In re Estate of Davis

• Decision Date: 02 September 2004
• Citation: 184 S.W.3d 231
• Parties: In re the ESTATE OF J.D. DAVIS, Deceased.
• Court: Tennessee Court of Appeals

184 S.W.3d 231

In re the ESTATE OF J.D. DAVIS, Deceased.

Court of Appeals of Tennessee, at Nashville.

August 3, 2004 Session.

September 2, 2004.

Application for Permission to Appeal Denied by Supreme Court February 28, 2005.

Petition to Rehear Denied May 2, 2005.

Overton Thompson, III, Nashville, Tennessee, for the appellant, Dorothy L. Davis.

Thomas O. Helton and Sheri A. Fox, Chattanooga, Tennessee, for the appellees J. Douglas Davis and Julie Ann Davis Griffin.

OPINION

DAVID R. FARMER, J., delivered the opinion of the court, in which ALAN E. HIGHERS, J. and HOLLY M. KIRBY, J., joined.

The probate court awarded summary judgment to Defendants/Appellees upon determining that, under Florida law, the antenuptial agreement entered into by Plaintiff/Appellant and Deceased was valid and enforceable. On appeal, Plaintiff/Appellant argues that the agreement is not enforceable as a violation of Tennessee public policy and by reason of duress. We reverse the award of summary judgment and remand for further proceedings.

This appeal requires us to construe an antenuptial agreement ("the agreement"). The facts relevant to our disposition of this appeal are undisputed. Plaintiff/Appellant, Ms. Dorothy L. Davis (Ms. Davis), a resident of Florida, and her late husband, J.D. Davis (Mr. Davis), a domiciliary of Tennessee, met in the spring of 1989 and married in July 1990. At the time of their marriage, Mr. Davis was 75 years of age and Ms. Davis was 66 years of age. Both Mr. Davis and Ms. Davis had been married previously, and both had children from their previous marriages. They were engaged for over a year before marrying, and their wedding date was postponed at least once. At the time of their marriage, both were in good health and were comfortable financially. They lived in Nashville, Tennessee, for six months of the year and in Florida for the remaining six months. Mr. Davis remained domiciled in Tennessee. Mr. Davis and Ms. Davis executed their antenuptial agreement at the offices of Mr. Davis' legal counsel in Florida on July 19, 1990, one day before their marriage. The agreement was notarized by a Florida notary.

The agreement executed by Mr. Davis and Ms. Davis provided, inter alia:

2. WAIVER OF RIGHT OF ELECTION. Each of the parties waives and releases any rights as surviving spouse to elect to take against the other's will, whether heretofore or hereafter made. This provision shall constitute a waiver and release of the right of election in accordance with the requirements of the Estates, Powers and Trusts Law of the State of Florida or of the same or similar law of any other jurisdiction which may be applicable.

3. RELEASE OF MARITAL RIGHTS. Each of the parties hereby waives and releases all rights and interest, statutory or otherwise, including by not limited to homestead, dower, spouse's allowance statutory allowance, distribution in intestacy, and right of election to take against the will of each other which they might acquire as the wife, widow, husband, spouse, heir-at-law, next of kin, or distributee of each other, in their property, owned by them at the time of the marriage or acquired by them at any time thereafter.

Mr. Davis died on May 9, 2002, and his Will was admitted to probate in Tennessee on May 15, 2002. In December 2002, Ms. Davis filed petitions for elective share, homestead, exempt property, and a year's support allowance against the estate of Mr. Davis ("the Estate"). The Estate moved for summary judgment, arguing that Ms. Davis was not entitled to elect against Mr. Davis' Will under the antenuptial agreement. In her response, Ms. Davis argued the agreement was invalid and that she was, therefore, entitled to exercise her right to elective share, homestead, exempt property, and a year's support allowance.

The probate court determined that, under Tennessee's choice of law provisions, Florida law applied to the agreement. It further found the agreement to be valid and enforceable under Florida law. The probate court entered summary judgment for the Estate in April 2003, holding that, in light of the antenuptial agreement, Ms. Davis is not a "surviving spouse" within the meaning of section 31-4-101, Tennessee Code Annotated. Ms. Davis appeals.

Issues Presented

Ms. Davis presents the following issues, as we re-state them, for review by this Court:

(1) Whether the trial court erred by determining the antenuptial agreement is governed by Florida law;

(2) Whether the trial court erred by awarding summary judgment to the Estate where a genuine issue of material facts exists regarding whether the antenuptial agreement was a product of duress;

(3) Whether the trial court erred by awarding summary judgment to the Estate when enforcing it violates Tennessee public policy.

Standard of Review

Antenuptial agreements are enforceable as contracts. Tenn.Code Ann. § 36-3-501(2001). Contract interpretation is a matter of law which we review de novo, with no presumption of correctness afforded to the trial court. Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn.1999); Tenn. R.App. P. 13(d). We also review an award of summary judgment de novo, with no presumption of correctness. Guy v. Mut. of Omaha Ins. Co., 79 S.W.3d 528, 534 (Tenn.2002).

Summary judgment is appropriate only when the moving party can demonstrate that there are no disputed issues of material fact, and that it is entitled to judgment as a matter of law. Tenn. R. Civ. P. 56.04; Byrd v. Hall, 847 S.W.2d 208, 214 (Tenn. 1993). The party moving for summary judgment must affirmatively negate an essential element of the nonmoving party's claim, or conclusively establish an affirmative defense. McCarley v. West Quality Food Serv., 960 S.W.2d 585, 588 (Tenn. 1998).

When a party makes a properly supported motion for summary judgment, the burden shifts to the nonmoving party to establish the existence of disputed material facts. Id. A mere assertion that the nonmoving party has no evidence does not suffice to entitle the moving party to summary judgment. Id. In determining whether to award summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor. Staples v. CBL & Assocs., 15 S.W.3d 83, 89 (Tenn.2000). The court should award summary judgment only when a reasonable person could reach only one conclusion based on the facts and the inferences drawn from those facts. Id. Summary judgment is not appropriate if there is any doubt about whether a genuine issue of material fact exists. McCarley, 960 S.W.2d at 588.

Analysis

Absent a contractual choice of law provision, Tennessee courts apply the lex loci rule to contract causes of action. Solomon v. FloWarr Mgmt., 777 S.W.2d 701, 704-05 (Tenn.Ct.App.1989). Accordingly, the substantive law of the state in which the contract was executed governs disputes arising from the contract. Id. An exception to this general rule is often made when the contract is to be performed in another state and the parties envision performance in accordance with that state's laws. Id. at n. 5. The primary consideration to be made in determining whether the exception applies is whether the contract was made "in good faith with reference to the law of some other state," or "with [a] view to" the other state. Ohio Cas. Ins. Co. v. Travelers Indem. Co., 493 S.W.2d 465, 466-67 (Tenn.1973) (quoting First Am. Nat'l Bank of Nashville v. Automobile Ins. Co., 252 F.2d 62 (6th Cir. Tenn.1958)). The intent of the parties in this regard is to be "gathered from the terms of the instruments and all of the attending circumstances." Id.

The agreement before us in this case contains no choice of law provision. Thus, absent a reason for exception, the lex loci rule applies and this agreement is to be construed under Florida law. Ms. Davis submits, however, that a genuine issue of material fact exists regarding whether the parties intended that the agreement would be construed under Tennessee or Florida law.

Although Mr. Davis remained a domicile of Tennessee and identified Tennessee as his residence in tax returns and in his Will, there is nothing in this record to suggest that Mr. Davis intended that this agreement would be construed under Tennessee law. Mr. Davis entered into the agreement while in Florida; he entered into the agreement with a Florida domiciliary; the agreement was prepared by Florida legal counsel; during the marriage, Mr. Davis resided in Florida for one-half of each year. Additionally, Florida law is the only law specifically referenced in the agreement. Further, there is nothing in the record to suggest Ms. Davis believed the agreement would be construed under Tennessee law at the time she entered into it. Thus, absent some reason for exception, the lex loci rule would apply to this agreement, and it would be governed by Florida law.

Ms. Davis submits, however, that this contract is not enforceable because it violates Tennessee public policy. In general, parties are free to contract under binding terms unless contrary to an overriding social policy. Planters Gin Co. v. Federal Compress & Warehouse Co., Inc., 78 S.W.3d 885, 892 (Tenn.2002). Thus, regardless of the generally applicable lex loci rule of contracts, courts will apply Tennessee law under circumstances where applying the law of a sister jurisdiction would contravene a strong public policy of Tennessee. Bowman v. Price, 143 Tenn. 366, 226 S.W. 210, 214 (1920); Robinson Prop. Group, LP v. Russell, No. W2000-00331-COA-R3-CV, 2000 WL 33191371, at *3 (Tenn.Ct.App. Nov.22, 2000) (no perm. app. filed). A contract which violates Tennessee public policy will not be enforceable in Tennessee, although it is enforceable in the state in which it was executed. Martin v. Dealers Transp. Co., 48 Tenn.App. 1, 342 S.W.2d 245, 249 (1961).

Florida and Tennessee law governing antenuptial agreements differ in at least one important respect. In Tennessee,...