Court Opinion

ID: 9633053
Source: CourtListenerOpinion
Date Created: 2023-08-22 11:32:40.374689+00
Date Added: 2024-06-11T18:08:28.325689
License: Public Domain

D.p. Marshall Jr., Judge, concurring. I concur in the court’s judgment. This case should be retried, as the court holds, because the circuit court erred by excluding testimony from Mr. Holmberg about Mr. Shinpaugh’s stated intentions to give Ms. Duke some real property. I also agree that the circuit court erred by invalidating the durable power of attorney. It was prepared for Mr. Shinpaugh at his request by his lawyer, and executed while the lawyer was present and Ms. Duke was not. The appellees conceded the validity of the power at trial. The circuit court therefore erred as a matter of law by reaching out and voiding it in spite of the parties’ contrary agreement. I disagree with the court, however, about procurement. As the court correctly holds, Ms. Duke and Mr. Shinpaugh had a confidential relationship in which she was the dominant party because of his dependence on her. A presumption of undue influence arose from the circumstances surrounding the agreement. Medlock v. Mitchell, 95 Ark. App. 132, 136, 234 S.W.3d 901, 905 (2006). The burden shifted to Ms. Duke to overcome that presumption. And the question that the parties and lower court need answered for retrial is: what evidentiary burden must Ms. Duke carry to demonstrate that no undue influence occurred? If procurement occurred, then she must prove beyond a reasonable doubt that Mr. Shinpaugh decided to give her the acre without improper pressure from her. Smith v. Welch, 268 Ark. 510, 513, 597 S.W.2d 593, 595 (1980). If no procurement occurred, then she must prove this point by a preponderance of the evidence. Ibid. The weight of Ms. Duke’s evidentiary burden may well determine the outcome of this case, and we should be clear about that burden. The circuit court implicitly found that Ms. Duke procured the agreement because it shifted the burden to her to prove — beyond a reasonable doubt — that she did not unduly influence Mr. Shinpaugh. This is the standard in procurement cases. Smith, supra; Looney v. Estate of Wade, 310 Ark. 708, 710, 839 S.W.2d 531, 533 (1992). I would hold that the circuit court did not err on this important embedded issue. The agreement was Ms. Duke’s idea. She and Mr. Shinpaugh drafted it together, and she wrote it down. Then her nephew typed it at her request. Ms. Duke waited outside Mr. Shinpaugh’s hospital room while he signed it, and then he handed it to her. This is a quintessential procurement situation. Looney, 310 Ark. at 710-12, 839 S.W.2d at 533-34. I part company with the court on one other point. Mr. Shinpaugh’s durable power of attorney does not expressly authorize Ms. Duke to make gifts of real property to herself. The “POWER TO ACQUIRE AND SELL” term is just that: an express power to “sell and convey” real property on whatever terms Ms. Duke decided were best for Mr. Shinpaugh. This conveyance, however, was no sale. It was a gift prompted by Ms. Duke’s caregiving. Now of course Mr. Shinpaugh could give his property away if he wanted to do so, and the “GENERAL GRANT OF POWER” in the power of attorney is broad enough to confer the authority to make gifts on Ms. Duke. But the sticking point is that this gift of land was self dealing. As the court notes, our law forbids a fiduciary from acting in her own interest vis-a-vis her principal unless the principal freely and knowingly consents to the transaction without any undue influence from the fiduciary. Cole v. Laws, 349 Ark. 177, 185-86, 76 S.W.3d 878, 883 (2002). This line must not be crossed. As then-judge Cardozo famously wrote, the law holds a fiduciary like Ms. Duke to “the punctilio of an honor the most sensitive.” Litvinko v. Downing, 260 Ark. 868, 870, 545 S.W.2d 616, 617 (1977) (quoting Meinhard v. Salmon, 249 N.Y. 458, 464, 164 N.E. 545, 546 (1928)). This case, then, rests on the agreement coupled with the power of attorney. If Ms. Duke proves beyond a reasonable doubt that Mr. Shinpaugh wanted to give her an acre of land and signed the agreement embodying this desire without undue influence, then the durable power of attorney authorized her to implement Mr. Shinpaugh’s wishes. But the power of attorney standing alone did not authorize her to make this gift of land to herself. With these explanations and limitations, I concur in the court’s judgment reversing and remanding for a new trial.