Treadaway v. Payne

• Decision Date: 05 October 2021
• Docket Number: No. COA20-861,COA20-861
• Citation: 866 S.E.2d 479,279 N.C.App. 664
• Parties: Laura Elizabeth (Lail) TREADAWAY, Bradley Charles Lail and Graham Scott Lail, Plaintiffs, v. Charles Ray PAYNE, individually, and Bryan C. Thompson, as Public Administrator for the Estate of Charles Melton Mull, Defendants.
• Court: North Carolina Court of Appeals

279 N.C.App. 664

866 S.E.2d 479

Laura Elizabeth (Lail) TREADAWAY, Bradley Charles Lail and Graham Scott Lail, Plaintiffs,

v.Charles Ray PAYNE, individually, and Bryan C. Thompson, as Public Administrator for the Estate of Charles Melton Mull, Defendants.

No. COA20-861

Court of Appeals of North Carolina.

Filed October 5, 2021

Craige Jenkins Liipfert & Walker LLP, by William W. Walker, for plaintiffs-appellees.

Crumpler Freedman Parker & Witt, by Stuart L. Brooks, for defendant-appellant Charles Ray Payne.

ZACHARY, Judge.

¶ 1 Defendant-appellant Charles Ray Payne appeals from the trial court's order and declaratory judgment determining that the will of Charles Melton Mull ("Testator") contained a patent ambiguity; construing Testator's intent to convey certain of his property to Plaintiffs-appellees Laura Treadaway, Bradley Lail, and Scott Lail (collectively, "Plaintiffs"); and concluding that Defendant was liable to Plaintiffs for conversion. After careful review, we affirm.

Background

¶ 2 This appeal concerns the trial court's interpretation of the phrase "personal property" as used in Testator's will. Specifically, at issue is the proper disposition of the funds and securities (collectively, "the contested property") held in Testator's Ameritrade investment account and Wells Fargo checking, savings, and brokerage accounts, as well as Testator's interest in Furniture Enterprises of Hickory. Defendant argues that Testator's will clearly evidences Testator's intent to bequeath the contested property to him, while Plaintiffs argue that Testator intended that the contested property pass to them.

¶ 3 On 21 February 2018, Testator executed his last will and testament (the "Will"). In his Will, Testator appointed Defendant—with whom Testator had lived from 1994 to 2001 and again from 2015 until Testator's death on 1 May 2018—to serve as the executor of his estate. Defendant is named in the Will as a beneficiary of Testator's estate, as are Plaintiffs.

¶ 4 Throughout his Will, Testator repeatedly refers to his "personal property" or "personal possessions." Article III of the Will first provides, in pertinent part:

Subject to the special bequests in Article V, I bequeath and devise all my personal property , including my automobile, furniture, clothing, watches, rings, electronics, art and any currency which I may have on my person, in my home or in my automobile in fee simple to my partner, [Defendant].

(Emphasis added).

¶ 5 Article III then directs the executor to sell the condominium in which Defendant and Testator resided no sooner than six months after Testator's death, during which time the executor "shall be entitled to sell [Testator's ] personal possessions (which have not been listed herein as being devised to [Testator's] partner, [Defendant])." (Emphasis added). Article III continues:

After the end of the said six months after my demise, I direct my Executor to sell all of my remaining personal possessions at the condominium ; ....

The net proceeds from the sale of the personal possessions and the condominium shall be used to fund my bequest set forth in Article V , with the remaining sale proceeds hereby devised in fee simple to my partner, [Defendant].

(Emphases added).

¶ 6 Article IV names Plaintiffs—Testator's niece and nephews—as the residuary beneficiaries of the Will:

All the residue of the property which I may own at the time of my death, real or personal, tangible and intangible, of whatever nature and wheresoever situated, including all property which I may acquire or become entitled to after the execution of this will, including all lapsed legacies and devises, or other gifts made by this will which fail for any reason, I bequeath and devise, in fee simple in equal shares, subject to special bequests in Article V, to [Plaintiffs].

¶ 7 Article V sets forth the specific bequests referenced in Articles III and IV, items (a)–(i) of which constitute a series of bequests of specific sums of money to particular named individuals, together with other bequests of personal property:

j. I bequeath and devise any funds I may have at the time of my demise with the Winston-Salem Foundation, to the University of North Carolina School of the Arts in Winston-Salem, North Carolina , to be used for landscaping and outside art.

k. I bequeath and devise any outstanding loan balance owed to me by Jeff Propst or his successors at the time of my demise in equal shares to [Plaintiffs ].

l. I direct that any motor vehicles I may own at the time of my demise be sold within thirty days of my demise. I bequeath and devise all of the net proceeds from the said sales to the University of North Carolina School of the Arts in Winston-Salem, North Carolina.

(Emphases added).

¶ 8 Following Testator's death on 1 May 2018, the Forsyth County Clerk of Court admitted the Will to probate, and on 4 June 2018, Defendant qualified as executor of the estate. In the fall of 2018, Defendant sold the condominium, used the proceeds from its sale to satisfy the Article V specific bequests, and transferred the net proceeds into a personal account in his name. Defendant also closed Testator's Wells Fargo and Ameritrade accounts and transferred the proceeds from these accounts into his personal accounts.

¶ 9 On 10 July 2019, Plaintiffs filed a complaint in Forsyth County Superior Court, seeking a declaratory judgment as to whether the Will contained a patent ambiguity with regard to the meaning of the phrase "personal property" and whether the contested property passed to Plaintiffs as residuary beneficiaries under the provisions of Article IV of the Will. Plaintiffs also asserted claims for conversion and breach of fiduciary duty, and moved the trial court for injunctive relief, requesting that the contested property be held in escrow pending resolution of the parties’ dispute. On 15 July 2019, the trial court entered a consent order reflecting the parties’ agreement that Defendant would freeze the accounts holding the contested property pending further order of the court.

¶ 10 On 16 September 2019, Defendant filed a motion to dismiss Plaintiffs’ complaint. With the parties’ consent, the Clerk of Court removed Defendant as executor and appointed Bryan C. Thompson, the Public Administrator, to serve as administrator c.t.a. of the estate.¹ Plaintiffs filed an amended complaint on 30 October 2019, naming Thompson in his representative capacity as a party to this action, and then filed a motion for summary judgment the following day. On 14 November 2019, Defendant filed a motion to dismiss the amended complaint. On 21 November 2019, the trial court entered an order denying both Plaintiffs’ motion for summary judgment and Defendant's motion to dismiss.

¶ 11 On 29 June 2020, the matter came on for trial in Forsyth County Superior Court before the Honorable David L. Hall. On 21 July 2020, the trial court entered its order and declaratory judgment in which it concluded, inter alia , that (1) the Will contained a patent ambiguity with respect to the phrase "personal property" as used in Articles III, IV, and V; (2) the contested property and Testator's interest in Furniture Enterprises passed to Plaintiffs as residuary beneficiaries; and (3) Defendant was liable to Plaintiffs for conversion of the proceeds from Testator's closed Wells Fargo and Ameritrade accounts. The trial court further determined that Defendant was not liable to Plaintiffs for breach of fiduciary duty. Defendant timely filed notice of appeal.

Discussion

¶ 12 On appeal, Defendant argues that (1) the trial court erred by concluding that the Will contained a patent ambiguity requiring judicial construction, and (2) the trial court's conclusions of law are not supported by the text of the Will or Testator's circumstances at the time that the Will was executed.

I. Standards of Review

¶ 13 "The interpretation of a will's language is a matter of law." Brawley v. Sherrill , 267 N.C. App. 131, 133, 833 S.E.2d 36, 38 (citation omitted), appeal dismissed , 373 N.C. 587, 835 S.E.2d 463 (2019). We review questions of law de novo. Id.

¶ 14 "The standard of review in declaratory judgment actions where the trial court decides questions of fact is whether the trial court's findings are supported by any competent evidence. Where the findings are supported by competent evidence, the trial court's findings of fact are conclusive on appeal." Nelson v. Bennett , 204 N.C. App. 467, 470, 694 S.E.2d 771, 774 (2010) (citation omitted). "Unchallenged findings of fact are presumed to be supported by competent evidence and are binding on appeal." In re Estate of Harper , 269 N.C. App. 213, 215, 837 S.E.2d 602, 604 (2020) (citation and internal quotation marks omitted).

II. Patent Ambiguity

¶ 15 Defendant argues that the trial court's conclusion that the Will contained a patent ambiguity as to the phrase "personal property" is not supported by the text of the Will, is "speculative about Testator's intent, and fails to adhere to our law's principles of testamentary interpretation." We disagree.

¶ 16 "Whenever the meaning of a will or a part of a will is in controversy, the courts may construe the provision in question and declare its meaning." Mitchell v. Lowery , 90 N.C. App. 177, 179–80, 368 S.E.2d 7, 8, disc. review denied , 323 N.C. 365, 373 S.E.2d 547 (1988). It is well settled that "the intention of the testator is the polar star which is to guide in the interpretation of all wills, and, when ascertained, effect will be given to it unless it violates some rule of law, or is contrary to public policy." Brawley , 267 N.C. App. at 133, 833 S.E.2d at 38 (citation omitted).

"The interpretation of any will is as simple, or complicated, as its language. Where the language employed by the testator is plain and its import is obvious, the judicial chore is light work; ... the words of the testator must be taken to mean exactly what they say." Id. at 134, 833 S.E.2d at 38 (citation and internal quotation marks omitted). "Resort to canons...