In re Estate of Sharpe

• Decision Date: 03 April 2018
• Docket Number: No. COA17-1151,COA17-1151
• Citation: 258 N.C.App. 601,814 S.E.2d 595
• Parties: IN RE: ESTATE OF Thomas S. SHARPE, Deceased.
• Court: North Carolina Court of Appeals

258 N.C.App. 601

814 S.E.2d 595

IN RE: ESTATE OF Thomas S. SHARPE, Deceased.

No. COA17-1151

Court of Appeals of North Carolina.

Filed: April 3, 2018

Holt, Longest, Wall, Blaetz & Moseley, PLLC, Burlington, by W. Phillip Moseley and Peter T. Blaetz, for petitioner-appellant.

Oertel, Koonts & Oertel, PLLC, Burlington, by Geoffrey K. Oertel, for respondent-appellee.

TYSON, Judge.

I. Background

Thomas S. Sharpe and Alma G. Seward were married on 21 November 2009, and remained married until Thomas S. Sharpe's death on 14 January 2016. Thomas S. Sharpe was 86 years old and Alma G. Seward was 75 years old when they were married. Both had been married previously and had adult children from their prior marriages.

On 18 February 2016, a will for Thomas S. Sharpe ("testator") was entered into probate by his son, Thomas F. Sharpe. Attached to the will was a pre-marital agreement and a document entitled the "Thomas S. Sharpe Irrevocable Trust Agreement."

The testator's will designates Thomas S. Sharpe's two adult children from a previous marriage, Susan Wall and Thomas F. Sharpe, as co-executors. The will bequeaths all of the testator's estate to the "Thomas S. Sharpe Irrevocable Trust Agreement." The two beneficiaries of the trust are Thomas F. Sharpe and Susan Wall. The will leaves nothing to the testator's wife at his death.

The pre-marital agreement was executed between Thomas S. Sharpe and Alma G. Seward on 4 November 2009. The pre-marital agreement has two schedules attached, Schedule A and Schedule B. Schedule A lists all the separate property belonging to Thomas S. Sharpe and Schedule B lists all the separate property belonging to Alma G. Seward. The pre-marital agreement states that "each party agrees that the separate property shall include, but not be limited to, the property described hereafter, and that the separate property of the party shall remain the separate property of the other party."

Following Thomas S. Sharpe's death, Alma G. Seward filed a petition to claim an elective share of her husband's estate on 23 June 2016. "Under N.C. Gen. Stat. § 30-3.1 et seq ., a wife who survives her husband may choose to take an ‘elective share’ of the decedent's assets rather than taking under the decedent's will." In re Estate of Heiman , 235 N.C. App. 53, 56, 761 S.E.2d 191, 193 (2014) (footnote omitted). The executor, Thomas F. Sharpe ("Respondent"), filed an answer and reply denying Alma G. Seward's right to claim an elective share.

The Alamance County Clerk of Superior Court conducted a hearing on 17 January 2017 and entered an order granting Alma G. Seward's petition for an elective share. Thomas F. Sharpe appealed to the Alamance County Superior Court on 31 January 2017. On 23 March 2017, Alma G. Seward died. Alma G. Seward's personal representative, Steven Lawrence Seward ("Petitioner"), filed a motion to substitute a party. That motion was granted by an order filed 25 May 2017.

The matter was heard on 15 May 2017 in the superior court. The superior court entered a judgment filed 23 June 2017 denying Petitioner's petition for an elective share. Petitioner gave timely notice of appeal.

II. Jurisdiction

Appeal lies of right in this Court pursuant to N.C. Gen. Stat. § 7A-27(b)(1) (2017).

III. Issues

Petitioner argues the superior court erred in concluding the pre-marital agreement between Alma G. Seward and Thomas S. Sharpe waives Alma G. Seward's right to claim an elective share in his estate. Petitioner also contends the superior court improperly took judicial notice of Alma G. Seward's will to interpret the premarital agreement. We address each argument in turn.

IV. Standard of Review

On appeal of estate matters determined by the clerk, the superior court reviews an order of the clerk for purposes of determining: (1) whether the findings of fact are supported by the evidence; (2) whether the conclusions of law are supported by the findings of fact; and (3) whether the order or judgment is consistent with the conclusions of law and applicable law. N.C. Gen. Stat. § 1-301.3(d) (2017).

The superior court, and therefore this Court, only reviews those "findings of fact which the appellant has properly challenged by specific exceptions."

In re Estate of Lowther , 271 N.C. 345, 354, 156 S.E.2d 693, 700-01 (1967) ; see also In re Estate of Pate , 119 N.C. App. 400, 403, 459 S.E.2d 1, 2-3 (1995) ("The standard of review in this Court is the same as in the Superior Court.").

V. Analysis

A. Pre-marital Agreement

Both parties agree the pre-marital agreement at issue was executed both voluntarily and after full disclosure. The order of the clerk reviewed by the superior court contained ten findings of fact. These include:

1. A prenuptial agreement was executed between Thomas S. Sharpe and Alma Seward on November 4, 2009.

2. Thomas S. Sharpe and Alma Seward were marred on November 21, 2009.

3. Thomas S. Sharpe died January 14, 2016 still married to Alma Seward Sharpe.

4. A will for Thomas Sharpe was filed with Alamance County Estate office on February 18, 2016.

5. The will named his son, Thomas F. Sharpe, and his daughter, Susan Sharpe Wall, as co-executors of his will.

6. The will gives the tangible personal property (clothing, jewelry, automobiles, and personal effects) to Susan Wall and Thomas F. Sharpe.

7. The will gives the residue of the estate to the Thomas S. Sharpe Trust which effectively divides the property between the two children, Susan Wall and Thomas F. Sharpe.

8. The widow of Thomas S. Sharpe, Alma Seward Sharp[e], receives nothing under this will.

9. Alma Sharpe, through her Attorney in Fact, Steven Seward, filed this petition [to] get an elective share of the Total Net Assets pursuant to N.C. G.S. 30-3.1 on June 23, 2016.

10. The Prenuptial agreement executed by Thomas Sharpe and Alma Seward contains no clause waiving her right to claim an elective share of his estate.

Based upon these findings of fact, the clerk concluded Alma G. Seward's petition for an elective share should be granted. Findings of fact 1 through 9 in the clerk's order recited undisputed facts, which were consented to by both parties, and neither party challenges these findings of fact. On appellate review, the superior court determined all of the clerk's findings of fact were supported by the evidence, except for finding of fact 10.

The superior court determined, "Finding of fact 10 is partially correct in that there is not one specific clause waiving the spouse[‘s] right to claim an elective share of the estate, but the findings supported by the evidence, contradict this statement and conclusively establish the intent of the parties." The only finding of fact at issue is finding of fact 10.

Although it was labelled as a "finding of fact" by the clerk, it is actually a conclusion of law, because it involves a matter of contract interpretation. Shelton v. Duke Univ. Health Sys. , 179 N.C. App. 120, 123, 633 S.E.2d 113, 115 (2006) ("Contract interpretation is a matter of law, and the standard of review for this Court is de novo .") (citation omitted). The labels "findings of fact" and "conclusions of law" employed by the lower tribunal in a written order do not determine the nature of our standard of review. See Peters v. Pennington , 210 N.C. App. 1, 15, 707 S.E.2d 724, 735 (2011) (reviewing what was labeled as a "conclusion of law" as a finding of fact). If the lower tribunal labels as a finding of fact what is in substance a conclusion of law, we review that "finding" as a conclusion de novo . See id. We therefore apply de novo review to the clerk's "finding of fact" 10.

To determine whether "finding of fact" 10 is outcome determinative of the issue, we review the terms of the pre-marital agreement. The pre-marital agreement contains, in part, the following pertinent provisions:

WHEREAS, both parties are individually possessed of certain separate property and both acknowledge that they played no role in the accumulation of the other's separate property; and,

WHEREAS, the parties desire to contract with each other concerning matters of the disposition of their separate property;

....

1. Division of Property. Except as provide[d] below, each party agrees that the separate property of the other party shall include, but not be limited to, the property described hereafter, and that the separate property of the party shall remain the separate property of the other party. ....

2. Exclusive Right to Manage Separate Property. Each party has the sole and exclusive right at all times to manage and control their respective separate property to the same extent as if each were unmarried . This right to manage and control includes the right to dispose of any or all of that party's separate property by deed, will, or otherwise on that party's sole signature without any involvement or control by the other party[.] (Emphasis supplied).

....

3. Obligation to Join in Execution of Documents and Free Trader Agreement.... Each party specifically waives, relinquishes, renounces, and gives up any claim that he or she may have or otherwise had or may have made to the other's separate property under the laws of this state. Each party agrees to execute a separate "Free Trader Agreement" to be recorded in the Alamance County Register of Deeds setting forth the intent of the parties.

....

8. Agreements with Respect to Home. The parties will be residing at a home owned by Husband.

1. In the event of the death of Husband, the property shall be the sole and separate property of Husband subject to a right to possession by Wife so long as she maintains the house as her principal residence.

2. If Wife should die and Husband survive, the property shall be the sole and separate property of Husband.

....

12. Miscellaneous Provisions. To clarify certain aspects of this document's execution and effectiveness, the parties agree as follows: ...

b. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, personal representatives, successors, and

...