Court Opinion

ID: 2727331
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:14:35.464854+00
Date Added: 2024-06-11T10:49:14.435743
License: Public Domain

FOR PUBLICATION
                                                               Jun 07 2013, 8:19 am

ATTORNEY FOR APPELLANT:                           ATTORNEY FOR APPELLEE:

THADDEUS CRAIG KELLEY                             P. MASON CLARK
Kelley, Belcher & Brown                           P. Mason Clark, Attorney at Law, P.C.
Bloomington, Indiana                              Bloomington, Indiana

                            IN THE
                  COURT OF APPEALS OF INDIANA

IN RE: THE MATTER OF THE SUPERVISED               )
ADMINISTRATION OF THE ESTATE OF                   )
CORA E. YOUNG, deceased,                          )
                                                  )
TERRY DOUTHITT, KELLY DOUTHITT,                   )
and KEVIN DOUTHITT,                               )
                                                  )
     Appellants-Intervenors,                      )
                                                  )
            vs.                                   )     No. 53A04-1301-EU-36
                                                  )
THEODORE R. YOUNG,                                )
                                                  )
     Appellee-Personal Representative.            )
                                                  )

                  APPEAL FROM THE MONROE CIRCUIT COURT
                       The Honorable E. Michael Hoff, Judge
                          Cause No. 53C01-1207-ES-158

                                         June 7, 2013

                           OPINION - FOR PUBLICATION

VAIDIK, Judge
                                     Case Summary

       Terry Douthitt, Kelly Douthitt, and Kevin Douthitt (collectively “the

grandchildren”), appeal the trial court’s denial of their motion to reconsider. They

contend that based on the language of Cora Young’s will, the trial court erred in finding

that the proceeds of a sale of her property should be distributed to her second husband at

her death. We hold that since the property was a specific bequest under Cora’s will and

was sold before Cora’s death, it was adeemed by extinction and therefore the proceeds

pass to the residuary beneficiary under her will. Finding that the residuary beneficiary is

her second husband, we affirm the trial court.

                              Facts and Procedural History

       On December 17, 1976, Cora executed her Last Will and Testament (“Will”).

Item Two of her Will reads:

       That property which was vested in me at the time of my marriage to my
       husband, Theodore R. Young, including the residence at R. R. 9, Box 314,
       Bloomington, Indiana, a lot in Turkey Mountain Estates, Stone County,
       Missouri, and a lot in Lehigh Acres, Lee County, Florida, I will, devise and
       bequeath to my son, Dennis A. Douthitt, of Monroe County, Indiana.

Appellants’ App. p. 15. Item Five of her Will reads:

       All the rest and residue of my property (excepting what m[a]y be the
       proceeds of any of the items mentioned in item two) I will devise and
       bequeath to my husband, Theodore R. Young, or if he shall not survive me
       then my property which may come directly through him shall be divided
       among his heirs and any property not so attributable shall go to my said
       son, Dennis Douthitt.

Id. at 16. Cora never changed her Will although her son, Dennis, predeceased her, id. at

7, and there was no language in her Will that specifically referred to her grandchildren in

                                            2
any way.    Rather, Cora left her grandchildren non-probate assets in the amount of

$350,271.97. Id. at 27.

       Cora sold the property in Florida in 1984 and sold the property in Missouri in

1987. Id. at 7. On May 2, 2012, Cora sold her Bloomington residence to the State of

Indiana for the expansion of Interstate 69. Id. at 10. She received $263,550 for the sale,

but the proceeds had not been paid at the time of her death. On June 6, 2012, Cora

purchased property at 3934 North State Road 45, Solsberry, Indiana, for $288,257. The

proceeds from the sale of Cora’s Bloomington property were used to pay off a portion of

the debt owed on the Solsberry property after Cora’s death.

       Cora died testate on June 26, 2012. On July 13, 2012, her second husband filed a

Verified Petition for Probate of Will in which he listed himself as the only beneficiary.

Id. at 11-16.   The grandchildren then filed a Petition Requesting Instructions as to

Interpretation and Construction of the Will, contesting that they should have been listed

as beneficiaries of the Will as well, since they would stand in the shoes of their deceased

father, Dennis, and therefore be entitled to the proceeds of the sale of the Bloomington

property. A hearing was held, and the trial court took the matter under advisement,

allowing the parties to submit further argument and authorities.

       The trial court entered its order three months later, holding that the proceeds from

the Bloomington property should be distributed to Cora’s second husband and not the

grandchildren. Since the property was no longer owned by Cora at the time of her death,

it was adeemed by extinction and therefore the proceeds of the sale would pass through

                                            3
the residuary clause of the Will and go to Cora’s second husband. Id. at 7-10. The

grandchildren filed a motion to correct errors, which the trial court denied.

        The grandchildren now appeal.

                                     Discussion and Decision

        The grandchildren appeal the trial court’s denial of their motion to correct errors.

We review rulings on motions to correct errors for abuse of discretion. Baumgart ex rel.

Baumgart v. DeFries, 888 N.E.2d 199, 205 (Ind. Ct. App. 2008), trans. denied. A trial

court abuses its discretion if its decision is against the logic and effect of the facts and

circumstances before the court. Id.

        The grandchildren first contend that the trial court erred in determining that since

Cora conveyed the Bloomington property during her lifetime, the devise is adeemed by

extinction.1 We disagree.

        The doctrine of ademption by extinction is “defined as an act which causes a

legacy to become inoperative because the subject matter of the legacy has been

withdrawn or disappeared during the testator’s lifetime.” In re Estate of Warman, 682

N.E.2d 557, 560 (Ind. Ct. App. 1997), trans. denied. This doctrine only applies to

specific bequests, not general bequests, and “occurs only when the subject matter of the

legacy is so altered or extinguished that the legacy is completely voided.” Id. Indiana’s

approach to ademption is governed by the “Modern Rule.” Pepka v. Branch, 155 Ind.

App. 637, 659, 294 N.E.2d 141, 153 (1973). There are two steps under this approach: (1)
        1
          The grandchildren also argue that this Court’s holding in Kemp v. Kemp, 92 Ind. App. 268, 154
N.E. 505 (1926), is controlling and that ademption by extinction does not apply to devises of real estate.
Appellants’ Br. p. 10. However, Kemp is distinguishable from the present case because the testator died
the owner of the land in question, 154 N.E. at 506, while in this case, Cora had completely divested
herself of the Bloomington real estate before her death. We therefore reject this argument.
                                                    4
“establish the identity of the specific bequest which the testator purports to make under

the terms of the will,” Warman, 682 N.E.2d at 560, and (2) apply the form and substance

test. Id.

       We therefore must first identify the specific bequest at issue. A specific bequest is

“a bequest of some definite or specific part of the testator’s estate which is capable of

being designated, identified, and distinguished from other like things composing the

testator’s estate.” Id. (citing Weaver v. Schultz, 177 Ind. App. 563, 380 N.E.2d 601, 602

(1978)). A general bequest, on the other hand, is “a bequest out of the general assets of

the testator’s estate, such as a gift of money or other things in quantity not in any way

separated or distinguished from other things of the same kind.” Key v. Sneed, 408 N.E.2d

1305, 1307 (Ind. Ct. App. 1980). Since Cora specifically named the piece of real estate

at issue, the bequest is capable of being distinguished from the other assets in her estate.

We therefore find that the bequest at issue was a specific bequest of the residence at R. R.

9, Box 314, Bloomington, Indiana.

       We next must apply the form and substance test, which states: “[i]f there has only

been a formal change in the bequest since the execution of the will, there is no

ademption; however, if the specific bequest has changed in substance, the legacy is

adeemed.” Warman, 682 N.E.2d at 560. In this case, the specific bequest has changed in

substance. Cora sold her Bloomington residence and signed a Warranty Deed in favor of

the State of Indiana on May 2, 2012. The bequest has therefore changed from a piece of

real estate to the proceeds that Cora received from the State of Indiana for the sale. This

is a change of substance of the bequest, so it was therefore adeemed. See id. at 561

                                             5
(“Under [the form and substance test], the bequest fails if the article specifically

bequeathed has been given away, lost or destroyed during the testator’s lifetime.”)

(Emphasis added).

        When a bequest is adeemed, the proceeds pass through the residuary clause of the

will.   Scher v. Stoffel, 115 Ind. App. 195, 199, 58 N.E.2d 118, 120 (1944).            The

grandchildren contend that the clause should be read in a way that excepts the proceeds

of the sale of the Bloomington property from the residuary beneficiary and leaves those

proceeds to Cora’s son, Dennis Douthitt. Appellant’s Br. p. 14. We disagree; we find

that the clear language of this clause indicates that the proceeds of the sale are to go to

Cora’s second husband, Theodore R. Young. The residuary clause is Item Five of the

Will, which reads:

        All the rest and residue of my property (excepting what m[a]y be the
        proceeds of any of the items mentioned in item two) I will devise and
        bequeath to my husband, Theodore R. Young, or if he shall not survive me
        then my property which may come directly through him shall be divided
        among his heirs and any property not so attributable shall go to my said
        son, Dennis Douthitt.

Appellants’ App. p. 16.

        The grandchildren first argue that the clause “excepting what m[a]y be the

proceeds of any of the items mentioned in item two” clearly excepts the proceeds of the

sale from the residuary clause and bequeaths them to Dennis. The word “proceeds” in

the clause, however, is not sufficiently specific to identify what proceeds Cora was

referencing. We are unable to determine if she was referring to the proceeds from any

sale of the properties, regardless of when they occurred, or if she was referring only to the

proceeds of a sale that occurred after her death. It is telling that the grandchildren are
                                             6
only contesting the proceeds from the sale of the Bloomington property and not the sales

of the Missouri and Florida properties that took place after the Will was executed but

some thirty years before Cora’s death, but we cannot be certain as to Cora’s true intent.

We therefore must find that this particular clause in Item Five is not specific enough to

overcome the clear doctrine of ademption by extinction and except the proceeds of the

sale of the Bloomington residence out of the residuary clause. The proceeds therefore

must go to the residuary beneficiary that Cora has clearly named in her Will: Theodore R.

Young.

      We also note that the last clause of Item Five leaving “any property not so

attributable” to Cora’s son, Dennis, is only applicable if Cora’s second husband

predeceases her. The grandchildren argue that “[t]he will unfortunately left out a few

commas,” Appellants’ Br. p. 14, and that the last clause was meant to apply regardless of

whether Cora’s second husband predeceases her. However, a plain reading of Item Five

as it is written makes it clear that the last clause that leaves property to Dennis is

dependent upon Cora’s second husband predeceasing her.          We therefore find this

argument of the grandchildren to be without merit.

      Finally, the grandchildren contend that this Court’s decision in Funk v. Funk, 563

N.E.2d 127 (Ind. Ct. App. 1990), trans. denied, should apply, and we should try to

discern Cora’s intent and find that she intended to leave the proceeds of the sale to her

grandchildren. However, we find that Funk is not applicable to this situation. In this

case, Cora had personally divested herself of the Bloomington property before her death,

signing a Warranty Deed in favor of the State of Indiana on May 2, 2012. In Funk,

                                           7
however, the testator’s attorney-in-fact sold the land in question when the testator was

alive but incapacitated. Id. at 128. This crucial fact distinguishes Funk from the present

case, rendering its holding inapplicable.

       We find that the trial court did not err in denying the grandchildren’s motion to

correct errors. The Bloomington residence was adeemed by extinction, so the proceeds

of the sale pass to the residuary beneficiary listed in Cora’s Will: her second husband,

Theodore R. Young. We therefore affirm the trial court.

       Affirmed.

KIRSCH, J., and PYLE, J., concur.

                                            8