Chavez v. Chavez-Krumland (In re Chavez)
| Decision Date | 04 August 2022 |
| Docket Number | Court of Appeals No. 20CA1125 |
| Citation | 520 P.3d 194,2022 COA 89 M |
| Parties | IN RE the ESTATE OF Marie M. CHAVEZ, deceased. Gilbert M. Chavez, Appellant and Cross-Appellee, v. Teresa Chavez-Krumland, as Personal Representative of the Estate of Marie M. Chavez, Appellee and Cross-Appellant. |
| Court | Colorado Court of Appeals |
Anne Whalen Gill, L.L.C., Anne Whalen Gill, Castle Rock, Colorado; Gill & Ledbetter, LLP, H.J. "Jay" Ledbetter, Castle Rock, Colorado, for Appellant and Cross-Appellee
Wade Ash Woods Hill & Farley, P.C., Jody J. Pilmer, Zachary D. Schlichting, Denver, Colorado, for Appellee and Cross-Appellant
Opinion by JUDGE FREYRE
¶ 1 In this probate matter, Gilbert M. Chavez appeals the breach of fiduciary duty, unjust enrichment, and civil theft orders entered in favor of Teresa Chavez-Krumland, conservator to Marie M. Chavez and personal representative to Marie's1 estate (collectively, the Estate), after a jury trial.2 The Estate cross-appeals the court's ruling denying treble damages on the civil theft claim. This claim presents an issue of first impression—whether a trial court may offset a defendant's repayment against a jury's damages award before determining treble damages. We conclude that it may not and that a court must first treble the jury's damages awarded for civil theft and then deduct any amounts already repaid. Accordingly, we affirm in part, reverse in part, and remand for further proceedings.
¶ 2 After her husband died, Marie lived by herself on their ten-acre ranch (the Ranch). At various times over the years, her children, including her son Gilbert, and grandchildren temporarily lived on the Ranch with her. As part of the distribution of her husband's estate, Marie received monthly pension payments from her husband's family-run auto body shop. Marie used this money to support herself and also to help her children.
¶ 3 Beginning in March 2005, Marie executed the following powers of attorney designating Gilbert as her agent:
¶ 4 In September 2014, Marie, with Gilbert's help, hired an attorney to complete her estate planning. Marie executed a will that, as relevant here, devised the Ranch to Gilbert and his wife. Marie also executed a general durable power of attorney and a medical durable power of attorney designating Gilbert as her agent.
¶ 5 In late 2015, Marie's physician told the family that she needed twenty-four-hour care due to her declining health following a series of falls. Based on this recommendation, the family agreed to place Marie in a rehabilitation and retirement facility that offered the recommended care.
¶ 6 As the person acting with power of attorney, Gilbert managed Marie's finances and maintained the Ranch. Over time, Gilbert became increasingly concerned about Marie's financial stability and his sisters’ taking advantage of Marie's generosity. He expressed these concerns to his sister Teresa and to Marie's estate attorney.
¶ 7 On July 29, 2016, Gilbert drove Marie to her bank, where she executed a quitclaim deed transferring the Ranch to Gilbert and his wife without consideration. At Marie's request, Gilbert drafted and recorded the deed, and he kept the transfer a secret from the rest of the family. Gilbert then changed all the locks at the Ranch and donated most of Marie's personal property inside the house. But he continued to use Marie's money to maintain the Ranch.
¶ 8 Gilbert ultimately told Marie's estate attorney about the quitclaim deed in May 2017. In July 2017, he changed his status on Marie's bank account from agent to joint owner. All of Marie's bank statements were mailed to the Ranch, where Gilbert and his wife were then living.
¶ 9 In November 2017, Teresa learned about the deed transferring the Ranch to Gilbert. She confronted him, and he assured her that he was following Marie's wishes. Gilbert then reached out to Marie's estate attorney in December 2017 with concerns about Marie's mental capacity and memory and family members pressuring her.
¶ 10 Around the same time, Teresa noticed that Marie was depressed and uncomfortable. When she asked what was happening, Marie said that Gilbert was not listening to her. Marie had asked to return home to the Ranch, but Gilbert had refused. In January 2018, Marie met with the estate attorney to discuss her request to return to the Ranch. Marie told her attorney that she wanted the Ranch back. She said she had not expected the transfer to be permanent and she had believed that if she asked Gilbert to return the Ranch, he would do so. Marie's attorney asked Gilbert to allow Marie to return to the Ranch, and Gilbert again refused. Marie then executed a general durable power of attorney and a medical durable power of attorney designating both Teresa and Gilbert as co-agents. These powers of attorney were later revoked in March 2018, and Teresa was designated the sole person with general durable power of attorney and medical durable power of attorney.
¶ 11 Because Gilbert refused to provide Teresa with Marie's bank records, Teresa requested the bank records from the bank after she became Marie's sole agent. Teresa discovered that, from December 2016 through March 20, 2018, Gilbert had transferred in excess of $59,000 from Marie's account into his commercial bank account. He said that the transfers were to prevent his sisters from getting Marie's money. Teresa asked Marie if she knew about the bank transfers and Marie said no. Marie wanted her money to remain in her own bank account.
¶ 12 Teresa then filed a petition to appoint herself as special conservator for Marie. The trial court granted the petition and limited her authority to "(1) securing and applying [Marie's] assets and income for [Marie's] health, maintenance, and support; (2) investigating Marie's estate plan; and (3) filing a Notice of Lis Pendens on [the Ranch]." As special conservator, Teresa demanded the return of funds that were used for expenses associated with the Ranch and transferred from Marie's bank account into Gilbert's commercial bank account. Gilbert complied with the demand and paid Teresa's attorney $70,901.17. The court later ordered Gilbert to allow Teresa access to the Ranch to prepare an inventory of any and all of Marie's personal property. But when she arrived, Teresa was unable to locate any of Marie's personal property because Gilbert had already donated most of it.
¶ 13 The Estate filed a petition to void the quitclaim deed transferring the Ranch from Marie to Gilbert. The Estate also brought claims against Gilbert for breach of fiduciary duty, unjust enrichment, and civil theft related to the transfer of the Ranch and the money transfers from Marie's bank account. It requested, as remedies, a surcharge for the breach of fiduciary duty claim, a constructive trust for the unjust enrichment claim, and the voiding of the quitclaim deed. In his response, Gilbert asserted a cross-claim of promissory estoppel for the quitclaim deed and demanded a jury trial. The Estate raised the affirmative defense of unclean hands, among others.
¶ 14 On the morning of trial, the Estate, through counsel, objected to treating jury verdicts for the breach of fiduciary duty and unjust enrichment claims as binding because those claims were equitable in nature. But the Estate agreed that the civil theft claim should be presented to the jury. Gilbert responded that the Estate had consented to a jury trial under C.R.C.P. 39(c) and that all claims should be presented to the jury. The trial court denied the Estate's objection, concluding that the breach of fiduciary duty and unjust enrichment claims could be tried to a jury. The court did, however, agree that the claims for a surcharge and a constructive trust, as well as the defense of unclean hands, were equitable issues to be decided by the court after the trial.
¶ 15 The jury returned verdicts in the Estate's favor on the breach of fiduciary duty and unjust enrichment claims. The jury also returned a verdict in the Estate's favor on the civil theft claim but only for the money transferred out of Marie's account. It then made the following damages findings:
However, the jury returned a verdict in Gilbert's favor on the promissory estoppel claim and declined to rescind or void the quitclaim deed.
¶ 16 After trial, the trial court issued an order addressing the jury's verdicts and the remaining equitable claims. First, the court found that Marie intended to give the Ranch to Gilbert by signing the deed and that Gilbert had not acted "in any manner to overcome her will to the extent that she was prevented from voluntary action and was deprived of free agency." Thus, it rejected the Estate's unclean hands defense and gave effect to the jury's promissory estoppel verdict.
And second, consistent with its unclean hands ruling, the court declined to impose a constructive trust on the Ranch. Finally, the court offset the $70,901.17 Gilbert had repaid the Estate before trial from the jury's damages award for civil theft. Because the order was then zero, the court denied treble damages. Therefore, the court entered an order in the Estate's favor for breach of fiduciary duty and civil theft, and it awarded the Estate $775,000 in damages. It then entered an order for Gilbert on the promissory estoppel claim and ruled that he could retain title to the Ranch. The court declined to enter an order in the Estate's favor on the...
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