Opinion
No. 106,708.
2012-08-31
COREFIRST BANK & TRUST, Appellee, v. David A. HERRMAN and Janet S. Herrman Carter, Appellees, and Angela Herrman, Doug Herrman, and Jennifer Herrman Amos, Appellants.
Appeal from Shawnee District Court; Larry D. Hendricks, Judge. Michael Clutter and Kammie Dillner, of Clutter & Aadalen, LLP, of Topeka, for appellants Angela Herrman, Doug Herrman, and Jennifer Herrman Amos. Michael J. Schenk, of Michael J. Schenk, P.A., of Topeka, for appellee CoreFirst Bank & Trust.
Appeal from Shawnee District Court; Larry D. Hendricks, Judge.
Michael Clutter and Kammie Dillner, of Clutter & Aadalen, LLP, of Topeka, for appellants Angela Herrman, Doug Herrman, and Jennifer Herrman Amos. Michael J. Schenk, of Michael J. Schenk, P.A., of Topeka, for appellee CoreFirst Bank & Trust.
Eric I. Unrein, of Frieden, Unrein & Forbes, LLP, of Topeka, for appellees David A. Herrman and Janet S. Herrman Carter.
Before STANDRIDGE, P.J., MARQUARDT and ARNOLD–BURGER, JJ.
MEMORANDUM OPINION
PER CURIAM.
This case presents an appeal from the district court's decision in a declaratory judgment action regarding a will. Upon independent review of the will, we find its terms unambiguous and reverse and remand with directions.
Factual and Procedural Background
On February 3, 1989, Patrick Herrman executed a last will and testament. At the time, Patrick was married to Mary Herrman, and Patrick and Mary had three children: Janet Herrman Carter, David Herrman, and Jack Herrman. In the will, Patrick declared what he wanted done with his tangible personal property, his real property, and his shares of common capital stock of Herrman's Excavating, Inc.
Article VIII of the will dictates how the residue and remainder of Patrick's estate would be handled. If Patrick's wife was still living at the time of his death, Patrick's residuary estate would be set aside as a separate trust known as the Herrman Family Trust (Trust). The trustee of the Trust was to pay each of Herrman's grandchildren $10,000 at the time of his death, and then the income and any principal deemed to be necessary was to be paid to Mary during her lifetime. The principal could also be used to pay any medical expenses incurred due to injury or illness of any of Patrick's children or their spouses or children. Subsection 1(F) of Article VIII of the will states:
“In the event that on the date of my death my wife has predeceased me or if she survives me, upon her death, the assets of the Herrman Family Trust, together with any assets transferred to the trust from any other source, shall be divided by the Trustee into equal shares so as to provide one (1) share for each of my children; Janet, Jack and David. Upon the date of my wife's death, in the event my wife survives me, the Herrman Family Trust shall terminate and the Trustee will distribute free of trust, one share to each of my children who shall have survived their mother. In the event that my wife shall not have survived me, upon the date of my death, my personal representative shall distribute, as soon as possible after my death, a one-third share of my residuary estate to each of my children who shall have survived me (it being my intention that if my wife has predeceased me, no Herrman Family Trust is to be created as a result of my death).”
The next paragraph of the will states that if any of Patrick's children predecease him, the child's share is to be divided per stirpes between the child's issue and held in trust for the benefit of those grandchildren.
Patrick died on November 27, 1992. Mary was still alive at the time of Patrick's death; thus, the Trust was created. Although Janet, David, and Jack were alive at the time of Patrick's death, Jack died on April 15, 1999, and was survived by his three children: Angela Herrman, Doug Herrman, and Jennifer Herrman Amos. Mary died on May 22, 2010.
On October 19, 2010, CoreFirst Bank & Trust (CoreFirst), as the trustee of the Patrick L. Herrman Testamentary Trust, filed a declaratory judgment action under K.S.A. 60–1706(c) asking the district court to interpret Patrick's will and determine how CoreFirst should distribute the trust assets under the will. CoreFirst maintained there were conflicting provisions in Patrick's will with regard to distribution of the assets when, as here, Mary and the children survived Patrick but one of the children predeceased Mary. Defendants in the declaratory judgment action were divided into two factions: Patrick and Mary's surviving children (David and Janet) on one side and Jack's children (Angela, Doug, and Jennifer) on the other.
When Mary died, the Trust's value was approximately $1,200,000. David and Janet each received a share of approximately $400,000; thus, the issue presented by CoreFirst to the court was who would get the remaining $400,000. Jack's children filed a motion for summary judgment, arguing that Patrick's will was ambiguous, that the rules of judicial construction applied as a result, and that application of those rules readily established that Patrick intended the issue of a deceased child to take his or her parent's share. Jack's children also argued that Jack's remainder interest vested at the time of Patrick's death.
David and Janet also filed a motion for summary judgment in which they argued that the remaining assets of the Trust should be distributed in equal one-half shares to each of them and that Jack's children should receive nothing. According to David and Janet, the will unambiguously provides that Patrick and Mary's children would receive a share of the remainder of the Trust if, and only if, they survived Mary; thus, Jack's children were not entitled to any of the Trust's remainder.
The district court ultimately agreed with Janet and David and held Patrick's will created either a contingent remainder or a vested remainder subject to a condition subsequent. The court found the language in Patrick's will expressly treated the grandchildren differently when a child who survived Patrick predeceased Mary; thus, Patrick's will was not ambiguous or uncertain, and there was no need to employ the rules of judicial construction. The district court granted David and Janet's motion for summary judgment and declared that all of the remaining Trust assets should be distributed to David and Janet in equal one-half shares. The district court denied Jack's children's motion for summary judgment and denied David and Janet's request for attorney fees and costs.
Analysis
Jack's children claim the district court erred (1) in finding the terms of Patrick's will unambiguous; and (2) in finding that Janet and David were each entitled to receive half of what remained in the trust after Mary's death.
The interpretation and legal effect of a will are matters of law, and an appellate court exercises unlimited review. The primary function of a court when interpreting a will is to ascertain the testator's intent. If the testator's intent can be ascertained from clear and unambiguous language in the will, the testator's intent must be carried out unless contrary to settled principles of law or public policy. If the testator's intent cannot be ascertained based on ambiguous language in the will that is indefinite or conflicting, the court must apply rules of construction to determine its effect. “The critical test in determining whether a will is ambiguous is whether the intention of the testator can be gathered from the four corners of the instrument itself.” In re Estate of Haneberg, 270 Kan. 365, 371, 14 P.3d 1088 (2000).
Having set forth the applicable legal standards, we move on to discuss each of the claims raised by Jack's children on appeal. Ambiguity
The crux of the ambiguity dispute is whether there is clear language in the will providing for division and distribution of trust assets upon Mary's death or whether the language is so uncertain that it is susceptible to two or more meanings, which necessarily requires the court to apply rules of construction to determine Patrick's intentions. See Central Natural Resources v. Davis Operating Co., 288 Kan. 234, 245–46, 201 P.3d 680 (2009) (words are ambiguous when subject to two or more meanings); Fire Association v. Taylor, 76 Kan. 392, Syl. ¶ 2, 91 P. 1070 (1907) (stating where language is susceptible of two or more meanings— i.e., ambiguous—court must ascertain the intent of parties).
To that end, the parties do not appear to dispute that the first sentence of subsection 1(F) of the will unambiguously provides that upon Mary's death, the trustee shall divide the Trust assets into three equal shares “for each of [Patrick's] children; Janet, Jack and David,” regardless of whether the children survive Mary. Moreover, the parties do not appear to dispute that the second sentence of subsection 1(F) unambiguously provides that upon Mary's death, the trustee shall terminate the Trust and distribute the shares set aside for those children who have survived Mary. The parties do dispute, however, whether an ambiguity arises when the first and second sentences of subsection 1(F) are read together. Janet and David argue that when read together, the two sentences unambiguously provide a conditional remainder in the trust assets to each of Jack's children; thus, in order for a child to be entitled to the share set aside for him or her, that child would have to be alive when Mary dies. Conversely, Jack's children argue that when read together, the language in the first two sentences are susceptible to two meanings under the circumstances presented here: a three-way split among all children upon Mary's death versus a two-way split among only the surviving children upon Mary's death.
Upon review of the will language at issue, we find no ambiguity. The first sentence of subsection 1(F) instructs the trustee to divide the Trust into equal shares so as to provide one share to each of the three children, regardless of whether the children survive Mary. The second sentence directs the trustee to distribute one share to each of the children who have survived Mary. The will contains no direction to the trustee regarding distribution of shares set aside for a child such as Jack, who did not survive Mary. But this omission does not render the terms of the will ambiguous. More specifically, the language at issue is not susceptible to two or more meanings. Because the terms of the will are not ambiguous, this court does not need to attempt to construe any ambiguous provisions. See In re Estate of Stroble, 6 Kan.App.2d 955, 960, 636 P.2d 236 (1981) (stating that “courts have no business rewriting or reconstructing wills, in whole or in part, on behalf of a testator, if the will is clear and unambiguous”), rev. denied 230 Kan. 818 (1982). Distribution
In its second claim of error, Jack's children argue the district court erred in holding that Patrick's will created a contingent remainder or a vested remainder subject to a condition subsequent and thus the remaining Trust assets should be distributed only to those children who survived Mary. Contrary to the court's holding, Jack's children maintain that Patrick's will created a vested remainder in Jack at the time of Patrick's death, which necessarily passes to them as Jack's heirs at law. We agree.
“The law favors vested rather than contingent remainders. If there is doubt whether the testator intended a remainder should vest at his death or at the termination of a life estate the doubt will be resolved in favor of the earlier vesting.” In re Estate of Works, 168 Kan. 539, Syl. ¶ 3, 213 P.2d 998 (1950). “In order to create a contingent remainder the intention so to do must be expressed in words so plain that no room for judicial construction remains.” 168 Kan. 539, Syl. ¶ 4;Buxton v. Noble, 146 Kan. 671, 675–76, 73 P.2d 43 (1937) (stating that unless a contrary intention clearly appears, a remainder is deemed to be vested at the death of testator).
We find the language contained in Patrick's will simply does not meet the legal standard required to create a contingent remainder. The will identified Jack by name as a beneficiary to whom the trustee should provide a one-third share of the residuary trust assets and did so without stating any contingencies or conditions. As such, Jack's share unconditionally vested at Patrick's death. Although Jack died before distribution of his share of the assets, his share already had vested. Because it was vested, Jack's share of the residuary trust assets must pass to Jack's heirs at law. See In re Estate of Anderson, 19 Kan.App.2d 116, 121–24, 865 P.2d 1037 (1993) (finding probate of a joint and mutual will after death of one of the testators creates a vested interest in the third-party beneficiaries as of the first testator's death, and if a third-party beneficiary predeceases second testator, that beneficiary's heirs are entitled to beneficiary's bequest), rev. denied 254 Kan. 1007 (1994).
Reversed and remanded with directions to distribute the remaining trust assets to Jack's children.