In re: Cracker ( 2020 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA20-4
Filed: 6 October 2020
New Hanover County, No. 18-E-144
IN THE MATTER OF THE ESTATE OF ANDREW ROBERT CRACKER
Appeal by Petitioner Pennaritta C. Cracker from order entered 26 June 2019
by Judge C.W. Bragg in New Hanover County Superior Court. Heard in the Court of
Appeals 26 August 2020.
Ward and Smith, P.A., by Jenna Fruechtenicht Butler and Christopher S.
Edwards, for Appellant Pennaritta C. Cracker.
Block, Crouch, Keeter, Behm & Sayed, LLP, by Colin J. Tarrant, for Appellee
Andrew John Edward Cracker.
COLLINS, Judge.
Pennaritta C. Cracker (“Petitioner”) appeals from an order denying her claim
to an elective share of the estate of her late husband, Andrew Robert Cracker
(“Decedent”). Petitioner argues that the trial court erred because she never signed
an express waiver of her elective share right, and a waiver cannot be inferred from
the terms of Petitioner and Decedent’s separation agreement. We affirm the order.
I. Procedural History and Factual Background
Petitioner and Decedent married in July 1990 and separated in November
2014. On 4 December 2014, Petitioner filed a complaint seeking post-separation
support, alimony, equitable distribution, and attorney’s fees. Following a settlement
IN RE CRACKER
Opinion of the Court
conference, Petitioner and Decedent (the “parties”) executed a Mediated Settlement
Agreement and Consent Judgment (“MSA”), which the trial court entered on
20 August 2015.
The parties stipulated that the MSA memorialized their agreement. The trial
court found that the parties had “agreed to resolve all pending issues”; the MSA was
“calculated to finally resolve their financial claims against one another”; and that
“[t]he parties waive[d] further findings of fact.” The MSA ordered Decedent to deed
certain real property to Petitioner in exchange for Petitioner’s assumption and
payment of all debts associated with the property. It also provided that Petitioner
and Decedent would have as their “sole and separate property all household furniture
and other personal property” at the time in their possession. Additionally, each party
“acknowledge[d] sole ownership in the other” of certain personal belongings owned
prior to the marriage, inherited during the marriage, or given or loaned to the party
by a relative. Petitioner and Decedent each received a vehicle as “sole and separate
property.” Each party would be responsible for the debts associated with the assets
distributed to him or her and for the debts in his or her individual name. Petitioner
and Decedent retained bank accounts in their respective names as “sole and separate
property,” and identified retirement accounts and joint bank accounts were
distributed to either Petitioner or Decedent. The MSA specified that the parties had
divided all intangible property such as stocks and bonds to their satisfaction, and
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provided that “neither party shall make any claim against the other for any
intangible personal property in the name, possession or control of the other.”
Petitioner also “dismisse[d] with prejudice any claim for post-separation
support, alimony and attorneys fees associated with said claims.” Decedent was
required to make payments of $6,900 to Petitioner in September and October of 2015.
The MSA required Decedent to maintain a supplemental health insurance policy
covering Petitioner at her cost. At the conclusion of the MSA, the parties agreed that
it “contains the entire understanding of the parties, and there are no representations,
warranties, covenants, or undertakings other than those expressly set forth herein.”
On 13 June 2017, Decedent executed his Last Will and Testament (“Will”). He
died on 26 January 2018. At the time of Decedent’s death, he and Petitioner were
still married but remained separated. The Will was admitted to probate on
5 February 2018. Decedent’s Will named his son, Andrew John Edward Cracker, as
executor of the estate. The Will devised Decedent’s entire estate to his two children.
The Definitions section of the Will provided, in relevant part:
As of the execution of this Will, I am physically separated
from my spouse, Pennaritta Cherry Cracker. She and I
have executed a Mediated Settlement Agreement and
Consent Judgment on marital property that contains a
complete and total waiver of alimony which includes a
waiver of any claim for post separation support, alimony
and attorney’s fees associated with any claims that were
raised in our separation. In addition, both Pennaritta C.
Cracker and myself have executed a Release of Estate and
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Opinion of the Court
Inheritance Rights, a copy of which is attached as Exhibit
A and incorporated herein by reference to this Will.
No release was attached to the Will.
On 30 July 2018, Petitioner timely filed a claim for an elective share of
Decedent’s estate under N.C. Gen. Stat. § 30-3.1(a). The executor objected to this
claim, arguing that, under N.C. Gen. Stat. § 30-3.6, the claim was barred because
Petitioner had waived her elective share right in the terms of the MSA. After a
hearing, by written order entered 28 November 2018, the clerk determined that the
duly executed MSA waived Petitioner’s right to claim any interest in Decedent’s
property after death.
The Clerk made the following relevant findings of fact:1
5. That the Decedent and [Petitioner] entered into a
Mediated Settlement Agreement and Consent Judgment
on August 20, 2015, wherein the parties settled issues of
equitable distribution and alimony and the same is
referenced in Decedent’s Last Will and Testament;
....
1. That the distribution of assets between the
Decedent and [Petitioner] under the Mediated Settlement
Agreement and Consent Judgment stated that the parties
shall have this property as his or her “sole and separate
property.”
2. That by execution of the Mediated Settlement
Agreement and Consent Judgment both parties expressly
waived any future claims “against the other for any
1 The order’s Conclusions of Law numbers 1, 2, and 3 are more accurately categorized as
findings of fact. Dunevant v. Dunevant, 142 N.C. App. 169, 173, 542 S.E.2d 242, 245 (2001) (“[A]
pronouncement by the trial court which does not require the employment of legal principles will be
treated as a finding of fact, regardless of how it is denominated in the court’s order.”).
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Opinion of the Court
intangible personal property in the name, possession or
control of the other.”
3. That the Mediated Settlement Agreement and
Consent Judgment further states that “Each party hereby
transfers, assigns and relinquishes unto the other party
any and all right, title or interest he or she may have in the
furnishings or other personal property presently in the
possession of the other party, except as otherwise
designated herein.”
The clerk thus denied Petitioner’s claim for an elective share. Petitioner timely
appealed this order to superior court.
After a hearing, by written order entered 26 June 2019, the court concluded
that the clerk’s decision was correct based on “the Separation Agreement as well as
the language of the Will, indicating clearly that Decedent’s intent was for his estate
to pass only to his children and to exclude Petitioner[;]” the clerk’s findings of fact
were supported by sufficient evidence; the conclusions of law were supported by the
findings of fact; and the denial of Petitioner’s claim was consistent with the
conclusions of law and applicable law. The superior court thus affirmed the clerk’s
order. Petitioner timely appealed to this Court.
II. Discussion
A. Waiver of Elective Share
Petitioner argues that she is statutorily entitled to an elective share of
Decedent’s estate because she did not waive this entitlement in a signed writing as
required by N.C. Gen. Stat. § 30-3.6(a).
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Opinion of the Court
On appeal of a probate matter decided by the clerk, the superior court reviews
the clerk’s order to determine “(1) [w]hether the findings of fact are supported by the
evidence[,] (2) [w]hether the conclusions of law are supported by the findings of
facts[, and] (3) [w]hether the order or judgment is consistent with the conclusions of
law and applicable law.” N.C. Gen. Stat. § 1-301.3(d) (2019). This Court applies the
same standard of review as the superior court. In re Williams, 208 N.C. App. 148,
151, 701 S.E.2d 399, 401 (2010); In re Estate of Pate, 119 N.C. App. 400, 403, 459
S.E.2d 1, 2-3 (1995). The determination of a party’s entitlement to an elective share,
as a decision that “require[es] the exercise of judgment” and “the application of legal
principles,” In re Estate of Helms, 127 N.C. App. 505, 510, 491 S.E.2d 672, 675 (1997),
is a conclusion of law. The interpretation of a contract is also a conclusion of law. In
re Estate of Sharpe, 258 N.C. App. 601, 605, 814 S.E.2d 595, 598 (2018). We review
conclusions of law de novo. In re Estate of Johnson, 824 S.E.2d 857, 861 (N.C. Ct. App.
2019).
By default, “[t]he surviving spouse of a decedent who dies domiciled in this
State has a right to claim an ‘elective share’” in the decedent’s estate. N.C. Gen. Stat.
§ 30-3.1(a) (2019). This statutory right “may be waived, wholly or partially, before or
after marriage, with or without consideration, by a written waiver signed by the
surviving spouse . . . .” N.C. Gen. Stat. § 30-3.6(a) (2019).
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“The statutory law of this state permits a married couple to execute a
separation agreement ‘not inconsistent with public policy which shall be legal, valid,
and binding in all respects.’” Sedberry v. Johnson, 62 N.C. App. 425, 429, 302 S.E.2d
924, 927 (1983) (quoting N.C. Gen. Stat. § 52-10.1). Such agreements are construed
according to “the same rules which govern the interpretation of contracts generally.”
Lane v. Scarborough, 284 N.C. 407, 409, 200 S.E.2d 622, 624 (1973). As with
contracts more broadly, in interpreting a marital agreement, “the primary purpose is
to ascertain the intention of the parties at the moment of its execution.” Id. at 409-10,
200 S.E.2d at 624. A contract “encompasses not only its express provisions but also
all such implied provisions as are necessary to effect the intention of the parties
unless express terms prevent such inclusion.” Id. at 410, 200 S.E.2d at 624-25 (citing
4 Williston, Contracts § 601B (3d ed. 1961)). “The court will be prepared to imply a
term if there arises from the language of the contract itself, and the circumstances
under which it is entered into, an inference that the parties must have intended [the]
stipulation in question.” Id. at 410, 200 S.E.2d at 624-25 (quoting 1 Chitty, Contracts
§ 693 (23d ed. A.G. Guest 1968)).
In Lane, our Supreme Court concluded that a separation agreement, which had
no specific express release of the wife’s right to intestate succession, waived the wife’s
right to share in her deceased husband’s estate. In analyzing the separation
agreement, the Supreme Court recognized express terms therein, such as “[t]hey
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Opinion of the Court
agreed . . . they would live wholly separate and apart from each other as though they
had never been married”; “[wife] agreed to make no demands upon [husband] for
support and to impose no obligation or responsibility upon him”; and that “[e]ach
agreed that the other would thereafter hold, acquire, and dispose of all classes and
kinds of property, both real and personal, as though free and unmarried.” Id. at 411,
200 S.E.2d at 625 (quotation marks and emphasis omitted). The Court also noted
that the separation agreement stated that each party “released the right to
administer upon the estate of the other.” Id.The Court determined that “the specific terms of the contract are totally
inconsistent with an intention that the parties would each retain the right to share
in the estate of the other . . . if he or she were to become the surviving spouse.” Id. at
411, 200 S.E.2d at 625. The Court ultimately concluded: “The provisions that each
would thereafter acquire, hold, and dispose of property as though unmarried and that
each renounced the right to administer upon the estate of the other refute the
contention that [the wife] intended to retain any rights in her husband's estate.” Id.Guided by Lane, this Court in Sharpe concluded that a pre-marital agreement
waived the wife’s right to claim an elective share in her deceased husband’s estate.
[T]he unambiguous language of the uncontested and valid
pre-marital agreement plainly establishes the parties
intention, prior to their marriage, that [wife] waived any
rights in [husband’s] separate property and that [husband]
waived any rights in [wife’s] separate property. The pre-
marital agreement also clearly and unambiguously states
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Opinion of the Court
“[e]ach party has the sole and exclusive right at all times
to manage and control their respective separate property
to the same extent as if each were unmarried[,]” and“[e]ach
party specifically waives, relinquishes, renounces, and
gives up any claim that he or she may have or otherwise
had or may have made to the other’s separate property
under the laws of this state.”
Sharpe, 258 N.C. App. at 608, 814 S.E.2d at 600. This Court reasoned that “[t]he only
logical reading of ‘each party specifically waives . . . any claim . . . to the other’s
separate property under the laws of this state, would extend, in light of the entire
agreement, to include a spouse’s right to claim an elective share under N.C. Gen. Stat.
§ 30-3.1.” Id. at 608, 814 S.E.2d at 600 (quotation marks omitted).
Here, the MSA clearly and unambiguously states, “[e]ach party hereby
transfers, assigns and relinquishes unto the other party any and all right, title or
interest he or she may have in the furnishings and personal property presently in the
possession of the other party, except as otherwise designated herein”; “[e]ach party
hereby acknowledges sole ownership in the other party of all his or her wearing
apparel, personal ornaments and other personal effects”; Petitioner shall have as her
“sole and separate property” a car, and certain bank and financial accounts; Decedent
shall have as his “sole and separate property” a car, and certain bank and financial
accounts; “[h]ereafter, neither party shall make any claim against the other for any
intangible personal property in the name, possession or control of the other”; and “[b]y
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her execution of this Agreement, [Petitioner] dismisses with prejudice any claim for
post-separation support, alimony and attorneys fees associated with said claims.”
As in Lane and Sharpe, “the specific terms of the [MSA] are totally inconsistent
with an intention that the parties would each retain the right to share in the estate
of the other . . . if he or she were to become the surviving spouse.” Lane, 284 N.C. at
411, 200 S.E.2d at 625. The MSA resolved all financial claims between the parties
by exhaustively identifying the particular property that each spouse would hold as
his or her “sole and separate property.” See id. at 411, 200 S.E.2d at 625 (spouses
divided the household furnishings which they jointly owned); Sharpe, 258 N.C. App.
at 609, 814 S.E.2d at 600 (premarital agreement identified separate property of the
spouses). The MSA also completely dismissed Petitioner’s claims for post-separation
support, alimony, and attorneys’ fees. See Lane, 284 N.C. at 411, 200 S.E.2d at 625(wife “agreed to make no demands upon [husband] for support and to impose no
obligation or responsibility upon him”); Sloop v. Sloop, 24 N.C. App. 295, 297, 210
S.E.2d 262, 264 (1974) (finding waiver where, inter alia, wife waived “any and all
right to alimony and support for herself”). Although the MSA does not expressly refer
to the parties’ rights to claim upon each other’s estate, “the plain and unambiguous
language does not permit us to read the agreement to mean the parties intended to
waive rights to each other’s separate property while they were alive, but not after one
of them had pre-deceased the other.” Sharpe, 258 N.C. App. at 610, 814 S.E.2d at
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601. See also Sloop, 24 N.C. App. at 298, 210 S.E.2d at 264 (“It seems inconceivable
that either surviving party to this deed of separation could claim upon the death of
the other that which manifestly he or she could not claim while both parties were
living.”).
Beyond the terms of the MSA, Petitioner contends that the reference in
Decedent’s Will to a Release of Estate and Inheritance Rights shows that the parties
did not understand the MSA to include such a waiver. We disagree. “Evidence of
statements and conduct by the parties after executing a contract is admissible to show
intent and meaning of the parties.” Heater v. Heater, 53 N.C. App. 101, 104, 280
S.E.2d 19, 21 (1981). But in this case, the terms that Decedent used in the Will do
not effectively reveal anything about the intent or meaning of the parties beyond
what can be gleaned from the MSA. As the estate argues, the terms of the Will are
equally susceptible to the interpretation that Decedent merely sought to make
explicit in the Will what was already implicit in the MSA.
“[T]he intention of each party to release his or her share in the estate of the
other is implicit in the express provisions of their separation agreement, their
situation[,] and purpose at the time the instrument was executed.” Lane, 284 N.C.
at 412, 200 S.E.2d at 625. “The law will, therefore, imply the release and specifically
enforce it.” Id. at 412, 200 S.E.2d at 625. We hold that Petitioner released her right
to share in Decedent’s estate by the execution of the MSA.
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B. Petitioner’s Testimony
Petitioner next argues that the trial court erred by finding that she had waived
her elective share right without first hearing her testimony on the issue.
When a party appeals an estate matter to superior court, “[i]f the record is
insufficient, the judge may receive additional evidence on the factual issue in
question. The judge may continue the case if necessary to allow the parties time to
prepare for a hearing to receive additional evidence.” N.C. Gen. Stat. § 1-301.3(d)
(emphasis added).
The permissive language of Section 1-301.3(d) grants the trial court discretion
to receive additional evidence if it finds a deficiency in the record. “In instances
involving permissive statutory language,” the trial court’s decision “is reviewed on
appeal using an abuse of discretion standard of review.” In re Z.T.W., 238 N.C. App.
365, 370, 767 S.E.2d 660, 664 (2014). An abuse of discretion occurs only where the
trial court’s “actions are manifestly unsupported by reason.” White v. White, 312 N.C.
770, 777, 324 S.E.2d 829, 833 (1985). “A ruling committed to a trial court’s discretion
is to be accorded great deference and will be upset only upon a showing that it was so
arbitrary that it could not have been the result of a reasoned decision.” Id. at 777,
324 S.E.2d at 833.
Petitioner offered testimony to explain why there was no executed release
attached to Decedent’s Will, why the parties never obtained a divorce, and whether
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the parties intended to leave the elective share right available. The superior court
declined to hear this testimony. This did not amount to an abuse of discretion.
There is no indication in the record on appeal that the superior court found the
record before it insufficient, and even if it had, it was within the court’s discretion to
accept additional evidence. N.C. Gen. Stat. § 1-301.3(d). Moreover, the superior court
was permitted to make a reasoned decision on the issue of whether the elective share
right was waived by reference to the language of the MSA and the Will alone. See
Christenbury Eye Ctr., P.A. v. Medflow, Inc., 370 N.C. 1, 7, 802 S.E.2d 888, 892 (2017)
(courts “determine the intent of the parties and the nature of an agreement ‘by the
plain meaning of the written terms’”); Heater, 53 N.C. App. at 104, 280 S.E.2d at 21(“Evidence of statements and conduct by the parties after executing a contract is
admissible to show intent and meaning of the parties.”). That is what the superior
court explicitly did; it relied on the language of the MSA and the Will to affirm the
clerk’s denial of Petitioner’s claim to an elective share. The Superior Court therefore
did not abuse its discretion by refusing to hear additional testimony from Petitioner.
III. Conclusion
The terms of the MSA impliedly waived Petitioner’s right to an elective share
of Decedent’s estate under N.C. Gen. Stat. § 30-3.1(a). The trial court was not
required to hear Petitioner’s testimony before making this determination. We
therefore affirm the trial court’s order.
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Opinion of the Court
AFFIRMED.
Judges INMAN and BERGER concur.
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