Estate of Stephen E. Libby
2018 ME 1
| Me. | 2018Background
- Decedent Stephen E. Libby (Stephen Sr.) executed a will naming his five children and appointed his daughter Sherryl L. Albert as personal representative; he died in 2013.
- Stephen Sr. transferred multiple Maine real properties to Sherryl in 2001, 2011, and 2013; upon his death Sherryl owned two outright and a one-half interest in six others (as tenant in common with her mother).
- Stephen E. Libby II (Stephen Jr.) counterclaimed in the probate proceedings, alleging the transfers were conditioned on Sherryl holding the property for the benefit of all of Stephen Sr.’s children and that her refusal to reconvey after Stephen Sr.’s death amounted to constructive fraud.
- A probate referee held a two-day hearing and found by clear and convincing evidence that Sherryl stood in a position of trust and had agreed to hold the conveyed property for the children, recommending imposition of a constructive trust on the property.
- The Probate Court adopted the referee’s report and stated judgment was entered on the record; Sherryl appealed, arguing insufficient evidence of constructive fraud.
- The Maine Supreme Judicial Court affirmed adoption of the referee’s report (finding sufficient evidence of constructive fraud) but remanded for an effective, detailed judgment entry describing the property, parties’ interests, and obligations because the docket entry did not comply with probate rules.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether evidence supports finding of constructive fraud and imposition of a constructive trust | Stephen Jr.: transfers were conditioned on Sherryl holding property for all children; refusal to reconvey is constructive fraud | Sherryl: insufficient evidence of an agreement or constructive fraud | Held for Stephen Jr.: clear and convincing evidence supported constructive trust on the Maine real estate conveyed to Sherryl |
| Whether a relationship of trust existed to support constructive fraud | Stephen Jr.: Sherryl occupied a trusted position with Stephen Sr. | Sherryl: no enforceable agreement; no fiduciary abuse proven | Held: referee reasonably found a relationship of trust existed |
| Standard of review for referee findings | N/A | N/A | Findings adopted by court; factual findings reviewed for clear error; legal application reviewed de novo |
| Whether the Probate Court entry constituted an effective judgment | Sherryl: docket entry insufficiently specific | Stephen Jr.: court intended to adopt referee’s report as judgment | Held: adoption affirmed, but remanded for an amended, particularized judgment entry consistent with Rules 58 and 79 of Maine Rules of Probate Procedure |
Key Cases Cited
- Wechsler v. Simpson, 131 A.3d 909 (Maine 2016) (referee findings become trial court’s findings and are reviewed directly)
- Karamanoglu v. Gourlaouen, 140 A.3d 1249 (Maine 2016) (referee’s factual findings entitled to substantial deference)
- Baizley v. Baizley, 734 A.2d 1117 (Me. 1999) (constructive trust may be imposed where grantee agreed to hold property for another and then failed to perform)
- Baillargeon v. Estate of Daigle, 8 A.3d 709 (Me. 2010) (standard for assessing whether clear and convincing evidence was shown on appeal)
- Rossignol v. Raynes, 650 A.2d 935 (Me. 1994) (docket entry must specify form of equitable relief to constitute effective judgment)