Oldham v. Oldham

• Decision Date: 04 February 2011
• Docket Number: No. 32,001.,32,001.
• Citation: 247 P.3d 736,2011 -NMSC- 007,149 N.M. 215
• Parties: Dustin OLDHAM, Petitioner–Respondent,v.Glenda OLDHAM, Respondent–Petitioner.
• Court: New Mexico Supreme Court

149 N.M. 215

247 P.3d 736

2011 -NMSC- 007

Dustin OLDHAM, Petitioner–Respondent,

v.Glenda OLDHAM, Respondent–Petitioner.

No. 32,001.

Supreme Court of New Mexico.

Feb. 4, 2011.

Luebben Johnson & Barnhouse LLP, Karl E. Johnson, Randolph H. Barnhouse, Samuel D. Hough, Albuquerque, NM, for Petitioner.Geer, Wissel & Levy P.A., Maria Garcia Geer, Robert D. Levy, Elizabeth Drotning Hartwell, Albuquerque, NM, for Respondent.

OPINION

DANIELS, Chief Justice.

{1} This case requires us to interpret and harmonize potentially conflicting provisions within our domestic relations, probate, and trust statutes to determine the process through which a decedent's estate is defined and distributed when one party to a pending divorce proceeding dies before a final divorce decree is entered. Under these circumstances, a provision within New Mexico's domestic relations code, NMSA 1978, Section 40–4–20(B) (1993), requires the domestic relations court to continue the proceedings in order to determine marital property rights and debts, spousal and child support, and paternity “as if both parties had survived.” We are asked to determine whether a marital property judgment entered under Section 40–4–20(B) can statutorily revoke a decedent's will or trust. We hold as a matter of law that the decedent's will and trust are not statutorily revoked by the entry of a Section 40–4–20(B) marital property judgment. We also hold that, before the domestic relations proceedings can be continued, a personal representative who is not disqualified by a conflict of interest must be appointed to represent the decedent's estate through the conclusion of those proceedings. After the domestic relations court concludes the Section 40–4–20(B) proceedings, the decedent's estate can be distributed according to the decedent's estate plan and our governing probate statutes.

I. FACTUAL BACKGROUND

{2} The relevant facts are undisputed. David Oldham (Husband) died on May 7, 2007, nearly four years after being diagnosed with brain cancer. At the time of his death, Husband was married to Glenda Oldham, and the married couple had one adult child, Dustin Oldham (Son).

{3} On March 29, 2004, Husband and Wife jointly executed the David M. Oldham and Glenda Oldham Revocable Trust Agreement (Trust), naming themselves as co-trustees. Under the terms of the Trust, “[e]ach Settlor individually reserve [d] the right and power ... without the consent of any other person ... to revoke or terminate [the Trust] as it affects his or her separate and community property by a duly executed instrument ... signed by such Settlor ... and delivered to the Trustee (if other than such Settlor).” Although Husband and Wife each reserved the right to revoke his or her share of the Trust during his or her lifetime, the Trust provided that, “[u]pon the death of the first Settlor,” that Settlor's share of the Trust property “shall be irrevocable.”

{4} On the same day Husband and Wife executed the Trust, Husband executed the Last Will and Testament of David M. Oldham (Will). The Will nominated Wife as Husband's personal representative and gave Husband's entire estate, with the exception of his tangible personal property, “to be administered as part of [the] Trust.” The parties agree that both the Will and the Trust were validly executed and that neither was amended nor revoked prior to Husband's death.

II. PROCEDURAL HISTORY

{5} In February 2007, a divorce petition was filed on Husband's behalf in the Second Judicial District Court of New Mexico. Wife filed a timely motion to dismiss the petition, alleging that Husband was not competent to file for divorce and that he was coerced to do so by relatives. Whether Husband was competent when he filed for divorce remains a contested issue,¹ and no final divorce decree has been entered. The domestic relations proceedings are not before this Court and have been stayed pending this appeal.

{6} After Husband's death, Son filed an application in the probate court for informal appointment as personal representative of Husband's estate. Son's position is that, under New Mexico law, a property division judgment entered pursuant to Section 40–4–20(B) will revoke Husband's Will and Husband's share of the Trust, rendering Husband intestate. Wife filed a counter-application for formal appointment to serve as personal representative of Husband's estate in the Second Judicial District Court, arguing that she has priority to serve because Husband nominated her in the Will. Wife then moved for partial summary judgment, seeking (1) appointment as personal representative of Husband's estate, (2) affirmation that the Will and Trust were valid, and (3) admission of the Will to probate. Son filed a countermotion for summary judgment seeking appointment as personal representative and invalidation of the Will and Trust.

{7} The district court concluded as a matter of law that “[o]nly a final decree of divorce, and not the mere filing and service of a divorce petition, is sufficient to revoke a governing instrument, including the Will and Trust.” The court therefore granted Wife's motion for partial summary judgment. The court's final order declared the Will and Trust to be unrevoked and fully enforceable, admitted Husband's Will to probate, and appointed Wife as the personal representative of Husband's estate.

{8} Son appealed the district court's decision to the Court of Appeals. Oldham v. Oldham, 2009–NMCA–126, 147 N.M. 329, 222 P.3d 701. The Court of Appeals reversed the district court on the issue of Wife's appointment as personal representative due to the conflict that would be present if Wife represented Husband's estate against herself in the domestic relations proceedings. Id. ¶ 2. The Court of Appeals also reversed the summary judgment determination that the Will and Trust were unrevoked and remanded for further proceedings on both issues. Id.

{9} We granted Wife's petition for certiorari to address two issues: (1) whether a final judgment distributing marital property pursuant to Section 40–4–20(B) revokes the governing estate planning instruments of the deceased party when the deceased party dies during the pendency of the divorce proceedings, and (2) whether an inherent conflict of interest disqualifies Wife from serving as the personal representative of Husband's estate. We hold that the entry of a Section 40–4–20(B) marital property judgment cannot statutorily revoke a decedent's estate planning instruments. We also hold that Wife is disqualified by a conflict of interest from serving as the personal representative of Husband's estate during the remainder of the domestic relations proceedings.

III. DISCUSSIONA. Standard of Review

{10} This is a case of statutory interpretation. “Statutory construction is a matter of law we review de novo.” State v. Nick R., 2009–NMSC–050, ¶ 11, 147 N.M. 182, 218 P.3d 868. “In construing a statute, our charge is to determine and give effect to the Legislature's intent. In discerning the Legislature's intent, we are aided by classic canons of statutory construction, and [w]e look first to the plain language of the statute, giving the words their ordinary meaning, unless the Legislature indicates a different one was intended.” Marbob Energy Corp. v. N.M. Oil Conservation Comm'n, 2009–NMSC–013, ¶ 9, 146 N.M. 24, 206 P.3d 135 (alteration in original) (internal quotation marks and citation omitted). “We must take care to avoid adoption of a construction that would render the statute's application absurd or unreasonable or lead to injustice or contradiction.” Nick R., 2009–NMSC–050, ¶ 11, 147 N.M. 182, 218 P.3d 868 (internal quotation marks and citation omitted).

{11} To resolve this case we must read Section 40–4–20(B) together with the Uniform Probate Code (UPC), NMSA 1978, Sections 45–1–101 to –9A–13 (1975, as amended through 2009), and the Uniform Trust Code (UTC), NMSA 1978, Sections 46A–1–101 to –11–1105 (2003, as amended through 2009). “[A] statutory subsection may not be considered in a vacuum, but must be considered in reference to the statute as a whole and in reference to statutes dealing with the same general subject matter.” State v. Smith, 2004–NMSC–032, ¶ 10, 136 N.M. 372, 98 P.3d 1022 (alteration in original) (internal quotation marks and citation omitted). “[S]tatutes covering the same subject matter should be harmonized and construed together when possible in a way that facilitates their operation and the achievement of their goals.” State ex rel. Quintana v. Schnedar, 115 N.M. 573, 575–76, 855 P.2d 562, 564–65 (1993) (citations omitted).

B. A Marital Property Judgment Entered Pursuant to Section 40–4–20(B) Cannot Statutorily Revoke a Will or a Trust.1. Section 40–4–20(B) Provides That Property Division Issues Must Still Be Addressed After the Death of a Party to a Divorce Action.

{12} At issue in this case is the application of Section 40–4–20(B) of our domestic relations code, which directly addresses the division of marital property in cases where one party to a pending divorce action dies. Section 40–4–20(B) provides in relevant part that, upon the filing and service of a petition for divorce,

if a party to the action dies during the pendency of the action, but prior to the entry of a decree granting dissolution of marriage, ... the proceedings for the determination, division and distribution of marital property rights and debts, distribution of spousal or child support or determination of paternity shall not abate. The court shall conclude the proceedings as if both parties had survived.

{13} By enacting Section 40–4–20(B), the Legislature departed from the common law rule that a pending divorce action abates when a party to the action dies before the entry of a final divorce decree. See Karpien v. Karpien, 2009–NMCA–043, ¶¶ 5–7, 146 N.M. 188, 207 P.3d 1165 (discussing the history and language of Section 40–4–20(B)).

{14} Section 40–4–20(B) applies in this case and requires the domestic...