Opinion
22A-MI-2825
08-28-2023
Wilma VanSant f/k/a Wilma Hillery, Appellant-Plaintiff/Counterdefendant, v. James Richard Salts, Appellee- Defendant/Counterclaimant/Cross- Claimant, and Mary Ann Merryman, Appellant-Defendant/Cross-Defendant, and Lois Woods f/k/a Lois Lusk, Appellee-Defendant/Cross-Defendant.
ATTORNEY FOR APPELLANTS Jon P. McCarty Fountain Hills, Arizona ATTORNEY FOR APPELLEE JAMES RICHARD SALTS Aaron J. Spolarich Bennett Boehning & Clary, LLP Lafayette, Indiana
Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision is not binding precedent for any court and may be cited only for persuasive value or to establish res judicata, collateral estoppel, or law of the case.
Appeal from the Warren Circuit Court The Honorable Hunter J. Reece, Judge Trial Court Cause No. 86C01-2103-MI-48
ATTORNEY FOR APPELLANTS
Jon P. McCarty
Fountain Hills, Arizona
ATTORNEY FOR APPELLEE
JAMES RICHARD SALTS
Aaron J. Spolarich
Bennett Boehning & Clary, LLP
Lafayette, Indiana
MEMORANDUM DECISION
Foley, Judge.
[¶1] Wilma VanSant f/k/a Wilma Hillery ("Wilma") and her sister Mary Ann Merryman (collectively, "Daughters") appeal the trial court's declaratory judgment recognizing that their brother James Richard Salts ("Son") has an option to purchase Daughters' interest in the family farm ("the Farm") under provisions of their father's will ("the Will"). Daughters contend that the trial court erred in its interpretation of the language of the Will, and in the alternative argue that Son failed to timely exercise the option. Daughters also assert-and Son agrees-that the parties had stipulated that they would have the opportunity to present evidence at a subsequent hearing regarding the Farm's valuation and the option price to be paid by Son, but that the trial court entered judgment and orders on those matters despite the stipulation.
A third daughter, Lois Woods f/k/a Lois Lusk, participated in the proceedings below. She does not actively participate on appeal.
[¶2] We conclude that (1) the trial court did not err in determining that the Will gave Son an option to purchase Daughters' interest in the Farm and (2) Daughters waived any claim that Son failed to timely exercise the option, so we affirm that portion of the judgment. Finding that the parties' stipulation concerning the opportunity to present further evidence regarding valuation was binding, we reverse and remand for further proceedings pursuant to the parties' stipulation.
Facts and Procedural History
[¶3] Daughters and Son are the children of Richard Salts ("Father") and Helen Salts ("Mother"). During his lifetime, Father inherited the Farm, consisting of about 211 acres. He later conveyed an undivided one-half interest in the Farm to Son. Father executed the Will in April 1990, and he subsequently died in August 1990. Father devised his remaining one-half interest in the Farm as follows:
To my said Wife, Helen A. Salts, I give and devise my undivided [o]ne-half . . . interest in and to [the Farm] for and during her natural life, . . . and the remainder I give and devise to my three daughters, Lois Lusk, Mary Ann Merryman and Wilma Hillery in equal shares in fee simple and absolutely. However I do request that my said son, James Richard Salts, shall have the right to buy the interest hereby given to my said three named daughters upon the termination of the life estate hereby given to my said Wife, Helen A. Salts, and, further, said right of purchase if exercised by my said son shall be for the then fair market value of said real estate and I hope and trust my daughters will honor such request.Ex. Vol. 3 pp. 43-44.
[¶4] Mother died in November 2020. A few months later, Wilma initiated the instant litigation, naming all siblings in an action to partition the Farm. Son filed a counterclaim and a cross-claim, contending that the Will gave him an option to purchase Daughters' one-half interest in the Farm. Son moved for a declaratory judgment recognizing the option. He also requested a hearing to determine the option price for the one-half interest in light of potential offsets.
[¶5] The trial court held a hearing in October 2022. At the outset, the parties stipulated that the main purpose of the hearing was to resolve Son's motion for a declaratory judgment. The parties informed the trial court that one sibling needed to orchestrate travel for an appraiser who had moved out of state, so the parties would be reserving the opportunity to present additional evidence on valuation. The hearing included arguments about the Will. Son also presented evidence concerning the valuation of the Farm and offsets to the purchase price.
[¶6] In November 2022, the trial court entered a judgment resolving all pending matters. In the judgment, the trial court (1) determined that Son has an option to purchase the Farm, and (2) despite the parties' stipulation to the contrary, entered orders regarding the option purchase price. Daughters now appeal.
Discussion and Decision
I. Option
A. Whether the Will Grants Son an Option
[¶7] In construing the devise of Father's remaining one-half interest in the Farm, the trial court concluded that Father established a life estate for Mother, granted "the remainder interest to [Daughters], [and] provided to [Son] . . . an absolute right to purchase that interest from [Daughters] for fair market value." Appellants' App. Vol. 2 p. 63. In so concluding, the trial court acknowledged that the clause referring to Daughters "may appear to convey [the remainder interest] in fee simple to [Daughters] upon the termination of [Mother's] life estate[.]" Id. at 63-64. However, the court determined that the Will "did in fact show a clear and unmistakable intent in the following sentences to reserve to [Son], the joint tenant, an absolute right to purchase" that interest from Daughters. Id. at 64. Thus, the trial court concluded that the Will gave Daughters "something less [than a] fee simple absolute" interest. Id.
[¶8] In support of the foregoing interpretation, the trial court observed that the word "shall" appears "only twice in the . . . Will and it does so in reference to . . . [Son's] right to purchase [Daughters'] interest" in the Farm. Id. The trial court noted that the word "shall" generally "connotes a mandatory as opposed to a directory import, unless doing so would frustrate the intent of the drafter." Id. The court determined that, here, reading the word "shall" in its mandatory sense "d[id] not frustrate [Father's] intent, but emphasizes it and harmonizes other provisions in the Will[.]" Id. The trial court also addressed clauses in the will containing the word "request," concluding that Father did not use this language because he intended to give Daughters the discretion to decline to sell their interest to Son. Rather, the trial court reasoned that the language of request had an independent function in that, if Father's "final bequest for [Son] to purchase the family farm [was] not well received," Father would "speak to [Daughters] from the grave to honor his wishes, rather than contradict th[e] otherwise plain and unambiguous language of the prior provisions." Id.
[¶9] In general, where-as here-the trial court enters special findings sua sponte, the court's findings control "only upon the issues or matters covered thereby and the judgment or general finding, if any, shall control as to . . . other issues or matters[.]" Ind. Trial Rule 52(D). Although we defer to the trial court's factual findings, see T.R. 52(A), we review legal conclusions de novo, In re Marriage of Gertiser, 45 N.E.3d 363, 369 (Ind. 2015). Indeed, to the extent an appeal presents questions of law, we owe no deference to the trial court. See id. at 371.
[¶10] "The interpretation, construction, or legal effect of a will is a question to be determined by the court as a matter of law." Carlson v. Sweeney, Dabagia, Donoghue, Thorne, Janes &Pagos, 895 N.E.2d 1191, 1197 (Ind. 2008). "In construing the language of a will, our primary focus is upon the intent of the testator." Id.; cf. Ind. Code § 29-1-6-1 (prioritizing the testator's intent over statutory rules of construction). To discern the testator's intent, "[w]e look to the four corners of the will and the language used in the instrument[.]" Carlson, 895 N.E.2d at 1197. "[T]he will in all its parts must be considered together," and we "should strive to give effect to every provision, clause, term, or word if possible." Id.
[¶11] When devising an estate, the testator may give property to one beneficiary while giving a different beneficiary the option to purchase that property. See, e.g., Weitzmann v. Weitzmann, 161 N.E. 385, 387 (Ind.Ct.App. 1928) (noting that this type of bequest does not violate the rule against perpetuities). In general, an option is "the right or privilege to buy property at the election of the purchaser." Option, Black's Law Dictionary (11th ed. 2019). Whether a will contains an option is a question of law that necessitates de novo interpretation of the instrument. See generally, e.g., Carlson, 895 N.E.2d at 1197.
[¶12] On appeal, Daughters argue that the trial court erred in determining the Will grants an option to Son, claiming that the language of the devise to them in "equal shares in fee simple and absolutely" controls, and the subsequent language giving Son an option to purchase the Farm is inconsistent with Daughters' fee-simple interest. Ex. Vol. 3 p. 43 (emphasis added). Daughters direct us to caselaw concerning the common-law rule of the "first taker," which provides as follows: "Where an interest in real estate is given in clear and decisive terms, such interest will not be cut down by subsequent provisions that are not as clear and decisive as the prior words giving the interest or estate." Johnson v. Hicks, 108 N.E.2d 129, 131 (Ind. 1952).
Because our review is de novo, we need not address Daughters' allegations that the trial court also erred by, among other things, improperly relying on "evidence extrinsic to the [W]ill." Appellants' Br. p. 12.
[¶13] According to Daughters, "the language in the Will . . . used to cut down [their] fee simple interest was anything but 'clear' or decisive.'" Appellants' Br. p. 13. Daughters point to the following language: "I do request that [Son] shall have the right to buy the interest," Ex. Vol. 3 p. 43, and "I hope and trust my daughters will honor such request," id. at 44. Daughters contend that, by using the term "request" along with words like "hope" and "trust," Father "was merely making a 'request' to his daughters that [Son] be allowed to purchase the real estate[.]" Appellants' Br. p. 10. They argue that, if Father intended for Son to have an "absolute right to purchase" the Farm, "there would be no reason . . . to have expressed any 'request'. . . nor any 'hope and trust' that the [D]aughters honor [the] request because [Son] could purchase the property irrespective of the [D]aughters' wishes." Id.
[¶14] In support of their interpretation that the Will sets forth a mere request of Daughters-not a right vested in Son-Daughters chiefly rely on Snodgrass v. Brandenburg, 71 N.E. 137 (Ind. 1904). In that case, the Court addressed whether the testator intended to give his wife "a fee-simple title to his real estate" or give his children a remainder interest in the real estate. Snodgrass, 71 N.E. at 137. The Court ultimately determined that the wife inherited a feesimple title. See id. at 138. That case involved the following three clauses:
I bequeath my entire estate, both real and personal, to my beloved wife .... I request that as soon as convenient after my death, that my wife shall sell the personal property sufficient to pay my entire indebtedness.... I request that at the death of my wife, that my estate that I am now seized of, be equally divided between my children[.]Id. at 137. In interpreting the will, the Snodgrass Court applied the rule of the "first taker." See id. at 138. The Court first determined that the initial clause granting the wife the "entire estate" was clear and decisive. Id. Thus, the initial clause showed "it was the intent of the testator to vest a fee in the first instance[.]" Id. at 137. As to the latter clauses, the Snodgrass Court determined that the language was not "so clear and decisive as to rebut the implication which a prior clause had created of an intent thereby to devise the fee." Id. at 138. The Court noted: "At the utmost, the [last clause] only served to create a doubt as to whether it was the testator's intention to limit [the bequest to wife]; but in such circumstances the subsequent clause is ineffectual." Id. In determining that the latter clauses were not so clear and decisive as to limit the bequest to the wife, the Court acknowledged that stronger language could have effectively limited the bequest:
A case might be conceived where, notwithstanding such language as was used in the [former] clause of said will, there was a subsequent provision so cogent as to lead the court to conclude that the word "entire" was used as a measure of extent or breadth only, and not of duration, and also to lead to the conclusion that the coupling of an absolute bequest of personalty with the devise was a meaningless circumstance.Id.
[¶15] Snodgrass is readily distinguishable. There, no provision stated that the children had a right to the real estate. See id. at 137. Rather, the will predominately used the language of request, only once using the phrase "shall" and, even then, using the term in reference to the wife rather than the children. See id. This distinction is critical because a right is a legal entitlement-"[s]omething that is due to a person by . . . legal guarantee[.]" Right, Black's Law Dictionary (11th ed. 2019). Put differently, a right is a "power . . . secured to a person by law." Id. Whereas the modifying clauses in Snodgrass do not refer to a "right," in this case, the clauses at issue expressly state that Son "shall have the right to buy the interest" and "said right of purchase . . . shall be for" fair market value. Ex. Vol. 3 pp. 43-44 (emphases added). Moreover, the Will uses other language of entitlement by using the word "shall" in reference to Son's right, directly stating Son "shall have" the right and establishing what the purchase price "shall be." Cf. Shall, Black's Law Dictionary (11th ed. 2019) (noting that the phrase "shall be" means "[i]s entitled to"). Furthermore-unlike in Snodgrass-here, the language of request is superfluous. That is, the passage referring to Son's right to purchase the Farm is a passage that functions independently of the language of request, capable of standing alone. Cf. Ex. Vol. 3 p. 43 ("I do request that my said son . . . shall have the right to buy the interest[.]" (emphasis added)) with Snodgrass, 71 N.E. at 137 ("I request that at the death of my wife, that my estate that I am now seized of, be equally divided between my children[.]").
[¶16] All in all, we agree with Daughters that the Will contains a clear and decisive clause granting them an interest in the Farm. However, for the reasons stated, we conclude that the subsequent language in the Will is just as clear and decisive as the initial clause and reflects Father's intent to devise an option to purchase the Farm to Son. The references to Father's requests, hopes, and wishes do not weaken the clause granting an option to Son. Nor does the language give Daughters discretion to decline to sell their interest. Therefore, the latter clauses effectively limit the initial bequest to Daughters.
[¶17] Mindful of our Supreme Court's directive that "the will in all its parts must be considered together" and that a court must "strive to give effect to every provision, clause, term, or word if possible," we conclude that the trial court did not err in declaring that Son has an option to purchase Daughters' interest. Carlson, 895 N.E.2d at 1197.
B. Waiver of Option
[¶18] Daughters argue in the alternative that reversal is necessary because Son did not timely exercise the option to purchase their interest. We conclude that Daughters waived this argument because they did not present the argument to the trial court. See, e.g., Reynolds v. Reynolds, 64 N.E.3d 829, 834 (Ind. 2016) ("Appellants may not sit idly by and raise issues for the first time on appeal.").
II. Valuation
[¶19] In its judgment, the trial court resolved issues pertaining to the valuation of the Farm, ultimately setting forth a purchase price. On appeal, Daughters and Son ask us to reverse and remand for additional fact-finding on these issues. They direct us to a colloquy at the outset of the hearing, asserting the parties stipulated that they first sought a ruling on whether Son had an option, then planned to present additional evidence concerning valuation at a future hearing. See Tr. Vol. 2 pp. 2-3 (discussing the anticipated scope of the hearing, with one party noting that the parties "reached that resolution" because an appraiser had moved out of state and the party "didn't want to bring him [to Indiana] twice").
[¶20] Concluding the parties stipulated to the opportunity to present additional evidence on issues related to valuation, we reverse that portion of the judgment establishing a valuation for the Farm and setting forth a purchase price for Son.
Conclusion
[¶21] The trial court did not err in determining the Will grants Son an option to purchase Daughters' interest in the Farm, and Daughters waived any claim Son failed to timely exercise the option. However, because the court improvidently resolved issues concerning the valuation of the Farm and the proper purchase price for Son, we reverse and remand for further proceedings on those issues.
[¶22] Affirmed in part, reversed in part, and remanded.
Altice, C.J., and May, J., concur.