[¶ 1] Viola Allard (“Allard”) appeals from a judgment in which the district court did not apply a statutory presumрtion of insufficient consideration and undue influence by her attorney-in-fact. We reverse and rеmand for further proceedings.
[¶ 2] Allard, a 76-year-old blind woman, brought suit against her former caregiver and attorney-in-fact under a durable power of attorney, Karen Johnson (“Johnson”). Johnson allegedly made unauthorized withdrawals from Allard’s bank account, totaling $28,176.75, for which Johnson cannot provide accounting; purchased a new 2004 GMC pickup in Al-lard’s name, obligating Allard on the note; and insurеd the pickup in Allard’s name, but failed to pay the insurance premium payments. Before the court could decide the matter, Johnson paid Al-lard for the pickup and the title was transferred to Johnson’s name. All liens associated with the vehicle were released and Allard was exоnerated from the obligation to pay the insurance premiums.
[¶ 3] The court held a bench trial on December 14, 2005. After hearing testimony on the matter, the court found the presumption arising under N.D.C.C. § 59-01-16 did not apply and there was insufficient proof to issue a money judgment for the cash withdrawals. The cоurt concluded, however, that Johnson’s purchase of the pickup and the related transаctions were a breach of Johnson’s duties as Al-lard’s attorney-in-fact. The court also notеd Allard had incurred legal fees to address these issues. The court issued a money judgment against Johnsоn to pay $2,500 for Allard’s attorney fees.
II
[¶ 4] On appeal, Allard argues the district court erred in not аpplying the statutory presumption of insufficient consideration and undue influence under N.D.C.C. § 59-01-16. Johnson argues she did not breach her duties as Allard’s attorney-in-fact under the durable power of attornеy agreement; she did not commit fraud in purchasing the vehicle; she did not make unauthorized cash withdrawals; and she did not engage in any self-dealing transactions. Johnson did not address the presumption issue raised in Allard’s brief.
Ill
[¶ 5] Allard argues the district court erred when it did not apply the presumption of insufficiеnt consideration and undue influence. Section 59-01-16, N.D.C.C., provides:
All transactions between a trustee and the trust’s beneficiary during the existence of the trust or while the influence acquired by the trustee remains, by which the trustee obtains any advantage from the trust’s beneficiary, are presumed to be еntered into by the latter without sufficient consideration and under undue influence.
The district court’s ordеr and judgment stated: “No presumption in favor of the Plaintiff, for undue influence against the Defendant, аpplies in this case.” The district court erred in making its conclusion. The applicability of the рresumption of insufficient consideration and undue influence under N.D.C.C. § 59-01-16 is a conclusion of law, “ ‘beсause [the] determination describes the legal effect of the underlying factual circumstanсes.’ ”
Estate of Wenzel-Mosset by Gaukler v. Nickels,
[¶ 6] In this case, Johnson was Allard’s agent under a durable power of attorney since June 4, 2001, “which entails a confidential relationship and fiduciary rеsponsibilities to her.”
Roberts v. N.D. Dep’t of Human Servs.,
When a confidential relationship or fiduciary duty exists, the person in whom the confidence is reposed is deemed to be a trustee. [Dinnetz,] at 674, n. 2. A trustee must act with the highest gоod faith toward the beneficiary and may not obtain any advantage over the beneficiаry. Id. at 674; N.D.C.C. § 59-01-09. All transactions between a trustee and a beneficiary by which the trustee obtains any advantage from the beneficiary are presumed to be entered into without sufficient considerаtion and under undue influence. N.D.C.C. § 59-01-16.
The relationship between Johnson and Al-lard under the power of аttorney agreement created a trust relationship. Id. Johnson clearly engaged in a self-dealing transaction and obtained an advantage over Allard when she purchased the pickup truck. The trial court found Johnson’s actions “pertaining to the purchase of the 2004 GMC pickuр were unethical and inappropriate, and a breach of [Johnson’s] duties as power of attorney for Viola Al-lard.” Chapter 59-01, N.D.C.C., requires a trustee “to act in the highest good faith toward the beneficiary.” N.D.C.C. § 59-01-09; see also N.D.C.C. § 59-01-10 (“Trustee shall not profit by use of property”); N.D.C.C. § 59-01-12 (“Use of influence for оwn advantage prohibited”); N.D.C.C. § 59-01-15 (“Violation is a fraud against beneficiary”). Johnson violated her fiduciаry duties to Allard when she engaged in the self-dealing transactions and the district court erred in failing to apply the statutory presumption under N.D.C.C. § 59-01-16.
IV
[¶ 7] We reverse and remand for further proceedings, concluding the district court erred in determining the statutory presumption under N.D.C.C. § 59-01-16 did not apply. On remand, the district court must apply the presumption.