Death Valley: Court Of Appeals Of South Carolina Finds Statement About Will Inadmissible Under State Of Mind Exception

Similar to its federal counterpart, South Carolina Rule of Evidence 803(3) provides an exception to the rule against hearsay for

A statement of the declarant’s then existing state of mind, emotion, sensation, or physical condition (such as intent, plan, motive, design, mental feeling, pain, and bodily health), but not including a statement of memory or belief to prove the fact remembered or believed unless it relates to the execution, revocation, identification, or terms of declarant’s will.

In Estate of Gill ex rel. Grant v. Clemson University Foundation, 2012 WL 720378 (S.C.App. 2012), the Court of Appeals of South Carolina found that a special referee did not err in excluding testimony about a statement made by the drafter  of a will because the statement came one year after the will was executed. But does this decision make sense given the language of Rule 803(3)?

In Estate of Gill, pursuant to Caroline’s Gill’s estate,

Gill bequeathed $100,000 to Clemson to establish [a] Scholarship. The Will specified that the Scholarship fund “shall be administered by the said legatee [Clemson] by using the income therefrom (but never any of the principal) to provide scholarships at [Clemson] for academically deserving football players.” The Will further stated the money was “to be used to defray the expenses of tuition, books, activities, and related living expenses such as room and board.” The Estate contend[ed] that to provide a funding mechanism for the Scholarship, Gill specifically designated the Scholarship as the beneficiary of $100,000 contained in an IRA account with Morgan Stanley. The Agreement, implemented almost one year after Gill executed the Will, list[ed] the designated primary beneficiaries as “Clemson University Foundation $100,000 Danny Ford Scholarship Fund” and “Caroline B. Gill Estate.” The Estate assert[ed] the gift was structured that way to provide the most tax-efficient method to fund the new endowment created by the Will. Clemson maintain[ed] it [wa]s entitled to both the $100,000 from the Morgan Stanley IRA account and $100,000 from the Will. As such, Clemson requested and received from Morgan Stanley $100,000 from Gill’s IRA.

Thereafter,

The Estate filed an amended complaint in probate court on July 13, 2009, seeking a declaratory judgment and a temporary injunction, adding Morgan Stanley as a party. Clemson filed a motion for removal of the matter to circuit court, which the probate court granted. The matter was referred to a special referee by consent order. On November 18, 2009, the Estate filed a second amended complaint, removing the cause of action for a temporary injunction and Morgan Stanley as a party. A non-jury trial was held on November 30, 2009, and the special referee took the matter under advisement. The special referee issued his order on December 15, 2009, finding the Will was unambiguous, and therefore, no extrinsic evidence could be considered to determine Gill’s intent. The referee further found the IRA was a non-testamentary asset that passed outside the Will. The Estate filed a motion to reconsider, which was denied.

The Estate thereafter appealed, claiming, inter alia, that the special referee erred by precluding the Estate from presenting the testimony of Gill’s personal representatives, J. Louis Grant, whom would have testified that “Gill told him she intended for the IRA designation to fulfill the Clemson bequest created in the Will.” The Estate contended that

Grant’s testimony should have been admissible to show that “the IRA Beneficiary Designation was part of [Gill’s] overall scheme and that the designation was part of the plan to fund the gift expressed in [the] Will” and the “testimony is relevant because it goes to [Gill’s intent].”

The Court of Appeals of South Carolina disagreed, concluding that

Grant’s testimony related to a statement made by Gill almost a year after she created the Will; therefore, her statement was not made at the time of the making of the Will to show her belief at that time, and the hearsay exception provided in Rule 803(3) does not apply to the testimony. Accordingly, we hold the special referee did not err in prohibiting Grant’s proffered testimony because it was not admissible under Rule 803(3), SCRE, as an exception to the hearsay rule.

But was this the correct ruling? Rule 803(3) covers statements concerning a declarant’s then existing state of mind “not including a statement of memory or belief to prove the fact remembered or believed unless it relates to the execution, revocation, identification, or terms of declarant’s will.” (emphasis added). Doesn’t this mean that Rule 803(3) does cover a statement of memory or belief it relates to the terms of the declarant’s will and that Grant’s testimony should have been admitted?

-CM