Estate of Johnson v. Johnson
237 So. 3d 698
| Miss. | 2017Background
- Dorothy Johnson opened five joint CDs in 2005 listing herself and two other family members as co-owners; she later executed a will and a durable power of attorney appointing daughter Sheila West.
- Dorothy delivered the durable power of attorney to Sheila in spring 2010 when Dorothy became bedridden; Sheila was Dorothy’s caregiver and had access to Dorothy’s bank lockbox.
- When the CDs matured in August 2010, Sheila (using the power of attorney) executed changes at the bank replacing Ron, Brad, and Melanie on various CDs with Sheila and her daughters, Jennifer and Jessica.
- Dorothy died in October 2010. Ron (Dorothy’s son) sued to set aside the 2010 CD changes as improper inter vivos gifts and later alleged Sheila abused the power of attorney.
- The chancery court found Sheila failed to overcome a presumption of undue influence, set aside the 2010 changes, and ordered the CDs returned to their 2005 ownership and distributed per Dorothy’s will.
- On appeal the Mississippi Supreme Court held there was no inter vivos gift because Dorothy retained ownership interest in the CDs, but affirmed the chancery court’s result on the alternative ground that Sheila abused the durable power of attorney by failing to rebut the presumption of undue influence arising from a confidential relationship.
Issues
| Issue | Plaintiff's Argument (Ron) | Defendant's Argument (Sheila) | Held |
|---|---|---|---|
| Whether the 2005 or 2010 changes constituted valid inter vivos gifts | Sheila used Dorothy’s name to convert others’ ownership into gifts to herself/daughters | Dorothy and Sheila intended the ownership change; Dorothy retained control so no gift issue | No inter vivos gift: Dorothy retained ownership/control of CDs, so element of delivery/surrender not met; gifts not established |
| Whether Sheila abused the durable power of attorney / engaged in self-dealing | Sheila used POA to remove other beneficiaries for personal gain; breached fiduciary duty | Actions were authorized by broad POA powers and taken per Dorothy’s instructions | Affirmed: confidential relationship + suspicious circumstances raised presumption of undue influence; Sheila failed to rebut by clear and convincing evidence, so transfers voidable |
| Whether a confidential relationship and presumption of undue influence were established | Sheila was caregiver, held POA, had exclusive access and influence—creates presumption | Relationship and POA alone insufficient; Dorothy acted knowingly | Confidential relationship found: Dorothys’ dependency and Sheila’s dominant role created presumption; Sheila failed the three-prong Murray test to rebut it |
| Whether the chancery court abused discretion by denying posting the supersedeas bond in kind and ordering distribution | Bond in kind (appellants’ half of CDs) should have been accepted to preserve appeal status quo | Trial court acted within discretion to require cash bond to protect appellees | Issue deemed moot; court declines to reach merits but notes trial courts have discretion re: supersedeas bonds |
Key Cases Cited
- In re Estate of Laughter, 23 So.3d 1055 (Miss. 2009) (elements and delivery requirement for inter vivos gifts)
- Murray v. Laird, 446 So.2d 575 (Miss. 1984) (three-prong test and good-faith factors to rebut undue influence presumption)
- Norris v. Norris, 498 So.2d 809 (Miss. 1986) (burden for proving existence of a confidential relationship)
- Foster v. Ross, 804 So.2d 1018 (Miss. 2002) (presumption of intent to vest ownership from joint bank instruments under §81-5-63 may be defeated by fraud, forgery, duress, or undue influence)
- Dunn v. Reilly, 784 So.2d 935 (Miss. 2001) (presumption that persons named on joint deposit are owners and each may treat account as entirely their own)