Green v. McAuley

Jill Looney GREEN v. Diann Looney MCAULEY

CA 97-83                                           ___ S.W.2d ___

                  Court of Appeals of Arkansas
                           Division I
               Opinion delivered October 22, 1997


1.   Wills -- family settlement agreement entered into by
     decedent's children -- in this instance consideration and
     intent sufficient to enter into binding agreement. -- The
     agreement entered into by the decedent's children constituted
     a family settlement agreement; the agreement noted that there
     were ongoing disputes concerning disposition of the estate's
     assets and other matters, that the parties intended to settle
     and resolve; the parties' motive to amicably settle the estate
     constituted sufficient consideration for a family settlement
     agreement; execution of the agreement by appellant, appellee,
     and their siblings indicated their mutual intent to enter into
     a binding agreement.  

2.   Wills -- family settlement agreements -- favored in law. --
     Family settlement agreements are favorites of the law; they
     are favored and should be encouraged where no fraud or
     imposition is practiced. 

3.   Wills -- family settlement agreements -- construction of. --
     The appellate court construes a family settlement agreement by
     seeking the real intent of the parties as revealed in the
     agreement; in the absence of fraud or mistake, the court must
     adhere strictly to the terms of the family settlement
     agreement. 

4.   Wills -- family settlement agreement evidenced intent to bar
     appellee's petition -- appellee discharged and released estate
     from her right to seek appointment as co-executrix. -- The
     family settlement agreement's preamble revealed the parties'
     intent to bar the appellee's petition for appointment as co-
     executrix; the substantive language of the agreement also
     evidenced an intent to bar her petition; in it, appellee
     discharged and released the estate from all claims, demands,
     and actions of any kind or every nature whatever, relating to
     the estate, except as specifically set forth, and there was no
     specific reservation of appellee's right to seek appointment
     as successor co-executrix; appellee discharged and released
     the estate from her right to seek appointment that she
     otherwise had pursuant to the probate code and the terms of
     the will.  

5.   Wills -- family settlement agreement contained no specific
     reservation of appellee's right to seek appointment as
     successor co-executrix -- appellee's argument without merit. -
     - Appellee's argument that the agreement's reservation of her
     interest in certain real estate sufficed to allow her pursuit
     of her claim was without merit; the agreement released and
     discharged the estate from all claims, demands, and actions,
     "except as set forth" therein; there was no specific
     reservation of the ability to seek appointment as successor
     co-executrix; without this specific reservation, the agreement
     released and discharged the claim. 

6.   Wills -- appellee's petition for appointment barred by family
     settlement agreement -- probate court's decision to appoint
     appellee co-executrix reversed and appellee's petition
     dismissed. -- Because appellee's petition for appointment was
     barred by the family settlement agreement, the appellate court
     reversed the probate court's decision to appoint appellee
     successor co-executrix, and dismissed appellee's petition.


     Appeal from Crittenden Probate Court; Rice Van Ausdall,
Probate Judge; reversed and dismissed.
     Sloan, Rubens & Peeples, by:  Kent J. Rubens and Cristina M.
Flechas, for appellant.
     Rees Law Firm, by:  Tom Young, for appellee.

     D. Franklin Arey, III, Judge
     Appellant, Jill Looney Green, appeals from an order entered by
the Crittenden County Probate Court that appoints appellee, Diann
Looney McAuley, successor co-executrix of their father's estate. 
Appellant argues that appellee's appointment is barred by a family
settlement agreement; appellant also claims the probate court erred
by limiting the hearing below to one hour.  We reverse and dismiss
the appellee's Petition for Appointment of Executrix, because it is
barred by the family settlement agreement.  This holding makes it
unnecessary to address appellant's second point.
     Joe E. Looney, Sr. died testate; his widow and five children
survived him.  Besides appellant and appellee, these children were
Joe E. Looney, Jr., Debbie Looney Wintersteen, and David Looney. 
The decedent's will nominated Joe, Jr., and Debbie to serve as co-
executors.  It further provided that if either co-executor
discontinued his or her service, then the next-oldest child would
be nominated to serve as successor co-executor.
     Initially, Joe, Jr., and Debbie both accepted appointment as
co-executors.  Debbie later resigned.  Appellee, claiming to be the
oldest child, petitioned to be appointed co-executrix pursuant to
the terms of the will; her petition was filed on January 11, 1994. 
Shortly thereafter, appellee filed a supplement to her petition,
praying for the removal of Joe, Jr.; she alleged that he labored
under "numerous conflicts of interest."  Joe, Jr., David, and the
decedent's widow objected to this supplement; further, the widow
objected to appellee's appointment as successor co-executrix.  The
record does not disclose a ruling on this petition.
     In February of 1995, the decedent's five children signed a
document entitled "Mutual Release and Settlement Agreement." 
Relevant provisions of this agreement are set forth in the margin. 
The agreement notes that "certain matters are in dispute between
the parties"; these disputes concern "disposition of assets of the
Estate and other matters pertaining to the Estate...."  For the
consideration recited, appellee discharged and released the estate
"from any and all claims, demands, [and] actions,... of any kind or
every nature whatever, whether known or unknown,... relating to the
Estate, except as set forth herein."  Paragraph six of the
agreement excepted certain real estate from the agreement.  The
agreement does not contain a specific reservation of appellee's
right to seek appointment as co-executrix.  
     Appellee filed a petition in May of 1996, again seeking
appointment as successor co-executrix of the estate.  At the
hearing on appellee's petition, appellant's counsel argued that the
terms of the agreement barred appellee from pursuing her petition. 
Appellee testified that she signed the agreement; the agreement was
admitted into evidence.  At the conclusion of the testimony, the
probate judge appointed appellee successor co-executrix.  He
specifically ruled that the agreement did not disqualify appellee
from appointment.
     On appeal, appellant argues that the probate court erred by
not recognizing that the agreement barred appellee from serving as
executrix.  Appellant contends that appellee's petition constitutes
a claim against the estate that appellee surrendered for valuable
consideration.  Appellant further notes that appellee did reserve
the right to certain assets of the estate, but otherwise released
her claims fully, finally, and completely.  
     The agreement entered into by the decedent's children in
February of 1995 constitutes a family settlement agreement.  The
agreement notes ongoing disputes, which the parties intended to
settle and resolve; these disputes concerned disposition of the
estate's assets and "other matters...."  The parties' motive to
amicably settle the estate constitutes sufficient consideration for
a family settlement agreement.  See Harris v. Harris, 236 Ark. 676,
370 S.W.2d 121 (1963); Jones v. Balentine, 44 Ark. App. 62, 866 S.W.2d 829 (1993).  Execution of the agreement by appellant,
appellee, and their siblings indicates their mutual intent to enter
into a binding agreement.  See Thurman v. Thurman, 50 Ark. App. 93,
900 S.W.2d 221 (1995).  
     Family settlement agreements are favorites of the law. 
Thurman, 50 Ark. App. at 97, 900 S.W.2d  at 224.  A common refrain
of our supreme court's decisions concerning family settlement
agreements is that they are favored and should be encouraged where
no fraud or imposition is practiced.  Pfaff v. Clements, 213 Ark.
852, 213 S.W.2d 356 (1948);  see Harris, 236 Ark. at 685, 370 S.W.2d  at 127. 
     We construe a family settlement agreement by seeking the real
intent of the parties as revealed in the agreement.  See Gannaway
v. Godwin, 256 Ark. 834, 511 S.W.2d 171 (1974); cf. 96 C.J.S. Wills
 1113 (1957) (as to compromise agreements between beneficiaries,
"[i]f there is no ambiguity apparent in the terms of the contract,
its meaning must be determined from the words used, and from no
other source."(footnote omitted)).  In the absence of fraud or
mistake, we must adhere strictly to the terms of the family
settlement agreement.  Gannaway, 256 Ark. at 838, 511 S.W.2d  at
174.  
     A review of the agreement's preamble reveals the parties'
intent to bar the appellee's petition.  Appellee's first petition
to be appointed successor co-executrix predated the execution of
the agreement; this first petition was contested.  The agreement
makes reference to certain disputes concerning asset disposition
"and other matters pertaining to the Estate...."  The parties noted
their intent to settle and resolve these disputes without further
legal proceedings.  
     The substantive language of the agreement also evidences an
intent to bar this petition.  The will's provision allowing for the
appointment of the next-oldest child as a successor co-executor
gave appellee a preference in appointment.  See Ark. Code Ann. 
28-48-101(a)(1)(1987).  Upon Debbie's resignation, appellee had the
right to request appointment as a successor co-executrix, by motion
or petition.  See Ark. Code Ann.  28-48-107(a).  However, in
paragraph number one, appellee discharges and releases the estate
"of and from any and all claims, demands, [and] actions... of any
kind or every nature whatever,... relating to the Estate, except as
set forth herein."  The type of claim, demand, or action discharged
is not limited to property claims; as long as the petition relates
to the estate, it is barred.  There is no specific reservation of
appellee's right to seek appointment as successor co-executrix. 
Thus, appellee discharged and released the estate from her right to
seek appointment that she otherwise had pursuant to our probate
code and the terms of the will.  
     Appellee argues that the agreement's reservation of her
interest in certain real estate suffices to allow her pursuit of
this claim.  The agreement cannot be read in this fashion.  It
releases and discharges the estate from all claims, demands, and
actions, "except as set forth" therein.  There is no specific
reservation of the ability to seek appointment as successor co-
executrix; without this specific reservation, the agreement
releases and discharges the claim.  Cf. Gannaway, 256 Ark. at 838,
511 S.W.2d  at 173-74 (releases which discharged all claims of heirs
except their interest in real estate prevent their subsequent claim
to certain common stock, even though the releases do not
specifically mention the stock).
     Because appellee's petition for appointment is barred by the
family settlement agreement, we reverse the probate court's
decision to appoint appellee successor co-executrix, and dismiss
appellee's petition.  Appellant's remaining point is moot in light
of this disposition, so it will not be addressed.
     Reversed and dismissed.
     Jennings and Griffen, JJ., agree.