in the Matter of the Estate of Revy L. Wharton ( 2020 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
§ No. 08-20-00002-CV
IN THE MATTER OF THE ESTATE § Appeal from the
OF § County Court at Law No. 2
REVY L. WHARTON. § of Midland County, Texas
§ (TC# P18584)
OPINION
This is a dispute about the interpretation of a will.1 The decedent, Revy L. Wharton, left a
will in which he expressed his “desire” that his majority stake in a company be sold to his business
partner, appellant Louise McKay. The will proposed terms of sale in the form of payments to
beneficiaries under the will. McKay filed suit against the estate’s independent executor to compel
the stock sale. On cross-motions for summary judgment, the trial court found that the executor has
no legal obligation to sell the stock and that McKay is not a beneficiary under the will. McKay’s
claims were dismissed with prejudice.
1
This case was transferred from the Eleventh Court of Appeals pursuant to the docket equalization efforts of
the Supreme Court of Texas. See TEX. GOV’T CODE § 73.001. We follow the precedents of the Eleventh Court to the
extent they might conflict with the precedents of this court. TEX. R. APP. P. 41.3.
1
On appeal and on the limited record before us, we conclude that neither party demonstrated
entitlement to complete relief as a matter of law. We conclude that the testator’s intent was that
his majority ownership interest in the company be sold, on terms stated in the will which would
have the effect of bequeathing money to the will beneficiaries. Based solely on the will itself and
without any further development of the record, the trial court erred by granting summary judgment
that the will imposed no legal obligation for the executor to sell the stock to McKay. Moreover,
because the will acknowledges the need to reasonably negotiate certain aspects of the intended
transaction, on this record McKay likewise was not entitled to her proposed relief of a court order
requiring the executor to complete the sale of stock in accordance with the incomplete terms
outlined in the will.
Background
Revy Wharton was survived by his two children, Lucille S. Bode and Lawrence R.
Wharton, as well as by his brother William Wharton, who has since passed away. Lucille was
appointed as independent executor of the will, with all powers of independent executors under the
laws of the State of Texas. Other key provisions of the will are attached as an appendix to this
opinion.
The decedent’s business partner, Louise McKay, filed suit against the executor in an
attempt to enforce provisions of the will describing terms for the sale of a majority stake in their
business venture. The dispute was presented to the trial court on the following stipulated facts:
1. Revy L. Wharton (“Decedent”) died on January 18, 2016, a resident of Midland
County, Texas.
2. At the time of his death, Decedent owned a majority interest in a business in
California known as Valley Improvement Programs, Inc. (“VIP” or the
“Company”). VIP issued 9,000 total shares, which were owned as of the date of
Decedent’s death as follows:
2
Owner Shares Percentage
a Revy L. Wharton 6,000 66.67%
b William Wharton[] 1,000 11.11%
c Lucille Bode 1,000 11.11%
d Louise McKay 1,000 11.11%
3. Decedent’s valid Last Will and Testament, dated January 14, 2016 (the “Will”),
was admitted to probate and Lucille S. Bode was appointed as the Independent
Executor of the Estate of Revy L. Wharton, Deceased (“Executor”) on March 8,
2016.
The parties agreed, and the trial court found, that the language of the will is not ambiguous.
The executor and McKay filed cross-motions for summary judgment. The primary dispute
concerned whether the will required the executor to sell to McKay the decedent’s majority stake
in VIP. The executor also took the position that McKay is not a beneficiary of the will and therefore
has no standing to pursue claims against the estate.
The trial court entered a “Final Judgment Construing Will and Dismissing Claims,”
granting the executor’s motion “in all things.” The final judgment stated that “Article 1,
Section 1.01, of the Last Will and Testament of Revy L. Wharton . . . contains precatory language
that does not impose a legal obligation on the Executor to sell Revy L. Wharton’s (now the
Estate’s) majority ownership interest in Valley Improvement Programs, Inc. to Louise McKay,”
and that “Louise McKay is not a beneficiary” under the will and “does not have an enforceable
property right in this Estate.” The judgment dismissed all claims with prejudice, and McKay filed
a notice of appeal.
Analysis
Summary judgments are reviewed de novo on appeal. See, e.g., Lujan v. Navistar, Inc., 555
S.W.3d 79, 84 (Tex. 2018). “A traditional motion for summary judgment requires the moving party
to show that no genuine issue of material fact exists and that it is entitled to judgment as a matter
3
of law.” Id. “Issues not expressly presented to the trial court by written motion, answer or other
response shall not be considered on appeal as grounds for reversal.” TEX. R. CIV. P. 166a(c).
“When both sides move for summary judgment, as they did here, and the trial court grants one
motion and denies the other, reviewing courts consider both sides’ summary-judgment evidence,
determine all questions presented, and render the judgment the trial court should have rendered.”
Gilbert Tex. Const., L.P. v. Underwriters at Lloyd’s London, 327 S.W.3d 118, 124 (Tex. 2010).
I. Standing
As a threshold jurisdictional matter, we will address the question of McKay’s standing. In
her second amended petition, McKay alleged causes of action against the independent executor
for breach of fiduciary duty, conversion, unjust enrichment and constructive trust, declaratory
judgment, violation of the will’s in terrorem clause, and removal under Estates Code
Section 404.0035. The parties agreed to a procedure by which they would present summary-
judgment motions to the court regarding construction of the will.
In her motion for summary judgment, the executor asked the trial court to determine that
McKay “is not a beneficiary under the Decedent’s Will and does not have an enforceable property
right in the Decedent’s Estate and therefore, lacks standing in this Estate.” That motion also asked
for a declaration that the will did not impose a legal obligation on the executor to sell the VIP stock
to McKay, but apart from the standing argument it did not specifically address and request
summary judgment on the merits of each of the various legal claims in McKay’s petition (such as
whether the executor owed and breached a fiduciary duty to McKay). Even if the construction of
the will ultimately might be determinative of McKay’s various claims, without specifically
addressing those claims in the motion for summary judgment, the only legitimate basis upon which
the trial court could have entered its final judgment dismissing all claims, including those not
4
specifically addressed in the motion, would have been a determination that McKay lacked standing
to sue. See TEX. R. CIV. P. 166a(c) (“The motion for summary judgment shall state the specific
grounds therefor.”).
A person interested in the outcome of an estate plan has standing in a probate proceeding,
including anyone having a property right in or claim against the estate being administered. See
Archer v. Anderson, 556 S.W.3d 228, 237 (Tex. 2018) (citing TEX. EST. CODE ANN. §§ 22.018(1),
55.001); see also TEX. EST. CODE ANN. § 31.001(7) (will construction suit falls within the scope
of probate proceedings). Regardless of whether she can prevail on the merits, McKay meets this
requirement for standing. She is named in the will. The testator stated in the will his “desire” that
his property be sold to her, and she has an interest in acquiring it. An interested party challenging
both the interpretation of a will and the distribution of an estate is not required to prove the merits
of her claim merely to establish her standing to appear and be heard. See In re Estate of Redus,
321 S.W.3d 160, 162 (Tex. App.—Eastland 2010, no pet.) (citing Baptist Found. of Tex. v.
Buchanan, 291 S.W.2d 464 (Tex. Civ. App.—Dallas 1956, writ ref’d n.r.e.)). Whether the will
requires sale of the decedent’s stock is the disputed question, and McKay has standing to litigate
it. The trial court erred by ruling otherwise and by dismissing McKay’s claims which were not
challenged on the merits in the executor’s motion for summary judgment.
II. Will construction
“A person who makes a will may . . . direct the disposition of property or an interest passing
under the will . . . .” TEX. EST. CODE ANN. § 251.002(b)(2); see also Boyles v. Gresham, 153 Tex.
106, 112, 263 S.W.2d 935, 938 (1954) (“The will is but the expression of the desire of and direction
by the testator as to what shall be done with the property left by him . . . .”). “An executor is the
person or persons nominated by a testator to carry out the directions in the testator’s will and to
5
dispose of the testator’s property, according to the will.” 1 Ronald R. Cresswell et al., Texas
Practice Guide: Wills, Trusts and Estate Planning § 4:137 (2018 ed.). When a testator authorizes
an executor to sell property, “[a]ny particular directions in the testator’s will regarding the sale of
estate property shall be followed unless the directions have been annulled or suspended by court
order.” TEX. EST. CODE ANN. § 356.002(b).
The longstanding rules of will construction require an approach that is distinct from the
interpretation of many other categories of legal texts. The objective is to discern and implement
the testator’s intent as reflected in the instrument as a whole. See, e.g., Hysaw v. Dawkins, 483
S.W.3d 1, 7 (Tex. 2016). The method is “holistic” and seeks to harmonize apparent conflicts or
inconsistencies in language. See id. at 4, 8; see also Knopf v. Gray, 545 S.W.3d 542, 545 (Tex.
2018).
The parties’ dispute primarily concerns the effect of language used by the testator to
describe the proposed sale of the majority interest in VIP to McKay. Section 1.01(A) of the will
states: “It is my desire, subject to tax considerations and other considerations to be worked out
among the interested parties that, after my death, all of my majority ownership interest in the
Company be sold to Louise McKay as described in subparagraph B. immediately below on terms
reasonably negotiated.” If McKay acquires the stock and later decides to sell it, the will proposes
that William, Lucille, and Lawrence, collectively and individually, shall have a right of first refusal
to purchase the entire business or any portion that McKay wishes to sell, “for the purchase price
she paid for it in the first instance taking into account any enhancement of the Company.” The will
goes on to state the testator’s “desire” and “further wish” that “matters be structured” such that
Lucille would receive “a net $50,000 a year for 10 years after my death at no interest” and that
Lawrence would receive “$25,000 per year for 10 years after my death at no interest from the
6
Company which is in addition to the gift in Section 1.02 to him.” Under these provisions of the
will, once Lucille and Lawrence received $500,000 and $250,000 respectively, whether over a ten-
year period or less, then McKay’s “purchase price for all of my majority ownership interest shall
be paid in full.” The testator also stated his “further desire” that his brother William continue to
receive his salary of $150,000 a year, “provided that the obligation of the Company to pay this
amount in either the form of salary or pension only exists as long as my brother is alive,
notwithstanding anything contained herein to the contrary, and is also subject to the continuing
profitability of the Company.”
McKay contends that these provisions of the will instruct the executor to offer her the
opportunity to buy the VIP stock. She emphasizes authorities that implement the intent of the
testator despite the use of precatory words such as “desire” and “wish,” which she argues can be
effective to create mandatory obligations in a will. See Knopf, 545 S.W.3d at 547 (“whether
language is precatory or testamentary is itself a question of intent”); Bergin v. Bergin, 159 Tex.
83, 89, 315 S.W.2d 943, 947 (1958) (“It is true that such words as ‘wanted’, ‘wish’, and ‘desire’
in their ordinary and primary meaning are precatory. But, they are often construed as mandatory
when used in an instrument admittedly a will or when it appears from the context or from the entire
document that they are the expression of the testator’s intention in making disposition of his
property.”). She thus argues that testators have the right to dispose of property as they see fit, and
to avoid defeating the testamentary intent, the will should be interpreted to make the stock sale
mandatory.2
2
McKay also relies on the will’s section headings—including “Intent Regarding California Business” and
“Sale to Louise McKay With Right of First Refusal”—to support her argument about the testator’s intent. But the will
also expressly states in Section 4.05 that “[t]he captions of the various articles, sections and paragraphs of this will
have been inserted for convenience of reference only, and the same shall not in any manner be taken into account in
construing or interpreting this will.” McKay offers no argument to explain why the captions of Section 1.01 should
7
In addition to the parts of Section 1.01 noted above, McKay also argues that the will
anticipates the sale of shares to her because it states that William, Lucille, and Lawrence “shall,
collectively and individually,” have a “right of first refusal” to repurchase all or part of the
business, should she later decide to sell. McKay reasons that if it were not the testator’s intent that
she buy the stock, there would be no reason to also provide that his family should retain the right
of first refusal applicable to any subsequent sale of the business. Interpreting the document to make
the sale to McKay merely optional would render superfluous a substantial, intricately planned
portion of the will. According to McKay, that also would result in a substantial asset being
“haphazardly” distributed as part of the residuary estate rather than in accord with the testator’s
detailed stated wishes.
In contrast, the executor relies upon authorities that recognize the will’s text as the source
for determining intent, arguing that no binding effect should be given to the will to the extent it
used words of mere “request or expectation.” E.g., Byars v. Byars, 143 Tex. 10, 14, 182 S.W.2d
363, 364–65 (1944). The executor emphasizes the will’s use of such precatory language to argue
that the portion of the will describing a sale of stock to McKay is advisory and non-binding, and
thus there is no legal obligation for the estate to sell the stock. Section 1.01 stated that it was the
testator’s “desire” that the stock be sold to McKay. It also stated the testator’s “desire,” “further
wish,” and “further desire” that the sale be structured to pay certain amounts to his daughter, son,
and brother. Further guidance in Section 1.01(C)-(D) about the terms of sale are characterized as
the testator’s “desire,” “intent,” and “request.”
control despite the contrary direction in Section 4.05, and accordingly we disregard the captions as irrelevant to our
task of will construction.
8
The executor contrasts the precatory language used in Section 1.01 with other parts of the
will which more definitely express the intent to make a devise. Rather than expressing the testator’s
“desire,” Sections 1.02-1.05 introduce gifts with the phrase “I give . . . .” The will specifically
defines “give” to mean “give, devise and bequeath.” The executor also relies upon the conditional
nature of the proposed sale, noting Section 1.01(a)’s references to the sale being “subject to tax
considerations and other considerations to be worked out among the interested parties,” the need
for additional terms to be “reasonably negotiated,” and a sentence introduced by stating “[i]f
Louise McKay acquires said company,” implicitly acknowledging the possibility that she might
not acquire the company. Finally, the executor observes that the will cannot force the sale of
property on an unwilling buyer, suggesting that treating the language as mandatory would violate
public policy.
A careful review of the complete will leads us to conclude that despite the use of precatory
terminology, it was the testator’s intention—and his instruction to his executor—that the stock be
offered for sale to his business partner, on terms that would effectuate his larger plan for the
distribution of the estate to his heirs. Considered in isolation, Section 1.01 does describe a sale of
shares to McKay in terms of preference rather than command. But a comprehensive review of the
entire will tells another story. In Section 1.01, the testator described a scenario in which the
majority interest in VIP would be sold—not in terms of an absolute value for the shares, but rather
in the form of “distributions” paid to each of the three primary beneficiaries under his will. Lucille
would receive $500,000 paid out over 10 years, and Lawrence would receive $250,000 paid out
over 10 years.3 William would be paid $150,000 annually, as salary or pension, so long as he lived
3
Curiously, in a part of the will not substantially relied upon by either party to support their competing
interpretations, the testator stated his desire that the “distributions from the Company” paid to Lucille and Lawrence
“be expedited as may be practicable.” The testator acknowledged this might not be possible, stating in the will: “If the
economics, for whatever reason, do not justify stepping up the amounts or duration of these distributions, then it is my
9
and the company remained profitable. And the three beneficiaries would equally split the
company’s working capital on the books.
In addition to these payments from the company, proposed as consideration for the sale of
the shares to McKay, the will made other specific, direct bequests. All three named beneficiaries
would share in the proceeds from selling a ten-acre desert property, with William and Lucille each
taking 37.5% and Lawrence taking the remaining 25%. Lawrence was given $40,000 in cash.
William was given $75,000 in cash, a trailer, and guns. Lucille received the residuary of the estate.
The proposed schedule of distributions resulting from selling the VIP stock to McKay
reflected the testator’s recognition of the value of his majority stake as a major component of the
estate and of his bequests to each of his beneficiaries. By contrast, if the company is not sold and
the proceeds are not allocated by the testator’s professed “desire,” “wish,” “intent,” and “request,”
McKay contends that the majority stake would fall into the residuary estate. The executor does not
expressly argue that the VIP shares are part of the residuary estate, she only argues that she is not
legally obligated to sell the shares to McKay. But the executor also does not argue or present any
record to suggest that this would not be the consequence of her position. The differences in the
distributions of the estate under the two scenarios are as follows:
request that they be kept at the $50,000.00 and $25,000.00 respectively for each of Lucille S. Bode and Lawrence R.
Wharton for the respective ten year periods previously set forth in this Section.” The will did not state that the total
amount to be paid to Lucille and Lawrence should be discounted in the event of expedited payments, and if anything
it arguably provided otherwise by stating that when “Lucille S. Bode and Lawrence R. Wharton have received
$500,000.00 and $250,000.00 respectively whether over a ten (10) year period or less, Louise McKay’s purchase price
for all of my majority ownership interest shall be paid in full.” If there would be no discounting of payments to account
for the present value of accelerating future payments, McKay would be economically disincentivized from expediting
payments in accordance with the testator’s wishes. The implementation of this aspect of the will therefore might be
one of the matters that the testator anticipated would be “reasonably negotiated” between the executor and McKay.
10
Testator’s “desire”: VIP stock falls
Sale of VIP stock on will’s terms into residuary estate
Lucille 37.5% of desert property proceeds 37.5% of desert property proceeds
Residuary estate Residuary estate
$500,000 paid over 10 years 66.67% majority stake of VIP
Equal share of working capital
Lawrence 25% of desert property proceeds 25% of desert property proceeds
$40,000 $40,000
$250,000 paid over 10 years No value for VIP stock
Equal share of working capital
William 37.5% of desert property proceeds 37.5% of desert property proceeds
$75,000 $75,000
Trailer and guns trailer and guns
$150,000/year salary/pension (for life, No value for VIP stock
subject to company’s profitability)
Equal share of working capital
For Lawrence and William, the difference between these two scenarios is stark. Under the
testator’s desired allocation of proceeds from selling the company, Lucille’s extended payout is
double the value of her brother’s. But if the executor treats the testator’s “desire” to sell and
distribute the value of the VIP stock as a mere suggestion, and if for that reason the shares instead
fall into the residuary estate, the consequences are that a substantial part of the testator’s intended
bequests to Lawrence and William are erased, and Lucille (the independent executor) instead
would keep the entire value of the testator’s stake in VIP for herself.
The guiding principle of our construction of the will is that it is our objective to discern
and give effect to the testator’s intent as expressed in the will’s four corners. See Hysaw, 483
S.W.3d at 4. In this case, it is evident that the testator did not intend for the entire value of his
majority stake in VIP to be solely owned by Lucille, to the exclusion of her brother and uncle.
Instead, it was the testator’s intent that the value of that stock be liquidated and distributed among
his heirs according to the detailed allocation set forth in the will.
11
Having resolved the fundamental difference between the parties concerning the
construction of the will, we now turn to resolution of issues presented by the appeal.
III. Executor’s motion for summary judgment
In her “Traditional Motion for Summary Judgment – Will Construction,” the executor
asked the court to “construe the terms of the Decedent’s probated Will and find and declare, as a
matter of law, that (i) Article 1, Section 1.01, of the Decedent’s Will contains precatory language
that does not impose a legal obligation on Executor to sell the Decedent’s majority ownership
interest in Valley Improvement Programs, Inc. to Louise McKay, and (ii) Louise McKay is not a
beneficiary under the Decedent’s Will and does not have an enforceable property right in the
Decedent’s Estate and therefore, lacks standing in this Estate.”
“As trustee of the property of the estate, the executor is subject to the high fiduciary
standards applicable to all trustees.” Humane Soc. of Austin & Travis County v. Austin Nat’l Bank,
531 S.W.2d 574, 577 (Tex. 1975). As explained above, the will expresses the testator’s wish that
his majority stake in VIP be sold and that the proceeds be distributed to the beneficiaries named in
the will. Any such instruction generally must be respected by the executor. See TEX. EST. CODE
ANN. § 356.002(b).
Relying solely on the language of the will, the executor asked the trial court to declare the
provisions of Section 1.01, which set forth the testator’s wishes concerning the VIP shares, as
purely advisory and legally non-binding. It was error for the trial court to do so. We need not
speculate about what the will would have required if McKay had no interest in acquiring the stock,
or if the executor’s attempts to negotiate remaining terms had proved futile. No such facts were
12
before the trial court.4 We also need not determine whether, consistent with her fiduciary duties,
some set of circumstances could have justified the executor in deciding, unilaterally or with the
consent of the other will beneficiaries, to dispose of the VIP stock in some fashion other than by
selling to McKay. No such circumstances were presented to the trial court.
As a matter of will construction, and without any factual record other than the will and the
parties’ limited stipulations, the trial court should have denied the executor’s motion for a summary
judgment declaring as a matter of law that she had no legal obligation to sell the VIP shares to
McKay. For the same reason, the record did not support a declaration as a matter of law that McKay
is not a beneficiary under the will. We sustain McKay’s appeal to the extent it challenges the
summary judgment granted in favor of the executor.
IV. McKay’s motion for partial summary judgment
McKay also assigns error to the trial court’s denial of her cross-motion for summary
judgment. In that motion, she asked the trial court to “declare the specific devise articulated in
Section 1.01(A) to be a mandatory provision,” and “order the Independent Executor of Revy L.
Wharton’s Estate to complete the sale of the Estate’s stock in Valley Improvement Projects, Inc.
to Louise McKay in accordance with the Will.” On appeal, McKay argues that the will created a
mandatory obligation for the executor to offer her a right of first refusal to purchase the VIP
shares.5
4
To be clear, we do not purport to prejudge the legal issue of whether the VIP shares fall into the residuary
estate if they are not sold to McKay. The will beneficiaries who would be impacted by that consequence are not parties
to the appeal, nor is that precise issue before the court.
5
The executor suggests that McKay’s reframing of the issue as a “right of first refusal” in her favor cannot
be raised for the first time on appeal. We disagree. The cross-motions for summary judgment jointly raised the issue
of the proper construction of Section 1.01 of the will. We consider McKay’s appeal to be a permissible refinement of
her argument on the issue jointly presented by the parties. See Greene v. Farmers Ins. Exch., 446 S.W.3d 761, 764 n.4
(Tex. 2014) (“We do not consider issues that were not raised in the courts below, but parties are free to construct new
arguments in support of issues properly before the Court.”).
13
McKay contends that the will demonstrates the testator’s intention that the shares be sold
to her, and as explained above we do not disagree that was his intent. However, it does not
necessarily follow that the sale was mandatory. As argued by the executor, the testator had no
power to make such a sale mandatory, at least to the extent a sale is contingent upon McKay’s
consent to buy. The will acknowledged this possibility that the shares might not be acquired by
McKay (e.g., “[i]f Louise McKay acquires said company . . .”). Beyond that, the will also
acknowledged that its proposed terms for the sale were not wholly sufficient, and that there would
be a need to negotiate additional terms (e.g., “tax considerations and other considerations to be
worked out among the interested parties”).
For these reasons, we cannot conclude that the testator’s intent that the shares be sold to
McKay was manifested in the will as a mandatory obligation that the executor sell the shares. If
an “agreement to agree” is unenforceable as between two parties who made such an agreement, a
testator also cannot impose upon two other parties an enforceable “agreement to agree.” Cf. Fort
Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 846 (Tex. 2000) (“It is well settled
law that when an agreement leaves material matters open for future adjustment and agreement that
never occur, it is not binding upon the parties and merely constitutes an agreement to agree.”).
McKay correctly notes that Section 1.01 does not expressly provide for payments to
Lucille, Lawrence, and William in the event the shares are not sold, but that does not mean that
the will entirely failed to provide for that scenario. As McKay acknowledges, the residuary estate
is bequeathed to Lucille. Moreover, the other will beneficiaries are not before us, and the record
does not reflect what arrangements the independent executor might have made with them, or what
legal arguments they might make about the executor’s legal obligations in the event the shares are
not sold to McKay.
14
We also cannot agree with McKay’s characterization of the will as giving her a right of
first refusal to purchase the VIP stock. Section 1.01 does reference the concept of a “right of first
refusal,” but only as a proposed term of the stock sale, and not as a right belonging to McKay. In
the event of a sale, the testator expressed his desire to preserving a right of Louise, Lawrence, and
William to re-purchase the company from McKay. It is inconsistent for McKay to argue both that
the will requires a mandatory sale to her (as proposed in her motion in the trial court) and that it
bestows on her a right of first refusal (as now proposed on appeal). If the will had dictated the
complete and mandatory terms of an offer to sell stock to her, there would be no need to address
the possibility of sale to another party by providing her a right of first refusal.
As stated above, on the record before us we cannot conclude, as a matter of law, that the
executor has no legal obligation to sell the VIP stock to McKay in accordance with the testator’s
wishes. But the record before us likewise does not allow us to conclude, as a matter of law, that
the executor is legally obligated to sell to McKay. The will anticipates that additional terms would
need to be negotiated to effectuate the testator’s intent, and McKay’s motion does not establish as
a matter of law that there could be no “tax considerations” or other transactional details that might
be, from the reasonable perspective of the estate, a legitimate obstacle to carrying out the testator’s
wishes. Likewise, McKay’s motion does not establish that the executor owed her any fiduciary
duty, nor does it eliminate the possibility that the executor is actually fulfilling her fiduciary duties
to the will’s beneficiaries by pursuing a different strategy of distributing the estate. We therefore
overrule McKay’s appeal to the extent she challenges the trial court’s denial of her motion for
summary judgment.
15
Conclusion
In summary, although the parties presented cross-motions for summary judgment based on
their opposed interpretations of the executor’s duties under the will, neither party carried her
burden to justify summary judgment. Read as a whole, the will demonstrates the testator’s intent
to distribute a substantial part of his estate through the sale of stock to his business partner, McKay.
Because McKay wants to buy the stock, she has standing to advocate on behalf of her interest in
the administration of the estate. That said, neither party has presented a record to support judgment
in her favor as a matter of law. Standing alone, the will does not support conclusions either that
the executor had no legal obligation to sell the stock in accordance with the testator’s wishes, nor
that the executor is subject to a mandatory obligation to sell. Accordingly, we reverse the judgment
of the trial court and we remand the case for further proceedings.
MICHAEL MASSENGALE, Visiting Justice
August 27, 2020
Before Rodriguez, J., Palafox, J., and Massengale, J. (Visiting Justice)
Massengale, J. (Visiting Justice), sitting by assignment
16
Appendix
LAST WILL AND TESTAMENT
OF
REVY L. WHARTON
* * *
ARTICLE I. SPECIFIC GIFTS
Section 1.01 - Intent Regarding California Business:
A. Sale to Louise McKay With Right of First Refusal.
I am the principal owner of Valley Improvement Programs, Inc. of Rancho
Cucamonga California (the “Company”). It is my desire, subject to tax
considerations and other considerations to be worked out among the interested
parties that, after my death, all of my majority ownership interest in the Company
be sold to Louise McKay as described in subparagraph B. immediately below on
terms reasonably negotiated. If Louise McKay acquires said company and then
decides to sell all or part of it to a third party, William A. Wharton, Lucille S.
Bode and Lawrence R. Wharton, shall, collectively and individually, have a right
of first refusal to purchase the entire business, or the portion she wishes to sell, from
Louise McKay for the purchase price she paid for it in the first instance taking into
account any enhancement of the Company Said right must be exercised and closed
within six (6) months after Louise McKay gives written notice to William A.
Wharton, Lucille S. Bode and Lawrence R. Wharton of her intent to sell.
B. Distributions.
It is also my desire that matters be structured so that the business pays my
daughter, Lucille S. Bode, a net $50,000.00 a year for 10 years after my death at
no interest. It is my further wish that my son, Lawrence R. Wharton, receive
$25,000.00 per year for 10 years after my death at no interest from the Company
which is in addition to the gift in Section 1.02 to him. When these payments have
been made and Lucille S. Bode and Lawrence R. Wharton have received
$500,000.00 and $250,000.00 respectively whether over a ten (10) year period or
less, Louise McKay’s purchase price for all of my majority ownership interest shall
be paid in full. It is my further desire that the Company continue to pay my brother,
William A. Wharton, his salary of $150,000.00 a year, provided that the obligation
of the Company to pay this amount in either the form of salary or pension only
exists as long as my brother is alive, notwithstanding anything contained herein to
the contrary, and is also subject to the continuing profitability of the Company.
17
C. Application of Distribution.
Further I desire that things be structured so that the monies paid to Lucille
S. Bode by Valley Improvement Programs, Inc. are all applied to all or part of the
purchase price for the business by Louise McKay. If either of Lucille S. Bode or
Lawrence R. Wharton shall die during the ten (10) year payment period, or less,
for each as prescribed herein, I direct that the survivor of them shall receive the
monies otherwise to have been paid to his or her deceased sibling.
D. Expedite Distributions If Possible.
It is my intent that since, upon my death, I will no longer be receiving
distributions from the Company that distributions to both of Lucille S. Bode and
Lawrence R. Wharton be expedited as may be practicable. Thus, I desire that
Lucille S. Bode receive $50,000.00 or more per year and Lawrence R. Wharton
receive $25,000.00 or more per year and, I no longer intend for there to be a ten
(10) year time limit on distributions to either one of them. If the economics, for
whatever reason, do not justify stepping up the amounts or duration of these
distributions, then it is my request that they be kept at the $50,000.00 and
$25,000.00 respectively for each of Lucille S. Bode and Lawrence R. Wharton
for the respective ten year periods previously set forth in this Section.
E. Non-Competition
During the pendency of the distributions to Lucille S. Bode and Lawrence
R. Wharton, none of Lucille S. Bode, Lawrence R. Wharton or Louise McKay
may compete against the Company or its programs in any way either individually
or with any affiliated entity. If any of them does compete against the Company, the
purchase of the Company will be then and there be null and void.
F. Working Capital
In addition to the parameters for the purchase of the Company by Louise
McKay she must also pay to Lucille S. Bode, William A. Wharton, and
Lawrence R. Wharton the amount of the working capital on the books at the date
of my death in equal shares.
Section 1.02 - Gift to Lawrence R. Wharton
I give the sum of $40,000.00 to my son, Lawrence R. Wharton.
* * *
18
Section 1.05 - Real Property
I give the proceeds of sale of my ten acre desert property in Newberry
Springs, California in the following percentages, to wit: William A. Wharton and
Lucille S. Bode shall each receive an undivided one-half of seventy-five (75%) of
the proceeds and the remaining twenty-five (25%) shall belong to Lawrence R.
Wharton.
ARTICLE II. DISPOSITION OF RESIDUARY ESTATE
I give my Residuary Estate as follows:
(a) To Lucille S. Bode;
(b) And, if Lucille S. Bode does not survive me, then to
William A. Wharton and Lawrence R. Wharton in equal
shares;
(c) And, if William A. Wharton does not survive me, to
Lawrence A. Wharton, and if Lawrence A. Wharton does
not survive me, to his then living descendants who shall take
by representation.
ARTICLE III. EXECUTORS AND ADMINISTRATION OF ESTATE
Section 3.01 - Appointment of Executor:
I appoint Lucille S. Bode as Independent Executor of my will and estate. If
Lucille S. Bode fails or ceases for any reason to serve as Independent Executor,
then I appoint William A. Wharton to serve as Independent Executor of my will
and estate. If William A. Wharton is unable to serve as Trustee, I appoint Steven
Wilcox to serve as Independent Executor of my will and estate.
* * *
19
ARTICLE IV. DEFINITIONS AND GENERAL PROVISIONS
* * *
Section 4.02 - Certain Definitions:
As used in this will, the following words and phrases shall have the
following meanings:
* * *
(g) “give” means give, devise and bequeath.
* * *
Section 4.05 - Effect of Captions:
The captions of the various articles, sections and paragraphs of this will
have been inserted for convenience of reference only, and the same shall not in any
manner be taken into account in construing or interpreting this will.
* * *
20