Estate of Irvine v. Erik
Decision Date | 17 September 2013 |
Docket Number | No. DA 12–0603.,DA 12–0603. |
Citation | 372 Mont. 49,309 P.3d 986 |
Parties | The ESTATE of Va Va IRVINE, Petitioner and Appellant, v. Erik & Debbie OAAS, Co–Personal Representatives of The Estate of John Winkley Irvine, Jr., Respondents & Appellees, and Michael Dodge, Interested Party and Appellee, and Shodair Crippled Children's Hospital, Interested Party and Appellee. |
Court | Montana Supreme Court |
OPINION TEXT STARTS HERE
For Appellant: Justin Starin; McKenna & Starin, PLLC, Missoula, Montana Mary Kay Starin; Mary Kay Starin, PC, Butte, Montana.
For Appellees: Jeffrey W. Dahood; Bernard J. “Ben” Everett; Knight, Dahood, Everett & Sievers, Anaconda, Montana (Attorneys for Erik and Debbie Oaas), Robert J. Whelan, Frank J. Joseph, Butte, Montana (Attorneys for Interested Party Michael Dodge), John F. Sullivan; Kate McGrath Ellis; Hughes, Kellner, Sullivan & Alke, PLLP, Helena, Montana (Attorneys for Interested Party Shodair Crippled Children's Hospital).
[372 Mont. 50]¶ 1 The Estate of Va Va Irvine appeals from an order of the Second Judicial District Court, Silver Bow County, that granted summary judgment to Michael Dodge. We affirm.
¶ 2 We restate the dispositive issues on appeal:
¶ 3 Issue One: Whether the District Court correctly determined that the contracts could not be reformed.
¶ 4 Issue Two: Whether the District Court correctly determined that proceeds from the decedent's investment accounts were properly paid to his estate.
¶ 5 John Winkley Irvine, Jr. (John) married Deana Dodge (Deana) in 1979. When they got married, Deana had a son, Michael Dodge (Dodge), from a prior marriage. John had no other children. John and Deana executed wills in 1983 that included Dodge as a beneficiary. Many years later, John executed a number of written beneficiary designations for various investment accounts that he owned.
¶ 6 Three of John's accounts are relevant to the case at bar, a Hartford Director Annuity (Hartford Account), a Pacific Life Individual Retirement Account (Pacific Life Account), and a Northwestern Energy Retirement Account (Northwestern Account). John executed the written beneficiary designations for each of the accounts between 2003 and 2006. For the Hartford Account and Pacific Life Account, John named Deana as the primary beneficiary and the “estate of the annuitant” as the contingent beneficiary. John also listed Deana as the primary beneficiary for the Northwestern Account, but he did not name a contingent beneficiary for that account.
¶ 7 Deana died in August of 2008. Ten months later, John died on June 30, 2009. Upon John's death, the proceeds from all three accounts were paid to his estate. In 2011, we affirmed the validity of John's 1983 will in an unpublished opinion. See In re Est. of Irvine, 2011 MT 37N, 360 Mont. 545, 264 P.3d 127 (Table). John's mother, Va Va Irvine (Va Va), has since sought a declaratory judgment that she is the sole beneficiary of all three accounts, which Dodge has opposed.1 After conducting discovery, Va Va and Dodge both filed summary judgment motions.
¶ 8 Va Va argued that John had intended for her to be the contingent beneficiary for all three accounts. To support her contention, Va Va offered testimony from John's financial planner, Steven Daniel (Daniel). In a deposition on July 13, 2011, Daniel testified that he had helped John execute beneficiary designation forms for a number of accounts, including the Hartford Account and the Pacific Life Account. According to Daniel, John had told him that he wanted the proceeds of his accounts to pass to Deana or, if Deana died before he did, to Va Va or his brother, William. Daniel claimed that John clearly told him that he did not want Dodge to receive the proceeds of the accounts.
¶ 9 Daniel testified that he had asked John multiple times if he had a will. According to Daniel, John told him that he did not. Because Daniel did not know about John's 1983 will, Daniel advised John that if he designated his estate as the contingent beneficiary and Deana died before he did, then, under the laws of intestacy, the proceeds of his accounts would pass first to Va Va and then to William. Daniel testified that he had filled out the forms for John that designated John's estate as his contingent beneficiary and had watched him sign them.
¶ 10 Va Va argued to the District Court that Daniel's testimony proves that John had intended to benefit his estate under the laws of intestacy, not under the terms of his 1983 will, if Deana died before him. Because John thought that Va Va would inherit the proceeds through his estate under the laws of intestacy, Va Va argued that the court should determine that she is John's contingent beneficiary to fulfill John's intent. Va Va also argued that Daniel's testimony established John's intent regarding the Northwestern Account even though Daniel had not helped John with that account and John had not designated a contingent beneficiary. Alternatively, Va Va argued that the written contracts should be reformed for mutual mistake due to Daniel's erroneous belief that John did not have a will when he executed the beneficiary designation forms.
¶ 11 The District Court held a joint hearing on Va Va's and Dodge's competing motions for summary judgment on August 29, 2012. In an order issued on October 2, 2012, the District Court concluded that Dodge was entitled to summary judgment under the contract terms and that no legal basis exists to require reformation of the contested contracts. Va Va appeals from that order.
¶ 12 We review de novo a district court's rulings on motions for summary judgment. Parish v. Morris, 2012 MT 116, ¶ 10, 365 Mont. 171, 278 P.3d 1015. Summary judgment is appropriate only when there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. M.R. Civ. P. 56; Turner v. Wells Fargo Bank, N.A., 2012 MT 213, ¶ 11, 366 Mont. 285, 291 P.3d 1082. Summary judgment is not appropriate where there is a genuine dispute over facts that could affect the outcome of the suit under the substantive law governing the cause of action. Broadwater Dev., L.L.C. v. Nelson, 2009 MT 317, ¶ 15, 352 Mont. 401, 219 P.3d 492. If a reasonable fact-finder could return a verdict for the non-moving party, there is a genuine dispute precluding summary judgment. Broadwater, ¶ 15. All reasonable inferences must be drawn in favor of the non-moving party. Hopkins v.Super. Metal Workings Sys., L.L.C., 2009 MT 48, ¶ 5, 349 Mont. 292, 203 P.3d 803.
¶ 13 Issue One: Whether the District Court correctly determined that the contracts could not be reformed.
¶ 14 A court's equitable power to reform a contract is codified at § 28–2–1611, MCA. When a written contract does not express the intention of the parties due to fraud, mutual mistake, or a mistake by one of the parties that the other party knew of or suspected, the contract may be revised to reflect their true intention. Section 28–2–1611, MCA; E.H. Oftedal & Sons, Inc. v. State, 2002 MT 1, ¶ 47, 308 Mont. 50, 40 P.3d 349. A court is not limited only to correcting errors in the language of the instrument, but may inquire into the intended meaning and effect of the instrument. Section 28–2–1613, MCA. The mutual intent of the parties serves as the standard from which the instrument may be reformed. Sullivan v. Marsh, 124 Mont. 415, 422, 225 P.2d 868, 872 (1950). A court may not, therefore, create a “ ‘new and different’ ” contract or make “ ‘significant additions.’ ” Rogers v. Relyea, 184 Mont. 1, 10, 601 P.2d 37, 42 (1979) (quoting Sullivan, 124 Mont. at 422, 225 P.2d at 872).
¶ 15 While the mutual intent of the parties is the appropriate standard by which a contract may be reformed, a donative instrument is by its nature unilateral, and its terms depend only on the intent of the donor. Laundreville v. Mero, 86 Mont. 43, 56, 281 P. 749, 752 (1929) ( ). The Restatement (Third) of Property: Wills and Other Donative Transfers allows for the reformation of donative documents to correct unilateral mistakes by the donor:
A donative document, though unambiguous, may be reformed to conform the text to the donor's intention if it is established by clear and convincing evidence (1) that a mistake of fact or law, whether in expression or inducement, affected specific terms of the document; and (2) what the donor's intention was. In determining whether these elements have been established by clear and convincing evidence, direct evidence of intention contradicting the plain meaning of the text as well as other evidence of intention may be considered.
Restatement (Third) of Property: Wills and Other Donative Transfers § 12.1 (2003). Life insurance contracts are specifically included among those donative instruments that may be reformed even after the death of the donor. Restatement (Third) of Property: Wills and Other Donative Transfers § 12.1 cmt. c. Notably, Montana has recently adopted § 415 of the Uniform Trust Code, which copies § 12.1 of the Restatement and allows for reformation of trusts based on clear and convincing evidence of mistake by the settlor. Section 72–38–415, MCA; Unif. Trust Code § 415 cmt. (2011). Other jurisdictions have relied on the Restatement to allow the reformation of donative instruments including trusts and deeds. Pullum v. Pullum, 58 So.3d 752, 759 (Ala.2010) ( ); Magnuson v. Diekmann, 689 N.W.2d 272, 274–75 (Minn.App.2004) ( ); Clairmont v. Larson, 831 N.W.2d 388, 394 (N.D.2013) ( ); Generaux v. Dobyns, 205 Or.App. 183, 134 P.3d 983, 989–90 (2006) (...
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