Carter v. Percy
708 N.W.2d 645 (2006) 270 Neb. 941 (2006)
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Rule of Law:
Under Nebraska Probate Code § 30-2723(d), a decedent's estate is liable for a check written by the decedent before death but presented for payment after death, thereby completing the delivery of a gift by operation of law upon the donor's death. This statutory provision supplants the common law rule that a donor's death revokes an undelivered gift by check.
Facts:
- For ten years, Deborah Carter performed housekeeping and other personal services for Edward Lamplaugh.
- On June 9, 2002, Lamplaugh gave Carter a check for $80,000, telling her it was a gift to enable her to buy a liquor store.
- Lamplaugh instructed Carter to write 'to pay bills' on the memo line of the check.
- On the morning of June 10, 2002, Carter discovered Lamplaugh deceased in his home.
- After Lamplaugh was pronounced dead, Carter deposited the $80,000 check into her account at Adams Bank & Trust.
- Upon learning of Lamplaugh's death, the Bank reversed the transaction, placed a hold on the account, and Carter was never able to access the funds.
Procedural Posture:
- Deborah Carter filed a petition for allowance of claim against the estate of Edward Lamplaugh in the county court.
- Following a trial, the county court granted Carter's claim in full, finding the $80,000 check was a valid gift.
- The successor personal representative of the estate, the appellant, appealed the judgment of the county court.
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Issue:
Does a donor's death revoke a check intended as a gift that has not been paid by the bank?
Opinions:
Majority - Gerrard, J.
No. A donor's death does not revoke a check intended as a gift, because a state statute makes the decedent's estate liable for checks written before death, regardless of when they are presented for payment. The court first affirmed the trial court's factual finding that Lamplaugh possessed the necessary donative intent, based on extensive testimony from Carter, her friend, and a bank employee about Lamplaugh's repeated expressions of his desire to give Carter his money. The court then addressed the central legal issue of delivery. While acknowledging the common law rule that a gift by check is incomplete until the check is paid and is revoked by the donor's death, the court found this rule was supplanted by Nebraska Probate Code § 30-2723(d). The statute's plain language states that a decedent's estate is liable to the payee of an unpaid check made by the party before death. The court reasoned that this statute makes no distinction between checks for gifts and checks for debts, and therefore completed the delivery of the gift by operation of law upon Lamplaugh's death, making the check irrevocable and payable by his estate.
Analysis:
This decision illustrates the power of modern statutory law, specifically the Uniform Probate Code, to override long-standing common law doctrines. It shifts the legal analysis for gifts by check from the traditional elements of delivery and dominion to a straightforward statutory interpretation. The ruling provides clarity and certainty, ensuring that a donor's clear intent is not frustrated by the timing of presentment for payment. This precedent significantly impacts estate administration by making estates liable for uncashed checks, protecting payees who may not have had an opportunity to cash a check before the drawer's death.
