Do you think that Shannon should prevail in her claim for part of Karat’s estate?

1. Wedge v. Planters Lifesavers

What theory of liability did Justice Posner use in finding the defendant liable? What are the judge’s reasons for reversing the decisions of the lower court? Do you agree with the decision? Why or why not? 

Here is a link to the case

2.  In Re the Estate of Charles Karat,

Do you think that Shannon should prevail in her claim for part of Karat’s estate? Why or why not? How does this case illustrate the importance of having a clear estate plan when there are joint interests in a family business and property?

Here is the case study

This case arose when Charles Karat died, leaving behind both a wife and a secret intimate companion, with whom he had a close personal relationship for nearly thirty years. Mar. Karat was hospitalized on June 18, 1997, after he became suddenly ill. He died on July 4, 1997. After his death, his wife, Pete, filed proof of authority to probate certain property in Montana. Pete did not know about her husband’s secret intimate companion until Patricia Elizabeth Shannon (Shannon) filed a petition for ancillary probate of will, claiming a letter Karat wrote on June 18, 1997, and mailed to her constituted a valid holographic will with regard to the Montana property.

   At issue in the case is the language in the letter dated June 18, 1997. Mar. Karat had taken three actions prior to June 19, 1997, to clarify what he wanted to happen to his property upon his death. On May 3, 1989, he executed a holographic will in which he bequeathed certain Montana property to Shannon. On May 4, 1997, Karat executed a formal will in which he devised all his property to his wife, Pete. On April 9, 1997, Mar. Karat deeded his interest to certain land in Montana to Shannon. He transferred a twenty-acre parcel of land with a cabin along the Big Hole River to Shannon through a sham sale; he disguised the transaction to look like a sale even though he gave Shannon the $80,000 needed to buy the parcel. Shannon and Karat agreed to the “sale” of an additional ninety acres along the Black Hole River. The sale was to be consummated in September 1997. Unfortunately for Shannon, Mar. Karat became ill and died prior to the transaction.

   Here is what the June 18, 1997, letter said:

       Dear Pat—       
       Something is terribly wrong with me and they can’t figure out what. After cat-scans and a variety of cardiograms, they agree it’s not lung cancer or heart trouble or blood clot. So they’re putting me in the hospital today to concentrate on infectious diseases. I am getting worse, barely able to get out of bed, but still have high hopes for recovery … if only I can get a diagnosis! Curio user and curio user! I’ll keep you informed. I’ll have the lawyer visit the hospital to be sure you inherit the rest of the place in MT if it comes to that.       
       I send love to you & [your youngest daughter,] Shannon. Hope things are better there!       

Shannon sought to probate this letter dated June 18, 1997, as a valid holographic codicil to Mar. Karat’s formal 1994 will. She did so because she wanted to make sure she got the ninety acres of Montana property she believed Mar. Karat wanted her to have.

   A district court in Madison County, Montana, ruled that the estate should be granted a summary judgment regarding the June 18 letter. The district court rejected Shannon’s claim that the letter was a valid holographic codicil and Shannon appealed. In the following case, the highest court of Montana decides whether the lower court was correct in granting the estate a summary judgment. If the lower court erred, Shannon will be allowed to present evidence in a trial of Karat’s intent regarding who should get the Montana property.

JUSTICE W. WILLIAM LEAPHART:   We disagree with the Estate’s position that Shannon’s extrinsic evidence is “immaterial” to the question of testamentary intent, and is merely “an insubstantial attempt to manufacture a material issue of fact.” Rather, we agree with Shannon that the District Court improperly resolved contested issues of material fact when it found, in support of its conclusion that the letter “clearly contemplates a separate testamentary instrument not yet in existence,” that: The extrinsic evidence—none of which is contested—confirms this conclusion. Petitioner herself testified during her deposition and at trial that the decedent intended to “sell”—not “will”—the Montana property to her in the fall of 1998 [sic]. While the extrinsic evidence substantiates a close and personal relationship between Petitioner and the decedent extending over twenty-nine years, during which she and her children were apparently entirely housed, supported, educated, and temporarily set up in business by the decedent, those facts are not sufficient to create a testamentary intent which the language of the letter clearly refutes.

   When drawing all reasonable inference in favour of Shannon, as the party opposed to summary judgment, we conclude that the extrinsic evidence raises a genuine issue of material fact as to whether Mar. Karat intended to gift, rather than sell, the remaining ninety acres of his Madison County property to Shannon. The plain language of the letter of June 18, 1997, indicates, as Shannon points out, that Mar. Karat desired that Shannon “inherit” all of his property along the Big Hole River. While other language in the letter—“I’ll have the lawyer visit the hospital … if it comes to that”—might suggest, as the Estate argues and as the District Court concluded, that Mar. Karat was contemplating a separate testamentary instrument not yet in existence, it is far from certain that this is the result Mar. Karat intended by the letter.

p. 1150

   At the very least, when reading the language of the letter in light of the extrinsic evidence showing the couple’s future plans to consummate the transfer of the remaining ninety acres vis-à-vis a mock “sale,” there arises a question of material fact as to whether Mar. Karat intended, given the state of serious illness, that the very letter of June 18, 1997, effect a posthumous disposition of his ninety acres of Madison County. Nor are the parties merely arguing different interpretations of the facts here; we have, in this case, a fundamental disagreement as to a genuine material fact which would be better reconciled by trial.

   … We hold that, because there is a genuine issue of material fact, the District Court erred in granting judgment as a matter of law. Accordingly, we reverse the court’s grant of summary judgment and remand, for trial, the factual question of whether, in light of the extrinsic evidence, Mar. Karat intended the letter of June 18, 1997, to effect a testamentary disposition of the ninety acres in Madison County to Shannon.

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