576 S.W.3d 46
Ark. Ct. App.2019Background
- Freddie Graham executed multiple estate documents between 1997 and 2011 transferring significant real and personal property to his daughter Donna Jones (warranty deeds, beneficiary deeds, a 2007 will, a durable power of attorney in 2008, a ratification/declaration, bills of sale in March 2011, and a final warranty deed on April 4, 2011).
- On December 8, 2008, Graham gave Jones a durable power of attorney authorizing broad management of his estate; on the same period he executed beneficiary deeds transferring mineral rights to Jones.
- After a March 2011 stroke, Graham exhibited cognitive issues; Jones arranged care, restricted medical-information disclosure, transported him to sign documents, and was present when he signed the April 4, 2011 warranty deed and earlier 2011 bills of sale.
- Connie Montigue (sister and later estate administrator) sued in 2013 seeking declaratory relief to void transfers, alleging undue influence and lack of capacity; Jones counterclaimed to quiet title and enforce the transfers.
- At the close of Montigue’s case, the circuit court granted Jones’s directed verdict motion, finding no procurement, no fiduciary relationship from the 2008 POA, and insufficient evidence of incapacity or undue influence. Montigue appealed.
- The appellate court reversed and remanded, holding there was sufficient evidence of a confidential relationship and procurement (for the April 2011 deed and March 2011 bills of sale) to shift the burden to Jones to produce evidence of capacity and lack of undue influence.
Issues
| Issue | Plaintiff's Argument (Montigue) | Defendant's Argument (Jones) | Held |
|---|---|---|---|
| Whether a confidential/fiduciary relationship existed between Jones and Graham | Power of attorney and Jones’s exclusive control after the stroke created a fiduciary/confidential relationship | The 2008 POA and counsel’s involvement do not alone establish a fiduciary relationship; Jones did not use the POA | Held: POA created agency/fiduciary relationship as to estate matters; appellate court reversed circuit court’s contrary finding |
| Whether Jones procured the April 4, 2011 deed and March 2011 bills of sale | Jones arranged drafting, transported Graham, was present at signing, and advised transfer — evidence of procurement | Jones claimed she was merely a courier; some testimony conflicted, and counsel (Walters) was involved | Held: Sufficient evidence of procurement to warrant shifting burden for the 2011 deed and bills of sale |
| Whether burden should shift to Jones to produce evidence of capacity and lack of undue influence | Procurement + confidential relationship raise rebuttable presumption requiring grantee to produce evidence of capacity/free will | Burden remains with challenger; procurement not proven; deeds/bills of sale are non-testamentary so presumption should not apply | Held: For the 2011 deed and bills of sale, burden shifts to Jones to rebut presumption by producing evidence of capacity and absence of undue influence; overall burden of proof remains with Montigue |
| Evidentiary rulings and preservation (judicial notice, leading questions, findings) | Court improperly took judicial notice of attorney Walters’s reputation; court erred refusing leading questions to hostile adverse witness; court erred denying findings | Jones did not preserve objection on judicial-notice issue; opposing party disputed scope of direct examination | Held: Judicial-notice objection not preserved — not reviewed; court erred in refusing leading questions to adverse witness; findings-of-fact issue left for remand |
Key Cases Cited
- Estate of McKasson v. Hamric, 70 Ark. App. 507, 20 S.W.3d 446 (Ark. Ct. App. 2000) (procurement and confidential relationship create a rebuttable presumption of undue influence or lack of capacity)
- Myrick v. Myrick, 339 Ark. 1, 2 S.W.3d 60 (Ark. 1999) (transfer to dominant party in confidential relationship raises presumption of undue influence)
- Dent v. Wright, 322 Ark. 256, 909 S.W.2d 302 (Ark. 1995) (power of attorney establishes agency and fiduciary relationship between principal and agent)
- Woodall v. Chuck Dory Auto Sales, Inc., 347 Ark. 260, 61 S.W.3d 835 (Ark. 2001) (standard for directed verdict; review evidence in light most favorable to nonmoving party)
- Stanley v. Burchett, 93 Ark. App. 54, 216 S.W.3d 615 (Ark. Ct. App. 2005) (directed-verdict review focuses on sufficiency of evidence that would be submitted to a jury)
- Lucas v. Grant, 61 Ark. App. 29, 962 S.W.2d 388 (Ark. Ct. App. 1998) (no single formula for confidential relationship; fact-specific inquiry)
- Medlock v. Mitchell, 95 Ark. App. 132, 234 S.W.3d 901 (Ark. Ct. App. 2006) (power of attorney can create confidential relationship)
- Hodges v. Cannon, 68 Ark. App. 170, 5 S.W.3d 89 (Ark. Ct. App. 1999) (burden of production can shift though ultimate burden of proof remains with challenger)
- Wesley v. Estate of Bosley, 81 Ark. App. 468, 105 S.W.3d 389 (Ark. Ct. App. 2003) (familial relation alone does not establish confidential relationship)