96-235
No. 96-235
IN THE SUPREME COURT OF THE STATE OF MONTANA
1997
IN RE THE ESTATE OF
LOU E. HILL,
Deceased.
APPEAL FROM: District Court of the Sixteenth Judicial District,
In and for the County of Garfield,
The Honorable Kenneth R. Wilson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Duncan A. Peete, Moulton, Bellingham, Longo &
Mather, Billings, Montana
For Respondent:
Mark D. Parker, Nicole A. Temkin, Parker Law Firm,
Billings, Montana
Submitted on Briefs: November 21, 1996
Decided: February 6, 1997
Filed:
__________________________________________
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Clerk
Justice William E. Hunt, Sr., delivered the Opinion of the Court.
Appellant Louanne Woodford (Louanne) appeals the decision of
the Sixteenth Judicial District Court, Garfield County, holding
that two disputed bank accounts were the property of Lou E. Hillþs
probate estate, and further holding that Lou E. Hill (Hill) had not
intended to leave the disputed accounts to Louanne as his joint
tenant with right of survivorship. We reverse and remand.
ISSUES
The following issues are presented on appeal:
1. Did the District Court err in concluding that the disputed
bank accounts were assets of Hillþs probate estate and not joint
accounts with rights of survivorship between Hill and Louanne?
2. Did the District Court err in concluding that the
Inventory and Appraisement of Hillþs estate constituted a judicial
admission by Louanne that the disputed accounts were assets of
Hillþs probate estate?
FACTS
In 1984, Hill opened a joint checking account with his wife,
Margaret, at the Garfield County Bank. After Margaret died in
1985, Hill executed a new signature card for the account with his
daughter, Louanne. The new signature card was signed by both Hill
and Louanne as authorized signatories and listed the account as a
joint account with right of survivorship. Also in 1985, Hill and
Louanne opened a second checking account at the First National Bank
in Miles City. The signature card for this account also was signed
by both of them and indicated the account was a "joint" one.
Louanne testified that the accounts were for her fatherþs use
during his lifetime. She further testified that her father told
her that, in the event of his death, she should pay his immediate
expenses from these accounts and then do as she pleased with the
balance of the money.
In December 1990, Hill died testate in Garfield County. His
daughter, Louanne, and his son, Phil Hill (Phil) were named by his
will as co-personal representatives. Phil and Louanne were also
the major beneficiaries of Hillþs will. After Hillþs death,
Louanne closed the Garfield County Bank joint account and deposited
the remaining funds into an individual account. She also executed
a new signature card at the First National Bank in Miles City,
changing the joint checking account at that bank to an individual
account as well.
During preparations for the probating of Hillþs estate, a
dispute arose regarding how the two bank accounts should be
treated. The attorney handling the estate notified Louanne and
Phil that he needed to know whether the accounts were estate
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property or Louanneþs property. The treatment of the accounts
dictated whether they would be included in the estateþs inventory
or not. Louanne contended that her right of survivorship meant the
funds in the accounts belonged to her, not to the estate. Phil
contended that Hill had not intended to gift Louanne with the
accounts prior to his death and, therefore, the accounts were
properly included as part of Hillþs estate.
The attorney presented the parties with copies of the estate
inventory which did not include the accounts as part of the estate.
At some point, the attorney redrafted the inventory and moved the
accounts from the joint property schedule to the estate property
schedule. Both Phil and Louanne initialed the changes and signed
the inventory, which was subsequently filed with the District
Court.
Phil then petitioned the District Court for an accounting of
the location and use of the accounts, which he contended were
estate property. In response, Louanne moved to dismiss Philþs
petition, asserting that the accounts were originally jointly owned
by her and her father and, since his death, were owned by her
alone. She therefore asserted that the estate was not entitled to
an accounting regarding the accounts. After a hearing, the
District Court concluded that the nature of the accounts was
ambiguous, justifying an inquiry into Hillþs actual intent. It
further concluded that Louanneþs name was placed on the accounts
for convenienceþs sake only, and that the accounts were estate
property. Louanne appeals.
STANDARD OF REVIEW
This Court reviews a district courtþs findings of fact to
determine whether they are clearly erroneous. In re Estate of
Parini (Mont.1996), 926 P.2d 741, 743, 53 St.Rep. 1062, 1063
(citing Daines v. Knight (1995), 269 Mont. 320, 324, 888 P.2d 904,
906). This Court reviews a district court's conclusions of law to
determine whether the court's interpretation of the law was
correct. Parini, 926 P.2d at 743 (citing Stratemeyer v. Lincoln
County (1996), 276 Mont. 67, 79, 915 P.2d 175, 182).
As a general rule, construction and interpretation of written
agreements is a question of law for the court to decide. Klawitter
v. Dettman (1994), 268 Mont. 275, 281, 886 P.2d 416, 420 (citing
First Security Bank of Anaconda v. Vander Pas (1991), 250 Mont.
148, 152-53, 818 P.2d 384, 387). Likewise, it is a question of law
whether ambiguity exists in a written agreement. Klawitter, 886
P.2d at 420 (citing Audit Services, Inc. v. Systad (1992), 252
Mont. 62, 65, 826 P.2d 549, 551).
DISCUSSION
1. Did the District Court err in concluding that the disputed
bank accounts were assets of Hillþs probate estate and not joint
accounts with rights of survivorship between Hill and Louanne?
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The disposition of the disputed bank accounts in this case
depends on how the accounts are classified, whether as joint
tenancies with rights of survivorship; as tenancies in common; or
as personal accounts of Lou E. Hill. The District Court concluded
the accounts were the personal property of Lou E. Hill and,
therefore, became part of his estate upon his death.
The creation of a joint tenancy (or joint interest) with right
of survivorship is governed by statute. Section 70-1-307, MCA,
provides:
A joint interest is one owned by several persons in equal
shares by a title created by a single will or transfer,
when expressly declared in the will or transfer to be a
joint tenancy or when granted or devised to executors or
trustees as joint tenants.
Under the plain language of the above statute, a right of
survivorship may only be created by the inclusion of an express
declaration indicating the partiesþ intent to create it. A tenancy
in common is also statutorily defined:
Every interest created in favor of several persons in
their own right, including husband and wife, is an
interest in common unless acquired by them in partnership
for partnership purposes or unless declared in its
creation to be a joint interest, as provided in 70-1-307,
MCA.
Section 70-1-314, MCA.
When the classification of a bank account is in dispute, the
court first looks at the signature card accompanying the account in
order to resolve the problem. Casagranda v. Donahue (1978), 178
Mont. 479, 483, 585 P.2d 1286, 1289 (citing State Board of
Equalization v. Cole (1948), 122 Mont. 9, 195 P.2d 989). The
court must then determine whether the signature card complies with
the statutory requirements, set out above, for creating a joint
tenancy with right of survivorship or a tenancy in common. Estate
of Lahren (1994), 268 Mont. 284, 286, 886 P.2d 412, 413.
a. The Garfield County Bank account.
The signature card for the Garfield County Bank account lists
the account in the name of Lou E. Hill alone. However, both Hill
and Louanne signed as authorized signatories and the account is
denominated as a "joint" account. In addition, the Garfield County
Bank signature card explicitly set forth a paragraph describing the
account as a "joint account, with right of survivorship." Both
Hill and Louanne again signed the signature card below this
paragraph, acknowledging that they had read and understood it.
The District Court, however, focused on the fact that the
account was listed in the name of Lou E. Hill alone and, on that
basis, determined that the signature card was ambiguous. As noted
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above, the determination of whether an agreement is ambiguous is a
question of law which this Court reviews for correctness.
Klawitter, 886 P.2d at 420. Given the statutory parameters for the
creation of a joint tenancy with right of survivorship, we conclude
that the District Courtþs determination of ambiguity was incorrect.
Section 70-1-307, MCA, requires an express declaration of the
intent to create a joint tenancy. The Garfield County Bank
signature card expressly declared that the account created was a
joint tenancy with right of survivorship. Both Hill and Louanne
signed the signature card below the paragraph setting forth this
declaration. In so doing, they both indicated that they understood
and agreed that the account should carry a right of survivorship.
The language used could hardly be clearer, and the failure of the
bank to list the account in both their names cannot overcome it.
Since the signature card followed the statutorily mandated
procedure for creating a joint tenancy with right of survivorship,
there was nothing left for the court to construe. Therefore, the
District Courtþs determination of ownership of the Garfield County
Bank account is reversed.
b. The First National Bank of Miles City account.
Like the Garfield County Bank account signature card, the
First National Bank of Miles City signature card was marked as a
"joint" account. But unlike the other accountþs signature card,
the signature card for the First National Bank of Miles City
account carried the names of both Hill and Louanne. And, unlike
the other account, the Miles City account lacked any specific
language indicating that the account was a joint tenancy with right
of survivorship. The only indication of intent is found in the
checking of the box next to the word "joint." Based on the lack of
any other indication on the signature card regarding how the
account should be treated, the District Court determined the card
was ambiguous, justifying an inquiry into the actual intent of the
decedent when the account was opened.
However, as noted above, 70-1-314, MCA, expressly provides
that "[e]very interest created in favor of several persons in their
own right . . . is an interest in common" if it is not a
partnership asset or a joint tenancy with right of survivorship.
No one argues that the disputed bank account was established as a
partnership asset, and the account cannot be a joint tenancy
because the necessary "express declaration" is lacking. Therefore,
the interest is a tenancy in common. The District Courtþs
acceptance of parol evidence to discern Hillþs intent does not take
into account the existence of this statute, which, if applied,
conclusively settles the issue of ownership.
This conclusion is supported by this Courtþs decisions In re
Estate of Shaw (1993), 259 Mont. 117, 855 P.2d 105, and Lahren,
886 P.2d 412. In Shaw, this Court acknowledged that the various
earlier decisions in this area were to some extent inconsistent.
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We therefore stated:
Without attempting to reconcile all of the various cases
dealing with the creation of joint tenancies that have
come before this Court, we hold as follows:
1. The creation of a joint tenancy (same as [a]
joint interest) in property is by Montana statute.
Sections 70-1-307 and 70-1-314, MCA, mandate that if
parties want to create a joint tenancy (same as [a] joint
interest) in property, they must make an express
declaration that they intend to create a joint tenancy or
joint interest. Simply using words such as "or" or
"and/or" without expressly using the words "joint
tenancy," "joint tenancy with right of survivorship," or
"joint interest" will not suffice to create a joint
tenancy, absent a specific statute to the contrary.
2. In the event the parties do not expressly
declare that the ownership interest created in the
instrument of title or transfer is a joint tenancy or
joint interest or a partnership interest, then a tenancy
in common or interest in common will be created.
Shaw, 855 P.2d at 111. See also Lahren, 886 P.2d at 413.
In determining that an inquiry into the decedentþs actual
intent was warranted, the District Court relied on Seman v. Lewis
(1992), 252 Mont. 508, 830 P.2d 1294. While noting the
applicability of 70-1-307, MCA, this Court in Seman overlooked
the secondary applicability of 70-1-314, MCA, which mandates that
an interest held by more than one person, if it is not a
partnership asset or a joint tenancy with right of survivorship,
must be deemed a tenancy in common. To the extent that the
authorization of the use of extrinsic evidence in Seman contradicts
the dictates of 70-1-314, MCA, Seman is overruled.
Since Hill and Louanne created a joint interest in the Miles
City bank account which is not a joint tenancy with right of
survivorship or a partnership asset, the account must be construed
as a tenancy in common. Section 70-1-314, MCA. As such, each
holder of an interest in the account is entitled to a proportional
share of its proceeds. Therefore, the estate inherits Hillþs one-
half interest as his successor, while Louanne retains her one-half
share.
2. Did the District Court err in concluding that the
Inventory and Appraisement of Hillþs estate constituted a judicial
admission by Louanne that the disputed accounts were assets of
Hillþs probate estate?
As a second basis for determining that the disputed accounts
should be included in the estate, the District Court noted that
Louanne herself had acquiesced to such a result when she allowed
the accounts to be listed as estate property on the estate
inventory, which she then initialed. The District Court concluded
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that the signing and filing of the estate inventory was a judicial
admission by Louanne that the accounts were estate property. The
court deemed Louanne to be bound by this judicial admission,
barring her from later arguing that the accounts were not estate
property. For her part, Louanne contends that she did not
understand the legal consequences of moving the accounts from one
schedule to another within the estate inventory. She asserts that
she believed at the time that the change was made for tax purposes
only and that it would not affect her claimed ownership of the
accounts.
A "judicial admission" is "an express waiver made in court by
a party or his attorney conceding for the purposes of trial the
truth of some alleged fact." Kohne v. Yost (1991), 250 Mont. 109,
112, 818 P.2d 360, 362. (See also Blackþs Law Dictionary 48 (6th ed.
1990): "Judicial admissions are those made in court by a personþs
attorney for the purpose of being used as a substitute for the
regular legal evidence of the facts at the trial.") This Court,
however, has stated that judicial admissions need not necessarily
be made in court. Rather,
[j]udicial admissions may occur at any point during the
litigation process. They may arise during discovery,
pleadings, opening statements, direct and cross-
examination, as well as closing arguments.
Kohne, 818 P.2d at 362 (citation omitted).
In this case, however, the initialing and signing of the
inventory was not done in the course of litigation but, rather, in
the course of probate. The events which in this case gave rise to
litigation must not be confused with the litigation itself; they
are two separate and distinct events. Therefore, Louanneþs
initialing of the estate inventory cannot be considered a judicial
admission because it did not occur during the course of litigation.
There is, however, a statutorily-created conclusive
presumption which Phil argues may be applicable. Section 26-1-601,
MCA, provides in part:
The following presumptions are conclusive . . . (1) the
truth of a declaration, act, or omission of a party, as
against that party in any litigation arising out of such
declaration, act, or omission, whenever he has, by such
declaration, act, or omission, intentionally led another
to believe a particular thing true and to act upon such
belief.
Section 26-1-601(1), MCA. This is "the statutory codification of
the doctrine of equitable estoppel." Belehumeur v. Dawson
(D.Mont.1964), 229 F.Supp. 78, 86. Unlike the case law regarding
judicial admissions, the codified version of the equitable estoppel
doctrine does not require that the declaration, act, or omission
occur during litigation. Instead, it requires only that litigation
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arise out of the declaration, act, or omission. Equitable
estoppel, however, involves far more than the mere existence of a
declaration, act, or omission which gives rise to litigation.
Equitable estoppel requires the proof of six separate
elements:
1) There must be conduct, acts, language or silence
by the estopped party amounting to a representation or
concealment of facts;
2) these facts must be known to the estopped party
at the time of the conduct, or at least the circumstances
must be such that knowledge of them is necessarily
imputed to the estopped party;
3) the truth concerning these facts must be unknown
to the other party claiming the benefit of the estoppel
at the time they were acted upon;
4) the conduct must be done with the intention, or
at least with the expectation, that it will be acted upon
by the other party, or under circumstances that it is
both natural and probable that it will be acted upon;
5) the conduct must be relied upon by the other
party; and
6) the other party must in fact act upon it in such
a manner as to change the other partyþs position for the
worse.
Bache v. Owens (Mont.1996), P.2d , , 53 St.Rep. 1320,
1322-23 (citing Ducham v. Tuma (1994), 265 Mont. 436, 441, 877 P.2d
1002, 1006). Furthermore, "equitable estoppel is not favored and
will be sustained only upon clear and convincing evidence." Bache,
53 St.Rep. at 1322 (quoting Ducham, 877 P.2d at 1006).
In this case, Phil argues that estoppel is appropriate to
prevent Louanne from claiming the disputed accounts as her own,
given that she formerly allowed their inclusion in her fatherþs
probate estate. Equitable estoppel cannot apply, however, because
Phil, acting on behalf of the estate, failed to prove each and all
of the necessary elements. In particular, Phil has not shown that
the estate relied on Louanneþs representation to its detriment. In
addressing this element, Phil claims a detriment arising from his
agreement to pay one-half of the estate taxes if Louanne included
the accounts in the estate. This does not translate into a
detriment to the estate, however. If the disputed accounts are
excluded, the estate taxes will be reduced accordingly. Phil, as
personal representative and as an heir, may well have an obligation
to allocate the taxes due on the estate and to pay some portion
thereof. This obligation, however, is not dependent on the issue
of which specific assets are or are not included in the estate.
Phil also raises on appeal the applicability of the doctrine
of judicial estoppel. He acknowledges, however, that he "did not
plead or attempt to prove judicial estoppel" at the hearing before
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the District Court. It is well settled that this Court will not
hear an issue which is raised for the first time on appeal.
Rasmussen v. Lee (1996), 276 Mont. 84, 88, 916 P.2d 98, 100
(citation omitted). We therefore decline to address the possible
applicability of this separate but related doctrine.
Reversed and remanded for proceedings consistent with this
opinion.
/S/ WILLIAM E. HUNT, SR.
We Concur:
/S/ J. A. TURNAGE
/S/ JAMES C. NELSON
/S/ TERRY N. TRIEWEILER
/S/ KARLA M. GRAY
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