Davisson v. Indiana Nat. Bank

• Decision Date: 19 June 1986
• Docket Number: No. 1-1085A263,1-1085A263
• Citation: 493 N.E.2d 1311
• Parties: Dorothy Jan DAVISSON, Karen D. Hill, Ruth S. Brewer, Ann McNamar, Pat Wissler, and Ernest Carl Smith, Jr., Appellants, v. The INDIANA NATIONAL BANK, Executor of the Estate of Claris B. Smith, Deceased, Suzanne Pursian Smith, and the Indiana National Bank, As Trustee of the Claris B. Smith 1982 Revocable Trust, Appellees.
• Court: Indiana Appellate Court

Page 1311

493 N.E.2d 1311

Dorothy Jan DAVISSON, Karen D. Hill, Ruth S. Brewer, Ann McNamar, Pat Wissler, and Ernest Carl Smith, Jr., Appellants, v. The INDIANA NATIONAL BANK, Executor of the Estate of Claris B. Smith, Deceased, Suzanne Pursian Smith, and the Indiana National Bank, As Trustee of the Claris B. Smith 1982 Revocable Trust, Appellees.

No. 1-1085A263.

Court of Appeals of Indiana First District.

June 19, 1986.

Alan H. Lobley, Catherine C. Kennedy, Ice, Miller, Donadio & Ryan, Indianapolis, for appellants.

John W. Houghton, Stanley C. Fickle, Barnes & Thornburg, Indianapolis, George B. Davis, Davis & Davis, Greenfield, for appellees.

NEAL, Judge.

STATEMENT OF THE CASE

Plaintiff-appellants, Dorothy J. Davisson, Karen D. Hill, Ruth S. Brewer, Ann McNamar, Pat Wissler, and Ernest Carl Smith, Jr. (Contestants), appeal an adverse summary judgment entered by the Hancock Circuit Court in their action to contest a will. The summary judgment was entered solely on the issue of standing. From that judgment Contestants appeal. We reverse.

STATEMENT OF THE FACTS

Claris B. Smith (Decedent) died on August 2, 1983, and his will, dated July 23, 1982, was admitted to probate on August 20, 1983. Contestants brought this action to contest the will on January 25, 1984, claiming unsoundness of mind, undue influence duress, and fraud in the execution. Contestant Brewer was a sister of the Decedent, Smith was a brother and Wissler, Davisson, McNamar, and Hill were nieces by a deceased brother and sister. Decedent's wife of six years, Suzanne Pursian Smith (Suzanne), survived as his widow; however, Suzanne and Decedent had executed a premarriage agreement by the terms of which she and Decedent waived any hereditary claim to each other's property. But the agreement did not prevent gifts by one to the other by devise. Decedent died without issue.

Decedent had executed prior wills in 1961, 1972, and 1977. All the wills, including the 1982 will, gave the vast bulk of the estate to a revocable inter vivos trust. Decedent created the trust as a spill-over trust; established with negligible assets but designed to receive additional assets by devise. The trusts contained provisions directing the trustee, upon Decedent's death, to transfer the property to various beneficiaries in designated proportions. Such directions were not contained in the will. On July 23, 1982, Decedent amended his will and the trust. The vast majority of the estate, valued at approximately $3,500,000.00, went to the trust. By the terms of the July 23, 1982 amended trust, Brewer was to receive $50,000.00; Smith--$50,000.00; Wissler--$50,000.00; Davisson--$25,000.00; McNamar--$25,000.00; and Hill--$25,000.00. The Indiana National Bank, as Executor and Trustee, disclosed to the above beneficiaries only an edited copy of the 1982 trust. It revealed, however, that seven unnamed persons, being friends of the Decedent or relatives of his first wife, received bequests totaling $160,000.00, ranging from $10,000.00 to $50,000.00. The Trustee/Executor further revealed that six unnamed persons, being former business employees and associates of Decedent, received 2,563 shares of Holiday Inns, Inc. stock, partnership interests in Northwest Inn Developers, and shares of certain stock in CBS Motel Corp. The residue of the trust went to the widow and the Shriner's Hospitals for Crippled Children.

Contestants sought and were denied discovery of copies of the 1977 trust and complete copies of the 1982 trust. There is evidence that Contestants had been told by Decedent that they would receive a greater share of the estate by the terms of the 1977 trust. Contestants also sought discovery of certain medical records of Decedent and the right to depose the widow. Responses to requests were deferred until after the ruling on standing.

The Executor filed a motion for summary judgment, claiming first that Contestants had no standing to bring an action to contest the will, and second, that no evidence was presented indicating that the will was invalid. The motion was supported by affidavits of subscribing witnesses attesting in effect that Decedent was of sound mind, and was not under any undue influence or duress when he executed the 1982 will. The trial court granted summary judgment on the issue of standing, but did not address the issue of the will's validity.

Pending the hearing on the motion for summary judgment, Contestants sought to amend their complaint to add as a ground for standing that they were beneficiaries under the 1977 trust, which, if it gave them more, would provide standing. This motion was denied. In effect, the trial court decided that collateral heirs have no standing to bring a will contest where there is no issue surviving and where the widow has executed a premarriage agreement by which she foregoes any interest in the estate.

The granting of the motion for summary judgment on the standing issue is the only issue on appeal, though connected with it are subsidiary issues of the denial of discovery of the 1977 and 1982 trusts, and the denial of Contestants' right to amend their complaint. All issues are connected and will be discussed together.

DISCUSSION AND DECISION

Any "interested person" may contest a will. IND.CODE 29-1-7-17. "Interested person" means an heir, devisee, spouse, creditor, or any other person having a property right in or a claim against the estate of a decedent. IND.CODE 29-1-1-3. That meaning "may vary at different stages and different parts of a proceeding, and must be determined according to the particular purpose and the matter involved." Id. "Heirs" are defined as "those persons, including the surviving spouse, who are entitled under the statutes of intestate succession, to the decedent's property upon the death of the decedent unless otherwise defined or limited by the will. Id.

The intestate share or other expectancy to which the spouse or other heirs may be entitled may be waived by written contract or agreement. IND.CODE 29-1-2-13. The provisions of marriage shall be sufficient consideration in the case of a premarriage agreement. Id. The Indiana Probate Code Study Commission's comment to IND.CODE 29-1-2-13 states that the section is merely declaratory of the common law, and adopts the rule as to expectancies generally set forth in Section 316 of the Restatement of the Law of Property. Section 316(a) of the Restatement provides that a person who has an expectant distribution has the power to relinquish all or any part of that distribution.

Comment f of Section 316 states that the expectant distributee can relinquish his interest only to the source. Where such relinquishment has been made as to the entire interest of an expectant distributee, that distributee is eliminated from a further claim to or participation in the estate of the source. RESTATEMENT OF THE LAW OF PROPERTY Sec. 316 comment f (1940). The comment further states that if the relinquishing party is the sole descendant, the collaterals of the source become entitled on intestate succession. ¹ An illustration to comment f of Sec. 316 states as follows:

"A owns interest in land and other things, worth $50,000. If A should die forthwith, A's only child B, would take as sole heir at law and next of kin of A. If B were not alive, and A died forthwith, A's brothers C and D would take as heirs at law the next of kin of A. B, in return for a present adequate consideration, executes and delivers to A an otherwise effective release to A of all B's claims in and to all of A's estate on A's death. A dies intestate. C and D receive all of which A died the owner. B receives nothing."

RESTATEMENT OF THE LAW OF PROPERTY Sec. 316 comment f, illustration 6 (1940).

The policy expressed in Section 316 is followed in IND.CODE 32-3-2-3 which is addressed to disclaimers of interest which, after the death of the decedent, may be filed with the executor. Subsection (d) provides:

"If provision has not been made for another devolution, an interest disclaimed under this section devolves as if the disclaimant had predeceased the decedent. A disclaimer under this section relates back for all purposes that relate to the interest disclaimed to a time immediately before the death of the decedent."

The same policy is expressed in IND.CODE 32-3-2-8 as to future interests. Although these two provisions from the Indiana Property Code are not directly in point with the issue at hand, they may be considered in determining legislative intent, as the purposes are the same.

As expressed in the comment to IND.CODE 29-1-2-13, prior to the enactment of the statutory provisions, the common law permitted premarriage agreements. The comment noted that this section is merely declaratory of the common law. The case of McNutt v. McNutt (1888), 116 Ind. 545, 19 N.E. 115, expressive of the common law, is in point here. In McNutt, premarriage agreements existed by which the decedent and his widow waived any right to the property of the other. At his death, the intestate decedent was survived by his widow, by his brothers and sisters, and by his nieces and nephews by deceased brothers and sisters. It was argued that collateral relatives cannot enforce the contract, but that only lineal heirs can. The court, emphasizing that each party to the premarriage agreement intended to bar the other from any right to their respective properties, held that the brothers and sisters and nieces and nephews were heirs of the decedent and, as heirs, were entitled to the property. The case stated:

"It is unduly assumed that the law absolutely casts upon the wife an estate in the lands of the husband; whereas it does not undertake to do so where by agreement the parties have fixed the rule which shall govern. The law operates in cases where there is no contract, but does not operate where the parties have for themselves agreed upon the mode in which marital rights shall attach. The law does not assume to override...