In the Matter of the Estate of EDWARD J. BURKE
MILDRED BURKE, Defendant Below, Appellee. KEVIN BURKE, Plaintiff Below, Appellant,
Submitted: August 23, 2017
Below: Court of Chancery of the State of Delaware C.A. No.
STRINE, Chief Justice; VALIHURA and VAUGHN, Justices.
L. Valihura Justice.
24th day of August 2017, upon consideration of the
briefs and record on appeal, it appears to the Court that:
This appeal concerns a dispute between Kevin Burke
("Kevin") and his stepmother, Mildred Burke
("Mildred"), over the estate of Edward J. Burke
("Burke"), who was Kevin's father and
Mildred's husband. In commencing this action, Kevin alleged
that, prior to Burke's death, Mildred improperly used a
power of attorney to retitle one of Burke's bank
accounts, which held the proceeds from Burke's sale of a
property that was the subject of a specific devise in his
will. The Court of Chancery granted summary judgment in
Mildred's favor, holding that Burke's sale of the
property resulted in an ademption of the specific bequest
thereof and that trial would be "useless" because
any recovery would flow to Mildred as the sole beneficiary of
Burke's estate. On appeal, Kevin challenges these
conclusions and the Master's determination that he lacked
standing. Because we agree with the Vice Chancellor's
bench ruling and his conclusion that a trial in this matter
would be futile, we do not reach the Master's conclusions
with respect to standing.
March 17, 1998, Burke executed a durable power of attorney
naming Mildred as his attorney-in-fact (the
"POA"). Burke also executed a Last Will and
Testament (the "Will"), which named Mildred
executor of Burke's estate and trustee of a trust created
in the Will (the "Trust"). The only asset devised to
the Trust was real property titled solely in Burke's name
(the "Property"). The Will provided:
BENEFICIARIES: I hereby give my home and it[s] contents
located at 2225 Grundy Road, Woodbridge, Virginia to my
Trustee herein named. The Trustee shall allow my daughter,
Julia Ann Bibbee[, ] to live in this home for three years
after my death. My daughter shall be responsible for the
payment of taxes, maintenance and insurance during this time
period. After three years have lapsed I direct my Trustee to
sell this house and invest the net proceeds and to give the
contents of the house to Julia Ann Bibbee. I direct the
Trustee to pay the net income to Mildred Burke for her life.
Upon the death of Mildred Burke the corpus shall be
distributed equally to my four children: Julia Ann Bibbee,
Edward J. Burke, Jr., Kevin T. Burke, and Elizabeth S. Frey.
In the event any of my children have predeceased me then I
give that child's share to his or her issue per stirpes.
I give the rest and remainder of my estate to my wife,
Mildred G. Burke.
July 24, 2012, Burke sold the Property and deposited the
proceeds in an account titled solely in his
name. After the sale, Burke's health began
to decline. In January 2013, he underwent quadruple bypass
surgery, and Mildred began using the POA to retitle his bank
accounts in both their names, including the account that held
the sale proceeds. Burke passed away on October 10, 2013.
March 10, 2015, Kevin initiated this action, alleging that
Mildred breached fiduciary duties she owed to Burke as his
attorney-in-fact. He asserted that Burke segregated the sale
proceeds to preserve them for his children and that Mildred
improperly used the POA to defeat Burke's testamentary
intent. The complaint sought invalidation of these
transactions, an accounting pursuant to the Delaware Durable
Personal Powers of Attorney Act,  and imposition of a
constructive trust. Mildred filed a motion to dismiss,
arguing that the devise of the Property lapsed when Burke
sold it, such that Kevin had no interest in the sale proceeds
and therefore lacked standing. The Master recommended that
the Court of Chancery grant summary judgment in favor of
Mildred, reasoning that Burke's sale of the Property
reflected his intention to revoke the devise
thereof. The Master concluded that Kevin was not
entitled to the proceeds of the sale and therefore lacked
standing to challenge Mildred's treatment of the account
holding those funds.
Upon review of Kevin's exceptions to the Master's
Final Report, the Vice Chancellor agreed that the specific
devise of the Property "was adeemed at the time that
[P]roperty was sold." He did not reach the
Master's standing analysis, stating:
That is an interesting question, but to my mind, it
doesn't dictate the result here, because, as I pointed
out earlier, equity will not require the doing of a useless
thing. If there were breaches of fiduciary duty in the
conduct of the attorney in fact in pulling money out of
accounts prematurely, putting them in her own name, or
whatever happened, if I were to so find, I would order those
amounts, I suppose, put back in the estate. They would flow
through the residuary clause of the estate to the
beneficiary, who, it happens, is the former attorney in fact.
So it seems to me that if this went forward to a trial, one
of two things would happen. Either the holder of the power
would be vindicated, in which case there would be no recovery
by the estate, or the exceptants would be vindicated, money
would be ordered put ...