Lazetich v. Miller , 206 Mont. 247 ( 1983 )

No. 82-295
I N T E SUPREME COURT O TEE STATE O MONTAP*JA
H F F
1983
MILANA LAZETICH, PETER LAZETICH
and WILLIAM LAZETICH,
P l a i n t i f f s and R e s p o n d e n t s ,
LUCILLE MILLER and LORRAINE DALTON,
e t al.,
D e f e n d a n t s and A p p e l l a n t s .
APPEAL FROM: District Court o f t h e Third J u d i c i a l D i s t r i c t ,
I n and f o r t h e County o f Deer Lodge,
The H o n o r a b l e Douglas G . H a r k i n , J u d g e p r e s i d i n g .
COUNSEL O F RECORD:
For Appellants:
Donald G a r r i t y ; G a r r i t y , Keegan & Brown, H e l e n a ,
Montana
For Respondents:
Moses Law F i r m ; M i c h a e l Moses, B i l l i n g s , Montana
Submitted on B r i e f s : March 4 , 1983
Decided: October 1 2 , 1983
Filed: Q&fT12 7983
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
Plaintiffs brought this action against the personal
representatives of the estate of Mary Lazetich to enforce an
oral agreement not to revoke the provisions of a will
disposing of family corporation stock. The Third Judicial
District Court, Deer Lodge County, ordered enforcement of the
agreement, and defendants appeal. We affirm.
The issue on appeal is whether there is sufficient
evidence to establish that Mary Lazetich orally contracted
not to revoke the provision of her May 2, 1966 will directing
the disposition of family corporation stock.
The dispute involves shares of stock in Lazetich & Sons,
a closely-held family corporation. Peter and Mary Lazetich,
husband and wife, each owned a one-sixth interest in the
stock of the corporation in early 1966. On May 2, 1966, they
executed mutual wills with clauses providing that the stock
woilld pass to the surviving spouse. Upon the death of the
surviving spouse, it would pass to three sons and one
grandson, share and share alike. The provision from the will
of Mary Lazetich was as follows:
"My husband, PETER LAZETICH, has made and executed
a Last Will and Testament, the same date as my
Will, and in this Will he has provided that his
undivided one-sixth of said stock in said
corporation [Lazetich & Sons] will go to me in the
event he dies before I do. Upon the death of the
survivor of myself or husband, the one-third
interest that we own in said stock is given and
bequeathed to my son, MILAN LAZETICH, to my son,
ELI LAZETICH, to my son WILLIAM LAZETICH, and to my
grandson PETER LAZETICH, son of WILLIAM LAZETICH,
share and share alike."
Peter Lazetich predeceased his wife and his May 2, 1966
will was admitted to probate. His undivided one-sixth
interest the Lazetich Sons corporate stock was
distributed to his wife, Mary Lazetich.
In the 1970s Mary Lazetich executed two more wills, the
last on November 28, 1978. Upon Mary's death, the November
28, 1978 will was admitted to probate. It did not bequeath
the Lazetich & Sons corporate stock in the manner provided in
the May 2, 1966 will. The plaintiffs filed claims against
the Mary Lazetich estate alleging they were entitled to the
one-third stock interest in Lazetich & Sons. Plaintiffs
claimed that Peter and Mary Lazetich had entered into an oral
contract not to revoke that portion of their mutual 1966
wills relating to the distribution of Lazetich & Sons stock.
The defendant personal representatives disallowed the claims
of the plaintiffs and this lawsuit followed.
The case was heard by the District Court without a jury.
Extensive findings of fact and conclusions of law were
prepared by the District Court.
The attorney who prepared the May 2, 1966 will also
prepared the November 28, 1978 will of Mary Lazetich. He was
the primary witness at the trial. The findings of the
District Court in regard to his testimony are substantially
as follows. Previous to execution of the mutual wills and in
the presence of their attorney, Mary and Peter Lazetich
agreed that upon the death of both parties, their one-third
interest in Lazetich & Sons corporate stock would be
distributed between their sons and one grandson, share and
share alike. Pursuant to that agreement, mutual wills were
drawn for Peter and Mary Lazetich and executed on May 2,
1966. When the attorney prepared the November 28, 1978 will
for Mary Lazetich, he had forgotten about the May 2, 1966
will. The District Court also found as follows:
"Peter and Mary Lazetich were very fond of each
other before, on and after May 2, 1966, and they
pledged that they would not change their Wills.
"There is no evidence that the agreement between
Mary and Peter Lazetich was induced by duress,
menace, fraud, undue influence or mistake."
The District Court's conclusions of law stated that
Peter and Mary Lazetich had agreed that upon the death of the
first of them the one-sixth stock ownership would pass to the
survivor. Upon the death of the survivor, the total
one-third stock interest would pass to the designated sons
and grandson, share and share alike. In consideration of
that agreement, the mutual wills were executed. Based upon
these findings and conclusions, the District Court ordered
the personal representatives to distribute the stock of
Lazetich & Sons in accordance with the May 2, 1966 will.
Agreements not to revoke wills are specifically
addressed by the Montana Uniform Probate Code (UPC). Section
72-2-105, MCA provides:
"(1) A contract . . .
not to revoke a will or
devise ...if executed after July 1, 1975, can be
established only by:
(a) Provisions of a will stating material
provisions of the contract;
(b) An express reference in a will to a
contract and extrinsic evidence proving the terms
of the contract; or
(c) A writing signed by the decedent
evidencing the contract.
(2) The execution of . .
. mutual wills does not
create a presumption of a contract not to revoke
the . .
. wills."
Because the alleged contract was entered into in 1966, the
provisions of the UPC do not apply.
It is clear that prior to the adoption of the Montana
UPC a person could make a valid oral contract to dispose of
her property by will. In Conitz v. Walker (1975), 168 Mont.
238, 244, 541 P.2d 1028, 1031, this Court stated:
"It is clear that in Montana a person may make a
valid contract to dispose of his property by will.
Erwin - Mark, 105 Mont. 361, 73 P.2d 537.
v. -
"This Court in - - v. Eggum, 107 Mont. 378, 87
Rowe
P.2d 189, enforced an oral agreement of a decedent
not to change a will made in favor of the
plaintiff.
"The rule of law in Montana is that proof of an
oral contract by a deceased to leave property by
will:
" ' * * * must be clear, cogent, and convincing, and
that the making of such an oral contract or
agreement must be established by disinterested
witnesses. ' - - v. Williamson, 124 Mont. 512, 227
Cox
P.2d 614."
In Conitz, as here, one party argued there was
sufficient evidence to find a contract while the other party
argued there was no such evidence and that the contract was
"pulled out of the air." In holding that there was such a
contract, the Court stated:
"Perhaps each item of evidence above standing by
itself does not establish a contract between Edward
and Leona to make mutual will[s] leaving their
property to the other. However, viewed as a whole
this Court finds that the oral contract between
Leona and Edward has been established in this case
by clear, cogent and convincing evidence and by the
testimony of disinterested witnesses . 11 . .
Conitz, 168 Mont. at 245, 541 P.2d at 1031.
The basic rule was restated more strongly in Craddock v.
Berryman (1982), Mont . , 645 P.2d 399, 402, 39
St.Rep. 835, 837. There we stated that "contracts to make
wills are looked upon with disfavor because the other
contracting party is dead and cannot affirm or deny the
making of the contract. The law, therefore, requires clear
and convincing evidence." Further, this Court emphasized
that it would not "substitute its judgment for that of the
lower court on factual issues if there is credible evidence
to support the court's findings." Craddock, 645 P.2d at 402,
39 St.Rep. at 838, citing Kearns v. McIntyre Construction Co.
(1977), 173 Mont. 239, 567 P.2d 433.
There is no significant disagreement between the
parties as to the law. However, the defendants contend there
is not sufficient evidence to establish that Mary Lazetich
orally contracted not to revoke the provisions of her May 2,
1966 will directing the disposition of family corporation
stock. In essence, the defendants attack the sufficiency of
the testimony of the attorney who prepared the wills in
question. The defendants contend that the testimony sets
forth only the attorney's conclusion that there was - - an
in law
agreement between Peter Lazetich and Mary Lazetich, rather
than establishing that there was - -
in fact such an agreement.
On redirect examination, the attorney-witness testified
as follows:
"Q. . ..
[I] your discussions with Mary and Peter
n
Lazetich prior to the mutual wills, did they freely
and mutually between themselves consent and enter
into an agreement as to how the shares of stock of
Lazetich and Sons, which they held, would be
distributed at not only the first one to die but
the second one to die?
"A. Yes, they had a very specific agreement and
they were totally in accord with one another.
"Q. Is that agreement as evidenced by their wills
of May 2, 1966?
"A. Without any question in my mind."
On cross examination the attorney-witness testified
regarding the question of revocation:
"Q. Did you advise them that upon the death of
either of them that these wills could not be
changed?
"A. They understood that. They said that's the
way they wanted it to be and pledged that to each
other in my presence.
"Q. Could you tell us exactly what was said?
"A. Did I tell them what?
"Q. Could you tell me exactly what was said at
that time?
"A. There was no question about the fact that they
knew this was binding upon each one. They each
wanted what the other wanted and as to those two
individuals, there was no question as to the fact
they would live up to their promises to one
another.
"Q. You have the well deserved reputation of being
a careful lawyer.
"A. I like to think I'm a careful lawyer, yes,
sir.
"Q. You did not specifically point out that upon
the death of one, these wills could not be revoked?
"A. That was discussed, Mr. Garrity, with both of
them and this is what they wanted'.
"Q. Why didn't you put it in the will?
"A. Why not? It wasn't necessary. I made mutual
wills and I don't think that is necessary if the
people understand them."
The defendants also question the foregoing testimony as
being inconsistent with the subsequent drafting of wills for
Mary Lazetich which changed the dispositive scheme for the
stock. The attorney explained as follows on cross-
examination:
"Q. And at the time you prepared those wills, were
you under the impression that the May 2nd, 1 9 6 6
will of Mary Lazetich was irrevocable?
"A. At the time I prepared those wills, I did not
have those wills in mind. I was busy in trial
practice. I never considered it. I never keep
copies of wills in my office. Mary Lazetich was a
personal friend of mine. I knew she was having
trouble with Eli Lazetich, her son, and I just did
it without any special type of consultation with
her whatsoever. I may have talked with her for
five or ten minutes at the most.
"Q. You didn't inquire as to whether she had a
will in existence at that time?
"A. No, I did not inquire, sir.
"Q. You didn't review any previous wills?
"A. No, I did not review any previous will. Had I
reviewed the previous will, I would have advised
her not to make any type of change and under those
circumstances I would not have prepared another
will for her."
Following direct and cross-examination of the attorney,
the court inquired as follows:
"Q. ... [Dlo you have a fairly good independent
recall of the circumstances existing at the time
the 1 9 6 6 will was prepared?
"A. Yes, I do. I might say, Your Honor, I've
never made up many mutual wills and for that reason
I do have an independent recollection of that
transaction.
"Q. Would you tell me what you can recall
concerning the conversations that occurred, I
assume in your office, regarding their expectations
as far as what would happen with their estate when
one would die and what would happen to that estate,
what would happen upon the death of the other?
"A. Your Honor, I looked at the copies of the two
wills. I think their expectations were certainly
in conformity with the language of the two
documents. They were very close to one another.
When they would visit with me, it was more on a --
I suppose a friendship basis than a technical
professional basis. And we would sit and visit and
enjoy each other's company. They would talk about
things. They were proud of what they had
accumulated and proud of their family and I was
proud of their friendship. I would say there was
no formal technical discussion that you might have
under certain situations.
"Q. You have no notes of the conversations you may
have had with them at the time the wills were
originally discussed or prepared in 1966?
"A. I do not. My method of operation in my
practice has been to make notes and I then dictate
the will. The will is returned to me, the clients
brought in and they look everything over. If they
agree, then the notes are discarded or destroyed.
As a matter of fact, I still practice that way."
This was the essential testimony concerning the existence of
the contract between Mary and Peter Lazetich.
It is also important to consider the wording of the will
of Mary Lazetich, which stated that her husband had executed
his will on the same date and which contained the same
provision regarding disposition of the stock. While not
sufficient in itself to show an agreement not to revoke, this
is strong confirmatory proof that such an agreement was made.
In Rowe v. Eggum (1938), 107 Mont. 378, 390, 87 P.2d 189,
193, this Court stated:
"Where a will is executed in conformity with the
alleged oral agreement, it is regarded as strong
confirmatory proof that such an agreement was
entered into, and the same degree of convincing
evidence is not required as where no such will was
made. (Worden - Worden, 9 6 Wash. 5 9 2 ,
v. 165 P.
501. ) "
It is true that the testimony by the attorney-witness
does not set forth exactly what was said by Mary and Peter
Lazetich. But it is reasonable that without notes the
attorney could not recall the specific statements or
conversations after a lapse of more than fifteen years.
Considering the testimony and the wording of the will itself,
we hold that there is sufficient credible evidence to support
the District Court's findings and conclusion. We therefore
We concur:
4
Chief Justice
,w *4
Justices
Justice Morrison deems himself disqualified and did
not participate in this decision.
Mr. Justice Daniel J. Shea, dissenting:
I dissent. I do not believe the testimony of the
attorney established the existence of an oral contract not to
revoke dispositive provisions of mutual wills by clear,
cogent and convincing evid.ence.
We recognized oral contracts not to revoke a will before
adopting the Montana Uniform Probate Code. Sanger v.
Huguenel (1922), 65 Mont. 236, 211 P. 349. However, we have
consistently regarded them with disfavor and require proof by
clear, cogent and convincing evidence established by the
testimony of disinterested witnesses.
Other jurisdictions have defined clear and convincing:
"Clear and convincing means simply that witnesses
to a fact must be found credible; facts to which
witnesses testify must be distinctly remembered,
details must be narrated exactly and in order,
testimony must be clear and direct and weighty and
witnesses must be lacking in confusion as to facts
at issue. " Schulte v. Franklin (1981), 6
Kan. App. 2d 651, 633 P.2d 1151.
"The phrase 'clear and convincing' characterizing
evidence required to support an oral contract for a
devise or legacy serves as a strong a.dmonition to
the trier of fact to bear in mind that the deceased
is not available and that those supporting the
claim are limited only by their own conscience and
practiced eye and ear of the trial judge." Edwards
v. Sentell (Ala. 19681, 208 So. 2d 914.
By either of these definitions, the evidence fails to meet
the sta.ndard.
The trial court refused to grant summary judgment for
either party because of concern for the conclusory statements
in the drafting attorney's affidavit. The affidavit provides
no factual basis to support the assertion of an agreement
between Mary and Peter Lazetich not to revoke dispositive
provisions of their mutual wills.
The hearing failed to resolve the question of exactly
what was said nor did it resolve the question of why the
attorney prepared and witnessed the later will knowing it was
contrary to alleged oral contract. The attorney's testimony
at the hearing did not provide clear and convincing answers
to these questions. His best answer to the question of
exactly what was said was to reply, " [tlhey understood that
(the wills could not be changed). They said that's the way
they wanted it to be and pledged that to each other in my
presence. " The attorney was asked about the agreement
several times, and his replies varied in degree of
uncertainty. He never made a clear and convincing response
to the questions of exactly what was said. Although the
attorney's testimony may show some kind of past intention of
the parties, it still falls short of clear and convincing
evid-ence of the mutual assumption of a contract obligation.
The trial judge's finding that an oral agreement was
made leaves open the question of the exact terms of the
agreement. Although the trial judge enforced only a single
clause of Mary Lazetich's 1966 will, we do not know whether
the agreement not to revoke was exclusive to justify that
provision of the will, or whether she had contracted not to
revoke the entire will. An agreement not to revoke the
entire will would be unenforceable because no copy of the
1966 will has produced at trial. We have only a single
clause of that will as part of the trial and appellate
record. In fact, a fair inference from the attorney's
testimony (quoted in the majority opinion) is that the entire
will was considered irrevocable rather than the one clause at
issue here. If this is so, failure to produce full copies of
the 1966 will would be fatal to the plaintiffs' case.
The attorney testified that he had no notes of his
conversations with Peter and Mary Lazetich at the time the
wills were discussed and prepared in 1966. He testified from
memory that Lazetichs had a specific agreement and were
totally in accord with one another. But that testimony is
inconsistent with the fact that he personally drafted and
witnessed one of Mary Lazetich's later wills. This will
changed the dispositive scheme and revoked her 1966 will. A
valid oral contract not to revoke the 1966 will would
invalidate the later will, yet the attorney prepared and
witnessed the will. The attorney did not distinctly remember
facts, the details were not exact and in order, and the
testimony was not clear and direct. I remain unconvinced
that the evidence meets the standard of clear, cogent and
convincing.
I would rule as a matter of law the evidence is
insufficient to establish an oral contract between Mary and
Peter Lazetich not to revoke the provision of their 1966
mutual will distributing their stock in the family
corporation. I would reverse the trial court.