Cisneros v. Graham
294 Neb. 83
| Neb. | 2016Background
- Hilda Graham owned a $59,665.27 CD; she executed a power of attorney on July 16, 2013 appointing her nephew Gregory G. Graham as agent.
- On August 22, 2013, Graham cashed the CD and deposited the proceeds into a joint checking account he co-owned with Hilda that had right of survivorship.
- Cisneros was the payable-on-death beneficiary of the CD (designated July 25, 2013) and sued Graham for conversion/constructive fraud after Hilda died and the checking account balance passed to Graham by survivorship.
- District court granted summary judgment for Cisneros under the Nebraska Uniform Power of Attorney Act (Neb. UPOAA), awarding the CD amount plus interest and costs; it denied attorney fees and denied Graham’s motion to alter or amend.
- On appeal, Graham argued he had express authority in the power of attorney (or was protected by §30-4014(4)) and that Hilda ratified his actions; Cisneros cross-appealed for attorney fees under §30-4017.
Issues
| Issue | Plaintiff's Argument (Cisneros) | Defendant's Argument (Graham) | Held |
|---|---|---|---|
| Whether Graham had authority under the POA to deposit CD proceeds into a joint survivorship account he co-owned | POA lacked express authority to create an interest in the agent; deposit created an interest that the agent could not create | POA granted broad banking and transfer powers allowing cashing and depositing the CD | Held for Cisneros: §30-4024(2) prohibits an agent who is not ancestor/spouse/issue from creating an interest in the principal’s property without express written authority; POA contained no such express grant |
| Whether §30-4014(4) shields an agent who benefits from an act if acting in principal’s best interest | N/A (relied on §30-4024(2) prohibition) | §30-4014(4) permits actions benefiting agent if agent acts with care, competence, diligence and in principal’s best interest | Held for Cisneros: §30-4014(4) does not override §30-4024(2); gifts/self-dealing creating agent’s interest remain forbidden absent express authority |
| Whether Hilda ratified Graham’s unauthorized act | Ratification in fact would validate the transaction | Graham claimed he orally informed Hilda, gave receipt, and Hilda’s register/behavior evidenced ratification | Held for Cisneros: Ratification required the same formalities as original authorization (writing); evidence was insufficient as a matter of law to show written ratification |
| Whether Cisneros was entitled to attorney fees under UPOAA or as frivolous litigation costs | Requested fees under §30-4017 and §25-824 | Graham contended his position was nonfrivolous given new statute interpretation | Held for Graham: Trial court did not abuse discretion denying attorney fees; Graham’s positions were not frivolous in light of statutory interpretation issues |
Key Cases Cited
- Archbold v. Reifenrath, 274 Neb. 894 (2008) (agent may not gift to self absent express authority and clear intent of principal)
- Crosby v. Luehrs, 266 Neb. 827 (2003) (constructive fraud and fiduciary self-dealing principles governing powers of attorney)
- Litherland v. Jurgens, 291 Neb. 775 (2015) (burden shifts to agent to prove express authority by clear and convincing evidence when self-dealing occurs)
- Sulu v. Magana, 293 Neb. 148 (2016) (summary judgment standards and viewing evidence in light most favorable to nonmovant)
- White v. Kohout, 286 Neb. 700 (2013) (standard for awarding attorney fees for frivolous or bad-faith litigation)
- Estate of Casey v. C.I.R., 948 F.2d 895 (4th Cir. 1991) (recognition of opportunities for self-dealing by holders of broad POAs)