ROBERT L. PACE; DOROTHY PACE MORTON; LENA PACE MORRIS; FAGAN PACE SR.; AND BETTY PACE TURNER v. SAMUEL L. BURKE, EXECUTOR OF THE ESTATE OF ROSEMARY PACE
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RENDERED:
FEBRUARY 20, 2004; 10:00 a.m.
TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-000251-MR
ROBERT L. PACE; DOROTHY PACE MORTON;
LENA PACE MORRIS; FAGAN PACE SR.; AND
BETTY PACE TURNER
v.
APPELLANTS
APPEAL FROM CHRISTIAN CIRCUIT COURT
HONORABLE JOHN L. ATKINS, JUDGE
ACTION NO. 01-CI-01665
SAMUEL L. BURKE, EXECUTOR OF THE
ESTATE OF ROSEMARY PACE
APPELLEE
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
COMBS, JOHNSON AND MINTON, JUDGES.
JOHNSON, JUDGE:
Robert L. Pace, Dorothy Pace Morton, Lena Pace
Morris, Fagan Pace, Sr., and Betty Pace Turner (appellants) have
appealed from an order of the Christian Circuit Court entered on
January 30, 2003, which granted Rosemary M. Pace’s1 motion for
summary judgment.
1
Having concluded that the trial court erred
Subsequent to the entry of the trial court’s order below, Rosemary died on
March 5, 2003. On June 16, 2003, this Court entered an order granting the
appellants’ motion to substitute Samuel L. Burke, the executor of Rosemary’s
estate, as appellee.
as a matter of law by determining that the agreement in question
was not binding due to a lack of mutuality of obligation, we
reverse and remand for further proceedings.
R.E. Pace, Sr. and Rosemary were married in 1954.
Both R.E. and Rosemary had children from previous marriages.
The appellants herein are R.E.’s natural children from his prior
marriage.
On July 1, 1957, R.E. and Rosemary purchased a farm
from J.P. Pace and his wife, Maggie.
The deed of conveyance
specifically stated that R.E. and Rosemary received title to the
farm “equally and jointly for life with the remainder to the
survivor of them in fee simple. . . .”
On July 10, 1957, the same day the deed of conveyance
was recorded in the Christian County Court Clerk’s Office, R.E.
and Rosemary entered into an agreement which provided in
pertinent part as follows:
It is mutually agreed between these
parties that the survivor shall have the use
of the [farm] until his or her death and at
that time, by will the property, shall be
devised one half to the children of R.E.
Pace Sr. and one half to the children of
Rosemary M. Pace.
Approximately two years later, on August 25, 1959,
R.E. executed his last will and testament.
R.E.’s will stated
in relevant part as follows:
The remainder of my estate, both
personal and real of every kind and
description, wherever the same may be
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situated, owned by me at the time of my
death I devise and bequeath share and share
alike to my six children, to wit: R.E. Pace,
Jr., Fagan W. Pace, Robert L. Pace, Dorothy
Dell Pace Morton, Betty Stone Pace Turner
and Lena Rivers Pace Morris.
On August 27, 1979, R.E. died and his will was admitted to
probate.
Pursuant to the survivorship clause in the deed of
conveyance, Rosemary took sole title to the farm.
Approximately 22 years later, on November 28, 2001,
the appellants filed a petition for declaratory judgment in
Christian Circuit Court.
The appellants noted that Rosemary had
“expressed her refusal to honor” the agreement requiring her, as
the survivor of R.E. and Rosemary, to devise one-half of the
farm to R.E.’s children and one-half of the farm to Rosemary’s
children.
The appellants asked the trial court to determine
whether Rosemary was bound by the terms of the agreement.
On January 6, 2003, Rosemary filed a motion for
summary judgment, arguing that she was entitled to rescind the
agreement on the grounds that R.E. had failed to perform his
obligations under the agreement.
Specifically, Rosemary argued
that since R.E.’s will did not provide for the farm to be
devised in accordance with the couple’s agreement, she was not
bound by the terms of the agreement.
On January 30, 2003, after
a hearing was held on the matter, the trial court entered an
order granting Rosemary’s motion for summary judgment.
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The
trial court ruled that the agreement was not binding on Rosemary
due to a “lack of mutuality” of obligation.
This appeal
followed.
Summary judgment is only proper “where the movant
shows that the adverse party could not prevail under any
circumstances.”2
The trial court must view the record “in a
light most favorable to the party opposing the motion for
summary judgment and all doubts are to be resolved in his
favor.”3
This Court has previously stated that “[t]he standard
of review on appeal of a summary judgment is whether the trial
court correctly found that there were no genuine issues as to
any material fact and that the moving party was entitled to
judgment as a matter of law.
There is no requirement that the
appellate court defer to the trial court since factual findings
are not at issue” [citations omitted].4
The appellants’ sole argument on appeal is that the
trial court erred as a matter of law by determining that the
agreement was not binding upon Rosemary due to a lack of
mutuality of obligation.
We agree.
2
Steelvest, Inc. v. Scansteel Service Center, Inc., Ky., 807 S.W.2d 476, 480
(1991) (citing Paintsville Hospital Co. v. Rose, Ky., 683 S.W.2d 255 (1985)).
3
Steelvest, supra, (citing Dossett v. New York Mining & Manufacturing Co.,
Ky., 451 S.W.2d 843 (1970)).
4
Scifres v. Kraft, Ky.App., 916 S.W.2d 779, 781 (1996).
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A valid contract to make a will is binding upon the
parties to the agreement.5
For an agreement to be deemed valid
and enforceable, there must be a mutuality of obligation between
the contracting parties.6
As the former Court of Appeals noted
in David Roth’s Sons, Inc. v. Wright & Taylor, Inc.,7 the concept
of mutuality of obligation is “closely related to the theory of
consideration in the law of contracts.”
The Court explained
that “[w]here an agreement is founded solely upon reciprocal
promises, unless each party has assumed some legal obligation to
the other the contract is wanting in consideration and is
lacking in mutuality.”8
As we mentioned previously, R.E. and Rosemary agreed
that “the survivor shall have use of the [farm] until his or her
death and at that time, by will the property, shall be devised
one half to the children of R.E. Pace Sr. and one half to the
children of Rosemary M. Pace” [emphasis added].
We interpret
the plain and ordinary meaning of this contractual language9 to
require the survivor of R.E. and Rosemary to devise the farm
5
Farmers National Bank of Danville, Kentucky v. Young, 297 Ky. 95, 101, 179
S.W.2d 229, 233 (1944).
6
Ford v. McGregor, 314 Ky. 116, 118, 234 S.W.2d 493, 494 (1950)(stating that
“[a] contract which is not mutually obligatory on the parties is void and
cannot be specifically enforced”).
7
Ky., 343 S.W.2d 389, 390 (1961).
8
Id.
9
Nationwide Mutual Insurance Co. v. Nolan, Ky., 10 S.W.3d 129, 131 (1999).
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under his or her will in accordance with the couple’s agreement.
Thus, the agreement between R.E. and Rosemary does not fail for
want of mutuality of obligation.
As evidenced by the
aforementioned deed of conveyance, R.E. and Rosemary held title
to the farm as joint tenants with the right of survivorship.
This form of ownership simply meant that both R.E. and Rosemary
had the right to use and enjoy the farm during their lives, and
that the surviving spouse would become the sole owner in fee
simple following the other spouse’s death.10
A fee simple
ownership interest includes the right to dispose of the property
by will as the owner desires.
However, the couple’s agreement limited the surviving
spouse’s ability to dispose of the farm by will.
R.E. agreed
that if he survived Rosemary, he would execute a will devising
one-half of the farm to his children, and one-half of the farm
to Rosemary’s children.
Similarly, Rosemary agreed that if she
survived R.E., she would execute a will devising one-half of the
farm to her children, and one-half of the farm to R.E.’s
children.
Therefore, following the execution of the agreement in
question, both R.E. and Rosemary were legally obligated to
execute a will in accordance with that agreement, in the event
10
See Sanderson v. Saxon, Ky., 834 S.W.2d 676, 678 (1992)(describing a joint
tenancy with the right of survivorship).
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he or she survived the other spouse.11
In exchange for each
spouse’s promise to devise one-half of the farm to the other
spouse’s children, R.E. and Rosemary were assured that his or
her children would receive one-half of the farm in the event he
or she predeceased the other spouse.
Hence, both spouses
received reciprocal benefits and burdens under the terms of
their agreement,12 and there was thus a mutuality of obligation
between the parties.
Accordingly, the trial court erred as a
matter of law by determining that the contract failed for a lack
of mutuality of obligation.
Rosemary’s estate takes the position that since R.E.’s
will did not contain a provision devising the farm in accordance
with the couple’s agreement, he breached the agreement and
Rosemary was free to consider the contract abandoned.
disagree.
We
While it is true that as a general rule, one party’s
total failure to perform his obligations under a contract
justifies the non-breaching party in treating the contract as
11
David Roth’s Sons, 343 S.W.2d at 391 (holding that “[i]f both parties are
bound by mutual obligations for even a short period of time, the contract
cannot be avoided by either party on this ground”).
12
See Phillips v. Phillips, 294 Ky. 323, 335, 171 S.W.2d 458, 464
(1943)(defining consideration as “‘[a] benefit to the party promising, or a
loss or detriment to the party to whom the promise is made. “Benefit,” as
thus employed, means that the promisor has, in return for his promise,
acquired some legal right to which he would not otherwise have been entitled.
And “detriment” means that the promisee has, in return for the promise,
forborne some legal right which he otherwise would have been entitled to
exercise’”)(quoting Luigart v. Federal Parquetry Manufacturing Co., 194 Ky.
213, 238 S.W. 758, 760 (1922)).
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abandoned and suspending his own performance,13 we hold that
R.E.’s will did not constitute a failure to perform his
obligations under the couple’s agreement.
At the time R.E. executed his will in 1959, Rosemary
was still alive.
Under the express terms of the couple’s
agreement, the obligation to execute a will in accordance with
the terms of that agreement did not arise until either R.E. or
Rosemary died.14
Furthermore, even though R.E.’s will provided
that all of his real property was to be divided equally among
his six children, this provision did not contradict the terms of
the agreement.
R.E. and Rosemary owned the farm as joint
tenants with the right of survivorship, which meant that R.E.’s
ownership interest in the farm was not affected by the terms of
his will, and instead passed immediately to Rosemary upon his
death.15
If Rosemary had predeceased R.E., he would have become
obligated to execute a will in accordance with the terms of the
agreement.
However, since R.E. executed his will when Rosemary
13
Dalton v. Mullins, Ky., 293 S.W.2d 470, 476 (1956)(holding that where one
party refused to perform the contract as written, the non-breaching party
“had the right to treat this action as a breach, to abandon the contract, and
to depart from further performance on his own part and finally demand
damages”).
14
The obligation to actually execute a will in accordance with the terms of
the agreement should not be confused with each spouse’s promise to execute a
will in the event he or she survived the other. While the former was an
obligation that would ultimately fall on only one spouse, the latter was a
mutual obligation undertaken by both spouses as a result of their reciprocal
promises.
15
See Sanderson, 834 S.W.2d at 678 (noting that at the death of one joint
tenant, his interest passes to the survivors).
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was still alive, this will did not constitute a breach of the
couple’s agreement.
Accordingly, Rosemary remained bound by the
terms of the agreement and was not entitled to treat the
agreement as abandoned.
Based on the foregoing, the order of the Christian
Circuit Court is reversed, and this matter is remanded for
further proceedings consistent with this Opinion.
MINTON, JUDGE, CONCURS.
COMBS, JUDGE, DISSENTS AND FILES SEPARATE OPINION.
COMBS, JUDGE, DISSENTING:
the majority opinion.
I respectfully dissent from
When R.E. failed to draft his will in
accordance with his promise, he breached his agreement with
Rosemary.
There can be no other reasonable interpretation of
his conduct or of its legal implications.
His only obligation
under their agreement was to draft his will as the reciprocal
counterpart of the will that Rosemary promised to execute.
The majority opinion reasons that the terms of their
agreement “did not arise until either R.E. or Rosemary died.”
disagree.
The obligation arose immediately.
The passage of
time alone delayed its execution but did not vitiate or alter
its binding nature.
In failing to keep his promise, R.E.
released Rosemary from her obligation to do so.
The promise
simply cannot be finessed away under the inescapably clear and
simple terms of the agreement.
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I
Breach of the agreement for lack of mutuality is the
only possible conclusion that the trial court could have
reached.
It reasoned correctly.
Therefore, I would affirm the
court’s entry of summary judgment in this case.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Kenneth R. Haggard
Hopkinsville, Kentucky
J. Daniel Kemp
Jason E. Holland
Hopkinsville, Kentucky
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