Opinion
No. 01-08-00214-CV
Opinion issued June 18, 2009.
On Appeal from Probate Court No. 4 Harris County, Texas, Trial Court Cause No. 333,305-401.
OPINION
Appellant, Mary Rochene Ray, appeals from the trial court's summary judgment in favor of appellee, Ronald Lee McMaster. The trial court determined that, as a matter of law, the 1992 wills of Ernest and Velma Alley were contractual and that McMaster was the beneficiary. In three issues, Ray contends the trial court erred by determining the wills were contractual wills. Ray asserts the wills fail to meet the requirements of the Probate Code in that they do not describe the material provisions of the contract. Alternatively, Ray claims the wills fail to meet the two common law requirements for contractual wills in that the wills grant a fee simple estate and do not provide for a plan of distribution that treats the estates as one estate. We conclude the wills are not contractual wills because they fail to meet the requirements of the Probate Code and the common law. Therefore, after Velma's death, Ernest could properly bequeath his property to Ray instead of McMaster. We reverse and render judgment in favor of Ray.
Background
Ernest and Velma Alley, a married couple with no children, executed separate wills in 1992. Ernest's 1992 will provides,
1. General Gift. I devise and bequeath all of my property, both real and personalty, as follows:
(A) One Hundred percent (100%) to my spouse, VELMA FRANCES ALLEY, . . . if my spouse survives me;
(B) If my spouse predeceases me, then equally to "my nephew" who survives me, per stirpes. At present, for purposes of this WILL, my nephew is:
(1) RONALD LEE MC MASTER. . . .
2. General Gift. If none of the above noted beneficiaries survive me, then all of my residuary estate shall pass to my heirs.
. . . .
8. Contract With Spouse. I hereby declare that I have an oral and/or written agreement with my spouse as to the disposition which may be made of my property, any property taken under this Will or my spouse's property upon the death of either of us. We have identical, or legally similar Wills, intending thereby to be contractually bound.
Velma's will contains identical provisions except she names Ernest as her spouse in paragraph 1(A). After she died in October 1994, Velma's will was probated. Ernest took her property under the terms of her will.
Ernest executed a new will in 1999, revoking his 1992 will. The 1999 will devised Ernest's estate to Ray, Velma's niece. After Ernest died in 2001, Ray applied for probate of Ernest's 1999 will. Ray was named executor of Ernest's estate. McMaster filed this suit contending that, by making the 1999 will, Ernest breached the contract he had with Velma because the 1992 will constituted a contract between Ernest and Velma to bequeath all their property to McMaster. McMaster sought to set aside the order probating Ernest's 1999 will and to impose a constructive trust in his favor on Ernest's estate.
Ray filed a motion for summary judgment, asserting that, as a matter of law, the 1992 wills were not contractual and seeking a final summary judgment in her favor. The trial court denied Ray's motion. Almost two years later, McMaster filed a motion for partial summary judgment, claiming that the 1992 wills were contractual as a matter of law. Ray filed a response. The trial court granted McMaster's motion for summary judgment and severed that portion of the case dealing solely with whether the 1992 wills were contractual wills. Ray appealed.
Standard of Review
We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Summary judgment is proper only when a movant establishes that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c). In reviewing a summary judgment, we must indulge every reasonable inference in favor of the nonmovant, take all evidence favorable to the nonmovant as true, and resolve any doubts in favor of the nonmovant. Valence Operating Co., 164 S.W.3d at 661.
When both sides move for summary judgment and the trial court grants one motion and denies the other, we review the summary judgment evidence presented by both sides and determine all questions presented. Comm'rs Court v. Agan, 940 S.W.2d 77, 81 (Tex. 1997); Cigna Ins. Co. v. Rubalcada, 960 S.W.2d 408, 411-12 (Tex.App. 1998, no pet.). We render such judgment as the trial court should have rendered. Agan, 940 S.W.2d at 81; Rubalcada, 960 S.W.2d at 412.
Contractual Wills
Challenging the trial court's determination that the wills were contractual wills, Ray claims the wills do not meet the requirements of the Probate Code or common law.
A. Applicable Law
Section 59A of the Probate Code, entitled "Contracts Concerning Succession," provides,
(a) A contract to make a will or devise, or not to revoke a will or devise, if executed or entered into on or after September 1, 1979, can be established only by:
(1) provisions of a written agreement that is binding and enforceable; or
(2) provisions of a will stating that a contract does exist and stating the material provisions of the contract.
(b) The execution of a joint will or reciprocal wills does not by itself suffice as evidence of the existence of a contract.
Tex. Prob. Code Ann. § 59A (Vernon Supp. 2008).
In addition to the requirements in the Probate Code, Texas courts apply a two-part test to determine if a will is contractual. See In re Estate of Friesenhahn, 185 S.W.3d 16, 19 (Tex.App.2005, pet. denied) (citing Magids v. Am. Title Ins. Co., 473 S.W.2d 460, 464 (Tex. 1971)); Reynolds v. Estate of Benefield, 995 S.W.2d 885, 888 (Tex.App.1999, pet. denied). First, the property at issue must not be conveyed to the survivor as an absolute and unconditional gift. Friesenhahn, 185 S.W.3d at 19; Reynolds, 995 S.W.2d at 888. Second, the remainder of the estate of the first to die and the estate of the survivor are treated as a single estate following the death of the survivor, which must be jointly disposed of by both testators in the secondary dispositive provisions of the will. Friesenhahn, 185 S.W.3d at 19; Reynolds, 995 S.W.2d at 888. Both parts of the test must be satisfied in order to find a will contractual. See Reynolds, 995 S.W.2d at 888 (citing In re Estate of Johnson, 781 S.W.2d 390, 393 (Tex.App. 1989, writ denied)). Texas courts view contractual wills cautiously and no inferences or presumptions are indulged in favor of contractual wills. Friesenhahn, 185 S.W.3d at 19 (citing Magids v. Am. Title Ins. Co., 473 S.W.2d 460, 464 (Tex. 1971)).
B. Analysis of Probate Code Requirements for Contractual Wills
In her third issue, Ray contends the trial court erred by granting summary judgment for McMaster because the 1992 wills do not state the material provisions of the contract, as required by the Probate Code. McMaster responds, without supporting authority, that paragraphs 1 and 8 are the material provisions of the contract and therefore the statutory requirements are met.
The dispute here concerns only the second alternative in section 59A(a)(2): whether there is a provision in the will that states the material provisions of the contract. See Tex. Prob. Code Ann. § 59A(a)(2). Although the statute does not define "material provisions," in the context of contracts, courts have said, for example, that specific performance of a contract is not possible if it "leaves material provisions to be agreed to later." Condovest Corp. v. John Street Builders, Inc., 662 S.W.2d 138, 140 (Tex.App. 1983, no writ). That is, the contract "must be reasonably certain." Id. In the context of contractual wills, in determining whether the provisions of the will state the material terms of the contract, courts have examined the wills for a number of different factors, including: (1) a statement about the consideration for making the agreement, (2) a statement that the agreement cannot be changed or varied without the consent in writing of each person making the will, (3) a reference to section 59A of the Probate Code, and (4) a specific description of what the contract requires in the event of the death of the first person making the contractual wills. See Estate of Hearn v. Hearn, 101 S.W.3d 657, 660-61 (Tex.App. 2003, pet. denied) (holding language met requirements of Probate Code because will referred to section 59A and stated specifically what was required in event of first person's death); Coffman v. Woods, 696 S.W.2d 386, 387 (Tex.App.-Houston [14th Dist.] 1985, writ ref'd n.r.e.) (holding language met requirements of Probate Code because will had statement about consideration for making agreement and expressly stated that agreement could not be changed or varied without consent in writing of each person making will). These factors are illustrative rather than specific, mandatory requirements.
In relevant part, the will in Estate of Hearn v. Hearn states,
In paragraph D-5 of the Trust Agreement, my husband [and in the case of Vernon's will, "my wife"] and I have contracted that we each will execute and maintain in force a will which directs our respective executors to make a marital deduction election under certain circumstances. In accordance with such agreement, and to evidence and perfect the same in accordance with Section 59A of the Texas Probate Code, I hereby direct that if I am the " first deceased trustor" within the meaning of the Trust Agreement, my executor shall elect in full Section 2056(b)(7) of the Internal Revenue Code to have all property passing to the Marital Trust established under Section D of the Trust Agreement treated as qualified terminable interest property for federal estate tax marital deduction purposes.
101 S.W.3d 657, 660 (Tex.App. 2003, pet. denied) (emphasis added).
In relevant part, the will in Coffman v. Woods states,
So that no contention may arise concerning the same, when we or either of us be dead, we do hereby each mutually in consideration of the other making this will, and of the provisions made herein in each other's behalf, make this our last will and testament and agree that the same cannot be changed or varied by either without the consent in writing of the other.
696 S.W.2d 386, 387 (Tex.App. 1985, writ ref'd n.r.e.) (emphasis added).
The wills at issue here state,
I hereby declare that I have an oral and/or written agreement with my spouse as to the disposition which may be made of my property, any property taken under this Will or my spouse's property upon the death of either of us. We have identical, or legally similar Wills, intending thereby to be contractually bound.
The language in the wills does not expressly recite the consideration exchanged for the contract or state the wills could not be changed or revoked without mutual consent. See Coffman, 696 S.W.2d at 387. The language in the wills does not expressly state the wills are contractual wills under section 59A of the Probate Code. See Hearn, 101 S.W.3d at 660. Furthermore, the wills do not state what the contract requires in the event of the first person's death. See id. Although the wills show the spouses have an agreement to be contractually bound, that reference is insufficient under section 59A(a)(2) because the will must state more than the fact that a contract exists; it must state the material provisions of the contract. See Tex. Prob. Code Ann. § 59A(a)(2).
We hold the 1992 wills do not meet the requirements of the Probate Code providing that a contractual will "can be established only by . . . provisions of a will stating that a contract does exist and stating the material provisions of the contract." See id.
We sustain Ray's third issue. Having determined the wills are not contractual wills due to their failure to comply with the Probate Code, it is necessary to reverse the summary judgment that determined the wills were contractual wills. But even if the wills met the terms of the Probate Code, we also conclude the summary judgment would have to be reversed because the wills fail to meet the common law requirements for contractual wills.
C. Analysis of Common Law Requirements for Contractual Wills
Ray's first and second issues challenge the wills on the ground that they do not meet the two-part common law test for contractual wills.
1. Extent of the Devise
In her first issue, Ray contends the trial court erred by granting summary judgment for McMaster because the 1992 wills devised a fee simple estate to the surviving spouse, without limits or conditions.
Here, the wills fail to meet the first part of the Friesenhahn test, which requires that the property must not be conveyed to the survivor as an absolute and unconditional estate. See Friesenhahn, 185 S.W.3d at 19. The wills "devise and bequeath all of my property, both real and personalty, . . . One Hundred percent (100%) to my spouse, . . . if my spouse survives me." There are no express limitations or conditions creating a lesser estate. This is a "clear and decisive" grant of a fee simple estate. See Cooley v. Williams, 31 S.W.3d 810, 812 (Tex.App. 2000, no pet.); see also Friesenhahn, 185 S.W.3d at 20 (holding language in husband's will stating property "shall pass to and vest in my wife" was unconditional grant and devised fee simple absolute).
McMaster contends that paragraphs 1(B) and 8, when read together, indicate that Velma's devise to Ernest was limited. Specifically, McMaster asserts, "The agreement made between the spouses in Paragraph 8 limits the gift made in Paragraph 1 such that the gift to the surviving spouse is not absolute and unconditional. The first to die leaves their [sic] estate to the surviving spouse with the limitation that on the death of the second spouse their remaining joint estates are left to Ronald Lee McMaster." McMaster cites to no authority construing similar language. McMaster does attempt to distinguish cases cited by Ray, such as Friesenhahn. McMaster contends this case is distinguishable from Friesenhahn because the will in that case did not provide for a disposition of the joint estate upon the wife's death. See Friesenhahn, 185 S.W.3d at 20.
We disagree with McMaster's contention. Consistent with the plain language of the will, as read to devise the greatest estate possible, see Cooley, 31 S.W.3d at 812, we conclude the language covered three possibilities. First, if Velma died but Ernest survived, Velma devised fee simple absolute of her entire estate to Ernest. Second, if Ernest predeceased Velma, Velma devised fee simple absolute of her entire estate to McMaster. Third, if both Ernest and McMaster died before Velma, Velma devised fee simple absolute to her heirs. We hold the trial court erred by granting McMaster's summary judgment because, as a matter of law, the written documents establish that Velma's 1992 will granted Ernest a fee simple absolute without limitation or condition, which means that after Velma died, Ernest could change the person to whom he bequeathed his property.
We sustain Ray's first issue.
2. Joint Disposition of Estates
In her second issue, Ray contends the trial court erred by granting summary judgment for McMaster because the 1992 wills do not provide for a joint disposition of the estate of the first to die. As noted above, McMaster contends paragraphs 1 and 8 operate to provide a joint disposition.
However, as explained above, Velma's will set forth the disposition of her estate in the case of three alternative possibilities. The existence of alternate beneficiaries does not create a condition or limitation on a devise of fee simple. Friesenhahn, 185 S.W.3d at 20. The will at issue in Friesenhahn provided,
It is my will and desire that my home at 4597 Stuart Road, Adkins, Bexar County, Texas 78101, shall pass to and vest in my wife, ELAINE LOUISE FRIESENHAHN, and I do hereby devise said real property to her.
. . . .
It is my will and desire that in the event my said wife, Elaine Louise Friesenhahn, shall predecease me, then and in that event the said property at 4597 Stuart Road, Adkins, Bexar County, Texas, shall then pass to and vest in said children, Danny Friesenhahn, Dale Friesenhahn, and Diane Anglin, and I do hereby devise and bequeath said property and estate unto them, share and share alike.
. . . .
I have executed this Last Will and Testament concurrently with my said wife, Elaine Louise Friesenhahn, having executed her Last Will and Testament, a copy of which is attached hereto and made a part hereof, both of said Last Wills and Testaments having been executed in accordance with a contract between us, and this is to acknowledge that both said wills are contractual and can not be revoked without the written consent of both myself and my wife.
Id. at 19-20. The San Antonio court held the will did not create a limitation on the estate devised to Elaine, but only created an alternate devise should Elaine predecease her husband. Id. at 20. Like the will in Friesenhahn, Velma's will sets forth the disposition of her estate in alternative possibilities that include a grant of fee simple estate without limitations or conditions. Therefore, the will does not provide for a joint disposition of the estate of the first to die.
McMaster also contends "a will should be read as a whole to determine whether it was executed by the parties to carry out a planned disposition of the joint estate of the survivor." McMaster cites a number of cases to support this proposition. However, the wills at issue in the cited cases contain express language making it clear a joint disposition was intended. For example, in Murphy v. Slaton, the will provided,
It is our will and desire that the survivor of us . . . shall, with the rights and authority below given, have all the estate of every description, real, personal or mixed, which either or both of us may own at our death, to be used, enjoyed, occupied and conveyed by such survivor for and during his or her life time, as the case may be, and that upon the death of such survivor any of such estate then remaining shall be divided among the persons following and in the following manner. . . .
273 S.W.2d 588, 590 (Tex. 1954) (emphasis added). The will in Novak v. Stevens had similar language providing for the surviving spouse to have full use of the estate but specifically providing for a devise of the remaining estate "upon the death of such survivor." 596 S.W.2d 848, 851 (Tex. 1980); see also Dougherty v. Humphrey, 424 S.W.2d 617, 619 (Tex. 1968) (devising estate to surviving spouse and devising all property remaining "upon the death of such survivor" to another beneficiary); Harrell v. Hickman, 215 S.W.2d 876, 877 (Tex. 1948) (granting estate to surviving spouse and providing devise of "the remainder of our property" "[a]fter the death of both of us").
Here, the will does not expressly provide for a joint disposition of the estate of both spouses. We hold the language of these wills does not indicate an intent to dispose of both estates as one in furtherance of a contractual agreement.
We sustain Ray's second issue.
Conclusion
We reverse the judgment of the trial court determining that the 1992 wills of Ernest and Velma Alley were contractual as a matter of law and render judgment that the 1992 wills were not contractual as a matter of law.