Sunday, February 7, 2016

Post-Probate Pickle

In re Estate of Holbrook, 2016 VT 13

By Andrew Delaney

One of my favorite Bill Burr lines is, “Daddy hides money in the wall because he doesn’t trust banks.” It’s a bit about what his hypothetical kids might say in school in response to a math problem. If you’re not easily offended, feel free to email me and I’ll send you a link to the entire bit. (You know it’s bad when we don’t link it directly here—you’ve been warned.)

Turns out here that Grandma Holbrook didn’t trust the banks very much either. But perhaps we’re getting ahead of ourselves.

Grandma Holbrook died in 2013. She was survived by six kids and seven grandkids.

In 2003, right before a surgery, she wrote a three-page letter titled “My Last Will & Testament” addressed “To all my children.” There’s a soap-opera joke just waiting to be made there, but we’ll skip it for brevity’s sake. The letter essentially said that if Grandma Holbrook didn’t make it through the surgery scheduled for the next day, she wanted things divided equally amongst the kids and grandkids. Grandma Holbrook did in fact survive her surgery and lived another ten years.

The will named two kids, David and Cheryl, co-executors of the estate. Ten days after Grandma Holbrook died, the letter-will, consents, a petition to open the estate, and a list of interested persons were filed in the probate division. The estate was valued at $150,000.00.

The probate division allowed the will without a hearing and appointed David and Cheryl co-executors. Nobody appealed that ruling.

Here’s where it gets interesting. When the kids started doing an inventory of the house, they found a few bucks under $320,000.00 in cash that Grandma Holbrook had squirreled away. Whoa. So the co-executors filed an inventory reflecting that the estate had increased in value from $150K to about $510K.

One of the kids, Amy, filed a motion to clarify the will. David and Cheryl then filed a motion for a “hearing to determine whether the document that the probate division allowed as testator’s will was in fact testator's last will and testament,” arguing that the document didn’t meet the execution requirements under Vermont law. Before the court scheduled a hearing, David and Cheryl filed another motion, challenging the allowance of the will on the grounds that: (1) the hearing requirements weren’t met because the court failed to notify the “grandchildren prior to allowance; (2) the will was ambiguous; and (3) the will was an ineffective conditional will.”

The probate division denied the motion as to the first and third grounds mentioned above, and reserved ruling on the ambiguity issue until ruling on the clarification motion. “The probate division concluded that appellant-executors lacked standing to raise the issue of notice and that their challenge to the validity of the will was untimely.”

A grandson, Charles III, then filed an improper-notice motion, making the same arguments David and Cheryl made in their earlier motion.

The probate division issued a decision, concluding that: “(1) the will was properly allowed despite the lack of notice to testator's grandchildren; (2) the will was not ambiguous and created a thirteen-part devise of equal shares to the six children and seven grandchildren; and (3) the will was not conditional.”

David, Cheryl, and Charles III appealed that decision to the civil division. Amy moved to dismiss for lack of subject-matter jurisdiction. The civil division granted Amy’s motion in part, reasoning that “appellants had failed to make a timely objection challenging either issue and that the issue of whether the will was conditional represented a collateral attack on the probate division’s final order.” Like the probate division, the civil division reserved on the ambiguity issue. Amy moved for summary judgment, and the civil division ruled in her favor, concluding that “the will unambiguously created a thirteen-part devise.”

David, Cheryl, and Charles III appeal to the SCOV on two major points. First, they argue that the civil division messed up when it concluded that it didn’t have subject-matter jurisdiction because their motions were untimely. Second, they argue that the will is ambiguous and the civil division shouldn’t have granted summary judgment, but should’ve taken extrinsic evidence about Grandma Holbrook’s intent.

The SCOV starts with the subject-matter-jurisdiction arguments. The first argument is that the civil division erred in concluding that grandson’s appeal was of the allowance of the will, when it was really an appeal of the probate division’s denial of his motion. The second argument is that whether a will is conditional is a matter of construction, not allowance, and that their attack on the will is neither collateral nor untimely. The first argument is a swing-and-a-miss, but the second argument gets some traction.

The SCOV explains that review of a dismissal for lack of subject-matter jurisdiction is a do-what-we-want-on-the-legal-front proposition. Facts are construed in the light most favorable to the nonmoving party.

To make a long story short, the SCOV explains that allowance of a will is a limited proceeding. While collateral attacks on allowance aren’t allowed, “The allowance of a will does not prevent a subsequent challenge to issues regarding the proper interpretation or construction of the instrument itself.”

On the notice-to-grandkids issue, the SCOV disagrees with the appellants’ reasoning. Though there’s a valiant effort to classify the appeal to the civil division as an appeal of the motion denial, the SCOV reasons that the probate division issued an order allowing the will; grandson got a copy, and if he wanted to make that notice-prior-to-allowance challenge, he should’ve done so when he got the order. He doesn’t get to make it several months later. That’s a collateral attack.

The SCOV takes a moment to remind folks that there should’ve been notice and a hearing before allowance of the will in this case, but nonetheless concludes that this doesn’t affect the outcome here. The challenge should’ve been made within thirty days of the allowance order and that’s that.

On the whether-the-will-is-conditional issue, the SCOV is more receptive to appellants’ position. The SCOV agrees with appellants’ this-is-an-issue-of-construction-not-allowance position, and reverses and remands.

The SCOV notes that Vermont has not yet dealt with the what-constitutes-a-conditional-will question. The SCOV further notes that there’s a consensus out there that a will can be conditioned on the happening of an event amongst the states that have considered the issue.

Appellants contend that the whether-a-will-is-conditional question should be determined after allowance; appellee says it should be considered at the allowance stage.

The SCOV explains that the allowance of a will is a limited proceeding. It’s limited to whether the will was properly executed. Accordingly, the determination of intent—whether the statement is a thing that has to happen before the will becomes operative or whether the statement is an explanation of why the person is making the will—is a determination that can’t really be made during the very-limited-allowance-of-the-will proceeding.

So, the SCOV concludes that the conditional-will challenge is not a collateral attack, and reverses and remands on the issue.

On the ambiguity issue, the SCOV agrees with the civil division, opining that Grandma Holbrook’s in-equal-parts-to-the-kids-and-the-grandkids language in the will unambiguously creates a thirteen-part devise.

Summary judgment is reviewed de novo using the same standard as the trial court. I’ve run out of clever and original ways to put it, so we’ll just quote it: “Summary judgment is appropriate ‘if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’”

The SCOV explains that the primary objective is to find the intent. Here, the equal-parts-to-the-kids-and-the-grandkids language is clear and unambiguous. We don’t need to start digging around for extrinsic evidence to prove intent that’s not in question. We’ve got a whole bunch of cases that say so.

Appellants try a there-are-three-potential-interpretations argument, arguing that the language could mean (1) six equal shares, one to each of the kids; (2) seven equal shares, one for each of the kids and one to be shared among the seven grandkids; or (3) thirteen equal shares, one to each of the kids and grandkids.

The SCOV entertains the idea, but ultimately concludes that while there may be a bit of poor sentence construction, the only truly reasonable interpretation is that Grandma Holbrook meant thirteen equal shares.

And so, the SCOV affirms the civil division’s conclusions that “the will was properly allowed and was not ambiguous as to its creation of a thirteen-part devise” and reverses and remands on the conditional-will issue.

I don't know about you, but I still want to know how Grandma Holbrook managed to squirrel away just shy of $320K in cash. Just what was grandma up to? 

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