Estate of Shaw v. McKown

• Decision Date: 10 April 2007
• Docket Number: No. WD 66590.,WD 66590.
• Citation: Estate of Shaw v. McKown, 222 S.W.3d 289 (Mo. App. 2007)
• Parties: In the ESTATE OF Pauline SHAW, Deceased, Wesley F. Troutt, Respondent, v. James and Donna McKOWN, Appellants.
• Court: Missouri Court of Appeals

222 S.W.3d 289

In the ESTATE OF Pauline SHAW, Deceased, Wesley F. Troutt, Respondent, v. James and Donna McKOWN, Appellants.

No. WD 66590.

Missouri Court of Appeals, Western District.

April 10, 2007.

Motion for Rehearing and/or Transfer to Supreme Court Denied May 29, 2007.

Kenneth C. Hensley, Raymore, for Appellants.

Dale A. Norris, Raymore, for Respondent.

Before LOWENSTEIN, P.J., SPINDEN and NEWTON, JJ.

HAROLD L. LOWENSTEIN, Judge.

James and Donna McKown ("the McKowns") appeal from the judgment of the Circuit Court of Clinton County, Probate Division, denying their motion under Section 473.803¹ for repayment of expenditures they made for repairs on property devised to them under the will of decedent Pauline Shaw. The primary question is whether the Independent Personal Representative of the estate took possession of the real estate and was, therefore, obligated pursuant to Section 473.803 to pay for expenses incurred by the appellants for repairs and improvements to a house and other property where appellants actually lived and farmed.

I. FACTS

A. OVERVIEW

Mrs. Shaw owned 320 acres in Clinton County on which the McKowns ran a cattle operation. Mrs. Shaw lived in a house ("the main house") on one acre of the total tract (hereinafter the "Clinton property"). The McKowns leased the remaining 319 acres and lived in a second house ("the tenant house") on the property. The McKowns did not pay rent for the tenant house, but, rather, helped Mrs. Shaw keep her property mowed and ran errands for her. They were obligated to pay rent on the acreage they farmed.

Mrs. Shaw died in July 2003 and devised all 320 acres, the two houses, and various farm buildings to the McKowns. Under the will, the McKowns also received personal property worth $46,000, including the decedent's car, household goods, coins and jewelry, and lawn and garden equipment. The real property was valued somewhere between $925,000 and $1,000,000.² The remaining estate assets, including real estate in Holt County, as well as stocks and bonds inventoried at $1,400,000, were bequeathed to the Shriner's Hospital for Children and the St. Jude Children's Research Hospital.

Two days after Mrs. Shaw died, the independent personal representative of her estate, Wesley Troutt ("the Independent Personal Representative" or "IPR"), contacted the McKowns and informed them of the devise. He told them that the Clinton property "was theirs to do with as they saw fit," and they "could move in or remodel the [main] house." A potential claim arising from the Holt County real estate, and unrelated to the Clinton property, required that the estate remain open indefinitely. The Clinton property, or some part thereof, might have been required to defray the costs of estate administration, to pay for federal or state estate tax liabilities, or to pay possible estate obligations arising from the pending litigation in Holt County.

Although not required under the will or by law, the Independent Personal Representative agreed to maintain insurance and pay property and personal taxes and utilities on the Clinton property during probate of Mrs. Shaw's will. At the date of Mrs. Shaw's death, the McKowns were already in possession of the keys to the main house as well as the home and buildings they had been renting. At all times during the estate administration, the McKowns lived and operated their business on the property. The McKowns proceeded to repair and remodel the portions of all property (as outlined in the attached time line).³

In September 2004, the IPR informed the McKowns by letter that the property was transferred to them from the estate of Pauline Shaw and that the estate would no longer pay the utilities, taxes, or insurance on the property. In January 2005, the McKowns made the present claims for re-imbursement against the estate totaling $44,458 for repairs to the property. They also demanded the insurance proceeds arising from damage to the property after a storm in 2004. The McKowns received a deed to the property in February 2005.

B. ITEMIZED CLAIMS

Shortly after the McKowns took possession of the Shaw residence, appellant Donna McKown approached the Independent Personal Representative to ask the estate to pay for repair of the Spanish tile roof on the main house. The roof had been leaking for years but the only damage was a small water stain on the ceiling of a room; the roof sheathing and rafters were not affected. The estate declined to pay for the roof work. Instead of approaching the probate court to ask for a determination whether the estate should be required to pay for repairs to the roof, the McKowns proceeded to replace the roof at a cost of $29,932.00. The McKowns did not consult the estate further. The replacement roof was expected to last another 65 years.

The McKowns contracted for bulldozer work to several earthen dams on ponds in the pastures on the property in September 2003. The McKowns did not approach the Independent Personal Representative about the repairs, did not ask that the estate to pay for the work, or advise the IPR after the work was completed. The ponds were on the acreage the McKowns had rented from Mrs. Shaw and had been in the hands of the McKowns for a number of years. The record does not indicate that the ponds were in danger of imminent failure at the time of the dam work. The McKowns claimed that the condition of the ponds made them unsuitable for cattle. The total cost of the dam work was $4,680.00.

The McKowns replaced a backflow prevention valve that had broken sometime during the winter of 2003. They argued that the repair was necessary as the house is connected to both a well and the rural water supply. The record is unclear whether the valve is the only repair in the line item for $400.00 denominated "Plumbing repairs." The McKowns also claimed $1,600.00 for "Repair to heating system."

In November 2004, two months after the IPR informed the McKowns that the estate would no longer pay the taxes, utilities, or insurance for the property, the McKowns obtained an estimate to have the property around the main house regraded. The work had not been done at the time of the trial but the McKowns argued that the regrading was reasonably required for preserving the estate property. The McKowns submitted an estimate for $4,935.00 for regrading and $1,411.00 for replacement of cabinets and floors damaged by water.

The McKowns also claimed insurance proceeds for damage done by a May 2004 storm. A section of fence and some farm buildings were damaged by the storm. The insurance adjuster estimated the cost of repairing a twenty-foot section of fence and two gates at $750. The total insurance proceeds of $2,155.36 included compensation for damage to the outbuildings and the tenant house. The McKowns submitted bills for: (1) replacing 224 feet of fence with a heavier gauge wire and three gates at a total cost of $1,618.00; and (2) repairing of cracks in the tenant home basement that were existing at the time of Mrs. Shaw's death at a cost of $1,500.⁴

In addition to the insurance proceeds, the McKowns' claims totaled $44,458. The claims include both completed work for which they had paid from personal funds and estimates for work they claim was required to preserve the Clinton property during estate administration.

II. PROCEDURAL POSTURE

In January 2005, the McKowns filed a claim against the estate for payment of the insurance proceeds, as well as the cost of repairs pursuant to Sections 473.803 and 473.810. In addition to the insurance proceeds, the McKowns sought to be recompensed for $44,458.00 in repairs. After a bench trial, the probate court granted the McKowns' motion as to all the insurance proceeds but denied all other claims. The trial court stated that substantially all the problems addressed by the McKowns' repairs existed prior to Mrs. Shaw's death. The repairs improved the property beyond the condition existing at the time of her death. The judgment stated that the "proposed expenditures go beyond simply maintaining or preserving the estate assets as contemplated by § 483.803 RSMo," and, therefore, the claims were denied. The trial court did not address the other issue confronting the McKowns' motion: Did the IPR ever have possession of the property in question?

III. DISCUSSION

In their single point on appeal, the McKowns argue that the court erred in denying the motion as the Independent Personal Representative was required to make the claimed repairs under Sections 473.803 and 473.810. The McKowns contend that under these provisions, the IPR was charged with maintaining and preserving the Clinton property. As the IPR failed to undertake the necessary repairs to the property, the McKowns were required to expend personal funds to maintain estate property. Therefore, they argue, they must be recompensed from the residuary estate funds for the cost of the repairs.

A. STANDARD OF REVIEW

This court reviews a bench-tried case under the standard established by Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). The judgment of the trial court will be affirmed if the judgment is not supported by substantial evidence, misstates, or misapplies the law. Id. Evidence is viewed in a light most favorable to the judgment and all permissible inferences are found in favor of the responding party. Id.

The central issue on appeal is whether the IPR was required to undertake the identified repairs to maintain and preserve the Clinton property. Mrs. Shaw's estate was independently administered by the personal representative of the estate. His authority and responsibility as to estate property were governed by Section 473.803, providing in part that:

[E]very independent personal representative has a right to, and shall take possession or control of, the decedent's property, except that any real property or tangible personal property may be left with or surrendered to the person presumptively titled thereto unless or...