In re Estate of Martha B. Schubert ( 2015 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
March 10, 2015 Session
IN RE: ESTATE OF MARTHA B. SCHUBERT
Appeal from the Chancery Court for Knox County
No. 65462-1 John F. Weaver, Chancellor
No. E2014-01754-COA-R3-CV-FILED-JULY 15, 2015
This case involves the construction of the Last Will and Testament of Martha B. Schubert
(“the Will”). The Chancery Court for Knox County (“the Trial Court”) found and held
that Martha B. Schubert (“Deceased”) intended the real property described in the second
paragraph of Article IV of the Will to be the two parcels of real property owned by
Deceased located on Cherokee Boulevard and that these properties vested immediately in
John Schubert upon Deceased‟s death. John Schubert appeals raising issues regarding
whether the Trial Court erred in finding and holding that the second paragraph of Article
IV of the Will referred to the two properties on Cherokee Boulevard and that these
properties vested in John Schubert immediately upon Deceased‟s death. We find and
hold that the Trial Court did not err in finding and holding that it was Deceased‟s intent
that the second paragraph of Article IV of the Will describe the two Cherokee Boulevard
properties. We find and hold, however, that these properties did not vest in John
Schubert immediately upon Deceased‟s death because the Will also contains specific
language which, pursuant to Tenn. Code Ann. § 31-2-103, directed that the real property
be administered as part of Deceased‟s estate. We, therefore, affirm, in part, and reverse,
in part.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed, in part; Reversed, in part; Case Remanded
D. MICHAEL SWINEY, J., delivered the opinion of the court, in which JOHN W.
MCCLARTY, and THOMAS R. FRIERSON, II, JJ., joined.
John A. Lucas and Lane E. McCarty, Knoxville, Tennessee, for the appellant, John
Clinton Schubert.
Thomas N. McAdams and Margo J. Maxwell, Knoxville, Tennessee, for the appellee,
Morgan Alexander Schubert, Jr.
James S. Tipton and Mack A. Gentry, Knoxville, Tennessee, for the appellee, Richard L.
Hollow, Executor of the Estate of Martha B. Schubert.
OPINION
Background
Deceased died in August of 2006.1 The Will was admitted to probate and Richard
L. Hollow was appointed as the Personal Representative of Deceased‟s estate. Mr.
Hollow filed a petition seeking construction of certain portions of the Will. John C.
Schubert (“John Schubert”) and Morgan Alexander Schubert, Jr. (“Alex Schubert”) each
filed a response to Mr. Hollow‟s petition.
The Will provides, in pertinent part:
I declare that my husband, Morgan Alexander Schubert, is deceased,
and that I have two children, namely, Morgan Alexander Schubert, Jr. and
John Clinton Schubert.
***
IV.
DISTRIBUTION OF ESTATE
All of the residue of my property, real, person and mixed, of
whatsoever kind and wheresoever situated, I give, devise and bequeath as
follows:
50% to my son, Morgan Alexander Schubert, Jr.
50% to my son, John Clinton Schubert.
It is my specific will and request that all real estate which I own or
may own at the date of my death located on Cherokee Boulevard and
running to Wilani Drive to the rear, including the Dan Mayo property, be
given to my son, John Clinton Schubert, as part of his share of my estate.
***
1
The Certificate of Death in the record on appeal shows Deceased‟s name as “Martha Ann Schubert.”
Deceased‟s Last Will and Testament, however, states that her name is “MARTHA B. SCHUBERT,” and
Deceased executed the will as “Martha B. Schubert.” The case now before us is styled “In re: Estate of
Martha B. Schubert.”
-2-
V.
DIVISION OF ESTATE
The Testatrix recognizes and by this instrument declares that she is
aware that a substantial portion of her estate may include real estate and
other assets which cannot be divided as easily as cash, stocks, bonds or
securities. In recognition of this fact, it is the will of the Testatrix that her
estate, including real estate, be divided between her heirs as hereinabove set
forth. It is her will and wish that her heirs agree as to the division of the
assets of her estate. It shall be the duty of the Executor to ensure that an
equitable division has taken place and, to that end, the Executor is granted
the authority to cause appraisals and other evaluations of estate assets to
take place to ensure, insofar as possible, the equitable division herein
requested. The Executor is also granted the express authority, in addition to
other authorities given to him by this instrument and by law, to exercise, in
his discretion, veto power of any plan of distribution if, in his sole
discretion, it appears to be not in conformity with the wishes of the
Testatrix as set forth in this document. If, in the sole discretion of the
Executor, it appears that the ability of the heirs to fairly and equitable [sic]
divide the estate assets by agreement does not exist or has been lost, then
the Executor, in his sole discretion, shall order the assets of the estate
liquidated in an orderly fashion and the proceeds distributed in accordance
with the wishes of the Testatrix as expressed in this document.
The Trial Court referred the case to the Clerk and Master, who held a hearing and
heard evidence in January of 2013. Richard L. Hollow testified that he is an attorney
who is married to Deceased‟s sister. Mr. Hollow prepared the Will.
At the time of her death Deceased owned two lots of real property fronting on
Cherokee Boulevard (“Cherokee Lots”) in Knoxville, Tennessee, one of which was
referred to as the Dan Mayo property.2 The other of the Cherokee Lots contained
Deceased‟s house. Deceased‟s residence was located at 1951 Cherokee Boulevard and
the Dan Mayo property was located at 1965 Cherokee Boulevard. Deceased did not own
any other property that either fronted on Cherokee Boulevard or had a Cherokee
Boulevard address.
Deceased also had owned at one time prior to making the Will three lots
contiguous to the Cherokee Lots, which extended from the boundaries of the Cherokee
2
A rough diagram is attached to this Opinion showing where the various parcels of real property owned
by Deceased are located in relation to one another.
-3-
Lots all the way to Wilani Drive (“Wilani Lots”). The three Wilani Lots are the only lots
Deceased owned on Wilani Drive. Mr. Hollow was not aware at the time Deceased
executed the Will that Deceased previously had conveyed the Wilani Lots to John
Schubert.
Mr. Hollow testified that he had a conversation with John Schubert after
Deceased‟s death about the Cherokee Lots, and stated:
I had spoken to Mr. John Schubert, who was concerned at that point, if I
remember correctly, about the title to the property. He wanted to be
assured that the property would be his.
I assured him at that time that as far as I was concerned there was
never a question in my mind but that property was his. That was the intent
of his mother from the day we first discussed her property, that that was to
be John‟s property.
But I did qualify that by saying, and this was before the inheritance
tax had been paid, I did qualify that by saying that there was the possibility
that if for some unforeseen reason assets of the estate available to pay the
tax were insufficient, the government could reach that property.
The estate taxes were paid after Mr. Hollow and John Schubert had that conversation.
Mr. Hollow testified that in his opinion the Cherokee Lots are the real properties
described in the second paragraph of Article IV of the Will. Mr. Hollow testified that he
believes that the Cherokee Lots vested in John Schubert immediately upon the death of
Deceased pursuant to statute. Despite this belief Mr. Hollow had two personal
representative deeds for the Cherokee Lots prepared in May of 2008 deeding the
properties to John Schubert. Mr. Hollow had these personal representative deeds
prepared at John Schubert‟s request. Mr. Hollow testified that those deeds were tendered
to John Schubert, but were not accepted and were not recorded. When asked why they
were not recorded, Mr. Hollow stated: “It was my impression based upon information
that we had exchanged during the meetings that we held during a period of the
administration of the estate that the property vested in [John Schubert] at the date of
death.”
After the hearing, the Clerk and Master filed the Master‟s Report on February 12,
2013. In pertinent part, the Master‟s Report stated:
-4-
(1) That Article IV of the Last Will and Testament of Martha B. Schubert
shall be construed to immediately vest the title to the real property owned
by the decedent designated as 1951 Cherokee Boulevard and 1965
Cherokee Boulevard into John Clinton Schubert at the time of the
decedent‟s death and shall be considered as part of his share of the
decedent‟s estate devised under the will;
(2) That since the ability of the will beneficiaries, Morgan Alexander
Schubert, Jr. and John Clinton Schubert, to fairly and equitably divide the
estate assets by agreement does not exist and has been lost, the executor,
Richard L. Hollow, is hereby authorized to exercise the powers granted to
him under Paragraph V of the decedent‟s will for the sale of assets of the
estate, except the above real property on Cherokee Boulevard, and to
distribute the proceeds in accordance with the wishes of the decedent as
expressed in said will; . . . .
John Schubert filed objections to the Master‟s Report. Alex Schubert filed a
motion for adoption and approval of the Master‟s Report.
The Trial Court heard the objections to the Master‟s Report and entered its
Memorandum Opinion and Order on July 24, 2014 overruling the objections and
adopting and approving the Master‟s Report after finding and holding, inter alia:
The decedent died on August 31, 2006. She executed her last will
and testament on June 5, 2002. Prior to October, 2001, the decedent owned
two lots fronting Cherokee Boulevard and three additional lots contiguous
to the rear boundaries of the two lots fronting Cherokee Boulevard. The
three additional lots, which are contiguous to the two Cherokee Boulevard
lots, extend to and front Wilani Drive. . . .
In October 2001, the decedent conveyed the three lots on Wilani
Drive to her son John Schubert. Thus, the devisee, John Schubert, argues
that there was no property covered by the above devise because the two
remaining lots fronting Cherokee Boulevard do not extend all the way to
Wilani Drive.
The proof in this case is that the decedent owned no other property
fronting Cherokee Boulevard and that the “Dan Mayo property,”
specifically referenced in the devise, is one of the two lots fronting
Cherokee Boulevard. As stated above, the three additional lots fronting
Wilani Drive were contiguous to the rear lot lines of the two lots on
-5-
Cherokee Boulevard. It is clear that the decedent intended for the above
specific devise to John Schubert to include the two lots owned by her on
Cherokee Boulevard. . . .
It is well established that “[i]f the decedent is testate, real property
vests immediately in the devisee named in the will unless it specifically
directs that the property be part of the estate under the control of the
executor.” Pritchards on Wills and Administration of Estates, § 634. Tenn.
Code Ann. § 31-2-103. “If the representative attempts to sell lands without
authority granted by will, his conveyance is a nullity . . . [.]” Pritchards on
Wills and Administration of Estates, § 634. With the finding that the two
lots fronting Cherokee Boulevard are within the specific devise to John
Schubert, the two lots vested immediately upon the death of the decedent in
the devisee, John Schubert and outside of the administration of the estate
and the control of the executor. See Tenn. Code Ann. § 31-2-103. It
further follows that the powers granted to the executor under Article V of
the will do not include the power or authority to administer the two lots
fronting Cherokee Boulevard. Despite the able arguments of counsel for
John Schubert, this Court is unable to conclude that the words of devise,
“be given to my son, John Clinton Schubert,” also constitute a power of
disposition or management of the property in favor of the personal
representative.
John Schubert appeals Trial Court‟s July 24, 2014 judgment.
Discussion
Although not stated exactly as such, John Schubert raises two issues on appeal: 1)
whether the Trial Court erred in finding that the real property described in the second
paragraph of Article IV of the Will referred to the Cherokee Lots; and, 2) whether the
Trial Court erred in finding that the Cherokee Lots vested in John Schubert immediately
upon Deceased‟s death.
We first consider whether the Trial Court erred in finding that the real property
described in the second paragraph of Article IV of the Will referred to the Cherokee Lots.
This issue concerns the Trial Court‟s construction of the Will. This Court discussed the
standard of review to be applied in cases involving the construction of a will in Horadam
v. Stewart stating:
The construction of a will is a question of law for the court;
therefore, we review the trial court‟s conclusions of law de novo affording
-6-
them no presumption of correctness. In re Estate of Milam, 181 S.W.3d
344, 353 (Tenn. Ct. App. 2005). In cases involving the construction of
wills, the cardinal rule “is that the court shall seek to discover the intention
of the testator, and will give effect to [that intent] unless it contravenes
some rule of law or public policy.” Stickley v. Carmichael, 850 S.W.2d
127, 132 (Tenn. 1992) (quoting Bell v. Shannon, 212 Tenn. 28, 367 S.W.2d
761, 766 (Tenn. 1963)); see also In re Crowell, 154 S.W.3d 556, 559
(Tenn. Ct. App. 2004); McBride v. Sumrow, 181 S.W.3d 666, 669 (Tenn.
Ct. App. 2005). Furthermore, in will construction cases, we rely on the
language of the instrument to determine the testator‟s intent:
[T]he testator‟s intention must be ascertained from “that
which he has written” in the will, and not from what he “may
be supposed to have intended to do,” and extrinsic evidence
of the condition, situation and surroundings of the testator
himself may be considered only as aids in the interpretation
of the language used by the testator, and “the testator‟s
intention must ultimately be determined from the language of
the instrument weighed in the light of the testator‟s
surroundings, and no proof, however conclusive in its nature,
can be admitted with a view of setting up an intention not
justified by the language of the writing itself.”
In re Cromwell, 154 S.W.3d at 559 (quoting Nichols v. Todd, 20 Tenn.
App. 564, 101 S.W.2d 486, 490 (Tenn. Ct. App. 1936)); see also Pritchard
on Wills §§ 384, 387, 388, and 409 (2d. ed.). Our Supreme Court has said
that when ascertaining the testator‟s intent by construing the language used
in a will, we must consider the entire will as a whole. In re Estate of
Vincent, 98 S.W.3d 146, 150 (Tenn. 2003).
Horadam v. Stewart, M2007-00046-COA-R3-CV, 2008 WL 4491744, at *5 (Tenn. Ct.
App. Oct. 6, 2008), Rule 11 appl. perm. appeal denied April 27, 2009.
With regard to the issue now before us the Trial Court specifically found:
The proof in this case is that the decedent owned no other property
fronting Cherokee Boulevard and that the “Dan Mayo property,”
specifically referenced in the devise, is one of the two lots fronting
Cherokee Boulevard. As stated above, the three additional lots fronting
Wilani Drive were contiguous to the rear lot lines of the two lots on
Cherokee Boulevard. It is clear that the decedent intended for the above
-7-
specific devise to John Schubert to include the two lots owned by her on
Cherokee Boulevard. . . .
In his brief on appeal John Schubert argues, in part, that Deceased did not own any
property at the time of her death that fit the full description of the real property contained
in the second paragraph of Article IV of the Will. In short, John Schubert asserts that
Deceased did not own any real property at the time of her death located on Cherokee
Boulevard that ran all the way to Wilani Drive to the rear. He further argues that because
the Will contains the phrase “running to Wilani Drive,” rather than „running toward
Wilani Drive,‟ that the Cherokee Lots do not satisfy the description in the Will because
the Cherokee Lots do not run all the way to Wilani Drive. This interpretation, however,
strains the language used in the Will. Article IV provides that the real property “located
on Cherokee Boulevard and running to Wilani Drive to the rear, . . .” includes the Dan
Mayo property, which the parties agree does not and never did run from Cherokee
Boulevard all the way to Wilani Drive.
We also must consider the language in the Will “weighed in the light of the
testator‟s surroundings, . . .,” which include the fact that Deceased already had deeded the
Wilani Lots contiguous to the Cherokee Lots to John Schubert and the fact that although
at the time he drafted the Will Mr. Hollow knew that Deceased had owned the Wilani
Lots, he was unaware that she previously had deeded them to John Schubert. Horadam,
2008 WL 4491744 at *5. The end result given the proper construction of the Will as a
whole coupled with the fact that Deceased previously deeded the Wilani Lots to John
Schubert is that John Schubert will have received all of the property that Deceased once
owned between Cherokee Boulevard and Wilani Drive. We hold, as did the Trial Court,
that Deceased‟s intent was that the real property described in the second paragraph of
Article IV of the Will referred to the Cherokee Lots.
Next, we consider whether the Trial Court erred in finding that the Cherokee Lots
vested in John Schubert immediately upon Deceased‟s death. As pertinent, Tenn. Code
Ann. § 31-2-103 provides:
31-2-103. Vesting of estate – Net estate. -- The real property of an
intestate decedent shall vest immediately upon death of the decedent in the
heirs as provided in § 31-2-104. The real property of a testate decedent
vests immediately upon death in the beneficiaries named in the will, unless
the will contains a specific provision directing the real property to be
administered as part of the estate subject to the control of the personal
representative. . . .
Tenn. Code Ann. § 31-2-103 (2007).
-8-
In the case now before us, Deceased died testate. Thus, pursuant to Tenn. Code
Ann. § 31-2-103 her real property vested immediately upon her death in the beneficiaries
named in the Will unless the Will contained a specific provision directing otherwise. As
pertinent to this issue, the Will provides:
It is my specific will and request that all real estate which I own or
may own at the date of my death located on Cherokee Boulevard and
running to Wilani Drive to the rear, including the Dan Mayo property, be
given to my son, John Clinton Schubert, as part of his share of my estate.
The Will directs that the real property in question is to “be given to my son, John
Clinton Schubert, as part of his share of my estate.” Preceding this specific phrase the
Will states: “All of the residue of my property, real, personal and mixed, of whatsoever
kind and wheresoever situated, I give, devise and bequeath as follows: . . . .” The
specific phrase with regard to the Cherokee Lots, however, contains only the words “be
given,” not the words “devise” or “bequeath.” The direction that the property “be given”
indicates that this property is to be administered as part of Deceased‟s estate and “given”
to John Schubert “as part of his share of [Deceased‟s] estate” by the personal
representative of the estate. The words “be given” without words such as “devise” or
“bequeath” show that further action is necessary before the property can vest in John
Schubert, especially in light of Deceased‟s specific direction that it be a “part of [John
Schubert‟s] share of my estate.”
The analysis that the Cherokee Lots did not vest in John Schubert immediately
upon Deceased‟s death is further supported by Article V of the Will wherein Deceased
acknowledged “that a substantial portion of her estate may include real estate and other
assets which cannot be divided as easily as cash, stocks, bonds or securities, . . .” and
then made it “the duty of the Executor to ensure that an equitable division has taken place
. . .” and granted the executor the authority to do things to effectuate the division.
Article V also provided the executor the power to liquidate Deceased‟s assets if
necessary. Deceased acknowledged in Article V that a substantial portion of her estate
may consist of real property, which the executor would be unable to liquidate “to ensure
that an equitable division . . .” was achieved if the real property was not subject to the
administration of the estate. Thus, Article V supports the conclusion that the real
property contained in the specific bequest to John Schubert did not vest immediately in
John Schubert upon Deceased‟s death, but instead was subject to the administration of the
estate.
We hold that the Cherokee Lots did not vest in John Schubert immediately upon
Deceased‟s death because the Will contained specific provisions directing that the real
-9-
property was to be administered as part of Deceased‟s estate subject to the control of the
personal representative. As such, we reverse that portion of the Trial Court‟s judgment
holding that the Cherokee Lots vested in John Schubert immediately upon Deceased‟s
death.
Conclusion
The judgment of the Trial Court that it was Deceased‟s intent that the real property
description in the second paragraph of Article IV of the Will refer to the Cherokee Lots is
affirmed. The judgment of the Trial Court holding that the Cherokee Lots vested in John
Schubert immediately upon Deceased‟s death is reversed. This cause is remanded to the
Trial Court for collection of the costs below. The costs on appeal are assessed one-half
against the appellant, John Clinton Schubert, and his surety; and one-half against the
appellee, Morgan Alexander Schubert, Jr.
_________________________________
D. MICHAEL SWINEY, JUDGE
-10-
-11-