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
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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
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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)
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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.
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“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
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(“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
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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,
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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.
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