Case Title: Grubb v. Grubb

Citation: 

Docket Number: 051859

State: virginia

Court: Virginia Supreme Court

Date: 2006-06-08T00:00:00Z

Document:
PRESENT:  All the Justices 
 
ROY GRUBB, ET AL. 
 
v. 
Record No. 051859 
 
ERNEST E. GRUBB, INDIVIDUALLY AND AS  
EXECUTOR OF THE LAST WILL AND TESTAMENT  
OF EVA BELLE LOGAN, DECEASED 
 
OPINION BY 
JUSTICE BARBARA MILANO KEENAN 
 
 
 
 
 
 
              June 8, 2006 
 
ERNEST E. GRUBB, INDIVIDUALLY AND AS  
EXECUTOR OF THE LAST WILL AND TESTAMENT  
OF EVA BELLE LOGAN, DECEASED 
 
v.  Record No. 051860 
 
ROY GRUBB, ET AL. 
 
FROM THE CIRCUIT COURT OF WASHINGTON COUNTY 
C. Randall Lowe, Judge 
 
In these consolidated appeals, we consider an executor’s 
claim that the chancellor erred in ordering him to pay to the 
decedent’s estate the value of certain assets in which the 
executor asserted an ownership interest.  We also consider 
claims by certain of the decedent’s siblings that the chancellor 
erred: 1) in determining that he could not adjudicate the 
executor’s responsibility to reimburse the estate for the value 
of one contested asset because a necessary party was not before 
the court; 2) in refusing to award prejudgment interest; and 3) 
in declining to require the executor to pay an award of costs 
and attorneys’ fees pursuant to Rule 4:12(c). 
 
2
In November 1996, Eva Belle Logan (Logan) executed a 
general durable power of attorney naming her brother, Ernest E. 
Grubb (Ernest), as her attorney in fact.  Logan died in February 
1999.  In addition to Ernest, Logan was survived by three other 
brothers, W. H. Grubb, Roy Grubb, and Gilbert Grubb, and by 
three sisters, Reba Grubb, Lula Mae Freeman, and Katherine G. 
Davenport.1  In her last will and testament, Logan named Ernest 
executor of her estate and directed that her estate be divided 
in equal shares among her seven siblings. 
According to the inventory Ernest filed, Logan’s probate 
estate included assets of $326,783.74, with an additional 
$418,727.77 held outside the estate in funds Logan maintained in 
various joint bank accounts.  This latter amount was divided 
among the following accounts: 1) $251,630.06 held in eight 
certificates of deposit issued by Wachovia Bank, formerly known 
as Central Fidelity Bank, that were listed as jointly owned by 
Logan and Ernest (Wachovia certificates); 2) $75,000.00 held in 
one certificate of deposit issued by Highlands Union Bank that 
was listed as jointly owned by Logan and Ernest (Highlands 
certificate); 3) $11,528.81 held in one certificate of deposit 
issued by Bank of America, formerly known as NationsBank, that 
was listed as jointly owned by Logan and Ernest (Bank of America 
certificate); 4) $58,068.90 held in one Bank of America checking 
                                                 
1 Reba Grubb died in February 2001. 
 
3
account that was listed as jointly owned by Logan and Ernest 
(Bank of America checking account); and 5) $5,000.00 held in one 
certificate of deposit issued by Wachovia that was listed as 
jointly owned by Logan and Ernest’s granddaughter, Meagan Marie 
Grubb (Meagan).2  Each of the Wachovia and Highlands certificates 
was designated as a “Joint Account – With Survivorship.” 
After obtaining Logan’s power of attorney, Ernest either 
opened or renewed several of the above accounts that were not 
included in the inventory for the probate estate.  The bank 
records involving these accounts did not indicate whether Ernest 
was previously listed as a joint owner on the accounts.  
However, Ernest maintained that Logan had placed his name on the 
various certificates before he received her power of attorney, 
and that his actions after November 1996 on accounts showing him 
as a joint owner were limited to the renewal of existing joint 
accounts. 
This litigation began when a lawsuit concerning certain 
real estate was filed against all the Grubb siblings in the 
circuit court.  Three of Ernest’s siblings, Roy Grubb, Gilbert 
Grubb, and Katherine G. Davenport (collectively, Roy), filed a 
cross bill against Ernest, alleging that Ernest improperly used 
his power of attorney to transfer assets from Logan’s sole 
                                                 
2 An additional $17,500.00 was held in bonds, which Ernest 
distributed to various members of Logan’s family without 
objection. 
 
4
ownership to accounts jointly owned by her and Ernest with 
rights of survivorship.  Roy also alleged that Ernest committed 
constructive and actual fraud by adding his name to the accounts 
without Logan’s knowledge and consent, and by entering her 
signature on the documents that created or renewed the joint 
accounts.  Roy asked that the court order the amounts at issue 
returned to Logan’s estate so that they could be distributed 
equally among the surviving siblings in accordance with the 
terms of Logan’s will.3 
Before trial, the parties obtained the deposition testimony 
of Mary M. Millsap, an employee of the Abingdon branch of 
Wachovia Bank (the bank) since 1989.  Millsap testified that she 
personally dealt with Ernest on all but two of the Wachovia 
financial instruments at issue.  Although the bank had not 
retained copies of any original certificates, Millsap stated 
that based on the bank’s policy she was certain that Ernest’s 
name was on each of the accounts before their renewal. 
According to Millsap, under the bank’s policy, “[i]f you 
were joint owner on an account with a customer and then after 
that you became their power of attorney, you could come in and 
renew that certificate for that person using your power of 
                                                 
3 The chancellor granted the complainant’s motion to sever 
the action pending in the bill of complaint from the action 
pending in the cross bill.  The original complaint is not at 
issue in this appeal. 
 
5
attorney.”  Millsap also stated that the bank would not allow an 
individual to add his name to a certificate using a power of 
attorney if the certificate did not previously list his name.  
In such a circumstance, Millsap explained, the person seeking to 
add his name to the account would need the account owner to sign 
a signature card making the attorney in fact a joint owner of 
the certificate.  During the deposition, Roy objected to 
substantial portions of Millsap’s testimony on the grounds of 
hearsay and violations of the “best evidence rule.” 
At the beginning of trial, Roy offered Millsap’s deposition 
testimony into evidence.  Roy submitted the deposition without 
qualification, despite the earlier objections he had noted 
during portions of Millsap’s testimony.  The chancellor admitted 
Millsap’s deposition without addressing Roy’s earlier 
objections. 
As part of his case, Roy presented Ernest as a witness.  
Ernest gave equivocal testimony regarding the signatures on the 
financial instruments.  He initially testified that he could not 
recall whether Logan signed the documents or whether he signed 
them on her behalf.  However, he later testified that he 
witnessed Logan sign each document. 
With regard to the Highlands certificate, which was 
purchased after Ernest obtained Logan’s power of attorney, 
Ernest admitted that all the money used to purchase the 
 
6
certificate came from Logan’s assets.  However, Ernest could not 
recall whether he or Logan signed the document to procure the 
Highlands certificate, but contended that Logan wished to share 
the account with him. 
Dr. Larry S. Miller, a forensic document examiner who 
qualified as an expert witness, also testified as part of Roy’s 
case.  He opined that Ernest, not Logan, actually signed Logan’s 
name on all but one of the Wachovia certificates at issue. 
At the conclusion of Roy’s case, Ernest made a motion to 
strike the evidence.  The chancellor denied the motion, holding 
that Roy’s evidence raised a rebuttable presumption of 
constructive fraud. 
Ernest presented evidence on his own behalf, including the 
testimony of his brother, W. H. Grubb, who recalled the close 
relationship between Logan and Ernest.  In addition, Ernest 
again testified that Logan made him a joint owner on each of the 
accounts in question before giving him her power of attorney, 
and that he renewed the certificates at issue with Logan’s 
consent.  However, Ernest failed to produce documentary evidence 
confirming the existence of any jointly owned certificates that 
he alleged existed before Logan provided him her power of 
attorney. 
In a letter opinion, the chancellor first concluded that 
Meagan was not properly before the court and that, therefore, 
 
7
the ownership of the Wachovia certificate listing her and Logan 
as joint owners could not be determined.  With regard to the 
eight Wachovia certificates that named Logan and Ernest as joint 
owners, the chancellor determined that only one of the documents 
used to obtain or renew these certificates was actually signed 
by Logan.  The chancellor found that the remaining seven 
accounts, in the total amount of $239,624.83, were created by 
Ernest using his power of attorney and, thus, Ernest’s actions 
involving these accounts were subject to a presumption of 
constructive fraud. 
The chancellor further concluded that Ernest had not 
rebutted the presumption of constructive fraud, stating that 
“Ernest [had] not proven the existence of any records that 
indicate [the Wachovia] accounts were joint with survivorship 
prior to the execution of the power of attorney.”  The 
chancellor directed that these funds be paid to Logan’s estate.  
The chancellor did not rule on the objections raised by Roy at 
Millsap’s deposition, nor did the chancellor indicate to what 
degree he had considered Millsap’s testimony in reaching his 
conclusions regarding the Wachovia certificates. 
Additionally, the chancellor concluded that Ernest failed 
to rebut the presumption of constructive fraud regarding the 
Highlands certificate because that instrument was purchased 
using money Logan acquired from the sale of her property.  The 
 
8
chancellor further directed that the funds from this account be 
paid to Logan’s estate.  The chancellor also ordered that Ernest 
pay to the estate the funds from the two disputed Bank of 
America accounts.4 
After the chancellor issued his letter opinion, Roy filed a 
motion pursuant to Rule 4:12(c) requesting attorneys’ fees and 
costs for Ernest’s failure to admit during the discovery process 
that he signed Logan’s name on the various accounts.  Roy also 
requested an award of prejudgment interest on the funds that the 
chancellor ordered returned to the estate. 
The chancellor denied Roy’s request for costs and 
attorneys’ fees, as well as his request for prejudgment 
interest.  However, the chancellor ordered that Ernest pay to 
Logan’s estate the interest accrued during the litigation on the 
funds that Ernest was found to have fraudulently converted. 
Ernest appeals from the chancellor’s final decree ordering 
Ernest to pay to Logan’s estate the funds from the Highlands 
certificate and the seven Wachovia certificates that the 
chancellor found Ernest fraudulently converted.  He asserts that 
                                                 
4 In his brief on appeal, Ernest does not refer to the Bank 
of America certificate and checking account nor does he 
reference exhibits 16 and 17, the documentary evidence 
pertaining to those accounts.  Therefore, we conclude that he 
has waived argument regarding those accounts.  See Rule 5:27 and 
5:17(c)(3) and (4); Whitley v. Commonwealth, 260 Va. 482, 492, 
538 S.E.2d 296, 301 (2000); Carstensen v. Chrisland Corp., 247 
Va. 433, 445, 442 S.E.2d 660, 667 (1994); Quesinberry v. 
Commonwealth, 241 Va. 364, 370, 402 S.E.2d 218, 222 (1991). 
 
9
Millsap’s deposition testimony was undisputed that the Wachovia 
certificates listed him as a joint owner before he obtained 
Logan’s power of attorney.  He further contends that the 
chancellor should not have applied a presumption of constructive 
fraud because Ernest proved that as a joint owner of the 
accounts, he merely renewed the accounts in order to maintain 
the “status quo.”  With regard to the Highlands certificate, 
Ernest likewise maintains that the evidence established that he 
was an owner of the account before being granted power of 
attorney.  In the alternative, Ernest argues that if the 
chancellor was correct in applying a presumption of constructive 
fraud to Ernest’s actions as attorney in fact, the evidence 
showed that he rebutted that presumption.  We disagree with 
Ernest’s arguments. 
Ernest had a confidential relationship with Logan in which 
Ernest acted as Logan’s attorney in fact and provided her advice 
on many financial matters.  As a result of this confidential 
relationship, Ernest owed a fiduciary duty to Logan.  See 
Economopoulos v. Kolaitis, 259 Va. 806, 812, 528 S.E.2d 714, 718 
(2000); Jackson v. Seymour, 193 Va. 735, 740-41, 71 S.E.2d 181, 
184-85 (1952); Nicholson v. Shockey, 192 Va. 270, 278, 64 S.E.2d 
813, 817-18 (1951). 
Based on Ernest’s status as Logan’s attorney in fact, any 
transaction involving her assets that he consummated to his own 
 
10
benefit while acting as her fiduciary is presumptively 
fraudulent.  See Economopoulos, 259 Va. at 812, 528 S.E.2d at 
718; Nicholson, 192 Va. at 277-78, 64 S.E.2d at 817-18.  When a 
presumption of constructive fraud arises, the burden of proof 
shifts to the fiduciary to produce clear and convincing evidence 
to rebut the presumption.5  Creasy v. Henderson, 210 Va. 744, 
749-50, 173 S.E.2d 823, 828 (1970); Nicholson, 192 Va. at 277, 
64 S.E.2d at 817; see Carter v. Williams, 246 Va. 53, 59, 431 
S.E.2d 297, 300 (1993).  This rule arises independently of any 
evidence of actual fraud, or of any limitations of age or 
capacity in the other party to the confidential relationship, 
and is intended to protect the other party from the influence 
naturally present in such a confidential relationship.  
Nicholson, 192 Va. at 277, 64 S.E.2d at 817; Stiers v. Hall, 170 
Va. 569, 577-78, 197 S.E. 450, 454 (1938). 
We have defined clear and convincing evidence as the degree 
of proof that provides the fact finder a firm belief or 
conviction regarding the allegations that a party seeks to 
establish.  This evidentiary standard is intermediate in nature, 
exceeding the “preponderance” standard but not requiring the 
level of certainty in criminal cases of “beyond a reasonable 
                                                 
5 Although Code § 6.1-125.5(A) generally provides a right of 
survivorship to a joint account holder in sums remaining on 
deposit on the death of another joint account holder, that 
statute is not applicable here because the presumption of fraud 
attached to Ernest’s actions before Logan died. 
 
11
doubt.”  Commonwealth v. Allen, 269 Va. 262, 275, 609 S.E.2d 4, 
13 (2005); Judicial Inquiry & Review Comm’n v. Lewis, 264 Va. 
401, 405, 568 S.E.2d 687, 689 (2002); Fred C. Walker Agency, 
Inc. v. Lucas, 215 Va. 535, 540-41, 211 S.E.2d 88, 92 (1975). 
Here, the Highlands transaction and the seven Wachovia 
transactions at issue are subject to a presumption of 
constructive fraud because Ernest either opened or renewed those 
accounts using his power of attorney.  These transactions were 
consummated to Ernest’s own benefit because he signed his name 
as a joint owner of all these accounts.  Therefore, we review 
the evidence presented to determine whether the chancellor erred 
in concluding that Ernest failed to rebut the presumption of 
constructive fraud arising from those transactions. 
In making this determination, we apply an established 
standard of review.  With the exception of Millsap’s testimony, 
the chancellor heard the evidence ore tenus and evaluated the 
witnesses’ testimony and their credibility.  Thus, his judgment 
is entitled to the same weight as a jury verdict.  Forbes v. 
Rapp, 269 Va. 374, 379-80, 611 S.E.2d 592, 595 (2005); The 
Dunbar Group, LLC v. Tignor, 267 Va. 361, 366-67, 593 S.E.2d 
216, 219 (2004).  Accordingly, we will not set aside the 
chancellor’s judgment on appeal unless it is plainly wrong or 
without evidence to support it.  Code § 8.01-680; Forbes, 269 
 
12
Va. at 380, 611 S.E.2d at 595; Shooting Point, L.L.C. v. 
Wescoat, 265 Va. 256, 264, 576 S.E.2d 497, 501 (2003). 
In determining the credibility of the witnesses and the 
weight to be accorded their testimony, the chancellor may 
consider the appearance and manner of the witnesses, their bias, 
and their interest in the outcome of the case.  Schneider v. 
Commonwealth, 230 Va. 379, 383, 337 S.E.2d 735, 737 (1985); see 
Cherrix v. Commonwealth, 257 Va. 292, 301-02, 513 S.E.2d 642, 
648-49 (1999); Burket v. Commonwealth, 248 Va. 596, 614-15, 450 
S.E.2d 124, 134 (1994); Fisher v. Commonwealth, 228 Va. 296, 
300, 321 S.E.2d 202, 204 (1984).  Here, the chancellor made 
findings against Ernest’s credibility that were critical to the 
decision in the case. 
The chancellor first observed that Ernest had contradicted 
himself on the crucial issue whether he or Logan had signed the 
eight Wachovia certificates.  After making this observation, the 
chancellor accepted Dr. Miller’s opinion that Logan had signed 
only one of those certificates.  Upon the chancellor’s own 
review of the documents, he plainly rejected Ernest’s testimony, 
finding that “a handwriting expert is not needed to determine 
that each time ‘Eva Belle Logan’ was penned, that it was by the 
same person but that person was not Eva Belle Logan.” 
In reaching his decision, the chancellor also cited the 
fact that Ernest had not produced any documentary evidence to 
 
13
support his position.  The chancellor stated in his letter 
opinion that “the [c]ourt relies on the fact that Ernest Grubb 
has not proven the existence of any records that indicate these 
accounts were joint with survivorship prior to the execution of 
the power of attorney.” 
Admittedly, the chancellor did not reference Millsap’s 
testimony when considering the issue whether Ernest had rebutted 
the presumption of constructive fraud.  However, even if we 
assume that the chancellor accorded some weight to her 
testimony, we nevertheless conclude that the record supports his 
determination that Ernest failed to rebut the presumption with 
regard to the Wachovia certificates at issue.  Having completely 
rejected Ernest’s credibility, the chancellor could properly 
conclude that the remainder of Ernest’s evidence did not meet 
the clear and convincing standard. 
Significantly, Millsap’s testimony showed only a limited 
recollection of the circumstances surrounding the issuance of 
each certificate, and she had to rely on her knowledge and 
application of the bank’s policy regarding the processing of 
such certificates.  In addition, Millsap could not testify that 
she observed either Ernest or Logan sign the signature cards for 
the certificate accounts.  Accordingly, we conclude that the 
evidence concerning the Wachovia certificates supports the 
chancellor’s determination that Ernest failed to rebut the 
 
14
presumption of constructive fraud with clear and convincing 
evidence. 
We reach the same conclusion with regard to the Highlands 
certificate.  The chancellor found that Ernest obtained the 
certificate by using his power of attorney, and that the funds 
for this certificate “were predominantly created by the sale of 
Eva Belle Logan’s personal residence.”  Also noting that Ernest 
used his power of attorney to convey Logan’s real estate, the 
chancellor held that “Ernest Grubb has not rebutted the 
presumption of constructive fraud in regard to this account.”  
We conclude that the above-stated evidence plainly supports this 
determination.  Thus, we hold that the chancellor did not err in 
ordering Ernest to pay to the estate the funds held in the 
Highlands certificate and the Wachovia certificates at issue. 
We next consider the claims raised by Roy in his appeal.  
Roy first argues that the chancellor erred in holding that he 
could not adjudicate the issue of the Wachovia certificate held 
jointly by Meagan and Logan because Meagan was not made a party 
in the case.  Roy contends that he was not required to make 
Meagan a party because he did not attack her ownership interest 
in the Wachovia certificate but merely sought to have Ernest 
account for and pay to the estate the amount of the funds he 
fraudulently converted in that account. 
 
15
In response, Ernest observes that it is undisputed that 
Meagan is listed as a joint owner of the Wachovia certificate.  
Thus, Ernest maintains, if the chancellor were to determine that 
the funds from the certificate should be placed in the estate, 
Meagan’s interest in those funds “will be totally and completely 
affected.”  We disagree with Ernest’s argument. 
In his cross bill, Roy alleged that Ernest breached his 
fiduciary duty to Logan when he removed the various amounts from 
her accounts and purchased the certificates of deposit at issue.  
Roy requested that the chancellor order Ernest “to pay unto the 
Estate of Eva Belle Logan the proceeds of all certificates of 
deposit . . . acquired by him from Eva Belle Logan . . . with 
interest thereupon from the date of said transfer.” 
A necessary party is a person, natural or artificial, who 
has a legal or beneficial material interest in the subject 
matter or event of the litigation.  Jett v. DeGaetani, 259 Va. 
616, 619, 528 S.E.2d 116, 118 (2000); Atkisson v. Wexford 
Assocs., 254 Va. 449, 455, 493 S.E.2d 524, 527 (1997); Kennedy 
Coal Corp. v. Buckhorn Coal Corp., 140 Va. 37, 49, 124 S.E. 482, 
486 (1924).  If such a person is not made a party to the suit, a 
decree cannot be rendered in the cause.  Id.  Among other 
things, the rule is designed to avoid having persons deprived of 
their property without giving them an opportunity to be heard 
 
16
and defend their interests in the property.  Atkisson, 254 Va. 
at 456, 493 S.E.2d at 528. 
In the present case, however, Roy did not seek to 
invalidate Meagan’s ownership interest in the Wachovia 
certificate in which Meagan and Logan were listed as joint 
owners.  Roy also did not attempt to recover funds from that 
account, or ask that the chancellor take any other action 
regarding the account or Meagan.  Instead, Roy asked that Ernest 
be held liable to pay the amount of the proceeds held in that 
account, plus accumulated interest, to Logan’s estate.  
Therefore, we hold that because Meagan’s interest in the funds 
held in the Wachovia certificate could not be affected by Roy’s 
claim and requested relief, she was not a necessary party to the 
suit and the chancellor erred in concluding otherwise. 
Roy next argues that the chancellor abused his discretion 
in failing to award prejudgment interest on the amounts that 
Ernest was found to have fraudulently converted.  We disagree. 
As Roy acknowledges in his argument, the award of 
prejudgment interest rests in the chancellor’s sound discretion.  
Code § 8.01-382; see Tauber v. Commonwealth, 263 Va. 520, 544, 
562 S.E.2d 118, 131 (2002); Dairyland Ins. Co. v. Douthat, 248 
Va. 627, 631, 449 S.E.2d 799, 801 (1994); Skretvedt v. Kouri, 
248 Va. 26, 36, 445 S.E.2d 481, 487 (1994).  Here, although the 
chancellor refused Roy’s request for prejudgment interest, the 
 
17
chancellor ordered that Ernest pay the interest accrued during 
the course of this litigation on the account funds that were 
fraudulently converted.  We hold that this provision was a 
reasonable exercise of the court’s discretion, and that the 
chancellor did not abuse his discretion by failing to award 
prejudgment interest. 
Finally, Roy argues that the circuit court abused its 
discretion by denying his motion under Rule 4:12(c) for costs 
and attorneys’ fees for failing to provide accurate answers in 
response to Roy’s requests for admission.  In his request for 
admissions, Roy asked Ernest to admit that, for each of the 
accounts at issue, Ernest signed Logan’s name.  In response to 
each such request, Ernest either denied that he had signed 
Logan’s name, denied that Logan had not signed her name, or 
stated that he could neither admit nor deny who had signed a 
particular document because he could not recall that 
information. 
We conclude that the chancellor did not abuse his 
discretion in denying Roy’s request for costs and fees.  
Although these issues of fact on which admissions were sought 
were ultimately decided against Ernest, he had a reasonable 
basis for failing to admit the signatures on the Wachovia 
certificates based on Millsap’s testimony.  See Rule 4:12(c)(3).  
While Ernest did not have similar corroborative evidence to 
 
18
support his testimony regarding the remaining accounts in 
dispute, we nevertheless conclude that the chancellor did not 
exceed the broad discretion granted him by this Rule in denying 
the requested relief.  See Erie Ins. Exch. v. Jones, 236 Va. 10, 
14, 372 S.E.2d 126, 128 (1988). 
In conclusion, we will reverse the part of the chancellor’s 
judgment holding that Meagan was a necessary party to the claims 
involving Exhibit # 3, the Wachovia certificate that listed her 
as a joint owner.  We will affirm all remaining parts of the 
chancellor’s judgment before us in this appeal. 
Accordingly, we will affirm in part, and reverse in part, 
the chancellor’s judgment and remand the case for further 
proceedings related to Exhibit #3, the Wachovia certificate 
bearing Meagan Marie Grubb’s name as a joint owner of that 
account. 
Affirmed in part, 
reversed in part, 
   and remanded.