In the Matter of the Supervised Estate of Gary D. Kent v. Cynthia Kerr
82 N.E.3d 326
| Ind. Ct. App. | 2017Background
- Gary Kent (decedent) executed a 2008 will leaving most of his residuary estate to his children John and Cynthia; Gary later, while terminally ill, asked John and Cynthia to sign a written family settlement agreement dividing expected inheritances.
- The written agreement (signed by Gary, John, Cynthia; notarized) allocated specific assets (coin collection to Cynthia; rental properties and subdivision duties to John) and addressed removal of a mortgage.
- John sent a written rescission a few days after signing (while Gary was still alive). Gary died on January 27, 2016.
- After Gary’s death John and Kevin (co-personal representatives) probated the will; Cynthia filed petitions/complaint to revoke probate and a motion to enforce the pre‑mortem settlement agreement.
- The probate court denied Cynthia’s motion, finding Indiana Code § 29-1-9-1 does not authorize pre‑mortem family settlement agreements, and concluded John’s prior rescission barred enforcement. Cynthia appealed.
Issues
| Issue | Cynthia's Argument | John/Kevin's Argument | Held |
|---|---|---|---|
| Whether I.C. § 29-1-9-1 permits pre-mortem (pre-death) family settlement agreements resolving future expectancy interests | § 29-1-9-1 does not specify timing; statute does not bar pre-mortem agreements and favors settlement/freedom of contract | Statute unambiguously contemplates post-mortem compromises only and thus pre-mortem agreements are prohibited | Court held statute does not prohibit pre-mortem family settlement agreements and such agreements can be valid and enforceable |
| Whether the written agreement here is supported by consideration | Mutual promises by John and Cynthia (and intent to carry out testator’s wishes) constitute adequate consideration | Agreement lacked consideration because it dealt with mere expectancy interests | Court held mutual promises and the testator‑wish rationale provide adequate consideration |
| Whether John validly rescinded the agreement before Gary’s death | Cynthia performed or was ready to perform; John’s unilateral rescission is ineffective | John rescinded in writing before decedent’s death, so rescission is valid | Court held unilateral rescission was ineffective; rescission was a nullity absent proof other party failed substantial performance |
| Remedy and disposition | Cynthia sought summary judgment enforcing the agreement | John/Kevin sought denial and probate to proceed under the will | Court reversed probate court, directed entry of judgment for Cynthia enforcing the agreement and remanded for further proceedings consistent with opinion |
Key Cases Cited
- Cont’l B’ball Ass’n, Inc. v. Ellenstein Enters., Inc., 669 N.E.2d 134 (Ind. 1996) (strong presumption favoring freedom to contract; courts reluctant to invalidate bargains absent clear statutory prohibition)
- Salcedo-Hart v. Burningham, [citation="656 F. App'x 888"] (10th Cir. 2016) (interpreting Colorado statute to permit pre-mortem family settlement agreements; persuasive authority)
- Kuhn v. Kuhn, 385 N.E.2d 1196 (Ind. Ct. App. 1979) (future interests recognized as property rights freely conveyed)
- Van Bibber Homes Sales v. Marlow, 778 N.E.2d 852 (Ind. Ct. App. 2002) (rescission requires showing substantial performance by rescinding party and refusal by other party to perform)
- Robert's Hair Designers, Inc. v. Pearson, 780 N.E.2d 858 (Ind. Ct. App. 2002) (presumption of enforceability for freely bargained contracts)
- Balt. & Ohio Sw. Ry. Co. v. Voigt, 176 U.S. 498 (U.S. 1900) (principle upholding sanctity of private contracts)