Walton v. Davy

BISHOP, Judge. Appellant, Charles Walton, personal representative of the estate of Nancy Davy, filed an election on behalf of Nancy Davy to take the surviving spouse’s intestate share of the estate of the decedent’s husband, Myron Davy, pursuant to Md.Est. & Trusts § 3-203(a) Code Ann. (1990). In the alternative, if the court found that the election was barred by Md.Est. & Trusts § 3-204 Code Ann. (1974), appellant filed a claim against the estate of Myron Davy which alleged conflicts of interest by Walter Davy, its personal representative, and Hyman Rubin, Esq., its attorney of record. Following a bench trial, the election and the claim against the estate of Myron Davy were disallowed by the Circuit Court for Montgomery County sitting as the Orphans’ Court for Montgomery County. 1 ²⁷⁹ ISSUES Appellant presents five issues on appeal which we have re-ordered and consolidated as follows: I. Whether the attorney for the estate of Myron Davy is a party within the meaning of the Dead Man’s Statute, Md.Cts. & Jud.Proc.Code Ann. § 9-116 (1989); II.

Whether Hyman Rubin’s status as the attorney of record for the estate of Myron Davy, and his prior representation of Walter Davy in a divorce case, amounted to a conflict of interest with the interests of Nancy Davy such that Hyman Rubin’s advice to Nancy Davy concerning her spousal rights would void her election not to file a request for her intestate share and thus permit the court to direct or permit a spousal election by the personal representative of her estate; III. Whether Walter Davy improperly influenced Nancy Davy not to file a request for her intestate share and thus permit the court to direct or permit a spousal election by the personal representative of her estate; and IV. Whether there was failure of notice to Nancy Davy of the probate proceedings and, if so, whether such failure of notice will permit the court to direct or permit a spousal election by the personal representative of her estate. FACTS Myron and Nancy Davy (Myron and Nancy) died approximately three months apart in 1988.

No children were born of their marriage, but each had children from a previous marriage. Myron had two sons, Charles and Walter Davy, and Nancy had one son, Charles Walton. Both Myron and Nancy had considerable personal estates. At the time of his death on September 13, 1988, Myron left a gross estate valued at almost $2.4 million.

Myron’s principal assets were properties located in Washington, D.C. and Virginia, and stock in Boulevard Housing Corporation (BHC), a closely-held corporation of which he was the ²⁸⁰ president. BHC’s principal business was the rental of residential and commercial real estate in Washington, D.C. At the time of Myron’s death, the BHC stock was owned by Myron (263) shares, Nancy (180) shares, Walter (297) shares and Charles Davy (160) shares. In 1978, Myron and Nancy executed separate wills prepared by attorney Clarence Keiser. Nancy’s will bequeathed her tangible personal property to Myron and the remainder of her estate to her son, Charles Walton, if Myron survived her.

If Myron did not survive her, Nancy’s will bequeathed half of her estate to Charles Walton and one quarter each to Myron’s children, Charles and Walter Davy. Charles Walton was nominated to be personal representative. Myron’s will bequeathed approximately half his estate and all his tangible personal property to Nancy, one-fifth of the residuary to Nancy’s son, Charles Walton and two-fifths of the residuary each to Myron’s children, Walter and Charles Davy. Walter Davy was nominated to be personal representative.

At the time of the execution of these wills the estimated value of Nancy’s estate was $500,000.00 and the value of Myron’s estate was estimated at $750,000.00. In 1984, Nancy became ill and permanently bedridden. Nonetheless, she remained mentally alert until her death on December 20, 1988. There was testimony, however, that she became increasingly weak during the last few weeks of her life.

In 1985, Myron executed a new will which was again prepared by Keiser. He bequeathed his properties in Washington, D.C. and his stock in BHC to his son, Walter, his tangible personal property to Nancy, if she survived him, and equal shares of the residuary of his estate to his two sons, Charles and Walter Davy. Walter was again nominated to be personal representative. Keiser also prepared codicils to Walter and Nancy’s wills that created identical trust funds for their servants.

Keiser did not inform Nancy about Myron’s new will. ²⁸¹ In 1988, Myron executed a second codicil which was prepared by attorney Hyman Rubin. Rubin had done legal work for BHC from 1962 to 1984, and was a family friend on a first name basis with Myron, Nancy and Walter. Most of Rubin’s work for BHC concerned landlord and tenant matters, real property issues and dealings with various departments of the District of Columbia government. Rubin also handled Walter’s divorce during 1981-82.

Myron’s second codicil bequeathed to Walter three properties located in McLean, Virginia and all indebtedness due to Myron from BHC. At Myron’s death, Walter qualified as personal representative and Rubin became the attorney of record for the estate. Walter informed Nancy of the terms of Myron’s 1985 will and 1988 codicil and advised her that she could elect to take one third of Myron’s estate, pursuant to Md.Est. & Trusts Code Ann. § 8-203 (1990), instead of the tangible personal property bequeathed to her under the will. At about the same time, Walter retrieved Nancy’s will from the house safe and learned that she had bequeathed one quarter of her estate to Mm and his brother, Charles.

He suggested that she change her will to be more beneficial to her son, Charles Walton. She agreed and asked that Rubin prepare her new will. Her final will created a trust for her servants, bequeathed her BHC stock to Walter and bequeathed the residuary of her estate, both real and personal, to Charles Walton. Rubin reviewed each paragraph of the will with Nancy before she signed it.

During the time that Rubin was preparing Nancy’s final will, he discussed with Nancy her spousal right of election against Myron’s estate on two occasions. Rubin discussed with Nancy the approximate value of her and Myron’s estates. He told Nancy that she had a right to take her intestate share of Myron’s estate, which was larger than her testate share. Rubin also stated that he was very familiar with the procedure for filing an election against an estate, because he had done one previously and, if she desired, he would prepare an election for her.

Rubin testi ²⁸² fied that he did not prepare such an election because Nancy did not want her intestate share, as she had more than enough assets to take care of her for the rest of her natural life. Rubin testified that at the time of these discussions with Nancy, she knew that he was the attorney of record for Myron’s estate. Walter witnessed a significant portion of these conversations, but Rubin testified that even when Walter was present, the conversations were only between Rubin and Nancy. Nancy never filed an election to take her intestate share.

At the time of her death, Nancy’s estate was valued in excess of $3.2 million. Discussion Md.Rule 8-131(c), which is derived from former Rules 1086 and 886, provides that where an action is tried without a jury, “[we] will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses.” If there is any evidence legally sufficient to support the court’s findings, they are not clearly erroneous, for the weight of the evidence is a question for the court, sitting as the finder of fact. Weisman v. Connors, 76 Md.App. 488, 500 , 547 A.2d 636 (1988), cert. denied, 314 Md. 497 , 551 A.2d 868 1989); Kline v. Chase Manhattan Bank, 43 Md.App. 133, 141-2 , 403 A.2d 395 cert. denied, 286 Md. 749 (1979); Staley v. Staley, 25 Md.App. 99, 110 , 335 A.2d 114 cert. denied, 275 Md. 755 (1975). In the case sub judice, the circuit court addressed appellant’s claims of conflict of interest and undue influence under the general category of fraud.

The standard for fraud relied on by the court in its order was as follows: “A pleading setting up fraud or deceit as a basis for recovery must allege clearly and distinctly all of the essential elements of actionable fraud. Thus it must show that defendant made a representation with respect to a material fact; that such representation was made with knowledge of its falsity or with reckless disregard ²⁸³ for its truth or falsity; that it was made for the purpose of defrauding Plaintiff; that Plaintiff had a right to rely on it in the full belief of its [truth] and that it was acted upon by Plaintiff to his damage. See Maryland Law Encyclopedia, Volume 11, Fraud Section 22 and cases cited therein.” The court determined that appellant clearly did not establish fraud and made the following findings: 1. Following her husband’s death and until her own death Nancy Davy was physically partially disabled but there was no evidence of any mental incompetence.

She had nurses in the house but it was not necessary for them to be in her room all the time. Oxygen was taken through a tube, not a mask. She read mail, watched TV, signed checks, talked on the telephone, and carried on intelligent conversations with those around her. There was absolutely no credible testimony that Nancy Davy was in any way mentally incapacitated. 2.

Setting aside the general rule that all are presumed to know and take notice of the law, Nancy Davy was informed specifically of her spousal rights of election on at least three occasions. First by her step-son, Walter Davy[,] and on two subsequent occasions by attorney Hyman Rubin. Mr. Rubin had had a long business and personal relationship with Mrs. Davy. 3. Nancy Davy had a substantial estate in her own right, valued in excess of $3.2 million at her death.

If inferences are to be made about why Mrs. Davy did not elect to take her spousal share under the estate of her late husband, it is perfectly feasible to infer that she did so because of her own substantial estate and there was no need for her to make such an election. 4. Hyman Rubin, Esq.[,] who prepared Mrs. Davy’s final will at her own request[,] acted at all times in a professional and responsible manner. The court finds that Mr. Rubin did in fact inform Mrs. Davy of her spousal rights, that he informed her properly insofar as ²⁸⁴ what he told her was accurate, and finally that the act of informing her at all was neither improper nor irregular. 5. Walter W. Davy neither urged Nancy B. Davy to write a new will in which he was named sole legatee of stock owned by her in Decedent’s closely held business, Boulevard Housing Corporation, nor did he misinform her or fail to inform her concerning her spousal rights.

Walter W. Davy impressed the Court as a man of high integrity and truthfulness. Clearly, Walter W. Davy was responsible for the vast majority of the work of developing and overseeing Boulevard Housing Corporation and there is absolutely nothing in the record from which one could make a finding that Nancy B. Davy in recognition of that long service to the corporation would not have rewarded Mr. Davy for his work as she in fact did in her last will. We affirm the decision of the court, but for reasons other than those relied on by the court. See Robeson v. State, 285 Md. 498, 502 , 403 A.2d 1221 (1979), cert. denied, 444 U.S. 1021 , 100 S.Ct. 680 , 62 L.Ed.2d 654 (1980); Offutt v. Montgomery County Bd. of Educ., 285 Md. 557, 563 , 404 A.2d 281 (1979) and Burwell v. Easton Memorial Hosp., 83 Md.App. 684, 691 , 577 A.2d 394 (1990).

The findings of the court remain relevant to our decision and will not be disregarded unless they are clearly erroneous. I. Appellant contends that Rubin’s testimony, which related statements by Nancy, was barred by the Dead Man’s Statute, Md.Cts. & Jud.Proc.Code Ann. § 9-116 (1989). We disagree. Section 9-116 provides: A party to a proceeding by or against a personal representative, heir, devisee, distributee, or legatee as such, in which a judgment or decree may be rendered for or against them, or by or against an incompetent person, may not testify concerning any transaction with or statement made by the dead or incompetent person, personally or through an agent since dead, unless called to testify by ²⁸⁵ the opposite party, or unless the testimony of the dead or incompetent person has been given already in evidence in the same proceeding concerning the same transaction or statement.

The purpose of the statute is to equalize the parties’ positions by imposing silence on the survivors as to transactions with or statements by the decedent and thereby require those who have asserted a claim against the decedent’s estate to produce testimony from disinterested persons. Reddy v. Mody, 39 Md.App. 675, 679 , 388 A.2d 555 cert. denied, 283 Md. 736 (1978). The statute is an exception to the general rule that all witnesses are competent to testify, see Md.Cts. & Jud.Proc.Code Ann. § 9-101 (1989), and is strictly construed “in order to disclose as much evidence as possible” without ignoring the purpose of the statute. Reddy, 39 Md.App. at 682 , 388 A.2d 555 .

In defining the term “party”, [t]he rule which has evolved is that a party is one who has an interest in the property sought or a person having a direct pecuniary and proprietary interest in the outcome of the case. Except in very unusual cases, the persons excluded from testifying are not those with an interest of any sort, but rather traditional real parties in interest and their representatives. Id. citing Trupp v. Wolff, 24 Md.App. 588, 602 , 335 A.2d 171 cert. denied, 275 Md. 757 (1975). In close cases involving the Dead Man’s Statute, Maryland precedent consistently has favored the admission of testimony.

Trupp, 24 Md.App. at 599-600 , 335 A.2d 171 (and cases cited therein). Rubin was not a party in this case, he was not a beneficiary under either Myron’s or Nancy’s will and he did not represent any of the beneficiaries. As the attorney of record for Myron’s estate, Rubin’s duty was to advise and aid Walter in the distribution of Myron’s estate, but not to represent Walter personally. There was no evidence that the relationship extended beyond that of attorney of record and personal representative.

Prior to trial, Rubin and his firm withdrew as attorneys for Myron’s estate and thus ²⁸⁶ were completely uninvolved in the case. Even if Rubin and his firm had remained, they would not have been affected by the outcome of the case because it would not alter Myron’s estate, only the amount distributed to each beneficiary. Rubin had no pecuniary or proprietary interest in the outcome of this case and was not a party within the meaning of the Dead Man’s Statute.

II

Appellant contends that Rubin’s advice to Nancy concerning her statutory right to an election of an intestate share amounted to a conflict of interest, which should allow the court to effect a spousal election by appellant, because Rubin advised Nancy while he was attorney of record for Myron’s estate and after he had represented Walter in his divorce and BHC in property matters. The general rule is that an attorney at law, who has been retained