McKeehan v. McKeehan

• Decision Date: 21 November 2011
• Docket Number: No. 03–10–00025–CV.,03–10–00025–CV.
• Citation: 355 S.W.3d 282
• Parties: Marcia McKEEHAN, Individually and as Independent Executor of the Estate of W. Dale McKeehan; and Allison Schirmer, Appellants, v. Mark Cameron McKEEHAN and Robin Leigh Mullenix, Appellees.
• Court: Texas Court of Appeals

355 S.W.3d 282

Marcia McKEEHAN, Individually and as Independent Executor of the Estate of W. Dale McKeehan; and Allison Schirmer, Appellants,

v.Mark Cameron McKEEHAN and Robin Leigh Mullenix, Appellees.

No. 03–10–00025–CV.

Court of Appeals of Texas, Austin.

July 6, 2011.Rehearing Overruled Nov. 21, 2011.

J. Bruce Bennett, Cardwell, Hart & Bennett, L.L.P., Michael C. McCrea, Dubois, Bryant & Campbell, L.L.P., Austin, TX, for appellant.

Glenn M. Karisch, Austin, TX, for appellee.

Before Justices PURYEAR, PEMBERTON and ROSE.

OPINION

JEFF ROSE, Justice.

Three weeks prior to his death, Dale McKeehan and his wife, appellant Marcia McKeehan, executed a change request form to add her as joint owner of his interest in Ford Motor Credit Company's Ford Interest Advantage investment program. In subsequent probate court proceedings regarding his estate, Dale McKeehan's children from a previous marriage, appellees Mark Cameron McKeehan and Robin Leigh Mullenix, successfully argued in a cross-motion for summary judgment that Marcia McKeehan's joint ownership of the Ford investment held no survivorship rights under Texas law, and thus, the Ford investment should pass to Dale McKeehan's testamentary beneficiaries as part of his probate estate. Because we hold that the Ford investment program is subject to a valid choice-of-law provision requiring that Michigan law be used to govern and construe the Ford investment program, and because under Michigan law Marcia McKeehan and Dale McKeehan held the Ford investment as joint tenants with right of survivorship, we will reverse the trial court's summary judgment and render judgment that ownership of the Ford investment passed to Marcia McKeehan as the surviving joint owner.

FACTUAL AND PROCEDURAL BACKGROUND

Dale ¹ worked for Ford Motor Company for more than 35 years, having started at Ford in 1962 as a trainee foreman at Ford's Dallas automotive assembly plant. He retired in 1998 as vice-president of Ford's Vehicle Operations in Michigan. In 1988, while living in Michigan, Dale opened an individual account in what was then a relatively new Ford Credit Company investment program known at that time as the Ford Money Market Account. ² Participants in the Ford investment program purchased Ford Credit debt securities—i.e., variable denomination floating rate demand notes—that earned the participants interest on their investment. Dale maintained his investment in the Ford investment program through his death in 2008.

In 1998, the same year he retired from Ford, Dale and Marcia married and moved to Texas. Ten years later, in early 2008, Dale was diagnosed with incurable non-small-cell lung cancer, which his doctors told him was a terminal condition. Marcia testified that soon after receiving this diagnosis, Dale spent a weekend reviewing his personal affairs and then made an appointment to meet with his banker, Jeff Bedell, at an Austin Comerica bank branch on February 19, 2008. Both Bedell and Marcia, who also attended the meeting at Comerica, testified that Dale brought his Ford investment program information to the meeting and told Bedell that he wanted to make Marcia a joint owner of the Ford investment. Bedell called Northern Trust, the bank that administered the Ford investment program, to inform them that Dale wanted to add Marcia as a joint owner. After speaking with Dale, who confirmed his intention to add Marcia as joint owner, the Northern Trust representative faxed a “Ford Interest Advantage Change Request Form” to Bedell. Bedell filled out part of the form and then handed it to Dale, who, according to both Bedell and Marcia, reviewed the form carefully and then handed it to Marcia to add her personal information. Dale reviewed the form again, signed at the bottom, and handed it to Marcia for her signature. Bedell also signed the form as witness to the McKeehans' signatures. According to Bedell, the completed form was then returned to Northern Trust.

Dale died on March 9, 2008. In his will, Dale left all his property to a revocable trust. The trust agreement creating Dale's revocable trust directs the trustee to, stated generally, distribute the trust assets in the following order upon Dale's death:

1. All real property, all death benefits paid by Ford, all death and pension benefits paid as a result of his employment with Ford, and $2,500,000 to Marcia;

2. $200,000 to the Allison Schirmer Education Trust; ³ and

3. After the payment of debts, expenses, and taxes, the remainder of the trust property, if any, to the “Child's Trusts” of Mark McKeehan and Robin Leigh Mullenix in equal shares.Dale's will was admitted to probate, and Marcia was appointed executor pursuant to Dale's will. Meanwhile, Marcia, treating the Ford investment as a non-probate asset, informed Ford Credit that Dale had died and asked them to disburse the funds to her as the surviving owner and close the account, which Ford did.

Mark and Robin filed a petition for declaratory judgment in the probate matter, arguing, in part, that Dale's investment in the Ford investment program should be included in Dale's probate assets because, under Texas law, Marcia did not have survivorship rights to that property. The parties filed competing traditional motions for summary judgment. Mark and Robin argued that Marcia's status as joint owner did not include a right of survivorship under Texas law. Marcia argued that she held the Ford investment as a joint tenant with right of survivorship under Texas law and, further, that the Ford investment program was subject to a Michigan choice-of-law provision and Michigan law presumes survivorship rights when spouses are joint owners of an asset such as the Ford investment. The probate court denied Marcia's motion and granted Mark and Robin's motion, holding that Texas law controls the disposition of Dale's personal property and that, because Marcia did not prove that Dale signed a written agreement establishing that Marcia held survivorship rights in the Ford investment, the investment was subject to disposition as part of Dale's probate estate.

On appeal, Marcia challenges the trial court's summary judgment, asserting that the probate court erred in refusing to enforce the Michigan choice-of-law provision in the Ford investment program documents. In her second issue, she argues that, under Michigan law, she became the sole owner of the Ford investment on Dale's death because Michigan law presumes a right of survivorship to assets of this type that are jointly owned by spouses. In a third issue, Marcia asserts that even if Texas law controls the disposition of the Ford investment, the probate court's summary judgment was erroneous because the change of ownership form signed by Dale and Marcia created a valid right-of-survivorship agreement under Texas law.

DISCUSSION

Standard of review

To be entitled to summary judgment, the movant must establish that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Tex R. Civ. P. 166a(c). In our de novo review of a summary judgment, we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.2002). When, as here, both parties move for summary judgment on overlapping issues and the trial court grants one motion and denies the other, we review the summary-judgment evidence presented by both sides, determine all questions presented, and render the judgment that the trial court should have rendered. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000). Thus, if the trial court erred, we will reverse and render the judgment that the court should have rendered. Id.

Choice of law

We first consider which jurisdiction's law—Michigan or Texas—we must apply in determining the ownership status of the Ford investment. Marcia asserts that we must use Michigan law to construe the status of the Ford investment because the summary-judgment evidence conclusively proves that the Ford investment program is subject to a Michigan choice-of-law provision. Specifically, Marcia points to a provision in a document titled “Ford Interest Advantage Terms and Conditions” (Terms and Conditions), which states that “[t]he [Ford investment] Program shall be governed by and construed in accordance with the laws of the State of Michigan.” In response, Mark and Robin argue that the law of the decedent's domicile—i.e., Texas—must govern the passage of that decedent's personal property and, regardless, that Marcia produced no evidence showing that Dale agreed to be bound by the Terms and Conditions.

When a party contends that a contractual choice-of-law provision requires us to apply the law of some other jurisdiction, we must first determine if the applicable laws of the two jurisdictions differ. See Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 419 (Tex.1984) If there is no conflict in the law, there is no need to determine which law applies. See id. Here, there is no dispute that Michigan and Texas law differ in their treatment of the jointly-owned asset at issue. Michigan law presumes that when a husband and wife are joint owners of an asset such as the Ford investment, they hold that interest as joint tenants with right of survivorship. See Mich. Comp. L. § 557.151 (2010) (providing that “promissory notes, debentures, or other evidences of indebtedness” payable to spouses are held in joint tenancy). In contrast, Texas law presumes that, unless specifically indicated in writing, joint ownership of an asset does not include a right of survivorship. See Tex. Prob.Code Ann. §§ 46(a) (joint tenancies), 439(a) (right of survivorship) (West 2003).

Because these laws conflict, our next step would ordinarily be to decide whether the contractual choice-of-law provision at issue is enforceable. See DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 677–81 (Tex.1990). Here, however, Mark and Robin argue that...