In re Estate of Cooney, DA 19-0324

• Citation: 454 P.3d 1190,398 Mont. 166,2019 MT 293
• Decision Date: 24 December 2019
• Docket Number: DA 19-0324
• Parties: In the MATTER OF the ESTATE OF John P. COONEY, II, Deceased.
• Court: United States State Supreme Court of Montana

398 Mont. 166

454 P.3d 1190

2019 MT 293

In the MATTER OF the ESTATE OF John P. COONEY, II, Deceased.

DA 19-0324

Supreme Court of Montana.

Submitted on Briefs: November 6, 2019

Decided: December 24, 2019

For Appellants: Rebecca R. Swandal, Swandal Law, PLLC, Livingston, Montana

For Appellee: Brandon JT Hoskins, Jeff G. Sorenson, Moulton Bellingham PC, Billings, Montana

Justice Beth Baker delivered the Opinion of the Court.

¶1 John Cooney II died in 2015, devising his property by will to his son John Cooney III. John II’s daughters moved to invalidate parts of his will in the probate proceedings, claiming that the will contravened a prior marital property settlement agreement between John II and his ex-wife. In that agreement, incorporated into John II’s dissolution decree, he agreed to leave real property he owned to all of his children "in equal shares to share and share alike." The District Court denied the daughters’ motion for lack of subject matter jurisdiction, and this appeal followed. We affirm for the reason that their claim is not properly brought in the probate proceedings.

PROCEDURAL AND FACTUAL BACKGROUND

¶2 John II and his ex-wife, Loriann Cooney, divorced in 1980. They entered into a Separation and Property Settlement Agreement ("Separation Agreement"), in which they agreed that the remainder of the ranch property¹ that John II owned at the time of his death would be distributed to their daughters, Jonnie and Melissa, "and any other children hereinafter born to [John II], in equal shares to share and share alike." The dissolution court incorporated the Separation Agreement into the final decree. John II later had two more children, Jill and John III. John Cooney II died on April 27, 2015. His final written will, executed in 2011, left all of his real property to John III.

¶3 John II’s will was admitted to formal probate in the Fourteenth Judicial District Court, Wheatland County. Appellants Jonnie, Melissa, and Jill ("Daughters") filed a motion to invalidate portions of the will that left the property entirely to John III, arguing that those portions contravened the Separation Agreement, resulting in fraud on the court. The District Court denied their motion, concluding that it did not have subject matter jurisdiction over equitable claims for relief and claims at law while sitting in probate. The Daughters appeal, asserting that the court erred when it determined that the Daughters could not enforce the Separation Agreement in the probate proceeding. They argue that the probate court had subject matter jurisdiction to administer the estate in accordance with the Separation Agreement because it directly involves the estate’s property, and the probate court has jurisdiction to determine that they were the rightful heirs and successors to the property by virtue of the Separation Agreement.

STANDARDS OF REVIEW

¶4 Whether a court has subject matter jurisdiction is a question of law that we review for correctness. Haugen v. Haugen , 2008 MT 304, ¶ 8, 346 Mont. 1, 192 P.3d 1132. Formal probate proceedings are subject to the Montana Rules of Civil Procedure. In re Estate of Glennie , 2011 MT 291, ¶ 10, 362 Mont. 508, 265 P.3d 654 ; § 72-1-207, MCA. The parties agree that the District Court’s denial of the Daughters’ motion is analogous to a dismissal for failure to state a claim on which relief could be granted. We accordingly apply our standard of review for a motion to dismiss under M. R. Civ. P. 12(b)(6). Glennie , ¶ 10 (citing McKinnon v. W. Sugar Coop. Corp. , 2010 MT 24, ¶ 12, 355 Mont. 120, 225 P.3d 1221 ). A district court’s determination that a complaint failed to state a claim is a conclusion of law that we review for correctness. Glennie , ¶ 11 (citing McKinnon , ¶ 12 ).

DISCUSSION

¶5 1. Did the District Court err when it determined it did not have subject matter jurisdiction to enforce the Separation Agreement while sitting in probate?

¶6 A district court sitting in probate has limited, not general, jurisdiction as set forth in § 72-1-202, MCA :

Subject matter jurisdiction. (1) To the full extent permitted by the constitution, the court has jurisdiction over all subject matter relating to:

(a) estates of decedents, including construction of wills and determination of heirs and successors of decedents, and estates of protected persons; and

(b) protection of minors and incapacitated persons.

(2) The court has full power to make orders, judgments, and decrees and take all other action necessary and property to administer justice in the matters which come before it.

¶7 A district court sitting in probate has only the special and limited powers expressly conferred by statute; the court may not hear or determine any matters other than those under the statute or which are necessary to exercise its powers. Haugen , ¶ 9 (citing In re Graff’s Estate , 119 Mont. 311, 316-17, 174 P.2d 216, 218 (1946) ); see In re Estate of Pegg , 209 Mont. 71, 84, 680 P.2d 316, 322 (1984) ("[A] probate court has subject matter jurisdiction over estates of decedents.") (emphasis in original). The administration of an estate is "neither an action at law nor a suit in equity[;] it is a special proceeding." State ex rel. Reid v. Fifth Judicial Dist. Court , 126 Mont. 586, 591, 256 P.2d 546, 549 (1953).² We have held that district courts sitting in probate have jurisdiction to consider a claim on a contract for the sale of real estate where no real controversy over the claim exists, but do not have jurisdiction to consider matters equitable in nature. In re Day’s Estate , 119 Mont. 547, 553, 177 P.2d 862, 866 (1947). We have held also that a probate court does not have jurisdiction to decree specific performance of an oral contract. Bullerdick v. Hermsmeyer , 32 Mont. 541, 552, 81 P. 334, 337 (1905) ; see Reid , 126 Mont. at 531, 256 P.2d at 549; Chadwick v. Chadwick , 6 Mont. 566, 13 P. 385 (1887).

¶8 Montana law is clear that "a person may make a valid contract to dispose of his property by will."

Lazetich v. Miller , 206 Mont. 247, 251, 671 P.2d 15, 16 (1983) (citing Erwin v. Mark , 105 Mont. 361, 369, 73 P.2d 537, 539 (1937) ); Conitz v. Walker , 168 Mont. 238, 244, 541 P.2d 1028, 1031 (1975). These contracts are known as succession contracts. Montana adopted the Uniform Probate Code ("UPC") in 1974. It requires that any succession contract be in writing. In re Estate of Braaten , 2004 MT 213, ¶¶ 12-13, 322 Mont. 364, 96 P.3d 1125 (citing Orlando v. Prewett , 218 Mont. 5, 705 P.2d 593 P.2d (1985) ); § 72-2-534, MCA. Montana recognized succession contracts prior to its adoption of the UPC, but litigation focused primarily on questions involving oral contracts to devise property. Bullerdick , 32 Mont. at 550-51, 81 P. at 336 ; In re Day’s Estate , 119 Mont. at 551-52, 177 P.2d at 865.

¶9 The succession contract at issue is the 1980 Separation Agreement. The decedent John II signed the Separation Agreement, which contains a promise to include a specific devise in his will. The Separation Agreement therefore meets the statutory requirement for a "writing signed by the decedent evidencing the contract." Section 72-2-534(1)(c), MCA.³

¶10 If a party to a succession contract fails to carry out the promise to make a valid will, "courts of equity will grant relief in the nature of specific performance by compelling the personal representative, the heirs, devisees, or legatees to hold the property as trustees for the benefit of the promisee." Erwin , 105 Mont. at 369, 73 P.2d at 539. This is not technical specific performance, since "there is no attempt to compel the promisor to make a will." Erwin , 105 Mont. at 370, 73 P.2d at 539 ; see 1 Page on the Law of Wills § 10.30, 536 (Rev. Ed. 2003). It is instead relief in the nature of specific performance, the purpose of which is to have the "devisees, next of kin, or personal representative of the deceased promisor held as trustees of the property which the promisor had agreed to devise or bequeath, and to compel them to hold the legal title thereto for the benefit of the promisee cestui que trust [possessing equitable rights in the property]." Erwin , 105 Mont. at 369, 73 P.2d at 539 (citations omitted). We reaffirmed Erwin in Rowe v. Eggum , holding that "an oral contract to make a will, when acted and relied upon, may be made the foundation of an action for relief in the nature of specific performance." 107 Mont. 378, 389, 87 P. 2d 189, 193 (1938).

¶11 An "action" is a proceeding "by which one party prosecutes another for the enforcement or protection of a right."

Section 27-1-102(2), MCA. "The remedy of beneficiaries [in a breach of contract to devise property] is not a proceeding in the probate court ... but an action in equity in a court of general jurisdiction." 79 Am. Jur. 2d Wills § 343 (2003). The equitable remedy of specific performance thus must be sought in a court of equity; it may not be administered by the probate court in a direct proceeding for that purpose. See 1 Page on the Law of Wills § 10.37, 537 (Rev. Ed. 2003).

¶12 A probate court has authority to settle claims against the estate, such as creditor claims. Christian v. A. A. Oil Corp. , 161 Mont. 420, 430, 506 P.2d 1369, 1374 (1973). Enforcement of a contract to devise property is not a claim against the estate. Erwin , 105 Mont. at 371, 73 P.2d at 539 (adopting the Colorado Supreme Court’s analysis distinguishing a claim against the estate and the rights of a claimant under a contract with the deceased). In Erwin , this Court held that the right of a claimant under a succession contract is a "right or interest in the estate, an equitable ownership therein, after the claims against the estate have been allowed and paid." Erwin , 105 Mont. at 372, 73 P.2d at 540.

¶13 The Daughters seek an equitable remedy in the nature of specific performance of the Separation Agreement. The probate court’s limited jurisdiction does not extend to adjudicating a breach of contract claim. The Daughters seek not a "construction of" the...