Opinion ID: 1847774
Heading Depth: 1
Heading Rank: 16

Heading: The Evidence Showed Both a Confidential Relationship and Suspicious Circumstances

Text: A confidential relationship exists between two persons if one has gained the confidence of the other and purports to act or advise with the other's interest in mind. [22] Here, obviously, a confidential relationship existed. Further, as Leona's attorney in fact, Charles not only had a confidential relationship but also had a fiduciary relationship with Leona. And this fiduciary relationship required him to act solely for her benefit even at the expense of his own interest. [23] The evidence clearly established that Leona had a history of relying on Charles in making important decisions and that she was vulnerable to his requests for financial help. After entering the nursing home, she totally depended upon him to handle her finances. The evidence showed that when she left the nursing home, she could not understand her finances and assets. Twelve days after Leona signed her 2004 willwhich was a little more than 1 month after Charles had removed her from the nursing homeCharles stipulated to the following in the conservatorship proceeding: Appointment of a Conservator is necessary because [Leona] is unable to manage her property and has property which will be wasted or dissipated unless proper management is provided due to her lack of capacity to make or communicate responsible decisions.... Moreover, the evidence established more than a confidential and fiduciary relationship. It also showed that Charles had breached his fiduciary duties. Even before Leona became totally dependent upon him for her physical needs, he was exploiting the power of attorney and self-dealing as Leona's attorney in fact. Further, the record is littered with other suspicious circumstances that raise a presumption of undue influence. Testimony from Dolores, Leona's physician and caretakers at the nursing home, her guardian ad litem, and her conservator, Schneider, established that Leona was impaired physically and mentally long before she was under Charles' exclusive control. Because of Charles' factual stipulations for the appointment of a conservator, he could not reasonably dispute Leona's impaired condition. Yet, despite Leona's sufficient assets to pay for her care at the nursing home and the belief of Leona's caretakers and Dolores that Leona should remain there, Charles insisted upon removing Leona to his home. After Leona went to live with Charles, he immediately began efforts to postpone the conservatorship hearing and have her estate plan rewritten. His ongoing financial problems, his knowledge that a conservator would likely soon be appointed, and his refusal of supportive services strongly support the inference that his campaign to remove Leona from the nursing home was motivated not by his concern for Leona's best interests, but by his desire to preserve her assets for himself. Other evidence also supports this inference. Leona had never told her close friends that she wanted to change her will. And Charles and Rogers made inconsistent statements regarding Charles' purpose for initially contacting Rogers on Leona's behalf. The evidence also supports another strong inference: Charles used his influence over Leona to turn her away from Dolores. As noted previously, Charles admitted telling Leona that Dolores was trying to steal the farm. At the time Charles was removing Leona from the nursing home, he was also influencing Leona to believe that Dolores had filed a guardianship and conservatorship application solely for personal gain. Both Leona's neighbor and Leona's sister-in-law testified that Leona was never upset with Dolores until Charles convinced her that Dolores was attempting to steal the farm. The neighbor and sister-in-law knew the parties well. Their testimony showed that Dolores and Leona had been close before and after Leona entered the nursing home. Leona's actions and statements also illustrate that she and Dolores had a close relationship before Charles removed Leona from the nursing home. Remember, Leona was dividing her oil royalty payments with both Charles and Dolores before she entered the nursing home. Even after entering the nursing home, she had repeatedly stated that she intended to divide her assets equally between her children, as her father had. Charles' manipulation and dominion infected Leona's attitude toward Dolores. Charles and Rogers also failed to provide Leona with information that would have permitted her to compare her new estate plan with her previous intentions in her earlier will. Rogers' billing statements and Charles' testimony showed that Charles was involved in the planning of Leona's new estate plan. Yet, he admitted that he did not explain to Leona that her new estate plan would effectively disinherit Dolores. Rogers told Leona that her medical expenses could deplete her cash assets if she lived a long time. But he did not discuss the money in her accounts at that time. Most important, neither Charles nor Rogers informed Leona that Charles had found her old will and that there were substantial differences. Nor did Leona have independent legal advice from an attorney solely dedicated to her interests. Despite her age, her infirmity, and allegations of Charles' theft, Rogers did not attempt to determine whether a conservatorship might be in Leona's best interests. He admitted that he did not explain to Leona that Dolores believed Charles was misappropriating her assets. And, at trial, Charles admitted that he had used trust funds for his benefit without authorization. We note that Rogers now represents Charles in this appeal. He argued Charles' case before this court. Rogers also failed to independently verify Leona's competency by asking her questions about her assets or speaking to her physician to determine if a guardianship or conservatorship was necessary. To the contrary, he successfully continued the competency hearing scheduled for December 15, 2004, until January 12, 2005, after Leona had executed new estate plan documents. Although Leona had told Rogers that she wanted to divide her property as her father had and that she did not know where her earlier will was, he did not verify that the differences in the new will represented her wishes. On this record, Rogers' testimony that Leona was not mentally impaired rings hollow. The evidence was sufficient to support a judgment for Dolores if unrebutted. The evidence clearly showed that Leona was subject to Charles' undue influence and that he had the opportunity to exercise such influence. The court's finding that Charles had engaged in self-dealing while he was Leona's attorney in fact and trustee established his disposition to exercise such influence. Finally, even if Leona could have understood that she was disinheriting Dolores, the evidence showed that she would not have done so but for Charles' ability to turn Leona against Dolores. In contrast, Charles' evidence established that Leona was unhappy at the nursing home and happy to be living with him. This evidence was intended to negate the inference that he had removed her from the nursing home to influence her to change her estate plan. But it also supported rather than negated an inference that she was susceptible to Charles' influence. Fleshed out, the testimony of Charles, his wife, and his attorney tended to support the following inferences: Leona was not close to Dolores; Leona was unconcerned about disinheriting Dolores; Leona wanted Charles to have her assets; and Leona never wanted Charles to account for funds that he had taken from her. But Charles' self-dealing and constructive fraud punctured his credibility. And Rogers' zeal of approval failed to resuscitate it. Further, their claims that Leona was clear about how she wanted to distribute her assets were undermined because neither Charles nor Rogers told Leona about finding her 1993 will, despite evidence that she believed she was creating the same estate plan. And even the banker suspected that Leona was being influenced. Above all, the court clearly did not believe Charles or Rogers when it found that Charles had helped himself to Leona's funds as her attorney in fact. Despite the testimony that these funds were included as a trust asset in the form of a loan, the court nonetheless found the appellants had proved constructive fraud. If the testimony of Charles and Rogers was not credible on that issue, we wonder how they were nonetheless credible regarding the absence of undue influence. While we recognize our deferential standard of review regarding the trial court's factual findings, we cannot ignore the overwhelming evidence that Leona would not have created this estate plan absent Charles' improper influence and manipulation. The record shows Charles' rushed and concerted effort to have Leona create new estate documents before the county court held a hearing on Leona's competency. Moreover, we cannot reconcile the trial court's finding of no undue influence regarding the will with its separate conclusion that Charles, as attorney in fact and trustee, had exploited his positions of trust for his own benefit both before and after Leona's death. The district court was clearly wrong in not finding that Leona's 2004 will was the result of undue influence. So, the 2004 will was invalid and we need not reach the issue of her testamentary capacity. We next turn to the parties' arguments regarding the nonprobate action.