Black v. Duffie
2016 Ark. App. 584
| Ark. Ct. App. | 2016Background
- Annabelle Duffie inherited a three-quarter interest in 180 acres and a Grassy Lake hunting-club share from her brother Jerome (who died April 2006). Her nephew Jack Duffie was appointed guardian in 2013 and sued in Nov. 2013.
- In June 2006 Annabelle transferred the Grassy Lake share to Clay and Travis Black (her brother’s longtime acquaintances); no money was paid. Appellants claim it was consistent with Jerome’s wishes.
- In August 2009 Annabelle executed a warranty deed (with vendor’s lien) conveying her three-quarter interest in the 180-acre tract to Joanne and Charles Black for $150,000 paid by installments of $1,000/month (no clear amortization shown); Blacks later sold timber from the land.
- A bench trial produced expert psychological testimony (Dr. Feir) that Annabelle had lifelong low cognitive functioning (IQ ~59) with gradual decline, making her vulnerable in financial matters; conflicting lay testimony described long-standing family friendships and some post-transfer recollection by Annabelle.
- The trial court voided both transfers for undue influence and incompetency, ordered reconveyance (three-quarter interest in the 180 acres and return of Grassy Lake stock), awarded damages for timber proceeds ($52,605.56), and later awarded guardian’s attorney $31,069.36 in fees. Appellants appealed.
Issues
| Issue | Plaintiff's Argument (Duffie) | Defendant's Argument (Blacks/Reynolds) | Held |
|---|---|---|---|
| Validity of Grassy Lake share transfer (2006) | Transfer void: Annabelle lacked capacity and was unduly influenced; no consideration; statute tolling applies | Transfer was voluntary/gift consistent with Jerome’s wishes; Annabelle was competent then; statute of limitations bars claim | Court: Transfer void for undue influence and incapacity; lack of consideration and surrounding facts support voiding |
| Validity of 180-acre deed (2009) | Deed void: Annabelle incompetent and unduly influenced; grossly inadequate consideration supports setting aside | Deed valid: Annabelle competent in 2009, negotiated sale, accepted installment terms, and price not unconscionable | Court: Deed voidable for undue influence and incapacity; inadequate consideration is a relevant factor among others |
| Remedies for timber and rescission | Seek rescission, return of property, rents, accounting for timber proceeds | Blacks argue rescission should restore parties to status quo including offsetting payments and improvement values | Court: Rescission awarded; Blacks owe 3/4 share of timber proceeds as damages; monthly payments treated as rent; no recovery for cabin improvements absent proof of increased value |
| Attorney’s fees award | Fees proper and submitted to trial court for reasonableness | Appellants: no motion/affidavit on record; no statutory or contractual basis; award improper and not preserved | Court: Fee objection not preserved for appeal; award affirmed (appellate court did not reach statute/merits due to preservation issue) |
Key Cases Cited
- Watson v. Alford, 255 Ark. 911, 503 S.W.2d 897 (discussing mental weakness, gross inadequacy of price, and setting aside conveyances for incapacity/undue influence)
- Donaldson v. Johnson, 235 Ark. 348, 359 S.W.2d 810 (test for mental capacity to execute deed)
- Rose v. Dunn, 284 Ark. 42, 679 S.W.2d 180 (presumption of capacity; burden on contestants to prove incapacity)
- Petree v. Petree, 211 Ark. 654, 201 S.W.2d 1009 (consideration of decedent’s letter expressing testamentary wishes in context of voluntary transfers)
- Kelly's Heirs v. McGuire, 15 Ark. 555 (early articulation that extreme weakness of mind rendering one unable to guard against imposition justifies setting aside contracts)