Court Opinion

ID: 8207968
Source: CourtListenerOpinion
Date Created: 2022-09-21 14:01:44.812238+00
Date Added: 2024-06-11T16:41:28.793893
License: Public Domain

Cite as 2022 Ark. App. 338
                    ARKANSAS COURT OF APPEALS
                                       DIVISION II
                                       No. CV-20-394

 BAUCUM FULK                                    Opinion Delivered September   21, 2022
       APPELLANT/CROSS-APPELLEE
                                                APPEAL FROM THE PULASKI
                                                COUNTY CIRCUIT COURT,
 V.                                             THIRTEENTH DIVISION
                                                [NO. 60PR-19-703]
 MARION FULK; MARTIN FULK; AND
 AUSTIN FULK                     HONORABLE W. MICHAEL REIF,
      APPELLEES/CROSS-APPELLANTS JUDGE

                                                AFFIRMED ON DIRECT APPEAL;
                                                AFFIRMED ON CROSS-APPEAL

                           RAYMOND R. ABRAMSON, Judge

       This is an appeal from a probate proceeding involving a dispute between the four

children of the late Augustus “Gus” Marion Fulk and his wife Anne. The primary dispute

concerns ownership of Gus’s stock in the LaGrue Land and Irrigation Company (“the Duck

Club”), a hunting club that has profitable farmland as well. The surviving children are a

daughter, Marion; and three sons, Martin, Baucum, and Austin. On April 1, 2019, Marion,

Martin, and Austin filed a petition for probate of will and appointment of executors in the

probate division of the Pulaski County Circuit Court. Although Gus’s will named Baucum as

executor, the petitioners asked that Marion and Martin be named as co-executors instead; they

argued that Baucum was unsuitable for the position because of his conduct in convincing Gus

to convey the Duck Club stock to him before their father’s death. Four months later, Marion,
Martin, and Austin filed a petition to have that Duck Club transfer set aside on the grounds of

incapacity and undue influence.

       Following a bench trial, the circuit court admitted Gus’s will to probate and appointed

Baucum as executor, but set aside the Duck Club stock transfer to Baucum, finding that it was

the result of incapacity and undue influence. Baucum filed the instant appeal from the circuit

court’s ruling setting aside the transfer; and the other three siblings filed the instant cross-appeal

from the circuit court’s appointment of Baucum as executor. We affirm on both direct appeal

and cross-appeal.

       On January 18, 2019, eighty-seven-year-old Gus executed an affidavit of lost stock (the

“Affidavit”) conveying stock that he owned in the Duck Club to his son, Baucum. Present were

Gus, Baucum, William “Hank” Griffin III (a family friend), and Anna Swallow (Baucum’s

girlfriend). Testimony established that following the death of Gus’s wife, Anne,’s death, on

December 31, 2016, Gus’s mental and physical health began to deteriorate significantly. He was

diagnosed with Alzheimer’s-type dementia in 2017 and eventually came to reside in a senior

living community in Pulaski County where he received around-the-clock care and supervision.

       Gus had executed a general durable power of attorney, appointing Marion and Baucum

as his attorneys-in-fact on December 3, 2018. This was drafted by Gus’s long-time estate-planning

lawyer, Christopher Rogers. It required that any gifts made under its authority to Gus’s

descendants must be made equally to all descendants of the same generation and class. Rogers

had also previously prepared estate plans for Gus and Anne. He prepared their wills as well as

the Fulk Family Revocable Living Trust dated November 24, 1994 (“the Trust”). The Fulks’

estate plan employed pour-over wills, which provided that upon their deaths, any of their (Gus’s

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and Anne’s) assets that were outside of the Trust would be transferred into the Trust. The Trust

also provided that its assets would then be divided equally between their four children.

       In 2017, Marion began working with Rogers to transfer assets into the Trust pursuant to

memos of instruction that he gave her. Consistent with the instructions she received from

Rogers, in July 2018, she asked the Duck Club’s officers to list a transfer-on-death clause on

Gus’s Duck Club stock certificate providing that the stock would be transferred to the Trust

upon Gus’s death, but they apparently took no action on her request. Baucum emailed Rogers

in December 2018, claiming that Gus wanted Baucum to inherit his ownership interest in the

Duck Club. This initiated a round of emails between Rogers and Baucum’s siblings in which

the siblings took the position that Gus’s estate plan should not change, and the Duck Club stock

should be transferred into the Trust with the rest of Gus’s assets.

       Gus initially purchased 8 and 8/11 shares of stock in the Duck Club on June 29, 1983.

Testimony presented established that Baucum also hunted at the Duck Club and enjoyed it for

many years. On January 18, 2019, Baucum picked up Gus from Woodland Heights, the senior

living center where he resided, and took him to lunch, where Baucum presented him with the

prepared Affidavit. The Affidavit averred that Gus had lost the stock certificate for his Duck

Club shares and authorized the president and secretary of the Duck Club to cancel his lost

certificate and transfer his shares of stock to Baucum. Baucum then took Gus to a notary, and

Gus signed the Affidavit. The day after he signed the Affidavit, Gus went to a hospital emergency

room and was admitted to the intensive care unit, where he remained for nearly a week.

        After his release, he had no recollection of his hospitalization and frequently did not

know where he was or what day it was. Roughly five months before procuring Gus’s signature

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on the Affidavit, Baucum remarked in an email to his siblings that Gus “has utterly ceased to be

able to connect cause and effect.” Gus died two months after signing the Affidavit.

       On direct appeal, Baucum argues that he sufficiently rebutted the presumption that the

Affidavit resulted from Gus’s lack of capacity or Baucum’s undue influence. We disagree.

Arkansas appellate courts do not reverse decisions of probate courts unless they are clearly

erroneous, but they do review legal rulings de novo. See Edwards v. Hart, 2020 Ark. App. 182, at

5, 598 S.W.3d 543, 545–56. In conducting its review, an appellate court must give “[d]ue

deference . . . to the superior position of the probate judge to determine the credibility of the

witnesses and the weight to be accorded their testimony.” See Medlock v. Mitchell, 95 Ark. App.

132, 135, 234 S.W.3d 901, 904–05 (2006).

       “Ordinarily, the party challenging the validity of [an instrument] is required to prove”

incapacity or undue influence “by a preponderance of the evidence.” See Harbur v. O’Neal, 2014

Ark. App. 119, at 5, 432 S.W.3d 651, 656. However, when the assignee procured the assignment

and had a confidential relationship with the assignor, this gives rise to a rebuttable presumption

of incapacity and undue influence. See Montigue v. Jones, 2019 Ark. App. 237, at 16, 576 S.W.3d

46, 56. To rebut this presumption, the party defending the assignment bears “the burden of

proving beyond a reasonable doubt that the testator enjoyed both required mental capacity and

freedom of will.” See Harbur, 2014 Ark. App. 119, at 5, 432 S.W.3d at 656. We have long held

that “[d]ue deference will be given to the superior position of the probate judge to determine

the credibility of the witnesses and the weight to be accorded their testimony.” Medlock, 95 Ark.

App. at 135, 234 S.W.3d at 904–05.

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       On appeal, Baucum argues that the witnesses who were present on January 18, 2019, all

testified that Gus was mentally competent and understood that he was conveying the Duck Club

stock to Baucum and that there was no undue influence. He specifically cites the evidence of

Gus’s condition during the precise moment he decided to sign the Affidavit. We agree that the

issue “is not the mental capacity of the testator before or after a challenged [instrument] is signed,

but rather the level of capacity at the time the [instrument] was signed.” Pyle v. Sanders, 344 Ark.

354, 360, 39 S.W.3d 774, 778 (2001). We also acknowledge that this court has held that a

person who might occasionally lack capacity may nevertheless make a valid execution of an

instrument “during a lucid interval.” Green v. Holland, 9 Ark. App. 233, 236, 657 S.W.2d 572,

575 (1983). But in light of our deferential standard of review, we agree with Marion, Martin,

and Austin that this does not mean that when all the witnesses to an instrument’s execution

have an interest in seeing it upheld, a finder of fact must simply accept their self-serving

testimony at face value and throw out all other relevant evidence and common sense.

       Instead, the circuit court had an obligation to consider all the relevant evidence, which

is what it did. “Undue influence on a testator may be inferred from the facts and circumstances.”

Medlock, 95 Ark. App. at 137, 234 S.W.3d at 905. A court may consider whether a signatory was

hospitalized or in a weakened state. Pyle, supra. A court may also consider whether the person

who stood to benefit from the instrument’s execution was “the driving force behind the changes”

or present when the changes were discussed with the signatory and executed. See Medlock, 95

Ark. App. at 137, 234 S.W.3d at 905–06. Further, when the party defending the instrument

“relies almost exclusively on the testimony of” individuals whose self-interest aligns with his own,

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then the circuit court is entitled to take that into account when making its credibility

determinations. Id. at 137, 234 S.W.3d at 906.

       In its order, the circuit court noted that the three witnesses present when Gus signed the

affidavit were Baucum; Baucum’s girlfriend, Anna Swallow; and Hank Griffin, a friend of Gus’s

who had hunted with him in the past. Baucum had arranged for Griffin to be a guest at the

lunch to witness Gus’s transfer of the Duck Club stock to Baucum. Baucum, a lawyer, prepared

two documents transferring the Duck Club stock from Gus to Baucum. One document

transferred the Duck Club stock to Baucum at Gus’s death. The second document that Gus

signed transferred the Duck Club stock to Baucum immediately.

       After the lunch, Swallow brought out pictures of Gus and Baucum hunting at the Duck

Club. Baucum, Swallow, and Griffin testified that Gus said he wanted Baucum to have his

ownership interest in the Duck Club. Gus asked Baucum what he should do, and Baucum told

Gus that he should transfer the stock to him now. Baucum took Gus, with Griffin following, to

a notary public, and Gus signed the Affidavit transferring the Duck Club stock from Gus to

Baucum. The next day, Gus went to the emergency room and was in the hospital for five days.

Gus did not remember being in the hospital; he died on March 19, 2019.

       The circuit court assessed the witnesses’ credibility and considered the facts before it,

including Gus’s mental and physical health during the months before and after he signed the

Affidavit. Specifically, the court found that the evidence presented at trial established the

existence of a confidential relationship between Gus and Baucum because, in addition to the

close familial relationship between them as father and son, Baucum held the power of attorney

and thereby was attorney-in-fact for Gus at the time of the execution of the Affidavit. The court

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held that as a result of the establishment of both procurement and a confidential relationship

between Gus and Baucum, a rebuttable presumption of lack of capacity and undue influence

arose. Given the record before us and our standard of review, we cannot say the circuit court

erred in finding that Baucum had not rebutted the presumption.

       Because we hold that the circuit court was correct in finding that Baucum had not

rebutted the presumption of incapacity and undue influence, we decline to address his second

appellate point in which he argues that after he rebutted the presumption of undue influence,

the burden of proving undue influence and lack of capacity shifted back to his siblings. We

affirm the direct appeal.

       On cross-appeal, Marion, Martin, and Austin argue that the circuit court erred in

appointing Baucum executor of Gus’s estate. Gus’s last will and testament appointed Baucum

as executor of his estate. Less than two weeks after Gus passed away, Marion, Martin, and Austin

brought suit, contending Baucum was unsuitable to serve as the executor of Gus’s estate. Their

entire argument centered on the conveyance of the Duck Club stock that is the subject of the

direct appeal. They further argued that Marion and Martin should be appointed as the co-

executors of Gus’s estate instead of Baucum. The circuit court disagreed and “decline[d] to

deviate from the provisions of Gus’s will,” noting that the Fulk siblings’ “personal animosity

does not render Baucum unsuitable to administer the estate.”

       Arkansas law calls for the executor named in a decedent’s will to be the first person

appointed by the court. Ark. Code Ann. § 28-48-101(a)(1) (Supp. 2021). Arkansas law allows

probate courts to choose another personal representative if the person named in the decedent’s

will is “not qualified to serve.” Ark. Code Ann § 28-48-101(b). Along with minors, those of

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unsound mind, convicted felons, and unauthorized corporations, “not qualified to serve” can

mean “[a] person whom the court finds unsuitable.” Ark. Code Ann. § 28-48-101(b). “The

statutory word ‘unsuitable’ gives wide discretion to a probate judge. Past maladministration of a

comparable trust, bad character, misconduct, neglect of duty, or physical or mental incapacity,

warrants a finding that an executor or administrator is unsuitable.” Ashley v. Ashley, 2012 Ark.

App. 236, at 12, 405 S.W.3d 419, 426 (citing Quincy Tr. Co. v. Taylor, 57 N.E.2d 573 (Mass.

1944)).

          Circuit courts are given wide discretion in determining whether an individual is

unsuitable to serve. Ashley, 2012 Ark. App. 236, at 12, 405 S.W.3d at 426; Taylor v. Woods, 102

Ark. App. 92, 102, 282 S.W.3d 285, 292 (2008) (statute provides that courts “may” render such

a decision). The standard in reviewing a circuit court’s decision is whether the court abused its

discretion. Taylor, 102 Ark. App. at 103, 282 S.W.3d at 292. We cannot say the circuit court

abused its discretion here.

          In his will, Gus nominated Baucum as his executor. Baucum is a licensed attorney who

practiced law in the private sector in Arkansas for three and a half years, and he has practiced

military law for over twenty-six years. Baucum is a magna cum laude graduate of Harvard

University and a colonel in the U.S. Army with over twenty-nine years of commissioned service.

Baucum’s military career has included service as a prosecutor, defense counsel, special assistant

U.S. attorney, professor at the U.S. Army JAG School, principal legal advisor to a major general

(two-star general), and principal legal advisor to a lieutenant general (three-star general). He has

recently served as the Deputy Chief of Staff for Operations, Plans, and Training for the U.S.

Army Reserve Legal Command, an organization commanded by a general that is made up of

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about 20 percent of the legal personnel for the U.S. Army (active duty plus reserve), and he

currently serves as the Command Judge Advocate with the 9th Mission Support Command.

       At trial, Baucum testified that if named executor of his father’s estate, he would retain

counsel, gather the assets of the estate, and distribute the assets according to the plan of

distribution approved by the court. Baucum also testified that he would hire tax advisers and

follow their recommendations. Baucum explained that he is familiar with the importance of

following the law and that the bulk of his career in the military has involved understanding,

interpreting, and following laws, rules, and regulations. The evidence presented at trial

demonstrates that Baucum is qualified, able, and fit to serve as executor of Gus’s estate. The

circuit court’s decision appointing Baucum as executor is supported by proof, and it will not be

disturbed on appeal. We affirm on cross-appeal.

       Affirmed on direct appeal; affirmed on cross-appeal.

       HARRISON, C.J., and HIXSON, J., agree.

       Barber Law Firm, PLLC, by: Mark W. Hodge and Rachel E. Hildebrand, for appellant/cross-

appellee.

       Rose Law Firm, a Professional Association, by: David S. Mitchell, Jr., and Joseph Hall, for

appellees/cross-appellants.

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