Eaton v. Eaton

336 P.3d 921 (Table)

Peggy A. EATON, et al., Appellees

v. James EATON, et al., AppellantsandIn the Matter of the Estate of Maurice F. Eaton, Deceased, case No. 10PR89andIn the Matter of the Estate of Maurice F. Eaton, Deceased, case No. 10PR101.

110,207.

Court of Appeals of Kansas.

Oct. 17, 2014.

Jay F. Fowler and Amy S. Lemley, of Foulston Siefkin LLP, of Wichita, for appellants.

Richard Loffswold, Jr., and Jennifer M. Hill, of McDonald, Tinker, Skaer, Quinn & Herrington, P.A., of Wichita, for appellees.

Before STANDRIDGE, P J., PIERRON, J., and JOHNSON, S.J.

MEMORANDUM OPINION

PER CURIAM.

This case involves a dispute between Maurice F. Eaton's widow, Peggy A. Eaton, individually and as administrator of the Estate of Maurice F. Eaton, deceased, and Maurice's brother and nephews (defendants) over the ownership of real estate located in Cherokee County, Kansas. The district court granted summary judgment in favor of Peggy, in part, holding that Peggy owned a one-half interest in 280 acres of the real estate upon Maurice's death because the property was jointly acquired by Peggy and Maurice after their marriage as provided in the couple's 1986 prenuptial agreement and wills. Defendants appeal the district court's ruling, arguing that (1) Peggy waived any future right to the real estate at issue when she signed the prenuptial agreement; (2) the 280 acres of real estate did not constitute after-acquired or jointly acquired property; and (3) delivery of a quitclaim deed transferring title to the real estate to Maurice's nephews was effective.

Facts

On December 22, 1986, Peggy and Maurice entered into a prenuptial agreement in Crawford County, Kansas, and were married that same day. The prenuptial agreement provided, in relevant part, that property currently owned by each party was to remain separate and to be held separate and apart from any marital property. Exhibit A to the prenuptial agreement provided that Peggy brought $136,727 in separate assets to the marriage. Exhibit B to the prenuptial agreement provided that Maurice brought $187,600 in separate assets to the marriage. Maurice's listing included a one-half undivided interest in various plots of real estate in Cherokee and Crawford Counties, Kansas, and one-half of various liabilities with an indication that Maurice and his brother, Marvin Eaton, operated a partnership with respect to the properties and liabilities. Both Peggy and Maurice signed certificates attached to the prenuptial agreement acknowledging that they were advised to receive independent legal counsel and advice from attorneys.

Two days after their marriage, Peggy and Maurice each executed wills containing reciprocal provisions providing that each would leave one-half of their jointly accumulated property acquired after marriage to the other. The wills each contained clauses that expressly acknowledged the prenuptial agreement and honored its terms. Peggy and Maurice each consented to the other's will. Attorney Fred Michelson prepared both the prenuptial agreement and the wills.

Prior to the marriage, Maurice and Marvin held title to certain real estate located in Cherokee County, Kansas, and Madison County, Arkansas; each held an undivided one-half interest in these properties. On April 2,1987, Marvin executed three quitclaim deeds to “Maurice F. Eaton and Peggy A. Eaton, husband and wife, as JOINT TENANTS and not as tenants in common, with full rights of survivorship, the whole estate to rest in the survivor in the event of the death of either.” The deeds covered 280 acres of farmland in Cherokee County. On that same date, Maurice and Peggy executed a quitclaim deed for 160 acres of Cherokee County farmland to Marvin, a single person.

The deeds were recorded over a year later on May 26 and 27, 1988. The deeds were recorded about the time each brother filed for bankruptcy. Marvin conceded that he and Maurice swapped titles to divide the real estate between them-rather than each of them holding one-half interest in the whole of the properties-for purposes of filing bankruptcy.

For the entirety of the marriage, Peggy and Maurice maintained separate financial accounts. However, for the majority of the marriage, they resided in Peggy's home in Columbus, Kansas. The couple filed joint tax returns every year after they were married. On May 14, 2010, Maurice injured his neck in an accident and moved to a medical facility; he also had been receiving treatment for cancer before that time. According to Peggy, Marvin later moved Maurice to different care homes and hospitals without notifying her and had a restraining order issued against her for harassment.

On July 8, 2010, Maurice executed the following documents in the office of his attorney, Bill Wachter: (1) A new “Last Will and Testament” that left all of his property to his nephews; (2) a general durable power of attorney naming Marvin as his attorney-in-fact; and (3) two quitclaim deeds transferring to his nephews 200 acres of real estate in Cherokee County, Kansas, and approximately 200 acres of real estate in Madison County, Arkansas (most of the same land transferred to Maurice and Peggy jointly by Marvin in 1987). After Maurice signed the quitclaim deeds, they were given to Marvin. Wachter advised that the deeds would need to be delivered to be effective but that delivery to Marvin was sufficient. Wachter, however, also advised that the deeds should not be recorded. Wachter hoped that Peggy would consent to the real estate plan and if so, new transfer on death deeds would be executed for tax reasons. Marvin took the deeds to his ex-wife and told her to put them in a safety deposit box, where they remained until September 2, 2010.

As for the durable power of attorney (DPOA), Wachter testified that Maurice wanted Marvin to have his power of attorney. Maurice thought Peggy had possibly tricked him into signing checks or that she might try to persuade him to sign checks, and he did not want to deal with that anymore. Maurice reported he was too sick, and he wanted his brother to handle the transaction of his financial affairs because he trusted Marvin to act in his best interests. Maurice and Marvin understood the DPOA went into effect when Maurice signed it. On July 27, 2010, Marvin used the DPOA to change Maurice's account at Citizen's Bank. In August 2010, Marvin sold soybeans stored in Maurice's name to a grain company.

On July 19, 2010, Wachter informed Peggy that Maurice had executed a new will and prepared deeds to transfer the real estate to his nephews upon his death. Wachter asked Peggy to consent to the will and advised her that if she refused to do so, divorce proceedings would be initiated. Peggy refused to consent to the new will. Consequently, on August 18, 2010, Maurice filed for divorce and obtained a temporary restraining order (TRO) restricting either party from disposing of or encumbering any of their assets, except as needed to comply with any court orders.

On August 27 and 28, 2010, two quitclaim deeds-both involving the same property description in Cherokee County-were executed, transferring an additional parcel of real estate inadvertently omitted from the July deeds. One of the deeds was signed by Marvin as power of attorney for Maurice. An identical deed was signed by Maurice.

On September 2, 2010, Marvin retrieved the July 8, 2010, quitclaim deeds from the safety deposit box and took the deeds to Wachter's law firm. A member of the firm subsequently recorded them with the county register of deeds.

On October 20, 2010, Maurice passed away. Maurice was still legally married to Peggy at the time of his death. Thereafter, the parties filed various probate and civil actions attempting to settle Maurice's estate and quiet title to the real estate at issue in the quitclaim deeds: (1) On November 3, 2010, Peggy filed a petition for letters of administration in Crawford County (case No. 10 PR 89P); (2) on December 3, 2010, Michael Eaton petitioned for probate of Maurice's July 8, 2010, will in Crawford County (case No. 10 PR 101P); and (3) on December 7, 2010, Peggy filed a civil action against defendants for partition, quiet title, accounting, and other relief relating to the 280 acres of Kansas property in Cherokee County (case No. 10 CV 155). The cases were consolidated for discovery.

Following discovery, Peggy moved for partial summary judgment, alleging: (1) she was entitled to a spousal allowance, (2) the terms of the prenuptial agreement did not constitute a consent to Maurice's 2010 will, and (3) legal delivery of the 2010 quitclaim deeds was never accomplished. The district court ruled that (1) Peggy had waived her spousal allowance, (2) Peggy did not consent to Maurice's 2010 will because it was not consistent with the agreement evidenced by the 1986 prenuptial agreement and wills, and (3) the quitclaim deeds were not effectively delivered to Maurice's nephews and violated the temporary order entered in the divorce proceeding prohibiting Maurice and Peggy from disposing of or encumbering their assets.

Defendants moved for reconsideration and for partial summary judgment, alleging that (1) delivery of the deeds to Marvin was sufficient, (2) the prenuptial agreement granted Maurice the right to dispose of his interest in the 800 acres of Cherokee County real estate, and (3) Marvin had mistakenly placed Peggy's name on the 1987 quitclaim deeds. The district court denied the motion for reconsideration and ruled that the prenuptial agreement did not purport to establish ownership of or confer title to any tracts of real estate.

Peggy later filed a second motion for partial summary judgment, seeking a determination of final disposition of the ownership interest of the Cherokee County real estate owned by Maurice at the time of his death. The district court ruled that the prenuptial agreement did not constitute a waiver or otherwise preclude Peggy from acquiring an interest in the property at issue here. More specifically, and based on the...