Montgomery v. Estate of Montgomery
| Decision Date | 05 March 1997 |
| Docket Number | No. 75A03-9604-CV-133,75A03-9604-CV-133 |
| Citation | 677 N.E.2d 571 |
| Parties | Harry MONTGOMERY, Appellant, v. In the Matter of the Supervised Administration of the ESTATE OF Cynthia S. MONTGOMERY, a/k/a Cynthia S. Matter, Deceased, Appellee. |
| Court | Indiana Appellate Court |
Harry Montgomery ("Montgomery") appeals the trial court's denial of his petition for a partial distribution of his share of the real estate. We affirm and remand to the trial court for further proceedings consistent with this opinion.
Cynthia S. Montgomery, a/k/a/ Cynthia S. Matter ("Cynthia"), died testate on June 2, 1993 while domiciled in Starke County, Indiana. She was survived by Montgomery, her second husband with whom she had no children, and her adult children, Shelli Matter, Stacey Sult and Steven Matter, all born of a prior marriage. At the time of her death, Cynthia had real property consisting of her home and her business, the Knox Beauty College. Her personal property consisted of her furniture and household goods, a bank account, an automobile, jewelry, and other miscellaneous personalty.
On June 15, 1993, Cynthia's estate was opened as an unsupervised estate with Shelli Matter as personal representative. Montgomery filed a notice to take against the will as well as a notice of election to take survivor's allowance. In August 1993, Montgomery filed an objection to the unsupervised administration and in September 1993, an agreed order was entered changing the estate to a supervised estate. In October 1993, the trial court approved a verified report of sale of real estate which sold Cynthia's former residence for $52,500 with selling expenses of $3,675.00.
On July 9, 1994, the trial court granted Steven Matter's petition for appointment of successor personal representative and appointed Steven Matter and Toni Palm as successor co-personal representatives. On July 29, 1994, the estate filed a motion to freeze the estate checking account which was granted. On September 16, 1994, the trial court ordered Shelli Matter to pay the estate $32,521.91. 1
On June 5, 1995, Montgomery petitioned for an estate and business accounting, indicating that it was necessary for him to "ascertain what he shall receive from the estate." (R.112). On June 30, 1995, the trial court approved the sale of the real estate and business which constituted the Knox Beauty College. 2 On July 25, 1995, the trial court entered a nunc pro tunc order requiring the sale proceeds to be held in an interest bearing account.
On August 2, 1995, Montgomery filed a brief supporting his request for an allocation of funds from the sale of the real estate and the estate responded. On September 13, 1995, Montgomery filed a petition for an accounting and for sanctions and attorney fees to which the estate filed a response on September 18, 1995. On October 2, 1995, the estate filed an interim accounting, asset disclosure and creditor listing. On October 5, 1995, a judgment in favor of the estate and against Shelli Matter was entered and the deed on the sale of the real estate and business was approved.
On November 20, 1995, Montgomery filed a petition requesting partial distribution. On December 12, 1995, the estate filed a response objecting to such; the co-personal representatives filed a proposed final accounting; and the trial court held a hearing on the petition. On December 29, 1995, the petition was denied. The trial court found:
1. That Harry Montgomery is a second subsequent childless spouse of the decedent, Cynthia S. Montgomery;
2. That Harry Montgomery has elected against the Will pursuant to I.C. § 29-1-3-1;
3. That pursuant to said section he is entitled to one-third (1/3) of the lands of the testator;
4. That the life estate in one-third (1/3) of the lands of the testator is a net estate subject to the payment of claims as set forth in the classification of claims in I.C. § 29-1-14-9;
5. That the second subsequent childless spouse does not have a priority status of any kind over other heirs of [sic] devisees such that he should receive his one-third (1/3) of the net personal estate of the testator plus a life estate in one-third (1/3) of the lands of the testator prior to final distribution of the estate, which would occur after payment of the various items set forth in I.C. § 29-1-14-9;
6. That pursuant to the authority of In Re Estate of White, 651 N.E.2d 324 (Ind.App.1995), the value of Harry Montgomery's life estate in one-third (1/3) of the lands of the testator should be determined as of the date of transfer of each of the parcels of real estate involved, and as set forth in I.C. § 29-1-14-9;
7. That the Court notes that the intent of the Legislature appears to be that a second subsequent childless spouse not be given any priority over any other heir or devisee, but that the language of the Probate Code, as written, creates confusion in that it creates the impression that the life estate in one-third (1/3) of the lands of the testator that the second subsequent childless spouse has upon his election to take against the Will is a priority over everything else in the estate. Such an interpretation would have disastrous consequences and the Court specifically finds that such is not the intent of the Legislature;
8. That as such the Petition and Request for Partial Distribution by Harry Montgomery should be denied.
(R.270-71). Montgomery now appeals. 3
Montgomery offers four issues on appeal, all of which culminate in the single issue of whether the trial court erred in failing to grant Montgomery's petition for partial distribution on the basis that his life estate interest in one-third of the real property of the deceased, as a second or subsequent childless spouse who elected against the will pursuant to Ind.Code § 29-1-3-1, was subject to the payment of claims set forth in Ind.Code § 29-1-14-9.
We agree with Montgomery that the issue involves the interpretation of various sections of the probate code. 4 "The interpretation of a statute is a question of law to which we owe the trial court's holding no deference." Figg v. Bryan Rental Inc., 646 N.E.2d 69, 72 (Ind.Ct.App.1995), reh'g denied, trans. denied. We review questions of law and the trial court's legal conclusions under a de novo standard, substituting our judgment for the trial court's if necessary. Battershell v. Prestwick Sales, Inc., 585 N.E.2d 1, 3 (Ind.Ct.App.1992), trans. denied; Kintzele v. Przybylinski, 670 N.E.2d 101, 102 (Ind.Ct.App.1996).
We recently provided a review of the well-established rules of statutory construction.
When construing a statute to determine the intent of the legislature, words and phrases are to be given their common and ordinary meaning. [Citation omitted]. If the language of a statute is clear and unambiguous it is not subject to judicial interpretation. [Citation omitted]. However, when the language is reasonably susceptible to more than one construction, we must construe the statute to determine the apparent legislative intent. [Citation omitted]. Statutory provisions cannot be read standing alone; instead, they must be construed in light of the entire act of which they are a part. [Citation omitted]. When the legislature enacts a statute, we presume it is aware of existing statutes in the same area. [Citation omitted].
Town of Merrillville v. Merrillville Conservancy Dist. By and Through Bd. of Directors, 649 N.E.2d 645, 649 (Ind.Ct.App.1995), reh'g denied, trans. denied. See also Seifert v. Bland, 587 N.E.2d 1317, 1319 (Ind.1992), reh'g denied.
We initially note that this appeal comes to us on the trial court's denial of a petition for partial distribution. IND.CODE § 29-1-17-1 provides that a court may order a partial distribution of an estate in varying circumstances. Subsection (a) allows the trial court, under certain circumstances and restrictions, to deliver to any distributee, who consents to it, possession of any specific real or tangible personal property to which he is entitled under the will or by intestacy. Subsection (b) allows for distribution at any time during the administration when it is apparent that the estate is solvent and that items of property are perishable in nature, would materially depreciate in value if distribution were delayed, or would necessitate the expenditure of estate funds for storage or preservation. Subsection (c) provides for a partial distribution after the expiration of time for filing claims. Any partial distribution can be modified pursuant to § 29-1-17-2(b) to protect other distributees and claimants and the court may require security for return of property to the extent necessary to satisfy distributees and claimants who may be prejudiced. The Indiana Probate Code Study Commission's ("the Commission") comments indicate that this section was designed to partially address the criticism that it takes too long for a distributee to receive his or her share of the estate. The comments offer a hypothetical example wherein the amount due beneficiaries was safely established and a balance which was more than adequate to handle the questionable claims was retained by the estate.
In his petition for partial distribution, Montgomery requested that he receive the value of his life estate in one-third of the real estate. He arrived at dollar amounts for his shares of the two properties by multiplying a life estate value factor taken from the Federal Estate Tax Regulations by the net proceeds from the land sale of each property. He contended, as he does in this appeal, that his share of the real estate should not be subjected to the debts and expenses of the estate and that it vested immediately upon Cynthia's death.
A partial distribution...
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