Pruss v. Pruss

• Decision Date: 08 April 1994
• Docket Number: No. S-92-266,S-92-266
• Citation: 514 N.W.2d 335,245 Neb. 521
• Parties: Albert J. PRUSS et al., Appellants, v. James PRUSS and Rodney L.A. Pruss, Copersonal Representatives of the Estate of Bessie T. Pruss, et al., Appellees.
• Court: Nebraska Supreme Court

Page 335

514 N.W.2d 335

245 Neb. 521

Albert J. PRUSS et al., Appellants, v. James PRUSS and Rodney L.A. Pruss, Copersonal Representatives of the Estate of Bessie T. Pruss, et al., Appellees.

No. S-92-266.

Supreme Court of Nebraska.

April 8, 1994.

Syllabus by the Court

1. Actions: Equity: Trusts: Accounting. An action to impose a constructive trust and an action for an accounting are equitable actions.

2. Equity: Appeal and Error. In an appeal of an equity action, an appellate court reviews the record de novo, subject to the rule that where credible evidence is in conflict on material issues of fact, an appellate court will consider and may give weight to the fact that the trial court observed the witnesses and accepted one version of the facts over another.

3. Trusts: Proof. A party seeking to have a constructive trust imposed has the burden to establish by clear and convincing evidence the factual foundation required for a constructive trust.

4. Contracts: Property: Consideration. An agreement to devise property is, where supported by consideration, valid and enforceable.

5. Wills: Contracts: Consideration. A mutual will executed in connection with an agreement based on sufficient consideration is both contractual and testamentary in nature. The contract becomes irrevocable as to the surviving spouse upon the death of the other and the probate of the deceased spouse's contractual will.

6. Decedents' Estates: Wills: Contracts: Breach of Contract. If the surviving spouse revokes the mutual contractual will, an action may lie for breach of the contract against the estate of the survivor.

7. Wills. To construe a will, the court must give effect to the language of the will in light of the circumstances surrounding the making and execution of the will.

8. Contracts: Consideration. The fact that part of a stated consideration is insufficient does not prevent another part of the consideration from operating as sufficient valid consideration to form a contract between the parties.

9. Wills. The execution of a subsequent will, like the execution of any will, revokes a prior mutual or joint will.

10. Contracts: Undue Influence: Proof. To establish undue influence, the party asserting that theory has the burden to prove (1) that the person who executed the challenged instrument was subject to undue influence, (2) that there was an opportunity to exercise undue influence, (3) that there was an intent to exercise undue influence for an improper purpose, and (4) that the result was clearly a product of the undue influence.

11. Equity: Undue Influence: Proof. The burden to prove undue influence is clear and convincing evidence when the case is an equitable action, not a probate action.

12. Undue Influence. It is not merely the exercise of influence which invalidates the action; rather, it is the exercise of undue influence.

13. Undue Influence. There must be a solid factual foundation on which to rest the inference of the existence of undue influence.

14. Wills: Undue Influence: Evidence. A prior will, executed when the testator's mental capacity is unchallenged and as to which the exercise of undue influence is not charged, and which conforms substantially as to the results produced by the instrument contested, may be considered as competent evidence to refute the charge of undue influence.

15. Wills. When the language in a will is clear and unambiguous, construction of the will is unnecessary and impermissible.

16. Wills: Intent. To discern the intent of the testator from the language of the will, a court must examine the will in its entirety, considering and liberally interpreting every provision. In examining the provisions of the will, the court shall employ the generally accepted literal and grammatical meaning of words used in the will and assume that the testator understood the words stated in the will.

17. Decedents' Estates: Wills: Contracts: Gifts: Intent. An agreement that the survivor's entire estate will be left to certain beneficiaries does not prevent a survivor from making lifetime gifts unless such gifts are made with an intent to defraud or are so unreasonable that the result defeats the purpose of the contractual wills.

Thomas B. Thomsen, of Sidner, Svoboda, Schilke, Thomsen, Holtorf & Boggy, Fremont, for appellants.

Larry C. Johnson, of Johnson & Vaughan, P.C., Fremont, for appellees.

HASTINGS, C.J., BOSLAUGH, WHITE, CAPORALE, FAHRNBRUCH, and LANPHIER, JJ., and GRANT, J., Retired.

WHITE, Justice.

This appeal arises from an order of the Dodge County District Court in favor of appellees denying appellants' request to have a constructive trust imposed on the estate of Bessie T. Pruss. Appellants contend that Bessie's estate should be distributed pursuant to the mutual and reciprocal wills executed by decedent and her husband in November 1980. We reverse the judgment of the district court and remand the cause for further proceedings.

Bessie and Albert Pruss had nine children: Albert, Francis, Richard, James, Rodney, Emil, Leonard, Theodore, and Edward. Appellants are three of the nine children: Albert, Francis, and Richard. Appellees are James, Rodney, Emil, Leonard, and Theodore. Edward predeceased Bessie and Albert. Edward was survived by Michael and Carolyn, who are also appellees in the present action. Together, appellants and appellees are the only interested parties in the several wills executed by Bessie and Albert.

In September 1980, decedent and her then living husband, Albert, executed a single document purported to be a joint contractual will (September 1980 will). The September 1980 will was drafted and executed after consultation with their attorney, Lawrence Yost. Also present during the discussions regarding the September 1980 will was Albert, an appellant and the eldest son of Bessie and Albert. The evidence presented at trial indicates that the estate of Bessie and Albert at the time they executed the September 1980 will consisted of their residence, approximately 130 acres of farmland located in Dodge County (which Bessie held in her name only before her September 1980 transfer to Albert of an undivided one-half interest in the farmland), and an expected inheritance by Albert from his deceased uncle.

The relevant provisions of the September 1980 will provided as follows: (1) Attorney Yost would serve as the personal representative, and he would not be required to post a bond. (2) Emil, Richard, James, and Rodney were to be excluded from inheriting from Albert's estate because they had already received substantial gifts outside the will. (3) James and Rodney were to be excluded from inheriting from Bessie's estate for the same reason as stated above. (4) If Bessie predeceased Albert, he would receive a life estate in her one-half interest in the Dodge County farmland. The remainder interest was to be divided into one-seventh shares for Albert, Francis, Emil, Richard, Leonard, and Theodore. The remaining one-seventh share was to be divided into two one-fourteenth shares for Michael and Carolyn. (5) If Bessie predeceased Albert, the remainder and residue of her estate would pass to six sons and two grandchildren: Albert, Francis, Emil, Richard, Leonard, Theodore, Michael, and Carolyn. (6) If Albert predeceased Bessie, she would receive a life estate in his one-half interest in the Dodge County farmland. The remainder interest was to be divided into one-fifth shares for Albert, Francis, Leonard and Theodore. The remaining one-fifth share was to be divided into two one-tenth shares for Michael and Carolyn. (7) If Albert predeceased Bessie, the remainder and residue of his estate would pass to four sons and two grandchildren: Albert, Francis, Leonard, Theodore, Michael, and Carolyn.

The final relevant provision of the September 1980 will stated that simultaneously with the execution of the will, Bessie had transferred an undivided one-half interest in "certain real estate" to Albert. The provision stated that this transfer was consideration for their agreement to make the terms of the will irrevocable unless both consent and, further, that after the death of either party, the terms would become irrevocable.

Contemporaneously with the execution of the September 1980 will, two land conveyances occurred. First, Bessie conveyed by deed to Albert an undivided one-half interest in the Dodge County farmland. (We note that this deed names Bessie and Albert as grantors in this conveyance; however, the undisputed testimony establishes that Bessie was the sole owner of the Dodge County land until the September 1980 conveyance.) Second, Albert and Bessie conveyed their residence by deed to Albert and Rodney (father and son) as joint tenants.

Subsequent to the execution of the September 1980 will, Francis recommended that the wills be redrafted to correct some deficiencies he perceived in the wills. At the time, Francis was an attorney licensed to practice law in Iowa. In November 1980, Francis visited his parents and drafted new mutual and reciprocal wills; Bessie and Albert executed these wills (November 1980 wills). Although the November 1980 wills were typed by Attorney Yost's secretary and were executed by Albert and Bessie at Yost's law offices, Yost did not consult with Bessie and Albert or participate in the drafting of these wills.

The relevant provisions of Albert's November 1980 will provide as follows: (1) Francis and Richard are to serve as corepresentatives, and no bond will be required. (2) James is excluded from the provisions of the will because he has already received real property by deed during Albert's lifetime. (3) If Albert predeceases Bessie, she shall receive a life estate in his one-half undivided interest in their residence. Rodney shall receive the remainder interest in Albert's one-half interest in the residence. (4) If Albert predeceases Bessie, she shall receive a life estate in all other real property presently owned or later acquired...