In re Estate of Uzelac

• Decision Date: 31 January 2008
• Docket Number: No. 20060858-CA.,20060858-CA.
• Citation: 178 P.3d 347,2008 UT App 33
• Parties: In the matter of the ESTATE OF Louis J. UZELAC. Barbara B. Uzelac, Plaintiff, Appellant and Cross-appellee, v. Joseph Uzelac Jr., as representative of the Estate, Defendant Susan Brooke Mageras and Allyson D. Uzelac, Intervenors, Appellees, and Cross-appellants.
• Court: Utah Court of Appeals

178 P.3d 347

2008 UT App 33

In the matter of the ESTATE OF Louis J. UZELAC Barbara B. Uzelac, Plaintiff, Appellant and Cross-appellee, v. Joseph Uzelac Jr., as representative of the Estate, Defendant Susan Brooke Mageras and Allyson D. Uzelac, Intervenors, Appellees, and Cross-appellants.

No. 20060858-CA.

Court of Appeals of Utah.

January 31, 2008.

Rehearing Denied February 15, 2008.

Charles M. Bennett, Salt Lake City, for Appellant and Cross-appellee.

Margaret H. Olson, Salt Lake City, for Appellees and Cross-appellants.

Before GREENWOOD, P.J., DAVIS and McHUGH, JJ.

OPINION

DAVIS, Judge:

¶ 1 Appellant Barbara B. Uzelac (Wife) argues that the trial court, on remand from our prior review, see Uzelac v. Uzelac (In re Estate of Uzelac) (Uzelac I), 2005 UT App 234, ¶ 25, 114 P.3d 1164, erred in denying her motion to compel the return of Louis Uzelac's (Husband) premarital property (the Homestead) to his estate. Wife argues that the Homestead must be sold in order to pay for the $230,660.90 judgment in her favor assessed against the estate. Intervenors Susan Brooke Mageras and Allyson D. Uzelac (the Children) cross-appeal, arguing that the trial court erred by including Husband's payable on death (POD) accounts in the judgment calculations. We disagree with both parties and affirm.

BACKGROUND

¶ 2 Prior to Husband and Wife's marriage, they executed an Ante Nuptial Agreement (the Agreement). See id. ¶ 2. The Agreement provided that "all of the real, personal or mixed property owned by each party prior to their marriage shall be the sole and separate property of him or her or their respective estates." Under the Agreement, all marital property would "go to the survivor" if one spouse should predecease the other. The Agreement also provided Wife with "the right to reside in [the Homestead] for her lifetime, or such shorter time as she may elect."

¶ 3 Husband later prepared a will (the Will), dividing his estate as follows: "(1) all debts, expenses, and administration expenses are to be paid; (2) Husband's two daughters are to receive equal shares of Husband's property; (3) Wife is to receive property per the terms of the Agreement; and (4) Husband's two granddaughters are to receive $5000.00 each." Id. ¶ 3. Specifically, the Will stated, "I give, devise and bequeath . . . to my children . . . all of my property, real mixed or personal, share and share alike . . . . [and t]o [W]ife . . ., she is to receive per the terms of [the Agreement]. . . ."

¶ 4 Upon his death on November 6, 1999, "Husband had three [POD] accounts totaling $189,049.15 with his two daughters as beneficiaries, and one POD account totaling $12,790.00 with Wife as beneficiary." Id. ¶ 5. Additionally, at his death Husband's non-POD accounts held funds totaling $75,876.85, and he had stocks worth $36,950.91. See id.

¶ 5 The Personal Representative (the PR) distributed the estate as follows: Wife received a POD account "in [her] name," a life estate in the Homestead, and $4,858.83 from the couple's joint accounts, in addition to the $15,000.00 that was deposited in a joint account post-mortem. See id. ¶ 6. The Children received all other property, including the Homestead subject to Wife's life estate. See id. On July 28, 2003, Wife filed a Motion for an Order Directing Beneficiaries to Return Estate Property to the Estate, or in the Alternative Voiding the Deed of Distribution, (Motion to Reconvey the Homestead), arguing that the distribution violated the Agreement, which was incorporated by reference into the Will, and that as a creditor, her claims must be paid before those of the Children.

¶ 6 The trial court found "no basis for [Wife]'s request," denying the motion on two grounds. First, to claim creditor status, Wife was required to file a "written demand" with the PR within "two years of the death of [Husband]," Utah Code Ann. § 75-6-107 (1993), which the trial court found that she had failed to do. As we explained in Uzelac I, "[m]erely providing the PR with a copy of the Agreement, which all parties have always agreed is binding, without explaining how the Agreement had been breached or the amount [Wife] was claiming as a creditor under the Agreement, does not begin to satisfy the requirements of notice pleading." Uzelac I, 2005 UT App 234, ¶ 14, 114 P.3d 1164. Second, Wife's argument that the PR breached his duty to administer in accordance with the rights of the claimants failed because the PR had given Wife a life estate in the Homestead, as required by the Agreement, while giving the Children the remaining rights to the Homestead as provided for in the Will.

¶ 7 In Uzelac I we affirmed the trial court, rejecting Wife's claim brought as a creditor because such a claim against the estate was time-barred under Utah Code section 75-3-803 due to insufficient notice pleading. See id. ¶¶ 11-14. However, using the analogue of a marital estate from our divorce jurisprudence, we vacated the trial court's rulings and remanded, instructing the trial court to determine the amount owed to Wife as beneficiary per the Agreement. See id. ¶¶ 20-21. We also ordered the trial court to "determin[e] . . . what property of Husband's is available to satisfy her claim." Id. ¶ 21.

¶ 8 On remand, the parties stipulated that "the only property acquired by [Husband] that is subject to [Wife's] claim is the cash (including stocks) on hand at his death." The parties also stipulated that there was $277,716.00 in cash on deposit¹ and nine stocks Husband held at his death. The court assessed the value of those stocks that had been acquired after marriage at $27,747.33, resulting in a subtotal of $305,463.33. The trial court then deducted $74,802.43 from this sum for a gift from Husband to Wife, a POD account in Wife's name at the time of the marriage (minus an insurance claim), and an account in Husband's name. Thus, the trial court found that there was $230,660.90 in "after acquired property" and concluded that Wife was entitled to that amount. However, the trial court further concluded that Wife as barred from recovering the $230,660.90 by Utah Code section 75-3-1006 because Wife did not commence a proceeding against the Children within the time specified by the statute of limitations. See Utah Code Ann. § 75-3-1006 (1992).

¶ 9 The trial court also determined, citing the Restatement of Property, see Restatement (Third) of Prop.: Wills and Other Donative Transfers § 5.1 cmt. c (1999), that the Children were general devisees due to the "all of my property" language in the Will, and not residuary devisees. The trial court further noted that the Will "does not have a residuary clause."

ISSUES AND STANDARDS OF REVIEW

¶ 10 Wife contends that the court improperly denied her Motion to Reconvey the Homestead, arguing that this motion amounted to a proceeding against the Children. Whether the trial court erred in interpreting Utah statutes to deny a motion is a question of law, which is reviewed for correctness. See In re VKS, 2003 UT App 13, ¶ 7, 63 P.3d 1284.

¶ 11 Wife argues next that her 2003 Motion to Reconvey the Homestead should have been granted because the Children were residual devisees and she is a general pecuniary devisee. If the trial court had agreed with Wife that the Children are residuary devisees and that she is a general pecuniary devisee, Wife's $230,660.90 claim against the estate must be satisfied before the estate can satisfy the Children's claims under the Will. See generally Restatement (Third) of Prop.: Wills and Other Donative Transfers § 5.1 (1999). Given the financial situation, this would mean the Children would have to reconvey the Homestead to the estate. The categorization of devisees is a mixed question of fact and law; we accord some deference to the trial court. See Jensen v. IHC Hosps., Inc., 2003 UT 51, ¶ 57, 82 P.3d 1076; State v. Pena, 869 P.2d 932, 937-38 (Utah 1994).

¶ 12 The Children cross-appeal and argue that the trial court improperly included POD accounts in determining "the amount owed to Wife as a beneficiary under the Will as per the Agreement," Uzelac I, 2005 UT App 234, ¶ 21, 114 P.3d 1164. We review a trial court's interpretation of our unambiguous order for correctness. See Bettinger v. Bettinger, 793 P.2d 389, 391 (Utah Ct.App. 1990). "However, if the trial court determines the language of an order is ambiguous and finds facts based upon extrinsic evidence, our review of those findings is limited to determining whether they are clearly erroneous." Southwick v. Leone (In re Estate of Leone), 860 P.2d 973, 975 (Utah Ct.App.1993) (citing Bettinger, 793 P.2d at 392).

ANALYSIS

I. The Homestead

¶ 13 Wife argues that she did initiate a proceeding against the Children and thereby is not time-barred from recovering against the estate via a reconveyance and sale of the Homestead. She cites Utah Code section 75-3-105(1), which states that "[p]ersons interested in decedents' estates may . . . petition the court for orders in formal proceedings within the court's jurisdiction, including, but not limited to those described in this chapter." Utah Code Ann. § 75-3-105(1) (1993). Specifically, Wife argues that the Motion to Reconvey the Homestead which was filed against the estate (and served on the Children and the PR), was not subject to section 75-3-803's time bar because it served as notice under section 75-1-401, a pleading under section 75-3-105(1), and a proceeding under section 75-3-106 against the Children. We disagree.

¶ 14 The Utah Probate Code defines a "formal proceeding" as a "proceeding[] conducted before a judge with notice to interested persons." Id. § 75-1-201(18) (Supp.2007). "Each proceeding before the court or registrar is independent of any other proceeding involving the same estate," id. § 75-3-106(1)(a) (1993), even though "[p]etitions for formal orders of the court may combine various requests for relief in a single proceeding," id. § 75-3-106(1)(b).

¶ 15 The trial court ruled that "the...