Tag: breach of contract
April 21, 2017 marked one year since the death of the beloved recording artist, Prince. We have previously blogged about the legal issues surrounding Prince’s Estate that have emerged since his death. Although more than a year has now passed, the Estate continues to be engaged in litigation.
According to media reports, producer George Ian Boxill tried to release an EP containing previously unreleased songs by Prince to coincide with the first anniversary of his death. Boxill asserted that he had the right to release the music. In a lawsuit commenced by Paisley Park Enterprises, Prince’s Estate disagreed and alleged that Boxill was in breach of the recording agreement that he had signed with Prince.
The Estate was initially successful in blocking Boxill’s attempts to release the EP of new music. However, according to a new report in TMZ, Boxill has now filed additional legal documents that state that the unreleased music was not the subject of a nondisclosure agreement.
Separately, as we have previously blogged, Prince died without a Will and any known children, resulting in claims from a number of possible heirs.
According to a recent news report, the Minnesota judge presiding over the proceedings had indicated that he would not make a declaration regarding the heirs of Prince’s Estate until appeals by other potential heirs whose claims had been rejected were allowed to run their course. Lawyers for Prince’s sister and half-siblings have now argued that this delay will unnecessarily increase costs and hinder the proper administration of the Estate.
We have previously blogged about the importance of carefully addressing issues regarding intellectual property and any possible rights the estate may have after the testator’s death in a testator’s estate plan. Deceased writers, musicians and other artists may be parties to agreements that bind their estates and affect the rights and control over their intellectual property.
It is generally advisable for drafting solicitors to ensure that such legal documents are reviewed as part of a creative professional’s estate planning. It may also be prudent to obtain the advice of a lawyer who specializes in intellectual property law, to ensure that the estate plan adequately addresses any possible rights the estate may have after the testator’s death. Disputes over the beneficial ownership and control of a testator’s intellectual property can result in protracted and expensive litigation.
The legal issues surrounding Prince’s Estate reiterate the importance of careful estate planning while the testator is still alive. Lack of certainty regarding the beneficiaries of the estate, the deceased’s intentions and the property/rights of the estate can significantly increase the risk that the estate will become embroiled in protracted litigation.
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An estate trustee has the legal authority to arrange the place and manner of the burial or cremation of the deceased. The estate trustee also has a duty to see that the deceased is buried in a suitable manner and that no undue expense is incurred. Where a person dies without a will, and an administrator has not yet been appointed by the court, the deceased’s next of kin may direct the manner of burial or cremation. In some cases, the deceased may have made arrangements for a funeral and pre-paid for their own burial or cremation. There are certain statutory and common law consumer protections in regard to the procurement of funeral services.
Burial and cremation services are governed by the Funeral, Burial and Cremation Services Act, 2002. Pursuant to s.42(1), a purchaser of internment rights, defined in s. 1 as “the right to require or direct the interment of human remains in a lot”, may cancel the contract at any time within 30 days after the contract was made. The operator must fully refund all money received upon notice of cancellation. A cemetery operator will be unable to enforce a contract unless it meets the formal requirements set out in the regulations.
Contract law also provides certain protections to those purchasing funeral or burial services. In the recent case of Tsekhman v Spero, the Court held that contracts for funeral and interment services are contracts for “peace of mind”. A breach of contract, therefore, can result in damages for mental suffering. In this case, the Court found that a delay in fulfilling the contract for burial prejudiced the Plaintiffs’ ability to abide by their Jewish laws and customs and to honour their parents’ wishes. The court held damages for loss of peace of mind in a contract case such as this one should be modest.
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If you have school-aged children, you have undoubtedly heard of the ironclad playground rule “no take-backs”. Siblings often relish in reminding one another of the rule after a cherished possession has been passed along, much to the donor’s instant regret. In the schoolyard, children who dare to renege on a promise are subject to the righteous indignation of their peers.
In estate law, we see this scene play out when a testator enters into an agreement that provides that he or she is prevented from revoking his or her will. The testator subsequently changes the will in breach of the agreement and upon the testator’s death, it is argued that the testator is prohibited from doing so.
The question thus arises: can a testator, by agreement, effectively imbue his or her will with an irrevocable designation, contrary to the principle that a will remains revocable until death? According to Feeney’s “Canadian Law of Wills”, “A will is revocable even when it is expressed to be irrevocable and even if the testator covenants not to revoke it. In no circumstances will equity grant an injunction to restrain the testator from revoking his or her will.” Accordingly, a valid agreement, in which a testator has agreed not to revoke his or her will, cannot render a will irrevocable and does not prevent the testator from making subsequent changes. However, although the will itself remains valid, there are recourses available to the disappointed beneficiary.
If a will is revoked in breach of a contract that provides otherwise, the testator or estate may be held liable in damages or, in certain circumstances, specific performance may be granted. Alternatively, an equitable remedy such as unjust enrichment or quantum meruit may be available. It is important to bear in mind that this does not allow for a will (or a portion of a will) to be declared void. As the Ontario Court of Appeal held in Frye v Frye Estate (2008 ONCA 606), “[…] a contractual obligation to make or to refrain from revoking a will gives rise to an action for breach of contract and does not affect the validity of the will itself.”
This approach is in contrast to the one taken in some civil law jurisdictions. For instance, in Quebec, the Civil Code provides at article 706, “No person may, even in a marriage or civil union contract, except within the limits provided in article 1841, renounce his or her right to make a will, to dispose of his or her property in contemplation of death or to revoke the testamentary provisions he or she has made.” This provision is one of public order and a clause in a contract (aside from an irrevocable gift mortis causa made in a marriage contract) that attempts to do this may be deemed null and void.
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George Webster appealed to the Ontario Court of Appeal from a summary judgment partially dismissing his claim for damages against the estate of Ken Thomson. Webster v. Thomson, 2008 ONCA 730.
At issue was a painting by the American artist, Charles Russell, "Pirates of the Plains", which had been in the Webster family since 1931. Mr. Russell, who died in 1926, is apparently well known for his paintings of the "Old American West". The painting was very special to Mr. Webster who saw it as a link to his father who had originally acquired the painting.
On September 29, 1982, Mr. Webster’s mother sold the painting to Mr. Thomson, without Mr. Webster’s knowledge, for $150,000. Mr. Webster asked Mr. Thomson if he could re-acquire the painting. Mr. Thomson proposed that if Mr. Webster sold him a painting he owned by Cornelius Krieghoff, Mr. Thomson would give Mr. Webster the opportunity to purchase the Russell painting after he died at the painting’s appraised market value. This proposal was contained in a letter that Mr. Thomson wrote to Mr. Webster. Mr. Webster accepted.
On August 25, 2003, Mr. Thomson sold the Russell painting for U.S. $5,600,000 without apparent regard to his agreement with Mr. Webster. In 2004, Mr. Webster commenced a legal proceeding against Mr. Thomson. Mr. Webster’s claimed damages for breach of contract in the amount of $4,000,000 and punitive damages in the amount of $10,000,000. After Mr. Thomson died in June 2006, the action was continued against his estate.
In considering causes of estate litigation sometimes you need not look further than to your extended family if the relationships within the extended family are acrimonious.
An extended family can include a spouse, former spouse whether legal or common-law, children and their respective spouses (and former spouses), grandchildren and their spouses (and former spouses), siblings, nieces and nephews, extra-marital partners and other dependents, whether related to you or not. It is possible that any one of the above-noted people might bring a claim against the estate, or raise a dispute. Jealousy amongst family members and/or the anticipation or expectation that they are to or will receive all or a portion of the estate, however unwarranted, may lead to family members taking unreasonable positions with respect to claims they feel they have against the estate.
In making an estate plan then, it is critical to have any and all agreements that may affect your estate plan prepared before you die. These agreements could include separation, marriage, co-habitation, partnership, employment and shareholders agreements depending on the nature and make up of your estate.
While the secrets one has from a family may be extremely touchy, emotional or just difficult to disclose or deal with, their disclosure following death may lead to demands against the estate. An extra-marital relationship, an illness of whatever kind not known to the family, a relationship with a caregiver or promises made to caregivers regarding their compensation can be examples of such secrets. For instance, a friend or family member may be assisting with one’s errands or day to day care. If promises are made to the family friend or relative that they will be “looked after” upon one’s death, then they may make a claim against your estate following your death if their relationship with you and/or compensation is not clearly known.
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During Hull on Estate and Succession Planning Podcast #20, we wrapped up our analysis of the 10 causes of Estate Litigation and discussed Breach of Contract and Constructive Trust Claims.