Opinion ID: 2776052
Heading Depth: 2
Heading Rank: 1

Heading: umb cd #3

Text: Williams alleges that the Nelsons unduly influenced Reynolds to designate Sandra as the POD beneficiary for UMB CD #3. Because the designation of a POD beneficiary is a “nonprobate transfer” as defined in section § 461.005(7) and (15), Reynolds’ designation of Sandra as the POD beneficiary for UMB CD #3 is governed by sections 461.003 to 461.081 (the “Nonprobate Transfers Law” or “NTL”). Section 461.028.5 provides that Reynolds’ designation is “conclusive evidence in the absence of fraud, duress, undue influence or evidence of clerical mistake by the transferring entity [UMB] that the direction was regularly made by the owner [Reynolds] and accepted by the transferring entity [UMB], and was not revoked or changed prior to the death giving rise to the transfer.” But, under section 461.054.1, any “beneficiary designation or a revocation of a beneficiary designation that is procured by fraud, duress or undue influence is void.” Accordingly, if the Nelsons exerted undue influence to cause Reynolds to designate Sandra as the POD beneficiary for UMB CD #3, as Williams alleges, then that designation is void. If Reynolds’ designation of Sandra as the POD beneficiary for UMB CD #3 is void, then that CD would have become part of Reynolds’ estate when she died because 6 The Nelsons do not seek summary judgment on the basis that Williams cannot make a submissible case on whether undue influence occurred. Accordingly, the Court assumes that he can do so, but makes no determination in that regard. This opinion should not be read to suggest that he will do so or that any undue influence, in fact, occurred. 10 there was no valid POD beneficiary (or joint ownership) prior to Reynolds’ designation of Sandra that Williams is challenging. Accordingly, Williams has standing to challenge Sandra’s ownership of, and the Nelsons’ conduct concerning, UMB CD #3. The Nelsons seek to avoid the logic of this result by extending it. They argue that, if Reynolds’ designation of Sandra as the POD beneficiary for UMB CD #3 is void due to undue influence, then Reynolds’ decision to buy that CD (and her decision to withdraw funds from other accounts for that purchase) must also be void. As a result, the Nelsons claim that the Court cannot determine who has standing to challenge their conduct until it returns (at least theoretically) the money Reynolds used to buy that CD to whatever account(s) it was in before the Nelsons unduly influenced Reynolds to use the funds to buy UMB CD #3. The Nelsons did not prove which account(s) this was, but they contend – and Williams concedes – that it must have been one of the four accounts (out of the original seven) that Reynolds owned in 2000 but closed prior to her death. Because Lamp or Baughman was the joint owner of (or POD beneficiary on) all four of these accounts, the Nelsons reason that – but for their alleged undue influence – the money Reynolds used to buy UMB CD #3 would have stayed in the original account(s) and passed to Lamp or Baughman when Reynolds died. Accordingly, the Nelsons insist that only Lamp or Baughman – but not Williams – can have standing to challenge their conduct because only Lamp or Baughman – but not Williams – was harmed by the Nelsons’ alleged undue influence over Reynolds. 11 The Nelsons’ argument misconstrues Williams’ allegations. He does not allege that the Nelsons unduly influenced every facet of every decision that Reynolds made from 2006 to her death. 7 Instead, Williams alleges only that the Nelsons unduly influenced Reynolds’ estate planning decisions. The decision whether to use cash in one bank to purchase an investment in another is not an estate planning decision. On the other hand, the decision whether (and to whom) to give joint ownership of the new asset, or whether (and to whom) to make a POD beneficiary designation on the new asset, is an estate planning decision. Here, Reynolds’ decision to withdraw the money she needed to purchase UMB CD #3 from whichever account was not an estate planning decision, and it is not within Williams’ allegations. Instead, like every other action, it is presumed valid until someone challenges it, and the Nelsons offer no proof in their motions for summary judgment that Reynolds’ decision was invalid. Accordingly, the Nelsons’ effort to extend the effects of their alleged wrongdoing beyond Williams’ reach is not a sufficient basis on which to grant their motions for summary judgment. The Nelsons’ argument also misconstrues the nature of their burden as the summary judgment movants: 7 “Undue influence” does not refer to a permanent or pervasive state. Instead, it refers to control over the will of another that is exercised to such an extent or under such circumstances that it vitiates the controlled party’s intent to make a specific decision or to engage in a discreet transaction. See Gibony v. Foster, 130 S.W. 314, 324 (Mo. 1910) (“It may be that Mrs. Banfield as the daughter of Mrs. Gibony had an undue influence over her, but it is fundamental that it is not the existence of undue influence but the exercise of it in the execution of the will which invalidates such will.”) (emphasis added). 12 The prima facie showing required by Rule 74.04(c) is necessarily different where the movant is a “defending party.” Where a “defending party” will not bear the burden of persuasion at trial, that party need not controvert each element of the non-movant’s claim in order to establish a right to summary judgment. Rather, a “defending party” may establish a right to judgment by showing (1) facts that negate any one of the claimant’s elements facts, (2) that the non-movant, after an adequate period of discovery, has not been able to produce, and will not be able to produce, evidence sufficient to allow the trier of fact to find the existence of any one of the claimant’s elements, or (3) that there is no genuine dispute as to the existence of each of the facts necessary to support the movant’s properlypleaded affirmative defense. Regardless of which of these three means is employed by the “defending party,” each establishes a right to judgment as a matter of law. Where the facts underlying this right to judgment are beyond dispute, summary judgment is proper. ITT Commercial, 854 S.W.2d at 381 (emphasis in original). The Nelsons’ motions fall into the second category described above. It is their burden to show that Williams cannot make a submissible case on one or more of the elements of his claim. They failed to do so. Instead, they assume – but do not set forth uncontested facts proving – that Reynolds’ decision to withdraw funds from one or more accounts to purchase UMB CD #3 resulted from undue influence and then insist that Williams must prove their assumption wrong. 8 This is incorrect. Until the Nelsons meet their burden under Rule 74.04(c) by showing that Williams cannot make a submissible case as to harm and causation, Williams does not have to show anything. ITT Commercial, 854 S.W.2d at 381. He may have the burden of proof at trial, but the 8 The Nelsons do not offer uncontested facts proving that their undue influence was so pervasive that they would not have allowed her to purchase UMB CD #3 (and, therefore, would not have allowed her to withdraw money from another account for that purpose) unless Reynolds designated Sandra as the POD beneficiary on that asset. If so, their motions would have belonged under the first category of summary judgment motions identified in the ITT Commercial quote above. Instead, their motions merely assert Williams lacks standing because he cannot make a submissible case on the issues of harm and causation at trial. 13 burden under Rule 74.04 is on the movant to show both that there is no genuine dispute as to the material facts and that the movant is entitled to judgment as a matter of law. Id. Finally, the Nelsons’ argument misconstrues the nature of section 461.054.1. Under section 461.054.1, the designation of a POD beneficiary is void if procured through undue influence. The 1995 Committee Comment to Section 461.054 states that property that is subject to a void beneficiary designation as a result of fraud, duress, or undue influence “will become part of the probate estate.” 4A John A. Borron Jr., MISSOURI PRACTICE: PROBATE AND SURROGATE LAW MANUAL (2001) (“MANUAL”), at 597. Even though the Comment may not always be accurate, 9 it is correct where – as here – there is no prior valid beneficiary designation or valid contingent beneficiary designation on which to fall back. Accordingly, Williams does not have to show that this money still would have been withdrawn from earlier accounts in the absence of undue influence by the Nelsons. It is sufficient that he show, as he has alleged, that – but for the 9 In Crocker v. Crocker, 261 S.W.3d 724, 727-28 (Mo. App. 2008), the court notes that Judge Borron expands on this Comment by stating that section 461.054 only applies to an original beneficiary designation, not a subsequent one. Id. at 728 (citing MANUAL at 598). This is not correct. Plainly, nothing in section 461.054 limits its application to an original beneficiary designation. Read in full, the Comment merely notes that, in the absence of a prior valid contingent beneficiary designation, section 461.054 requires that property subject to a void beneficiary designation becomes part of the probate estate instead of passing to the decedent’s spouse and children as the previous NPT law had required. MANUAL at 598. Accordingly, it appears that Judge Borron intended to say that the Comment – rather than the statute – applies only to an original beneficiary designation, and so it does. On the other hand, Crocker rightly holds that section 461.054 is not limited only to the original designation and, instead, applies to a second or subsequent beneficiary designation as well. Crocker, 261 S.W.3d at 727-28. When such a designation is void under section 461.054, courts must give effect to a valid prior designation. Id. at 727 (even though “a subsequent beneficiary designation revokes a prior beneficiary designation, … a void subsequent beneficiary designation [does not] revoke a valid prior beneficiary designation”) (emphasis in original). 14 Nelsons’ undue influence over Reynolds’ estate planning decisions – UMB CD #3 would have become part of Reynolds’ probate estate.