Blando v. Reid

• Decision Date: 09 August 1994
• Docket Number: No. WD,WD
• Citation: 886 S.W.2d 60
• Parties: Carmie BLANDO, Respondent, v. Georgianna REID and La Cuticle, Inc., Appellants. 47731.
• Court: Missouri Court of Appeals

Page 60

886 S.W.2d 60

Carmie BLANDO, Respondent, v. Georgianna REID and La Cuticle, Inc., Appellants.

No. WD 47731.

Missouri Court of Appeals Western District.

Aug. 9, 1994.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Oct. 4, 1994.

Application to Transfer Denied

Nov. 22, 1994.

Robert L. Shirkey, Jack B. Robertson, Kansas City, for appellants.

Tedrich A. Housh, III, Swanson, Midgley, Gangwere, Kitchin & McLarney, Kansas City, for respondent.

Before SMART, P.J., and KENNEDY and ULRICH, JJ.

ULRICH, Judge.

Carmie Blando filed suit in equity to rescind her warranty deed transferring her interest in the house located at 103 East Meyer Boulevard, Kansas City, Missouri, to her granddaughter Georgianna Reid. Additionally, Ms. Blando sued Ms. Reid for alleged misuse of funds that belonged to Ms. Blando, alleging actual fraud, constructive fraud, breach of a fiduciary duty, and conversion. Ms. Blando also sued La Cuticle, Inc., owned in part by Ms. Reid and operated by her, for conversion. These claims arose from actions taken by Ms. Reid and La Cuticle with respect to Ms. Blando's ownership interest in the house at 103 East Meyer Boulevard and her checking and savings accounts. Ms. Blando sought rescission of the July 9, 1990, warranty deed, and actual and punitive damages from Ms. Reid and La Cuticle.

After the court trial, the trial court: 1) declared the warranty deed signed by Ms. Blando on July 9, 1990, void and set it aside; 2) ordered the property to be partitioned and sold and the deed of trust held by McGuire Investment Company be paid entirely from Ms. Reid's proceeds; 3) ordered Ms. Reid to pay Ms. Blando $20,707.67 in compensatory damages; and 4) ordered La Cuticle to pay Ms. Blando $5,000 in compensatory damages. Both Ms. Reid and La Cuticle appeal.

On August 28, 1981, Carmie and Frank Blando (husband and wife) and their granddaughter, Georgianna Reid, purchased a house located at 103 East Meyer Boulevard. The warranty deed granting title gave one half interest in the property to the Blandos and one half interest to Ms. Reid. After Frank Blando's death in 1984, Carmie Blando and Georgianna Reid each owned a one half interest in the property as tenants in common.

On July 1, 1990, Ms. Blando was admitted to Menorah Medical Center for surgery to address complications from a previous cataract surgery in June of 1990. Ms. Blando had surgery on her right eye on July 1, 1990, at approximately 3:00 p.m. In the period immediately following surgery, Ms. Blando was confused and in pain. The medical records reflect that at 10:20 p.m. on the evening of her surgery, the nurse on duty observed that Ms. Blando "appears asleep but easily arousable," and that Ms. Blando "thinks she's at the bank."

On July 2, 1990, Ms. Reid visited Commerce Bank in Brookside to withdraw funds from accounts owned by Ms. Blando. James Edwards, the bank's branch manager, informed Ms. Reid that she could not withdraw funds from Ms. Blando's accounts unless she either was a joint owner or had a power of attorney signed by Ms. Blando. On that same day, Ms. Reid directed her attorney and business associate, Jack Robertson, to draft a power of attorney. Mr. Robertson took the power of attorney to Ms. Blando's hospital room. Ms. Blando signed it.

On July 3, 1990, Ms. Reid returned to Commerce Bank in Brookside with the signed power of attorney. The power of attorney named Ms. Reid as Ms. Blando's attorney-in-fact. Ms. Reid was accompanied by her attorney, Jack Robertson, with whom Ms. Reid owns the entire interest in La Cuticle, Inc.

Ms. Reid filled out the fiduciary forms necessary to permit her to make transactions on Ms. Blando's Commerce Bank accounts. Both Mr. Edwards, branch manager of the bank, and Jack Robertson, Ms. Reid's attorney, explained Ms. Reid's fiduciary duties to her. Ms. Reid acknowledged her understanding of those duties and checked the box marked "fiduciary" on the Commerce Bank forms. After this, Ms. Reid made a number of withdrawals from Ms. Blando's accounts.

Ms. Blando's checking account numbered 5-326-277-8 had a balance of $1,529.35 as of July 5, 1990, before Ms. Reid made any withdrawals. On July 25, 1990, the account had a balance of $1.83. Ms. Blando's savings account numbered 5-805-547-9 had a balance of $19,178.32, on June 22, 1990. On July 10, 1990, Ms. Reid, acting as attorney-in-fact for Ms. Blando, wrote a check for $5,000 on this account payable to her business, La Cuticle, Inc. On July 11, 1990, Ms. Reid, again acting as attorney-in-fact for Ms. Blando, transferred $13,498.23 from this savings account to an account belonging to Ms. Reid. On July 27, 1990, Ms. Blando's savings account had a zero balance.

The trial court found that the monies withdrawn from Ms. Blando's accounts were "utilized by Georgianna Reid for her own benefit and not the benefit of Carmie Blando." The trial court found that Ms. Reid "kept no records of Carmie Blando's funds from after July 2, 1990, and intermingled said funds with funds in her own personal checking accounts." The trial court found that Ms. Blando at "no time and in no way ratified the conduct of defendants Georgianna Reid or La Cuticle, Inc., and their treatment of Carmie Blando's proceeds as their own." Furthermore, the trial court found that Ms. Reid's and La Cuticle's "depositing of the above-mentioned funds into their accounts was accomplished without Carmie Blando's knowledge and consent."

On July 9, 1990, Ms. Reid arranged for Ms. Blando to sign a document entitled "Warranty Deed" which was subsequently recorded in Book 239, Page 291, in the office of the Recorder of Deeds for Jackson County, Missouri, and which purported to convey the property located at 103 East Meyer Boulevard to Ms. Reid. Jack Robertson drafted the warranty deed. Ms. Blando signed the deed in her hospital room at Menorah Medical Center while she was recuperating from complications related to her cataract surgery. At the time the warranty deed was executed, Ms. Reid, Jack Robertson, and Rita Dubin, a Notary Public employed by Menorah Medical Center, were present. The medical records show that Ms. Blando was in pain and disoriented on the day she executed the warranty deed.

The trial court found that Ms. Reid was active in procuring the execution of the deed and that Ms. Blando was "unaware of the nature and extent of the document she executed in her hospital room on or about July 9, 1990." Ms. Blando believed she was signing a document to transfer various funds between her banking accounts. The trial court also found that Ms. Blando

was not represented by independent counsel at the time the warranty deed was executed. Although Jack Robertson claimed to represent Carmie Blando in the execution of the warranty deed, he was also counsel for Georgianna Reid, the grantee and La Cuticle, Inc., the ultimate sublessee of the Meyer Boulevard property.

The trial court further found that Ms. Blando "was unable to read the warranty deed as she was recuperating from complications related to her cataract surgery. Neither Jack Robertson nor Georgianna Reid explained, read, or otherwise described the contents of the warranty deed to Carmie Blando while notary public Rita Dubin was present." In addition, the trial court found that Ms. Blando received no consideration for execution of the warranty deed and that there was a confidential relationship between Ms. Blando and Ms. Reid wherein Ms. Blando manifested a special trust in Ms. Reid.

The trial court found that there was opportunity for Ms. Reid to exercise undue influence over Ms. Blando and the warranty deed was obtained by Ms. Reid's calculated and intentional efforts to mislead, deceive, defraud and trick Ms. Blando. The trial court further found that when Ms. Blando executed the warranty deed, she did not intend to convey any vested interest in the property located at 103 East Armour Boulevard.

Shortly after Ms. Blando signed the warranty deed, La Cuticle, owned by Jack Robertson and Ms. Reid, subleased the property at 103 East Meyer Boulevard from Ms. Reid. In August of 1990, Ms. Reid placed a lien on the property in the amount of $38,499.00 which was subsequently recorded as a Deed of Trust in Book 202, Page 849 in the office of the Recorder of Deeds for Jackson County, Missouri, on August 17, 1990.

Ms. Blando did not return to 103 East Meyer Boulevard immediately after her release from the hospital on July 15, 1990. She stayed at University Towers for recuperation until September 7, 1990. Ms. Blando then stayed with her daughter in Las Vegas, Nevada. In October of 1990, Ms. Blando moved back in the house at 103 East Meyer Boulevard with Ms. Reid, Ms. Reid's son, Raymond Reid, and his girlfriend, Lavina Lionburger. Ms. Blando moved out of the house in December of 1990 and this litigation ensued.

I

In her first point, Ms. Reid argues that the "trial judge committed error in refusing to recuse himself because his comments prior to commencement of trial and because his findings of fact and conclusions of law overwhelmingly demonstrate that the defendants could not, under any circumstances, have obtained a fair trial, and that the trial judge violated the canons of judicial ethics." Specifically, Ms. Reid contends that the trial judge violated Rule 2, Canon 3(C)(1)(a) of the Missouri Supreme Court Rules which provides that, "[a] judge should recuse in a proceeding in which the judge's impartiality might reasonably be questioned including but not limited to instances where the judge ... has a personal bias or prejudice concerning the proceeding."

Ms. Reid's claim is based on the trial judge's participation in settlement talks. Before the trial began, the parties' attorneys asked the trial judge to recommend a settlement. The trial court recommended that the house be sold in six months and that Ms. Blando receive all proceeds from the sale. It also recommended that Ms. Reid pay Ms. Blando $5,000 "up front." Ms. Reid...