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In re Estate of Lorenz

Court of Appleals of Nebraska

December 2, 2014

IN RE ESTATE OF WILLIAM LORENZ, DECEASED. THERESA LORENZ, PERSONAL REPRESENTATIVE OF THE ESTATE OF WILLIAM LORENZ, APPELLEE,
v.
ALICE SHEA, APPELLANT

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Appeal from the County Court for Douglas County: SHERYL L. LOHAUS, Judge.

Jeffrey A. Silver for appellant.

Richard A. DeWitt, Robert M. Gonderinger, and David J. Skalka, of Croker, Huck, Kasher, DeWitt, Anderson & Gonderinger, L.L.C., for appellee.

Inbody, Chief Judge, and Irwin and Bishop, Judges.

OPINION

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[22 Neb.App. 550] Bishop, Judge.

I. INTRODUCTION

Alice Shea (Alice) is the ex-wife of decedent William Lorenz. The county court for Douglas County granted summary judgment in favor of the personal representative of William's estate (Estate) on two issues: (1) Alice's petition for the appointment of a special administrator and (2) her challenge to a codicil to William's will (Second Codicil). The county court concluded, in essence, that a request to remove a personal representative must precede a request for appointment of a special administrator and that Alice did not follow that procedure. The court further held that Alice made an untimely demand for the personal representative to compel beneficiaries of payable-on-death (POD) transfers to pay such transfers over to the Estate as a basis for the appointment of a special administrator. The court also held that Alice's challenge to the [22 Neb.App. 551] validity of the Second Codicil was untimely. The court did find that Alice was entitled to claims made against the Estate, including: (1) interest for delinquent alimony; (2) alimony in the amount of $2,000 per month, commencing September 1, 2010, and continuing each month thereafter until she dies or remarries, whichever occurs first; and (3) interest in the amount of $129.78 on a late property settlement payment. Alice appeals; we affirm as modified.

II. BACKGROUND

William passed away in Douglas County on February 20, 2010, at the age of 91. William left behind seven children. Alice is not the mother of any of William's children.

William was single at the time of his death, having been divorced from Alice since 2006. Pursuant to their Iowa divorce

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decree, and relevant to this appeal, William was ordered to pay Alice (1) a property settlement in the amount of $113,761 and (2) alimony in the amount of $2,000 per month until Alice dies or remarries. The decree provided, " In the event William predeceases Alice, this alimony award shall be a lien against" the Estate.

On May 4, 2010, Theresa Lorenz, one of William's children, filed a " Petition for Formal Probate of Will, Determination of Heirs, and Appointment of Personal Representative" in the matter of the Estate. The petition sought to admit William's " Last Will and Testament" dated June 6, 1989, and two codicils dated February 24, 2005, and May 11, 2007, to probate. The petition also sought to appoint Theresa as the personal representative of the Estate. A notice of the petition was published in the " Daily Record of Omaha" for 3 consecutive weeks in May 2010.

On June 24, 2010, the county court entered an order admitting the will and two codicils to formal probate as " valid, unrevoked and the last Will of [William]." The court also appointed Theresa as the personal representative of the Estate. In her affidavit filed on July 9, Theresa stated that she mailed a copy of the notice of the proceedings (albeit the notice was for " informal probate" ) to numerous interested parties, including Alice, on July 2.

[22 Neb.App. 552] On August 30, 2010, Alice filed three separate claims (all relating back to the 2006 divorce decree) against the Estate in the probate proceeding. The claims were for (1) future alimony in the amount of $2,000 per month for Alice's lifetime; (2) delinquent alimony as of August 1, 2010, in the amount of $6,000 plus interest; and (3) past due property settlement funds in the amount of $1,189.65 plus interest.

On September 23, 2010, Theresa, as personal representative, filed a " Short Form Inventory" of the " probate property" owned by William at the time of his death. The assets listed were (1) a checking account ($12,007.11), (2) an investment account ($100,163), and (3) household goods and furnishings and miscellaneous tangible personal property ($500). The total value of the probate property listed was $112,670.11. Nonprobate transfers were not listed on the inventory.

On October 28, 2010, Theresa disallowed all three of the claims Alice had filed on August 30.

Following the disallowance of her claims, on December 21, 2010, Alice filed a " Petition for Allowance of Claims, Appointment of Special Administrator Pursuant to Neb. Rev. Stat. § 30-2457, and Challenge to Second Codicil" (Petition). (Emphasis omitted.) In the Petition, Alice alleged that on August 30, she filed three claims against the Estate in the probate proceeding, for (1) future alimony in the amount of $2,000 per month for Alice's lifetime; (2) delinquent alimony as of August 1, 2010, in the amount of $6,000 plus interest; and (3) past-due property settlement funds in the amount of $1,189.65 plus interest. Alice alleged that Theresa's disallowance of the claims was improper based on the clear and unambiguous language of the 2006 divorce decree. Alice alleged that " [b]ased on the Divorce Decree and [Alice's] expected life expectancy, the amount that will be due [Alice] under the Decree of Dissolution is $224,400.00" Alice asked the court to allow each of her three claims, including, but not limited to, an award of $224,400.

Alice also requested the appointment of a special administrator. She alleged that Theresa had a general power of attorney for William since June 26, 2006, and was also the personal representative of the Estate and that from the time [22 Neb.App. 553] Theresa's power of attorney became activated

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through the date of William's death, William's liquid assets were reduced from approximately $1 million to $112,000, all while Theresa had actual knowledge of the alimony award under the divorce decree. Alice alleged that Theresa, acting as both power of attorney and personal representative, had " a conflict of interest to properly administer and/or preserve the [E]state, including but not limited to collecting assets belonging to the Estate and therefore a special administrator [was] necessary pursuant to and in accordance with Neb. Rev. Stat. § 30-2457." (Emphasis omitted.)

Additionally, Alice challenged the Second Codicil executed by William on May 11, 2007, as being " subsequent to the date he was declared unable to conduct and manage his business affairs, pursuant to a Certificate of Disability." Alice alleged that because William was incompetent to execute the Second Codicil, it should be declared null and void and of no force and effect. (We note that relevant to these proceedings, the Second Codicil effectively removed Alice from William's will, except that it did provide that if Alice survived him, his executor " may" in his or her sole discretion allocate a portion of the " rest, residue and remainder" of the Estate to Theresa, " as Trustee of the William F. Lorenz Alimony Trust," which funds she may in her sole discretion use to pay Alice $2,000 per month to satisfy any obligation ordered by an Iowa court. (Emphasis omitted.))

On January 25, 2011, Theresa, as personal representative, filed her answer to the Petition. In her answer, Theresa affirmatively stated that the amounts claimed to be due in Alice's three statements of claim were incorrect and that therefore, the disallowance of claims was proper. She also affirmatively stated:

[Theresa] has paid all amounts due to Alice . . . under and pursuant to the " Divorce Decree" described in the Petition other than future alimony payments and . . . adequate provision has been made for the payment of future alimony payments through [William's] Last Will and Testament and Codicils thereto that have been filed with the Court, including particularly Item III of the [22 Neb.App. 554] Second Codicil which provides for establishment of the William F. Lorenz Alimony Trust. The Divorce Decree specifically contemplated and authorized satisfaction of future alimony obligations through a trust funded by [William], as specifically set forth in paragraph 12 of the Petition.

Theresa asked the court for an order denying each of the claims submitted by Alice, except for the claim for future alimony in the amount of $2,000 per month until Alice's death or remarriage. Theresa also asked the court for a further order authorizing and approving the satisfaction of such claim for future alimony through the funding of the " William F. Lorenz Alimony Trust" pursuant to the Second Codicil of William's will.

With regard to the appointment of a special administrator, Theresa affirmatively stated that Alice " lack[ed] standing to seek the appointment of a special administrator and [was] improperly seeking to require the Estate to incur expenses for the sole benefit of [Alice], which expenses should in equity be borne by [Alice]." Theresa also affirmatively stated that the Petition filed by Alice failed to state a cause of action for the appointment of a special administrator. Finally, Theresa affirmatively stated that William made adequate provision for the payment of future alimony payments to Alice via the alimony trust provision in the Second Codicil.

With regard to the Second Codicil, Theresa affirmatively stated that " [Alice],

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as a creditor of the Estate, has no interest or standing to assert the invalidity of the Second Codicil." Theresa also affirmatively stated that " the Second Codicil was formally admitted to probate by Order of [the Douglas County] Court after notice to interested persons, including [Alice], and formal hearing, which Order is final and nonappealable." Theresa alleged that Alice's prayer to have the Second Codicil declared to be null and void was barred by the doctrines of res judicata and collateral estoppel.

More than a year after the filing of the pleadings just described, on May 10, 2012, Alice and Theresa filed a stipulation regarding the life expectancy of Alice, agreeing that for purposes of the adjudication of Alice's claim against the [22 Neb.App. 555] Estate, the life expectancy of Alice would be determined pursuant to " the Commissioners 2001 Standard Ordinary Mortality Table as approved by the Nebraska Department of Insurance," a copy of which was attached to the stipulation and incorporated by reference. However, the parties further stipulated that the Estate objected to the relevancy of Alice's life expectancy with regard to the adjudication of her claim against the Estate and that both parties reserved the right to present evidence regarding Alice's health or physical condition which may justify a departure from the mortality table in determining her life expectancy.

The county court granted continuances requested by Theresa in November 2011, August and December 2012, and January 2013.

On March 14, 2013, Theresa filed a motion for summary judgment as to the Petition dated December 21, 2010. Theresa alleged that the Estate was entitled to judgment as a matter of law on all of the claims in the Petition and asked the court to dismiss the Petition with prejudice, with the exception of the following claims: (1) Alice's statement of claim for alimony in the amount of $2,000 per month commencing September 1, 2010, and continuing each month thereafter should be allowed, with the additional condition that such claim and obligation terminates upon Alice's death or remarriage, whichever shall first occur, and (2) Alice's statement of claim for a property settlement in the amount of $1,189.65 plus interest should be partially allowed in the amount of $129.78, but otherwise disallowed.

A hearing on Theresa's motion for summary judgment was held on April 15, 2013. At the hearing, the county court took judicial notice of its June 24, 2010, order admitting the will and two codicils to formal probate as " valid, unrevoked and the last Will of [William]." Evidence was offered and received in support of and in opposition to the motion for summary judgment. The contents of such evidence will be discussed as necessary later in our analysis.

The county court's final order was filed on May 10, 2013. In that order, the court noted that the parties submitted briefs in support of their respective positions at the hearing on the [22 Neb.App. 556] motion for summary judgment (however, those briefs do not appear in our record on appeal). The court also stated that after the hearing, " each party stipulated that the court consider additional argument by written correspondence dated April 17 [and] 24 and May 6, 2013" (similarly, neither the stipulation nor the written correspondence appears in our record on appeal, and the county court did not elaborate on what was contained in that correspondence).

The county court found: (1) A genuine issue of material fact existed regarding Alice's claim for interest for delinquent alimony, but both parties stipulated and conceded that the actual amount of delinquent alimony had been paid; (2) Alice's

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claim for alimony commencing September 1, 2010, in the amount of $2,000 per month should be allowed until she dies or remarries, whichever occurs first, and Alice's previous request for a lump sum based upon her life expectancy was withdrawn; (3) Alice's claim for interest as a result of a late property settlement payment should be allowed in the amount of $129.78; (4) Alice's demand for Theresa to compel beneficiaries of POD transfers to pay such transfers over to the Estate as a basis for the appointment of a special administrator was not timely as required by " Neb. Rev. Stat. Section 30-746" (later corrected by order nunc pro tunc to read Neb. Rev. Stat. ยง 30-2726 (Reissue 2008)); (5) the Petition for a special administrator was not warranted, because " the procedure by which to suspend and remove [Theresa as] Personal Representative and thereby [for] Appointment of a Special Administrator was not followed as required pursuant to Neb. Rev. Stat. Sections 30-2454 and 30-2457" ; and (6) Alice's challenge to the validity of the Second Codicil was untimely, the court's order dated June 24, 2010, having validated William's will and both codicils, which order was final and appealable. Accordingly, the county court granted Theresa's motion for summary judgment, except for (1) Alice's claim for interest for delinquent alimony; (2) Alice's claim for alimony in the amount of $2,000 per month, commencing September 1, 2010, ...


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