Opinion
No. 110,207.
2014-10-17
Peggy A. EATON, et al., Appellees, v. James EATON, et al., Appellants, and In the Matter of the Estate of Maurice F. Eaton, Deceased, case No. 10PR89, and In the Matter of the Estate of Maurice F. Eaton, Deceased, case No. 10PR101.
Appeal from Cherokee District Court and Crawford District Court; Oaliver Kent Lynch, Judge.Jay F. Fowler and Amy S. Lemley, of Foulston Siefkin LLP, of Wichita, for appellants.Richard Loffswold, Jr., and Jennifer M. Hill, of McDonald, Tinker, Skaer, Quinn & Herrington, P.A., of Wichita, for appellees.
Appeal from Cherokee District Court and Crawford District Court; Oaliver Kent Lynch, Judge.
Jay F. Fowler and Amy S. Lemley, of Foulston Siefkin LLP, of Wichita, for appellants. Richard Loffswold, Jr., and Jennifer M. Hill, of McDonald, Tinker, Skaer, Quinn & Herrington, P.A., of Wichita, for appellees.
Before STANDRIDGE, P J., PIERRON, J., and JOHNSON, S.J.
MEMORANDUM OPINION
PER CURIAM.
This case involves a dispute between Maurice F. Eaton's widow, Peggy A. Eaton, individually and as administrator of the Estate of Maurice F. Eaton, deceased, and Maurice's brother and nephews (defendants) over the ownership of real estate located in Cherokee County, Kansas. The district court granted summary judgment in favor of Peggy, in part, holding that Peggy owned a one-half interest in 280 acres of the real estate upon Maurice's death because the property was jointly acquired by Peggy and Maurice after their marriage as provided in the couple's 1986 prenuptial agreement and wills. Defendants appeal the district court's ruling, arguing that (1) Peggy waived any future right to the real estate at issue when she signed the prenuptial agreement; (2) the 280 acres of real estate did not constitute after-acquired or jointly acquired property; and (3) delivery of a quitclaim deed transferring title to the real estate to Maurice's nephews was effective.
Facts
On December 22, 1986, Peggy and Maurice entered into a prenuptial agreement in Crawford County, Kansas, and were married that same day. The prenuptial agreement provided, in relevant part, that property currently owned by each party was to remain separate and to be held separate and apart from any marital property. Exhibit A to the prenuptial agreement provided that Peggy brought $136,727 in separate assets to the marriage. Exhibit B to the prenuptial agreement provided that Maurice brought $187,600 in separate assets to the marriage. Maurice's listing included a one-half undivided interest in various plots of real estate in Cherokee and Crawford Counties, Kansas, and one-half of various liabilities with an indication that Maurice and his brother, Marvin Eaton, operated a partnership with respect to the properties and liabilities. Both Peggy and Maurice signed certificates attached to the prenuptial agreement acknowledging that they were advised to receive independent legal counsel and advice from attorneys.
Two days after their marriage, Peggy and Maurice each executed wills containing reciprocal provisions providing that each would leave one-half of their jointly accumulated property acquired after marriage to the other. The wills each contained clauses that expressly acknowledged the prenuptial agreement and honored its terms. Peggy and Maurice each consented to the other's will. Attorney Fred Michelson prepared both the prenuptial agreement and the wills.
Prior to the marriage, Maurice and Marvin held title to certain real estate located in Cherokee County, Kansas, and Madison County, Arkansas; each held an undivided one-half interest in these properties. On April 2,1987, Marvin executed three quitclaim deeds to “Maurice F. Eaton and Peggy A. Eaton, husband and wife, as JOINT TENANTS and not as tenants in common, with full rights of survivorship, the whole estate to rest in the survivor in the event of the death of either.” The deeds covered 280 acres of farmland in Cherokee County. On that same date, Maurice and Peggy executed a quitclaim deed for 160 acres of Cherokee County farmland to Marvin, a single person.
The deeds were recorded over a year later on May 26 and 27, 1988. The deeds were recorded about the time each brother filed for bankruptcy. Marvin conceded that he and Maurice swapped titles to divide the real estate between them-rather than each of them holding one-half interest in the whole of the properties-for purposes of filing bankruptcy.
For the entirety of the marriage, Peggy and Maurice maintained separate financial accounts. However, for the majority of the marriage, they resided in Peggy's home in Columbus, Kansas. The couple filed joint tax returns every year after they were married. On May 14, 2010, Maurice injured his neck in an accident and moved to a medical facility; he also had been receiving treatment for cancer before that time. According to Peggy, Marvin later moved Maurice to different care homes and hospitals without notifying her and had a restraining order issued against her for harassment.
On July 8, 2010, Maurice executed the following documents in the office of his attorney, Bill Wachter: (1) A new “Last Will and Testament” that left all of his property to his nephews; (2) a general durable power of attorney naming Marvin as his attorney-in-fact; and (3) two quitclaim deeds transferring to his nephews 200 acres of real estate in Cherokee County, Kansas, and approximately 200 acres of real estate in Madison County, Arkansas (most of the same land transferred to Maurice and Peggy jointly by Marvin in 1987). After Maurice signed the quitclaim deeds, they were given to Marvin. Wachter advised that the deeds would need to be delivered to be effective but that delivery to Marvin was sufficient. Wachter, however, also advised that the deeds should not be recorded. Wachter hoped that Peggy would consent to the real estate plan and if so, new transfer on death deeds would be executed for tax reasons. Marvin took the deeds to his ex-wife and told her to put them in a safety deposit box, where they remained until September 2, 2010.
As for the durable power of attorney (DPOA), Wachter testified that Maurice wanted Marvin to have his power of attorney. Maurice thought Peggy had possibly tricked him into signing checks or that she might try to persuade him to sign checks, and he did not want to deal with that anymore. Maurice reported he was too sick, and he wanted his brother to handle the transaction of his financial affairs because he trusted Marvin to act in his best interests. Maurice and Marvin understood the DPOA went into effect when Maurice signed it. On July 27, 2010, Marvin used the DPOA to change Maurice's account at Citizen's Bank. In August 2010, Marvin sold soybeans stored in Maurice's name to a grain company.
On July 19, 2010, Wachter informed Peggy that Maurice had executed a new will and prepared deeds to transfer the real estate to his nephews upon his death. Wachter asked Peggy to consent to the will and advised her that if she refused to do so, divorce proceedings would be initiated. Peggy refused to consent to the new will. Consequently, on August 18, 2010, Maurice filed for divorce and obtained a temporary restraining order (TRO) restricting either party from disposing of or encumbering any of their assets, except as needed to comply with any court orders.
On August 27 and 28, 2010, two quitclaim deeds-both involving the same property description in Cherokee County-were executed, transferring an additional parcel of real estate inadvertently omitted from the July deeds. One of the deeds was signed by Marvin as power of attorney for Maurice. An identical deed was signed by Maurice.
On September 2, 2010, Marvin retrieved the July 8, 2010, quitclaim deeds from the safety deposit box and took the deeds to Wachter's law firm. A member of the firm subsequently recorded them with the county register of deeds.
On October 20, 2010, Maurice passed away. Maurice was still legally married to Peggy at the time of his death. Thereafter, the parties filed various probate and civil actions attempting to settle Maurice's estate and quiet title to the real estate at issue in the quitclaim deeds: (1) On November 3, 2010, Peggy filed a petition for letters of administration in Crawford County (case No. 10 PR 89P); (2) on December 3, 2010, Michael Eaton petitioned for probate of Maurice's July 8, 2010, will in Crawford County (case No. 10 PR 101P); and (3) on December 7, 2010, Peggy filed a civil action against defendants for partition, quiet title, accounting, and other relief relating to the 280 acres of Kansas property in Cherokee County (case No. 10 CV 155). The cases were consolidated for discovery.
Following discovery, Peggy moved for partial summary judgment, alleging: (1) she was entitled to a spousal allowance, (2) the terms of the prenuptial agreement did not constitute a consent to Maurice's 2010 will, and (3) legal delivery of the 2010 quitclaim deeds was never accomplished. The district court ruled that (1) Peggy had waived her spousal allowance, (2) Peggy did not consent to Maurice's 2010 will because it was not consistent with the agreement evidenced by the 1986 prenuptial agreement and wills, and (3) the quitclaim deeds were not effectively delivered to Maurice's nephews and violated the temporary order entered in the divorce proceeding prohibiting Maurice and Peggy from disposing of or encumbering their assets.
Defendants moved for reconsideration and for partial summary judgment, alleging that (1) delivery of the deeds to Marvin was sufficient, (2) the prenuptial agreement granted Maurice the right to dispose of his interest in the 800 acres of Cherokee County real estate, and (3) Marvin had mistakenly placed Peggy's name on the 1987 quitclaim deeds. The district court denied the motion for reconsideration and ruled that the prenuptial agreement did not purport to establish ownership of or confer title to any tracts of real estate.
Peggy later filed a second motion for partial summary judgment, seeking a determination of final disposition of the ownership interest of the Cherokee County real estate owned by Maurice at the time of his death. The district court ruled that the prenuptial agreement did not constitute a waiver or otherwise preclude Peggy from acquiring an interest in the property at issue here. More specifically, and based on the face of the deeds signed by Marvin that quitclaimed 280 acres of property in Cherokee County to Maurice and Peggy as joint tenants with right of survivorship in 1987 after they were married, the court determined that Peggy owned a one-half interest in the 280 acres upon Maurice's death. The court determined the remaining one-half interest was to pass through Maurice's estate with no elective share entitlement to Peggy. Finally, the court refused to reconsider defendants' argument that delivery of the deeds had been sufficient.
Analysis
On appeal, defendants argue the district court erred in granting summary judgment in favor of Peggy. Specifically, they contend that (1) Peggy waived any future right to the real estate at issue when she signed the prenuptial agreement; (2) the 1987 deeds transferring the 280 acres of real estate to both Maurice and Peggy did not constitute after-acquired or jointly acquired property, and (3) the delivery of the 2010 quitclaim deeds was effective and sufficiently transferred title to Maurice's nephews. We address each of these contentions in turn.
Standard of Review
When the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law, summary judgment is appropriate. The district court is required to resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom the ruling is sought. When opposing a motion for summary judgment, an adverse party must come forward with evidence to establish a dispute as to a material fact. In order to preclude summary judgment, the facts subject to the dispute must be material to the conclusive issues in the case. On appeal, the same rules apply; summary judgment must be denied if reasonable minds could differ as to the conclusions drawn from the evidence. Waste Connections of Kansas, Inc. v. Ritchie Corp., 296 Kan. 943, 962, 298 P.3d 250 (2013).
An issue of fact is not genuine unless it has legal controlling force as to the controlling issue. A disputed question of fact which is immaterial to the issue does not preclude summary judgment. In other words, if the disputed fact, however resolved, could not affect the judgment, it does not present a genuine issue for purposes of summary judgment. Northern Natural Gas Co. v. ONEOK Field Services Co., 296 Kan. 906, 934–35, 296 P.3d 1106, cert. denied 134 S.Ct. 162 (2013); Carr v. Vannoster, 48 Kan.App.2d 19, 21, 281 P.3d 1136 (2012).
1. Prenuptial agreement
Defendants assert the district court erred in finding that the prenuptial agreement and the reciprocal wills executed 2 days later necessarily must be construed together in order to properly ascertain how Peggy and Maurice intended to apportion property rights before, during, and after the parties' marriage.
The legal effect of a written instrument is a question of law. It may be construed and its legal effect determined by the appellate court regardless of the construction made by the district court. Osterhaus v. Toth, 291 Kan. 759, 768, 249 P.3d 888 (2011). When interpreting written contracts, the primary rule of construction is to ascertain the parties' intent. If the terms of the contract are unambiguous, the parties' intent is to be ascertained from the contract language without applying rules of construction. See Waste Connections of Kansas, Inc., 296 Kan. at 963. “[C]ontracts, made either before or after marriage, the purpose of which is to fix property rights between a husband and wife, are to be liberally interpreted to carry out the intentions of the makers, and to uphold such contracts where they are fairly and understandingly made, are just and equitable in their provisions and are not obtained by fraud or overreaching.” Ranney v. Ranney, 219 Kan. 428, Syl. ¶ 1, 548 P.2d 734 (1976). In the present case, there is no dispute that the prenuptial agreement was fairly and understandingly made, was just and equitable, and was not obtained by fraud.
The prenuptial agreement provided that property currently owned by each party was to remain separate and to be held separate and apart from any marital property. Specifically, the agreement stated, in relevant part:
“WHEREAS, it is mutually desired and agreed by the said parties that the property and estate of each of the said parties as now owned and constituted, shall remain the separate property of each of said parties respectively, and be subject to the sole control and use of its owner as well and as completely after the solemnization of said marriage as previously thereto, except as is specifically hereinafter provided.
....
“4. That the estate of the said MAURICE F. EATON shall remain his separate property, subject entirely to his individual control and use the same as if he were unmarried; and the said PEGGY A. NEWTON shall not acquire by reason of said contemplated marriage, for herself, her heirs, assigns or creditors, any interest in his said property or estate; or right to the control thereof or any interest in the gross income, increase, rents, profits or dividends arising therefrom, excepting as hereinafter provided; and it is further agreed by the said PEGGY A. NEWTON that any property that said MAURICE F. EATON may hereafter acquire by will or descent, shall be owned and held by him as though he had acquired it before the solemnization of said marriage; and the said PEGGY A. NEWTON hereby agrees in consideration of said contemplated marriage and the covenants of the said MAURICE F. EATON herein set forth, that she will and does waive, release and relinquish unto the said MAURICE F. EATON all right to the use and control of his separate property and estate and the gross income therefrom, except as hereinafter provided: and further agrees that the said MAURICE F. EATON shall have the right at any time to dispose of any part or all of his separate property or estate by deed, will or otherwise, upon his sole signature, hereby ratifying and consenting on her part to any and all such disposition of his said separate property or estate, or in case any purchaser desires that she join in the execution of any instrument conveying any part of his said separate estate, she will jointly execute the same with him.” (Emphasis added.)
Paragraph 9 of the prenuptial agreement stated:
“9. The parties covenant and agree that upon the solemnization of the marriage of the parties hereto, the parties having been fully advised in the premises of their rights under the statutes of descent and distribution of the State of Kansas and those statutes pertaining to the execution of wills and the rights of a spouse thereunder, will execute written consents to a Last Will and Testament of the other party containing any provisions consistent with this agreement and in the event either part[y] fails or refuses to execute such a consent to any such will of the other party, his or her execution of this agreement shall constitute and be taken as and for his or her consent to any such will, or wills, and in any event the rights of the parties to the property and estate of the other party shall be as herein provided and agreed, and not otherwise.”
Additionally, paragraph 11 stated:
“11. This Agreement constitutes the entire agreement between the parties and there are no representations, conditions or agreements other than those expressly set forth herein. No other agreements, statements or promises made by any party to this Agreement that are not in writing and signed by all such parties shall be binding.”
As noted above, Maurice and Peggy executed reciprocal wills 2 days after they were married, in which they each made different dispositions of their premarital separate property but gave to each other one-half of any property accumulated by them jointly after the marriage. Consistent with the terms of the prenuptial agreement, both parties signed a written consent to the other's will stating that each understood and consented to the provisions contained in the will “in lieu of the rights secured ... by Statute.”
Reading the prenuptial agreement and the reciprocal wills together “as part and parcel of the same agreement,” the district court concluded the parties “intended to keep their accumulations up to that point in their lives separate, and to share with each other in the mutually acquired property.” Given the court's conclusion that Peggy and Maurice intended the prenuptial agreement and reciprocal wills that they executed 23 years earlier to provide one-half of any property jointly accumulated after their marriage to each other, the court held that the will executed by Maurice in 2010 unlawfully disposed of jointly acquired property without Peggy's consent.
In challenging the district court's holding, defendants argue the prenuptial agreement constitutes the entire agreement between the parties and, by its very terms, constitutes written consent to any last will and testament of the other party as long as the will does not contain any provision inconsistent with the prenuptial agreement. The success of defendants' argument is contingent upon a finding that the district court erred in concluding that the prenuptial agreement and the 1986 wills must be read in conjunction with each other to determine the parties' intent. In holding that the prenuptial agreement and the 1986 wills were part of the same agreement, the district court relied on the axiom that “where two or more instruments are executed by the parties at or near the same time in the course of the same transaction and concern the same subject matter, they will be read and construed together to determine the intent of the parties.” Hall v. Mullen, 234 Kan. 1031, 1038, 678 P.2d 169 (1984).
We agree with the district court that the prenuptial agreement should be interpreted along with the 1986 reciprocal wills. The prenuptial agreement and the reciprocal wills were executed 2 days apart, by the same parties, and each concern the handling and disposition of the parties' estates and property. Although Mitchelson, the attorney who drafted both the prenuptial agreement and the 1986 wills, testified that the wills were intended to be independent of the prenuptial agreement, he also testified that the wills “attempted to fulfill what was set out in the Prenuptial Agreement,” “accomplished what I think the Prenuptial Agreement provided for,” and “were prepared after the parties agreed to the Prenuptial Agreement and in order to fulfill what they wanted done at that time.” Moreover, the two documents cross-reference each other. The prenuptial agreement sets forth the parties' requirement to execute a last will and testament upon “the solemnization of said marriage” and to provide written consent to each other's wills so long as disposition of property is consistent with terms in the prenuptial agreement. The parties' reciprocal 1986 wills expressly refer to the parties' prenuptial agreement and, immediately thereafter, give, devise, and bequeath one-half of any property jointly accumulated after their marriage to each other. Finally, we note defendants' argument that Peggy consented to the 2010 will based on language in the prenuptial agreement is wholly inconsistent with Wachter's attempts to obtain Peggy's consent to Maurice's 2010 will, which culminated in a threat to institute divorce proceedings.
The district court properly determined that the prenuptial agreement and the 1986 wills were part of the same agreement and, as a result, the prenuptial agreement did not provide Peggy's consent to Maurice's 2010 will.
2. Separate or jointly acquired property
Next, defendants argue the district court erred in finding that Marvin's one-half interest in the 280 acres of real estate deeded to Maurice and Peggy constituted jointly acquired postmarriage property.
At the time of Maurice and Peggy's marriage in 1986, Maurice and Marvin each owned an undivided one-half interest in various parcels of Cherokee County real estate. Exhibit B attached to the prenuptial agreement reflected that Maurice owned a one-half interest in 600 acres of farmland in Kansas and that Maurice was in partnership operations with Marvin. On April 2, 1987, Marvin executed three quitclaim deeds covering approximately 280 acres of real estate in Cherokee County to “Maurice F. Eaton and Peggy A. Eaton, husband and wife as JOINT TENANTS and not as tenants in common, with full rights of survivorship, the whole estate to vest in the survivor in the event of the death of either....” Relying on language in the prenuptial agreement stating it governed only “property owned and ‘as constituted’ at the time of signing,” the district court found the undivided one-half of the property owned by Marvin in 1986 did not constitute separate property owned by Maurice at the time the prenuptial agreement was executed. When Marvin quitclaimed his one-half interest in the real estate to Peggy and Maurice together after they were married, the court found the property became jointly acquired postmarriage property. Because the 1986 reciprocal wills provided one-half of the jointly acquired postmarriage property would be left to the surviving spouse, the district court ruled that Peggy owned a one-half interest in the 280 acres of real estate at issue.
In challenging the court's ruling, defendants note that the prenuptial agreement only referenced jointly acquired property in the event the parties obtained a divorce and further provided that the parties would not have an interest in each other's separate estates, despite any future changes to their separate estates. For support, defendants rely on the language in paragraphs 3 and 4 of the prenuptial agreement, which provided that any property the parties obtained by will or descent was to be owned and held as though it was acquired before the marriage as separate property. They also rely on the following highlighted language in paragraph 7 of the agreement:
“7. As to the income of the said parties from their personal earnings or growing out of their separate estates, any residue of the income derived from the use of either of said estates or personal earnings of either or both, shall be distributed according to the terms of any wills drawn by the parties, as referred to herein above, or according to the laws of descent of distribution. Any increment to the separate estate of either party by operation of law shall be considered as an increase to that party's separate estate: Provided, however, that nothing in this agreement shall relieve MAURICE F. EATON from his obligation to support said PEGGY A. NEWTON as his wife, as provided by the laws of the State of Kansas.” (Emphasis added.)
Defendants' reliance on the language found in paragraphs 3 and 4 of the prenuptial agreement is misplaced, as Maurice and Peggy did not obtain the 280 acres of real estate from Marvin by will or descent. And paragraph 7 relates to any increase in the parties' income from their separate estates, meaning that Peggy would not be entitled to any increase in income from Maurice's one-half interest in the real estate. While these provisions may provide support for defendants' claim that the prenuptial agreement anticipated future changes to the parties' separate estates, the language of the agreement clearly does not address claims relating to rights to any property jointly acquired after the marriage.
Simply put, there is no language in the prenuptial agreement to support defendants' argument that the 280 acres of real estate at issue remained Maurice's separate property following Marvin's transfer of his one-half interest in the real estate to Maurice and Peggy. At the time the parties executed the prenuptial agreement, Maurice owned an undivided one-half interest in the 280 acres at issue, as set forth in Exhibit B. He owned no interest in Marvin's one-half interest in the real estate. The prenuptial agreement specifically provided that Peggy would not acquire “any interest in [Maurice's] said property” following the marriage. The agreement further stated that “the property and estate of each of the said parties as now owned and constituted” would remain the separate property of each party. Notably, the prenuptial agreement did not provide that Peggy waived any interest in any of the Eaton property. Under the prenuptial agreement, Peggy could not acquire any interest in Maurice's one-half interest in the 280 acres. Following the parties' marriage, however, they executed wills providing that a portion of postmarriage, jointly acquired property would be left to the other on death. When Marvin conveyed his one-half interest in the 280 acres of real estate to Maurice and Peggy as joint tenants, his one-half interest portions of the real estate constituted jointly acquired property because Maurice did not own this interest prior to his marriage to Peggy.
Defendants also allege that Peggy waived all future rights to the real estate simply because she acknowledged that it was included in the inventory of Maurice's real estate in Exhibit B to the prenuptial agreement and did not contribute funds to acquire any interest in the property after the marriage. But Exhibit B merely identified as separate property Maurice's one-half interest in the real estate; therefore, Peggy only waived all future rights to Maurice's one-half interest. Additionally, Maurice's 1986 will provides Peggy was entitled to one-half of “all the property accumulated by us jointly since the date of our marriage, December 22, 1986.” There is no additional language found in the will defining the term “jointly accumulated property” or any language otherwise requiring Peggy to contribute funds toward the acquisition of the property in order for it to constitute jointly accumulated property. In addition, whether legally necessary or not, Peggy and Maurice jointly executed the deed of 160 acres to Marvin in exchange for his deed, presumably to permit Marvin to build a home on the property and claim it as homestead when he filed bankruptcy a year later.
Finally, defendants argue that Marvin never intended to give or gift any of his interest in the family real estate to Peggy when he signed the quitclaim deed. Defendants argue Marvin merely intended to give Maurice an incremental increase in the real estate; thus, the property's designation as separate property should not change. This argument is contrary to the record. In 1987, Marvin executed three quitclaim deeds to “Maurice F. Eaton and Peggy A. Eaton, husband and wife as JOINT TENANTS and not as tenants in common, with full rights of survivorship, the whole estate to vest in the survivor in the event of the death of either....” Maurice accepted the deeds, and they were recorded on May 26, 1988. Neither Marvin nor Maurice ever attempted to revoke, alter, or otherwise change ownership of the real estate until July 2010. In fact, defendants acknowledge that “no one paid any attention to the form of the deed [s] until years later.” Regardless of Marvin's intent in executing the deeds, the fact remains that he conveyed the real estate to Maurice and Peggy as joint tenants. As a result, Marvin's one-half interest in the real estate passed to Peggy pursuant to the terms of the parties' 1986 wills and the laws of joint tenancy. See In re Estate of Mater, 27 Kan.App.2d 700, 704–07, 8 P.3d 1274 (upon death of joint tenant, title to property under joint tenancy deed immediately vests in fee simple to surviving joint tenants), rev. denied 270 Kan. 898 (2000).
The district court properly determined that Marvin's one-half interest in the 280 acres of real estate deeded by Marvin to Maurice and Peggy constituted postmarriage, jointly acquired property under the 1986 wills.
3. Delivery of quitclaim deed
Defendants contend the district court erred in ruling that delivery of the quitclaim deed signed by Maurice in 2010 was insufficient to establish a gift transferring title to the real estate to his nephews.
In order to establish a valid inter vivos gift, there must be (1) an intention to make a gift; (2) a delivery by the donor to the donee; and (3) an acceptance by the donee. In re Estate of Button, 17 Kan.App.2d 11, Syl. ¶ 1, 830 P.2d 1216, rev. denied 251 Kan. 938 (1992). “The burden of proving that a gift was made, including the existence of all the elements necessary to its validity, is upon the party asserting the gift.” 17 Kan.App.2d 11, Syl. ¶ 2. The element at issue in the present case is delivery.
In Kansas, title to real estate vests at the time the deed is delivered. In order to transfer title through a deed, the grantor must cause the deed to be effectively delivered during the grantor's life. Reicherter v. McCauley, 47 Kan.App.2d 968, 974, 283 P.3d 219 (2012). When a deed duly executed and acknowledged is found in a third party's possession, it is presumed that the grantor delivered the deed. See Cole, Administrator v. Hoefflin, 187 Kan. 66, 69, 354 P.2d 362 (1960). Conversely, the law presumes the grantor did not effectively deliver the deed when a deed is signed and acknowledged but the grantor retains control of the deed. See 187 Kan. at 69, 72–73 (Price, J., dissenting); Johannes v. Idol, 39 Kan.App.2d 595, 604, 181 P.3d 574 (2008). The party challenging the preceding presumptions must supply clear and convincing evidence to rebut the presumption. 39 Kan.App.2d at 604.
Whether the grantor delivered the deed to the grantee is a question of intent and occurs where there is evidence from all the facts and circumstances surrounding the transaction that the grantor had a present intent to divest himself or herself of title to the property and vest it in the grantee. 39 Kan.App.2d at 604. Because delivery is a question of intent, it is normally a question of fact. However, when the facts are not disputed, delivery is a question of law. Hoard v. Jones, 119 Kan. 138, 158, 237 P. 888 (1925).
On July 8, 2010, Maurice executed a quitclaim deed transferring 200 acres of the real estate at issue here to his nephews. After Maurice signed the deed, it was given to Marvin. Wachter advised that the deed would need to be delivered to be effective but that delivery to Marvin was sufficient. Wachter also advised that the deed should not be recorded, as new deeds would need to be executed if Peggy consented to the real estate plan; the new deeds would be transfer on death deeds that would likely result in better tax consequences for the family. Marvin took the deed to his ex-wife and told her to put it in a safety deposit box, where it remained until September 2, 2010, when Marvin retrieved the deed and took it to Wachter's law firm, which later recorded it. On August 27 and 28, 2010, two quitclaim deeds transferring one parcel omitted from the previous deeds were executed. One of the deeds was signed by Marvin as power of attorney for Maurice. The other deed was signed by Maurice. Between the signing of the July deeds and their filing, Maurice filed for divorce on August 18, 2010, and obtained a temporary restraining order (TRO) barring Peggy and Maurice from disposing or encumbering any of their assets.
Based on the facts set forth above, the district court held that delivery of the July 8, 2010, deed to Marvin was not legally sufficient to transfer title of the real estate to Maurice's nephews. The court reasoned: (1) delivery of the deed to Marvin was conditional because he was not free to record the deed until some later time, (2) delivery was not clearly made to a third person because Maurice already had granted Marvin power of attorney over Maurice's affairs, and (3) the TRO entered in the divorce proceeding prohibited both Maurice and Peggy from disposing of or encumbering any of their assets.
But defendants argue that delivery of the deed to Marvin was sufficient to transfer title to Maurice's nephews. Specifically defendants claim (1) Maurice's intention was the controlling factor, (2) the power of attorney was not in effect at the time of delivery of the deed to Marvin because Maurice was not yet incapacitated, (3) delivery of the deed was accomplished before the petition for divorce was filed and the temporary order was entered, and (4) the prenuptial agreement provided that temporary orders in any divorce proceeding would have no effect on the parties' separate property. a. Conditional delivery
Defendants correctly note that the usual test of what constitutes sufficient delivery is whether the grantor by his or her acts or words, or both, manifested an intention to divest himself or herself of title, as evidenced by all the facts and circumstances surrounding the transaction. See Yunghans v. O'Toole, 224 Kan. 553, 556–57, 581 P.2d 393 (1978). They point to uncontroverted evidence establishing Maurice's intent to divest himself of title and relinquish control over the real estate, including his reliance on Wachter's legal advice that delivery of the deed to Marvin was sufficient; his lack of custody, control, or access over the safety deposit box; and his August 2010 execution of the corrected deed, in his own capacity.
But even if Maurice clearly manifested an intention to divest himself of title to the real estate, delivery of the July 8, 2010, deed to Marvin was conditional and thus was not legally sufficient to transfer title of the real estate to Maurice's nephews because Marvin was not free to record the deed until some later time:
“[I]t is not necessary that a deed be delivered personally by the grantor to the grantee, and ... an unconditional delivery to a third person for the use and benefit of the grantee, where the grantor intends to divest himself [or herself] of the title and to part with control of the instrument, is ordinarily a sufficient delivery.” (Emphasis added.) Libel v. Corcoran, 203 Kan. 181, 185, 452 P.2d 832 (1969).
We agree with the district court that delivery of the deed to Marvin was conditional. Wachter advised Marvin not to record the deed; thus, the deed was not available for the use and benefit of Maurice's nephews upon delivery to Marvin. Despite Maurice's general intent to gift the real estate to his nephews, the delay in finalizing the transfer in the hopes that Peggy would consent indicates that Maurice did not intend to convey the real estate at the time of delivery to Marvin. Upon his attorney's advice, Maurice intended to execute new deeds, if Peggy consented, to lessen the tax consequences of the transfer. If the July deeds had, in fact, been unconditionally delivered, Maurice would have had no power to issue new deeds to lessen the tax consequences because the transfer would already have been completed. See, e.g., Albrecht v. Brais, 324 Ill.App.3d 188, 192, 754 N.E.2d 396 (2001) (in cases of delivery of deed to third person, controlling question is whether grantor reserved right to recall or revoke his or her action). b. Power of attorney
As discussed above, a grantor is presumed to have delivered a duly executed and acknowledged deed when it is found in a third party's possession. But a grantor is presumed not to have effectively delivered a signed and acknowledged deed when the grantor retains control of the deed. See Hoefflin, 187 Kan. at 69, 72–73 (Price, J., dissenting). Here, the district court held that delivery of the deed was not clearly to a third person because Maurice had granted Marvin power of attorney and, as a result, they had a fiduciary relationship that did not equate to delivery to a third person or put the deed out of Maurice's control.
“A power of attorney is an instrument in writing by which one person, as principal, appoints another as agent and confers upon such agent the authority to act in the place of the principal for the purposes set forth in the instrument.” Muller v. Bank of America, 28 Kan.App.2d 136, 139, 12 P.3d 899 (2000). A durable power of attorney (DPOA) is a power of attorney that remains in effect even if the grantor becomes incompetent. Geren v. Geren, 29 Kan.App.2d 565, 569, 29 P.3d 448 (2001).
Defendants assert that Marvin's DPOA was not in effect at the time Maurice signed the deed and delivered it to Marvin, as the power vested only upon Maurice's “ ‘subsequent disability or incapacity’ “ and did not otherwise take away Maurice's power to act on his own behalf if he was able. Under Kansas law, powers of attorney may be drafted with either immediate powers or “springing” powers. “Springing powers indicate that the agent's authority does not ‘spring’ until the occurrence of certain conditions or events (such as a principal's inability to meaningfully comprehend events or communicate) or at some moment measured in time....” Hoy, Powerful Powers Under the Kansas Power of Attorney Act, 74 J.K.B.A. 20, 21 (June 2005), see K.S.A.2013 Supp. 58–652(e).
While the language of the power of attorney in this case states that the “authority of my agent shall commence and be in full force and effect upon my subsequent disability or incapacity,” the record is less than clear when, if ever, Maurice became disabled. Despite the language of the DPOA, however, both the attorney and Marvin testified to their understanding that the power of attorney was effective when signed. The attorney testified Maurice wanted the DPOA drawn up because he believed Peggy would persuade him to sign checks, and he did not want to deal with that any further because he was too sick; he wanted his brother to handle the transaction of his financial affairs. Marvin understood, and testified that Maurice also understood, that the power of attorney went into effect when Maurice signed it. Marvin used the DPOA on July 27, 2010, to change Maurice's bank account and later to sell Maurice's soybeans. Thus, by his own testimony Marvin was exercising his authority under the DPOA almost immediately after it was signed.
Despite the intent of the attorney or Marvin's understanding of when his power of attorney became effective, the document itself clearly stated Marvin had the authority to act as Maurice's attorney-in-fact only when Maurice became disabled or incapacitated. Under the terms of the document, Maurice had to be “a person whose ability to receive and evaluate information effectively or to communicate decisions, or both, is impaired to such an extent that the person lacks the capacity to manage such person's financial resources as determined by the certification of one licensed physician.”
For these reasons, the district court's finding that Marvin's actions in receiving the July 8 deeds was in his role as Maurice's agent rather than a third party is a factual question that cannot be resolved based upon the present record. Still, it does not appear the district court's finding that the tender of the deeds was conditional rather than unconditional is undermined by the question of when Marvin's authority as attorney-in-fact became effective. Marvin's receipt of the deeds was still a conditional delivery; they would not be effective until after it was determined whether Peggy would consent to Maurice's new will. If Peggy consented, the deeds in Marvin's possession would be replaced by other deeds. Because the conditional deeds remained in a safety deposit box, unrecorded, until after the divorce was filed and temporary orders were issued, the factual question of when Marvin's authority to act as power-of-attorney legally became effective does not require reversal of the district court's order. c. Temporary divorce orders
The district court also found that because the quitclaim deeds to Maurice's nephews were not filed until after Maurice filed for divorce, the transfers violated the TRO issued by the district court at the time the divorce action was filed. The TRO—issued at Maurice's request—prohibited both Maurice and Peggy from disposing of or encumbering any of their assets during the pendency of the proceeding.
Defendants argue that the temporary orders in the divorce case did not affect the transfer of Maurice's property because Peggy had agreed, in the prenuptial agreement, that no divorce decree of judgment shall determine the property rights of the parties, temporary or permanent. However, a complete reading of that paragraph reflects that it applies to “the property of either party whether owned at the date of execution hereof or acquired by will or descent.” That paragraph goes on to state that they shall retain their “separately owned property” and “shall make division and disposition of their jointly owned property, if any, as they shall agree, or if they are unable to agree ... said property shall be divided and disposed of by judicial determination.”
Thus, the prenuptial agreement did not extend to property jointly acquired by Peggy and Maurice after their marriage. As noted above, the district court correctly determined that Marvin's former one-half interest in the real property conveyed jointly to Peggy and Maurice in 1987 was postnuptial, jointly owned property. Since Marvin's former interest was not covered by the terms of the prenuptial agreement and was conveyed in joint tenancy with rights of survivorship, that portion of the property acquired after the marriage passed to Peggy at the moment of his death as the surviving joint tenant.
Affirmed.