568 S.W.3d 585
Tenn. Ct. App.2018Background
- Brenda Vargo (decedent) changed payable-on-death (POD) designations in 2015; a new bank membership agreement named Claude Moyers (defendant) as sole POD beneficiary and revoked prior beneficiary designations that had included four family members (plaintiffs).
- Plaintiffs sued Claude Moyers alleging fraud and undue influence by Claude’s wife, Wanda (who had a close relationship with the decedent), and the trial court found a confidential relationship and presumed undue influence; the court imputed Wanda’s undue influence to Claude and divested him of the disputed funds.
- Facts: Wanda prepared taxes for the Vargos since ~2005–06 and became close after the decedent’s husband died in 2014; Wanda provided transportation, cashed checks, helped with banking technology, and assisted with various financial or personal matters.
- The only pre-change conduct (before the May 11, 2015 POD designation) shown was frequent phone contact, occasional transport to bank when accounts were opened in April 2015, and limited check-cashing/ATM help; plaintiffs offered no direct evidence that Wanda or Claude drafted or directly procured the POD change.
- Trial court concluded a confidential relationship existed without fully applying the dominion-and-control standard; the Court of Appeals reversed, finding the evidence preponderated against a confidential relationship and thus against undue influence presumption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction/standing | Plaintiffs are proper claimants to challenge POD changes under bank statutes and common law undue-influence claim | Defendant argued statutes governing POD accounts make standing a jurisdictional prerequisite | Court: Undue-influence claim arises at common law; standing did not strip subject-matter jurisdiction — trial court had jurisdiction |
| Directed verdict denial | Plaintiffs argued sufficient circumstantial evidence (relationships, suspicious circumstances) to submit undue influence to factfinder | Defendant argued no confidential relationship or dominion/control; directed verdict warranted | Court: Denial proper; reasonable minds could differ, so case reached merits |
| Existence of confidential relationship (undue-influence presumption) | Plaintiffs argued Wanda’s close friendship, assistance, transportation, check-cashing, and involvement in the decedent’s affairs created a confidential relationship | Defendant argued Wanda did not exercise dominion and control, decedent was mentally competent and acted independently, and most assisting acts occurred after POD changes | Court: Reversed trial court — evidence preponderates against finding dominion and control; no confidential relationship, so presumption of undue influence does not arise |
| Imputation of undue influence to Claude Moyers | Plaintiffs contended Wanda’s undue influence could be imputed to her husband Claude | Defendant argued no basis to impute because no undue influence proved | Court: Declined to decide because it held no confidential relationship existed and undue-influence presumption failed; |
Key Cases Cited
- Osborn v. Marr, 127 S.W.3d 737 (Tenn. 2004) (statutory creation of cause of action can make standing jurisdictional)
- Matlock v. Simpson, 902 S.W.2d 384 (Tenn. 1995) (confidential-relationship doctrine requires dominion and control for family/other relationships)
- Childress v. Currie, 74 S.W.3d 324 (Tenn. 2002) (confidential relationship followed by benefit to dominant party gives rise to presumption of undue influence)
- Johnson v. Tennessee Farmers Mut. Ins. Co., 205 S.W.3d 365 (Tenn. 2006) (standard for reviewing directed-verdict motions on appeal)
- Mitchell v. Smith, 779 S.W.2d 384 (Tenn. Ct. App. 1989) (undue influence usually proven by circumstantial "suspicious circumstances")
- Kelley v. Johns, 96 S.W.3d 189 (Tenn. Ct. App. 2002) (examples where dominion and control were found based on access to decedent and deterioration)
- Johnson-Murray v. Burns, 525 S.W.3d 625 (Tenn. Ct. App. 2017) (caregiving alone does not necessarily establish dominion and control)