In re Estate of Walker v. Stefan

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 15-PR-1069
IN RE ESTATE OF FRANCES WALKER, APPELLANT,
V.
STANLEY STEFAN, APPELLEE.
Appeal from the Superior Court
of the District of Columbia
(ADM-1834-99)
(Hon. Cheryl M. Long, Trial Judge)
(Hon. Rhonda Reid Winston, Trial Judge)
(Hon. John M. Campbell, Trial Judge)
(Argued November 1, 2016 Decided June 15, 2017)
Howard Haley for appellant.
Thomas J. Gagliardo for appellee.
Before EASTERLY and MCLEESE, Associate Judges, and RUIZ, Senior Judge.
MCLEESE, Associate Judge: Appellant, the estate of Frances Walker,
challenges the trial court‟s ruling that appellee Stanley Stefan was entitled to funds
from a bank account opened by Ms. Walker and Mr. Stefan. We affirm.
2
I.
The following facts appear to be undisputed. Ms. Walker and Mr. Stefan,
who were long-time friends, jointly opened a savings account in July 1998. The
account contained approximately $183,000 at the time of Ms. Walker‟s death in
September 1999. Only Ms. Walker contributed funds to the account. Mr. Stefan
did not withdraw any funds from the account during Ms. Walker‟s lifetime, but he
did withdraw funds from the account to pay for Ms. Walker‟s funeral expenses.
In November 1999, the estate‟s personal representative -- Ms. Walker‟s
great-nephew, Eulse Cee Young, Jr. -- transferred the funds from the savings
account to the estate‟s separate account. Mr. Stefan sued the estate, claiming
among other things that Ms. Walker intended for him to have the funds in the
account upon her death. The trial court granted summary judgment to the estate.
In In re Estate of Walker, 890 A.2d 216, 224-25 (D.C. 2006), this court concluded
that summary judgment was not warranted, because there were genuine issues of
material fact regarding Ms. Walker‟s intent in establishing the account. We
therefore remanded for further proceedings. Id. at 226. We specifically directed
the trial court to consider on remand whether the Nonprobate Transfers on Death
3
Act, D.C. Code § 19-601.01 et seq., which went into effect in 2001, had any
impact on the case. Id. at 221 n.5.
On remand, the parties agreed that the Act applied, but they disagreed as to
the proper disposition of the funds at issue. The trial court interpreted the Act to
create a presumption of a right of survivorship in multiple-party accounts. The
trial court further concluded that the presumption had not been rebutted, because
there was no express disclaimer of a right of survivorship in the account
documents. Thus, the trial court concluded that the funds passed to Mr. Stefan as
the surviving party.
The estate appealed, and we once again remanded, directing the trial court to
make factual findings as to the parties‟ intent in establishing and maintaining the
account. In re Estate of Walker, No. 08-PR-1638, Order (D.C. Jul. 30, 2010) (per
curiam). We also noted that the trial court had not addressed whether Ms. Walker
had given Mr. Stefan an interest in the account during her lifetime (“inter vivos”).
Id.On the second remand, the parties agreed that no additional facts needed to
be found and that the trial court should decide the case on the existing record. The
4
trial court concluded that the clear weight of the evidence indicated that Ms.
Walker intended for the funds in the account to pass to Mr. Stefan upon her death.
The trial court therefore declared that Mr. Stefan owned the funds at issue by right
of survivorship.
II.
We briefly address two procedural issues raised by the estate. First, the
estate contends that the trial court on the most recent remand should not have
considered certain of Mr. Stefan‟s filings. We see no abuse of discretion. After
the parties submitted cross-motions for judgment and cross-oppositions, the trial
court rejected two of those filings as improperly formatted. Both parties
resubmitted motions for judgment, but only the estate resubmitted a cross-
opposition. Even assuming that Mr. Stefan‟s resubmitted motion for judgment was
untimely and that Mr. Stefan should have resubmitted his opposition to the estate‟s
motion for judgment, the trial court had discretion to consider those filings. See In
re Estate of Yates, 988 A.2d 466, 468 (D.C. 2010) (under Super. Ct. Civ. R.
6 (b)(2), trial court may extend deadline upon showing of “excusable neglect”;
“[W]hether a party‟s neglect is excusable is at bottom an equitable [question],
taking into account all relevant circumstances surrounding the party‟s omission.
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The factors a court considers include the danger of prejudice to other parties, the
length of the delay and its potential impact on judicial proceedings, the reason for
the delay, including whether it was within the reasonable control of the movant,
and whether the movant acted in good faith.”) (brackets, ellipses, citation, and
internal quotation marks omitted); see generally Friendship Hosp. for Animals v.
District of Columbia, 698 A.2d 1003, 1006 (D.C. 1997) (if time limit is non-
jurisdictional, trial court has discretion to entertain untimely motion). In granting
Mr. Stefan‟s resubmitted motion for judgment, which was substantially identical to
the motion that had been timely submitted, the trial court noted that the original
rejection of Mr. Stefan‟s motion was for “technical procedural failings.” Under the
circumstances, and particularly given that the estate has not attempted to show that
it suffered unfair prejudice as a result of the delay in resubmission, we see no basis
for reversal.
Second, the estate contends that Mr. Stefan should be denied relief because
Mr. Stefan did not properly raise the claim that he had a survivorship right in the
funds. We disagree. Mr. Stefan has consistently claimed to have a survivorship
right in the funds. In his complaint, for example, Mr. Stefan asserted that “[i]t was
Decedent‟s expressed intent that the account would be for the benefit of Plaintiff
upon her death.” In any event, we directed the trial court to consider the right of
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survivorship in connection with the first appeal, In re Estate of Walker, 890 A.2d at221 n.5, and the litigation thereafter has focused primarily on whether Mr. Stefan
had a right of survivorship. The trial court thus properly resolved the case on that
basis.
III.
Turning to the merits, we affirm the trial court‟s conclusion that the funds in
the account belong to Mr. Stefan. First, we provide pertinent background. Second,
we address the parties‟ arguments as to the proper interpretation of the Act. Third,
we address the estate‟s contention that there was insufficient evidence to support
the trial court‟s finding that Ms. Walker intended for the funds to pass to Mr.
Stefan upon her death.
A.
Before passage of the Act, multiple-party accounts opened by one party
without consideration from the other were presumed to be created for the
convenience of the first party, even where the account documents specified a right
of survivorship. In re Estate of Blake, 856 A.2d 1151, 1154 (D.C. 2004). Thus,
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funds deposited in a multiple-party account by a decedent were considered assets
of the decedent‟s estate. Id. A second party on the account could obtain
ownership of such funds only by proving by clear and convincing evidence that the
first party had transferred the funds to the second party through a valid inter vivos
gift. Id.In 2001, the District enacted a version of the Uniform Nonprobate Transfers
on Death Act. The Act, “[a]mong other things, . . . identifies different types of
multiple-party accounts, recognizes the various purposes for which they might be
held, and clarifies the rights and relationships among joint account holders,
including survivorship rights.” In re Estate of Blake, 856 A.2d at 1155 (footnote
and internal quotation marks omitted). Three sections of the Act are most directly
relevant to this appeal. First, D.C. Code § 19-602.03 (2012 Repl.) requires that all
accounts, including those established before the Act went into effect, be
categorized as one of several types of accounts -- namely, as “a single-party
account or multiple-party account, with or without right of survivorship.” D.C.
Code § 19-602.03 (b). Second, D.C. Code § 19-602.04 (2012 Repl.) provides
forms for the types of accounts listed in § 19-602.03. If an account‟s documents
are not substantially similar to one of the provided forms, then the account is
categorized as “the type of account that most nearly conforms to the depositor‟s
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intent.” D.C. Code § 19-602.04 (b). Third, D.C. Code § 19-602.12 (2012 Repl.)
addresses the disposition of multiple-party account funds upon a party‟s death.
The first part of that section states that “[e]xcept as otherwise provided in this
subchapter, on death of a party sums on deposit in a multiple-party account belong
to the surviving party or parties.” D.C. Code § 19-602.12 (a). Section 19-
602.12 (c) provides that “[s]ums on deposit . . . in a multiple-party account that, by
the terms of the account, is without right of survivorship, are not affected by death
of a party, but the amount to which the decedent, immediately before death, was
beneficially entitled . . . is transferred as part of the decedent‟s estate.”
Although the establishment of the account and Ms. Walker‟s death both
preceded the effective date of the Act, we do not understand the parties to dispute
that the Act applies to the account. See generally In re Estate of Blake, 856 A.2d
at 1155-56 (applying Act to account established before Act went into effect).
In ruling for Mr. Stefan, the trial court reasoned along the following lines.
The account documents in this case were not substantially similar to the forms
provided in D.C. Code § 19-602.04 (a). Therefore, under D.C. Code § 19-
602.04 (b), Ms. Walker‟s intent determined whether the account should be viewed
as an account with or without right of survivorship. Based on the evidence before
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it, the trial court concluded that Ms. Walker intended to create a multiple-party
account with a right of survivorship.
B.
We are not persuaded by the estate‟s objections to the trial court‟s
interpretation of the Act. First, the estate contends that it was entitled to prevail
under D.C. Code § 19-602.12 (c), because the account in this case was by its terms
without right of survivorship. More specifically, the estate argues that (1) at the
time the account was created, the presumption was that such accounts did not
confer a right of survivorship; (2) the account documents were silent on the issue;
and (3) the account therefore should be understood as not conferring a right of
survivorship. Our disagreement with the estate turns on the meaning of the phrase
“by the terms of the account.” For several reasons, we conclude that an account is
without right of survivorship within the meaning of that phrase only if the account
documents explicitly provide that the account does not confer a right of
survivorship.
First, the Act defines the phrase “terms of the account” as including “the
deposit agreement and other terms and conditions, including the form, of the
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contract of deposit.” D.C. Code § 19-602.01 (12) (2012 Repl.). This definition
focuses on the explicit language of account documents, and points against the idea
that the phrase as used in § 19-602.12 (c) would treat silence as establishing the
absence of a right of survivorship. Moreover, the phrase “by the terms” is
naturally understood to refer to express language. See In re McCaffrey’s Estate, 20
N.Y.S.2d 178, 184 (Surr. Ct. 1940) (“The words „by the terms of such revocation‟
are limited to a revocation in writing.”).
Second, adopting the estate‟s reading would undermine a basic purpose of
the Act. By creating standard forms for various types of accounts, and by creating
a default rule that multiple-party accounts confer a right of survivorship, the
legislature attempted to establish clearer and more predictable rules to govern the
disposition of bank accounts. See D.C. Council, Report on Bill 13-298, at 3, 41-42
(Nov. 16, 2000) (stating generally that probate laws were in need of
“modernization, clarification, simplification, and uniformity,” and explaining that
Act would “provide clear and simple directions”); see also In re Conservatorship
of Milbrath, 508 N.W.2d 360, 363 (N.D. 1993) (purpose of provisions governing
multiple-party accounts in Nonprobate Transfers on Death Act is to “provide
simple non-probate alternatives for disposition of assets upon death of one party to
a multiple-party account”). The exception in § 19-602.12 (c) fits comfortably with
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the Act‟s purpose if the exception is limited to accounts that explicitly provide for
no right of survivorship. If the exception were instead read to incorporate silence
and other circumstances that might bear on the parties‟ intent as part of the
account‟s “terms,” then the exception would perpetuate the very complexity and
uncertainty that the Act was intended to reduce.
Finally, the legislative history of the Act contradicts the estate‟s
interpretation of § 19-602.12 (c). The Judiciary Committee report explains that
“[s]ubchapter 2 establishes a preference for survivorship between the parties
whether or not specified in the account contract. But if the account contract
expressly negates survivorship rights . . . the surviving parties to the account do not
take by right of survivorship.” Report on Bill 13-298, at 42 (emphasis added).
The report reaffirms this understanding in the section-by-section analysis,
describing § 19-602.12 (a) as “mak[ing] an account payable to one or more of two
or more parties to a survivorship arrangement unless a nonsurvivorship
arrangement is specified in the terms of the account.” Id. at 46 (emphasis added).
In addition, the comment to the corresponding provision in the Uniform
Nonprobate Transfers on Death Act describes the effect of subsection (a) as
“mak[ing] an account payable to one or more of two or more parties a survivorship
arrangement unless a nonsurvivorship arrangement is specified in the terms of the
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account.” Unif. Nonprobate Transfers on Death Act § 212 cmt. (Nat‟l Conference
of Comm‟rs on Unif. State Laws 1990).
For the foregoing reasons, we conclude that because the account documents
in this case do not expressly disclaim a right of survivorship, § 19-602.12 (c)‟s
exception does not apply.
C.
The estate also challenges the trial court‟s finding, under D.C. Code § 19-
602.04 (b), that Ms. Walker intended for the funds in the account to pass to Mr.
Stefan upon Ms. Walker‟s death. We uphold the trial court‟s finding.
At the outset, the estate contends that Mr. Stefan was required to show by
clear and convincing evidence that Ms. Walker intended Mr. Stefan to have a right
of survivorship. In support of its argument, the estate relies primarily on D.C.
Code § 19-602.11 (b) and In re Estate of Blake. Section 19-602.11 (b) (addressing
“[o]wnership during lifetime”) imposes the clear-and-convincing-evidence
standard on a party to a multiple-party account who claims that another party to the
account made an inter vivos gift to the claimant of some of the sums deposited by
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that other party. The clear-and-convincing-evidence standard set forth in § 19-
602.11 (b) does not by its terms apply to a claim that a multiple-party account was
intended to create a right of survivorship upon the death of one of the account
holders. In In re Estate of Blake, 856 A.2d at 1156, we applied § 19-602.11 (b)‟s
clear-and-convincing-evidence standard to a claim that the decedent had intended
to make an inter vivos gift. Blake did not state that § 19-602.11 (b)‟s clear-and-
convincing-evidence standard would also properly apply to a claim that a decedent
intended to confer a right of survivorship. We also note that § 19-602.12
(addressing “[r]ights at death”), which directly applies in this case, does not
include a clear-and-convincing-evidence standard.
The trial court determined Ms. Walker‟s intent pursuant to § 19-602.04 (b)
of the Act, which as previously noted directs the trial court to make a finding as to,
among other things, the depositor‟s intent as to a right of survivorship. That
provision does not expressly indicate which party bears the burden of proof on that
issue or what the magnitude of that burden of proof should be. One court has
interpreted an analogous provision to place a burden of proof by a preponderance
on the party seeking to obtain possession of the proceeds in a disputed account.
See In re Estate of Greb, 848 N.W.2d 611, 618 (Neb. 2014) (“[T]he party not in
possession of the proceeds of a disputed account has the burden to move forward
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with evidence of the depositor‟s intent in creating the account. And in a dispute
regarding the ownership of an account arising from the depositor‟s death, such
intent must be proved by a greater weight of the evidence only.”) (footnote
omitted).
We need not decide in this case either who bears the burden of proof on this
issue under the Act or what the magnitude of that burden should be. In ruling for
Mr. Stefan, the trial court found that “the clear weight of the available evidence”
indicated that Ms. Walker intended for Mr. Stefan to receive the funds in the
account upon her death. The estate has not contended that this finding is
meaningfully different from a “clear and convincing evidence” finding. Thus,
even assuming that the clear-and-convincing-evidence standard applies to the trial
court‟s finding, we see no basis for remanding for the trial court to announce a
finding framed explicitly in those terms. Cf. In re Adoption of J.S.R., 374 A.2d
860, 864 (D.C. 1977) (“[W]e are satisfied that the standard enunciated by the trial
court, i.e., „substantial preponderance‟ of the evidence and the one we establish
herein, i.e., „clear and convincing‟ evidence, are substantially identical. Thus,
there is no occasion to remand to the trial court for consideration in light of this
opinion.”).
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The estate also contends that the evidence is insufficient to support a finding
that Ms. Walker intended Mr. Stefan to receive the funds in the account upon her
death. We disagree. After the second remand, the parties asked the trial court to
take the facts in the record as undisputed. The trial court thus conducted what
amounted to a trial on stipulated evidence.
Mr. Stefan relies on evidence supporting a conclusion that Ms. Walker
wanted the funds to pass to Mr. Stefan upon her death. Ms. Walker told the bank
manager that she wanted to remove her great-nephew (Mr. Young) from a prior
multiple-party account. There was evidence that Ms. Walker was angry at Mr.
Young, and both Mr. Stefan and the bank manager recalled Ms. Walker saying she
did not want Mr. Young to have “one red cent.” When Ms. Walker was told she
could not simply remove Mr. Young from the account, she closed that account,
withdrew the funds, and deposited those funds into the multiple-party account that
she opened with Mr. Stefan. Ms. Walker set up the new multiple-party account
with full knowledge that Mr. Stefan could withdraw funds from the account at any
time.
The estate relies on evidence pointing in the opposite direction. Specifically,
the estate points to evidence that Ms. Walker initially tried to include both the bank
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manager and Mr. Stefan as co-owners on the account, and to Mr. Young‟s
testimony at a deposition that Ms. Walker had always used multiple-party
accounts, simply for the sake of convenience.
The trial court analyzed the evidence and made the following findings:
(1) Ms. Walker clearly wanted to remove Mr. Young from the account; (2) Ms.
Walker could have set up an account in her own name, but chose to add Mr. Stefan
instead; (3) Ms. Walker‟s statement that she did not want Mr. Young to get “one
red cent” strongly suggested that Ms. Walker wanted the funds to pass to Mr.
Stefan rather than to her great-nephew; and (4) Ms. Walker knew that Mr. Stefan
could withdraw the sums on deposit at any time. The trial court also found that
Ms. Walker‟s attempt to add the bank manager to the account merely reflected her
desire to have a personal steward for the account, rather than serving as an
indication that Ms. Walker did not intend for Mr. Stefan to have a survivorship
right.
We review a trial court‟s findings of fact for clear error. Thai Chili, Inc. v.
Bennett, 76 A.3d 902, 909 (D.C. 2013). “A finding is clearly erroneous when,
although there is evidence to support it, the reviewing court on the entire evidence
is left with the definite and firm conviction that a mistake has been committed.”
17
Abulqasim v. Mahmoud, 49 A.3d 828, 834 (D.C. 2012) (internal quotation marks
omitted). “[W]here the evidence [is] such that either one of two different
conclusions might reasonably have been drawn from it, the decision is for the trial
court; and the appellate court may not reweigh the evidence or override the
findings, except where it clearly appears they are manifestly wrong.” Palmer v.
Garves, 123 A.2d 611, 612 (D.C. 1956) (internal quotation marks and ellipses
omitted). We find no error in the trial court‟s finding that Ms. Walker intended for
the account to have a right of survivorship, because there was sufficient evidence
to support that finding. Cf. Khawam v. Wolfe, 84 A.3d 558, 563 n.2 (D.C. 2014)
(trial court did not commit clear error in making findings based on conflicting
evidence).1
1
At times, Mr. Stefan seems to suggest that the trial court should have ruled
in his favor on an alternative rationale. Specifically, Mr. Stefan argues that D.C.
Code § 19-602.12 (a) creates a presumption that a multiple-party account confers a
right of survivorship, and that presumption can be rebutted only if the “terms of the
account” provide otherwise, D.C. Code § 19-602.12 (c). Mr. Stefan further argues
that because the account documents in this case were silent as to a right of
survivorship, the account did not by its terms rebut the statutorily presumed right
of survivorship. Under this rationale, Ms. Walker‟s intent would be irrelevant.
Although § 19-602.12 (a) does create a default rule that multiple-party accounts
confer a right of survivorship, it also states that the default rule is inapplicable if
other provisions in the subchapter “otherwise provide[].” Arguably, § 19-
602.04 (b) provides otherwise in the circumstances to which it applies. Unif.
Nonprobate Transfers on Death Act § 212 cmt. (Nat‟l Conference of Comm‟rs on
Unif. State Laws 1990) (provisions corresponding to D.C. Code §§ 19-604.04and .12 “permit a court to implement the intentions of parties to a joint account
governed by [the provision corresponding to D.C. Code § 19-606.04 (b)]” based on
(…continued)
18
The judgment of the trial court is therefore
Affirmed.
(…continued)
the form of the account and “extrinsic evidence tending to confirm or contradict
intention as signalled by the form”). In any event, the rationale suggested by Mr.
Stefan and the approach taken by the trial court both lead to the conclusion that
Mr. Stefan is the owner of the funds at issue. Thus, we need not decide the precise
scope of the default rule (or presumption) created by the statute with respect to the
rights of survivorship in multiple-party accounts.