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In re Estate of Ramstetter

Court of Appeals of Colorado, Third Division

May 19, 2016

In re the Estate of Louise F. Ramstetter, deceased.
v.
Edrie Jeanne Hostetler, Appellee. Florence Marie Ramstetter and Karol Lue Ramstetter, Appellants,

         Mesa County District Court No. 09PR151 Honorable David A. Bottger, Judge

          Hoskin Farina & Kampf, Professional Corporation, David M. Dodero, Nicholas H. Gower, Grand Junction, Colorado, for Appellants

          Poskus, Caton & Klein, P.C., Bernard A. Poskus, Jarod Balson, Denver, Colorado, for Appellee

          OPINION

          WEBB JUDGE

         ¶ 1 This estate case concerns the interests of three sisters - Edrie Jeanne Hostetler (Jeanne), Florence Marie Ramstetter (Marie), and Karol Lue Ramstetter (Karol) - in a 500-acre tract located in Jefferson County (Ranch).[1] Their late mother, Louise F. Ramstetter (Louise), devised the Ranch to them "in equal shares to be held as joint tenants." Their dispute arose from the admitted uncertainty of the attorney who drafted the will and - as found by the trial court - the uncertainty of the devisees over how a joint tenancy created by will could be severed.

         ¶ 2 Marie and Karol appeal:

●an order granting Jeanne's motion for judgment on the pleadings and dismissing their claim to reform Louise's will; and
● an order entered following a bench trial declaring, as relevant to this appeal, that an "Agreement and Release" entered into among the sisters was "invalid as a result of mutual mistake, " and that Jeanne had severed the joint tenancy by creating a tenancy in common.

         ¶ 3 We hold that the trial court properly excluded extrinsic evidence of Louise's intent in executing the will, as the recently-enacted section 15-11-806, C.R.S. 2015, is not retroactive on these facts. We further hold that the trial court did not err in applying the mutual mistake defense. Accordingly, we affirm.

         I. Background

         ¶ 4 Louise's 2008 will devised the Ranch to the sisters "in equal shares to be held as joint tenants." It also designated Marie and Karol as personal representatives if Rose Pugliese, the attorney who had drafted the will, declined appointment. After Louise died in 2009 and Pugliese renounced her appointment, Marie and Karol began administering the estate.

         ¶ 5 Three years later, Jeanne petitioned to remove Marie and Karol as personal representatives.[2] She also sought a declaratory judgment that she had severed the joint tenancy among the sisters, creating a tenancy in common as to her one-third of the Ranch, by deeding her interest to a trust that she had created.

         ¶ 6 Marie and Karol cross-petitioned to enforce the 2012 Agreement and Release, in which they had agreed to convey thirty-five acres of the Ranch to Jeanne and she had agreed to convey the remainder of her interest in the Ranch to them, with all other claims being released. They amended their cross-petition to seek reformation of the will based on Pugliese's failure to have implemented Louise's intent to keep ownership of the Ranch within the family (because Pugliese mistakenly believed that a joint tenancy created by a will could not be severed through the unilateral action of any one joint tenant).

         ¶ 7 In a detailed written order, the trial court granted Jeanne's motion for judgment on the pleadings. The court held that the will was unambiguous because the only "reasonable, or for that matter, legal" interpretation was that it conveyed the Ranch "to the named devisees in joint tenancy, which may be severed by any joint tenant."

         ¶ 8 Then the court addressed section 15-11-806, effective July 1, 2010, which allows a court to reform even an unambiguous instrument, "to conform the terms to the transferor's intention, " based on clear and convincing evidence that "the transferor's intent and the terms of the governing instrument were affected by a mistake of fact or law." It accepted the parties' position that application of section 15-11-806 was determined by section 15-17-101(2), C.R.S. 2015, but concluded that section 15-17-101(2) did not make section 15-11-806 applicable because Louise had died before the latter section became effective. This conclusion presents a novel question of statutory interpretation.

         ¶ 9 Following a four-day hearing on the claim to enforce the Agreement and Release, the trial court entered another lengthy written order addressing Jeanne's defenses - lack of consideration, rescission, and mutual mistake. The court ruled against Jeanne as to lack of consideration and rescission, rulings that she has not appealed.

         ¶ 10 After summarizing the evidence, the court found, "as a matter of fact that when they executed the Agreement and Release, Jeanne, Marie and Karol believed that this was the only way the joint tenancy created by Louise's will could be severed." On this basis, it declared the Agreement and Release "invalid as a result of mutual mistake among the parties to it." It also declared that Jeanne had severed the joint tenancy by the conveyance to her trust, and thus, as between Jeanne, on the one hand, and Marie and Karol, on the other, a tenancy in common existed.

         II. Whether the Trial Court Properly Excluded Extrinsic Evidence of Louise's Intent Offered to Reform Her Will

         ¶ 11 Karol and Marie first contend the trial court improperly dismissed their claim for reformation of Louise's will. Like the trial court and the parties, we agree that whether to apply section 15-11-806 turns on section 15-17-101(2). Hence, first, we construe section 15-17-101(2). Then we conclude that the trial court properly declined to apply section 15-11-806, although our conclusion does not rest on the date of Louise's death. See Roque v. Allstate Ins. Co., 2012 COA 10, ¶ 7 ("We can affirm for any reason supported by the record, even reasons not decided by the trial court.").

         A. Preservation and Standard of Review

         ¶ 12 Although Jeanne concedes preservation of this issue, she asserts on appeal that we should not consider it because had Marie and Karol expeditiously administered the estate, their reformation claim would have been resolved before the General Assembly enacted section 15-11-806. But Jeanne does not indicate where she raised this assertion in the trial court. See C.A.R. 28(a)(7)(A). Nor have we found a record reference to her assertion. For these reasons, we decline to address it. See Laleh v. Johnson, 2016 COA 4, ¶ 8 (noting that appellate courts "generally do not address unpreserved civil issues").

         ¶ 13 "An appellate court reviews a district court's order granting a judgment on the pleadings based on C.R.C.P. 12(c) de novo." In re Estate of Johnson, 2012 COA 209, ¶ 18. Likewise, "[t]he interpretation of a statute raises a question of law that we review de novo." Cain v. People, 2014 CO 49, ¶ 10.

         B. Law

         1. Statutory Framework

         ¶ 14 Section 15-11-806 amended the probate code by permitting a court to

reform the terms of a governing instrument, even if unambiguous, to conform the terms to the transferor's intention if it is proved by clear and convincing evidence that the transferor's intent and the terms of the governing instrument were affected by a mistake of fact or law, whether in expression or inducement.

         ¶ 15 Whether section 15-11-806 applies retroactively is governed by a separate section of that code providing, in pertinent part:

(a)The code or the amendment applies to governing instruments executed by decedents dying thereafter;
(b)The code or the amendment applies to any proceedings in court then pending or thereafter commenced, regardless of the time of the death of decedent, except to the extent that in the opinion of the court the former procedure should be made applicable in a particular case in the interest of justice or because of infeasibility of application of the procedure of this code or any amendment to this code;
. . . .
(e) Any rule of construction or presumption provided in this code or in any amendment to this code applies to governing instruments executed before July 1, 1974, or before the effective date of an amendment to this code, unless there is a clear indication of a contrary intent[.]

§ 15-17-101(2).

         2. Statutory Interpretation

         ¶ 16 When construing statutes, an appellate court looks first "to the plain meaning of the statutory language, reading words and phrases in context and construing them according to common usage." People v. Bonvicini, 2016 CO 11, ¶ 12. The court should harmonize, if possible, provisions that could conflict. Colo. Dep't of Revenue v. Hibbs, 122 P.3d 999, 1004 (Colo. 2005). And it should avoid interpretations that render provisions superfluous. See Kisselman v. Am. Family Mut. Ins. Co., 292 P.3d 964, 969 (Colo.App. 2011).

         C. The Trial Court's Order

         ¶ 17 In concluding that Karol and Marie could not present extrinsic evidence of Louise's intent to support their reformation claim under section 15-11-806, the trial court primarily relied on section 15-17-101(2)(a). The court explained that because Louise had died before the General Assembly enacted section 15-11-806, that provision "is inapplicable to her Will."

         ¶ 18 The trial court rejected Karol and Marie's arguments that section 15-17-101(2)(b) and (2)(e) rendered section 15-11-806 retroactively applicable to their case. Pointing to section 15-17-101(2)(b)'s reference to a "former procedure, " the trial court concluded that subsection (2)(b) only applies to amendments relating to "the procedural ...


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