In re Estate of Gillin

In re Estate of Gillin (2000-373); 172 Vt. 546; 773 A.2d 270

[Filed 19-Mar-2001]


                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2000-373

                             JANUARY TERM, 2001


In re Estate of John P. Gillin	       }	APPEALED FROM:
                                       }
                                       }
                                       }	Franklin Superior Court
                                       }	
                                       }
                                       }	DOCKET NO. S 377-99 Fc

                                                Trial Judge: Edward J. Cashman

             In the above-entitled cause, the Clerk will enter:


       This is an appeal by Petitioners Esther Kearney, Margaret Raleigh and
  Charlotte Keefe, from  an order of the Franklin Superior Court dismissing
  their appeal from the Franklin Probate Court.   The Probate Court denied
  petitioners' claim as adoptive first cousins to the estate of John P.
  Gillin,  who died intestate on May 24, 1984.  At the time of Gillin's
  death, no heirs by blood survived him,  and the Vermont statutes in effect
  at the time prohibited collateral relatives, such as petitioners, from 
  inheriting from a person who had been adopted.  See 15 V.S.A. § 448 (1963). 
  The primary property  in the estate was a 155-acre farm located in
  Fairfield, which passed to the Town of Fairfield by Order  of Escheat on
  August 15, 1985.  Petitioners' claim is based on our subsequent decision in
  MacCallum  v. Seymour's Administrator, 165 Vt. 452, 453, 686 A.2d 935, 935
  (1996), which held that 15 V.S.A.  § 448 unconstitutionally denied adopted
  children the right to inherit from collateral relatives.   Petitioners
  argued before the Probate Court and the Superior Court that the MacCallum
  decision  applies, as well, to permit collateral relatives to inherit from
  adopted children, and that their claim is  timely filed under the escheat
  statute, 14 V.S.A. § 684.  We agree and reverse.

       In MacCallum, we held that the two rationales proffered to validate 15
  V.S.A.§ 448 were not  reasonably related to a valid public purpose.  The
  first, that the presumed intent of collateral relatives  was that their
  property would pass only within the bloodline, was rejected because, as
  applied to the  laws of intestate succession, it made statutory
  discrimination lawful as if it were private  discrimination.  MacCallum,
  165 Vt. at 458, 686 A.2d  at 938 (citing Trimble v. Gordon, 430 U.S. 762,
  775 n.16 (1977)(applying same rationale to illegitimacy)).  Moreover, the
  statute reflected an  outdated way of thinking about the status of adopted
  children.  The second rationale, that adoption  represented a contract
  between the adoptee and the adopting parent to which the collateral
  relatives  had not consented, was rejected because it made no sense. 
  Indeed, the contractual theory was based  on the same underlying premise
  that we found to be outdated in the presumed intent theory-that the 
  adopted child should occupy a status that is less than equal to other
  relatives.  

 

       Given our rationale in MacCallum, we see no reason why it is not
  equally valid in the case at  bar, where the only difference in the two
  cases is that the persons seeking to inherit are the collateral  relatives
  of an adopted child, rather than the reverse.  The decision was not based
  on the  characterization of adopted children as a suspect class, entitled
  to a level of stricter scrutiny that  would not apply to the petitioners
  here.  See id. at 460-461, 686 A.2d  at 940.  We applied the  analysis from
  Choquette v. Perrault, 153 Vt. 45, 569 A.2d 455 (1989), that the rationale
  was not  reasonably related to a legitimate state purpose.  MacCallum, 165
  Vt. at 457, 460, 686 A.2d  at 937-38, 939.  Therefore, if we were to hold
  the statute valid as to petitioners, thereby barring their  inheritance, we
  would have to embrace the underlying premises we have already rejected.  

       The Town makes a number of arguments as to why MacCallum should not
  apply to the  petitioners, none of which we find meritorious.  First, the
  Town argues that our decisions in In re  Estate of Hagar, 98 Vt. 235, 126 A. 507 (1924), and In re Raymond Estate, 161 Vt. 544, 641 A.2d 1342
  (1994), require us to hold that the inheritance rights of petitioners
  vested at the death of Gillin,  and that the statutes in force at the time
  govern the disposition of the estate.  In reality, this is an  argument
  that MacCallum should not be applied retroactively.  The Town argues that
  it would be  inequitable to do so because the ruling might affect numerous
  estates long since settled.  With  respect to hardship to the Town, the
  Town claims, as the temporary beneficiary of the escheat laws, it  has lost
  the tax value of the estate since 1986 and may now suffer the hardship of
  losing both the  property and the taxes.

       The general rule is that judicial decisions are applied retroactively. 
  In American Trucking  Ass'ns, Inc. v. Conway, 152 Vt. 363, 377, 566 A.2d 1323, 1332 (1989), we held that "relief will be  non retroactive only where
  the case establishes a new rule of law . . . and where its retroactive 
  application would be inequitable." (FN1)  Assuming MacCallum announced a
  new rule of law, we see  no inequity either to estates settled or to the
  Town itself that would prevent us from applying our  general rule on
  retroactivity.

       First, with respect to whether we would create a hardship to intestate
  estates already settled,  where collateral relatives by adoption may have
  been excluded, we think the number is likely to be  small.  The question of
  unsettling closed estates is further complicated by whether such estates
  may  be reopened.  We view these potential complications as remote and not
  likely to cause major  difficulties.  For intestate estates that may not be
  reopened, MacCallum is not a factor.  Here,  petitioners were able to file
  a late claim to the estate because the Town took the property by escheat, 
  under 14 V.S.A. § 684, which provides:

 

    If a devisee, legatee, heir, widow or other person entitled to
    such estate  appears within seventeen years from the date of such
    decree and files a  claim with the probate court which made such
    decree, and establishes the  claim to such estate, he shall have
    possession of the same, or, if sold, the  town shall be
    accountable to him for the avails, after deducting reasonable 
    charges for the care of the estate.  If the claim is not made
    within the time  mentioned, it shall be barred.

  Thus, the number of estates that mirror these facts - intestacy, adoptive
  relatives excluded, and  escheat - may be nonexistent.

       With respect to hardship to the Town, there is none.  Petitioners
  brought their claim within  seventeen years, and as long as they are
  determined to be the heirs, the Town has no right to claim  the property
  for itself.  Escheat is not favored and applies only as a last resort when
  no one qualifies  to inherit.  United States v. 198.73 Acres of Land, More
  or Less, 800 F.2d 434, 435 (4th Cir. 1986).   The Town's interest was
  always contingent unless no heirs appeared within the time allowed.  
  Therefore, there can be no hardship to the Town to lose a property to which
  it did not have a vested  right.

       Nor does the Town suffer from its failure to collect taxes for the
  years the property was off the  grand list.  Towns collect whatever taxes
  are necessary to run the town from the properties on the  grand list.  The
  Town did not suffer a deficiency in taxes.  For the same reason, the Town's
  claim for  back taxes for the years it held the property must fail.  No tax
  bills were issued for the property for  those years.  There is no
  deficiency to be reimbursed.

       Finally, the Town claims that this case must be remanded for the trial
  court to determine an  issue it did not reach - whether the Town could
  retroactively charge taxes on the property and recoup  its expenses, now
  that heirs have appeared.  In the interests of judicial economy, and in
  light of the  age of the claimants in this case, we address the tax issue
  here.  Nothing in the escheat statute gives  the Town the right to charge
  taxes retroactively.  See In re Ohlsen's Estate, 75 P.2d 6, 9 (Or. 1938) 
  (real property that escheats to the state is not subject to taxes).  Under
  14 V.S.A. § 683, the escheated  estate assigned to the town "shall be for
  the use of schools in the towns respectively and shall be  managed and
  disposed of like other property appropriated to the use of the town school
  districts."   Although the Town was permitted under the statute to dispose
  of the property, if it did so, the  proceeds were to be used for school
  purposes.  School property is not taxable.  32 V.S.A. § 3802(4)  (exempting
  real property owned or leased by public schools).  As exempt real estate,
  such property  could not be listed as "taxable" real estate in the grand
  list.  32 V.S.A. §§ 3651, 4151(b), 4152(a)(3).  The Town, which held the
  property by virtue of the escheat statute, cannot retroactively change the 
  status of the property when its right to hold it is extinguished.

       The only other provision for the Town's expenses appears in 14 V.S.A.
  § 684, which provides  that if the property is sold, "the town shall be
  accountable to [the heir] for the avails, after deducting  reasonable
  charges for the care of the estate."  The property at issue was not sold. 
  Therefore, there  can be no claim on the part of the heirs for the "avails"
  or the Town for reasonable expenses for care  of the estate.

 

       Reversed and remanded to the Franklin Probate Court to determine the
  heirs, such cause to be  expedited and a hearing, if necessary, held
  forthwith. 




                                       BY THE COURT:



                                       _______________________________________
                                       Jeffrey L. Amestoy, Chief Justice

                                       _______________________________________
                                       John A. Dooley, Associate Justice

                                       _______________________________________
                                       James L. Morse, Associate Justice

                                       _______________________________________
                                       Denise R. Johnson, Associate Justice

                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice



------------------------------------------------------------------------------
                                  Footnotes


FN1.  Our decision in American Trucking was based on the United States
  Supreme Court decision in  Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07
  (1971).  The analysis of retroactivity in Chevron has  since been
  abandoned, in part, by Harper v. Virginia Dep't of Taxation, 509 U.S. 84,
  97-99 (1993),  which held that retroactivity should not depend on the
  particular equities of individual claims.   Eliminating the hardship
  analysis, however, only strengthens our decision here that retroactive
  application  of MacCallum is appropriate.  See Lafaso v. Patrissi, 161 Vt.
  46, 57, 633 A.2d 695, 701 (1993).