's financial status is grounds for invalidating [a prenuptial] agreement." Id. at 133, 370 S.E.2d at 855. Here, however, the evidence presented by Wife regarding Husband's lack of financial status disclosure was inadmissible under the Dead Man's Statute.
Wife is a "person interested in the event"; she has a "direct legal or pecuniary interest" in the outcome of the litigation. Rape , 287 N.C. at 622, 215 S.E.2d at 750. To agree with Wife's argument that the Agreement is void ab initio and is thereby unenforceable would require the Agreement to be set aside. Wife's Petition for Elective Share would be granted, and Wife would inherit 50% of the total net assets of Husband's estate. See generally N.C.G.S. § 30-3.1(a)(4) (2019).
The only evidence we have regarding the Agreement comes from Wife's testimony during her deposition:
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