Opinion ID: 2128874
Heading Depth: 1
Heading Rank: 3

Heading: fraud, undue influence, and duress

Text: It is the contention of the plaintiff that the statements and conduct of the defendants, coupled with the fiduciary and confidential relationship of the defendant Lona at the September 4, 1965, meeting, constituted acts of fraud, undue influence, and duress, which induced the plaintiff to sign the family settlement agreement against her will. The plaintiff's counsel, in his argument to this court, points up five statements made to induce her to sign the agreement which it is claimed were untrue. They are set forth in the brief in this appeal as follows: (1) that her marriage to Peter O. Johnson was invalid; (2) that the marriage could be annulled; (3) that there could be litigation over an existing will; (4) that the plaintiff had destroyed the deceased's last will and testament; and, (5) that there could be a lawsuit involving the manner in which the estate should be distributed. It is a well-settled principle of law that, when free from fraud and misrepresentations, courts will look with favor upon family agreements in settlement of estates. Zimmerman v. Kitzan, (N.D.) 65 N.W.2d 462. And, if creditors are not involved, family settlement agreements of estates will be enforced by the courts regardless of whether the settlement follows the law of descent and distribution. Muhlhauser v. Becker, 76 N.D. 402, 37 N.W.2d 352. The county courts of the state which handle probate matters are authorized by statute to make distribution of the estate of a decedent in accordance with agreements entered into by the heirs, legatees, or devisees interested therein. Section 30-21-20, N.D.C.C.; Muller v. Sprenger, (N.D.) 105 N.W.2d 433. Family settlements are favored, and will be upheld in the absence of fraud;   . 15A C.J.S. Compromise and Settlement, § 3(b). Compromises and settlements among heirs, distributees, devisees, and legatees of a decedent's estate will be enforced if made between persons having the legal capacity to contract. 31 Am.Jur.2d Executors and Administrators, Sec. 12. The plaintiff asserts that the events of September 4, 1965, constitute actual fraud and undue influence and that such acts induced the plaintiff to sign the family settlement agreement. The complaint alleges actual fraud. The elements of fraud are set forth in several North Dakota cases. In Zimmerman v. Kitzan, supra, we held at Syllabus #1: As a general rule actual fraud cannot be presumed but must be proved affirmatively by the one who relies upon it. And, at Syllabus #2: Fraud does not exist as a matter of fact when intent to deceive does not exist. It is the action of the mind which gives fraud its existence. See also City of Granville v. Kovash, Incorporated, (N.D.) 118 N.W.2d 354; Charlson v. Charlson Estate, (N.D.) 75 N.W.2d 321. In the last cited case we held: There can be no actual fraud without misrepresentation. In Leach v. Kelsch, (N.D.) 106 N.W.2d 358, we held that to constitute actionable fraud, representations must be made with knowledge of their falsity and with the intent to deceive, and that the plaintiff must show that he relied upon the representations made; that fraud is not presumed but must be proved. See also, Chester v. Einarson, 76 N.D. 205, 34 N.W. 2d 418, rehearing denied at 35 N.W.2d 137. The burden of proving fraud rests on the party asserting it. City of Granville v. Kovash, Incorporated, supra; Leach v. Kelsch, supra; Pauly v. Haas, (N.D.) 84 N.W.2d 302; Zimmerman v. Kitzan, supra; and Chester v. Einarson, supra. We have examined the evidence in the light of the principles set forth above and find the assertions of fraud, made by the plaintiff, upon which she relied, do not sustain her claims, nor do they sustain the claims made by her counsel in his argument to this court. The plaintiff testified that the statements made at this meeting caused her to become shaky, frightened and nervous. These statements she attributed to various children present at the meeting and are as follows: She said I married her dad for his money.          What will your nice children in Fargo say or think if you don't accept this.          You ought to be ashamed of yourself.       He said something about they could annul my marriage and pay me off as a nurse.       You disgraced us so by sending our father to the State Hospital. When asked what effect these statements had upon her, she testified: Well, you know I had never had known of them being like that because they were always so nice to me. I got just so terribly shook up. Each of the defendant children and the defendant Mr. Lona were called as witnesses by the plaintiff. Each described in detail what occurred and what was said at the meeting of September 4, 1965. There is no doubt but what the meeting was heated and that strong language was used. However, it is clear that throughout the period the plaintiff continuously advised the group that she was entitled to one-half of the estate and made no concessions whatever. Toward the end of the session, the defendant Lona prepared to leave. The plaintiff testified that he asked: Do you want me to come back tomorrow?, to which she answered: Yeah, I said you can come back. It appears the defendants then left the plaintiff's home at about 4:30 p. m. No agreement had been reached. On the evening of September 4, 1965, following the family meeting, the plaintiff invited two friends to her home. These friends were a Mr. Botheim and a Mr. Harding, and she discussed the events of the day with them. However, she testified that she did not arrive at a decision as a result of her conversation with these friends. She testified she knew that she was entitled to one-half of the estate under the law of North Dakota, and that she had been so advised, by letter, from Mr. Bloedau, the attorney for the administrator. The following day she made her decision and advised the defendant Lona that she would sign a family settlement agreement and agree to a division of the property of the estate including the jointly held properties, in equal shares, one-fifth to each. Mr. Lona then left; prepared the family settlement agreement which we have set forth above; and, returned to the plaintiff's home where she signed it. The evidence does not support the contention that she relied upon the statements made by the defendants or any of them in making this decision, nor does the evidence permit a finding that the statements of which she now complains were made with intent to deceive her. The plaintiff is a high school graduate; she had worked in the retail store of her first husband for a number of years; she had also purchased produce. She had been employed for many years doing market research for the National Analysts of Chicago, and for which company she also selected and trained other personnel to work under her supervision in several counties in a two-state area, doing market research. She was also a census-taker in 1940. She did not state, nor is there any indication from the evidence, that she was deceived by the statements of which she now complains. After the family settlement agreement had been entered into there were numerous friendly letters exchanged and it appears that she desired to live up to the agreement. On January 12, 1966, she had a conversation with the defendant Lona and told him explicitly that she was going to stay by her agreement. However, only two days later, on January 14, 1966, a letter was directed to the judge of the county court in which the estate was being probated, to the effect that she had decided to reject the family settlement agreement on the grounds that it had been obtained by fraud and duress. We do not feel that the evidence supports her claim of undue influence. There are three indispensable factors involved in the establishment of undue influence. They are as follows: (1) a person who can be influenced; (2) the fact that improper influence was exerted; and, (3) submission to the overmastering effect of such unlawful conduct. Seaborn v. Kaiser, (N.D.) 117 N.W.2d 863; Hendricks v. Porter, (N.D.) 110 N.W.2d 421; and, Johnson v. Johnson, (N.D.) 85 N.W.2d 211. In Ireland v. Charlesworth, (N.D.) 98 N.W.2d 224, we said: The degree of persuasion which amounts to undue influence is that which dominates the mind or the emotions of the person persuaded to the extent that the agreement to a contract by such person is not the result of a freely exercised and competent judgment. Whether a fiduciary or confidential relationship existed between the defendant Lona and the plaintiff is not material to the decision of this action, because it is clear from the evidence that the plaintiff was not impressed by such a relationship nor that she was influenced thereby. It is clear that she exercised an independent judgment in making the decision to sign the family settlement agreement. Further, it is indicated from her testimony that the defendant Lona did not attempt to influence her to agree to a one-fifth division. She was asked on direct examination by her attorney the following questions to which she gave the following answers: Q Did Lona ask you several times that if you could take a fifth of the estate? A No, he didn't say it that way. Q How did he say it? A How much do you want of this estate? Q And what did you answer him? A One-half. Q And was that type of statement made by him several times? A It was three or four times. Q And was the same answer given by you? A Every time the same answer. The testimony establishes that the plaintiff continuously refused to enter into an agreement on September 4; that she had independent advice from two friends that evening, but that she still had not made her decision; that the decision was not made until the following day when she advised the defendant Lona that she would sign such an agreement, which she did after he had gone to his motel to draw it, returning later in the day with the proposed form. There is no evidence in the record, nor is there any claim made that the plaintiff was not mentally alert and strong or that she was incapable of understanding or making intelligent decisions. Her testimony, on the other hand, indicates that she was mentally alert and that she demonstrated that she made her own decision after due consideration. Although duress is also charged, there is no evidence in the record to substantiate a conclusion that the consent of the plaintiff to the contract was procured through duress. For the reasons set forth herein, we find that the plaintiff has failed to sustain the burden to prove fraud, undue influence, or duress, and having failed in this burden, cannot prevail in this action. For these reasons, the judgment of the trial court must be reversed and judgment entered dismissing the action. STRUTZ, ERICKSTAD, KNUDSON and PAULSON, JJ., concur.