Michael P. McGarry v. Ruth Zambo

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
March 27, 2024
A party may file with the Supreme Court a
Samuel A. Christensen petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10 and
RULE 809.62.

Appeal No. 2023AP119 Cir. Ct. No. 2021PR149

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

IN RE THE ESTATE OF KENNETH J. WITZIG, JR.:

MICHAEL P. MCGARRY,

APPELLANT,

V.

RUTH ZAMBO, ASSOCIATED BANK N.A., DAVID JOHNSON AND
MICHELLE JOHNSON,

RESPONDENTS.

APPEAL from an order of the circuit court for Waukesha County:
MICHAEL P. MAXWELL, Judge. Reversed and cause remanded for further
proceedings.

Before Gundrum, P.J., Grogan and Lazar, JJ.
No. 2023AP119

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

¶1 PER CURIAM. Michael P. McGarry appeals the circuit court’s grant
of judgment on the pleadings in favor of Ruth Zambo, David Johnson, Michelle
Johnson, and Associated Bank N.A. McGarry argues the circuit court erred when
it determined that a 2020 quitclaim deed did not revoke a 2016 transfer-on-death
(“TOD”) beneficiary designation and that the WIS. STAT. § 705.15(8) (2021-22)1
statute of repose barred McGarry’s claims. We conclude the 2020 quitclaim deed
revoked the 2016 TOD beneficiary designation and the § 705.15(8) statute of repose
does not apply to McGarry’s claims. We reverse and remand for further
proceedings.

¶2 As relevant to this appeal, Kenneth J. Witzig, Jr., who was unmarried
and had no children, owned a lake house (“Property”). McGarry was Witzig’s
neighbor. In 2013, Witzig executed a TOD deed naming McGarry as the grantee of
the Property upon Witzig’s death and a will naming McGarry as the beneficiary and
heir of Witzig’s estate. Zambo was Witzig’s financial advisor. In 2016, Witzig
executed a TOD deed naming Zambo as the grantee upon Witzig’s death and a will
naming Zambo as the beneficiary and heir of Witzig’s estate.

¶3 In 2020, as part of a reverse mortgage transaction, Witzig executed
and had recorded a quitclaim deed that named himself as both grantor and grantee
of the Property. Witzig died on February 17, 2021. On February 24, Zambo had
the Waukesha County Register of Deeds record a termination of decedent’s interest

1
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted.

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No. 2023AP119

(“TODI”) in the Property, naming herself as transferee of Witzig’s property. On
March 1, Zambo opened a probate matter in regard to Witzig’s estate.2

¶4 On July 6, Zambo, via a warranty deed, conveyed the Property to
David and Michelle Johnson. A mortgage naming Associated Bank as mortgagee
and the Johnsons as mortgagors was signed the same day. The deed and mortgage
were recorded on August 5, 2021. However, on July 29, after Zambo sold the
Property but before the Johnsons’ deed and mortgage were recorded, McGarry had
a lis pendens recorded on the Property.

¶5 On September 17, McGarry filed a declaratory action, alleging that he
had an interest in the Property as the beneficiary of McGarry’s will, that when
Witzig executed and had recorded the 2020 quitclaim deed, Zambo’s status as a
TOD beneficiary was revoked, that, because Zambo was no longer a TOD
beneficiary, she could not confirm her interest through the filing of a TODI, and that
Zambo did not have title to the Property when she conveyed it to the Johnsons.
McGarry argued that any purported sale of the Property was void. McGarry sought
a judgment declaring the Property to be transferred into Witzig’s probate estate.3

¶6 Zambo and the Johnsons moved for judgment on the pleadings.
Zambo and the Johnsons argued McGarry failed to file his declaratory complaint
and record his lis pendens within 120 days of Witzig’s death. They argued
McGarry’s challenge was untimely pursuant to WIS. STAT. § 705.15(8), which
provides:

2
On April 22, McGarry appeared in the probate matter and objected to the Zambo’s
petition. McGarry argued that he was Witzig’s beneficiary and that the 2016 will naming Zambo
was procured by Zambo’s undue influence.
3
The circuit court consolidated the probate matter with the civil declaratory action.

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No. 2023AP119

Unless previously adjudicated in a formal testacy
proceeding or otherwise barred, the claim of any claimant to
recover real property transferred to a TOD beneficiary under
this section is barred unless, by no later than 120 days after
the death of the sole owner or the last to die of multiple
owners, a complaint is filed in an action in which the relief
demanded may confirm or change interests in the real
property transferred under this section and a lis pendens is
filed or recorded in each county where any part of the real
property is located.

They also argued the 2020 quitclaim deed did not revoke Zambo’s status as a TOD
beneficiary.

¶7 In opposition to Zambo’s and the Johnsons’ motions, McGarry argued
WIS. STAT. § 705.15(8)’s statute of repose did not apply because that subsection
only applied to claims challenging transfers to a TOD beneficiary and Zambo was
not a TOD beneficiary at the time of Witzig’s death. McGarry contended that, as a
matter of law, Witzig’s 2020 quitclaim deed revoked Zambo’s status as a TOD
beneficiary.

¶8 Following a hearing, the circuit court issued a written decision
granting Zambo’s and the Johnsons’ motions for judgment on the pleadings and
dismissing McGarry’s declaratory complaint. The circuit court concluded Witzig’s
2020 quitclaim deed did not revoke Zambo’s status as a TOD beneficiary. It
reasoned:

Quitclaim deeds cannot designate or extinguish a
transfer-on-death beneficiary because they do not contain
the correct elements according to WIS. STAT. § 705.15(2)(a).
In addition, a quitclaim deed transferring the grantee’s
interest to himself as the grantor does not extinguish the
interests conveyed in a Transfer-on-Death deed. There is no
language in any documentation that conveys Witzig’s intent
to remove Zambo as a transfer-on-death beneficiary.

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No. 2023AP119

The circuit court explained that because Zambo was the TOD beneficiary at the time
of Witzig’s death, McGarry was required to file his complaint and record his lis
pendens challenging the transfer within 120 days of Witzig’s death. See WIS. STAT.
§ 705.15(8). Because McGarry’s filings were outside the deadline set by
§ 705.15(8), he was too late to challenge the transfer of the Property. McGarry
appeals.

¶9 Owners of real property may record a deed with a TOD provision. See
WIS. STAT. § 705.15. Such a provision, however, “does not affect ownership of the
property until the death of the sole owner.” § 705.15(3).

The designation may be canceled or changed at any time by
the sole owner …, without the consent of the TOD
beneficiary, by executing and recording another document
that designates a different TOD beneficiary or no
beneficiary. The recording of a document that designates a
TOD beneficiary or no beneficiary revokes any designation
made in a previously recorded document relating to the same
property interest.

Id.

¶10 On appeal, McGarry argues that pursuant to WIS. STAT. § 705.15(3),
Witzig’s 2020 quitclaim deed revoked Zambo’s status as a TOD beneficiary because
the quitclaim deed was a recorded document that listed no TOD beneficiary.
McGarry also argues that § 705.15(8)’s 120-day statute of repose does not apply in
this case because that statute only applies to claims challenging transfers to a TOD
beneficiary and Zambo was not a TOD beneficiary at the time of Witzig’s death.

¶11 Zambo, the Johnsons, and Associated Bank (collectively, the
Respondents) argue the 2020 quitclaim deed did not revoke the TOD beneficiary
designation because the quitclaim deed did not mention the TOD designation. They
argue that to qualify as “another document that designates … no beneficiary,” see

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No. 2023AP119

WIS. STAT. § 705.15(3), the recorded document must contain the elements as listed
in § 705.15(2)(a).4 The Respondents also contend Witzig did not intend to revoke
the TOD beneficiary designation through the quitclaim deed because the quitclaim
deed states “subject to matters of record.” Finally, they argue § 705.15(8)’s 120-
day statute of repose bars McGarry’s action.

¶12 We agree with McGarry and reject the Respondents’ arguments.
First, pursuant to the plain language of WIS. STAT. § 705.15(3), all that is required
to revoke a TOD beneficiary is that the property owner record a document that does
not designate a TOD beneficiary. See § 705.15(3); see also State ex rel. Kalal v.
Circuit Ct. for Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110
(“[S]tatutory interpretation ‘begins with the language of the statute. If the meaning
of the statute is plain, we ordinarily stop the inquiry.’” (citation omitted)). Section
705.15(3) explicitly states: “The recording of a document that designates … no
beneficiary revokes any designation made in a previously recorded document
relating to the same property interest.”

4
WISCONSIN STAT. § 705.15(2)(a) provides:

A TOD beneficiary may be designated on a document that includes
all of the following:

1. The name of the owner or owners of the interest in real
property that will be transferred.

2. The name of the designated TOD beneficiary.

3. That the transfer is effective only upon the death of the
owner or owners.

4. If the interest that will be transferred is an interest in real
property owned by a spouse as marital property, the signatures of
both spouses who have an interest in the marital property.

(Emphasis added).

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No. 2023AP119

¶13 In this case, in 2020, Witzig, as sole owner of the property, executed
and recorded another document that did not designate a TOD beneficiary. See WIS.
STAT. § 705.15(3). Specifically, he executed a quitclaim deed that listed himself as
both grantor and grantee and conveyed to himself his entire interest in the Property.
See WIS. STAT. § 706.10(4) (“A quitclaim deed shall pass all of the interest in or
appurtenant to the land described which the grantor could lawfully convey, but shall
not warrant or imply the existence, quantity or quality of any such interest.”).
Because the quitclaim deed contained no TOD beneficiary, the recording of the
quitclaim deed “revoke[d] any designation made in a previously recorded document
relating to the same property interest.” See § 705.15(3). Accordingly, the 2020
quitclaim deed revoked Zambo’s status as a TOD beneficiary.

¶14 The Respondents’ argument that to revoke a TOD beneficiary
designation, the recorded document must contain the elements as listed in WIS.
STAT. § 705.15(2)(a) ignores the plain language of § 705.15(3). Section
705.15(2)(a) provides a document designating a TOD beneficiary must include: the
name(s) of the property owner(s), the name of the TOD beneficiary, a statement that
the transfer is only effective upon death of the owner, and, if the property is martial
property, the signatures of both spouses. These requirements, however, are not
needed if the owner is revoking a TOD beneficiary by recording a document that
lists no TOD beneficiary. See § 705.15(3).

¶15 The Respondents also argue that Witzig did not intend to revoke
Zambo’s status as a TOD beneficiary through the filing of the quitclaim deed.
However, “[i]n conveyances of land … every conveyance shall pass all the estate or
interest of the grantor unless a different intent shall appear expressly or by necessary
implication in the terms of such conveyance.” WIS. STAT. § 706.10(3). Here, the
2020 quitclaim deed did not explicitly reserve Zambo’s status as a TOD beneficiary.

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No. 2023AP119

Zambo’s status as a TOD beneficiary was revoked when the 2020 quitclaim deed
was recorded on the Property.

¶16 Finally, we conclude WIS. STAT. § 705.15(8)’s statute of repose does
not apply in this case. Section 705.15(8) requires claimants to file claims “to recover
real property transferred to a TOD beneficiary” within 120 days after death of the
property owner. Here, Zambo was not a “TOD beneficiary” at the time of Witzig’s
death. Accordingly, McGarry’s declaratory action and lis pendens were not
untimely filed pursuant to § 705.15(8). We therefore reverse the order of the circuit
court and remand for further proceedings.

By the Court.—Order reversed and cause remanded for further
proceedings.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

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