Lazetich v. Miller, 82-295

• Decision Date: 12 October 1983
• Docket Number: No. 82-295,82-295
• Citation: 671 P.2d 15,206 Mont. 247,40 St.Rep. 1626
• Parties: Milana LAZETICH, Peter Lazetich and William Lazetich, Plaintiffs and Respondents, v. Lucille MILLER and Lorraine Dalton, et al., Defendants and Appellants.
• Court: Montana Supreme Court

Page 15

671 P.2d 15

206 Mont. 247

Milana LAZETICH, Peter Lazetich and William Lazetich Plaintiffs and Respondents, v. Lucille MILLER and Lorraine Dalton, et al., Defendants and Appellants.

No. 82-295.

Supreme Court of Montana.

Submitted on Briefs March 4, 1983.

Decided Oct. 12, 1983.

Donald Garrity, Garrity, Keegan & Brown, Helena, for defendants and appellants.

Moses Law Firm, Michael Moses, Billings, for plaintiffs and respondents.

WEBER, Justice.

Plaintiffs brought this action against the personal representatives of the estate of Mary Lazetich to enforce an oral agreement not to revoke the provisions of a will disposing of family corporation stock. The Third Judicial District Court, Deer Lodge County, ordered enforcement of the agreement, and defendants appeal. We affirm.

The issue on appeal is whether there is sufficient evidence to establish that Mary Lazetich orally contracted not to revoke the provision of her May 2, 1966 will directing the disposition of family corporation stock.

The dispute involves shares of stock in Lazetich & Sons, a closely-held family corporation. Peter and Mary Lazetich, husband and wife, each owned a one-sixth interest in the stock of the corporation in early 1966. On May 2, 1966, they executed mutual wills with clauses providing that the stock would pass to the surviving spouse. Upon the death of the surviving spouse, it would pass to three sons and one grandson, share and share alike. The provision from the will of Mary Lazetich was as follows:

"My husband, PETER LAZETICH, has made and executed a Last Will and Testament, the same date as my Will, and in this Will he has provided that his undivided one-sixth of said stock in said corporation [Lazetich & Sons] will go to me in the event he dies before I do. Upon the death of the survivor of myself or husband, the one-third interest that we own in said stock is given and bequeathed to my son, MILAN LAZETICH, to my son, ELI LAZETICH, to my son WILLIAM LAZETICH, and to my grandson PETER LAZETICH, son of WILLIAM LAZETICH, share and share alike."

Peter Lazetich predeceased his wife and his May 2, 1966 will was admitted to probate. His undivided one-sixth interest in the Lazetich & Sons corporate stock was distributed to his wife, Mary Lazetich.

In the 1970s Mary Lazetich executed two more wills, the last on November 28, 1978. Upon Mary's death, the November 28, 1978 will was admitted to probate. It did not bequeath the Lazetich & Sons corporate stock in the manner provided in the May 2, 1966 will. The plaintiffs filed claims against the Mary Lazetich estate alleging they were entitled to the one-third stock interest in Lazetich & Sons. Plaintiffs claimed that Peter and Mary Lazetich had entered into an oral contract not to revoke that portion of their mutual 1966 wills relating to the distribution of Lazetich & Sons stock. The defendant personal representatives disallowed the claims of the plaintiffs and this lawsuit followed.

The case was heard by the District Court without a jury. Extensive findings of fact and conclusions of law were prepared by the District Court.

The attorney who prepared the May 2, 1966 will also prepared the November 28, 1978 will of Mary Lazetich. He was the primary witness at the trial. The findings of the District Court in regard to his testimony are substantially as follows. Previous to execution of the mutual wills and in the presence of their attorney, Mary and Peter Lazetich agreed that upon the death of both parties, their one-third interest in Lazetich & Sons corporate stock would be distributed between their sons and one grandson, share and share alike. Pursuant to that agreement, mutual wills were drawn for Peter and Mary Lazetich and executed on May 2, 1966. When the attorney prepared the November 28, 1978 will for Mary Lazetich, he had forgotten about the May 2, 1966 will. The District Court also found as follows:

"Peter and Mary Lazetich were very fond of each other before, on and after May 2, 1966, and they pledged that they would not change their Wills.

"There is no evidence that the agreement between Mary and Peter Lazetich was induced by duress, menace, fraud, undue influence or mistake."

The District Court's conclusions of law stated that Peter and Mary Lazetich had agreed that upon the death of the first of them the one-sixth stock ownership would pass to the survivor. Upon the death of the survivor, the total one-third stock interest would pass to the designated sons and grandson, share and share alike. In consideration of that agreement, the mutual wills were executed. Based upon these findings and conclusions, the District Court ordered the personal representatives to distribute the stock of Lazetich & Sons in accordance with the May 2, 1966 will.

Agreements not to revoke wills are specifically addressed by the Montana Uniform Probate Code (UPC). Section 72-2-105, MCA provides:

"(1) A contract ... not to revoke a will or devise ... if executed after July 1, 1975, can be established only by:

(a) Provisions of a will stating material provisions of the contract;

(b) An express reference in a will to a contract and extrinsic evidence proving the terms of the contract; or

(c) A writing signed by the decedent evidencing the contract.

(2) The execution of ... mutual wills does not create a presumption of a contract not to revoke the ... wills."

Because the alleged contract was entered into in 1966, the provisions of the UPC do not apply.

It is clear that prior to the adoption of the Montana UPC a person could make a valid oral contract to dispose of her property by will. In Conitz v. Walker (1975), 168 Mont. 238, 244, 541 P.2d 1028, 1031, this Court stated:

"It is clear that in Montana a person may make a valid contract to dispose of his property by will. Erwin v. Mark, 105 Mont. 361, 73 P.2d 537.

"This Court in Rowe v. Eggum, 107 Mont. 378, 87 P.2d 189, enforced an oral agreement of a decedent not to change a will made in favor of the plaintiff.

"The rule of law in Montana is that proof of an oral contract by a deceased to leave property by will:

" ' * * * must be clear, cogent, and convincing, and that the making of such an oral contract or agreement must be established by disinterested witnesses.' Cox v. Williamson, 124 Mont. 512, 227 P.2d 614."

In Conitz, as here, one party argued there was sufficient evidence to find a contract while the other party argued there was no such evidence and that the contract was "pulled out of the air." In holding that there was such a contract, the Court stated:

"Perhaps each item of evidence above standing by itself does not establish a contract between Edward and Leona to make mutual will[s] leaving their property to the other. However, viewed as a whole this Court finds that the oral contract between Leona and Edward has been established in this case by clear, cogent and convincing evidence and by the testimony of disinterested witnesses ...." Conitz, 168 Mont. at 245, 541 P.2d at 1031.

The basic rule was restated more strongly in Craddock v. Berryman (1982), Mont., 645 P.2d 399, 402, 39 St.Rep. 835, 837. There we stated that "contracts to make wills are looked upon with disfavor because the other contracting party is dead and cannot affirm or deny the making of the contract. The law, therefore, requires clear and convincing evidence." Further, this Court emphasized that it would not "substitute its judgment for that of the lower court on factual issues if there is credible evidence to support the court's findings." Craddock, 645 P.2d at 402, 39 St.Rep. at 838, citing Kearns v. McIntyre Construction Co. (1977), 173 Mont. 239, 567 P.2d 433.

There is no significant disagreement between the parties as to the law. However, the defendants contend there is not sufficient evidence to establish that Mary Lazetich orally contracted not to revoke the provisions of her May 2, 1966 will directing the disposition of family corporation stock. In essence, the defendants attack the sufficiency of the testimony of the attorney who prepared the wills in question. The defendants contend that the testimony sets forth only the attorney's conclusion that there was in law an agreement between Peter Lazetich and Mary Lazetich, rather than establishing that there was in fact such an agreement.

On redirect examination, the attorney-witness testified as follows:

"Q. ... [I]n your discussions with Mary and Peter Lazetich prior to the mutual wills, did they freely and mutually between themselves consent and enter into an agreement as to how the shares of stock of Lazetich and Sons, which they held, would be distributed at not only the first one to die but the second one to die?

"A. Yes, they had a very specific agreement and they were totally in accord with one another.

"Q. Is that agreement as evidenced by their wills of May 2, 1966?

"A. Without any question in my mind."

On cross examination the attorney-witness testified regarding the question of revocation:

"Q. Did you advise them that upon the death of either of them that these wills could not be changed?

"A. They understood that. They said that's the way they wanted it to be and pledged that to each other in my presence.

"Q. Could you tell us exactly what was said?

"A. Did I tell them what?

"Q. Could you tell me exactly what was said at that time?

"A. There was no question about the fact that they knew this was binding upon each one. They each wanted what the other wanted and as to those two individuals, there was no question as to the fact they would live up to their promises to one another.

"Q. You have the well deserved reputation of being a careful lawyer.

"A. I like to think I'm a careful lawyer, yes, sir.

"Q. You did not specifically point out that upon the death of one, these wills could not be revoked?

"A. That was discussed, Mr. Garrity, with both of them and this is what they wanted.

"Q. Why didn't you put it in the will?

"A. Why not? It wasn't necessary. I made mutual wills and...