In re the Estate of Howard C. Kinney, Deceased.

In re the Estate of Howard C. Kinney, Deceased. A05-1794, Court of Appeals Unpublished, July 3, 2006.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-1794

 

In re the Estate of Howard C. Kinney, Deceased.

 

Filed July 3, 2006

Affirmed. Worke, Judge

 

Ramsey County District Court

File No. 62-PR-04-5681

 

Mary R. Vasaly, Dawn C. Van Tassel, Maslon Edelman Borman & Brand, LLP, 3300 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN 55402 (for appellant)

 

David Adler-Rephan, 200 Village Center Drive, Suite 800, North Oaks, MN 55127 (for respondent)

 

            Considered and decided by Hudson, Presiding Judge; Wright, Judge; and Worke, Judge.

U N P U B L I S H E D   O P I N I O N

WORKE, Judge

          On appeal from the district court's grant of summary judgment and order invalidating an antenuptial agreement because respondent was not advised of her right to seek independent legal counsel before signing the agreement, appellant argues that (1) the district court erred by failing to apply the common law as it existed in 1969, and (2) a genuine issue of material fact exists regarding respondent's opportunity to seek the advice of counsel.  We affirm.

FACTS

            Howard C. Kinney's first wife died intestate in 1967 leaving behind an estate worth approximately $175,000.  As a result of her death, Howard inherited a one-third ownership interest in farmland located in Illinois and Indiana that had belonged to his first wife's family.  The couple's three children inherited the remaining two-thirds ownership interest.  Two years later, Howard met with his children to discuss his future retirement needs.  The children agreed to give Howard a life estate in their two-thirds ownership interest so that Howard would have all of the income generated by the family farms rather than just his one-third.  In return, Howard agreed that his children would inherit his one-third interest upon his death.  Howard eventually moved back to Minnesota, where he met respondent Lillian Seiler (n/k/a Lillian Kinney).  During their courtship, Howard and respondent discussed the fact that the farms Howard inherited from his first wife were to pass to his children upon his death.   

            Howard and respondent were married on August 29, 1969.  At the time, respondent was 45 years old and had never been married.  On the morning of the wedding, Howard took respondent to his attorney's office.  Respondent had never met or heard of Howard's attorney.  Respondent was presented with an antenuptial agreement, which stated that respondent agreed to waive her right to inherit from Howard upon his death.  In return, respondent would receive the proceeds of a $10,000 life insurance policy upon Howard's death.  The agreement also provided that respondent acknowledged that Howard had disclosed to her that he had a net worth of approximately $200,000.  By signing the agreement, respondent acknowledged that she was entering the agreement freely and with a full understanding of its provisions.  Respondent was not advised by Howard or his attorney that she should ask another attorney to review the document before signing it; and neither of them explained to her any rights she would be giving up by signing the agreement.

            Howard passed away on July 3, 2004.  Howard's son, James Kinney, was appointed the executor of his estate.  Respondent filed a claim for an augmented share of the estate, family maintenance, homestead rights, and a selection of personal property.  Cross-motions for summary judgment were filed, and the district court entered summary judgment in favor of respondent concluding that while respondent had sufficient knowledge of Howard's estate prior to signing the agreement and that there was sufficient consideration for the agreement, she was not provided with the opportunity to consult with independent legal counsel prior to signing the agreement.  This appeal follows.

D E C I S I O N

            "On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the [district court] erred in [its] application of the law."  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  There is no genuine issue of material fact when the evidence "merely creates a metaphysical doubt as to a factual issue[.]"  DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).  The evidence must be "sufficiently probative with respect to an essential element of the nonmoving party's case to permit reasonable persons to draw different conclusions."  Id.  "[T]he party resisting summary judgment must do more than rest on mere averments."  Id.  "A defendant is entitled to summary judgment as a matter of law when the record reflects a complete lack of proof on an essential element of the plaintiff's claim."  Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn. 1995).    

Application of Law

            Appellant first argues that the district court failed to apply the common law as it existed in 1969.  Parties to a marriage have long been able to enter into enforceable antenuptial agreements.  Appleby v. Estate of Appleby, 100 Minn. 408, 418, 111 N.W. 305, 307 (1907).  In 1911, the Minnesota Supreme Court determined that a presumption of fraud exists when parties to an antenuptial agreement stand in a confidential relationship to one another and there is inadequate consideration to support their antenuptial agreement.  Slingerland v. Slingerland, 115 Minn. 270, 274-75, 132 N.W. 326, 328 (1911).  Here, while the district court did not explicitly find that the deceased and respondent were in a confidential relationship when the antenuptial agreement was executed, it can be reasonably inferred from the fact that they were to be married that day.  See In re Malchow's Estate, 143 Minn. 53, 59, 172 N.W. 915, 917 (1919) (stating that "[p]ersons under contract to intermarry are presumed to stand in a confidential relation to each other.").  Further, the district court found that there was sufficient consideration for the agreement.  "We give due deference to the [district] court's opportunity to judge the credibility of the witnesses and will not set aside such a finding of fact made by the district court without a jury unless clearly erroneous."  Serbus v. Serbus (In the Estate of Serbus), 324 N.W.2d 381, 384-85 (Minn. 1982) (citing Minn. R. Civ. P. 52.01).  

            The codification of Minn. Stat. § 519.11, subd. 1 (1980), changed the common law regarding antenuptial agreements.  Under the statute, parties may enter into a "valid and enforceable [antenuptial contract] if (a) there is a full and fair disclosure of the earnings and property of each party, and (b) the parties have had an opportunity to consult with legal counsel of their own choice."  Minn. Stat. § 519.11, subd. 1.  Because the antenuptial agreement at issue here was executed in 1969, the district court correctly concluded that the statute does not apply and the agreement is governed by the common law.  The district court concluded that respondent was not provided with an "opportunity to consult with independent legal counsel prior to signing the antenuptial contract," and that "[d]ue to the lack of knowledge of the right to consult with independent legal counsel, the antenuptial contract [was] invalid." 

            Appellant argues that the opportunity to consult with an attorney did not exist under common law, and, therefore, the attorney who drafted the antenuptial agreement would not have known that respondent was entitled to such a right.  The Minnesota Supreme Court, however, held in Serbus that "[u]nder both Slingerland and Minn. Stat.  § 519.11, subd. 1, each party to an antenuptial contract must also have an opportunity to consult with an attorney."  Serbus, 324 N.W.2d at 386.  Thus, the supreme court has interpreted the common law to include the opportunity to consult with independent legal counsel.  Appellant argues that the holding in Serbus is incorrect.  But this court is not in a position to disregard established supreme court precedent.  See State v. Ward, 580 N.W.2d 67, 74 (Minn. App. 1998).  In addition, a review of the common law shows that most cases generally include a reference to either receiving advice from a separate attorney or that the individual was at least advised of the rights that were being given up absent the agreement.  See, e.g., Gartner v. Gartner, 246 Minn. 319, 325, 74 N.W.2d 809, 814 (1956) (stating that the evidence indicated that wife was fully informed by the drafting attorney as to what her rights would be as a widow and the effect of the agreement with respect to those rights); Stanger v. Stanger, 152 Minn. 489, 491, 189 N.W. 402, 403 (1922) (referring to the fact that wife had no counsel); Slingerland, 115 Minn. at 274, 132 N.W. at 328 (referring to the fact that wife did not have a lawyer or friend to advise her when the antenuptial agreement was signed, and that she was not informed as to the nature or extent of the rights she was surrendering in return for the consideration contained in the agreement).

            Here, Howard and respondent went to Howard's attorney on the morning of their wedding to sign the antenuptial agreement.  While respondent claims that she read the document before signing, did not ask for more time to review the agreement, and felt that she was able to sign it, she was not represented by independent legal counsel with respect to the drafting or signing of the agreement.  There is no evidence that respondent was given an opportunity to consult with independent legal counsel before signing the agreement.  The only contact respondent had with an attorney was with the attorney who drafted the agreement.  The supreme court has previously noted that "we have never held, nor are we prepared to do so now, that an attorney should never represent both parties seeking an antenuptial agreement."  McKee-Johnson v. Johnson, 444 N.W.2d 259, 266 (Minn. 1989).  The evidence, however, fails to show that the attorney who drafted the agreement informed respondent of her rights as a widow absent the antenuptial agreement.  The district court correctly applied the law as it existed at the time the antenuptial agreement was executed. 

            Finally, appellant argues that the district court erred by concluding that the antenuptial agreement was invalid because Howard failed to inform respondent of her right to consult with independent legal counsel.  Appellant claims that Serbus spoke only to the opportunity to consult with independent legal counsel, and that does not mean that the proponent of the agreement must inform the opponent of this right or to furnish counsel for the soon-to-be spouse.  The attorney who drafted the antenuptial agreement failed to inform respondent of the widow's rights she was giving up by signing the agreement or even ask her whether she would like the opportunity to meet with separate legal counsel prior to signing the agreement.  There is no evidence that before the meeting respondent knew that she had a right to consult with independent legal counsel before signing the agreement or that anyone even asked her if she wished to do so.  Without knowledge, the opportunity does not exist. 

Genuine Issues of Material Fact

            Appellant next argues that the evidence, when viewed in a light most favorable to appellant, shows that respondent had an opportunity to seek independent legal counsel.  Appellant argues that the evidence shows that respondent and Howard discussed the agreement before their wedding day, and that respondent knew of Howard's plans to preserve his assets for his children, even if she did not see the actual agreement until the morning of the wedding.  The district court found that:

The evidence tends to show that [respondent] discussed the general terms of the antenuptial contract with the decedent prior to the wedding, that [respondent] read the entire contract prior to signing it, that [respondent] understood the purpose of the contract was to preserve decedent's assets for his children, and that [respondent] understood she would receive none of decedent's assets at his death other than what was stated in the contract.

 

While the evidence supports the argument that respondent understood that Howard intended to preserve certain assets for his children, there is no evidence to support the argument that respondent knew that Howard was drafting an antenuptial agreement to that effect.  In fact, the evidence shows that respondent claims she knew nothing about the antenuptial agreement until she arrived at the attorney's office on the morning of the wedding.  Because the antenuptial agreement was first presented to respondent on the morning of the wedding and because she was unaware of her right to consult independent legal counsel regarding the agreement and did not have an opportunity to do so, the district court did not err in granting summary judgment in favor of respondent.

            Affirmed.