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In re Supervised Estate of Kent

Supreme Court of Indiana

June 19, 2018

In the Matter of the Supervised Estate of Gary D. Kent, Deceased;
v.
Cynthia Kerr, Appellee/Cross-Appellant (Petitioner below). John David Kent and Kevin Kent, as Co-Personal Representatives of the Estate of Gary D. Kent, Deceased; Nicholas Kent; and David Kent, Appellants/Cross-Appellees (Respondents below),

          Argued: February 8, 2018

          Appeal from the Morgan Superior Court, Nos. 55D01-1602-ES-000022, 55D01-1603-TR-000038, and 55D01-1605-PL-000659 The Honorable Peter R. Foley, Judge.

         On Petition to Transfer from the Indiana Court of Appeals, No. 55A01-1612-ES-02907.

          ATTORNEY FOR APPELLEE/CROSS-APPELLANT Robert M. Hamlett Carmel, Indiana.

          ATTORNEY FOR APPELLANTS/CROSS-APPELLEES Darla S. Brown Sturgeon & Brown, PC Bloomington, Indiana.

          OPINION

          Goff, Justice.

         A terminally-ill father tried to broker peace between two of his children by having them agree between themselves how they would divide some of his assets after his death. But the peace was short lived. Before the father died, the son tried to rescind the agreement. After the father died, the daughter sued to enforce the agreement as part of the probate process. This appeal presents the question of whether the agreement between the children, executed before their father's death, can be enforced using a chapter in the Probate Code providing for the adjudicated compromise of controversies. Because we find that the legislature intended the chapter to apply only to post-mortem agreements, the daughter cannot use this chapter of the Probate Code to enforce the agreement.

         Factual and Procedural History

         In 2008, Gary D. Kent ("Gary") executed a will dividing most of his estate equally between his daughter, Cynthia Ann Kerr ("Cindy"), and one of his sons, John David Kent ("David"). On December 16, 2015, at the request of their terminally-ill father, Cindy and David signed a document entitled "Settlement Agreement" (the "Agreement") to "formalize their agreement as to how their inheritance [would] be divided." Cross-Appellant's App. Vol. 4, p. 8. The Agreement provided that Cindy and David would each receive certain pieces of personal and real property. Gary signed the Agreement indicating that it "conform[ed] to [his] wishes." About a week later, David sent a written notice to Cindy purporting to rescind the Agreement.

         On January 27, 2016, Gary passed away. David and Kevin Kent, as co-personal representatives under Gary's will (the "Personal Representatives"), then petitioned the trial court to admit Gary's will to probate.[1] The Personal Representatives did not refer to the Agreement in their petition.

         Cindy challenged the probate of Gary's will without the Agreement and, in a motion for partial summary judgment, requested that the Agreement be enforced either as a codicil to Gary's will or as a settlement agreement pursuant to Indiana Code chapter 29-1-9 (the "Compromise Chapter"). The Personal Representatives filed their own motion for summary judgment arguing that the Agreement was invalid and unenforceable. After a hearing on the parties' motions, the trial court found that the Agreement was not a codicil to Gary's will and did not fall within the scope of the Compromise Chapter. In reaching the latter conclusion, the trial court relied upon the fact that the parties executed the Agreement before Gary's death. In addition, the trial court found that David rescinded the Agreement. Accordingly, it denied Cindy's motion, dismissed the will contest, and ordered the Personal Representatives to administer Gary's estate according to his will without reference to the Agreement.

         Cindy appealed the trial court's ruling.[2] She focused on the enforceability of the Agreement under the Compromise Chapter, but also briefly mentioned general principles of contract law. The Court of Appeals reviewed the statutory text in light of "the statute's underlying policy of encouraging family settlement agreements and Indiana's policy which favors freedom of contract[, ]" and it concluded that "[n]o part of the statute clearly and unambiguously prohibits pre-mortem family settlement agreements." Kent v. Kerr (In re Supervised Estate of Kent), 82 N.E.3d 326, 330-31 (Ind.Ct.App. 2017). It buttressed this conclusion with analysis of a case that reached the same conclusion in interpreting a Colorado statute with some similarities to the Compromise Chapter. Id. at 331-32 (citing Salcedo-Hart v. Burningham, 656 Fed.Appx. 888, 892-93 (10th Cir. 2016) (unpublished) (interpreting Colo. Rev. Stat. § 15-12-912)). The Court of Appeals went on to find that there was adequate consideration for the Agreement, and David's purported rescission was a nullity because he did not show he had a right to rescind the Agreement. Id. at 332-33. As a result, the Court of Appeals reversed the trial court and remanded with instructions to enter judgment for Cindy and to enforce the Agreement. Id. at 333.

         We granted the Personal Representatives' petition to transfer, thereby vacating the Court of Appeals opinion. See Ind. Appellate Rule 58(A).

         Standard of Review

         "When reviewing the grant or denial of a motion for summary judgment we stand in the shoes of the trial court." City of Lawrence Utils. Serv. Bd. v. Curry, 68 N.E.3d 581, 585 (Ind. 2017) (citation omitted). Summary judgment is appropriate "if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Ind. Trial Rule 56(C). Although they aid our review, the findings of fact and conclusions of law a trial court may enter in support of its judgment do not bind us. Knighten v. E. Chicago Hous. Auth., 45 N.E.3d 788, 791 (Ind. 2015). Issues of statutory construction present questions of law, which we review de novo. Curry, 68 N.E.3d at 585. This standard "remains unchanged when, as here, the parties file cross-motions for summary judgment." In re Ind. State Fair Litig., 49 N.E.3d 545, 548 (Ind. 2016).

         Discussion and Decision

         I. The Compromise Chapter applies only postmortem.

         The Compromise Chapter of our Probate Code provides a method by which interested parties may compromise certain contests or controversies about a will, estate, or testamentary trust. Ind. Code ch. 29-1-9 (2004). Upon making such an agreement, any interested person can submit it for court approval. I.C. § 29-1-9-2(b). If the court finds that the agreement complies with statutory requirements (including that there is a good faith contest or controversy), it must "make an order approving the agreement and directing [its execution]." I.C. § 29-1-9-3.[3]

         Section one of the Compromise Chapter, which lies at the center of this dispute, defines the specific types of contests and controversies that fall within the chapter's scope and ...


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