Jennings v. Atkinson
| Decision Date | 16 December 2014 |
| Docket Number | WD 77496 |
| Citation | 456 S.W.3d 461 |
| Court | Missouri Court of Appeals |
| Parties | Nancy Jo Jennings, Administrator Pendente Lite of the Estate of Bertha Blanche Don Carlos, Deceased, Appellant, v. Russell E. Atkinson, Respondent. |
John Edmiston, Warrensburg, MO, Counsel for Appellant.
Charles Fitzgerald, Warrensburg, MO, Counsel for Respondent.
Before Division Four: Alok Ahuja, C.J. Presiding, James Edward Welsh, J., and Tracey Mason–White, Sp. J.
Nancy Jo Jennings, in her capacity as administrator pendente lite of the Estate of Bertha Blanche Don Carlos (“the Estate”), appeals the circuit court's judgment in favor of Russell E. Atkinson on her Petition for Discovery of Assets of the Estate. We reverse and remand.
Franklin Don Carlos (“Franklin”) and Bertha Don Carlos (“Bertha”)1 were married on March 28, 1935. Eleven years later, the married couple acquired 277.8 acres of property in Johnson County, Missouri (“the Johnson County property”), pursuant to a warranty deed dated March 1, 1946.2
On December 10, 1993, Franklin and Bertha, as husband and wife, executed and recorded a beneficiary deed that conveyed the Johnson County property to Russell Ray Atkinson, effective upon the “death of the last to die of these grantors.”
Less than a year later, on August 18, 1994, Franklin and Bertha, as husband and wife, executed and recorded a warranty deed conveying this same property to Bertha, individually. That warranty deed recites that “Franklin Don Carlos and Bertha B. Don Carlos, husband and wife, grantors, [do] grant, bargain and sell, convey and confirm, unto Bertha B. Don Carlos, ... grantee, her heirs and assigns,” the Johnson County property. The deed further states that the grantors are “lawfully seized of an indefeasible estate, in fee.”
Bertha died on September 8, 2009. She was preceded in death by Franklin.3 Nancy Jo Jennings was appointed as administrator pendente lite of Bertha's probate estate. In January 2013, Jennings filed a “Petition for Discovery of Assets” alleging that the 1994 warranty deed conveying the Johnson County property to Bertha transferred “the owner's interest in [the] property” and, thus, had terminated the beneficiary deed in favor of Atkinson by operation of law. Jennings asked the circuit court to enter judgment directing the surrender of the Johnson County property as an asset of Bertha's Estate and to enter judgment in favor of the Estate for “all losses, expenses, damages and lost profit.”
Atkinson asserted in his Answer that he was the rightful owner of the property based upon the beneficiary deed executed by Franklin and Bertha “and that during the owner's lifetime there was never a transfer of the owner's interest in the property, and, therefore, the beneficiary designation in favor of [Atkinson] was never terminated.”
At a bench trial in March 2014, Jennings offered, and the court received into evidence, certified copies of the 1946 warranty deed conveying the property to Franklin and Bertha, Franklin and Bertha's 1935 marriage license, the 1993 beneficiary deed in favor of Atkinson, and the 1994 warranty deed conveying the property to Bertha, individually. The parties presented no further evidence.
The circuit court entered judgment in favor of Atkinson. The court found that the 1993 beneficiary deed in favor of Atkinson was not terminated by the 1994 warranty deed, that the beneficiary deed became effective upon the death of Bertha, and that the property was not an asset of Bertha's Estate.
Jennings appeals.
The decisive issue in this appeal is whether the warranty deed that Franklin and Bertha executed in August 1994 terminated their 1993 beneficiary deed in favor of Atkinson. Jennings contends that the circuit court erred in concluding that the 1994 warranty deed did not revoke the earlier beneficiary deed. She notes that, pursuant to statute, a conveyance during the owners' lifetime of the owners' interest in property terminates the beneficiary designation with respect to the property transferred and, here, Franklin and Bertha, as husband and wife, conveyed their interest in the property via warranty deed after executing and recording the beneficiary deed.
Our review of this judge-tried case is governed by Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976), under which we will affirm the circuit court's judgment unless it is unsupported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Pearson v. Koster, 367 S.W.3d 36, 43 (Mo. banc 2012). Where, as here, the issue is strictly a question of law, we apply de novo review. Id. We give no deference to the circuit court's rulings on questions of law. Id. at 43–44.
Resolution of this matter requires the interpretation and application of various statutes. Statutory interpretation is a question of law. Bohr v. Nodaway Valley Bank, 411 S.W.3d 352, 356 (Mo.App.2013). “The primary rule of statutory construction is to determine the intent of the legislature from the plain and ordinary meaning of the words used in the statute.” Id. “To give effect to the legislature's intent, the words should be construed within the context of the legislature's purpose in enacting the law.” Id.
In 1989, the Missouri Legislature enacted Chapter 461, the “Nonprobate Transfers Law.”4 Id. The Law “created an informal means by which property, including real property, could be transferred outside of probate, and without consideration, by a ‘beneficiary designation’ that could be revoked at anytime, and that would not become effective to convey the property until the death of the grantor.” Id. at 356–57. In section 461.025, the Law creates a deed unrecognized in the common law: the “beneficiary deed.” See Pippin v. Pippin, 154 S.W.3d 376, 379 (Mo.App.2004) ; Ziegenhorn, Legal Forms, 6 Missouri Practice Series , § 2:182, Author's Comment (a) (2003). Under that statute, if a deed “expressly states that the deed is not to take effect until the death of the grantor,” and it is recorded in the county where the property is located, then the deeded property interest will be conveyed to the beneficiary upon the grantor's death. § 461.025.1.5 Neither party contends that the beneficiary deed that Franklin and Bertha executed in favor of Atkinson failed to comply with the statute's requirements.
The relevant statutes also make clear that, prior to the death of the owner, the beneficiary has no rights in the property, and transactions respecting the property may be made by the owner without the signature or agreement of the beneficiary. § 461.031.1. Consistent with this, a beneficiary deed “may be revoked in whole or in part and the beneficiaries changed during the lifetime of an owner or surviving joint owner.” § 461.033.1; see Hammack v. Coffelt Land Title, Inc., 348 S.W.3d 75, 83 (Mo.App.2011). One means by which a beneficiary deed may be revoked or terminated is by “conveyance” during the owner's lifetime of the owner's interest in the property, with or without consideration. § 461.033.6. That statute provides, in pertinent part:
A conveyance or assignment during the owner's lifetime of the owner's entire interest in property subject to a nonprobate transfer arrangement, with or without consideration, ... terminates rights under a beneficiary designation and all interest of the beneficiaries in the property and in the proceeds from the property.
Id. “Conveyance” is defined as a “transfer of title to land from one person, or class of persons, to another by deed.” Black's Law Dictionary 333 (6th ed. 1990 West). Thus, “the grantor's simple act of transferring his interest in property [that is] subject to a beneficiary deed, during his lifetime, supersedes and terminates a beneficiary designation with respect to that same property.” Hammack v. Coffelt Land Title, Inc., 284 S.W.3d 175, 180 (Mo.App.2009) (Ahuja, J., concurring).
Here, in ruling on this issue, the circuit court interpreted Jennings's argument as a claim that Franklin's and Bertha's 1994 conveyance “severed the tenancy by the entirety and changed [Bertha's] form of ownership.” The court noted that the term “owner” in the Nonprobate Transfers Law includes “joint owners”6 and that “joint owners” include “a husband and wife who hold property as tenants by the entirety.” § 461.005(5), RSMo Cum.Supp. 2009. The court then opined that “whether or not the 1994 warranty deed severed the tenancy by the entirety ownership, ... the property was not transferred to a third party ” and Bertha “at all times continuously from March 1, 1946, until her death September 8, 2009, was by definition an owner of the property ”, thus, “the beneficiary deed was not revoked.” (Emphasis added.)
We disagree. Franklin and Bertha were husband and wife when they acquired the Johnson County property via warranty deed in 1946. Thus, although the 1946 deed did not so specify, it nevertheless created a prima facie “tenancy by the entirety.” See Bakewell v. Breitenstein, 396 S.W.3d 406, 412 (Mo.App.2013) (). Under Missouri law, “[t]he distinctive characteristic of an estate by the entirety is that it is deemed to be owned by a single entity, the marital community.” In re Estate of Blair, 317 S.W.3d 84, 89 (Mo.App.2010) (citing Stewart v. Shelton, 356 Mo. 258, 201 S.W.2d 395, 398 (1947) ). “Where land is held by the entirety, the husband and wife hold it not as separate individuals but as one person[.]” Johnson v. Cook, 167 S.W.3d 258, 263 n. 4 (Mo.App.2005). Because the estate is deemed to be “owned by a single entity, ‘neither spouse has any ... interest which may be conveyed, encumbered or devised by his or her sole act.’ ” Bakewell, 396 S.W.3d at...
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