In re Estate of Graham

• Court: Iowa Supreme Court
• Writing for the Court: STREIT, Justice.
• Citation: In re Estate of Graham, 690 N.W.2d 66 (Iowa 2004)
• Decision Date: 17 December 2004
• Docket Number: No. 03-1817.,03-1817.
• Parties: In the Matter of the ESTATE of Helen E. GRAHAM, Deceased. Mary G. Sacco and Julie Ann Jones, Executor of the Estate of Dorothy A. Devore, Appellants, v. Susan A. Richardson, Executor of the Estate of Helen E. Graham, and Susan A. Richardson, Individually, Appellee.

690 N.W.2d 66

In the Matter of the ESTATE of Helen E. GRAHAM, Deceased.

Mary G. Sacco and Julie Ann Jones, Executor of the Estate of Dorothy A. Devore, Appellants, v. Susan A. Richardson, Executor of the Estate of Helen E. Graham, and Susan A. Richardson, Individually, Appellee.

No. 03-1817.

Supreme Court of Iowa.

December 17, 2004.

Richard O. McConville of Coppola, Sandre, McConville & Coppola, P.C., West Des Moines, and Richard J. Murphy, Osceola, for appellants.

G. Stephen Walters of Jordan, Oliver & Walters, P.C., Winterset, for appellee.

STREIT, Justice.

This appeal concerns the interpretation of a will executed more than forty years ago. The question presented is whether the 1962 will of John and Helen Graham was a mutual will. We must decide whether the Grahams' will was in effect a contract to divide up their earthly possessions in equal shares to their three daughters. The district court ruled the will was not mutual. As a consequence, the court found Helen could change her will after her husband's death without incurring liability to two daughters she disinherited. Because we find the will was mutual, we reverse and remand with instructions.

I. Facts and Prior Proceedings

John and Helen Graham, a married couple, had three daughters: Charlene, Dorothy, and Mary. In 1962, John and Helen executed a joint will in which they each promised to leave everything to whoever survived; at death, the survivor would give everything to their three daughters in equal shares. The 1962 will named Charlene executor of the survivor's estate.

In 1972, John passed away. Neither John nor Helen changed the 1962 will before John's death.

In 1987, Helen executed a codicil to the 1962 will. The codicil retained the equal distribution of assets to the daughters but provided that Charlene's share would be held in trust for her benefit. Upon termination of the trust, the codicil directed the trustee to distribute the remaining principal and income to Susan, Charlene's daughter. The trust was designed so Charlene would remain eligible to receive financial assistance from the government. The codicil also removed Charlene as executor, substituting Mary in her stead.

All three daughters contemporaneously signed a separate agreement in which they approved of the codicil's changes to the 1962 will. Helen did not sign the agreement, but the codicil expressly referenced it, noting that "[a]ll of the heirs named in [the 1962 will] have entered into an Agreement approving and agreeing with the changes...."

In 1999, Helen executed a new will that revoked all prior wills she had previously made. In the 1999 will, Helen effectively disinherited her three daughters. Helen gave the bulk of her estate to her granddaughter Susan, whom she also appointed executor. Susan had lived with Helen in Osceola and cared for her grandmother in her last years.

In 2002, Helen died. She left an estate valued at approximately $70,000. Susan, as executor of her grandmother's estate, admitted the 1999 will into probate.

Mary and Dorothy sued their mother's estate and Susan individually.¹ The daughters claimed the 1962 will was a "mutual will" and sought a declaration that Helen breached her contractual obligations when she died having executed the 1999 will. The daughters asked the court to set aside the 1999 will and impress a trust upon the estate in favor of the beneficiaries of the 1962 will. The daughters also asked the court to remove Susan as executor and appoint Mary instead.²

The parties filed competing motions for partial summary judgment. The district court granted the defendants' motion and denied the daughters' motion; relying upon the language of the preamble of the will, the court ruled the will was not a mutual will.

II. Scope and Standards of Review

Review of a ruling on a motion for summary judgment is for correction of errors at law. Barreca v. Nickolas, 683 N.W.2d 111, 116 (Iowa 2004). Summary judgment is proper

if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Iowa R. Civ. P. 1.981(3). We are obliged to view the record in the light most favorable to the nonmoving party and must afford that party all reasonable inferences. Barreca, 683 N.W.2d at 116.

III. The Merits

A. Contractual Will

The question presented in this appeal is whether the Grahams' 1962 will is a mutual will. A mutual will (more transparently referred to as a "contractual will") exists "only when there is evidence sufficient to show a binding agreement as to disposal of the property of the makers in a certain way." Father Flanagan's Boys' Home v. Turpin, 252 Iowa 603, 608, 106 N.W.2d 637, 640 (1960); see also Duhme v. Duhme, 260 N.W.2d 415, 419 (Iowa 1977); In re Estate of Chapman, 239 N.W.2d 869, 871 (Iowa 1976); In re Estate of Ryder, 219 N.W.2d 552, 554 (Iowa 1974). Evidence is sufficient only if it is clear and convincing. See Ryder, 219 N.W.2d at 554 ("[T]he executor had the burden of proving by clear and convincing evidence that the instrument was intended to be [a] mutual will...."); accord Sawyer v. Sawyer, 261 Iowa 112, 118, 152 N.W.2d 605, 609 (1967) ("clear and satisfactory evidence"); In re Estate of Ramthun, 249 Iowa 790, 799, 89 N.W.2d 337, 342 (1958) ("clear, satisfactory and convincing"). "A mere preponderance of the evidence is not sufficient." Ramthun, 249 Iowa at 799, 89 N.W.2d at 342. A more exacting quantum of proof is required because of

the serious and far-reaching consequences of such an agreement, which may have the effect of preventing the surviving spouse from altering his or her estate plan to suit intervening changes in circumstances ... that may render provisions of the contractual wills inappropriate or unfair, so much so that the deceased spouse, had he or she lived, would have desired or sanctioned appropriate changes in the testamentary provisions.

Lamberg v. Callahan, 455 F.2d 1213, 1218 (2d Cir.1972). A mutual will is in essence a "contract as to irrevocability." See Father Flanagan's Boys' Home, 252 Iowa at 610, 106 N.W.2d at 641.

Whether a given will is a contractual will can be a difficult matter to decide. A history of shifting legal definitions and standards have not helped matters. As a noted commentator once remarked, "[t]he contractual will in Iowa is a thicket of perplexity upon whose thorns the supreme court has frequently found itself impaled." N. William Hines, Freedom of Testation and the Iowa Probate Code, 49 Iowa L.Rev. 724, 738 (1964). Fortunately, the present state of the law is now relatively clear and settled.

Matters were helped on January 1, 1964 when the Iowa Probate Code became effective. See Iowa Code ch. 633 (2001); see also id. §§ 633.1 (short title), 633.2 (effective date). "In order to avoid the complexities and uncertainties of litigation involving [contractual] wills, [section] 633.270 was enacted." 1 Sheldon F. Kurtz, Kurtz on Iowa Estates § 4.52, at 216 (3d ed.1995) [hereinafter Kurtz]. That section of the probate code expressly provides that in Iowa "[n]o will shall be construed to be contractual or mutual, unless in such will the testator shall expressly state the intent that such will shall be so construed." Iowa Code § 633.270. In other words, extrinsic evidence of testator intent is not permitted; the evidence must be found within the four corners of the will itself. Chapman,239 N.W.2d at 871 (when the probate code applies, "the evidence to establish a mutual will must be found in the instrument itself"); In re Estate of Prehoda, 309 N.W.2d 516, 520 (Iowa Ct.App.1981); see, e.g., Floerchinger v. Williams, 260 Iowa 53, 56-60, 148 N.W.2d 410, 412-14 (1967) (considering only text of will itself and not extrinsic evidence).³ The reason for the rule is clear: "[t]hose who desire mutual wills are required to say so since theirs is the unusual rather than the usual intent." Floerchinger, 260 Iowa at 58,148 N.W.2d at 413 (quoting bar committee comment).

Although the Grahams' 1962 will was executed before the effective date of the probate code, the parties agree the provisions of the probate code apply to the present dispute. The rights of beneficiaries under a contractual will do not accrue or vest until one of the testators dies. Id. at 59-60, 148 N.W.2d at 412-14; see Iowa Code § 633.2(2) (enactment of probate code shall not impair any "accrued or vested right"). Because John died after the effective date of the probate code, section 633.270 applies to this case. Compare Floerchinger, 260 Iowa at 59-60, 148 N.W.2d at 412-14 (section 633.270 applied to will executed in 1963 because testator died after the effective date of probate code), with Sawyer, 261 Iowa at 119, 152 N.W.2d at 610 (same section did not apply when one testator died before effective date).

The district court ruled the 1962 will was not a contractual will. The court focused upon the preamble to the will, which stated:

We, the undersigned, John R. Graham and Helen E. Graham ... mutually agree, each in consideration of the promise and act of the other, to revoke all wills by us heretofore made, and to dispose of our property in the manner hereinafter set forth; and we do make, publish and declare the following as our joint and several wills....

(Emphasis added.) Although the district court recognized the phrases "mutually agree" and "each in consideration of the promise and act of the other" supported the conclusion that the parties intended their joint will to be contractual, the court seized upon the fact that the parties referred to the document as their "joint and several wills." The court pointed out "several" is commonly defined as "separate," "exclusive," or "relating separately to each individual involved." The court ruled "[t]his language represents the most specific... indication of the parties' intent...