Dowling v. Rowan

Present: All the Justices

DANIEL J. DOWLING,
EXECUTOR OF THE ESTATE
OF WILMA P. DOWLING

v. Record No. 050181 OPINION BY JUSTICE DONALD W. LEMONS
November 4, 2005

VIVIANNE FRANCOISE
PELLETIER ROWAN, ET AL.

FROM THE CIRCUIT COURT OF ARLINGTON COUNTY
William T. Newman, Jr., Judge

In this appeal, we consider whether a premarital

agreement constituted a waiver of the surviving spouse’s

claims for a statutory elective share of the decedent spouse’s

estate, family allowance, and to exempt property, and whether

the surviving spouse claiming an elective share is entitled to

attorney’s fees.

I. Facts and Proceedings Below

On July 10, 1993, Daniel Dowling (“Dowling”) and his

future wife, Wilma, entered a premarital agreement (“the

Agreement”). The Agreement stated in prefatory language that

“[t]he purpose of this Agreement is to settle the rights and

obligations of each of them, during their marriage, upon the

death of either or both of them, or in case of dissolution of

the marriage.” In paragraph nine of the Agreement, they

agreed “[t]he property currently belonging to each party and

titled in his or her name shall remain his (her) separate

1
property.” Both of them came into the marriage with

significant assets that were listed in appendices to the

Agreement.

During their marriage, Wilma established the Wilma P.

Dowling Revocable Trust (“Revocable Trust”), the Wilma P.

Dowling Irrevocable Life Insurance Trust (“Insurance Trust”),

and executed a Last Will and Testament (“will”) that devised

her tangible personal property to her husband, Dowling, except

for “that tangible personal property identified in our

Prenuptial Agreement” which was devised to Wilma’s daughter by

a former marriage, Vivianne Rowan (“Rowan”).

After Wilma’s death, her will was submitted to probate

and Dowling qualified as Executor of her estate in accordance

with the will. Thereafter Dowling timely filed claims for an

elective share of Wilma’s augmented estate, family allowance

of $18,000, and exempt property valued at $15,000. Dowling

also claimed reimbursement of expenses related to

administering the estate, funeral expenses, his Executor’s

commission, and attorney’s fees, which brought the total sum

of his claims to $371,678. Rowan opposed all of Dowling’s

claims.1 Dowling is an attorney licensed in Virginia and he

represented himself in the elective share litigation.

1
Rowan answered in her personal capacity, as Trustee of
the Insurance Trust, and as Co-Trustee of the Revocable Trust.

2
 The trial court submitted the matter to a commissioner in

chancery whose report concluded that the Agreement is

unambiguous and constituted a waiver of any claims upon the

property listed in the Agreement. After reviewing Dowling’s

exceptions to the commissioner’s report and hearing argument

ore tenus from the parties, the trial court overruled

Dowling’s exceptions and entered a decree consistent with the

commissioner’s findings of fact and conclusions of law.

In calculating Dowling’s elective share, the trial court

listed the items to be included and excluded from the

augmented estate. Included were several bank accounts,

jointly owned property, and tangible personal property not

listed in the Agreement. The court excluded all real and

personal property listed in the Agreement, certain real

property located in Peru, the proceeds of Wilma’s life

insurance policies, and the value of benefits conferred upon

Dowling under the Revocable Trust. The value of the property

included in the augmented estate was $63,893. This amount was

reduced by $44,606, the total amount of funeral expenses,

various fees, and costs for administration of the estate.2 The

2
The trial court granted Dowling’s claims for
reimbursement for expenses including $8,604 for costs of
administration of the estate, $15,439 for funeral expenses,
and $13,922 for legal fees related to administration of the
estate, and $6,641 for accountant fees.

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remaining amount, $19,287, was the value of the augmented

estate as determined by the trial court.

Pursuant to the trial court’s conclusions, Dowling’s

elective share, one-third of the augmented estate, was $6,429.

Since Dowling had already received assets from the estate

totaling $52,806, and those assets must be deducted from the

elective share, the trial court held that the estate would owe

nothing to Dowling. The court denied Dowling’s claim for

attorney’s fees and costs relating to the elective share

litigation.

Dowling, proceeding pro se, appeals the trial court’s

final order and maintains that the trial court erred in

calculations of the augmented estate in its (i) exclusion of

items listed in the Agreement, (ii) exclusion of the Peruvian

properties, and (iii) exclusion of the life insurance

policies. Dowling also claims that the trial court erred in

its denial of attorney’s fees for his elective share

litigation.

II. ANALYSIS

A. Property excluded from the augmented estate

1. Property listed in the Agreement

Parties to a premarital agreement can contract with

respect to disposition of property upon separation, marital

dissolution, death, or any other event. Code § 20-150. See

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Code § 64.1-151.6 (a surviving spouse’s rights to family

allowance, exempt property, and homestead allowance can be

waived by premarital agreement). Premarital agreements “are

contracts subject to the rules of construction applicable to

contracts generally.” Pysell v. Keck, 263 Va. 457, 460, 559

S.E.2d 677, 678 (2002).

On appeal, we review a trial court's interpretation of

the contract de novo. Wilson v. Holyfield, 227 Va. 184, 188,

313 S.E.2d 396, 398 (1984) (“We have an equal opportunity to

consider the words of the contract within the four corners of

the instrument itself”). Where contracts are “plain upon their

face, they are to be construed as written, and the language

used is to be taken in its ordinary significance unless it

appears from the context it was not so intended. They are to

be construed as a whole.” Virginian Ry. Co. v. Hood, 152 Va.

254, 258, 146 S.E. 284, 285 (1929); accord State Farm Ins. Co.

v. Justis, 168 Va. 158, 167, 190 S.E. 163, 167 (1937); J.M.

Turner & Co. v. Delaney, 211 Va. 168, 172, 176 S.E.2d 422, 425

(1970).

In this case, we revisit the issue that was before us in

Pysell and determine whether this particular premarital

agreement operates as a waiver of the surviving spouse’s

rights to property in the decedent’s estate. In Pysell, we

held that no such waiver existed in the premarital agreement

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because “nowhere . . . do we find a reference to either

party’s rights in the property of the estate of the other.”

263 Va. at 460, 559 S.E.2d at 679 (construing a premarital

agreement to apply only while the parties were living). This

case is different.

The plain language of the Agreement in this case contains

an express waiver of rights to specific property of the

decedent upon death. The Agreement sets forth in prefatory

language that “[t]he purpose of this Agreement is to settle

the rights and obligations of each of them, during their

marriage, upon the death of either or both of them, or in case

of dissolution of marriage.” (Emphasis added.) The explicit

reference to rights “upon the death” is precisely the language

that was lacking in Pysell.

Furthermore, there is an implicit reference to survivor’s

rights in paragraph five, which states:

Each party fully understands that, in the
absence of this Agreement, the law would
confer upon him or her certain property
rights and interests in the assets and
property owned by the other, and it is the
intent of each party, by this Agreement, to
relinquish certain of such property rights
and interests in such assets as specified
herein.

Many property rights may arise by operation of law upon

marriage. Lacking any language to the contrary, and

considering the stated purpose of the Agreement, we hold that

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the foregoing language refers to all property rights accrued

during the marriage, including a surviving spouse’s rights to

an elective share, family allowance, and exempt property. The

trial court did not err in holding that "[Dowling's] claims to

elective share, family allowance and exempt property in

Decedent's separate property listed in the appendices of the

Premarital Agreement are denied as being barred by the terms

of the Premarital Agreement . . . executed by Petitioner and

Decedent prior to their marriage.”3

However, Dowling did not completely waive his

survivorship rights by executing the Agreement. Rather,

paragraph five limits the waiver to “certain of such property

rights and interests in such assets as specified herein.”

(Emphasis added.) Under paragraph seven, each item of

individually owned property is listed in the two appendices of

the Agreement. Consequently, the waiver pertains only to a

specific list of property. This interpretation is supported

by paragraph nine wherein the parties agreed that “[t]he

property currently belonging to each party and titled in his

or her name shall remain his (her) separate property.” This

language does not conflict with any other portion of the

3
As expressed in the Assignments of Error, the claims for
family allowance and exempt property are made only against
"Wilma's separate property listed in the appendices of the
Premarital Agreement."

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Agreement. In fact, it appears to accord perfectly with the

stated intent in paragraph five to “relinquish” certain rights

in the property of the other.

This court is duty bound to construe a contract as a

whole, considering every word and every paragraph, if there is

a sensible construction that can be given. E.g., State Farm,

168 Va. at 167, 190 S.E. at 167; J.M. Turner & Co., 211 Va. at

172, 176 S.E.2d at 425. Read together, the quoted portions of

the Agreement establish that (i) the Agreement applies upon

death, (ii) it pertains to certain rights in certain assets

specified therein, and (iii) separate property is to remain

separate. There is no conflicting language within the four

corners of the Agreement.

We agree with the trial court that the Agreement

constituted a waiver of rights in the property designated as

“separate property” under the Agreement. Accordingly,

Dowling’s claims to elective share, family allowance, and

exempt property cannot be satisfied using any property listed

in the appendix to the Agreement.4

4
Dowling raises an additional argument seeking
satisfaction of his elective share from property bequeathed to
Rowan. He cites Joint Admission No. 21 which states:
“[Dowling] is entitled to property specifically bequeathed or
devised to Ms. Rowan in order to satisfy his elective share.”
Dowling makes much of the fact that, under Rule 4:11(b), the
admission would be conclusively established for the purposes
of the trial court proceeding. We agree with Dowling’s

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 2. Real property in Peru

At the time of her death, Wilma held a remainder interest

in various real properties located in Peru that she acquired

by intestate succession. This property is not listed in the

Agreement. Wilma acquired this interest after she was married

to Dowling. The trial court excluded the value of these

properties from the augmented estate pursuant to Code § 64.1-

16.1(B)(ii) which directs exclusion of property from the

augmented estate which is “received by the decedent by gift,

will, intestate succession . . . to the extent such property,

income or proceeds were maintained by the decedent as separate

property.” The question before us is whether Wilma

“maintained” this property as separate property.

The construction of a statute is a question of law which

we review de novo. Wilby v. Gostel, 265 Va. 437, 440, 578

S.E.2d 796, 798 (2003); Ainslie v. Inman, 265 Va. 347, 352,

577 S.E.2d 246, 248 (2003). We are bound by the plain meaning

of the words used “unless a literal interpretation would

result in a manifest absurdity.” Horner v. Dep’t of Mental

argument regarding the effect of an admission, however it is
irrelevant to the issues before us. The trial court
calculated that Dowling’s elective share was a mere $6,429,
and the amount was offset by Dowling’s receipt of assets from
the estate valued at $52,806. See Code § 64.1-16.2(A). Since
Dowling’s elective share was more than satisfied by property
already received, there is no issue regarding satisfaction of
elective share from property listed in the appendices.

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Health, 268 Va. 187, 192, 597 S.E.2d 202, 204 (2004). Accord

In re: Gordon E. Hannett, 270 Va. 223, 233, 619 S.E.2d 465,

469 (2005).

Dowling urges this Court to require physical repair or

maintenance upon the property to consider it “maintained as

separate” under the statute. We disagree. The properties at

issue were located in Peru and Wilma’s relatives who held a

similar interest occupied several of the properties. It would

be manifestly absurd to require that Wilma travel to another

country, enter upon land occupied by another person, and

perform physical improvements as an act of “maintenance” in

order to retain the “separate” nature of the property.

Looking to the context of the word “maintain” in the

statute, the language does not refer to physical maintenance

of “property,” “income” or “proceeds.” Code § 64.1-

16.1(B)(ii). Rather, the language of the statute refers to

keeping a legal interest in the property separate.

At times we consider statutes relating to the same

subject matter to help provide meaning to the statute before

us. See Turner v. Commonwealth, 226 Va. 456, 459-60, 309

S.E.2d 337, 338 (1983). There is ample authority on the

matter of separate property within domestic relations law.

The equitable distribution statute defines separate property

to include “all property acquired during the marriage by

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bequest, devise, descent, survivorship or gift from a source

other than the other [spouse].” Code § 20-107.3(A)(1)(ii).

Such property will retain its “separate” status for purposes

of equitable distribution unless one of several circumstances

transmutes the nature of the property, such as commingling

separate assets with marital assets or retitling the property

in the joint names of the spouses. Code § 20-107.3(A)(3)(d),

(e), and (f). Since the primary purpose of the equitable

distribution statute is to provide a fair manner for

classifying assets accumulated during a marriage, we find that

this body of law is sufficiently analogous to the issue at

hand to inform our decision.

Dowling did not argue that Wilma took any action, such as

commingling or retitling, which would defeat the separate

status of her remainder interest in the Peruvian properties.

In fact, Dowling emphatically argued that Wilma did nothing

with regard to these properties. On this basis we conclude

that Wilma’s interest in the Peruvian properties was

maintained as separate and the trial court properly excluded

the value of these properties from the augmented estate.

3. Life insurance policies

Wilma owned two life insurance policies that were not

listed in the Agreement. Three years before her death, Wilma

established an irrevocable life insurance trust, transferred

11
the policies to the trust, and named her daughter as

beneficiary of the trust. The policies had no investment or

“cash” value on the date of transfer.5

A life insurance policy subject to the decedent’s control

on the date of an irrevocable transfer is treated as

“property” within the augmented estate statute. Code § 64.1-

16.1(D). Property transferred to a third party donee within

five years prior to death will be included in the augmented

estate to the extent that the transferred value exceeds

$10,000 in the calendar year of transfer. Code § 64.1-

16.1(A)(3)(d). The party seeking inclusion of property in the

augmented estate under Code § 64.1-16.1(A) has the burden of

proof. Chappell v. Perkins, 266 Va. 413, 418, 587 S.E.2d 584,

587 (2003). Accordingly, Dowling has the burden to show that

the value of the life insurance policies exceeded $10,000 in

the calendar year they were transferred.

Valuation of a life insurance policy is governed by Code

§ 64.1-16.1(C)(2), which states that

[t]he value of an insurance policy that is
irrevocably transferred during the lifetime of a
decedent is the cost of a comparable policy on
the date of transfer or, if such a policy is not
readily available, the policy's interpolated
terminal reserve.

5
The Midland National Life Insurance policy was a
“graded” whole life policy with no cash value until Wilma
reached 80 years of age. The Garden State Life Insurance
policy was a term life policy with no cash value.

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 The evidence offered by Dowling does not satisfy his

burden. Dowling maintains that evidence of a “comparable

policy” is not available for the date of transfer, and there

was no interpolated terminal reserve. Dowling urges the Court

to recognize the “full proceeds of the existing policies” as

the appropriate measure of value. Were we to adopt Dowling's

position, it would effectively rewrite the plain language of

Code § 64.1-16.1(C). “Where the General Assembly has

expressed its intent in clear and unequivocal terms, it is not

the province of the judiciary to add words to the statute or

alter its plain meaning.” Jackson v. Fidelity & Deposit Co.,

269 Va. 303, 313, 608 S.E.2d 901, 906 (2005).

Moreover, we think it is self evident that the value of a

term life insurance policy upon transfer before death of the

named insured is not the full death benefit. Having rejected

Dowling's position that the value of the policies is the face

value of the death benefit, the only remaining evidence in the

record is that offered by Rowan which is the annual premiums

in the year of transfer, a sum far less than $10,000.

Consequently, Dowling has failed to prove the $10,000

threshold to trigger the “pull back rule” in the statute. We

hold that upon this record the life insurance policies were

properly excluded from the augmented estate.

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 B. Attorney’s fees

The trial court awarded Dowling $13,922 in legal fees

related to the administration of the estate, but denied his

claim for legal fees related to the elective share litigation.

Dowling argues that the trial court erred in denying his claim

for attorney’s fees related to the elective share litigation.

We adhere to the “American rule” which embodies the

principle that each litigant must pay his own attorney’s fees

in the absence of a statute or contractual provision that

would shift the burden of payment to the unsuccessful party.

E.g., Lee v. Mulford, 269 Va. 562, 565, 611 S.E.2d 349, 350

(2005); Mullins v. Richlands Nat’l Bank, 241 Va. 447, 449, 403

S.E.2d 334, 335 (1991). In Virginia, there is no statutory

basis for an award of attorney’s fees to the surviving spouse

in elective share litigation.

Dowling attempts to get around this problem by arguing

that his elective share litigation will help resolve questions

that must necessarily be answered “to properly settle” the

estate. He relies upon Code § 26-30 to support his claim

which states that the commissioner “shall allow the fiduciary

any reasonable expenses incurred by him as such.” In

construing this statute, we have held that reasonable expenses

can be paid out of the estate when the fiduciary, in execution

of his duties, proceeds in good faith and the aid of counsel

14
is reasonably necessary for performance of the fiduciary’s

duties. Clare v. Grasty, 213 Va. 165, 170, 191 S.E.2d 184,

188 (1972) (partially denying appellant’s claims to attorney’s

fees for those portions of his litigation that were

detrimental to the estate). Dowling’s reliance upon this Code

section and our holding in Clare is misguided.

In Clare, we specified that attorney’s fees will not be

awarded to an executor whose litigation seeks to frustrate the

testator’s expressed wishes. 213 Va. at 171, 191 S.E.2d at

188-89. In this case, Dowling's personal interests are

adverse to those of the estate, to which, as a fiduciary, he

owes a duty of utmost fidelity. See Pritchett v. First Nat’l

Bank of Danville, 195 Va. 406, 412, 78 S.E.2d 650, 653 (1950)

(fiduciaries have the duty to exercise “the highest fidelity”

and “utmost good faith” in how they deal with an estate). Our

opinion in O’Brien v. O’Brien, 259 Va. 552, 526 S.E.2d 1

(2000) is particularly instructive on this point. There, two

brothers who were co-executors of their deceased mother’s

estate sued the third brother, in his individual capacity and

as co-executor, to collect a debt to the estate. O’Brien, 259

Va. at 554, 626 S.E.2d at 2. We approved the trial court’s

ruling which granted attorney’s fees to the co-executors who

sued on behalf of the estate to recover the debt and denied

attorney’s fees for the defendant brother. Id. at 557-58, 526

15
S.E.2d at 4. We reasoned that the defendant’s attorney’s fees

“were incurred for his personal benefit and not to benefit the

estate or to aid him in his duties as executor.” Id. The

critical distinction in O’Brien among the brothers was based

upon function, not form, with regard to the interests of the

estate.

Such is the case here. Dowling’s attempt to characterize

his elective share litigation as “necessary” to settle the

estate confuses his function as Executor with his personal

interests. The only issues that need settling are those

created by Dowling. Certainly he has a right to pursue his

elective share litigation but he is not entitled to be

compensated from the estate for doing so.

Because the purpose of Dowling’s elective share claim is

easily distinguishable from his duties as Executor of the

estate, the trial court properly granted Dowling the fees for

administration of the estate while denying his claim for fees

related to the elective share litigation.

III. CONCLUSION

Based on the foregoing reasons, the trial court did not

err in its ruling regarding the property to be included in the

augmented estate or its holding regarding claims of elective

share, family allowance, or exempt property. Further the

16
trial court did not err in denying attorney’s fees to Dowling.

We will affirm the judgment of the trial court.

Affirmed.

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