Strunk v. Lawson

447 S.W.3d 641, 2013 WL 3835360
CourtCourt of Appeals of Kentucky
DecidedJuly 26, 2013
DocketNos. 2009-CA-001810-MR, 2010-CA-001133-MR, 2010-CA-001195-MR
StatusPublished
Cited by10 cases

This text of 447 S.W.3d 641 (Strunk v. Lawson) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Strunk v. Lawson, 447 S.W.3d 641, 2013 WL 3835360 (Ky. Ct. App. 2013).

Opinion

OPINION

NICKELL, Judge:

These consolidated appeals challenge the McCreary Circuit Court’s interpreta[644]*644tion of the will of Mamie L. Strunk (Mamie).1 The challenge is brought by Peggy Neal (Neal)2 and Tim Strunk (Strunk)3 as the result of a declaratory judgment action filed by Robert Lawson (Robert)4 as co-executor of the estate. Upon careful review of the record, the briefs and the law, we affirm the judgment.

BACKGROUND

The rub in Mamie’s will is a bequest of 970 shares of stock in the “Bank of [645]*645McCreary County” (BMC) that were not owned by the estate when Mamie died in 2003, and 10,000 shares of stock in McCreary Bancshares, Inc. (MBI) that were owned by the estate but for which no specific provision was made in the will. Petitioners, primarily descendants of Mamie’s second husband, W.Z. Lawson, through whom much of the bank stock originated, argued 9,700 of the 10,000 shares of stock in the estate should pass pursuant to Item II of the will which specified bequests of stock to 13 named individuals.5 Neal and Strunk, respondents below (now appellants), argued that only 970 shares of stock should pass under Item II of the will and the remaining 9,030 shares should pass under Item IV of the will, commonly referred to as a residual clause.

We begin with a recitation of relevant provisions of the will. Item II made specific bequests of stock. Item VI contained a residual clause directing the executrix and executor to sell all of Mamie’s remaining realty and personalty (“including stock in the Bank of McCreary County not bequeathed in Item II”) to pay debts and funeral expenses; to devise $11,000.00 in $1,000.00 increments pursuant to a schedule; and finally, “[t]o my husband, Hobert Strunk, and my dear friend, Peggy Neal, the balance of such proceeds, share and share alike.” Item VII stated additional provision had been made for Hobert through survivorship accounts at BMC and title to other assets in their joint names with right of survivorship. Also deserving of mention is Item VIII, an in terrorem clause, directing:

It is my desire that my property be divided as hereinabove set forth, and in keeping with that desire should any of my said devisees and legatees attempt to contest or otherwise pervert the orderly procedure and distribution as herein directed, then and in that event such recalcitrant devisee or legatee shall receive no part of my estate. None of the persons herein named, or anyone else, has any claim for services or otherwise against my estate.

Finally, Item IX designated Hobert and Neal to serve as executor and executrix without bond.

Following the denial of motions for summary judgment and a bench trial, on June 16, 2009, the trial court issued a 21-page-opinion that closely followed pleadings filed by Robert on behalf of the estate. The court found: BMC and MBI are separate legal entities; Mamie’s MBI stock was directly attributable to her previously-owned BMC stock; Mamie was a competent, intelligent woman who was aware of her financial holdings, formation of MBI in 1982, and a 1995 stock split; Mamie dictated the desired language of her will to her attorney and he wrote it verbatim into the will that Mamie reviewed and executed in 1997; and finally, at death, Mamie owned no shares of BMC stock, but did own 10,000 shares of MBI stock.

From these facts, the court drew the following conclusions. The will’s in terrorem clause was not triggered by the filing' of the declaratory judgment action because requesting interpretation of a will’s language is not a will contest. George v. George, 283 Ky. 381, 141 S.W.2d 558 (1940). Under the polar star rule, the [646]*646court must determine the testator’s intent from what she said — not from what she might have said. So long as the testator’s intent is clear from the four corners of the will, resort to rules of construction and extrinsic evidence is unnecessary. Bireley’s Adm’rs v. United Lutheran Church in America, 289 Ky. 82, 89 S.W.2d 203, 205 (1931); Merritt, Kentucky Practice; Probate Practice and Procedure, Sec. 1151 et seq.

Though Mamie did not own stock in BMC at the time of her death, the bequest of BMC stock did not fail (in other words, there was no ademption)6, because the BMC stock she attempted to devise had been converted into the MBI stock she owned at death. Goode v. Reynolds, 208 Ky. 441, 271 S.W. 600, 604 (1925). Thus, the stock’s change in form did not defeat the bequest contained in the will. The trial court found this view to be buttressed by KRS7 394.550(3), Kentucky’s anti-ademption statute, which, without reference to timing directs, “[a]ll shares of stock issued as a result of merger, consolidation, reorganization or other similar action, and attributable to the devised shares” are included in any legacy of stock. See Hatcher v. Southern Baptist Theological Seminary, 632 S.W.2d 251, 254 (Ky.1982). Thus, the fact that the stock was converted in 1983 and split in 1995, before the will was executed in 1997, was not fatal to the bequest.8

While the court found the bequest did not fail for attempting to devise an item that did not exist as named in the will, it did find the bequest was ambiguous due to the misidentifieation of the stock and therefore, an interpretation was necessary. The court stated that because it was converting the bequest of BMC stock into a bequest of MBI stock, it was also necessary to multiply the number of shares bequeathed by ten to reflect the ten-for-one stock split. (Thus, a bequest of 100 shares of BMC stock became a bequest of 1,000 shares of MBI stock). The court stated it would reach this conclusion whether it literally enforced the words of the will or relied upon rules of construction and extrinsic evidence to interpret the will. The court concluded this resolution was consistent with case law favoring distribution of one’s estate to the natural objects of one’s bounty, Clarke, Trustee, et al. v. Kirk, et al., 795 S.W.2d 936 (1990), and a 1987 Shareholder Agreement restricting ownership of MBI stock to “parents, siblings, or lineal descendants.”

Ultimately, the trial court adjudged the will to be valid9 and deemed each bequest of BMC stock to be a bequest of MBI stock. Furthermore, it multiplied the number of shares bequeathed under Item II of the will by ten to reflect the 1995 stock split. The court denied all other relief, awarded costs to the petitioners, and entered a final and appealable judgment.

The wrangling did not end. Robert moved to alter, amend or vacate the judgment to; correct a typographical error; clarify that the codicil removing Stouse as an heir due to her death was still in effect; [647]*647note that Hicks’s purchase of new office space had a bearing on when Mamie’s first will was executed; and rule that if anyone had violated the will’s in terrorem clause, it was Neal and Strunk.

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Bluebook (online)
447 S.W.3d 641, 2013 WL 3835360, Counsel Stack Legal Research, https://law.counselstack.com/opinion/strunk-v-lawson-kyctapp-2013.