In the Matter of the Estate of: Ronald Keith Scherer, Lilyanna B. Knudson ( 2014 )

IN THE SUPREME COURT, STATE OF WYOMING
2014 WY 129OCTOBER TERM, A.D. 2014
October 14, 2014
IN THE MATTER OF THE ESTATE OF:
RONALD KEITH SCHERER, Deceased
LILYANNA B. KNUDSON,
Appellant
(Petitioner),
S-13-0281
v.
ROBERT LEE SCHERER II,
Appellee
(Respondent).
Appeal from the District Court of Laramie County
The Honorable Peter G. Arnold, Judge
Representing Appellant:
John Z. Courson and Matthew D. Kaufman, Hathaway & Kunz, P.C., Cheyenne,
Wyoming. Argument by Mr. Courson.
Representing Appellee:
Donald P. Prehoda, Jr. and Aaron L. Tomisich, Prehoda, Leonard & Edwards,
LLC, Laramie, Wyoming. Argument by Mr. Tomisich.
Before BURKE, C.J., and HILL, KITE*, DAVIS, and FOX, JJ.
*Chief Justice at time of oral argument.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers
are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming
82002, of any typographical or other formal errors so that correction may be made before final publication in
the permanent volume.
BURKE, Chief Justice.
[¶1] Ronald K. Scherer died intestate in 2009. At that time, Appellant Lilyanna
Knudson believed that the decedent was her biological father. She learned after his death
that he was not. She filed a petition in district court seeking a determination that she was
his heir. She based her claim on the judicially-created doctrine of equitable adoption.
Robert L. Scherer, II, 1 brother of the decedent, filed a motion to dismiss Ms. Knudson’s
petition, claiming that equitable adoption is not recognized in Wyoming law and is
contrary to Wyoming’s probate statutes. The district court granted Mr. Scherer’s motion
to dismiss, and Ms. Knudson filed this appeal. We will affirm the district court’s ruling.
ISSUES
[¶2] Ms. Knudson presents three issues in this appeal:
1. Does the theory of equitable adoption apply in
Wyoming?
2. Do the Determination of Heirship statutes, Wyo. Stat.
Ann. § 2-9-201, et seq. (LexisNexis 2009), apply only to real
property?
3. If the Determination of Heirship statutes, Wyo. Stat.
Ann. § 2-9-201, et seq., applies only to real property, did the
district court err by dismissing Appellant’s application instead
of limiting the proceedings to the real property at issue?
FACTS
[¶3] When we review a district court’s grant of a motion to dismiss pursuant to
W.R.C.P. 12(b)(6), we accept the facts stated in the complaint or petition as true.
Sinclair v. City of Gillette, 2012 WY 19, ¶ 8, 270 P.3d 644, 646 (Wyo. 2012). The facts
underlying Ms. Knudson’s equitable adoption claim were pleaded clearly and concisely
in her petition, and we quote them here:
8. Pursuant to the doctrine of equitable adoption,
Petitioner is the daughter and heir of Decedent.
1
In this opinion, we will refer to the Appellee, Robert L. Scherer, II, as “Mr. Scherer,” and to Ronald K.
Scherer as “the decedent.”
1
9. Decedent was present at Petitioner’s birth.
10. For a period after Petitioner’s birth, Decedent
cohabitated with Petitioner’s mother.
11. Upon information and belief, during that period,
Decedent believed and held himself to be Petitioner’s
biological father.
12. When Petitioner was a child, her mother had a
paternity test performed, which showed Decedent was not
Petitioner’s biological father.
13. Petitioner’s mother informed Decedent of the test
results.
14. Nevertheless, after learning he was not Petitioner’s
biological father, Decedent considered Petitioner to be, and
treated Petitioner as, his daughter, and held himself out as
Petitioner’s father.
15. From Petitioner’s birth until the Decedent’s death,
Petitioner believed and considered Decedent to be, and
treated Decedent as, her father.
16. Decedent contributed financially and emotionally to
Petitioner’s upbringing.
17. Among other things, Decedent provided Petitioner
with the following items throughout his life:
a. Educational books and magazines;
b. Jewelry;
c. Vitamins;
d. Bicycles;
e. A collection of dolls;
f. Clothing; and
g. A vehicle.
18. Moreover, Decedent signed holiday cards he sent to
Petitioner as “Your Dad.” Exhibit B.
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19. On numerous occasions over several years, Decedent
advised Petitioner’s mother that he considered Petitioner as
his heir who would inherit his estate upon his death.
20. Decedent demonstrated his commitment to provide for
Petitioner’s welfare by making her the beneficiary of a [“Pay-
on-Death”] account he held at Warren Federal Credit Union,
in Cheyenne, Wyoming.
21. Upon information and belief, Decedent made no plans
for his estate that benefitted anyone other than Petitioner.
[¶4] Mr. Scherer filed a motion to dismiss Ms. Knudson’s petition. The district court
agreed with Mr. Scherer that Wyoming law does not recognize equitable adoption, and
that equitable adoption would be contrary to Wyoming’s probate code, which states that
“foster children and their descendants do not inherit.” Wyo. Stat. Ann. § 2-4-104. The
district court also ruled that Wyoming’s Determination of Heirship statutes, Wyo. Stat.
Ann. § 2-9-201 et seq., apply only to real property, not to personal property. It granted
the motion to dismiss, and Ms. Knudson appeals that decision.
STANDARD OF REVIEW
[¶5] We set forth the applicable standard of review in Sinclair, ¶ 8, 270 P.3d at 646:
When reviewing W.R.C.P. 12(b)(6) motions to
dismiss, we accept the facts stated in the complaint as
true and view them in the light most favorable to the
plaintiff. We will sustain such a dismissal when it is
certain from the face of the complaint that the plaintiff
cannot assert any fact which would entitle him to
relief.
Belden v. Lampert, 2011 WY 83, ¶ 6, 251 P.3d 325, 327
(Wyo. 2011), quoting Cramer v. Powder River Coal, LLC,
2009 WY 45, ¶ 35, 204 P.3d 974, 983 (Wyo. 2009). . . .
When we interpret statutes, our goal is to give effect to the
intent of the legislature, and we “attempt to determine the
legislature’s intent based primarily on the plain and ordinary
meaning of the words used in the statute.” Krenning v. Heart
Mountain Irrigation Dist., 2009 WY 11, ¶ 9, 200 P.3d 774,
778 (Wyo. 2009). Statutory interpretation presents a question
of law, so our review of the district court’s conclusions is de
3
novo. Id.; Sinclair Oil Corp. v. Wyo. Dep’t of Revenue, 2010
WY 122, ¶ 7, 238 P.3d 568, 570 (Wyo. 2010).
DISCUSSION
[¶6] We discussed equitable adoption in depth in In re Estate of Seader, 2003 WY 119,
76 P.3d 1236 (Wyo. 2003). We explained that the doctrine is based on the theory that
“[O]ne who had agreed to adopt a child during his life, but for some reason did not, for
inheritance purposes alone, will be considered to have […] adopted [the child].” Id.,
¶ 10, 76 P.3d at 1240 (quoting 2 Am.Jur.2d, Adoption § 43 at 918-19 (1994)). We
observed the following description of equitable adoption:
While a child to be adopted pursuant to an
agreement between his natural parent and the adoptive
parent cannot specifically enforce its adoption by the
deceased adoptive parent, nevertheless, because of the
agreement, he can obtain specific enforcement of the
benefits that would accrue from such adoption – this
remedy is sometimes referred to as an equitable
adoption. . . .
An [equitable adoption] is an equitable remedy
to protect the interests of a person who was supposed
to have been adopted as a child but whose adoptive
parents failed to undertake the legal steps necessary to
formally accomplish the adoption; the doctrine is
applied in an intestate estate to give effect to the intent
of the decedent to adopt and provide for the child.
Seader, ¶ 10, 76 P.3d at 1240 (quoting 2 Am.Jur.2d, Adoption, supra, § 53 at 929-30).
We listed the elements of equitable adoption as:
(1) an implied or express agreement to adopt the child;
(2) reliance on that agreement; (3) performance by the natural
parents in giving up custody; (4) performance by the child in
living in the home of, and in acting as the child of, the
adoptive parents; (5) partial performance by the foster parents
in taking the child into their home and treating the child as
their child; and (6) the intestacy of the foster parents.
Seader, ¶ 12, 76 P.3d at 1241 (citing Lankford v. Wright, 489 S.E.2d 604, 606-07 (N.C.
1997)).
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[¶7] Ms. Knudson’s argument that Wyoming has recognized equitable adoption rests
chiefly on an older case, Pangarova v. Nichols, 419 P.2d 688 (Wyo. 1966). In that case,
Mr. Nichols’ adult niece, Ms. Pangarova, lived in Bulgaria. He offered to adopt her and
make her his heir if she came to Casper, Wyoming, to live with him and his wife. Id. at
690. By the time she moved to Casper, Mr. Nichols’ first wife had died, and he had
remarried. Mr. Nichols made a will naming Ms. Pangarova as the sole beneficiary of his
estate. Id. at 693. Although she lived in the Nichols’ home for a short time,
Ms. Pangarova did not get along with the second wife, and soon moved to a separate
apartment. Mr. Nichols later changed his will to name his second wife as his sole
beneficiary. Id. at 693-94. After Mr. Nichols died, Ms. Pangarova filed an action to
recover damages for breach of the contract to adopt her and make her his heir. Id. at 690-
91. The district court directed a verdict against Ms. Pangarova. Id. at 691. We reversed
and remanded for a new trial. Id. at 698.
[¶8] Ms. Knudson contends that Pangarova establishes equitable adoption as a viable
doctrine in Wyoming. However, as we discussed in Seader, our decision in Pangarova is
not quite that simple.
In reversing and remanding for a new trial, this Court
emphasized that the alleged contract did not deal solely with
adoption, but promised that the uncle would make the niece
his heir. We concluded that “[s]uch contracts are not
uncommon in the case of minor children and are ‘generally
construed to impose upon the adoptive parent an obligation to
make the child an heir, which equity will specifically
enforce.’” [Pangarova, 419 P.2d] at 695 (quoting R.P. Davis,
Annotation, Specific Performance of, or Status of Child
Under, Contract to Adopt Not Fully Performed, 171 A.L.R.
1315, 1318 (1947)). This quoted language, taken from an
annotation concerning enforcement of a contract to adopt,
appears to be at least an indirect acceptance of the concept of
equitable adoption. However, the quoted language is
followed immediately in the opinion by this sentence: “Our
difficulty here is that an adult is involved.” Pangarova, 419
P.2d at 695. Thereafter, we pursued neither that general issue
– adoption of an adult – nor the specific issue of equitable
adoption of an adult. Instead, we cited several cases where
the contract being enforced in equity was not simply a
contract to adopt, but also contained a promise to make the
adoptee an heir. Id. at 695-96.
On appeal after retrial, a jury verdict in favor of the
niece was affirmed. Nichols v. Pangarova, 443 P.2d 7565
(Wyo. 1968). While reference is made in the second opinion
to “a contract that decedent would adopt her and make her his
heir,” the concept of equitable adoption is not directly
discussed. Nichols, 443 P.2d at 758. Instead, the discussion
focuses on “a contract to devise or bequeath property,” “an
oral contract to make a will,” and “an agreement to will
property.” Id. at 759, 761 and 762. In the final analysis,
Pangarova is fundamentally not an equitable adoption case.
Seader, ¶¶ 18-19, 76 P.3d at 1242-43 (footnote omitted). Based on our interpretation of
Pangarova, we warned in Seader that “Wyoming has not incontrovertibly recognized
equitable adoption.” Id., ¶ 14, 76 P.3d at 1241.
[¶9] In Seader, we also did not accept or reject equitable adoption. We instead
concluded that it did not apply in the circumstances of that case. The decedent,
Mr. Seader, had married Ms. Schroeder’s mother when Ms. Schroeder was two years old.
Seader, ¶ 2, 76 P.3d at 1237. Mr. Seader agreed at the time of the marriage to adopt
Ms. Schroeder, but the adoption was never completed. In his will, Mr. Seader directed
that most of his estate would be split equally among his two biological sons and
Ms. Schroeder. Id., ¶ 3, 76 P.3d at 1238.
[¶10] Ms. Schroeder predeceased Mr. Seader, however. Id. The personal representative
of Mr. Seader’s estate proposed to distribute Ms. Schroeder’s share of the estate to her
two children. Id., ¶ 4, 76 P.3d at 1238. One of Mr. Seader’s sons objected, contending
that his father’s testamentary devise to Ms. Schroeder failed pursuant to Wyo. Stat. Ann.
§ 2-6-106, which provided that “If a devisee who is a grandparent or a lineal descendent
of a grandparent of the testator is dead at the time of execution of the will, fails to survive
the testator, or is treated as if he predeceased the testator, the issue of the deceased
devisee take in place of the deceased devisee.” Ms. Schroeder was not a “lineal
descendent” of Mr. Seader’s grandparent and so, Mr. Seader’s son asserted, he and his
brother should take in her place. Ms. Schroeder’s children asserted that the court should
recognize her as having been equitably adopted by Mr. Seader, making her the equitable
equivalent of a lineal descendent of Mr. Seader’s grandparents so that his bequeath to
Ms. Schroeder would go to her two children. Seader, ¶ 7, 76 P.3d at 1239.
[¶11] In our discussion of equitable adoption, we observed that “The majority of states
recognize equitable adoption in one form or another, although the doctrine has been
explicitly rejected in others. Almost exclusively, the application of the doctrine has been
limited to intestate estates.” Id., ¶ 13, 76 P.3d at 1241 (footnote omitted). We noted that
Wyoming precedent “left considerable doubt as to the status of equitable adoption in
Wyoming.” Id., ¶ 22, 76 P.3d at 1243. Further, because Mr. Seader did not die intestate,
“this case is quite unlike the usual equitable adoption case because its focus is not upon
enforcing specific performance of a contract. Instead, its focus is upon statutory
6
construction.” Id.
[¶12] Applying familiar rules of statutory interpretation, we gave plain meaning to the
statutory phrase “lineal descendent” in Wyo. Stat. Ann. § 2-6-106. “A lineal descendent
is a lineal descendent,” we said. “We cannot create an ambiguity within the statute by
asking whether we should apply an equitable doctrine to broaden the class of persons
identified by the statute.” Seader, ¶ 27, 76 P.3d at 1245. We also stated that the
provisions of Mr. Seader’s will were “clear and unambiguous and that they simply do not
contain any hint of an intention on [his] behalf that the bequest and devise to
[Ms. Schroeder] should be exempt from the anti-lapse statute.” Id., ¶ 36, 76 P.3d at 1247.
In conclusion, we declined “to apply the doctrine of equitable adoption to affect the
distribution of a testate estate,” because “[e]quity should not be available to countermand
clear legislative mandates.” Id., ¶ 38, 76 P.3d at 1248.
[¶13] Ms. Knudson’s case does involve an intestate estate, and because neither
Pangarova nor Seader incontrovertibly established whether equitable adoption is
recognized in Wyoming, we answer that question here for the first time. As we said in
Seader, ¶ 23, 76 P.3d at 1243, “the inter-related issues of adoption and the distribution of
decedents’ estates are purely statutory,” and so we apply standard rules of statutory
interpretation:
First, we determine if the statute is ambiguous or
unambiguous. A statute is unambiguous if its wording
is such that reasonable persons are able to agree as to
its meaning with consistency and predictability.
Unless another meaning is clearly intended, words and
phrases shall be taken in their ordinary and usual
sense. Conversely, a statute is ambiguous only if it is
found to be vague or uncertain and subject to varying
interpretations.
Sinclair Oil Corp. v. Wyoming Dep’t of Revenue, 2010 WY
122, ¶ 7, 238 P.3d 568, 570-71 (Wyo. 2010) (quoting BP
America Production Co. v. Dep’t of Revenue, 2006 WY 27,
¶ 20, 130 P.3d 438, 464 (Wyo. 2006)). In determining
whether a statute is ambiguous
[w]e begin by making an inquiry respecting the
ordinary and obvious meaning of the words employed
according to their arrangement and connection. We
construe the statute as a whole, giving effect to every
word, clause, and sentence, and we construe all parts
of the statute in pari materia. When a statute is
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sufficiently clear and unambiguous, we give effect to
the plain and ordinary meaning of the words and do
not resort to the rules of statutory construction.
Ball v. State ex rel. Wyo. Workers’ Safety & Comp. Div., 2010
WY 128, ¶ 29, 239 P.3d 621, 629 (Wyo. 2010).
Anderson v. State ex rel. Wyo. Workers’ Safety & Comp. Div., 2010 WY 157, ¶ 9, 245
P.3d 263, 266-67 (Wyo. 2010).
[¶14] Both parties focus on Wyo. Stat. Ann. § 2-4-104. It provides that “Persons of the
half-blood inherit the same share they would inherit if they were of the whole blood, but
stepchildren and foster children and their descendants do not inherit.” (emphasis
added). The term “foster children” is not defined in the probate code, but we agree with
the district court that a foster child “is a child whose parental care and upbringing has
been left to persons other than his natural parents or legal relatives.” See Black’s Law
Dictionary 290 (10th ed. 2014).
[¶15] Mr. Scherer contends that Ms. Knudson was, at most, the decedent’s foster child.
He maintains that the language of the statute is clear and the meaning plain:
Ms. Knudson, a foster child, does not inherit. Ms. Knudson counters by relying on
another provision of the probate statutes, Wyo. Stat. Ann. § 2-1-102(b), which provides
that “Unless displaced by the particular provisions of this code, the principles of law and
equity supplement the code provisions.” She asserts that the statutory provision does not
displace the doctrine of equitable adoption, and the doctrine can be applied to supplement
the provisions of Wyoming’s probate code. She points out that the provision concerning
foster children does not provide that they cannot inherit, only that they do not inherit if
they are only foster children. She claims to be not merely the foster child of the
decedent, but also his equitably adopted child.
[¶16] The statute must be interpreted in the context of other provisions of the probate
code. In re Estate of Kirkpatrick, 2003 WY 125, ¶ 6, 77 P.3d 404, 406 (Wyo. 2003) (“In
ascertaining the meaning of a given law, we consider all statutes relating to the same
subject or having the same general purpose and construe them in harmony.”). In broad
terms, Wyoming’s probate code establishes that the property of a person dying intestate is
distributed to the surviving spouse and children in the first instance. Wyo. Stat. Ann. § 2-
4-101(a)(i). The code also clearly indicates who is to be treated as “children” or a
“child.” Wyo. Stat. Ann. § 2-1-301(a)(v) states that the term “child” includes “an
adopted child but does not include a grandchild or other more remote descendent, nor,
except as provided in Chapter 4, an illegitimate child.” Wyo. Stat. Ann. § 2-4-102 sets
forth rules of descent for illegitimate children. Wyo. Stat. Ann. § 2-4-104 provides for
persons of half-blood and, as previously discussed, that “stepchildren and foster children
and their descendents do not inherit.” Wyo. Stat. Ann. § 2-4-106 directs that the divorce
8
of parents does not affect the right of children to inherit. Wyo. Stat. Ann. § 2-4-107provides additional details regarding the treatment of adopted children.
[¶17] Our reason for listing these provisions is to show that the probate code provides
substantial detail specifying how the relationships of parent and child, in all their
variations, are to be treated. But the code never mentions equitable adoption, and we
cannot presume this was an inadvertent oversight. To the contrary, “[w]e presume that
statutes are enacted by the legislature with full knowledge of existing law.” Seader, ¶ 23,
76 P.3d at 1244. Accordingly, the “omission of words from a statute is considered to be
an intentional act by the legislature, and this court will not read words into a statute when
the legislature has chosen not to include them.” Stroth v. North Lincoln County Hosp.
Dist., 2014 WY 81, ¶ 13, 327 P.3d 121, 127 (Wyo. 2014) (quoting Walters v. State ex rel.
Wyo. DOT, 2013 WY 59, ¶ 18, 300 P.3d 879, 884 (Wyo. 2013) and Adelizzi v. Stratton,
2010 WY 148, ¶ 11, 243 P.3d 563, 566 (Wyo. 2010)).
[¶18] The probate code of at least one other state makes explicit provision for equitable
adoption. “Nothing in this chapter affects or limits application of the judicial doctrine of
equitable adoption for the benefit of the child or the child’s issue.” Cal. Prob. Code
§ 6455 (2014). If the Wyoming Legislature had wanted to preserve or introduce
equitable adoption as part of Wyoming’s probate code, it could have said so. It did not,
and that is another factor in our conclusion that equitable adoption is displaced by the
provisions of our probate code.
[¶19] Wyo. Stat. Ann. § 2-1-102, entitled “Rules of construction and applicability,” also
sheds light on the intent of the legislature. It provides, in relevant part:
(a) This code shall be liberally construed and applied, to
promote the following purposes and policies to:
(i) Simplify and clarify the law concerning the affairs
of decedents, missing persons, protected persons,
minors and incapacitated persons;
(ii) Discover and make effective the intent of a
decedent in distribution of his property; [and]
(iii) Promote a speedy and efficient system for
liquidating the estate of the decedent and making
distribution to his successors[.]
The foster children provision of Wyo. Stat. Ann. § 2-4-104 must be interpreted in light of
the stated overall goals of simplicity, clarity, speed, and efficiency. Our complex and
difficult decisions in Pangarova or Seader amply demonstrate that the doctrine of
9
equitable adoption is anything but simple, clear, or speedy in application. In fact, we
agree with the Supreme Court of Utah that “The doctrine of equitable adoption
undermines these objectives by introducing uncertainty, complexity, and inefficiency –
the very evils the Probate Code was designed to avoid.” In re Estate of Hannifin, 2013
UT 46, ¶ 29, 311 P.3d 1016, 1023 (Utah 2013).
[¶20] Another expressed purpose of the probate code is to “[d]iscover and make
effective the intent of a decedent in distribution of his property.” Wyo. Stat. Ann. § 2-1-
102(a)(ii). In her petition, Ms. Knudson alleged that the decedent had advised her mother
that he considered her “as his heir who would inherit his estate upon his death.” She
claims that he intended to provide for her, and that recognizing her as his equitably
adopted child would effectuate his intent. This case comes before us because the district
court granted a motion to dismiss. Ms. Knudson has not had an opportunity to present
any evidence concerning the decedent’s intent, and so of course we cannot evaluate that
evidence. The reason we discuss the decedent’s intent here is to observe that there are at
least two straightforward ways the decedent could have expressed his real intent. He
could have adopted Ms. Knudson or provided for her in a will. He did neither.
[¶21] Based on our interpretation of Wyoming’s probate code, we hold that Wyoming
does not recognize the doctrine of equitable adoption. Ms. Knudson’s other two claims
seek interpretation of Wyoming’s Determination of Heirship statutes, Wyo. Stat. Ann.
§ 2-9-201, et seq. Because her equitable adoption claim fails, she is not an heir, and these
statutes do not apply. We therefore do not need to consider these last two issues. We
affirm the district court’s dismissal of Ms. Knudson’s petition.
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