Orlando v. Prewett

• Decision Date: 27 September 1985
• Docket Number: No. 84-289,84-289
• Citation: 218 Mont. 5,705 P.2d 593
• Parties: George ORLANDO, as Personal Representative of the Estate of Frank A. Donnes, Deceased, Plaintiff and Appellant, v. Lee PREWETT and Barbara Prewett, husband and wife, Defendants and Respondents.
• Court: Montana Supreme Court

Page 593

705 P.2d 593

218 Mont. 5

George ORLANDO, as Personal Representative of the Estate of Frank A. Donnes, Deceased, Plaintiff and Appellant, v. Lee PREWETT and Barbara Prewett, husband and wife Defendants and Respondents.

No. 84-289.

Supreme Court of Montana.

Submitted on Briefs April 25, 1985.

Decided Sept. 9, 1985.

Rehearing Denied Sept. 27, 1985.

Kelly & Halverson, P.C.; Sheehy, Prindle & Finn, Billings, for plaintiff and appellant.

Dunaway & O'Connor; Vicki W. Dunaway, Billings, for defendants and respondents.

HARRISON, Justice.

This is an appeal from a judgment of the District Court, Thirteenth Judicial District, Treasure County, Montana. The lower court ordered specific performance of two oral agreements entered into between Lee and Barbara Prewett, respondents (hereafter referred to as "Prewetts"), and Frank A. Donnes, deceased. George Orlando, as personal representative of the Estate of Frank A. Donnes, appeals from that order. This case is remanded to comply with this opinion.

Frank A. Donnes owned a ranch ("Donnes ranch") in Treasure County. He was raised on a portion of the property contained in the ranch and lived most of his adult life thereon. He was once married but his wife died young and without children. Some years prior to his death, Mr. Donnes ceased operating the ranch himself and leased it under a cash rental agreement. He continued to live on the ranch, however, and to have the use of the buildings and to run a few cattle. This particular lease arrangement terminated in 1978 and from that time until 1980 Mr. Donnes resumed sole responsibility for operating the ranch.

In May of 1980 Mr. Donnes, advancing in years and having grown tired of working the ranch himself, approached his niece, Barbara Prewett, and asked if she and her husband Lee would be interested in moving to the ranch and operating it. Thereafter the Prewetts met with Mr. Donnes and reached an oral agreement wherein it was agreed that if the Prewetts moved to the Donnes ranch and leased the same for $18,000 per year, Mr. Donnes would leave the Prewetts an undivided one-half interest in the ranch and give them the option of purchasing the other half at an appraised value at the date of his death. As a result of this agreement the Prewetts bought a trailer-home and moved to the Donnes ranch in July of 1980. They testified that they would not have moved to the ranch and assumed the duties of running it if there had not been the agreement with Mr. Donnes described above.

In May of 1982, Lee Prewett and Mr. Donnes made an oral agreement for the sale of certain items of Mr. Donnes' personal property. On or about September 9, 1982, Frank Donnes was murdered. No lease payment on the ranch or payment on the purchase price of the personal property had been made to him at the time of his death.

A short period of time passed before the duly executed last will and testament of Frank A. Donnes was discovered in the home of one of his sisters in the State of Washington. Helen Carbone and Mabel Orlando, sisters of Mr. Donnes were named under the will as sole devisees of his entire estate. On November 16, 1982, appellant George Orlando filed this will with the Treasure County Clerk of Court along with a petition for formal probate. On January 8, 1983, the Prewetts filed creditor's claims wherein they demanded specific performance of the oral agreements made between them and Mr. Donnes. On January 19, 1983, the will of decedent was admitted to formal probate as the valid last will and testament of Frank A. Donnes.

On January 24, 1983, George Orlando, appellant, having been appointed personal representative of the Frank A. Donnes estate, filed notice of disallowance of the creditor's claims and instituted an action to quiet title against the Prewetts in and to the Donnes ranch and certain personal property. The Prewetts counterclaimed for specific performance of the two oral agreements set forth in their creditor's claims. A bench trial was held beginning on November 7, 1983 and on April 17, 1984, the District Court ruled in favor of the Prewetts.

The dispositive issue presented by this appeal is whether the oral agreements entered into between the Prewetts and Mr. Donnes are enforceable?

The parties to this appeal disagree over the nature of the oral agreement for the transfer of real property. Appellant contends that the agreement constituted a contract to make a will or devise; the Prewetts argue that the agreement was for the leasing, sale, and purchase of the Donnes ranch. The lower court was in accord with the Prewetts. Paragraphs 5 and 7 of its Conclusions of Law read as follows:

5. That the agreement between decedent and the Prewetts, as herein set forth in Conclusion No. 1, above, was an agreement for the leasing, sale and purchase of real property and, therefore, is specifically covered by Sections 30-11-111, 70-20-101, and 70-20-102, which authorize the Court to compel the specific performance of an oral agreement for the leasing, sale and purchase of real property in case of part performance thereof.

* * *

7. That Section 72-2-105 requires a contract to make a Will or devise or not to revoke a Will or devise or to die intestate to be in writing, and even assuming this statute to be applicable to the instant case, which the Court concludes it is not, it is a statute of frauds provision, and part performance thereof will remove the same from the operation of the statute.

We disagree with these conclusions and find them inexplicable in light of paragraph 13 of the lower court's own findings of fact. In crucial part that paragraph reads as follows:

... Thereafter, in May of 1980, decedent contacted his niece, Barbara Prewett, one of the defendants herein ... and asked whether or not she and her husband would be interested in moving to the ranch and operating it. As a result of the inquiry, the defendant, Lee Prewett, husband of Barbara Prewett, met with decedent and discussed the possibility of working out an arrangement relative to the Donnes Ranch. A few days later a second meeting occurred, at which time the parties reached an oral agreement whereby the parties agreed that if the Prewetts moved to the Donnes Ranch and leased the same for $18,000.00 per year annually, ... that upon his death decedent would leave unto the Prewetts an undivided one-half interest in the Donnes Ranch and the Prewetts would have the right to purchase the other one-half of the Donnes Ranch at an appraised value as of the date of death. (Emphasis added.)

Further, in paragraph one of its conclusions of law the lower court restates the terms of the agreement:

1. That in May, 1980, decedent and the Prewetts entered into an oral agreement whereby they agreed to move to the Donnes Ranch and lease the Donnes Ranch from decedent for the remainder of his lifetime for consideration, initially, of $18,000.00 annually, and decedent agreed to give an undivided one-half interest in the ranch to them at the time of his death and provide them with the right to buy the other one-half interest in the ranch at the appraised value as of the date of his death.

Given the findings of fact, which are amply supported by the record and not challenged by either party to this appeal, it could not be more clear that the Prewetts and Mr. Donnes entered into an oral agreement for the disposition of certain of Mr. Donnes' property at his death. The vehicle for making this disposition was to be either a will or a grantor trust. But despite the formalities that were contemplated it is not challenged that the intent of the oral agreement was that Frank Donnes should leave real property to the Prewetts at his death. The District Court committed error, and contradicted its own findings of fact, when it concluded that the oral agreement was for the leasing, sale and purchase of real property and therefore was covered by Secs. 30-11-111, 70-20-101 and 70-20-102, MCA. Section 72-2-105, MCA, is the clearly applicable statute to the facts of this case and provides in pertinent part as follows:

Contracts concerning succession. (1) A contract to make a will or devise or not to revoke a will or devise or to die intestate, 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.

In the present case (1) there is no provision in decedent's will stating material provisions of the contract; (2) there is no reference, express or otherwise, in decedent's will to a contract; (3) there is no writing signed by the decedent evidencing the contract. The agreement between the Prewetts and Mr. Donnes by which the Prewetts were to receive half the ranch and first option to purchase the other half at the death of Mr. Donnes does not conform in a single particular to the requirements provided by statute for the...