Court Opinion

ID: 4151465
Source: CourtListenerOpinion
Date Created: 2017-03-09 16:07:26.376991+00
Date Added: 2024-06-11T14:28:39.347850
License: Public Domain

FILED
                                                                    Mar 09 2017, 5:24 am

                                                                        CLERK
                                                                    Indiana Supreme Court
                                                                       Court of Appeals
                                                                         and Tax Court

      ATTORNEYS FOR APPELLANT                                   ATTORNEY FOR APPELLEE
      Rebecca L. Loeffler                                       Michael D. Conner
      H. Joseph Certain                                         Marion, Indiana
      Marion, Indiana

                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Jay Garrison,                                             March 9, 2017

      Appellant-Respondent,                                     Court of Appeals Case No.
                                                                27A05-1603-EU-507
              v.                                                Appeal from the Grant Superior
                                                                Court.
                                                                The Honorable Jeffrey D. Todd,
      Pamela Garrison,                                          Judge.
      Appellee-Plaintiff.                                       Cause No. 27D01-1508-EU-140

      Shepard, Senior Judge

[1]   When someone on his deathbed transfers his property under circumstances

      where competence may be in question, how should the burden of proof

      concerning the transfer be applied?

                                Facts and Procedural History
[2]   While on his deathbed, Thomas R. Garrison transferred title on two cars to one

      of his sons, Jay Garrison. After Thomas’ death, his widow Pamela Garrison as

      Court of Appeals of Indiana | Opinion 27A05-1603-EU-507 March 9, 2017                      Page 1 of 8
      the personal representative of the estate, filed a petition to recover assets. She

      contested what she deemed inter vivos gifts of the cars to Jay and sought to have

      them returned to the estate, explicitly disputing Thomas’ competency. Jay

      intervened, challenging Pamela’s petition. The trial court ordered the return of

      the vehicles to the estate, finding that they were gifts causa mortis for which

      Thomas was not competent to form donative intent. The trial court certified its

      order for interlocutory appeal. Agreeing with the trial court’s conclusion that

      the evidence of Thomas’ competence was in equipoise, and, thus, the assets

      should be recovered by the estate, we affirm, albeit on other grounds.

[3]   Pamela and Thomas were married for twenty-eight years before Thomas’ death,

      and while no children were born of the marriage, they each had children from

      prior relationships. Thomas was diagnosed with terminal lung cancer on July

      27, 2015, ultimately passing away on August 9, 2015. On August 11, 2015, two

      days prior to Thomas’ funeral, Jay, who was accompanied by police officers,

      came to Pamela and Thomas’ house to take possession of a 2013 Chevrolet

      Corvette Z06 and a 2006 Ford Explorer XLT. Those vehicles had been titled in

      Thomas’ name, but as of July 30, 2015, were titled in Jay’s name.

[4]   An unsupervised estate was opened on August 18, 2015. Pamela filed a

      petition to recover assets, seeking to nullify the inter vivos gifts of the vehicles to

      Jay.

[5]   Those who testified at the contested hearing agreed that Thomas frequently

      smoked cigarettes, especially prior to his death, and that he consumed whiskey

      Court of Appeals of Indiana | Opinion 27A05-1603-EU-507 March 9, 2017          Page 2 of 8
      and beer in increasingly large quantities before his death. Most witnesses

      acknowledged that after his diagnosis, Thomas was sad and in considerable

      physical pain.

[6]   According to some, including Jay, Thomas’ sister Janet Baller, and Janet’s

      husband David Lee Baller, Thomas’ behavior in the period leading up to his

      death remained fairly consistent with behavior they had observed over the

      years. Thomas was an alcoholic, who smoked a great deal, and had an unusual

      sense of humor.

[7]   In contrast, Pamela testified that beginning in June 2015, Thomas exhibited

      drastically changed behavior, such as going outdoors wearing only a winter

      coat and racing helmet, and crawling on the living room floor searching for a

      missing air pump he thought would be located under the couch. Pamela’s

      daughter Carla Thompson, who had grown up in Thomas’ household, testified

      that at the beginning of summer Thomas’ physical and mental health had

      deteriorated noticeably. She observed him fall often, lose his balance, become

      weaker and thinner, and become completely incontinent. She often had to

      insist on supplying him with clean bedding where he lay. She heard him say

      things that did not make sense, engage in verbal arguments with Pamela

      without realizing it, and call out the name of his childhood dog instead of the

      name of his current dog.

[8]   Thomas’ good friend Dan Hanthorn had a conversation with Thomas after the

      diagnosis about why he was going to heat an ice pick and lie down on it to

      Court of Appeals of Indiana | Opinion 27A05-1603-EU-507 March 9, 2017    Page 3 of 8
       relieve his pain, ultimately removing the ice pick from the hands of Thomas’

       grandson, who had been enlisted by Thomas to help in this enterprise.

[9]    The trial judge concluded that the evidence of Thomas’ competency to make a

       gift causa mortis was evenly split, and that the vehicles must therefore be

       returned to the estate. Jay now appeals.

                                     Discussion and Decision
[10]   Jay argues that 1) the trial court erroneously concluded it was a gift causa mortis

       as opposed to a gift inter vivos, 2) applied the wrong standard of review, and 3)

       based its decision on insufficient evidence.

[11]   Pamela raised a straight claim of incompetence in her petition to recover assets.

       A review of a variety of standards of review, burdens of proof, and burdens of

       going forward, will aid in resolving this appeal.

[12]   There are two different kinds of gifts—inter vivos gifts and gifts causa mortis. An

       inter vivos gift is one where the donee becomes the absolute owner of a thing

       given in the lifetime of the donor. Dunnewind v. Cook, 697 N.E.2d 485, 489 n.3

       (Ind. Ct. App. 1998), trans. denied. An inter vivos gift is made when: (1) the

       donor is competent to contract; (2) the donor has freedom of will; (3) the donor

       intends to make a gift; (4) the gift is completed with nothing left undone; (5) the

       property is delivered by the donor and accepted by the donee; and (6) the gift is

       immediate and absolute. Id.

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[13]   A gift causa mortis, on the other hand, is accomplished when: (1) the gift was

       the donor’s property; (2) the gift was given when the donor was in peril of death

       or while under the apprehension of impending death from an existing malady;

       (3) the donor dies as a result of the disorder without intervening recovery; and,

       (4) there was actual or constructive delivery of the thing given to the donee with

       the intention that the title vest conditionally upon the death of the donor.

       Dunnewind, 697 N.E.2d at 489 n.2.

[14]   Delivery of the gift—inter vivos or causa mortis—is an indispensable requirement

       without which the gift fails. Heaphy v. Ogle, 896 N.E.2d 551, 557 (Ind. Ct. App.

       2008); Hopping v. Wood, 526 N.E.2d 1205, 1207 (Ind. Ct. App. 1988), trans.

       denied. Still, manual transfer is not always necessary. Id. It is sufficient if the

       delivery is as complete as the thing and the circumstances of the parties will

       permit, because delivery may be actual, constructive or symbolic. Heaphy, 896
N.E.2d at 557 (citing Lewis v. Burke, 248 Ind. 297, 226 N.E.2d 332, 336 (1967)).

[15]   The mental capacity required to make a valid inter vivos gift is the same as the

       capacity required to execute a will. Guardianship of Fowler v. Fowler, 175 Ind.

       App. 386, 387, 371 N.E.2d 1345, 1346 (1978) (quoting Lewis v. Teegarden, 145
Ind. 98, 101, 40 N.E. 1047, 1048 (1895)); but cf., Henry’s Indiana Probate Law

       and Practice 5 § 32.20 at 32-111 (competency requirement for donor of inter

       vivos gift is “business judgment” test of contracts rather than the weaker mind

       test of a testator). The same is true of the donor of a gift causa mortis, who

       “must possess sufficient mental capacity to make the gift, that is, must be

       mentally competent or of sound mind.” 38A C.J.S. Gifts § 101 (2016). Indeed,
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       “generally, the same degree of mental capacity is required to make a gift causa

       mortis as is required to make a will.” Id.; Restatement (Third) of Property

       (Wills & Don. Transfers) § 8.1 TD No 3 (2001). The determination of mental

       capacity is tested at the moment the gift is made. 38A C.J.S. Gifts § 101 (2016).

[16]   The parties to this case contest the burden of establishing the type of gift versus

       the presumptions of competency for each kind of gift, the burden imposed on

       the challenger, and the burden of going forward with corresponding rebuttal

       evidence. Resolution of the appeal turns on whether the parties have met their

       respective burdens on the issue of competency.

[17]   For an inter vivos gift, when determining whether a transfer qualified as such, the

       burden of proof is a preponderance of the evidence. In re Estate of Deahl, 524
N.E.2d 810, 812 (Ind. Ct. App. 1988), trans. denied. For a gift causa mortis,

       because of the opportunity for the perpetration of fraud on the decedent, the

       evidence establishing such a gift must be clear and convincing, and must be

       accompanied by a delivery of the subject matter. In re Collinson, 231 Ind. 605,

       108 N.E.2d 700, 701, (1952) (citing 24 Am. Jur., Gifts, § 129, p. 797). The

       burden cannot be met by the sole uncorroborated testimony of the donee.

       Collinson, 108 N.E.2d at 702.

[18]   In Branstrator v. Crow, 162 Ind. 362, 69 N.E. 668 (1904), the children of a

       deceased contested the competency of the testator. Our Supreme Court

       acknowledged that once these plaintiffs established incapacity of the testator by

       a preponderance of the evidence, the presumption of incapacity arose. Id. at

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       669. The prima facie case would be made, and if the defendants came forward

       with no evidence to establish competency, the plaintiffs would prevail. Id. Yet,

       if the defendants successfully prevented the plaintiffs from establishing

       incompetency by a preponderance of the evidence, the plaintiffs’ claim would

       be defeated. Id. If the evidence of competency was in equipoise, then the

       plaintiffs’ claim would be defeated. Id.

[19]   Following these lines alone, Pamela’s claim would fail and the vehicles would

       remain in Jay’s hands. Still, as a trial court may be affirmed on any grounds

       apparent in the record, we conclude that the outcome ordered by the court was

       correct. See Campbell v. El Dee Apartments, 701 N.E.2d 616, 620 n.3 (Ind. 1998)

       (“We acknowledge the trial court’s ruling may be affirmed on any ground

       supported by the evidence of record.”).

[20]   Certain transfers are viewed differently based on the relationship of the donor

       and donee. In Lucas v. Frazee, 471 N.E.2d 1163, 1166 (Ind. Ct. App. 1984), we

       examined whether a deed should be rescinded because it was procured through

       constructive fraud or upheld as a gift. We acknowledged that establishment of

       the existence of certain relationships, such as parent and child, lead to a

       presumption that the questioned transaction was the result of undue influence

       exerted by the dominant party, constructively fraudulent, and, therefore, void.

       Id. at 1166-67. In that situation, the burden of proof shifts to the dominant

       party to demonstrate that the transaction was conducted at arm’s length, and

       thus was valid. Id. at 1167. The dominant party must rebut the presumption of

       fraud by clear and unequivocal proof. Id. Evidence of the donor/subordinate

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       party’s competence is relevant to consideration of the validity of such gift. See

       In re Estate of Deahl, 524 N.E.2d 810, 812 (Ind. Ct. App. 1988) (assets properly
                                                                                            1
       excluded from estate as gifts made prior to donor’s death).

[21]   Inasmuch as Thomas and Jay were father and son, the presumption of undue

       influence arose with respect to the transfer. Jay presented testimony that

       Thomas was competent at the time of the transfer, and that Jay possessed

       certificates of title to the two vehicles dated July 30, 2015. Pamela, however,

       presented testimonial evidence of Thomas’ incompetency before and at the time

       of transfer. The trial court found the evidence of competency was evenly split.

       Jay, therefore, has not rebutted the presumption of undue influence, and the

       estate is entitled to recovery of the vehicles.

                                                      Conclusion
[22]   For the foregoing reasons, we affirm the decision of the trial court.

[23]   Affirmed.

       Riley, J., and Kirsch, J., concur.

       1
        Additionally, if the gift was a gift causa mortis, the possibility of fraud raises the burden of proof for
       establishing the gift.

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