Title: Lowrey v. LAST WILL AND TESTAMENT OF SMITH
Citation: 543 So. 2d 1155
Docket Number: 58371
State: Mississippi
Issuer: Mississippi Supreme Court
Date: March 29, 1989

543 So. 2d 1155 (1989) Danny L. LOWREY v. In the Matter of the Last WILL and Testament OF Lois Elizabeth Vinson SMITH, Deceased. No. 58371. Supreme Court of Mississippi. March 29, 1989. Danny L. Lowrey, Corinth, for appellant. Shelby D. Goza, Ethridge, Grisham &amp; Goza, Oxford, for appellee. Before HAWKINS, P.J., and PRATHER and ROBERTSON, JJ. HAWKINS, Presiding Justice, for the Court: This is an appeal from a decree of the chancery court of Lafayette County entered on December 23, 1986, finding that Danny L. Lowrey (Lowrey), attorney, breached a fiduciary relationship with David Carter Smith and Lois Elizabeth Vinson Smith (David and Lois) and failed to overcome the presumption of undue influence thereby necessitating the return of funds taken by Lowrey taken from a checking account on which the names of David Smith, Lois Smith and Danny Lowrey were all listed with right of survivorship. The estate of Lois Smith through M.B. Spencer, administrator de bonis non, cross-appeals a separate judgment entered on January 26, 1987, finding the estate owed Lowrey $6,666.66 on an unpaid claim for attorney's fees. The issues we address on direct appeal are whether the chancellor erred in denying Lowrey's defense of wrong venue, and that venue should have been changed from Lafayette County to Alcorn County, the county of Lowrey's residence; and in holding the presumption of undue influence required that Lowrey restore the funds he removed for his personal use from the joint *1156 checking account. We find no error on the direct appeal and affirm. On the cross-appeal we likewise affirm. Between 1976 and 1979 Lowrey attended the University of Mississippi Law School in Oxford. He, his wife Mary Ann and six-month-old son lived in a duplex in Oxford. Living in the other section of the duplex were Katie Bell and Eleanor Lindenburger, elderly aunts of Lois. During visits with these aunts by David and Lois, Lowrey and Mary Ann became acquainted with and eventually became close friends of David and Lois. Following graduation from law school in 1979, Lowrey and his family moved to Alcorn County. However, they kept in frequent and close contact with the Smiths. Additionally, Lowrey performed legal services for the Smiths including advising the Smiths on their wills and preparing codicils thereto in November, 1979; opening an estate of which Lois was executrix in February, 1980; and closing the same in August, 1980; preparing new wills for the Smiths in April, 1981; representing the estate of David following his death in July, 1985. with Lois as executrix; and representing Lois on an insurance claim in July, 1985. Lowrey was paid for all of these services, with the exception of the insurance claim, discussed infra. According to Lowrey, in early 1985 Lois had become concerned that either she or David, who had Alzheimer's disease, might become incapacitated and be unable to care for themselves. Consequently, she approached Lowrey about agreeing to care and provide for the Smiths should something happen to one or the other of them. Lowrey suggested to Mrs. Smith that she have a conservatorship set up; however, when Lois asked Lowrey could she be guaranteed that he would act as conservator, Lowrey advised her that there was no guarantee of this and that a family member might be chosen over him. Consequently, Lois chose not to have a conservatorship set up. Instead she invited Lowrey and Mary Ann to her house on February 25, 1985, and then presented Lowrey with a signature card on the Smith's joint checking account at the First National Bank (the Bank) in Oxford, # 33-369-7. Lowrey signed the signature card giving him right of survivorship so, as he testified, that he could take money out of the checking account to care for Lois and David should they either or both become incapacitated. Specifically, according to Lowrey, if one of the Smiths died and the other was unable to care for himself or herself, then Lowrey was to write checks on the account to provide the welfare and upkeep of the survivor, and further, if any money remained in the account following both of the Smiths' deaths, Lois told Lowrey it would belong to him. Lowrey stated he did not know or ask how much money was in the account when he signed the signature card. Lowrey testified that on the day he signed the signature card, February 25, 1985, both Lois and David were aware of what they were doing and what they were asking Lowrey to do, and both agreed that they wanted Lowrey's name signed on the account with right of survivorship. Subsequently on July 22, 1985, David died of a gunshot wound to the chest. He was alone in his bedroom at the time of the shooting and there was a question as to whether or not the wound was self-inflicted. Lowrey agreed to represent the estate and Lois as executrix of David's estate, and for this, he was paid a $300 retainer fee. Thereafter, on July 31, 1985, while at Lois's home, Lowrey was presented with a life insurance policy from Allstate Insurance Company (Allstate) on David in the amount of $20,000. Lois, noting a suicide exclusion clause, questioned Lowrey as to whether or not she would be able to make a claim from Allstate. Lowrey, stating that he knew the law in Mississippi regarding suicide exclusion clauses, told Lois that he believed that he could get a payment from Allstate. However, believing that the proceeds from this policy were separate from David's estate and consequently would pass out of the will, he felt a separate fee arrangement should be set up for this service. Consequently, on this day, July 31, 1985, according *1157 to Lowrey, Lois agreed to an oral contract of a one-third contingency fee of any amount which Allstate might agree to pay on the insurance policy. Thereafter, between July and November, 1985, Lowrey investigated the death of David by going to the Oxford Police Department, speaking with investigating officers, looking at and receiving reports on David's death and talking with Lois about the day of the shooting and events thereto. He also contacted Allstate and made a claim under the life insurance policy. On November 8, 1985, Lowrey received a telephone call from an Allstate representative stating that Allstate would pay the full $20,000 claim. The next day, November 9, 1985, Lois, who was then in a hospital in Memphis died. On November 11, 1985, Lowrey received written confirmation from Allstate that they had agreed to pay the $20,000 claim. On November 19, 1985, Lowrey probated Lois's will. Under the terms of the will, Lowrey's wife Mary Ann acted as executrix. On November 20, 1985, Lowrey went by the Bank in Oxford, MS, and had the checking account # XX-XXX-X, which had $12,012.05 in it, changed solely to his name. Following Lois's death, Lowrey wrote five checks covering expenses such as funeral bills and medical bills on Lois. Also, during November and December, 1985, Lowrey made two separate withdrawals from the account in the amounts of $7,000 and $4,700, which he transferred to his own account in a bank in Alcorn County. Lowrey stated these two withdrawals were for his personal use.[1] Sometime following the probating of Lois's will, the residuary legatees began calling Lowrey and complaining because he had taken money out of the checking account and because Mary Ann was executrix.[2] Accordingly, on December 27, 1985, Lowrey and Mary Ann petitioned the chancery court to withdraw as counsel and executrix respectively. Thereafter, on December 30, 1985, M.B. Spencer, brother-in-law of David Smith, was made administrator d.b.n. The Administrator filed a complaint to require Lowrey to give an accounting of the funds in the joint checking account. Lowrey also probated a claim against the estate for $5,000 under his contract with Lois, later amended to $6,666. In his answer to the complaint, Larry raised the defense of wrong venue. The chancellor reserved ruling on the venue question. At the hearing in chancery court held on November 5, 1985, Mrs. M.B. Spencer (Lucille Smith Spencer), a residuary legatee and sister of David, testified that in February, 1985, Lois had asked her to put her name on a joint bank account in case either she or David became incapacitated. However, a few days later, Lois told Mrs. Spencer that Lowrey had agreed to do it. Mrs. Spencer further stated that David was not always competent around the time of his death as he was suffering from Alzheimer's disease. Frances Hilburn, Judge L. Breland Hilburn and Frank S. Smith, Jr., also testified and stated that following the funeral of Lois, her heirs were called by Lowrey to meet at the funeral home. At this meeting Lowrey explained that he owned the funds in the bank account as his name was on the account with right of survivorship and, further, that his wife Mary Ann was acting executrix of the estate. These witnesses also testified that at this meeting Lowrey stated that the bank account contained $4,000, when actually there was over $12,000. At trial, however, Lowrey explained this $4,000 figure came from a telephone call from Frank Smith subsequent to the funeral during which Lowrey told Smith $4,000 remained in the account, as by this time Lowrey had already withdrawn $7,000 and transferred that to Alcorn County. *1158 He also told the heirs about the life insurance policy on David, his one-third contingency fee contract with Lois, and that the insurance company was paying the claim of $20,000. Following the hearing on November 5, 1986, the chancellor found that Lowrey, although not committing any civil or criminal wrong, had acted unwisely, had breached a fiduciary relationship with David and Lois Smith, and had failed to overcome the presumption of undue influence thereby necessitating the return of the $11,700 which he had transferred to Alcorn County from the bank account in Oxford. The chancellor found that Lowrey had waived his right to have the venue changed from Alcorn County by failure to timely make a motion to change the venue. Finally, the chancellor found that Lois and Lowrey had entered into a valid oral contract whereby Lois obligated herself to pay unto Lowrey one-third of all funds received under the insurance policy, and allowed his claim for $6,666. In Mississippi venue is controlled by statute. Specifically, venue in chancery courts is controlled by MCA § 11-5-1 (1972) which states the following: In a well-reasoned opinion, the chancellor explained why Lowrey had waived his right to change venue: The chancellor correctly held that defects in venue are deemed waived if not timely asserted. Rule 12(h)(1), Mississippi Rules of Civil Procedure; H &amp; W Transfer &amp; Cartage Service v. Griffin, 511 So. 2d 895, 901 (Miss. 1987); Belk v. State Dept. of Public Welfare, 473 So. 2d 447, 451 (Miss. 1985). Moreover, since Lowrey agreed to act as de facto conservator for David and Lois, we find nothing startling in requiring such an individual under Miss. Code Ann. § 11-5-1 to be required to account for the funds in the county of their situs just as he would have been had he been appointed conservator by a court. Also, Miss. Code Ann. § 91-7-253. The record shows that both David and Lois were in their early 70s at the time of their deaths. While David had Alzheimer's disease with its consequent disability, the record does not disclose Lois having any disabling illness until the illness resulting in her death. Lois kept a careful record of their finances, was knowledgeable and independent. David was a retired employee of the state highway department and Lois a retired employee of the Bell telephone system. No doubt both received retirement pensions, as well as social security retirement benefits. They had no children, and none of the legatees lived in Oxford. Besides their residence, they had a personal liquid estate in excess of $200,000. An examination of the will of Lois reveals nothing to indicate Lowrey acted other than honorably and dutifully to his trust as attorney. Neither he nor his wife were legatees, although she was named as executrix. It clearly appears that both David and Lois thought a great deal of Lowrey and Mrs. Lowrey, and we have no difficulty in believing that David and Lois intended for any funds remaining in the joint account to be Lowrey's. The record also reveals that Lowrey at his first opportunity upon Lois's death fully explained to the heirs about the estate, and Lois's desire that he have the funds in the joint checking account. The legatees lived some distance from Oxford, and it was not inappropriate for Lowrey to ask to meet them all immediately following Lois's funeral. That was the most convenient time and place for them, as they no doubt were about to return to their homes. In holding, however, that Lowrey should have been required to restore the funds he removed from the joint checking account, we cannot improve upon the chancellor's reasoning, from which we quote at length: We agree. Also see, Miner v. Bertasi, 530 So. 2d 168 (Miss. 1988); Angle v. Estate of Angle, 519 So. 2d 883 (Miss. 1988); Estate of McRae, 522 So. 2d 731 (Miss. 1988); Mullins v. Ratcliff, 515 So. 2d 1183 (Miss. 1987); Blissard v. White, 515 So. 2d 1196 (Miss. 1987). We begin with an analysis of whether a contingency fee contract in this case was unreasonable. David had a $20,000 life insurance policy in effect with Allstate Insurance Company, with Lois the beneficiary. It had an absolute exclusion for: Lois was aware of this exclusion in the policy. It is also clear that Lois indeed believed David had committed suicide. The Oxford police department investigated David's death, and the report recited: With this claim of doubtful liability, there was nothing at all unusual or unfair for Lois or Lowrey to reach an agreement which was a gamble to Lowrey. If he recovered nothing, he received nothing. And, it would be difficult to conceive of a poorer witness in denying suicide than his client Lois. Indeed, Lois might very well have been unwilling to pursue the claim if she was going to have to spend money in attorney's fees. Lowrey's serious problem arises from not seeing that the contract was reduced to writing. He certainly should have done so. Factors which the chancellor undoubtedly considered, however, were: *1163 Rule 1.5(c) of the Rules of Professional Conduct (RPC) states in pertinent part: Aside from this Rule, an attorney attempting to claim a fee under an oral contingency fee contract has the burden of proving by clear and convincing evidence that he fully disclosed all of the terms of the agreement to his client, that it was fair and reasonable, and above all was made in good faith. Fitzpatrick, et al. v. Kellner, 187 Miss. 843, 193 So. 911 (1940); Mercy Hospital, Inc. v. Johnson, 390 So. 2d 103 (Fla.App. 1980); Kirby v. Liska, 214 Neb. 356, 334 N.W.2d 179 (1983). The chancellor obviously found Lowrey had met this burden in approving the claim of $6,666 under the contract. We certainly cannot find that he was manifestly in error. While we would ordinarily be inclined to find that even where an attorney met these case law requirements, he was nevertheless obligated under Rule 1.5(c) of RPC to reduce it to writing, under the unusual facts of this case we believe it would be unduly harsh to deny Lowrey recovery under the agreement between Lois and him, and the chancellor was not manifestly wrong in approving it. AFFIRMED ON DIRECT APPEAL AND CROSS APPEAL. ROY NOBLE LEE, C.J., DAN M. LEE, P.J., and PRATHER, ROBERTSON, SULLIVAN, ANDERSON, PITTMAN and BLASS, JJ., concur. [1] These two withdrawals along with the funeral and medical payments for Lois left approximately $2.05 in the savings account. The account later went overdrawn when service fees were charged. (T-II. 223) [2] The residuary legatees were Lucille S. Spencer, Ruth Smith Smith, Russell W. Sublette, Mrs. Marguerite Sublette Bullard, Mrs. Frances Holmes Smith Hilburn (wife of Hinds County Circuit Judge L. Breland Hilburn) and Frank S. Smith. [3] (d) Improper Venue. When an action is filed laying venue in the wrong county, the action shall not be dismissed, but the court, on timely motion, shall transfer the action to the court in which it might properly have been filed and the case shall proceed as though originally filed therein. The expenses of the transfer shall be borne by the plaintiff. The plaintiff shall have the right to select the court to which the action shall be transferred in the event the action might properly have been filed in more than one court.