Estate of Hull v. Williams

• Decision Date: 30 November 1994
• Docket Number: No. 21039,21039
• Citation: 126 Idaho 437,885 P.2d 1153
• Parties: ESTATE OF William R. HULL and Dorothea B. Hull, Plaintiffs-Appellants, v. Glen WILLIAMS, Defendant-Respondent.
• Court: Idaho Court of Appeals

Page 1153

885 P.2d 1153

126 Idaho 437

ESTATE OF William R. HULL and Dorothea B. Hull, Plaintiffs-Appellants, v.Glen WILLIAMS, Defendant-Respondent.

No. 21039.

Court of Appeals of Idaho.

Nov. 30, 1994.

Peterson Law Office, Lewiston, for appellants.

Ricks & Ramey, Boise, for respondent.

LANSING, Judge.

Dorothea Hull(Dorothea), wife of the decedent, William R. Hull(William), brought this action in her individual capacity and as personal representative of William's estate.She alleged that shortly before William's death, she and William transferred certain community property to William's son, Glen Williams(Glen), with the intent to create a trust to benefit the grandchildren of Dorothea and William.Dorothea acknowledges that the intended oral trust failed for lack of specificity of terms, but contends that the transferred property is consequently impressed with a resulting trust in her favor and that Glen is obligated to return the property to her.Following a court trial, the district court found that the property in question was the separate property of William, that he made an inter vivos gift of the property to Glen, and that Dorothea has no interest in the property.Because we conclude that the district court erred in its findings of fact and application of law, we vacate the judgment and remand for further proceedings.

I.FACTS AND PROCEDURAL BACKGROUND

William, then age 78, and Dorothea, then age 73, were married in 1983.This was William's fourth marriage and Dorothea's second.The marriage lasted for more than eight years and ended on William's death at the age of 86.William did not leave a will, and Dorothea was his primary heir by intestacy.

William also had a son, Glen, whom he had abandoned as an infant during the Depression.William and Glen had become reacquainted in 1967 and subsequently maintained close contact.William often telephoned Glen, who resided in California, and Glen visited William at various times at William's home in Lewiston, Idaho.On two occasions in early 1992, just prior to William's death, William and Dorothea transferred certain assets to Glen.Dorothea contends that these transfers were made to Glen with the intent that an educational trust be established for the benefit of William's and Dorothea's thirty-five grandchildren and great-grandchildren.She also contends that the primary reason for transferring the assets at that time was to shield them from potential claims of health care providers because William was gravely ill.Glen disavows any knowledge of an intent to create a trust and contends that William gave him the assets as an outright gift.

After William's death, Dorothea wrote to Glen inquiring about the alleged trust and how it was being managed.Glen did not answer this letter.Dorothea wrote again, sending the letter by certified mail, but it was not accepted.Dorothea testified that she also telephoned Glen to ask how the trust was being managed, but did not receive a satisfactory response.

Dorothea eventually consulted an attorney who filed the present action seeking to enforce the terms of the trust or in the alternative to compel return of the assets to Dorothea.Following a court trial, the district court found that Dorothea had failed to prove that a trust was created.Although the district court found that Dorothea was being truthful in her statements in court, the court also found that the transferred assets were William's separate property and that William had intended to give the assets to Glen as an outright gift.The court therefore granted a judgment in favor of Glen from which Dorothea appeals.

The issues before this court are, 1) whether the district court erred in characterizing the property at issue as William's separate property; and 2) whether the district court erred in not imposing a resulting trust upon the property at issue for the benefit of William's estate and Dorothea.

II.STANDARD OF REVIEW

Where a trial court sits as a finder of fact without a jury the court is required to enter findings of fact and conclusions of law.I.R.C.P. 52(a).Our review of the trial court's decision is limited to ascertaining whether substantial, competent evidence supports the findings of fact, and whether the trial court correctly applied the law to the facts as found.I.R.C.P. 52(a);Cummings v. Cummings, 115 Idaho 186, 188, 765 P.2d 697, 699(Ct.App.1988);Bischoff v. Quong-Watkins Properties, 113 Idaho 826, 828, 748 P.2d 410, 412(Ct.App.1987).The task of weighing evidence and finding facts is within the province of the trial court, and we give due regard to the trial court's opportunity to judge the credibility of witnesses.Rueth v. State, 103 Idaho 74, 77, 644 P.2d 1333, 1336(1982);Javernick v. Smith, 101 Idaho 104, 609 P.2d 171(1980);Roemer v. Green Pastures Farms, Inc., 97 Idaho 591, 548 P.2d 857(1976).We will not set aside the trial court's findings if they are supported by substantial, competent evidence.Rueth, 103 Idaho at 77, 644 P.2d at 1336(1982).

III.ANALYSIS

A.COMMUNITY PROPERTY ISSUES

In this casethe parties present differing perceptions of the transfers to Glen.Correct resolution of this dispute turns upon the intent of the owner or owners of the property who made the transfers.It is thus necessary to determine at the outset who owned the assets in order to ascertain whose intent is relevant.

If an asset is community property it cannot be given away without the consent of both marital partners.Koenig v. Bishop, 90 Idaho 182, 186, 409 P.2d 102, 103(1965);Anderson v. Idaho Mutual Benefit Association, 77 Idaho 373, 292 P.2d 760(1956).Therefore, if the transferred assets were property of the marital community, both Dorothea's and William's intent is relevant.On the other hand, if the property at issue was William's separate property, William's intent alone determines whether a gift or a transfer in trust occurred.

An asset's character as community or separate property depends upon the date of its acquisition and the source from which it was acquired.All property of either the husband or the wife owned by him or her before marriage, that acquired afterward by gift, bequest, devise or descent, and that acquired with proceeds of separate property is separate property.I.C. § 32-903.All property that is otherwise acquired after marriage by either the husband or wife is community property.I.C. § 32-906.Income generated from separate property is community property.Id.Under the so-called "source doctrine," an asset that is acquired as or with the proceeds of separate property becomes separate property, and if community property is used to acquire the asset, the asset becomes community property.I.C. § 32-903;W.J. Brockelbank, THE COMMUNITY PROPERTY LAW OF IDAHO, § 3.2 at 122(1962).

All property acquired during the course of a marriage is presumed to be community property.Shumway v. Shumway, 106 Idaho 415, 420, 679 P.2d 1133, 1138(1984);Stanger v. Stanger, 98 Idaho 725, 727, 571 P.2d 1126, 1128(1977).This presumption places the burden of persuasion on the party contending that certain assets are owned separately by one spouse.That party must prove "with reasonable certainty and particularity" that the property is separate.Houska v. Houska, 95 Idaho 568, 570, 512 P.2d 1317, 1319(1973);Stahl v. Stahl, 91 Idaho 794, 797, 430 P.2d 685, 688(1967).This may be done by establishing that the property was acquired by one spouse prior to the marriage, by tracing the funds used to acquire the asset to a separate property source, or by showing that the property was acquired by gift, bequest or devise during the marriage.I.C. § 32-903;Cummings, 115 Idaho at 190, 765 P.2d at 701;Shumway, 106 Idaho at 420, 679 P.2d at 1138.Where the source of an asset is unknown or unprovable, by application of the community property presumption the asset is deemed community property even though no evidence exists as to its community nature.Brockelbank, supra, § 3.5.1at 136.

In the case before us, Dorothea testified that before their marriage William owned a mobile home which he later sold for $3,500, some unidentified stocks and a checking and savings account at West One bank with unknown balances.She also said that William had told her at the time of their marriage that he was "in pretty poor financial condition" because of medical expenses incurred during his previous wife's three-year illness.Dorothea owned a mobile home in which the couple resided, a used car and a modest bank account at West One.

Both Dorothea and William had income from Social Security and retirement benefits throughout their marriage.At times during the marriage William also had earnings from employment selling materials by telephone for a construction company.After getting married, Dorothea and William did not combine their respective bank accounts; they continued to maintain their individual checking accounts into which were deposited their respective Social Security and retirement benefits and William's earnings.Both spouses' names were placed on each of the accounts, however, and either spouse was authorized to sign checks on the accounts.

The assets at issue here are funds that were held in an account known as the "Dreyfuss account" and transferred to Glen by five separate checks, and assets that had been kept in a safe-deposit box, including ten gold coins, stock certificates for approximately eight hundred shares of utility stocks, ten or twelve rolls of silver dimes, and some miscellaneous silver coins.On review of the trial court's finding that these assets were entirely William's separate property, our focus is upon any evidence indicating the date or source of acquisition of these items.

The Dreyfuss account was used by William for stock market investments and apparently included proceeds from his investments.The account was maintained under both spouses' names.The evidence is indefinite as to the date when...