1998 -NMSC- 13, Estate of Gersbach, Matter of

• Decision Date: 13 May 1998
• Docket Number: No. 24214,24214
• Citation: 1998 NMSC 13,125 N.M. 269,960 P.2d 811
• Parties: , 1998 -NMSC- 13 In the Matter of the ESTATE OF Frank V. GERSBACH, deceased, Mae GERSBACH, Petitioner-Respondent, v. Tom WARREN, Respondent-Petitioner.
• Court: New Mexico Supreme Court

Page 811

960 P.2d 811

125 N.M. 269, 1998 -NMSC- 13

In the Matter of the ESTATE OF Frank V. GERSBACH, deceased,

Mae GERSBACH, Petitioner-Respondent, v. Tom WARREN, Respondent-Petitioner.

No. 24214.

Supreme Court of New Mexico.

May 13, 1998.

Gerding & O'Loughlin, P.C., Richard L. Gerding, Farmington, for Petitioner-Respondent.

Tucker Law Firm, P.C., Steven L. Tucker, Santa Fe, for Respondent-Petitioner.

OPINION

MINZNER, Justice.

¶1 Tom Warren appeals from a decision of the Court of Appeals affirming the trial court's judgment in favor of Mae Gersbach. The trial court granted Mrs. Gersbach's petition to declare a portion of her husband's will void as a result of undue influence. In voiding a portion of the will, the trial court found that Mr. Gersbach and Warren had a confidential relationship, and that several suspicious circumstances surrounded a devise to Warren. The suspicious circumstances identified by the trial court included secrecy on Mr. Gersbach's part and the fact that in a prior will Mr. Gersbach had made a different disposition of the property at issue. The trial court concluded that "[t]he existence of the confidential relationship, coupled with the suspicious circumstances gives rise to a presumption that the devise ... in the [later] will was a result of the undue influence of Tom Warren...." We hold that Mrs. Gersbach did not present sufficient evidence to support the finding of secrecy and that the remaining findings do not support a presumption of undue influence. We conclude that Mrs. Gersbach did not satisfy her burden of proof at trial, and we therefore reverse and remand.

I.

¶2 Mr. and Mrs. Gersbach executed wills in 1979 and 1985. In the 1979 will, Mr. Gersbach left everything to his wife, if she survived him. If she did not survive him, he willed an eighty-acre farm near Waterflow, New Mexico, to the New Mexico Military Institute, subject to Warren's exercise of an option to buy the farm at seventy-five percent of the appraised value. Mrs. Gersbach's 1979 will contained similar provisions. She left everything to her husband, if he survived her; but, if he did not survive her, she devised the Waterflow farm to the New Mexico Military Institute, subject to Warren's option. In 1985, the Gersbachs executed new wills. Mr. Gersbach's 1985 will devised the Waterflow farm to Warren. Mrs. Gersbach's 1985 will recognized that the farm was her husband's separate property and, further she devised any interest she might have in the farm to Warren.

¶3 The trial court found that "[p]rior to and subsequent to the execution of the will, Frank B. Gersbach had explained to his wife that the purpose [of the 1985 will] was to see that the children of [Warren] got the ranch if she did not need it or want it." The Court of Appeals noted that Mrs. Gersbach testified that Mr. Gersbach told her that it "would be alright if [Warren] had the property if he would not sell it and keep it for [Warren's] kids." Gersbach v. Warren, No. 17,302, slip op. at 5 (N.M.Ct.App. Mar. 6, 1997).

¶4 Mr. Gersbach met Warren through Warren's father. Mr. Gersbach and Warren's father had been friends a long time. Mr. Gersbach rented the farm to Warren for many years, for a nominal amount of rent. Warren paid rent once a year and if he was late, Mr. Gersbach charged no interest; he permitted Warren to pay the balance due as he was able. Over the course of their relationship, Warren and his family visited the Gersbachs once a year, but Warren and Mr. Gersbach talked by telephone frequently.

¶5 The trial court found that Mrs. Gersbach had presented proof of facts, "of which the Court has an abiding conviction," that Warren and Mr. Gersbach had a confidential relationship, and that several suspicious circumstances surrounded the will. Those circumstances were:

a. No consideration was present for the gift of approximately one-half (1/2) of the Decedent's Estate to Respondent with Decedent receiving nothing in return and Respondent's wife of almost fifty years [receiving nothing] in return.

b. The disposition to a non-family member was unnatural and contrary to the natural disposition which occurred in 1979.

c. An element of secrecy existed in that Decedent communicated to Petitioner that the purpose of the will changes was to see that Respondent received the ranch and would keep it for his children only if Petitioner did not want or need the ranch.

d. Decedent, Frank B. Gersbach, was suffering from a loss of short term memory giving rise to an issue as to his competency and further that his vision had failed as a result of macular degeneration.

e. No specific evidence exists to establish that the Petitioner participated in the making of either will.

f. No discussion occurred which communicated to Petitioner the effect of the change.

g. Subsequent to the execution of the will, Respondent was able to obtain substantial loans and gifts without consideration.

The trial court concluded that the devise to Warren of the Waterflow farm was "void and of no effect and the Waterflow, New Mexico ranch passes to Petitioner, Mae Gersbach, pursuant to the residuary clause of the August 12, 1985 will and testament." The court subsequently entered judgment in favor of Mrs. Gersbach.

¶6 Warren appealed to the Court of Appeals, which affirmed the trial court in a memorandum opinion. The Court of Appeals reviewed the trial court's findings for substantial evidence and concluded that, taken as a whole, there was sufficient evidence to support the trial court's "conclusion of a presumption of undue influence which was not rebutted by Respondent." Gersbach v. Warren, slip op. at 11. The Court of Appeals relied on the existence of a confidential relationship and three suspicious circumstances: an element of secrecy on the part of Mr. Gersbach, the lack of consideration for the gift, and the disposition to a non-family member contrary to the disposition in the 1979 will. The Court of Appeals rejected Warren's suggestion that a lack of consideration is not a suspicious circumstance in the case of a testamentary disposition; "[g]iven the nature of the concept of undue influence, strict definitions are not necessarily useful analytical tools." Gersbach v. Warren, slip op. at 7. The Court of Appeals also rejected Warren's alternative suggestion that, to the extent an appellate court takes into account a lack of consideration, the court's analysis is related to the broader question of whether a disposition may be characterized as "unjust." Id. at 8. Finally, the Court of Appeals rejected Warren's suggestion that his friendship with Mr. Gersbach "constitutes the necessary consideration." Id.

¶7 We granted certiorari in order to consider the relevance of a lack of consideration in this case as well as the appropriate analysis of an "unjust" disposition. We now reverse. We agree that there was sufficient evidence to support a finding that Warren had a confidential relationship with Mr. Gersbach, but we do not believe that there is sufficient support in the record for the conclusion that a presumption of undue influence arose.

II.

¶8 Undue influence is not "susceptible of any fixed formula." Hummer v. Betenbough, 75 N.M. 274, 282, 404 P.2d 110, 116 (1965) (quoting Brown v. Cobb, 53 N.M. 169, 172, 204 P.2d 264, 266 (1949)). In fact, "New Mexico courts have refused to state a legal definition of undue influence." Mary Catherine McCulloch, Comment, Undue Influence in Wills--Evidence--Testators' Position Changes After In re Will of Ferrill, 13 N.M.L.Rev. 753, 755-56 (1983) (characterizing the Court's analysis as avoiding "a blue print for the commission of a wrongful act"). We have, instead, "described the approach contestants must use to prove an undue influence claim." Id. at 755. We have held that a confidential relationship is required in order to support a determination of undue influence. Hummer, 75 N.M. at 282, 404 P.2d at 116. In addition to a confidential relationship, however, suspicious circumstances must also exist. Id. at 280, 404 P.2d at 114.

Some circumstances found to be suspicious in undue influence cases are (1) old age and weakened physical or mental condition of testator; (2) lack of consideration for the bequest; (3) unnatural or unjust disposition of the property; (4) participation of beneficiary in procuring the gift; (5) domination or control over the donor by a beneficiary; and (6) secrecy, concealment, or failure to disclose the gift by a beneficiary.

Montoya v. Torres, 113 N.M. 105, 110, 823 P.2d 905, 910 (1991). This is not an exhaustive list, nor is it a list of circumstances that are always suspicious. Furthermore, the presence of any of these circumstances is not in itself dispositive. "In making its determination the court must answer the question of whether the donor would have made the gift but for the undue influence exerted over him or her." Id. "Undue influence exists when 'testator's volition at the time of testamentary act was controlled by another and ... the resulting will was not the result of the free exercise of judgment and choice.' " 1 William J. Bowe & Douglas H. Parker, Page on the Law of Wills § 15.2, at 716 (1960).

¶9 Mrs. Gersbach had the burden of proof to establish a prima facie case of undue influence. See NMSA 1978, § 45-3-407 (1975). She had to do so by clear and convincing evidence. Montoya v. Torres, 113 N.M. at 109, 823 P.2d at 909. If she established facts sufficient to support a presumption of undue influence, however, Warren was required to rebut the presumption. See In re Estate of Gonzales, 108 N.M. 583, 584-85, 775 P.2d 1300, 1301-02 (Ct.App.1988).

¶10 Warren argues that the record before the trial court does not support a presumption of undue influence. We review the evidence in the light most favorable to the prevailing party, recognizing that the standard requires sufficient evidence to permit "the fact finder to reach an abiding conviction as to the truth of the facts found."...