Opinion ID: 1579481
Heading Depth: 2
Heading Rank: 2

Heading: There is opportunity to exercise undue influence and a disposition to influence. Relative to these two factors, the district court found:

Text: Marilyn had the opportunity to exercise undue influence over Gladys. Marilyn returned to Ottumwa, Iowa in 1993 and lived there continuously through the date of Gladys's death on May 21, 2001. Gladys's other two children, Ed and Roger, lived in West Des Moines and Huntington Beach, California, respectively, and were not in as frequent contact with Gladys in her later years. Marilyn is to be commended for her loving care of Gladys in Gladys's declining years. Ironically, that very care also carried with it the opportunity for Marilyn to exercise undue influence over Gladys. Marilyn had a disposition to unduly influence Gladys for the purpose of procuring the gift of the Hardsocg stock. As noted, Marilyn started the legal work on the stock transfer through attorney Vern Ball in November of 1997, while a co-executor with Ed, concerning Mr. Mendenhall's Estate. Three days after Mr. Mendenhall's Estate was closed on June 22, 1998, Gladys executed the declaration of gift of Hardsocg stock to Marilyn. The Court does not conclude that Marilyn's only intent concerning Gladys was to unduly influence her for the purpose of obtaining the gift of Hardsocg stock. Marilyn clearly loved and cared for her mother and spent countless hours providing for her welfare. Even so, Marilyn clearly influenced Gladys as concerns the gift of Hardsocg stock. There is other evidence bearing on these two factors. For example, Gladys had executed a will in June 1995 that left her property in equal shares to her three children. Shortly after Ed, Sr. died Gladys talked about dividing her estate equally among her three children. Ball testified that at his first meeting with Gladys in December 1997 Gladys wanted Marilyn to have the company, but as far as her whole estate was concerned she wanted to treat her boys ... evenly. Ball was concerned about the issue of undue influence because he was aware Marilyn was in a confidential or fiduciary relationship with Gladys. It was that concern that prompted Ball to have Gladys's family physician examine Gladys and attest that Gladys was competent and that the transfer of the Hardsocg stock was not the result of undue influence. Thereafter, Ball met with Gladys on February 12, April 21, and the latter part of July 1998. At the February 12 and April 21 meetings, Gladys was still considering transferring the stock to Marilyn but dividing her entire estate evenly among her three children. The July meeting took place after the transfer of stock to Marilyn. Ball tape-recorded that meeting. It is clear from the recording that Gladys was unsure on how to divide the balance of her estate. One month later, Gladys executed a trust in which she was the trustee and in which she divided her remaining assets among her three children. Marilyn would therefore receive in value approximately half of the estate by virtue of the stock transfer and one-third of the balance of the estate by virtue of the trust. In total, Marilyn stood to receive two-thirds of Gladys's estate. See Miller v. Doan, 233 Iowa 315, 317, 6 N.W.2d 318, 320 (1942) (If there is some direct or substantive evidence of undue influence, the fact that the last will differs from a previous one, that it is unnatural or inequitable, may be considered as tending to show the influence operated on the mind of the testator.). From all of this evidence, we find that Marilyn was on a mission to make sure that her mother transferred the Hardsocg stock to her. Her intention was clearly apparent from the telephone conversation that took place among the mother and three children shortly after Ed, Sr. died. In that conversation, Marilyn proposed taking the Hardsocg stock as her third of Gladys's estate. One month later Marilyn hired Ball and together they not only accomplished this mission but more: Rather than ending up with one-third of Gladys's estate, Marilyn stood to end up with two-thirds. Ball was not Gladys's attorney; rather he was Marilyn's attorney. Marilyn hired him and paid him. This leads to another disturbing fact. No one saw fit to have Gladys seek proper independent advice of her own choosing. In addition, Marilyn and Ball did not inform the brothers of the transfer until after it was completed, thereby depriving Gladys of the brothers' advice. Proper independent advice in these circumstances means showing that the donor had the benefit of conferring fully and privately upon the subject of his intended gift with a person who was not only competent to inform him correctly as to its legal effect, but who was furthermore so disassociated from the interests of the donee as to be in a position to advise with the donor impartially and confidently as to the consequences to himself of his proposed benefaction. Merritt, 226 Iowa at 528, 284 N.W. at 404 (citation omitted); see also Luse v. Grenko, 251 Iowa 211, 219, 100 N.W.2d 170, 175 (1959) (holding that independent advice to the transferor is an important consideration where there is a confidential relation between grantor and grantee who is in position of dominance; no showing that siblings were made aware of plan to make defendant joint payee of mother's bank account and bonds); McGaffee, 244 Iowa at 887, 56 N.W.2d at 39-40 (grantor's lack of independent advice material on question of undue influence by grantee in suit by grantor against grantee for cancellation of instruments assigning grantor's businesses to grantee). A lack of independent advice is sometimes sufficient in and of itself to set aside conveyances and contracts executed under such circumstances. Marron, 235 Iowa at 113, 16 N.W.2d at 17. Clearly, the transfer was materially beneficial to Marilyn while at the same time materially disadvantageous to Gladys. The company was earning $20,000 per year, all of which would go to Gladys absent the stock transfer. The stock transfer limited Gladys's access to the company's income to just $12,000 per year. Gladys was giving up at least $8,000 per year to help with her living expenses. As it turned out, $12,000 per year was not enough to meet Gladys's needs; assets from the trust were used to supplement her care.