Ruzic v. Ruzic

• Decision Date: 28 July 1989
• Citation: 549 So.2d 72
• Parties: Joseph P. RUZIC, Jr., as Executor of the Estate of Joseph P. Ruzic, Deceased, v. Dorothy H. RUZIC. 87-1284.
• Court: Alabama Supreme Court

Page 72

549 So.2d 72

Joseph P. RUZIC, Jr., as Executor of the Estate of Joseph P. Ruzic, Deceased, v. Dorothy H. RUZIC.

87-1284.

Supreme Court of Alabama.

July 28, 1989.

W.W. Dinning, Jr. of Lloyd, Dinning, Boggs & Dinning, Demopolis, for appellant.

William C. Brewer III, Livingston, for appellee.

KENNEDY, Justice.

The appellant (Joseph P. Ruzic, Jr., as executor of the estate of Joseph P. Ruzic, deceased) appeals the judgment of the circuit court, entered in a nonjury case in which the court heard ore tenus evidence. The issue is whether the court correctly ruled that a written instrument executed by the appellee (Dorothy H. Ruzic, widow of Joseph P. Ruzic) did not constitute a valid waiver of her right to dissent from her husband's will and to take an elective share of the estate. We reverse and remand.

The appellee, Mrs. Ruzic (the former Dorothy H. Johnson), and the deceased, Joseph P. Ruzic, were divorcees, and they began dating in June 1980. They began to live together in August 1980 and married in 1986. They resided at Mrs. Ruzic's home in Demopolis, Alabama. Mr. Ruzic was retired, and Mrs. Ruzic was employed as a hospital executive. They shared expenses, but did not commingle their funds until 1983. Before he began living with Mrs. Ruzic, Mr. Ruzic owned a house at Lake Serene in Hattiesburg, Mississippi; owned a 1/5 interest in approximately 1900 acres of real estate in Sumter County, Alabama, known as the "Ruzic estate"; and a 1/5 interest in other real property in Sumter County, known as the "Perolio Estate". While they were dating and living together, Mrs. Ruzic accompanied Mr. Ruzic on hunting trips to the Ruzic estate. She visited his house at Lake Serene and knew that it was worth approximately $180,000. Mrs. Ruzic also knew that Mr. Ruzic had an interest in the Perolio estate as well. However, she did not know the precise value of Mr. Ruzic's real property or his net worth.

While they were living together and before their marriage, Mr. Ruzic had expressed some concern to Mrs. Ruzic about recent difficulties in his relationship with his former wife and about "palimony suits." On March 21, 1983, Mrs. Ruzic (then Dorothy H. Johnson) executed an instrument that she prepared with the assistance of a public accountant; that instrument read as follows:

"TO WHOM IT MAY CONCERN:

"I, Dorothy H. Johnson, do hereby state and declare that if at anytime during the relationship and marriage of myself and Joseph P. Ruzic, Sr., it is incompatible it will be dissolved immediately.

"I, Dorothy H. Johnson, do not wish anything out of this dissolvement or in the event of the death of Joseph P. Ruzic, Sr., except what I brought into the relationship and marriage and one-half of what we have accumulated from the time of marriage.

"s/Dorothy H. Johnson

Dorothy H. Johnson

Date: 3-21-83

Witness s/Sue N. Manning

Witness s/Catherine Ferguson

"s/Sue N. Manning

Notary Public

My commission expires 6-24-86"

Mrs. Ruzic presented the instrument to Mr. Ruzic, "thinking it would make him feel better." Mr. Ruzic had not requested that Mrs. Ruzic execute any kind of antenuptial agreement. Mr. Ruzic kept the instrument in his safe. The combination to the safe was kept in a safe deposit box, to which only Mr. Ruzic and his son, Joseph P. Ruzic, Jr., had a key. The matter of the instrument was not discussed again, nor did Mr. Ruzic draft and execute a similar instrument purporting to waive any interest in Mrs. Ruzic's estate.

In April 1983 (approximately two weeks after Mrs. Ruzic gave the instrument to Mr. Ruzic), they moved to his house at Lake Serene. Mrs. Ruzic had previously applied for a job at a hospital in Hattiesburg, Mississippi, and she began working there. Mrs. Ruzic paid for certain improvements that were made to the house with some of the proceeds from the sale of her house in Demopolis, Alabama. She also purchased a tractor and some equipment that were used on Mr. Ruzic's property in Sumter County, Alabama.

In 1985, they moved to Baton Rouge, Louisiana, because Mrs. Ruzic was transferred by her employer. In May 1986, Mrs. Ruzic resigned from her job, at Mr. Ruzic's request, and they were married on May 28, 1986.

In March 1987, Mr. Ruzic was hospitalized. On March 24, 1987, Mr. Ruzic executed his last will and testament; he died just three days later. The will was admitted to probate, and Mrs. Ruzic filed a petition for an elective share, homestead allowance, exempt property, and family allowance. Although the terms of the will indicated that Mr. Ruzic had made provision for Mrs. Ruzic during his lifetime by maintaining a joint bank account and by naming her as the beneficiary of certain life insurance, at the time of his death the joint account had a balance of only $42.18, and no life insurance policy naming Mrs. Ruzic as the beneficiary was discovered. Pursuant to the will, Mrs. Ruzic did receive a life estate in the home at Lake Serene, which was debt free, and Mr. Ruzic's personal property, including jewelry, furniture, and automobiles. The rest of his estate was willed to his children, who were all adults.

At trial, the executor claimed that the instrument executed by Mrs. Ruzic on March 21, 1983, constituted a waiver of Mrs. Ruzic's right to dissent from the will or to take an elective share of her husband's estate. The trial court, without a jury, ruled that the instrument "did not constitute a waiver by the surviving spouse of her right to dissent or take an elective share of her deceased husband's estate," and specifically held that "this instrument was not sufficient, in law, to bar the surviving spouse from exercising her rights granted by the Code of Alabama." The court ordered the executor to produce a complete inventory and statement of assets and liabilities of the estate so that the value of the wife's interest could be calculated. The executor appealed.

The executor argues, inter alia, that the trial court erred in ruling that the instrument did not constitute a waiver of Mrs. Ruzic's right to dissent or to take an elective share of the estate and that it erred in ruling that the instrument was not sufficient "in law" to bar Mrs. Ruzic from exercising her rights under the Code. The executor argues that Mrs. Ruzic had a full and fair disclosure of Mr. Ruzic's assets and real estate holdings before executing the alleged waiver; that Mrs. Ruzic had such education and experience as to understand the consequences of her actions; and that Mr. Ruzic relied on the instrument as an inducement to marriage.

Mrs. Ruzic argues that the executor has failed to show that the consideration for the waiver was fair, just, and equitable from her point of view or that the agreement was freely and voluntarily entered into with competent independent advice and with full knowledge of her interest in the estate and its approximate value.

A surviving spouse may waive the right of election, homestead allowance, exempt property, and family allowance under Code 1975, § 43-8-72, which provides:

"The right of election of a surviving spouse and the rights of the surviving spouse to homestead allowance, exempt property and family allowance, or any of them, may be waived, wholly or partially, before or after marriage, by a written contract, agreement, or a waiver signed by the party waiving after fair disclosure. Unless it provides to the contrary, a waiver of 'all rights' (or equivalent language) in the property or estate of a present or prospective spouse or a complete property settlement entered into after or in anticipation of separation or divorce is a waiver of all rights to elective share, homestead allowance, exempt property and family allowance by each spouse in the property of the other at death and a renunciation by each of all benefits which would otherwise pass to him from the other by intestate succession or by virtue of the provisions of any will executed before the waiver or property settlement."

Under the statute, a valid waiver must meet three requirements: (1) it must be in the form of a written contract or agreement; (2) it must be signed by the party waiving the right; and (3) there must have been a fair disclosure.

This Court has recognized "that an antenuptial agreement of one party to release rights and interests in the estate of the other party in consideration of marriage or supported by other valuable consideration is enforceable in equity." Such contracts are scrutinized by the courts to determine their justice and reasonableness. Allison v. Stevens, 269 Ala. 288, 291, 112 So.2d 451 (1959). By denying that a spouse has a share in the estate, the spouse or the estate asserting the agreement has the burden of showing that the consideration was adequate and that the entire...