## Facts

- A dissolution decree required each parent to maintain life insurance for the children in the amount of $250,000.
- After Jordon R. Wiggins died, Allison Hardy (guardian for the two minor children) asserted a $250,000 claim against the estate based on the decree’s insurance requirement.
- The parties later learned the decedent had two employer-provided life-insurance policies totaling about $360,000 and initially believed Jason Wiggins (the decedent’s brother) was the sole beneficiary of both policies.
- Based on that belief, Hardy, Jason, and the estate entered a settlement: Jason would place $250,000 of the insurance proceeds he received into a trust for the children, and Hardy would release the children’s claim against the estate.
- After execution, it was discovered that one policy (about $120,000) named the older child, Elizabeth, as beneficiary and paid her directly; the other policy (about $240,000) named Jason and paid him.
- Jason funded the trust with $130,000 and kept $110,000, taking the view that the combined amounts ($120,000 + $130,000) satisfied the $250,000 objective.
- The parties jointly sought declaratory relief in the probate proceeding to determine their rights and obligations under the settlement.
- The county court found a mutual mistake about the beneficiary structure and reformed the settlement to require only $130,000 from Jason (crediting the $120,000 paid to Elizabeth).
- Hardy appealed; the Nebraska Supreme Court took the case on direct review and the dispute centered on whether Jason must contribute the full $240,000 he received.

## Issues

1. Whether the settlement agreement could be equitably reformed based on mutual mistake concerning the life-insurance beneficiaries and proceeds.
2. Whether the $120,000 paid directly to one child could be credited toward the $250,000 life-insurance obligation reflected in the decree and incorporated into the parties’ settlement purpose.
3. Whether declaratory relief and contract reformation were properly granted in the probate proceeding, and under what standard of appellate review.

## Decision

- The Nebraska Supreme Court affirmed the county court’s judgment.
- The Court treated the matter as equitable because reformation of a contract sounds in equity and reviewed the record de novo, giving weight to credibility determinations.
- The Court held the evidence showed a mutual mistake: all parties negotiated on the mistaken assumption that Jason was beneficiary of all relevant policies.
- The Court concluded the parties’ shared intent was to ensure $250,000 in life-insurance benefits for the children, not to require Jason to transfer every dollar he received under any policy.
- The Court upheld reformation limiting Jason’s obligation to $130,000 (so that, with the $120,000 paid to Elizabeth, the total equaled $250,000), and rejected Hardy’s request to compel transfer of the remaining $110,000.

## Legal Principles

- A settlement agreement is governed by general contract principles.
- Whether a declaratory judgment action is treated as legal or equitable depends on the nature of the dispute; reformation is an equitable remedy.
- Reformation is available when the parties reached an agreement but, due to mutual mistake (or unilateral mistake induced by fraud or inequitable conduct), the written instrument does not reflect the parties’ actual intent.
- A mutual mistake exists when there was a meeting of the minds, but the written agreement does not express what the parties actually intended.
- Reformation differs from rescission: rescission applies when, due to mistake, there was no meeting of the minds on essential terms such that no real contract was formed.

## Conclusion

The Nebraska Supreme Court affirmed equitable reformation of a probate settlement because a mutual mistake about life-insurance beneficiaries caused the writing to misstate the parties’ agreement; crediting the $120,000 paid directly to one child, Jason’s required trust contribution was limited to $130,000 to achieve the intended $250,000 benefit for the children.


Hardy v. Wiggins (In re Estate of Wiggins), 314 Neb. 565, 992 N.W.2d 429 (Neb. 2023)