Carvalho v. Estate of Carvalho

• Decision Date: 12 June 2009
• Docket Number: No. 08-110.,08-110.
• Citation: 978 A.2d 455,2009 VT 60
• Parties: Agnes CARVALHO v. ESTATE OF Donald L. CARVALHO.
• Court: Vermont Supreme Court

978 A.2d 455

2009 VT 60

Agnes CARVALHO v. ESTATE OF Donald L. CARVALHO.

No. 08-110.

Supreme Court of Vermont.

June 12, 2009.

Martin Nitka, Ludlow, for Plaintiff-Appellant.

J. Christopher Callahan and Brendan P. Donahue of Brady & Callahan, P.C., Springfield, for Defendant-Appellee.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

¶ 1. DOOLEY, J.

This case requires us to decide whether and in what circumstances a person who has disclaimed an interest in property under the Uniform Disclaimer of Property Interests Act, codified at 14 V.S.A. §§ 1951-1959, may revoke that disclaimer. Agnes Carvalho appeals the superior court's summary judgment order precluding her from revoking a disclaimer of her interest in her son's estate. Ms. Carvalho claims that the superior court erred in: (1) ruling that disclaimers are irrevocable absent incompetence, duress, coercion, or undue influence; (2) finding that there were no genuine issues of material fact as to whether she was incompetent or under duress or coercion when she executed the disclaimer; and (3) concluding that she had failed to properly preserve the issue of whether the disclaimer described the subject property with sufficient specificity to be valid. We hold that while statutory disclaimers are generally revocable only in limited circumstances, the superior court erred by granting summary judgment to Ms. Carvalho's nephew, Robert Winkis (hereinafter nephew), who opposed revocation of the disclaimer. Accordingly, we remand the matter for the court to hold a hearing on whether the circumstances warranted allowing revocation of the disclaimer.

¶ 2. We review decisions granting summary judgment de novo, using the same standard as the trial court; we will uphold such decisions if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Field v. Costa, 2008 VT 75, ¶ 14, 184 Vt. 230, 958 A.2d 1164. "The moving party has the burden of proof, and the opposing party must be given the benefit of all reasonable doubts and inferences in determining whether a genuine issue of material fact exists." Price v. Leland, 149 Vt. 518, 521, 546 A.2d 793, 796 (1988): see also Fritzeen v. Trudell Consulting Eng'rs, Inc., 170 Vt. 632, 633, 751 A.2d 293, 296 (2000) (mem.).

¶ 3. With that standard in mind, we examine the undisputed facts and identify some of the disputed facts. Agnes Carvalho was a ninety-two-year-old widow when her son Donald, who was her only child and had been living with her, unexpectedly died in December 2005. The trial court found that she "was deeply upset and distraught after Donald's death." Donald's will left his estate to Ms. Carvalho unless she predeceased him, in which case the estate would go to nephew. Ms. Carvalho was the only noncontingent beneficiary in Donald's will, and nephew was the only contingent beneficiary in the will. Thus, as the trial court recognized, nephew was "the alternate residuary legatee and the person who would benefit if Ms. Carvalho were to disclaim her interest in Donald's estate."

¶ 4. Besides being a contingent beneficiary, nephew was named executor of Donald's estate, thereby making him a fiduciary to the estate and its beneficiaries. See In re Estate of Watkins, 113 Vt. 126, 133, 30 A.2d 305, 310 (1943) ("In our law an executor is a person, or corporation empowered to discharge the duties of a fiduciary, appointed as such by the testator in his will."). As executor, nephew told Ms. Carvalho that she needed to sign some paperwork for her son's estate. Three weeks after Donald's death, on January 11, 2006, nephew took Ms. Carvalho to the office of the attorney representing him in his capacity as executor of Donald's estate. According to Ms. Carvalho's deposition, she went because "I was told to go to a lawyer so I won't lose my property, so that's why I went." As the superior court found, although Ms. Carvalho had contacted that attorney's office before when Donald became sick, she had not previously met or done business with the attorney. Ms. Carvalho had, however, talked with a paralegal in the attorney's office and requested that the office prepare for her a will, an advanced healthcare directive, and a financial power of attorney. Thus, the attorney understood that Ms. Carvalho would on that day "sign her own will, and do an advanced directive and a financial power of attorney" and other papers related to the estate.

¶ 5. In addition to signing other documents that the attorney had prepared ahead of time, Ms. Carvalho signed the following disclaimer, which, as the trial court found, had not been prepared or reviewed by her in advance of the meeting:

NOW COMES Agnes Carvalho, mother and interested person of the deceased, Donald L. Carvalho, and pursuant to the Vermont Uniform Disclaimer of Property Interest[s] Act 14 V.S.A. Chapter 83, hereby disclaims all right, title and interest held by me in the Estate and to the following property devolving, passing or otherwise distributing property to Robert Winkis the heir of the decedent, at the death of Donald L. Carvalho, who died on December 21, 2005:

Assets:

The space after the word "Assets" was left blank.

¶ 6. In his deposition, the attorney explained the sequence of events and the reason for the disclaimer. The attorney first met together with nephew and Ms. Carvalho to sign the estate papers. Then nephew left the room to allow the attorney and Ms. Carvalho to discuss the other documents, particularly because nephew was the beneficiary of Ms. Carvalho's will. The attorney recommended the disclaimer as "Medicaid planning," in view of the fact that nephew was Ms. Carvalho's beneficiary. Apparently, in the event Ms. Carvalho were to enter a nursing home, the disclaimer would allow her to avoid having to sell her house to pay for the nursing home before becoming Medicaid eligible. The disclaimer was then prepared by the attorney and signed by Ms. Carvalho. The attorney saw the preparation of these documents as "paperwork for the estate" and billed the estate for this work. Although nephew was not present when Ms. Carvalho signed the disclaimer, he apparently signed the document later the same day. After nephew and Ms. Carvalho left the attorney's office, nephew had Ms. Carvalho add his name to her bank accounts, but he did not resist her subsequent decision to take his name off of those accounts.

¶ 7. In her deposition, Ms. Carvalho indicated that she had no memory of signing the disclaimer or that she signed a will that day. She testified that the disclaimer "is supposed to be after I'm gone." She also testified that she did not understand the disclaimer when she signed it.

¶ 8. On April 3, 2006, before any of Donald's assets had been distributed and within the statutory nine-month time period for executing disclaimers of inherited property following the testator's death, see 14 V.S.A. § 1952(a), Ms. Carvalho executed a document purporting to revoke the disclaimer and reassert her interest in Donald's estate. As executor of Donald's estate, nephew did not initially directly oppose Ms. Carvalho's attempt to revoke the disclaimer, but filed a motion to appoint a guardian ad litem for Ms. Carvalho to help with matters concerning the estate, "including specifically, the attempt by Agnes Carvalho to revoke the disclaimer." In support of the motion, nephew argued that although Ms. Carvalho was not incompetent, she had been "strongly influenced by neighbors . . . and due to her advanced age, may not be making decisions that are in her long term best interest." In September 2006, when nephew was no longer executor, he formally objected to the disclaimer in the probate court.

¶ 9. Ms. Carvalho asserted in the probate court that "suspicious circumstances" concerning the execution of the disclaimer—including nephew's involvement in facilitating his ninety-two-year-old aunt's signing of a document that would give him $380,000—supported revocation. She acknowledged that the person claiming undue influence ordinarily has the burden to prove it, but argued that the burden should shift to the other party when there are suspicious circumstances, such as when an estate fiduciary puts himself in a position to benefit financially from a disclaimant's action. In a two-page order, the probate court denied Ms. Carvalho's request to allow the revocation, stating briefly that there was little evidence regarding duress or coercion, other than Ms. Carvalho's statement that she was distraught over the death of her son.

¶ 10. Ms. Carvalho appealed to the superior court, listing as questions for review (1) whether the probate court erred by ruling that disclaimers are irrevocable absent a showing of incompetence, undue duress, or coercion, and (2) whether the circumstances surrounding the execution of the disclaimer in this case supported revocation of the disclaimer. In her motion for summary judgment filed with the superior court, Ms. Carvalho argued that the circumstances, including her advanced age, the recent unexpected death of her son, the lack of an opportunity to review the disclaimer or consult with an attorney, and her failure to fully understand the repercussions of the document—coupled with her sworn affidavit—warranted allowing her to revoke the disclaimer. Among other things, Ms. Carvalho stated in her affidavit that her nephew, who stood to benefit from her signing the disclaimer, took her to his attorney's office, telling her that she needed to sign some documents. According to her affidavit, she did not understand that the document she was signing would transfer assets she would inherit from the estate to her nephew during her lifetime.

¶ 11. Relevant to this point, the deposition testimony Ms. Carvalho gave in response to questions from nephew's attorney was as follows:

Q: Did anybody force you or coerce you to sign your name there on [the disclaimer]?

A: No.

Q: You did it willingly; is that...