Opinion ID: 1126318
Heading Depth: 1
Heading Rank: 2

Heading: Effectiveness of the Durable Power of Attorney

Text: The trial court held that the power of attorney gave Charles no authority to sue on behalf of Roy Lee because, it found, the power to file a personal-injury action was not specifically stated within the powers described in the document. In support of this conclusion, the trial court cited Lamb v. Scott, 643 So.2d 972 (Ala.1994), for the proposition that the authority granted through a power of attorney is to be strictly construed and restricted to those powers expressly granted therein. Id. at 973. The trial court reasoned that, because of its want of specificity, the power of attorney gave Charles no power to bring a personal-injury action on behalf of Roy Lee. We disagree with this conclusion and, in so doing, distinguish Lamb. In Lamb, a mother gave a durable power of attorney to her oldest daughter, authorizing the daughter to manage her affairs. A year later, the mother executed a will leaving all her property, including a farm, to her two daughters and her stepson, in equal portions. The oldest daughter, purporting to act pursuant to the power of attorney, conveyed the farm to herself and her sister, to the exclusion of her stepbrother. This Court held: One who accepts a power of attorney covenants to use the power for the sole benefit of the one conferring the power and to use it in a manner consistent with the purposes of the agency relationship created by the power of attorney. Lamb, 643 So.2d at 974. The principal-agency relationship is fiduciary in nature and imposes upon the agent a duty of loyalty, good faith, and fair dealing. Sevigny v. New South Fed. Sav. & Loan Ass'n, 586 So.2d 884, 887 (Ala. 1991). In Myers v. Ellison, 249 Ala. 367, 369, 31 So.2d 353, 355 (1947), this Court stated: An agent sustains a position of trust toward his principal and in all transactions affecting the subject of his agency, the law dictates that he must act in the utmost good faith and must make known to his principal ... all material facts within his knowledge which in any way affect the transaction and subject matter of his agency. The law sedulously regards this principle and acts of an agent which tend to violate this fiduciary obligation are prima facie voidable, and are considered, in law, as `frauds upon confidence bestowed.' (Citations omitted.) The situation presented by Lamb involved self-dealing. This Court held that in order to act against the intent of the donee as expressed in her will, the attorney-in-fact had to have the express authority to do so. 643 So.2d at 973. In other words, this present case is distinguishable from Lamb. The power of attorney in Lamb made no express grant of authority to engage in self-dealing, and the self-dealing appeared to go against the true intent of the donee. See, also, Hall v. Cosby, 288 Ala. 191, 258 So.2d 897 (1972), and Dillard v. Gill, 231 Ala. 662, 166 So. 430 (1936) (holding that authority to self-deal must be specifically granted). Roy Lee vested Charles with the authority to institute, prosecute, defend, compromise, arbitrate and dispose of legal, equitable, or administrative hearings, actions, suits, attachments, arrests, distresses, or other proceedings, or otherwise engage in litigation in connection with any legal or equitable matters. (Emphasis added.) Charles's exercise of the power by filing an action for the benefit of Roy Lee did not involve self-dealing. To force the donor to predict the future and to list every cause of action or legal proceeding that might become necessary in the months or years after the execution of the power of attorney, even in instances where there is no self-dealing, lest a court later hold the power of attorney ineffective, would frustrate the donor's purpose in executing the instrument. We decline the defendants' request to impose the requirement of specificity even in instances where there has been no self-dealing. To do so would unnecessarily inhibit the utility of a durable power of attorney.
The defendants also contend that § 26-1-2, Ala.Code 1975, gives the attorney-in-fact only the power to bring actions after the donor becomes incapacitated or incompetent, and they point to the absence of evidence of incompetence. While § 26-1-2 permits a durable power of attorney to survive incompetency of the donor, the statute provides no basis for a conclusion that all such powers of attorney are dormant until the donor becomes incompetent. Section 26-1-2(a) recites the operative language necessary and offers two choices. One option simply states that the power is unaffected by subsequent incompetence of the donor, while the other option provides that the power shall not become effective until the donor becomes incompetent. The language used by Roy Lee is of the former category, and that language suggests the power was to be effective immediately. The absence of evidence indicating Roy Lee is incompetent is inconsequential.