Blaising v. Mills

• Citation: 176 Ind.App. 141,99 A.L.R.3d 1238,374 N.E.2d 1166
• Decision Date: 12 April 1978
• Docket Number: No. 3-1175A251,3-1175A251
• Parties: , 99 A.L.R.3d 1238 L. Michael BLAISING, Defendant-Appellant, v. Kay Lynn MILLS, Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 1166

374 N.E.2d 1166

176 Ind.App. 141, 99 A.L.R.3d 1238

L. Michael BLAISING, Defendant-Appellant, v. Kay Lynn MILLS, Plaintiff-Appellee.

No. 3-1175A251.

Court of Appeals of Indiana, Third District.

April 12, 1978.

Charles R. LeMaster, Fort Wayne, for defendant-appellant.

John S. Knight, Peters & Terrill, Fort Wayne, for plaintiff-appellee.

HOFFMAN, Judge.

Plaintiff-appellee Kay Lynn Mills (Mills) brought this action to recover real estate, certain personal property and damages from defendant-appellant L. Michael Blaising (Blaising), Mills' ex-husband. The real estate, located at 1630 Short Street, Fort Wayne, Indiana, and personal property, including a 1963 Thunderbird automobile, had been awarded to her in a May 18, 1972, divorce decree. In her complaint, Mills alleged that during the divorce proceedings and for a period of time thereafter she was under a physician's care for psychological and emotional distress and that, while she was in a weakened emotional and mental state, Blaising fraudulently represented that a reconciliation between the parties was imminent. She further alleged that, acting in reliance upon Blaising's promises of reconciliation and without the advice of counsel, she reconveyed to Blaising the subject real estate on July 26, 1972, relinquished ownership of personal property, including the 1963 Thunderbird, and paid one-half of Blaising's debt to the J. C. Penney Company. Additionally, Mills alleged Blaising failed to reconcile with her and stated he had never earnestly contemplated such a reconciliation. Accordingly, Mills sought a return of legal title to the real estate, the reasonable rental value of the real estate during Blaising's wrongful possession, a judgment in the amount Mills paid to the J. C. Penney Company on Blaising's account, and the return of the personal property or a judgment for its value.

In his answer, Blaising denied the allegations asserting, in addition, that the conveyance of the real estate was voluntarily made by Mills at her request after she disclaimed any desire for the assistance of counsel and that the conveyance was fully supported by consideration, consisting of an agreement whereby Mills would live on the property and tender the mortgage payments when due to Blaising. Blaising further asserted that Mills conveyed the 1963 Thunderbird to an automobile dealer as a trade-in on a 1966 Thunderbird and that Blaising merely acted as an accommodation party in the financing of the latter.

Following trial to the court, the court entered special findings of fact and conclusions of law at Blaising's request. The trial court found that between December of 1971 and January of 1973, Mills was suffering from emotional distress and personality disorders which resulted in substantial dependence upon Blaising. During that period of time Mills' demeanor and actions were compelled and controlled by her love for Blaising, her fear of him and her psychological need for his attention. The court found that Blaising knew of Mills' psychological condition, that she was dependent upon him and that she would respond favorably to nearly all demands he placed upon her. During this period Blaising made representations to Mills by word and action that there would be a marital reconciliation between the parties and a restoration of the marital home. The court found that Mills relied upon the representations and was induced to reconvey to Blaising the real estate located at 1630 Short Street, to surrender control of the 1963 Thunderbird and to pay $300 toward Blaising's obligation to the J. C. Penney Company. The trial court entered judgment against Blaising, ordered him to reconvey to Mills the real estate at 1630 Short Street and awarded Mills damages in the sum of $5,500.

Following the denial of his motion to correct errors, Blaising perfected this appeal.

Blaising first contends that the judgment is contrary to law because actionable fraud cannot be predicated upon a promise to do a thing in the future.

Fraud may be actual or constructive; actual fraud is intentional deception. The presence or absence of the intent to deceive distinguishes actual from constructive fraud. Coffey et al. v. Wininger et ux. (1973), 156 Ind.App. 233, 296 N.E.2d 154 (transfer denied). The essential elements of actual fraud are a material representation of past or existing facts, which representations are false, made with knowledge or reckless ignorance of this falsity, which cause a reliance upon these representations, to the detriment of the person so relying. Gonderman v. State Exchange Bank, Roann (1975), Ind.App., 334 N.E.2d 724; Grissom v. Moran (1972), 154 Ind.App. 419, 290 N.E.2d 119, rehearing denied 154 Ind.App. 432, 292 N.E.2d 627 (transfer denied).

Blaising correctly argues that actual fraud cannot be predicated upon promises of future performance. Indeed, in Indiana the representations upon which an action for fraud can be maintained must be representations of alleged existing facts and not promises to be performed in the future. Sachs v. Blewett (1933), 206 Ind. 151, 185 N.E. 856; Wellington v. Wellington (1973), 158 Ind.App. 649, 304 N.E.2d 347; Martin et ux. v. Grutka (1972), 151 Ind.App. 167, 278 N.E.2d 586; Middelkamp v. Hanewich (1970), 147 Ind.App. 561, 263 N.E.2d 189.

In this case the trial court found that Blaising represented to Mills that their marriage would be reconciled and that, in reliance thereupon, Mills was induced to reconvey to Blaising the real estate at 1630 Short Street, to surrender ownership of the 1963 Thunderbird automobile, and to pay $300 on Blaising's behalf to the J. C. Penney Company. Since Blaising's alleged representation about the marital reconciliation was a promise to be performed in the future, the judgment of the trial court cannot be sustained on the theory of actual fraud. Sachs v. Blewett, supra; Wellington v. Wellington, supra.

The judgment, however, can be sustained on the theory of constructive fraud. Constructive fraud has been defined as:

" 'a breach of legal or equitable duty which, irrespective of the moral guilt of the fraud feasor, the law declares fraudulent because of its tendency to deceive others, to violate public or private confidence, or to injure public interests.' " Coffey et al. v. Wininger, et ux., supra, 156 Ind.App. at 239-240, 296 N.E.2d at 159; Brown v. Brown (1956), 235 Ind. 563, 135 N.E.2d 614.

Such acts or breaches of duty sufficient to constitute constructive fraud "may include mistake, undue influence, or duress." Brown v. Brown, supra, 235 Ind. at 568, 135 N.E.2d at 616 (emphasis added).

Undue influence, sufficient to invalidate a deed, was defined in Folsom v Buttolph (1924), 82 Ind.App. 283, 295, 297, 143 N.E. 258, 262:

"Undue influence may be defined to be the exercise of sufficient control over the person, the validity of whose act is brought in question, to destroy his free agency and constrain him to do what he would not have done if such control had not been exercised.

" 'Undue influence exists when, through weakness, ignorance, dependence, or implicit reliance of one on the good faith of another, the latter obtains an ascendency which prevents the former from exercising an unbiased judgment . . . .' " See also: Hunter v. Milhous (1973), 159 Ind.App. 105, 305 N.E.2d 448, 459-460; Baker et al. v. Whittaker et al. (1962), 133 Ind.App. 347, 182 N.E.2d 442; Norman v. Norman (1960), 131 Ind.App. 67, 169 N.E.2d 414.

In Folsom, the court stated:

" '. . . As bearing on the question of undue influence, the relationship of parties to each other, the mental condition of the person whose act is in question, and the character of the transaction, should be taken into consideration. If the relation of confidence and trust between the parties to the transaction exists; if the mind of the one nominally acting is weak and susceptible, and if the transaction results beneficially to the person charged, and detrimentally to the person in whose name the act was done, a presumption of undue influence is raised, and the burden is placed on the one claiming the benefit of the transaction to prove that the act was voluntary and no unfairness was used. Indeed, the presence of the relation of confidence and trust alone is generally sufficient to raise a presumption of undue influence . . . .' " Folsom v. Buttolph, supra, 82 Ind.App. at 296-297, 143 N.E. at 262.

In Hunter v. Milhous, supra, the court held:

"The relationship necessary to create the presumption of undue influence exists when confidence is reposed on one side and accepted on the other. This fiduciary relationship need not be a legal one; it may be moral, social, domestic or personal. McCord v. Bright (1909) 44 Ind.App. 275, 87 N.E. 654."

A confidential relationship exists between a man and a woman contemplating marriage in the immediate future. See: Johnston v. Johnston, Executor, et al. (1962), 134 Ind.App. 351, 184 N.E.2d 651. The same sort of confidential relationship exists between a man and a woman, separated or recently divorced, who are contemplating a marital reconciliation. When such a confidential relationship is accompanied by facts and circumstances from which undue influence may be fairly inferred, a presumption of undue influence is created. Johnston v. Johnston, supra.

In the case at bar, the trial court's special findings of fact create the presumption of undue influence. The court found that Mills, in reliance upon Blaising's representations of a marital reconciliation, contemplated a reconciliation and restoration of the marital home. The court also found the following evidence of Blaising's exertion of undue influence to induce Mills to reconvey the property at 1630 Short Street, to surrender control of the 1963 Thunderbird, and to pay his debt of $300 to the J. C. Penney Company:

"5. That between December of 1971 through and including January of 1973, Plaintiff was affected by emotional distress and the personality...