Dowling v. Rowan

• Decision Date: 04 November 2005
• Docket Number: Record No. 050181.
• Citation: 621 S.E.2d 397
• Parties: Daniel J. DOWLING, Executor of the Estate of Wilma P. Dowling v. Vivianne Francoise Pelletier ROWAN, et al.
• Court: Virginia Supreme Court

Page 397

621 S.E.2d 397

Daniel J. DOWLING, Executor of the Estate of Wilma P. Dowling v. Vivianne Francoise Pelletier ROWAN, et al.

Record No. 050181.

Supreme Court of Virginia.

November 4, 2005.

Daniel J. Dowling, for appellant.

Jean Galloway Ball, Fairfax, for appellees.

Present: All the Justices.

DONALD W. LEMONS, Justice.

In this appeal, we consider whether a premarital agreement constituted a waiver of the surviving spouse's claims for a statutory elective share of the decedent spouse's estate, family allowance, and to exempt property, and whether the surviving spouse claiming an elective share is entitled to attorney's fees.

I. Facts and Proceedings Below

On July 10, 1993, Daniel Dowling ("Dowling") and his future wife, Wilma, entered a premarital agreement ("the Agreement"). The Agreement stated in prefatory language that "[t]he purpose of this Agreement is to settle the rights and obligations of each of them, during their marriage, upon the death of either or both of them, or in case of dissolution of the marriage." In paragraph nine of the Agreement, they agreed "[t]he property currently belonging to each party and titled in his or her name shall remain his (her) separate property." Both of them came into the marriage with significant assets that were listed in appendices to the Agreement.

During their marriage, Wilma established the Wilma P. Dowling Revocable Trust ("Revocable Trust"), the Wilma P. Dowling Irrevocable Life Insurance Trust ("Insurance Trust"), and executed a Last Will and Testament ("will") that devised her tangible personal property to her husband, Dowling, except for "that tangible personal property identified in our Prenuptial Agreement" which was devised to Wilma's daughter by a former marriage, Vivianne Rowan ("Rowan").

After Wilma's death, her will was submitted to probate and Dowling qualified as Executor of her estate in accordance with the will. Thereafter Dowling timely filed claims for an elective share of Wilma's augmented estate, family allowance of $18,000, and exempt property valued at $15,000. Dowling also claimed reimbursement of expenses related to administering the estate, funeral expenses, his Executor's commission, and attorney's fees, which brought the total sum of his claims to $371,678. Rowan opposed all of Dowling's claims.¹ Dowling is an attorney licensed in Virginia and he represented himself in the elective share litigation.

The trial court submitted the matter to a commissioner in chancery whose report concluded that the Agreement is unambiguous and constituted a waiver of any claims upon the property listed in the Agreement. After reviewing Dowling's exceptions to the commissioner's report and hearing argument ore tenus from the parties, the trial court overruled Dowling's exceptions and entered a decree consistent with the commissioner's findings of fact and conclusions of law.

In calculating Dowling's elective share, the trial court listed the items to be included and excluded from the augmented estate. Included were several bank accounts, jointly owned property, and tangible personal property not listed in the Agreement. The court excluded all real and personal property listed in the Agreement, certain real property located in Peru, the proceeds of Wilma's life insurance policies, and the value of benefits conferred upon Dowling under the Revocable Trust. The value of the property included in the augmented estate was $63,893. This amount was reduced by $44,606, the total amount of funeral expenses, various fees, and costs for administration of the estate.² The remaining amount, $19,287, was the value of the augmented estate as determined by the trial court.

Pursuant to the trial court's conclusions, Dowling's elective share, one-third of the augmented estate, was $6,429. Since Dowling had already received assets from the estate totaling $52,806, and those assets must be deducted from the elective share, the trial court held that the estate would owe nothing to Dowling. The court denied Dowling's claim for attorney's fees and costs relating to the elective share litigation.

Dowling, proceeding pro se, appeals the trial court's final order and maintains that the trial court erred in calculations of the augmented estate in its (i) exclusion of items listed in the Agreement, (ii) exclusion of the Peruvian properties, and (iii) exclusion of the life insurance policies. Dowling also claims that the trial court erred in its denial of attorney's fees for his elective share litigation.

II. ANALYSIS

A. Property excluded from the augmented estate

1. Property listed in the Agreement

Parties to a premarital agreement can contract with respect to disposition of property upon separation, marital dissolution, death, or any other event. Code § 20-150. See Code § 64.1-151.6 (a surviving spouse's rights to family allowance, exempt property, and homestead allowance can be waived by premarital agreement). Premarital agreements "are contracts subject to the rules of construction applicable to contracts generally." Pysell v. Keck, 263 Va. 457, 460, 559 S.E.2d 677, 678 (2002).

On appeal, we review a trial court's interpretation of the contract de novo. Wilson v. Holyfield, 227 Va. 184, 188, 313 S.E.2d 396, 398 (1984) ("We have an equal opportunity to consider the words of the contract within the four corners of the instrument itself"). Where contracts are "plain upon their face, they are to be construed as written, and the language used is to be taken in its ordinary significance unless it appears from the context it was not so intended. They are to be construed as a whole." Virginian Ry. Co. v. Hood, 152 Va. 254, 258, 146 S.E. 284, 285 (1929); accord State Farm Mut. Ins. Co. v. Justis, 168 Va. 158, 167, 190 S.E. 163, 167 (1937); J.M. Turner & Co. v Delaney, 211 Va. 168, 172, 176 S.E.2d 422, 425 (1970).

In this case, we revisit the issue that was before us in Pysell and determine whether this particular premarital agreement operates as a waiver of the surviving spouse's rights to property in the decedent's estate. In Pysell, we held that no such waiver existed in the premarital agreement because "nowhere ... do we find a reference to either party's rights in the property of the estate of the other." 263 Va. at 460, 559 S.E.2d at 679 (construing a premarital agreement to apply only while the parties were living). This case is different.

The plain language of the Agreement in this case contains an express waiver of rights to specific property of the decedent upon death. The Agreement sets forth in prefatory language that "[t]he purpose of this Agreement is to settle the rights and obligations of each of them, during their marriage, upon the death of either or both of them, or in case of dissolution of marriage." (Emphasis added.) The explicit reference to rights "upon the death" is precisely the language that was lacking in Pysell.

Furthermore, there is an implicit reference to survivor's rights in paragraph five, which states:

Each party fully understands that, in the absence of this Agreement, the law would confer upon him or her certain property rights and interests in the assets and property owned by the other, and it is the intent of each party, by this Agreement, to relinquish certain of such property rights and interests in such assets as specified herein.

Many property rights may arise by operation of law upon marriage. Lacking any language to the contrary, and considering the stated purpose of the Agreement, we hold that the foregoing language refers to all property rights accrued during the marriage, including a surviving spouse's rights to an elective share, family allowance, and exempt property. The trial court did not err in holding that "[Dowling's] claims to elective share, family allowance and exempt property in Decedent's separate property listed in the appendices of the Premarital Agreement are denied as being barred by the terms of the Premarital Agreement ... executed by Petitioner and Decedent prior to their marriage."³

However, Dowling did not completely waive his survivorship rights by executing the Agreement. Rather, paragraph five limits the waiver to "certain of such property rights and interests in such assets as specified herein." (Emphasis added.) Under paragraph seven, each item of individually owned property is listed in the two appendices of the Agreement. Consequently, the waiver pertains only to a specific list of property. This interpretation is supported by paragraph nine wherein the parties agreed that "[t]he property currently belonging to each party and titled in his or her name shall remain his (her) separate property." This language does not conflict with any other portion of the Agreement. In fact, it appears to accord perfectly with the stated intent in paragraph five to "relinquish" certain rights in the property of the other.

This court is duty bound to construe a contract as a whole, considering every word and every paragraph, if there is a sensible construction that can be given. E.g., State Farm, 168 Va. at 167, 190 S.E. at 167; J.M. Turner & Co., 211 Va. at 172, 176 S.E.2d at 425. Read together, the quoted portions of the Agreement establish that (i) the Agreement applies upon death, (ii) it pertains to certain rights in certain assets specified therein, and (iii) separate property is to remain separate. There is no conflicting language within the four corners of the Agreement.

We agree with the trial court that the Agreement constituted a waiver of rights in the property designated as "separate property" under the Agreement. Accordingly, Dowling's claims to elective share, family allowance, and exempt property cannot be satisfied using any property listed in the appendix to the Agreement.⁴

2. Real property in Peru

At the time of her death, Wilma held a remainder interest in various real properties located in Peru that she acquired by intestate succession. This property is not listed in the...