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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.
