Estate of Lutz, Matter of

• Citation: 563 N.W.2d 90,1997 ND 82
• Decision Date: 24 April 1997
• Docket Number: No. 960177,960177
• Parties: In The Matter of the ESTATE OF Emanuel LUTZ, Deceased. Lavilla LUTZ, Appellant, v. Ingrid SCHNEIDER and Edward Lutz, co-personal representatives of the Estate of Emanuel Lutz, Appellees. Civil
• Court: United States State Supreme Court of North Dakota

Page 90

563 N.W.2d 90

1997 ND 82

In The Matter of the ESTATE OF Emanuel LUTZ, Deceased.

Lavilla LUTZ, Appellant, v. Ingrid SCHNEIDER and Edward Lutz, co-personal

representatives of the Estate of Emanuel Lutz, Appellees.

Civil No. 960177.

Supreme Court of North Dakota.

April 24, 1997.

Wheeler Wolf, Bismarck, for appellant; argued by Gregory C. Larson.

Zuger, Kirmis & Smith, Bismarck, for appellee Co-representatives Ingrid L. Schneider and Edward J. Lutz; argued by Rebecca S. Thiem.

Tschider & Smith, Bismarck, for appellee Estate; argued by Morris A. Tschider.

MESCHKE, Justice.

¶1 Lavilla Lutz appeals two summary judgments, one dismissing her creditor's claim for her extraordinary services to Emanuel Lutz before his death, and another dismissing her petition for an elective share and exempt allowances from Emanuel's estate. Lavilla also appeals an order approving the distribution of Emanuel's estate. We reverse and remand for trial of Lavilla's claims and for reconsideration of distribution of the estate.

I. Background

¶2 Lavilla and Emanuel met in 1983 when she was age fifty-three and he almost sixty. Lavilla moved into Emanuel's home in 1985. They discussed marriage in 1987. Then, Emanuel said he wanted to leave the bulk of his property to his children and grandchildren, and he told Lavilla a premarital agreement would be needed for their marriage. According to Lavilla, however, Emanuel told her "there would still be something to take care of me anyway," and she expected him to do more than the premarital agreements assured.

¶3 In May of 1987, Emanuel contacted attorney Morris Tschider to prepare a marriage agreement, consents to wills, and wills for Emanuel and Lavilla. Emanuel and Lavilla met with Tschider to discuss the documents, including Lavilla's will, prepared by Tschider. In Tschider's office, Lavilla reviewed a disclosure of financial information identifying Emanuel's assets and obligations.

¶4 Before signing, Lavilla did not consult another attorney about their legal effect. According to Lavilla, she believed Tschider was acting as counsel for both herself and Emanuel. Tschider denies he acted as her attorney, and he asserts he told her to seek independent counsel. Emanuel and Lavilla signed the premarital agreement, consents to will, and wills on February 1, 1988. Emanuel and Lavilla married February 14, 1988.

¶5 When Emanuel had heart trouble in 1991, Lavilla cared for him extensively for two months, and again when Emanuel began suffering from cancer in early 1994. After his cancer surgery in April, Lavilla increased her care, but he gradually recovered enough to take his own medication and dress himself. Lavilla drove Emanuel to Mayo Clinic in August 1994, where doctors said his condition was terminal. After they came home, Emanuel became very weak and begged Lavilla not to move him into a nursing home.

¶6 From then on, Lavilla cared for Emanuel nearly around the clock until he died. Besides ordinary household tasks, her care included bathing and dressing Emanuel, helping him to the bathroom and his favorite chair, bringing him his food, and even feeding him. She took him to the doctor, picked up his prescriptions and, to give him pain medication, got up nearly every two hours each night.

¶7 After nearly ten years together, Emanuel died on November 9, 1994.

II. Decisions Appealed

¶8 In the premarital agreements, Emanuel and Lavilla each waived any share in the other's estate "except as provided in their respective wills." They each specifically waived "all rights of [d]ower, courtesy, community property, homestead, inheritance, succession, surviving spouse or family allowance, exempt property, claims for support, alimony, attorneys' fees, costs of property settlement."

¶9 Emanuel's will gave Lavilla certain property in Article II:

BEQUESTS TO SURVIVING SPOUSE: I give and bequeath to Lavilla [Lutz] the resident property used and occupied by us as a home if I be the owner thereof or have any interest therein at my death for the remainder of her natural life, or until she remarries. I further give and bequeath to Lavilla [Lutz], if she survives me, all furniture and household items and all other tangible personal property located in or used in connection with my home including the family automobile. Any personal property listed in any handwritten instrument prepared by me, as hereinafter set forth, shall be excluded from this bequest. If Lavilla [Lutz] does not survive me all property items bequeathed under this Article shall become part of my residuary estate.

His residuary clause, Article III, directed:

RESIDUARY ESTATE: In the event Lavilla [Lutz] does not survive me, all of the rest and remainder of my property, whether real, personal or mixed, and wheresoever situated, I give, devise and bequeath as follows: to my children, to-wit, Ingrid L. Schneider and Edward J. Lutz, each an equal one-half ( 1/2) interest in and to the residue of my estate.

Emanuel's will named his two children as his personal representatives but, without explanation, his will was silent about disposition of the residue if Lavilla survived him.

¶10 Lavilla filed a creditor's claim in Emanuel's estate for her extraordinary services to him while he suffered from heart disease and cancer. After his children disallowed her claim, Lavilla petitioned the trial court for compensation. His children moved for summary judgment, contending her services were gratuitous and not extraordinary. The trial court granted this motion because there was no evidence of an express agreement to compensate Lavilla for her services, and the court believed evidence about the type and degree of services for an implied agreement was missing.

¶11 Lavilla petitioned for an elective share of Emanuel's estate as his surviving spouse, a family allowance, a homestead allowance, and an exempt property entitlement. The children moved for summary judgment, contending Lavilla had waived all those rights in the premarital agreements. Lavilla argued the premarital agreement was involuntary because she did not have independent legal counsel before signing and she was induced to sign by constructive fraud. She also urged the agreement was unconscionable for "harshness and one-sidedness." The trial court concluded the premarital agreements were legally enforceable waivers of Lavilla's rights and not unconscionable, and granted summary judgment dismissing these claims by Lavilla.

¶12 Later, Emanuel's children petitioned for approval of distribution of the estate, to distribute the household property and a life occupancy of half of Emanuel's duplex home to Lavilla, and to distribute the rest of the estate to themselves and their children. Lavilla objected, contending Emanuel's residuary gift to his children was inoperative because it took effect only if "Lavilla [Lutz] does not survive me." Since the residuary clause was ineffective, Lavilla argued she was entitled to half of the estate through the combined effect of the incomplete will and the intestacy laws.

¶13 The trial court concluded the will was ambiguous because, while the introductory phrase of the residuary clause could be read to vest Lavilla with an intestate share, the court believed that would be inconsistent with what Article II specifically designated Lavilla was to get through the will. Relying on Lavilla's waiver of "all rights of ... inheritance" in the premarital agreements as extrinsic evidence of Emanuel's testamentary intent, the trial court concluded Emanuel had intended to "limit the devise to Lavilla and to provide for his children and grandchildren by devising everything not specified for Lavilla to them." The court approved the children's proposed distribution.

¶14 Lavilla appealed the order for distribution and the two summary judgments. Under our mantra of review in NDRCivP 56, a summary judgment should be approved only when there are no genuine disputes about material facts. Matter of Estate of Otto, 494 N.W.2d 169, 171 (N.D.1992). The litigant moving for summary judgment has the burden of demonstrating no material facts are disputed. Id. In deciding a motion for summary judgment, a court must view the evidence in the light most favorable to the litigant resisting the motion, and give that party the benefit of all favorable factual inferences. Kristianson v. Flying J Oil & Gas, Inc., 553 N.W.2d 186, 188 (N.D.1996). We reverse these summary judgments because we conclude genuine disputes about material facts exist on each claim.

III. Extraordinary Services

¶15 Lavilla contends the trial court erred in dismissing her compensation claim because her care "went beyond the general care one family member would generally provide to another gratuitously." Lavilla argues an implied agreement to compensate arose because her benefits from the marriage did not equal the value of her extraordinary services. She contends Emanuel's estate was enriched by her extensive services because she saved his estate the cost of institutional nursing care.

¶16 The children argue her services were not extraordinary since volunteers and health aides helped her care for Emanuel near the end. The children urge that it is speculative to think the only alternative to Lavilla's care was institutional nursing care. They note Lavilla admitted she had not expected to be paid for her services. They contest any lack of mutuality because Lavilla received many lifetime benefits from the marriage.

¶17 Ordinarily, someone who performs substantial services for another without an express agreement for compensation becomes entitled to the reasonable value of the services. Matter of Estate of Raketti, 340 N.W.2d 894, 901 (N.D.1983). When, however, services are performed by a family member in the same household, it is presumed that the services were gratuitous and that compensation was not intended. Id. Compare NDCC 14-07-05: "Any person after marriage has with respect to ... contracts ... the same...