Downes v. Downes

• Decision Date: 13 September 2004
• Docket Number: No. 1697,1697
• Citation: 158 Md. App. 598,857 A.2d 1155
• Parties: Shirley L. DOWNES v. Gregory DOWNES.
• Court: Court of Special Appeals of Maryland

857 A.2d 1155

158 Md. App. 598

Shirley L. DOWNES v. Gregory DOWNES.

No. 1697, Sept. Term, 2003.

Court of Special Appeals of Maryland.

September 13, 2004.

Richard J. Magid, Christopher B. Lord (Whiteford, Taylor & Preston, LLP on the brief), Baltimore, for Appellant.

Charles W. Collett, Easton, for Appellee.

Panel: KENNEY, BARBERA, and WILLIAM W. WENNER (Retired, specially assigned), JJ.

BARBERA, Judge.

Appellant, Shirley L. Downes, filed this appeal after the Circuit Court for Talbot County, on appeal from the orphans' court, denied her motion to grant a fifth petition for extension of time to file an election to take a statutory share of her deceased husband's estate. The court determined that it did not have the discretion to grant the petition after the preceding extension period had expired, and dismissed the appeal.

Appellant challenges that judgment before us. For the reasons that follow, we affirm.

FACTS AND LEGAL PROCEEDINGS

Appellant's husband, Eldridge Downes, IV, ("decedent") died testate on October 23, 1997. The decedent was also survived by a son from a previous marriage, Gregory Downes, appellee.

In his last will and testament, the decedent bequeathed to appellant all of his personal property and a marital trust. The trust was to be funded by any assets that exceeded the credit shelter equivalent amount, i.e., all sums exceeding $600,000.00, which, in 1997, was the amount a testator could pass to other beneficiaries free from federal tax. The amount of appellant's inheritance, therefore, depended on the net value of the decedent's estate.

The credit shelter equivalent amount was bequeathed to a residuary trust for the benefit of the decedent's parents and descendants. At the time of the decedent's death, appellee was the sole living beneficiary of the residuary trust.

Appellant was named as personal representative of the estate. She had difficulty ascertaining the value of the decedent's estate due to several unresolved claims against the estate and disputes over the decedent's ownership interests in three businesses.

The problems encountered by appellant in valuing the estate prompted her to seek to extend the period within which she could elect to renounce the will and take what is known as the "statutory" or "elective" share of the estate, i.e., a one-third share of the decedent's estate if, as in this case, the decedent also has a surviving child. See Maryland Code (1974, 2001 Repl.Vol.), § 3-203(a) of the Estates and Trusts Article ("ET").¹

Extensions of time to elect the statutory share are authorized by ET § 3-206(a), which at the relevant time provided:

In general; extension. — The election by a surviving spouse to take an elective share shall be made not later than seven months after the date of the first appointment of a personal representative under a will. The court may extend the time for election, before its expiration, for a period not to exceed three months at a time, upon notice given to the personal representative and for good cause shown.[²]

Appellant filed five petitions for extension of time. The first four of these were timely filed and were granted by the orphans' court.

The election period under the fourth petition expired on June 2, 1999. Twenty-two days later, appellant filed a "Fifth Petition for Extension of Time to File Election to Take a Statutory Share" ("fifth petition"). The orphans' court denied the fifth petition as having been filed late. Appellant filed a motion to reconsider the denial of the petition, arguing that she had substantially complied with the statutory deadline. By order entered on September 28, 1999, the orphans' court denied the motion to reconsider. In a separate opinion, the orphans' court rejected appellant's substantial compliance argument, explaining that it lacked the authority to grant the petition because it was filed after the expiration of the preceding extension period.³

Eventually, through litigation and other means, the estate's financial affairs were resolved and its net worth was determined to be approximately $1,000,000.00. Consequently, about a year and a half after the orphans' court denied the fifth petition, appellant filed the fifth and final administration account of the decedent's estate.

The orphans' court approved the final account on February 13, 2001. The court determined that appellant was entitled to take under the will only the personal property, which was valued at $66,155.00.

Appellant filed an appeal in circuit court.⁴ She challenged the orphans' court's denial of the fifth petition. She also filed in the circuit court a "Motion to Grant the Fifth Petition for Extension of Time to File Election to Take a Statutory Share."

Appellee filed a motion to intervene, which the court granted. Appellee also filed a motion to dismiss the appeal on the ground that the appeal was late because the orphans' court's denial of appellant's motion for extension of time and motion for reconsideration were appealable orders. The circuit court agreed that appellant's appeal was untimely and dismissed it.

Appellant appealed to this Court, and we reversed in an unreported opinion, Downes v. Downes, No. 2162, September Term, 2001, 148 Md.App. 715 (filed November 14, 2002), cert. denied, 373 Md. 407, 818 A.2d 1106 (2003). We held that the orphans' court's orders denying appellant's fifth petition and subsequent motion to reconsider were not immediately appealable. We explained that appellant's claim was not resolved until the orphans' court approved the fifth and final administration account on February 13, 2001, and only then did the claim become final, and thus appealable. Slip op. at 14. Consequently, we remanded the case to the circuit court for further proceedings. Id. at 16.

The parties appeared for a hearing in the circuit court on August 29, 2003, to address appellant's motion to grant the fifth petition. Appellant argued that the court had the equitable discretion to "extend the time to permit the filing even though it is technically late."

After hearing argument, the court rendered its decision:

[T]he question therefore boils down to, is this Court bound by the dictates of Section 3-206 of the Estates and Trust Article and does that section require that the Petition for Extension be made prior to the expiration of the latest period for making the election? The Court finds that this Court is bound by that law. And that the election, the Court could only extend the time for election if before the expiration of the period the petition was filed seeking to have it extended for an additional three months.

The court added:

This, [appellant's counsel] says, is a harsh law and maybe that's true. But this Court feels that if that law should be changed, as perhaps it should be to provide that an extension can be granted until the filing of the final administration account, that is a change that should be made by the legislature and not the judicial branch[,] [w]hich should not rewrite clear and unambiguous laws. The law in this case Section 3-206(a) seems clear and unambiguous to this Judge. But that notice had to be given and good cause shown prior to the expiration of the previous extension. Accordingly the Court will decline to extend the time. And we'll find that [appellant] gave up or lost her right to elect by failing to file that motion within the time set by the statute.

The court thereafter entered an order denying appellant's motion to grant the fifth petition for the reasons stated in its oral ruling.

This appeal followed.

DISCUSSION

I.

Appellant argues that the circuit court committed legal error in denying her fifth petition to extend the time to elect the statutory share of the decedent's estate. Appellant states the issue before us as whether

[t]he Orphans' Court (or the Circuit Court when it is hearing a de novo appeal) has discretion to extend the deadline to accept a petition for an extension of time in which to make an election to take a statutory share when the petition was filed after the expiration of the previous period.

We note preliminarily that our review is limited to whether the circuit court correctly concluded that it did not have the discretion to enlarge the election period beyond the statutorily prescribed extension period. We therefore do not reach the parties' arguments concerning whether, assuming the court did have such discretion, it was an abuse of discretion not to grant the petition.

II.

At the heart of this appeal is the proper construction of ET § 3-206(a), which, as we have said, provided at the time relevant to this case that "the court may extend the time for election, before its expiration, for a period not to exceed three months at a time, upon notice given to the personal representative and for good cause shown." Neither the Court of Appeals nor this Court has construed this provision, although the Court of Appeals construed an earlier version of it in Barrett v. Clark, 189 Md. 116, 54 A.2d 128 (1947). We therefore shall discuss that case at some length here.

At the time Barrett was decided, the then-governing law precluded any extension of the statutory share election period by surviving spouses. The operative section of the statute provided that the period of renunciation was thirty days after expiration of the notice to creditors. It read:

A surviving husband or widow shall be barred of his or her right of dower in land or share in land or share in the personal estate by any such devise or bequest, unless within thirty (30) days after the expiration of the notice to creditors in the wife's or husband's estate, as the case may be, he or she shall deliver or transmit to the Court or Register of Wills where administration has been granted a written renunciation in substantially the following form or to the following effect....

Md.Code Ann. (1943), art. 93, § 314.

A separate section of the statute created an exception to that rule for infant spouses...