Diller v. Diller
| Decision Date | 02 April 2023 |
| Docket Number | 2022-0058 |
| Citation | 2023 Ohio 1508 |
| Parties | Diller, Appellee, v. Diller, Coexr. of the Estate of Theodore C. Penno, Appellee; Pennucci, Individually and as Coexr. of the Estate of Theodore C. Penno, et al., Appellants. |
| Court | Ohio Supreme Court |
Submitted January 10, 2023
Appeal from the Court of Appeals for Mercer County, Nos. 10-21-03 and 10-21-04, 2021-Ohio-4252.
Howell, Gast-Schlater & Co., LP.A., and Paul E. Howell for appellee Mary Ann Diller.
Faber & Associates, L.L.C., John R. Willamowski Jr., and Travis J. Faber, for appellee Phyllis Diller, coexecutor of the estate of Theodore C. Penno.
Cory Meredith, Witter & Smith, L.P.A., Ashley R. Doty, J. Alan Smith, and Dalton J. Smith, for appellants, Linda Pennucci, individually and as coexecutor of the estate of Theodore C. Penno, and David Penno.
Koesters Law Office and Judy A. Koesters, cocounsel for appellants Linda Pennucci, individually, and David Penno.
Knapke Law and Jeffrey P. Knapke, cocounsel for appellant Linda Pennucci, as coexecutor of the estate of Theodore C. Penno.
{¶ 1} This cause is dismissed as having been improvidently accepted.
Kennedy, C.J., dissents and would affirm the court of appeals' judgment.
{¶ 2} I disagree with the majority's decision to dismiss this appeal as having been improvidently accepted. We should answer the questions before us on the merits and in so doing, reverse the Third District Court of Appeals' determination that former R.C. 2107.52[1] fails to prevent a primary devise in a will from lapsing when the beneficiary predeceases the testator.
{¶ 3} This case involves a dispute about a devise[2] to a beneficiary who died before the testator. The central question before this court is whether Ohio's antilapse statute that was in effect at the time of the testator's death prevented the devise from lapsing.
{¶ 4} The common-law rule is that a devise to a beneficiary who predeceases the testator lapses upon the beneficiary's death. See 1 Restatement of the Law 3d, Property: Wills & Other Donative Transfers Section 1.2, Comment a (1999). The lapsed devise then becomes part of the testator's residual estate, which is distributed pursuant to the terms of a residuary clause contained in the testator's will or through intestate succession if there is no residuary clause. See Margolis v. Pagano, 39 Ohio Misc.2d 1, 3-4, 528 N.E.2d 1331 (C.P.1986); Shalkhauser v. Beach, 14 Ohio Misc. 1, 3, 233 N.E.2d 527 (P.C.1968).
{¶ 5} The common-law lapse rule originates from the understanding that a testator cannot gift property to a person who is deceased, because that person (i.e., the beneficiary) is unable to receive the gift. 1 Restatement, Section 1.2, Comment a. Although this may be a logical way to view a devise, depriving a deceased beneficiary of gifted property under this rule consequently stops the deceased beneficiary's heirs from inheriting the property that would have gone to the deceased beneficiary had he or she survived the testator. The common-law lapse rule has been criticized for this harsh result because it is entirely reasonable to assume that the testator would have understood when executing his or her will that in devising the property to a beneficiary, that property would or could be passed to the beneficiary's heirs upon the beneficiary's death. See Woolley v. Paxson, 46 Ohio St. 307, 314, 24 N.E. 599 (1889). In other words, it is logical to assume that a testator intends the heirs of a deceased beneficiary to eventually inherit the property that is the subject of a devise anyway. See id.; see also Belardo v. Belardo, 187 Ohio App.3d 9, 2010-Ohio-1758, 930 N.E.2d 862, ¶ 15 (8th Dist). With this understanding, the Ohio legislature enacted the first "antilapse" law in 1840. See Woolley at 313-314. Although Ohio's antilapse law has been repealed, reenacted, and revised multiple times over the years, the essence of the law has remained more or less the same-it prevents a devise from lapsing under the common-law rule when a beneficiary under a will predeceases the testator. See, e.g., id.; see also West v. Aigler, 127 Ohio St. 370, 376-377, 188 N.E. 563 (1933); Cochrel v. Robinson, 113 Ohio St. 526, 536, 149 N.E. 871 (1925).
{¶ 6} Since 1953, Ohio's antilapse statute has been codified in R.C. 2107.52. See Am.H.B. No. 1, 125 Ohio Laws 7 (). Under that statute, if the devise is an individual devise (i.e., if the devise is not to a group or class of persons like "my children" or "my grandchildren"), a substitute gift is created in the beneficiary's surviving heirs, and the surviving heirs are entitled to the property that the beneficiary would have been entitled to had the beneficiary survived the testator. See R.C. 2107.52(B).
{¶ 7} Turning to the facts of this case: In May 2019, Theodore Penno, a retired farmer who owned roughly 65 acres of farmland, died leaving a will that was validly executed in 1998. The will read in part:
(Underlining, boldface, and capitalization sic.)
{¶ 8} When Theodore executed the will, he was farming the Butler Township land with his brother, John, and John's son, David Penno. John died in 2016-three years before Theodore died. John was survived by appellants-his son, David, and his daughter, Linda Pennucci. Appellee Mary Ann Diller[3] was Theodore's only surviving sibling.
{¶ 9} Shortly after Theodore's will was admitted to probate, Mary Ann filed a complaint in the probate court seeking a declaratory judgment and construction of the will. Mary Ann argued that she had an interest in the farmland that Theodore had devised to their deceased brother, John, because the devise to John lapsed when John died. Mary Ann argued that the law required that a lapsed devise be included in the testator's residual estate and distributed in accordance with the terms of the will's residuary clause. In this case, the residuary clause is in Item III of the will; it provides that Theodore's property that is not otherwise specifically devised shall be shared equally between Mary Ann and John.
{¶ 10} Mary Ann additionally argued that Ohio's antilapse statute did not save the devise to John in Item II of the will, because it was a "primary devise" that did not fall within the meaning of "devise" found in that statute. See former R.C. 2107.52(A)(3)(a), 2018 Sub.H.B. No. 595. John's children opposed Mary Ann's assertions and asked that the farmland be distributed only to them as John's surviving heirs.
{¶ 11} The probate court determined that the devise in Item II did not lapse and that John's children were entitled to the farmland. Mary Ann appealed to the Third District. She argued that the devise to John was a primary devise and that because Ohio's antilapse statute protected only an alternative devise, a devise in the form of a class gift, or an exercise of a power of appointment, see id, the statute did not apply in this case.
{¶ 12} The court of appeals agreed. The court began its analysis by broadly defining the different types of testamentary gifts:
A "primary devise" is a "devise to the first person named as taker." PRIMARY DEVISE, Black's Law Dictionary (11th Ed.2019). In contrast, an "alternative devise" is a "devise that, under the terms of the will, is designed to displace another devise if one or more specified events occur." ALTERNATIVE DEVISE, Black's Law Dictionary (11th Ed.2019). An alternative devise necessarily follows a primary devise. "For example, a devise of 'Blackacre to A, but if A does not survive me then to B' names A as the recipient of the primary devise and B as the recipient of the * * * alternative devise." PRIMARY DEVISE, Black's Law Dictionary (11th Ed.2019). A "class gift" is a "gift to a group of persons, uncertain in number at the time of the gift but to be ascertained at a future time, who are all to take in definite proportions, the share of each being dependent on the ultimate number in the group." CLASS GIFT, Black's Law Dictionary (11th Ed.2019). Finally, a "power of appointment" is a "power created or reserved by a person having property subject to disposition, enabling the donee of the power to designate transferees of the property or shares in which it will be received; esp., a power conferred on a donee by will * * * to select and determine one or more recipients of the donor's estate." POWER OF APPOINTMENT, Black's Law Dictionary (11th Ed.2019).
(Capitalization sic; footnote omitted.) 2021-Ohio-4252, 182 N.E.3d 370, ¶ 35.
{¶ 13} The court of appeals then turned to the language of former R.C. 2107.52(A)(3)(a), which provided, "As used in this section: 'Devise' means an alternative devise, a devise in the form of a class gift, or an exercise of a power of appointment." However, the definition provided in former R.C. 2107.52(A)(3)(a) did not explicitly mention a "primary devise." In interpreting the statute, the court of appeals determined that because former R.C. 2107.52(A)(3)(a) used the word "means" as opposed to "i...
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