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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Vukmir v. Vukmir (8/1/2003) sp-5722

Vukmir v. Vukmir (8/1/2003) sp-5722

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA


LINDA VUKMIR, Personal                  )    Supreme Court No. S-
                                   10594
Representative of the Estate of         )
Louis Vukmir,                                      )     Superior
                                   Court No.
                              )    3AN-98-1070 P/E
               Appellant,          )
                              )    O P I N I O N
     v.                                           )
                              )    [No. 5722 - August 1, 2003]
MICHAEL D. VUKMIR and MARY    )
LOU VUKMIR EPPERSON,               )
                              )
               Appellees.          )
_______________________________    )
          
          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Morgan Christen, Judge.

          Appearances:  Robert C. Erwin and Roberta  C.
          Erwin,   Erwin   &   Erwin,  Anchorage,   for
          Appellant.   Charles W. Coe,  Law  Office  of
          Charles W. Coe, Anchorage, for Appellees.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, Bryner, and Carpeneti, Justices.

          CARPENETI, Justice.


I.   INTRODUCTION

          I.   Linda Vukmir appeals the superior courts holding that

she  is  responsible for the mortgage debt on her  fathers  home,

which she purchased by exercising an option bequeathed to her  in

her  fathers  will.  We affirm the superior courts assignment  of

the  mortgage debt to Linda because we conclude that the language

of  the  will  clearly states that the heirs were not responsible

for the debt in the event that Linda exercised her option.

II.  FACTS AND PROCEEDINGS

     A.   Facts

          Louis  Vukmir died on August 22, 1998.  His valid will,

dated  July  27, 1992, was admitted to probate on  September  23,

1998.  Pursuant to the will, the same court order named Linda  E.

Perkins (formerly Vukmir) as the estates personal representative.

          The  will  distributed  Louiss  property  to  his  four

children:  Linda, George D. Vukmir, Michael D. Vukmir,  and  Mary

Lou  Vukmir  Epperson.  Paragraph five of the will provided  that

Louiss  residual  estate be divided with Linda receiving  thirty-

five  percent,  George  and  Michael each  receiving  twenty-five

percent, and Mary Lou receiving fifteen percent.  Paragraph  four

of  the  will, entitled Specific Gifts, gave Linda an  option  to

purchase  [Louiss]  residence from [his]  estate  by  paying  the

amount  of  $80,000.00 to [his] estate within one year of  Louiss

death.   The  will further directed that this amount  be  divided

among  the  heirs pursuant to the formula used to distribute  the

residual estate.

          In  November  1998 Linda negotiated  the  sale  of  the

residence  for $152,000, using an $80,000 advance from the  buyer

to  purchase  the residence from the estate.  In  exercising  her

option,  Linda used the $80,000 payment to the estate to pay  the

outstanding  mortgage  debt  of  approximately  $35,000  on   the

residence.   She deposited the remaining $45,000 into the  estate

account for division among the testators heirs.

     B.   Proceedings

          Linda,  acting  as the estates personal representative,

filed a petition for final settlement and distribution on January

5,   2000.    This  petition  sought  approval  of  the  proposed

distribution  of  the  testators  estate,  including  the   above

transactions  concerning Lindas sale of the  residence.   Michael

and  Mary  Lou  objected  to  several portions  of  the  proposed

settlement and distribution, including the proposed treatment  of

Lindas  sale  of the testators residence.  Michael and  Mary  Lou

claimed that the will provision constituted a specific devise  to

Linda, and that Linda therefore took the residence subject to the

existing  mortgage debt.  Linda maintained that she was  free  to

retain the entire $72,000 profit from her resale of the residence

because the estate was liable for the mortgage debt.

          This controversy was brought before Probate Master John

E.  Duggan for an evidentiary hearing on June 15, 2000.   In  its

September 15, 2000 report, the probate court agreed with  Michael

and  Mary Lou that the gift was a specific devise and applied  AS

13.12.607  to hold that Linda did not have a right to exoneration

of the mortgage debt by the estate.1

          Linda  objected  to  Master Duggans report,  contending

that  he  erred  in characterizing the gift as a specific  devise

subject  to  nonexoneration under AS 13.12.607.   Superior  Court

Judge Stephanie E. Joannides agreed with Linda and remanded  this

issue  back  to the probate court for consideration of additional

evidence as to the sale of the testators residence.

          The  probate court filed a supplemental report on  July

2, 2001 in which it reconsidered its earlier findings, concluding

that  the  clear  language of the will gave Linda  an  option  to

purchase  the  residence  rather than a  specific  bequest.   The

probate   court   went  on  to  find,  based  entirely   on   its

interpretation of paragraphs four and five of the will, that  the

will  provides  that  the full purchase price  of  $80,000  is  a

specific  gift  to be distributed among the heirs.   The  probate

court  found  that  Linda exercised her option  to  purchase  the

residence   subject  to  the  outstanding  mortgage   debt,   and

recommended  that  Linda be ordered to divide  the  full  $80,000

purchase   price  among  the  heirs.   Linda  objected   to   the

supplemental report, arguing that the clear language of the  will

and  extrinsic evidence of mortgage debt at the time the will was

made  demanded  that she not be held liable  for  the  debt.   On

February 2, 2002 Superior Court Judge Morgan Christen adopted the

July  2,  2001  supplemental report concerning the  sale  of  the

          testators residence.  The superior court entered a final judgment

consistent with this order, directing Linda to personally pay the

mortgage debt on the home, on March 26, 2002.  Linda appeals.

III. STANDARD OF REVIEW

            Linda argues that we should review the superior court

decision  regarding her sale of the testators residence  de  novo

because the interpretation of a written document is a question of

law.  Michael and Mary Lou respond that the superior court made a

factual  finding regarding the testators intent which  should  be

reviewed under the clearly erroneous standard.

          We  held  in Smith v. Estate of Peters2 that  [b]ecause

the  testators  intent is a question of fact,  the  trial  courts

decision to label a legacy as demonstrative or specific will  not

be  set aside unless it is clearly erroneous.3  However, in Smith

the  superior court was required to consider extrinsic  evidence.

The  rule  in Smith does not govern a case in which the  superior

court   determined  the  testators  intent  solely   through   an

examination of the will.  Several states have held that in  these

circumstances,  that  is, absent the need to  consider  extrinsic

evidence, questions concerning the interpretation of a  will  are

questions of law that are reviewed de novo.4  This comports  with

Alaska  law  generally concerning the interpretation  of  written

documents:  [Q]uestions  of  interpretation  of  the  meaning  of

written  documents are treated as questions of law for the  court

except   where  they  are  dependent  for  their  resolution   on

conflicting  extrinsic evidence.5  Accordingly, we apply  the  de

novo  standard of review here because the superior  court  relied

exclusively  on  the  language of the  will  in  determining  the

testators  intent.

IV.  DISCUSSION

     The  Will  Requires that Linda Pay the Outstanding  Mortgage
     Debt in Addition to the $80,000 Purchase Price.
     
          Several  courts  have  held that when  a  testators  or

testatrixs  intent is clear from the language in a  will,  it  is

unnecessary  for  a  court  to  examine  extrinsic  evidence   to

          determine his or her intent.6  We agree with these courts that it

is  unnecessary  to look beyond the words of a  will  when  those

words   clearly  express  the  testators  or  testatrixs  intent.

Therefore, if the language of paragraph four is clear,  there  is

no need to examine, or remand to develop, extrinsic evidence.

          This   controversy  over  the  interpretation  of   the

testators will centers on paragraph four of the will, which reads

in relevant part:

          I  direct  that  my residence, 2615  Galewood
          Ave.,   Anchorage,  Alaska  be  sold  by   my
          personal representative under whatever  terms
          she  thinks best; provided, however, that  my
          daughter,   LINDA  VUKMIR  may  purchase   my
          residence from my estate by paying the amount
          of $80,000.00 to my estate which amount shall
          be  distributed among my heirs as set out  in
          paragraph  five.  Should LINDA VUKMIR  desire
          to purchase the residence, she shall make the
          payment set out above to my estate within one
          year  of the time of my death otherwise,  the
          property  shall  be  sold with  the  proceeds
          distributed pursuant to paragraph five.
          
The superior court adopted the probate courts interpretation that

this  paragraph  provided  that if Linda  Perkins  exercised  her

option  to purchase the residence for $80,000.00 then the sum  of

$80,000.00,  and  not  a  lesser  residual  amount,  was  to   be

distributed  to  the  heirs as a specific  gift.    This  holding

classified  the gift of the entire $80,000 from the  exercise  of

the  option  as a specific bequest to the heirs to be divided  in

accordance   with  paragraph  five  of  the  will.   Under   this

interpretation  of  the  will  Linda purchased  Louiss  residence

subject to the outstanding mortgage debt.

          Linda argues that the will bequeathed to her the option

to  purchase the residence by paying only $80,000 to the estate.7

She  points  to  paragraph four, which states  that  [Linda]  may

purchase  my  residence from my estate by paying  the  amount  of

$80,000.00  to  my  estate and that [s]hould  [Linda]  desire  to

purchase the residence, she shall make the payment set out  above

to  my  estate  within one year of the time  of  my  death.   She

          contends that this language means that she could purchase the

residence for a total price of $80,000 rather than the  price  of

the  $80,000 payment to the heirs plus the $35,802.91  needed  to

satisfy the outstanding mortgage debt.

          Michael  and Mary Lou respond that the will establishes

the  testators intent to divide the entire $80,000  payment  from

Linda,  rather than $80,000 minus the mortgage debt, between  the

heirs.   They  argue  that  the superior  court  was  correct  in

characterizing  paragraph four of the will as a specific  bequest

of  exactly  $80,000 to the four heirs in the  event  that  Linda

exercised her option.

          We  agree with the superior court:  The will is open to

only one reasonable interpretation of the testators intent.   The

will  envisions two gifts: (1) a gift to Linda of  an  option  to

purchase  the residence for $80,000 plus the outstanding mortgage

debt  and  (2)  a  gift to all of the heirs to receive  the  full

$80,000 payment split in accordance with the formula set forth in

paragraph five of the will.  Lindas argument that the will states

that  she is entitled to purchase the residence for only  $80,000

appears  reasonable only if the portions of the will  she  relies

upon  are read out of context.  Linda misinterprets the testators

intent  by  focusing on the first half of the wills key sentence.

The  complete  sentence  states  that  [Linda]  may  purchase  my

residence from my estate by paying the amount of $80,000.00 to my

estate  which amount shall be distributed among my heirs  as  set

out  in  paragraph  five.  (Emphasis added.)  When  read  in  its

entirety,  this  sentence states that the entire $80,000  payment

should  be  divided between the heirs because it uses the  phrase

which  amount  to  refer to the $80,000 payment.   This  sentence

clearly conveys the testators intent to provide the heirs with  a

specific  bequest in the amount of exactly $80,000,  not  $80,000

minus  the  mortgage debt, in the event that Linda exercises  her

option to purchase the house.  If Linda exercises her option  but

does  not pay the mortgage debt, the heirs would not receive  the

entire $80,000 bequest envisioned by the testator.

          This   result  is  even  clearer  when  the   provision

governing  Lindas exercise of the option is read  in  conjunction

with  the provision governing the gift to the heirs in the  event

that Linda declined to exercise her option and the residence  was

sold  to  someone else.  The will uses the phrase,  the  property

shall be sold with the proceeds distributed pursuant to paragraph

five  to  describe the gift to the heirs in the event that  Linda

declined  to  exercise her option.  This phrase clearly  reflects

the testators understanding that the mortgage debt would have  to

be satisfied out of the sale price, as it provides the heirs with

the  proceeds  from  the sale rather than a  specific  amount  of

money.   This  stands in stark contrast to the language  used  to

describe  the gift to the heirs in the event that Linda exercised

her  option:  a specific amount, $80,000, which shall be  divided

among  the  heirs.  This evinces the testators  intent  that  the

heirs receive the full, specified amount of $80,000, rather  than

the  remainder of the purchase price minus the mortgage debt they

would  have received in the event that Linda declined to exercise

her  option.  Because the language of the will clearly  expresses

the  testators intent to provide the heirs with the full  $80,000

payment,  Linda  is responsible for paying the mortgage  debt  in

addition to the $80,000 exercise price of her option.8

V.   CONCLUSION

          We   AFFIRM  the  superior  courts  holding  that   the
testators will demonstrates a clear intention to provide  all  of
his  heirs with a bequest of the full $80,000 exercise  price  of
Lindas option to purchase his residence, rather than a bequest of
the  exercise price minus the outstanding mortgage  debt  on  the
residence.  Linda is therefore responsible for the mortgage debt.
_______________________________
     1     AS  13.12.607 states that [a] specific  devise  passes
subject  to any mortgage interest existing at the date of  death,
without  right of exoneration, regardless of a general  directive
in the will to pay debts.

     2    741 P.2d 1172 (Alaska 1987).

     3    Id. at 1174.

     4     E.g., In re Estate of Bem, 637 N.W.2d 506, 509  (Mich.
App.  2001); In re Estate of Kuruzovich, 78 S.W.3d 226, 227  (Mo.
App.  2002); Summers v. Summers, 699 N.E.2d 958, 961  (Ohio  App.
1997).

     5    Alaska Diversified Contractors, Inc. v. Lower Kuskokwim
Sch. Dist., 778 P.2d 581, 584 (Alaska 1989).

     6     Wilkins v. Wilkins, 48 P.3d 644, 647-48 (Idaho  2002);
In re Estate of Bem, 637 N.W.2d at 509-10; Summers, 699 N.E.2d at
961; In re Jacobsons Estate, 331 A.2d 447, 449 (Pa. 1975); In  re
Estate of Martin, 635 N.W.2d 473, 477 (S.D. 2001).

     7     She also argues that the testators intent to limit her
total  cost  to  $80,000 can be deduced by reading  the  will  in
conjunction with established precedent that estate debts, such as
the  mortgage debt at issue in this case, should be satisfied out
of  the  residual  estate  rather than transferred  to  an  heir.
Because we hold that the testators intent is clearly expressed by
the  language of the will, there is no need to examine  precedent
governing  the  exoneration  of  an  estates  debt  in  order  to
determine the testators intent.  Similarly, we do not examine the
arguments   made   by   the   parties   suggesting   that   their
interpretation of the will is supported by extrinsic evidence not
considered by the probate and superior courts.  There is no  need
to  resort  to  an  examination  of  extrinsic  evidence  of  the
testators intent because the will clearly expresses his intent.

     8     We reach this conclusion without giving any weight  to
Michael  and  Mary  Lous  argument that Linda  has  breached  her
fiduciary  duty  to the other heirs by seeking to  interpret  the
will in the manner most favorable to herself.