Kelley v. Neilson

• Decision Date: 06 December 2000
• Citation: 433 Mass. 706,745 NE 2d 952
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: JANE KELLEY v. DONALD B. NEILSON, executor.

433 Mass. 706

745 NE 2d 952

JANE KELLEY v. DONALD B. NEILSON, executor.¹

Supreme Judicial Court of Massachusetts, Middlesex.

December 6, 2000.

April 13, 2001.

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, COWIN, & SOSMAN, JJ.

Joseph Melone for the defendant.

Paul R. Chomko (Donald J. Bertrand with him) for the plaintiff.

MARSHALL, C.J.

We decide in this case whether the execution of a purchase and sale agreement by a testatrix adeemed by extinction a specific devise of real property where the testatrix died before the real estate transaction was completed. We conclude that in the circumstances of this case it did.

The dispute concerns a two-family residential property located on Laurel Avenue in Waltham (Waltham property), previously owned by Aileen T. Neilson (testatrix). The property has been sold. The defendant, the son and executor of the testatrix, and the plaintiff, granddaughter of the testatrix, each claim the right to all of the proceeds from that sale. The plaintiff filed a complaint in the Probate and Family Court seeking an order directing the defendant to relinquish the proceeds to her. The defendant moved for summary judgment, arguing that the devise of the Waltham property had been adeemed by the sale; the plaintiff filed a cross motion for summary judgment. A judge in the Probate and Family Court dismissed the complaint and entered summary judgment for the defendant, and the plaintiff appealed.

The Appeals Court reversed, holding that the devise to the plaintiff had not been adeemed because the property was "in existence and owned" by the testatrix at the time of her death, and that the plaintiff was entitled to the net proceeds of the sale. Kelley v. Neilson, 49 Mass. App. Ct. 115, 118 (2000). The defendant filed a petition for rehearing in which he claimed that the Appeals Court had failed to consider and to value a life estate in the Waltham property that the testatrix had devised to him. The Appeals Court issued an order modifying its opinion, the effect of which was to remand the case to the Probate and Family Court for further consideration of the defendant's claim to a life estate. We granted the defendant's application for further appellate review.

1. We summarize the relevant and undisputed material facts. See Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989); Mass. R. Civ. P. 56, 365 Mass. 824 (1974). In September, 1991, the testatrix deeded to the defendant her interest in the Waltham property. Approximately one year later, the defendant deeded the property back to her.²

On January 5, 1993, the testatrix executed her last will. Under the terms of the will she made several specific monetary bequests.³ With respect to the Waltham property that she owned and in which she apparently resided at the time, the testatrix devised the property to the plaintiff, subject to substantial restrictions that benefited the defendant and his wife. Specifically, the will provided that the defendant and his wife would have the absolute right during their respective lifetimes to occupy one of the two Waltham property apartments, and restricted the plaintiff from selling the Waltham property while either the defendant or his wife did so. The will further required the plaintiff to provide the defendant and his wife with the net proceeds from the rental of the second apartment, regardless of whether the defendant or his wife continued to occupy the other apartment.⁴ In short, while the testatrix devised the Waltham property to the plaintiff, she did not have the right to benefit economically from it while the defendant and his wife chose to reside there.

Finally, under the terms of her will, the testatrix bequeathed to the defendant all her personal property, including "bank accounts, securities, automobile, and the contents of [her] residential home." She also appointed him to serve as the executor of her will, with the "full power and authority, without need of a license from the Probate Court of jurisdiction, to sell, mortgage, rent, lease, and manage [her] real and personal property."

On November 28, 1995, nearly three years after she executed her last will, the testatrix signed a purchase and sale agreement for the sale of the Waltham property to another granddaughter, Bonnie Neilson, and Sean B. Lane (buyers), for the sum of $169,000.⁵ The agreement provided that the closing would take place on January 16, 1996. On November 30, 1995, the testatrix took all steps necessary on her part to effect the sale: she executed a quitclaim deed, as well as a special limited power of attorney in favor of her attorney, David L. Mitchell, authorizing him "to do all things necessary with respect [to] the sale" of the Waltham property.⁶

On January 16, 1996, Mitchell, acting as authorized on behalf of the testatrix, agreed to extend the time of performance for the closing until January 30, 1996.⁷ The testatrix died four days later on January 20, 1996, ten days before the scheduled closing. It is undisputed that by the rescheduled closing date the buyers were ready, willing, and able to complete the sale transaction.

The death of the testatrix placed a cloud on the title of the Waltham property. On January 30, 1996, the date on which the closing had been rescheduled to take place, the attorney for the buyers requested an extension to February 29, 1996, explaining that "the Seller had been unable to deliver clear title." The buyers' attorney pointed to the provision in the purchase and sale agreement that provided the seller with the power to extend the closing date to remove any defects in the title. On January 30, 1996, Mitchell, now acting as attorney for the estate of the testatrix,⁸ agreed to extend the closing date until February 29, 1996. The agreement was further extended twice, and the Waltham property was conveyed to the buyers on May 22, 1996.

2. The plaintiff argues that, as the devisee of a specific devise of real estate under the testatrix's will, she is entitled to all proceeds from the sale of the Waltham property consummated after the death of the testatrix.⁹ A specific legacy is one that "separates and distinguishes the property bequeathed from the other property of the testator, so that it can be identified." Tomlinson v. Bury, 145 Mass. 346, 347 (1887). See Restatement (Third) of Property (Wills and Other Donative Transfers) § 5.1(b) and comment b, at 346 (1999). "The distinctive characteristic of such a legacy is its liability to ademption or extinction." Moffatt v. Heon, 242 Mass. 201, 203 (1922).

It is settled law in this Commonwealth that a specific legacy or devise is adeemed when a testator, during her lifetime, disposes of the subject of the specific legacy. Walsh v. Gillespie, 338 Mass. 278, 280 (1959), quoting Richards v. Humphreys, 15 Pick. 133, 135 (1833). The doctrine of ademption "seeks to give effect to a testator's probable intent by presuming he intended to extinguish a specific gift of property when he disposed of that property prior to his death." Wasserman v. Cohen, 414 Mass. 172, 174 (1993).

To determine whether a devise has been adeemed, we, along with the "great weight of modern authority," have adhered to the "identity" theory of ademption and "ordinarily look[] only to the existence or nonexistence of the subject matter of the specific legacy."¹⁰ Walsh v. Gillespie, supra at 280. We have "focused on the actual existence or nonexistence" of the bequeathed property at the time of the testator's death, "and not on the intent of the testator with respect to it." Bostwick v. Hurstel, 364 Mass. 282, 295 (1973). See Walsh v. Gillespie, supra at 279-280, and cases cited. We have also recognized that a bequest of specific property

"can only be satisfied by the thing bequeathed; if that has no existence, when the bequest would otherwise become operative, the legacy has no effect. If the testator subsequently parts with the property, even if he exchanges it for other property or purchases other property with the proceeds, the legatee has no claim on the estate for the value of his legacy. The legacy is adeemed by the act of the testator."

Bostwick v. Hurstel, supra,

quoting Tomlinson v. Bury, 145 Mass. 346, 347-348 (1887).

Nevertheless, we have on occasion departed from a rigid application of the "identity" rule where the rule would yield a harsh and unjust result and "would result in a disruption of the dispositive scheme of the testatrix because of wholly fortuitous circumstances beyond her control." Walsh v. Gillespie, supra at 282-283. See Bostwick v. Hurstel, supra.

In Walsh v. Gillespie, supra, for example, we held for just those reasons that the sale by a conservator, just after his appointment and six weeks before the testatrix's death, of one-half of the shares of stock bequeathed in her will did not operate as an ademption of the specific bequest as to the unexpended balance of the proceeds remaining in the conservator's hands at the testatrix's death. The sale of the stock, the largest asset of the estate, had been necessary for the testatrix's support. If adeemed, this asset would not have benefited "the principal objects of the testatrix's bounty," a result we declined to sanction. Id. at 283.

For similar reasons we held in Bostwick v. Hurstel, supra,

that a bequest of specific shares of stock was not adeemed even though the testatrix did not have continuous ownership of the shares of stock after she executed her will. Id. at 295-296. We held that there were sufficiently compelling circumstances to conclude that a specific legacy had not been adeemed where the testatrix had ample shares for the gift at the time of her death. Cf. BayBank Harvard Trust Co. v. Grant, 23 Mass. App. Ct. 653 (1987).

A specific bequest "can only be satisfied by the thing bequeathed." Bostwick v. Hurstel, supra at 295, quoting Tomlinson v. Bury, supra at 347-348. In this case the testatrix made two specific devises concerning the Waltham property: a devise of title to...