My Father's House 1 v. McCardle , 2013 Ohio 420 ( 2013 )

[Cite as My Father's House #1 v. McCardle, 2013-Ohio-420.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
MARION COUNTY
MY FATHER’S HOUSE #1, INC.,
ET AL.,
PLAINTIFFS-APPELLANTS, CASE NO. 9-11-35
v.
H. MICHAEL McCARDLE, ET AL., OPINION
DEFENDANTS-APPELLEES.
Appeal from Marion County Common Pleas Court
Probate Division
Trial Court No. 08 CIV 51666
Judgment Affirmed in Part, Reversed in Part and Cause Remanded
Date of Decision: February 11, 2013
APPEARANCES:
Richard Kolb for Appellants
George Q.B. Vaile for Appellees
Andromeda McGregor Attorney for State of Ohio, ex rel.
Case No. 9-11-35
PRESTON, J.
{¶1} Plaintiffs-appellants, My Father’s House #1, Inc. and Lois Beringer,
appeal the Marion County Court of Common Pleas, Probate Division’s judgment
determining that appellants lacked standing to challenge Donald Beringer’s
conveyance of his real property to defendants-appellees, Michael and Lynda
McCardle. Appellants claim the trial court erred by piercing the corporate veil to
determine My Father’s House and Lois operated as one and the same entity, and
erred by deciding that they both lacked standing as a result of Lois’ antenuptial
agreement with Donald. For the reasons that follow, we affirm in part and reverse
in part.
{¶2} On April 2, 1996, Donald and Lois entered into an antenuptial
agreement enabling them to pass their respective estates without any marital
claims, but permitting them to make gifts or bequests to each other. (Antenuptial
Agreement, Joint Ex. 1). Donald and Lois were subsequently married. (Oct. 27,
2010 Tr. at 254).
{¶3} Donald and Lois filed incorporation papers for My Father’s House, the
church they operated, on or after December 30, 2000. (Pl. Ex. 11). The name of
the church was originally My Father’s House Full Gospel Fellowship. (Id.). In
2005, Donald and Lois changed the church’s name to My Father’s House #1, Inc.
(Oct. 27, 2010, 2011 Tr. at 270).
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{¶4} On July 28, 2005, Donald signed a will that primarily left his real
property to named trustees for the benefit of My Father’s House. (2005 Will, Joint
Ex. 2). Donald also made a small life estate bequest to Lois. (Id.). On November
28, 2006, Donald signed a second will, which left all of his assets to Michael,
Lois’ foster child. (2006 Will, Pl. Ex. 4).
{¶5} On September 18, 2007, Donald conveyed 31 acres of land to Michael
and his wife, Lynda. (Quit Claim Deed, Pl. Ex. 6). Lois signed off any dower
interest in the property. (Id.).
{¶6} On December 12, 2007, Donald signed a transfer on death deed to
Michael for the remainder of his farm, which consisted of approximately 175
acres. (Transfer on Death Deed, Pl. Ex. 7). Lois again signed off any dower
interest. (Id.). Donald died on June 26, 2008. (Oct. 27, 2010 Tr. at 324).
{¶7} On November 14, 2008, Lois and My Father’s House filed a
complaint in the Marion County Court of Common Pleas, Probate Division,
against: (1) Michael and Lynda, the primary beneficiaries under Donald’s will, (2)
Michael, as the executor of the will, (3) Laura Leigh Elsrod, the contingent
beneficiary under Donald’s will, (4) Brent Harraman, the attorney that prepared
the will, and (5) the Ohio attorney general, as statutorily required. (Doc. No. 1).
Lois and My Father’s House contested the validity of Donald’s 2006 will. (Id.).
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{¶8} On December 8, 2008, the Ohio attorney general filed an answer to
the complaint. (Doc. No. 10). On January 10, 2009, Harraman filed his answer to
the complaint. (Doc. No. 14). On March 16, 2009, Michael and Lynda filed their
answer asserting, among other things, that Lois and My Father’s House lacked
standing, that My Father’s House was Lois’ alter ego, and that My Father’s House
was not a legitimate legal entity. (Doc. No. 16).
{¶9} On April 16, 2009, the trial court dismissed Elsrod as a party to the
proceedings. (Doc. No. 18). On January 19, 2010, the trial court dismissed
Harraman as a party to the case. (Doc. No. 30).
{¶10} On January 12, 2010, Lois and My Father’s House filed a motion for
leave to file an amended complaint. (Doc. No. 27). On February 12, 2010,
Michael and Lynda filed a memorandum in opposition of appellants’ motion to
file an amended complaint and a motion to dismiss the complaint. (Doc. No. 33).
On February 19, 2010, the trial court granted appellants leave to file an amended
complaint. (Doc. No. 35). Appellants filed an amended complaint and jury
demand on February 19, 2010, asserting the conveyance of the deeds was also
invalid. (Doc. No. 36).
{¶11} The Ohio attorney general filed its second answer on February 25,
2010. (Doc. No. 39). Michael and Lynda filed their second answer on March 5,
2010. (Doc. No. 42).
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{¶12} The trial court held hearings on the issue of Lois and My Father’s
House’s standing on October 27, 2010 and February 7, 2011, after the parties had
submitted pre-hearing briefs on the issue. (Doc. Nos. 54, 55, 56, 63, 94). The
parties subsequently submitted briefs to the trial court again addressing the
standing issue. (Doc. Nos. 83, 86, 87, 88, 91, 92). On May 2, 2011, the trial court
issued its judgment entry determining both Lois and My Father’s House had
standing to challenge Donald’s will, but neither Lois nor My Father’s House had
standing to challenge the real estate transfers to Michael. (Doc. No. 94).
{¶13} On May 27, 2011, Lois and My Father’s House filed a notice of
appeal. (Doc. No. 112). On June 20, 2011, this Court dismissed the appeal for
lack of a final, appealable order. (Doc. No. 117).
{¶14} On August 3, 2011, the trial court issued a second judgment entry
dismissing Lois and My Father’s House’s claim that the deed transfer was invalid
and certifying that its judgment was a final, appealable order. (Doc. No. 120). On
August 16, 2011, Lois and My Father’s House filed a second notice of appeal.
(Doc. No. 121). Appellants now raise one assignment of error for our review.
Assignment of Error
The trial court erred in finding that Plaintiffs, My Father’s
House #1, Inc. and Lois Beringer, lacked standing to challenge
the real estate transfers.
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{¶15} In their sole assignment of error, appellants argue the trial court erred
by finding that Lois and My Father’s House lacked standing to challenge Donald’s
conveyance of his real property to Michael. Appellants contend that they do have
standing to challenge the transfer because they were beneficiaries under Donald’s
original will. Appellants argue that, as a result, the trial court erred in determining
Lois lacked standing based on the antenuptial agreement. Appellants further
contend that the trial court erred by deciding that Lois and My Father’s House
“operated as one and the same,” and since Lois did not have standing to challenge
the conveyance, My Father’s House also lacked standing.
{¶16} As a preliminary matter, we must determine the appropriate standard
of review. The trial court considered the issue of appellants’ standing in response
to Michael’s motion to dismiss. (Doc. No. 33). However, it is clear the trial court
treated Michael’s motion to dismiss as a motion for summary judgment. First,
standing is an affirmative defense. Everhome Mortgage Co. v. Behrens, 11th Dist.
No. 2011-L-128, ¶ 12 (March 30, 2012). As an affirmative defense, the issue of
standing is more appropriately raised in a motion for summary judgment.
Goodwin v. T.J. Schimmoeller Trucking, 3d Dist. No. 16-07-08, 2008-Ohio-163, ¶
10. Second, if the trial court wishes to consider evidence outside of the pleadings
on a motion to dismiss, the court must convert the motion to a motion for
summary judgment and provide the parties with an opportunity to present the
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pertinent materials. Id., citing State ex rel. The V Cos. v. Marshall, 81 Ohio St.3d
467, 470 (1998); Civ.R. 12(B). In the present case, the parties submitted pre-
hearing briefs regarding the standing issue, submitted evidence during a two-day
hearing, and submitted post-hearing briefs on the issue. (Doc. Nos. 54, 55, 56, 63,
64, 66, 83, 86, 87, 88, 91, 92). The trial court thus considered evidence outside of
the pleadings, and the parties had ample opportunity to present the relevant
materials. Consequently, we will review the trial court’s judgment as we would a
ruling on a motion for summary judgment.
{¶17} We review a decision to grant summary judgment de novo. Doe v.
Shaffer, 90 Ohio St.3d 388, 390 (2000). Summary judgment is proper where there
is no genuine issue of material fact, the moving party is entitled to judgment as a
matter of law, reasonable minds can reach but one conclusion when viewing the
evidence in favor of the non-moving party, and the conclusion is adverse to the
non-moving party. Civ.R. 56(C); State ex rel. Cassels v. Dayton City School Dist.
Bd. of Edn., 69 Ohio St.3d 217, 219 (1994).
{¶18} A plaintiff must have standing to assert a claim against a defendant.
Camp St. Mary’s Assn. of the West Ohio Conference of the United Methodist
Church, Inc. v. Otterbein Homes, 176 Ohio App.3d 54, 2008-Ohio-1490, ¶ 13 (3d
Dist.). In order to have standing, a party must have an actual or imminent injury,
there must be causal connection between the injury and the conduct the party is
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addressing, and the court must be capable of redressing the injury with its
decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130(1992). Thus, “the injury must be traceable to the challenged action, and the
injury must likely be redressed by a favorable decision.” Ahrns v. SBA
Communications Corp., 3d Dist. No. 2-01-12, *2 (Sept. 28, 2001), citing Eng.
Technicians Assn. v. Ohio Dept. of Transp., 72 Ohio App.3d 106, 110-111 (10th
Dist.1991). Additionally, a nonprofit corporation may sue and be sued. R.C.
1702.12(A).
{¶19} We must examine each of Lois and My Father’s House’s claims to
determine whether they have standing. Lois and My Father’s House argue they
have standing to challenge Donald’s transfer of the deeds to Michael because they
were beneficiaries of Donald’s property under his 2005 will. R.C. 2107.71
permits “a person interested” in the will to challenge the will. In re Estate of
Scanlon, 8th Dist. No. 95264, 2011-Ohio-1097, ¶ 12. An interested person is
“‘any person who has such a direct, immediate and legally ascertained pecuniary
interest in the devolution of the testator’s estate as would be impaired or defeated
by the probate of the will, or be benefitted by setting aside the will.’” Id., quoting
York v. Nunley, 80 Ohio App.3d 697 (8th Dist.1992).
{¶20} In the present case, Donald’s 2005 will granted Lois the right to live
in Donald’s home on Newmans-Cardington Road for as long as she chose. (Joint
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Ex. 2). The will did not grant Lois the right to assign or transfer her interest in the
home. (Id.). The will further granted Lois the right to use Donald’s miscellaneous
household goods, furnishings, and farm equipment. (Id.). Donald’s 2005 will also
granted My Father’s House’s trustees the real property on Newmans-Cardington
Road and the real property on Merkle Avenue. (Id.). The will created a charitable
trust and directed the nominated trustees to use Donald’s real and personal
property for the benefit of My Father’s House. (Id.). The trial court determined
that Lois and My Father’s House had standing to challenge the 2007 will because
they were beneficiaries under the 2005 will, but did not have standing to challenge
the subsequent deed transfers. (Doc. No. 94).
{¶21} Lois and My Father’s House argue that they also have the right to
contest the deed transfers because they had a right to the real property under the
2005 will. Appellants contend that Michael fraudulently induced Donald to alter
his will and convey his property to Michael under the belief that Michael would
use it for the church’s benefit. Appellants argue that Donald left them his real
property in his 2005 will, and if Michael acted fraudulently as they allege, the
2007 will and subsequent deed transfers are invalid. In that case, appellants
contend they have the right to the real property. Michael argues that appellants
lack standing because Lois signed an antenuptial agreement preventing her from
claiming any marital property, and My Father’s House is an invalid corporation.
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Michael also contends that the trial court correctly concluded My Father’s House
lacked standing because it and Lois are “one and the same.” We agree that Lois
lacks standing as a result of the antenuptial agreement, but disagree that My
Father’s House lacks standing. We will now address each argument in turn.
1. Antenuptial Agreement
{¶22} Appellants argue the trial court erred by determining Lois lacks
standing because she signed an antenuptial agreement disclaiming any right to
Donald’s property. The Supreme Court of Ohio has defined an antenuptial
agreement as “a contract entered into between a man and a woman in
contemplation, and in consideration, of their future marriage whereby the property
rights and economic interest of either the prospective wife or husband, or both, are
determined and set forth in such instrument.” Gross v. Gross, 11 Ohio St.3d 99,
102 (1984). Antenuptial agreements are contracts. Wolf-Sabatino v. Sabatino,
10th Dist. No. 10AP-1161, 2011-Ohio-6819, ¶ 14, citing Fletcher v. Fletcher, 68
Ohio St.3d 464, 466 (1994). Consequently, the law of contracts applies to their
interpretation and application. Wolf-Sabatino at ¶ 14, citing Fletcher at 466. The
court will presume the contract’s language represents the parties’ intent. Wolf-
Sabatino at ¶15, citing Skivolocki v. E. Ohio Gas Co., 38 Ohio St.2d 244 (1974).
{¶23} In the present case, Donald and Lois entered into an antenuptial
agreement that allowed them to pass their estates free from marital claims, but also
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permitted them to make gifts or bequests to each other. (Joint Ex. 1). Section 1a
of the agreement explicitly states, “[t]he surviving party shall not present, make, or
assert any claim or right whatsoever to share or participate in any matter in the
other party’s estate.” (Id.). Section 3 of the antenuptial agreement further
provides that “[e]ach party may freely make such disposition of his/her property of
whatever kind or nature, acquired before or during the parties’ marriage, by sale,
gift, will, or otherwise during his/her lifetime as he/she may desire.” (Id.). During
the trial court’s hearing, the parties also stipulated that the antenuptial agreement
is a valid, enforceable contract that gave Donald the right to transfer his real
property free of any claim from Lois. (Feb. 7, 2011 Tr. at 16).
{¶24} After reviewing the record, we agree with the trial court that the
antenuptial agreement permitted Donald to transfer his real property to whomever
he chose. (Joint Ex. 1). Consequently, we cannot find that Lois now has standing
to assert a claim that Donald’s transfer to Michael was invalid. Since Lois agreed
to permit Donald to transfer the property to whomever he chose, she did not suffer
any injury when he exercised that right. Furthermore, this Court cannot find any
legal support for Lois’ contention that she has a claim to the property based on
Donald’s 2005 will, even though that claim conflicts with the antenuptial
agreement. See In re Estate of Dawson, 117 Ohio App.3d 51 (2d Dist.1996)
(Antenuptial agreement required the testator to bequeath her entire estate to her
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stepchildren; however, by her will, she divided the estate between her
stepchildren, nephews, and nieces. Antenuptial agreement was upheld.).
{¶25} The dissent argues that because the will in question was subsequent
to the antenuptial agreement, R.C. 2107.71 grants Lois standing to challenge the
will as a beneficiary. We disagree. In the antenuptial agreement, Lois agreed not
to “present, make, or assert any claim or right whatsoever to share or participate in
any matter in the other party’s estate,” which is what she now attempts to do by
challenging Donald’s bequest to Michael. (Joint Ex. 1). Furthermore, the
antenuptial agreement specifically permits the parties to dispose of their property
by will, and does not contain any provisions preventing them from making
bequests to each other. (Id.). The antenuptial agreement thus authorizes the
parties to leave their property to anyone, including the surviving spouse, but still
prevents the surviving spouse from asserting any other claims to the estate. (Id.).
Granting Lois standing pursuant to R.C. 2107.71 is in direct contradiction with
section 1a of the antenuptial agreement prohibiting Lois from making such a
claim. As a result, we conclude that Lois’ antenuptial agreement with Donald
prevents her from having standing to contest his subsequent deed transfers.
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2. Piercing the Corporate Veil
{¶26} Appellants next argue that the trial court erred by determining that
since Lois lacked standing, My Father’s House also lacked standing because they
“operated as one and the same.” In its judgment entry, the trial court stated:
While this Court recognizes that My Father’s House, #1, Inc. is a
separate legal entity from Lois Beringer in the eyes of the law, it is
clear based upon how My Father’s House, #1, Inc. was incorporated
and conducted business, this corporate entity and Lois Beringer
operated as one and the same. This is evidenced in every aspect of
the corporation’s affairs operated solely under the direction and
approval of Lois Beringer.
(Doc. No. 94). The trial court thus determined that My Father’s House lacked
standing because although it was a separate legal entity from Lois, it did not
operate as a separate entity. Appellants argue this language indicates the trial
court decided My Father’s House was Lois’ alter ego, and that the trial court
incorrectly pierced the corporate veil to determine My Father’s House lacked
standing.
{¶27} It is well settled that a corporation is a separate legal entity from its
shareholders, even when the corporation only has one shareholder. LeRoux’s
Billyle Supper Club v. MA, 77 Ohio App.3d 417, 421 (6th Dist.1991), citing First
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Natl. Bank of Chicago v. Trebein Co., 59 Ohio St. 316 (1898). “Nevertheless, in
certain circumstances, courts can ‘pierce the corporate veil,’ that is, disregard the
corporate entity, and treat the shareholder and his corporation as a single entity.”
LeRoux’s at 421, citing E.S. Preston Assoc., Inc. v. Preston, 24 Ohio St.3d 7, 11
(1986). The Supreme Court of Ohio has adopted a three-pronged test to determine
when a court should pierce the corporate veil. Belvedere Condominium Unit
Owners’ Assn. v. R.E. Roark Cos., Inc., 67 Ohio St.3d 274 (1993). According to
the Belvedere test, a court may pierce the corporate veil when:
(1) control over the corporation by those to be held liable was so
complete that the corporation has no separate mind, will, or
existence of its own, (2) control over the corporation by those to be
held liable was exercised in such a manner as to commit fraud or an
illegal act against the person seeking to disregard the corporate
entity, and (3) injury or unjust loss resulted to the plaintiff from such
control and wrong.
Id. at paragraph three of the syllabus. The Supreme Court of Ohio subsequently
clarified that the second prong of the Belvedere test refers specifically to fraud or
illegal acts, rather than unjust or inequitable acts that do not rise to the level of
fraud. Dombroski v. WellPoint, Inc., 119 Ohio St.3d 506, 2008-Ohio-4827, ¶ 18
(“To fulfill the second prong of the Belvedere test for piercing the corporate veil,
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the plaintiff must demonstrate that the defendant shareholder exercised control
over the corporation in such a manner as to commit fraud, an illegal act, or a
similarly unlawful act.”). All three prongs of the test must be met for the court to
pierce the corporate veil. State ex rel. Cordray v. U.S. Technology Corporation,
5th Dist. No. 11AP060025, 2012-Ohio-855, ¶ 19.
{¶28} The first prong of the Belvedere test is essentially the “alter ego
doctrine.” Pottschmidt v. Thomas J. Klosterman, M.D., Inc., 169 Ohio App.3d
824, 2006-Ohio-6964, ¶ 37 (9th Dist.). A corporation is an individual’s alter ego
when “the individual and the corporation are fundamentally indistinguishable.”
Belvedere at 288. “Some of the factors used to determine if this standard has been
met include (1) whether corporate formalities were observed, (2) whether
corporate records were kept, (3) whether corporate funds were commingled with
personal funds, and (4) whether corporate property was used for a personal
purpose.” Pottschmidt at ¶ 37, citing LeRoux’s Billyle Supper Club, 77 Ohio
App.3d at 422-423.
{¶29} In the present case, Michael presented evidence indicating that Lois
comingled funds and failed to observe the corporate formalities. (Oct. 27, 2010
Tr. at 26, 79, 263, 280). However, all three prongs of the Belvedere test must be
met to pierce the corporate veil. Cordray, 5th Dist. No. 11AP060025, 2012-Ohio-
855 at ¶ 19. Even assuming Michael demonstrated that My Father’s House
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functioned as Lois’ alter ego, Michael failed to provide any evidence regarding the
remaining two prongs of the Belvedere test by demonstrating Lois exerted her
control to commit fraud or an illegal act, and that Michael was injured by Lois’
wrongful act. Since all three prongs of the Belvedere test were not met, the trial
court erred by piercing the corporate veil. Id.
3. Corporation’s Validity
{¶30} Michael argues that even if the trial court erred by determining My
Father’s House lacked standing because it is Lois’ alter ego, My Father’s House
still lacks standing because it is an invalid legal entity. Michael contends that My
Father’s House submitted invalid articles of incorporation, has failed to adhere to
the corporate formalities, and lost its corporate status, so it does not have standing
to bring the suit.
{¶31} R.C. 1702.53(A) states:
A copy of the articles or amended articles filed in the office of the
secretary of state, certified by the secretary of state, shall be
conclusive evidence, except as against the state, that the corporation
has been incorporated under the laws of this state, and a copy duly
certified by the secretary of state of any certificate of amendment or
other certificate filed in the secretary of state’s office shall be prima-
facie evidence of such amendment or of the facts stated in any such
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certificate, and of the observance and performance of all antecedent
conditions necessary to the action which such certificate purports to
evidence.
Once a corporation is established, it continues to exist until it is dissolved. Athens
Cty. Property Owners Assn., Inc. v. City of Athens, 4th Dist. No. 1482, *2 (Aug.
26, 1992).
{¶32} Appellants submitted a copy of My Father’s House’s articles of
incorporation as well as a certification from the secretary of state that it is a
corporation in good standing to the trial court. (Pl. Exs. 11, 11A). There is
nothing in the record to indicate that My Father’s House was voluntarily dissolved
pursuant to R.C. 1702.47 or judicially dissolved pursuant to R.C. 1702.52.
Additionally, no evidence of the secretary of state cancelling My Father’s House’s
corporate status was presented to the trial court. Our review is limited to the
record that was before the trial court; consequently, we cannot consider Michael’s
additional evidence that My Father’s House’s corporate status was cancelled.
Wedemeyer v. U.S.S. F.D.R. (CV-42) Reunion Assoc., 3d Dist. No. 1-09-57, 2010-
Ohio-1502, ¶ 44. Appellant’s articles of incorporation and certificate of good
standing are thus conclusive evidence pursuant to R.C. 1702.53(A) that My
Father’s House was incorporated. As a corporation that was a beneficiary of
Donald’s real property under his 2005 will, My Father’s House suffered an injury
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by Donald’s conveyance of the property to Michael. That injury could be
remedied were the trial court to determine that the 2007 will and subsequent
conveyances were invalid; consequently, My Father’s House has standing to
challenge the deed transfers.
{¶33} For the aforementioned reasons, the trial court did not err by
determining Lois lacked standing to challenge the deed transfers to Michael but
did err by determining My Father’s House lacked standing to challenge the
transfers.
{¶34} Appellants’ assignment of error is sustained to the extent expressly
stated in this opinion.
{¶35} We, therefore, affirm the judgment of the trial court as to Lois
Beringer, but we reverse the judgment of the trial court as to My Father’s House
#1, Inc. as it pertains to the challenge of the real estate transaction and remand for
further proceedings consistent with this opinion.
Judgment Affirmed in Part,
Reversed in Part and
Cause Remanded
SHAW, P.J., concurs.
/jlr
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WILLAMOWSKI, J., Dissenting in Part and Concurring in Part.
{¶36} I concur in the portion of the judgment which reverses the judgment
of the trial court as to the standing of My Father’s House. However, I dissent from
the majority as to the affirmation of the judgment as to Lois. Due to the
antenuptial agreement I agree that Lois is unable to challenge the will in her
capacity as the surviving spouse of Donald. I also agree that the antenuptial
agreement would prohibit Lois from taking against the will and thereby collecting
up to one half of the net estate or exercising any of the other statutory rights of a
surviving spouse granted pursuant to R.C. 2106. If that was the only way that Lois
had standing, I would concur fully with the majority. It is not. In addition to
being the surviving spouse, Lois was also a beneficiary of the will. Lois was to
inherit a life estate pursuant to the terms of the will. A life estate is an asset that
has value. See Cook v. Ohio Dept. of Job and Family Services, 4th Dist. No.
02CA22, 2003-Ohio-3479; OAC 5101:1-39-32(E) (identifying life estates as
resources for Medicaid purposes); and Holdren v. Holdren, 78 Ohio St. 276(1908).
{¶37} An antenuptial agreement is merely a contract by the parties that
limits the marital rights. Gross v. Gross, 11 Ohio St.3d 99 (1984). Like any other
contract, an antenuptial agreement can be modified. It is not a document that
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controls all future documents and prohibits one spouse from later giving rights to
the other.
{¶38} Here, the will was made by the testator AFTER the antenuptial
agreement. This makes a tremendous difference. Although Donald knew that by
virtue of the antenuptial agreement Lois had no intestate rights as a surviving
spouse, he chose to name her as a beneficiary of his will. Since it was made
subsequent to the antenuptial agreement, it gives Lois rights that she would
otherwise not have. She does not have the rights because of her status as a
surviving spouse. She does however have these rights due to her status as a
beneficiary under the will, which status was granted to her by the testator
subsequent to the antenuptial agreement.
{¶39} R.C. 2107.71 sets forth who has standing to contest the validity of a
will. The statute provides that the persons interested in a will that has not been
previously declared valid may challenge the validity of the will filed. R.C.
2107.71(A). An interested party is one who has a direct, pecuniary interest in the
estate of the testator that would be defeated by the admission of the instrument
challenged. Steinberg v. Central Trust Co., 18 Ohio St.2d 33 (1969). Any person
who has a direct, immediate and legally ascertainable pecuniary interest in the will
that would be benefitted by the setting aside of the will is a person of interest.
Donovan v. Decker, 98 Ohio App. 183 (2d Dist. 1953).
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{¶40} As discussed above, Lois is a beneficiary under the will with a
pecuniary interest that would be benefited by the setting aside of the will being
challenged. This makes her an interested party under R.C. 2107.71. For the same
reason that My Father’s House has the right to challenge the will due to its status
as a beneficiary, Lois also has the right to challenge the will. To treat them
differently ignores the intent of the testator, i.e. Donald, to provide the life estate
for Lois. Since the will was made after the antenuptial agreement, its distribution
to named beneficiaries is not affected by the antenuptial agreement. Instead, it
gives Lois a second type of standing, the standing of a specifically named
beneficiary.
{¶41} A testator can give the status of beneficiary to anyone, including a
complete stranger. Donald gave such status to Lois. Beneficiary status is
completely separate from Lois’ status as spouse. To find because Lois is the
spouse who gave up her spousal rights to take against the will via the antenuptial
agreement that she also gave up her rights as a specifically named beneficiary in a
subsequently drafted will would be to place her in a lower position than even a
complete stranger.
{¶42} The majority is focused on the Dawson case to claim that the prior
antenuptial agreement terminates Lois’ standing to challenge the new will.
However, the Dawson case does not stand for this proposition. In Dawson, the
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parties entered into an antenuptial agreement. Part of the antenuptial agreement
contained a provision requiring mutual wills in which the husband would place his
entire estate into a trust. Dawson, supra at 53. The wife then was given the use
and benefit of the trust assets and the husband’s home until she either remarried or
died. Id. at 54. In exchange, the wife agreed that upon her death, her will would
leave her entire estate to her step-children. Id. The husband died in 1985. In
1990, the wife executed a new will that left part of her estate to her nieces and
nephews as well as her step-children. The step-children contested the new will.
Upon review, the court held that due to the antenuptial agreement, the entire estate
belonged to the step-children and invalidated the new will. The dispute before the
appellate court in Dawson was whether the executor could require the estate to pay
the attorney fees for defending the will that was declared invalid. The appellate
court upheld the payment of the fees pursuant to a statutory provision. That is not
the dispute in this case.
{¶43} Unlike the antenuptial agreement in Dawson, the antenuptial
agreement in this case provides that both parties may distribute their estates at they
wish. The majority concedes that this allows the testator to name Lois as a
beneficiary under the will without violating the terms of the antenuptial
agreement. However, they argue that it prevents her from challenging the validity
of the newest will. I disagree. Another way of looking at the question raised is to
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ask what affect the antenuptial agreement has on the will itself. Assuming for the
sake of argument that the newest will was procured through fraud, it would be
invalid. Then Lois would have been a beneficiary under the former (post
antenuptial) will even with the antenuptial agreement in place. The antenuptial
agreement would have no effect on her status as a beneficiary. She would be
allowed to inherit. Since the antenuptial agreement would not affect her status as
beneficiary absent the newest will, it is illogical to argue that it affects her status as
beneficiary under the former (post antenuptial) will when it comes to challenging
the validity of the newest will.
{¶44} Finally, if the logic of the majority is followed, a party could
conceivably commit a fraud and leave a named beneficiary under a prior will with
no legal remedy. If Donald had chosen to leave all of his estate to Lois and not
just a life estate, she would inherit fully, even with the antenuptial agreement. If
then a party had procured a new will through the use of fraud or undue influence
which excluded Lois from inheritance, the logic of the majority’s opinion would
be that no one would have standing to challenge the will. This is not the intent of
the statute and would certainly be against public policy.
{¶45} Thus, I would find that in addition to My Father’s House, Lois has
standing as well. I would reverse the matter for further proceedings.
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