Estate of Dugger v. Dugger

• Decision Date: 31 July 2003
• Docket Number: No. 25235.,25235.
• Citation: 110 S.W.3d 423
• Parties: ESTATE OF Russel DUGGER, Deceased, Gary Dugger, Brenda Dugger, Randy Dugger and Dan Nelson, Trustee for Jerry Dugger, Appellants, v. Dorothy DUGGER, Marsha Dalton, Evelyn Camby, Cheryl McLatchy and John Miller, as Personal Representative of the Estate of Russel Dugger, Respondents.
• Court: Missouri Court of Appeals

110 S.W.3d 423

ESTATE OF Russel DUGGER, Deceased, Gary Dugger, Brenda Dugger, Randy Dugger and Dan Nelson, Trustee for Jerry Dugger, Appellants, v. Dorothy DUGGER, Marsha Dalton, Evelyn Camby, Cheryl McLatchy and John Miller, as Personal Representative of the Estate of Russel Dugger, Respondents.

No. 25235.

Missouri Court of Appeals, Southern District, Division One.

July 31, 2003.

COPYRIGHT MATERIAL OMITTED

Scott B. Stinson, Mountain Grove, for appellants.

Paul D. Link, Husch & Eppenberger, LLC, Springfield, for respondents.

ROBERT S. BARNEY, Judge.

Central to this appeal are issues involving: (a) the validity of a Beneficiary Deed executed by Russel Dugger, deceased, and his wife, Respondent Dorothy Dugger; and (b) whether, by executing certain purported "estate planning" documents together with the Beneficiary Deed, Russel and Dorothy entered into a valid postnuptial agreement, pursuant to section 474.120, RSMo 1994, by which Dorothy waived her spousal rights of inheritance to a farm owned by Russel.¹

Appellants are children of Russel. At the time of his death on October 7, 2000, Russel was also survived by his wife, Dorothy. Russel and Dorothy had no children in common, but Russel had four children from his first of three marriages, and Dorothy had three children from a former marriage. Dorothy's children are also named Respondents in this action. Dorothy has since remarried.

Prior to their marriage, Russel was seised of 214 acres of land ("the farm") standing in his sole name, and Dorothy was seised of 40 acres of land, which she sold during the course of the marriage. She testified at trial that the proceeds of the sale were deposited into joint accounts with her husband, Russel.

The record reveals that on September 13, 1999, Russel and Dorothy met with a local attorney and discussed creating an estate plan. Russel was then ill with cancer. Exhibits introduced at trial show that Russel and Dorothy jointly executed the following documents on September 17, 1999:(1) Beneficiary Deed; (2) Beneficiary Assignment; and (3) identical Last Wills and Testaments (the "Wills").² Only the Beneficiary Deed sought to make disposition regarding the farm. As best we discern, neither Will referenced the Beneficiary Deed or made disposition relative to the farm. The Beneficiary Assignment explicitly set out that it applied only to personal property.

The Beneficiary Deed is the primary document at issue in this suit. It set out, in pertinent part, the following:

BENEFICIARY DEED

THIS DEED, made this 17th day of September, 1999, wherein Grantors Russel Dugger and Dorothy Dugger, husband and wife, of the County of Wright, State of Missouri, without consideration do by these presents GRANT AND ASSIGN, CONVEY AND CONFIRM unto GRANTEE BENEFICIARIES named as follows: [Respondent children of Russel], the following described Real Estate, situated in the County of Wright, State of Missouri, to-wit:

[Legal description of 214 acres of real estate]

Grantor, Dorothy Dugger, hereby reserves the right of use, occupancy, and benefit of the house and yard so long as she may live.

TO HAVE AND TO HOLD the same together with all rights and appurtenances to the same belonging unto the said Grantee Beneficiaries, their heirs and assigns forever.

THIS BENEFICARY DEED is executed pursuant to the Nonprobate Transfers Law of Missouri, Chapter 461, RSMo. (1989). It is not effective to convey title to the above described real estate until Grantor's death or the death of the last to die of two or more Grantors. This deed is subject to revocation and change in the manner provided by law.

IN WITNESS WHEREOF, Grantors execute this beneficiary deed on the day and year first above written.

[Signatures of Russel Dugger and Dorothy Dugger]

[Acknowledgement and notarial entries]

Shortly after Russel's death it was discovered that the Beneficiary Deed had not been recorded and was still in the possession of the attorney who had prepared the instrument. The record shows that the recording fee had been collected at the attorney's office. The attorney's secretary testified, however, that on the Monday morning following the signing of the Beneficiary Deed, she received a phone call from a man who identified himself as Russel Dugger and that he told her, "I was in there last week and signed a deed. Tell [the attorney] not to record that deed until I get back with him." The attorney's secretary also testified that she was not certain that the voice she heard was that of Russel and that she had no further contacts concerning the deed until after Russel's death, when she eventually turned the deed over to Dorothy.

Subsequently, Appellants filed their second amended petition in four counts seeking: (I) a declaration that the Beneficiary Deed was valid between the parties; alternatively monetary damages; (II) a declaration that Dorothy had executed a valid waiver of her inheritance rights to the real estate "pursuant to § 474.120 RSMo"; (III) a judicial construction of Russel's Will; and (IV) a reformation of the Beneficiary Deed.

The trial court entered judgment in favor of Respondents on Counts I and II and in favor of Appellants on Counts III and IV. The trial court further ordered, adjudged and decreed, in pertinent part, that Russel "died intestate with respect to the 214 acre farm;" and that Dorothy was "entitled to one-half of the intestate estate that is the 214 acre farm as the surviving spouse pursuant to § 474.010 RSMo." This appeal followed.

In their sole Point Relied On, Appellants premise their appeal on the trial court's denial of their second count, based on Appellants' contention that the collective effect of Dorothy and Russel having signed a Beneficiary Deed, a Beneficiary Assignment, and mutual Wills constituted a postnuptial contract pursuant to section 474.120, by which Dorothy waived and renounced her inheritance rights to the farm. They also argue that in either event, the Beneficiary Deed alone constituted a written contract, under the terms of which Dorothy had waived her inheritance rights by agreeing that Russel's farm would not pass through probate and that his children would receive the farm at his death.³

We review both arguments together because the issues are intertwined. Central to our discussion is the Beneficiary Deed executed by Russel and Dorothy on September 17, 1999.

The trial court's rulings as to Counts I, III, and IV are not disputed in this appeal. The trial court ruled, and all parties concede, that the beneficiary deed in question was not effective to pass title⁴ at Russel's death because it was not recorded, as required by section 461.025.1, RSMo Cum. Supp.1999.⁵

"On review, we determine whether the judgment is supported by substantial evidence and is not against the weight of the evidence, and whether the court erroneously declared or applied the law." Estate of Tegeler, 688 S.W.2d 794, 796 (Mo.App.1985); see also Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976); Lehr v. Collier, 909 S.W.2d 717, 719 (Mo.App. 1995). "[W]e view the evidence and the concomitant inferences in a manner favorable to the prevailing party while disregarding all contradictory evidence." Wood v. Wood, 2 S.W.3d 134, 138 (Mo.App.1999).

We observe that "[t]he overarching principle in operation in construing the General Assembly's statutes is that the legislature's intent must prevail, and that intent is discerned from the plain and ordinary meaning of the statute's language." Groh v. Ballard, 965 S.W.2d 872, 873 (Mo. App.1998). The plain and ordinary language of section 461.025.1, RSMo Cum. Supp.1999 is clear:

A deed that conveys an interest in real property to a grantee designated by the owner, that expressly states that the deed is not to take effect until the death of the owner, transfers the interest provided to the designated grantee beneficiary, effective on death of the owner, if the deed is executed and filed of record with the recorder of deeds in the city or county or countries in which the real property is situated prior to the death of the owner.

"The requirement that the [beneficiary] deed be recorded before death is the formality that takes the place of the delivery requirement." JACKSON AND EICKHOFF, JR., II MO. TRUSTS, POWERS OF ATTORNEY, CUSTODIANSHIPS, AND NONPROBATE MATTERS § 13.37(MoBar 1998, 2001).⁶

"The General Assembly created beneficiary deeds in § 461.025 ... and governs their use in Chapter 461 of its revised statutes." Groh, 965 S.W.2d at 873. "It has mandated in § 461.062.1, RSMo [Cum.Supp.1999] that: `The rights and obligations of the owner, beneficiary and transferring entity [in nonprobate transfers] shall be governed by the nonprobate law of Missouri.'" Id. (second alteration in original). As with other deeds, to be recorded the beneficiary deed must conform to the provisions of sections 442.130, RSMo 1994 and 59.330, RSMo 1994. Pursuant to "461.033.6, RSMo 1994 any transfer of the property during the owner's lifetime terminates the beneficiary's interest in the property." Id. at 873 n. 1. Indeed, section 461.031.1, RSMo 1994 provides that: "Prior to the death of the owner, a beneficiary shall have no rights in the property by reason of the beneficiary designation and the signature or agreement of the beneficiary shall not be required for any transaction respecting the property."

The questions for our determination are: (1) did the unrecorded Beneficiary Deed that Dorothy signed, which in fact and law was a nullity, constitute a written postnuptial contract that waived her spousal rights of inheritance as to the farm? (2) Did the execution by Dorothy and Russel of the Beneficiary Deed, separate but similar Wills, and joint beneficiary assignments at the same time constitute a postnuptial agreement pursuant to section 474.120 by which Dorothy renounced her inheritance rights to the farm? We answer both questions in the negative.

Section 474.120, RSMo 1994 sets out that:

The rights of...