Oldham v. Oldham

Certiorari Granted, No. 32,001, November 4, 2009

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 2009-NMCA-126

Filing Date: September 11, 2009

Docket No. 28,493

DUSTIN OLDHAM,

Petitioner-Appellant,

v.

GLENDA OLDHAM,

Respondent-Appellee.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
William F. Lang, District Judge

Geer, Wissel & Levy P. A.
Maria García Geer
Robert D. Levy
Albuquerque, NM

for Appellant

Luebben, Johnson & Barnhouse LLP
Samuel D. Hough
Karl E. Johnson
Kelli J. Keegan
Los Ranchos de Albuquerque, NM

for Appellee

OPINION

GARCIA, Judge.

{1} Dustin Oldham (Son) appeals from the final order appointing his mother, Glenda
Oldham (Wife), as personal representative of the estate of his father, David Oldham

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(Husband). At the time of Husband’s death, Husband and Wife were involved in ongoing
divorce proceedings. Prior to the divorce proceedings, Husband had designated Wife as his
named personal representative and the beneficiary of his estate. NMSA 1978, Section 40-4-
20(B) (1993) provides that when one party to a pending divorce proceeding dies prior to the
entry of a final decree, the proceedings are to continue to conclusion as if both parties had
survived. As a result, a personal representative must be substituted to represent the interests
of Husband’s estate and the divorce proceedings are to continue.

{2} In this case, we must determine whether the district court erred by granting Wife’s
motion for partial summary judgment and by appointing Wife as personal representative of
Husband’s estate. In light of the divorce proceedings instituted before Husband’s death, we
hold that an inherent conflict of interest was created when the district court appointed Wife
to represent Husband’s estate against herself in the pending divorce proceedings.
Accordingly, we reverse and remand for the appointment of someone other than Wife as a
substitute personal representative or administrator to complete the pending divorce
proceedings pursuant to Section 40-4-20(B) before continuing the probate proceedings. We
further reverse the summary judgment determination in favor of Wife regarding the
controlling effect of Husband’s will and trust (the Will and Trust) and remand for further
proceedings.

BACKGROUND

{3} Husband and Wife were married for twenty-three years and had one child together.
In 2003, Husband was diagnosed with brain cancer. In early 2007, Husband became upset
regarding his marital relationship and expressed his desire to initiate divorce proceedings
against Wife. Husband then signed a letter of acknowledgment stating his desire to have
Son, acting as attorney-in-fact, assist him in initiating divorce proceedings against Wife. On
February 7, 2007, Husband filed a petition for divorce. Shortly thereafter, Wife filed a
motion to dismiss Husband’s petition for dissolution of marriage stating that Husband lacked
the competency to file for divorce. Husband died in May 2007 before any rulings were
issued in the pending divorce proceedings.

{4} In the probate proceeding following Husband’s death, Son filed an application for
informal appointment as personal representative of Husband’s estate. Wife subsequently
filed a counter application for formal appointment as personal representative. She also filed
a joint motion for summary judgment and motion to dismiss the petition for dissolution of
marriage. In her motions, Wife asserted that the district court was required to appoint her
as personal representative to administer Husband’s estate pursuant to Husband’s Will and
Trust. Son then filed a counter motion for summary judgment requesting that the district
court appoint him, as a matter of law, as personal representative to complete the divorce
proceedings pursuant to Section 40-4-20(B). The district court issued an order that
appointed Wife as personal representative of Husband’s estate, admitted the Will to probate,
validated the Trust, and found that Section 40-4-20(B) did not revoke, invalidate, or affect
the Will and Trust in the probate proceedings. This appeal followed.

DISCUSSION

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Appointment of Personal Representative

{5} We must address whether Wife was properly appointed to serve as the personal
representative of Husband’s estate. We review the district court’s statutory interpretation
and conclusions of law de novo. See Bell v. Estate of Bell, 2008-NMCA-045, ¶ 11, 143
N.M. 716, 181 P.3d 708 (reviewing statutory interpretation de novo); Alverson v. Harris,
1997-NMCA-024, ¶ 6, 123 N.M. 153, 935 P.2d 1165 (filed 1996) (reviewing de novo
whether the district court correctly applied the law to the facts).

{6} We look to our recent decision in Karpien for guidance regarding how to proceed
under Section 40-4-20(B) when one party to a pending divorce proceeding dies prior to the
entry of a final decree. Karpien v. Karpien, 2009-NMCA-043, 146 N.M. 188, 207 P.3d
1165. In Karpien, the husband and wife were involved in divorce proceedings when the wife
died intestate. Id. ¶ 1. Following the wife’s death, the district court appointed the wife’s
parents as personal representatives of her estate. Id. ¶ 2. On appeal, the husband asserted
that when one party to a pending divorce proceeding dies, the Uniform Probate Code
(Probate Code) prevails over Section 40-4-20(B), effectively abating the divorce proceedings
so that the surviving spouse is not prevented from receiving an inheritance. Karpien, 2009-
NMCA-043, ¶¶ 8, 10-11. Relying on Section 40-4-20(B), we rejected this argument.
Karpien, 2009-NMCA-043, ¶¶ 8-11. Section 40-4-20(B) provides:

[I]f a party to the action dies during the pendency of the action, but prior to
the entry of a [final] decree granting dissolution of marriage, separation,
annulment or determination of paternity, the proceedings for the
determination, division and distribution of marital property rights and debts
. . . shall not abate. The court shall conclude the proceedings as if both
parties had survived.

(Emphasis added.) Therefore, we held that in order to give effect to both Section 40-4-20(B)
and the Probate Code, the divorce proceedings must continue until conclusion before the
district court could address any limitations imposed by the Probate Code. Karpien, 2009-
NMCA-043, ¶¶ 8-11.

{7} In the present case, in order for the divorce proceedings to continue in accordance
with Section 40-4-20(B), a proper personal representative must be appointed to represent
Husband’s estate in the continuation of the proceedings. NMSA 1978, § 45-3-703(E) (1975)
(“[A] personal representative . . . has the same standing to sue and be sued . . . as his
decedent had immediately prior to death.”); Rule 1-025(A) NMRA (“If a party dies and the
claim is not thereby extinguished, the court may order substitution of the proper parties.”).
It is clear there is an inherent conflict of interest in having Wife serve as personal
representative of Husband’s estate. As personal representative, Wife would be obligated to
represent Husband, who is the opposing party in their divorce proceedings. Wife cannot
adequately represent the adverse interests of Husband while contemporaneously protecting
her own interests. Moreover, Wife’s repeated efforts to dismiss the pending divorce
proceedings filed by Husband exemplify the inherent conflict in this case. To ignore this
inherent conflict would result in an absurdity. Therefore, the district court erred by

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appointing Wife as personal representative of Husband’s estate since the pending divorce
proceedings must continue.

{8} Wife counters that regardless of the pending divorce proceedings, the district court
was correct in appointing her as personal representative of Husband’s estate pursuant to
NMSA 1978, Section 45-3-203(A)(1) (1975). Section 45-3-203(A)(1) provides that “a
person nominated by a power conferred in a will” has priority for appointment as personal
representative. Wife contends that the Will was not revoked when Husband filed the petition
for divorce and thus the district court was required, as a matter of law, to appoint her as
personal representative of Husband’s estate. It is premature at this stage of the probate
proceedings to address Wife’s argument regarding the validity of Husband’s Will. The
outcome of the pending divorce proceedings will determine whether the Husband’s Will is
valid and whether Wife is eligible for appointment as personal representative of Husband’s
estate. Once Wife’s status as a surviving spouse has been determined in the divorce
proceedings, the district court will then apply the Probate Code to administer Husband’s
estate. The following summary judgment analysis will clarify this issue in more detail.

Summary Judgment

{9} We must address whether the district court erred when it granted Wife’s motion for
partial summary judgment, admitted the Will to probate, and validated the Trust. Our recent
decision in Karpien highlighted the interrelationship between Section 40-4-20(B) and the
Probate Code. We must now review these additional issues of statutory construction de
novo. See Karpien, 2009-NMCA-043, ¶ 3. This case is procedurally unique from Karpien.
Based on Wife’s motion to dismiss, it remains unclear whether the divorce proceeding will
ultimately continue to conclusion. Consistent with the district court’s rulings, we will
analyze the Probate Code issues under the assumption that the divorce proceedings will
continue pursuant to Section 40-4-20(B).

{10} In Karpien, we evaluated the relationship between Section 40-4-20(B) and the
Probate Code, and we were able to harmonize the statutes so that each provision was given
effect. Karpien, 2009-NMCA-043, ¶¶ 4-12, 18 (“We have an obligation to read and construe
‘statutes [that] appear to conflict, . . . if possible, to give effect to each.’” (alterations in
original) (quoting NMSA 1978, § 12-2A-10(A) (1997))). Section 40-4-20(B) requires that
“marital property rights and debts shall not abate and shall be concluded as if both parties
had survived.” Karpien, 2009-NMCA-043, ¶ 9 (internal quotation marks omitted). As a
result of the conclusion of the divorce proceedings and the entry of a judgment or decree
terminating all property rights pursuant to Section 40-4-20(B), we determined that the
husband was “precluded from being considered a ‘surviving spouse’ for purposes of
inheritance or allowances under probate law.” Karpien, 2009-NMCA-043, ¶ 10 (construing
the definition of a surviving spouse under NMSA 1978, Section 45-2-802(B)(3) (1995)).
As a result, the husband was not a surviving spouse and could not inherit from the wife
under the Probate Code. This Court refused to “interpret the relevant [provisions of the
Probate Code] to effectively repeal the provisions of Section 40-4-20(B).” Karpien, 2009-
NMCA-043, ¶ 11.

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{11} The present case requires us to expand upon the analysis set forth in Karpien and to
address how previously executed governing instruments, specifically the Will and Trust, are
affected by the entry of a judgment or decree terminating all property rights pursuant to
Section 40-4-20(B). See N.M. Mining Ass’n v. N.M. Water Quality Control Comm’n, 2007-
NMCA-010, ¶ 12, 141 N.M. 41, 150 P.3d 991(filed 2006), (stating that statutes must be read
in pari materia so as to “facilitate[] the operation of the statute[s] and the achievement of
[their] goals”). In determining how to proceed when a party to a pending divorce dies
testate, we must analyze NMSA 1978, Section 45-2-804 (1995), which controls the effect
of a divorce upon any previously executed governing instruments. See § 45-2-804(A)(4)
(defining a governing instrument as an “instrument executed by the divorced individual
before the divorce or annulment of his marriage to his former spouse”). In addition, NMSA
1978, Section 45-2-508 (1993) recognizes that the change of circumstances set forth in
Section 45-2-804 are sufficient to revoke a will or any part of it. The district court accepted
Wife’s argument that only a final decree of divorce meets the required definition to revoke
a governing instrument under the Probate Code. The district court concluded that because
a judgment or decree dividing marital property and debts entered pursuant to Section 40-4-
20(B) did not amount to a “decree of divorce” it did not affect the surviving party’s right to
property pursuant to a probated will. We disagree with this interpretation of the Probate
Code. A judgment or decree terminating all property rights pursuant to Section 40-4-20(B)
meets the definition of a divorce pursuant to Section 45-2-804(A)(2) and is sufficient to
revoke governing estate planning instruments pursuant to Section 45-2-804(B)(1)(a).

{12} Divorce or annulment under Section 45-2-804(A)(2) is defined as “any divorce or
annulment or any dissolution or declaration of invalidity of a marriage that would exclude
the spouse as a surviving spouse [under] Section 45-2-802[.]” (Emphasis added.) Pursuant
to Section 45-2-802(B)(3), “an individual who was a party to a valid proceeding concluded
by an order purporting to terminate all marital property rights, including a property division
judgment entered pursuant to the provisions of Section 40-4-20” does not constitute a
surviving spouse. (Emphasis added.) Thus, a judgment or decree issued pursuant to Section
40-4-20(B) excludes the surviving party from being defined as a surviving spouse under
Section 45-2-802. See Karpien, 2009-NMCA-043, ¶ 10. The determination that a party is
not a surviving spouse is then applied pursuant to Section 45-2-804(A)(2) to define the term
“divorce.” The Section 40-4-20(B) proceeding ultimately determines whether the parties are
defined to be divorced under Section 45-2-804. Consequently, a surviving wife in a divorce
proceeding would be precluded from receiving any distribution as a surviving spouse under
the deceased husband’s governing instruments.

{13} Under Section 45-2-802(B)(3), Wife will be precluded as a surviving spouse if there
is a judgment or decree entered that terminates all marital property rights pursuant to Section
40-4-20(B). In addition, such a judgment or decree would serve to revoke all governing
instruments pursuant to Section 45-2-804(B)(1)(a). If Husband’s Will and Trust are
revoked, Wife will have no interest in Husband’s estate as a surviving spouse. Based on the
facts of this case, the district court erred by prematurely adjudicating the validity of the Will
and Trust and by prematurely admitting the Will to probate prior to the completion of the
pending divorce proceedings.

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{14} Wife presents other arguments as to why we should affirm the district court’s
decision to admit the Will to probate and to appoint her as personal representative of
Husband’s estate. Relying on our Supreme Court’s decision in Romine v. Romine, 100 N.M.
403, 671 P.2d 651 (1983), Wife argues that the pending divorce proceedings should be
dismissed because Husband’s death dissolved the marital relationship and stripped the
district court of jurisdiction to terminate the marriage. Wife’s reliance on Romine is
misplaced. In Romine, our Supreme Court held that “the [husband’s] death dissolved the
marital relationship, rendering the questions presented in [the wife’s] suit moot[,] . . . leaving
the court without jurisdiction.” Id. at 404, 671 P.2d at 652. The determination in Romine
was consistent with the recognized common-law rule that death effectuated an abatement of
the divorce proceedings. In 1993, “[t]he New Mexico Legislature . . . made a clear break
from the majority of jurisdictions by enacting Section 40-4-20(B).” Karpien, 2009-NMCA-
043, ¶ 7. Therefore, Romine has been superceded by the Legislature’s enactment of Section
40-4-20(B), which now requires that the divorce proceedings continue to conclusion “as if
both parties had survived.” See Karpien, 2009-NMCA-043, ¶ 5. We further reject Wife’s
remaining arguments because they are contrary to the legislative intent that divorce
proceedings continue to their conclusion under Section 40-4-20(B) and contradict our
holding in Karpien.

CONCLUSION

{15} Based on the inherent conflict that exists if Wife serves as personal representative
of Husband’s estate, we reverse the appointment of Wife as personal representative of
Husband’s estate and remand to the district court to appoint a substitute personal
representative or other administrator to complete the pending divorce proceedings. We
further reverse the district court’s premature decision to grant Wife’s motion for partial
summary judgment, to admit the Will to probate, and to validate the Trust.

{16} IT IS SO ORDERED.

____________________________________
TIMOTHY L. GARCIA, Judge

WE CONCUR:

____________________________________
MICHAEL D. BUSTAMANTE, Judge

____________________________________
RODERICK T. KENNEDY, Judge

Topic Index for Oldham v. Oldham, No. 28,493

AE APPEAL AND ERROR
AE-RM Remand

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CP CIVIL PROCEDURE
CP-SJ Summary Judgment

DR DOMESTIC RELATIONS
DR-DM Dissolution of Marriage

WL WILLS, TRUSTS AND PROBATE
WL-AE Administration of Estate
WL-CM Competence
WL-HR Heir
WL-PR Personal Representative
WL-PL Probate Law, General
WL-WC Will Contest

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