Christensen v. Britton, 89-219

• Decision Date: 28 December 1989
• Docket Number: No. 89-219,89-219
• Citation: 784 P.2d 908,46 St.Rep. 2223,240 Mont. 393
• Parties: Rose CHRISTENSEN, Conservator of the Estate of Clarence B. Neidigh, a protected person, Plaintiff and Appellant, v. Dorothy BRITTON, Joyce Lange, and Debbie McShane, Defendants and Respondents.
• Court: Montana Supreme Court

Page 908

784 P.2d 908

240 Mont. 393

Rose CHRISTENSEN, Conservator of the Estate of Clarence B Neidigh, a protected person, Plaintiff and Appellant, v. Dorothy BRITTON, Joyce Lange, and Debbie McShane, Defendants and Respondents.

No. 89-219.

Supreme Court of Montana.

Submitted on Briefs Sept. 15, 1989.

Decided Dec. 28, 1989.

Michael W. Cotter, Cotter & Cotter, Great Falls, for plaintiff and appellant,

Dirk Larsen, Larsen & Neill, Great Falls, for defendants and respondents.

McDONOUGH, Justice.

This is an appeal from an action to recover real and personal property that Clarence Neidigh gave to defendants Dorothy Britton, Joyce Lange and Debbie McShane (sometimes collectively referred to as "Defendants"). Rose Christensen, later appointed conservator of the estate of Clarence Neidigh, brought this action for damages and to set aside certain transfers on the grounds that Clarence Neidigh was incompetent and the transactions were a result of undue influence. The District Court of the Eighth Judicial District, sitting without a jury, found that the transactions between Clarence Neidigh, who was found to be competent, and the Defendants, were fair and regular. We reverse, remand and order the trial court to conduct a new trial to determine damages.

The issue in this case is:

Whether the District Court erred in concluding that the various transactions between Clarence Neidigh and the Defendants were valid.

Clarence Neidigh (Lou) was born on January 15, 1900. In 1929, he married Marie and had two children, Rose, and Dwight. Lou and Marie were married for 57 years. During this period of time, they enjoyed a very close and loving relationship. According to testimony, Lou and his wife were inseparable. They went everywhere together and he relied on her exclusively, for all of his needs. Marie died on September 14, 1986. Lou was extremely distraught over the loss of his wife. His neighbors described him as a "lost soul" during the months following the death.

The Defendants, Dorothy Britton, Debbie McShane and Joyce Lange, all knew Lou and Marie very well. Britton and McShane, who are daughters of Lange, grew up within a block of Lou. Consequently, they enjoyed a very close relationship with him for about 25 years before his wife died.

After Marie died, Britton began spending an inordinate amount of time with Lou. She helped him with his day to day activities, such as driving him to the store and fixing his meals. In October, approximately one month after Marie's death, Britton contacted her family attorney. She asked him to prepare a power of attorney, giving her full control over all of Lou's assets. She maintained that this was necessary, because Lou was unable to handle his business affairs due to his depression over his wife's death and because his eyesight was very poor. Accordingly, on October 20, 1986, Britton took Lou to her attorney's office and he signed a durable power of attorney giving her full and complete control over his property.

On February 4, 1987, Britton took Lou to see her attorney for a second time. The purpose of this visit was for Lou to make a new will. According to Britton's testimony, Lou wanted to make a new will in order to leave the bulk of his estate to her, her mother and her sister. It was also decided that Lou would deed his house and all of its contents to Britton through an immediate transfer. Lou executed a warranty deed and conveyed his house and all of "the furniture, furnishings and equipment located therein" to Dorothy Britton. The house was fully paid for and there was no consideration paid to Lou for the home or the furnishings.

A number of monetary transactions then took place between Lou and the Defendants, most of which were in 1987. They included a $5,000.00 loan to Joyce Lange, a $4,000.00 loan to Rudette Mattingly (Dorothy Britton's sister), a $2,500.00 loan to Debbie McShane and a gift of a diamond ring, valued at $1,500, to Joyce Lange.

Most of these loans have never been repaid. Lange maintains, however, that she has repaid her $5,000.00 loan. She asserts that the loan was repaid by returning to Lou a gun collection which he had previously given to her. Each of these loans and their purported repayments were cash transactions. No promissory notes were every drafted, nor did the Defendants keep records of any repayment. The loans were usually accomplished by Lou making out a check to "cash." The Defendants would then drive him to the bank where he would cash the check and give them the money.

In October of 1987, Lou gave Britton his 1982 Ford LTD, which was valued at $3,800.00. Britton used the car for 13 days. She then sold the car back to Lou for $6,000.00. A receipt evidencing this sale was executed by both Lou and Britton.

During this period of time Lou met a young woman named Kim Stevens. Kim was 24 years old when she was introduced to Lou. Apparently Kim was a close friend of Defendant, Debbie McShane. Kim had three children and was, at this time, involved with a man by the name of Leland LaPier, who is currently incarcerated at the Montana State Prison.

A short time after they met, Lou and Kim were married on October 23, 1987. She moved herself and her three children into the home which Lou had previously deeded to Dorothy Britton. Debbie McShane also moved into the house with Kim and Lou.

Lou, no longer having any furniture and appliances in the house, bought furniture and appliances. He obtained many of the items that he needed by repurchasing some that he had given to Dorothy Britton. Among other things, he repurchased from her, his bed for $600.00 and his washer and dryer for $700.00.

In December of 1987, animosity began to develop between Lou and the Defendants. Britton's testimony is that the animosity arose after Lou's marriage to Kim. Eventually Britton asked Lou to leave the house. As a result Lou was forced to leave the home that he had occupied for over thirty years. He was not allowed to take any of his personal possessions because, as stated earlier, these had been conveyed to Britton. Following Lou's departure Britton began renting the house to her sister, Debbie McShane, for $342.00 a month.

Lou's son, Dwight, died in January of 1988. At the funeral Lou's daughter, Rose, discovered that he was out of money and was no longer in possession of his home or his belongings. Consequently, she moved him into her home in Helena. In February, after she was appointed conservator of her father's estate, she cashed out his bank account. He had only $800.00 left.

When Lou's wife died, his checking account contained between $45,000 and $50,000. He also had an income of approximately $1,500.00 a month which was obtained through retirement benefits and stock dividends. The total depletion of his cash assets between September of 1986 and February of 1988 was in an amount between $69,000 and $74,000. Additionally he lost his home and virtually all of his personal possessions.

Lou's marriage to Kim was annulled in June of 1988. In the stipulation to annul the marriage, Kim stated her belief that "other parties set up and fraudulently induced the marriage relationship." Following the annulment Kim returned all of Lou's property that was in her possession.

Rose Christensen, as Conservator of the Estate of Lou Neidigh, brought this action to recover the property given to Dorothy Britton, Joyce Lange and Debbie McShane. After a bench trial, the District Court held that the various gifts and transactions between Lou and the Defendants were valid. The court further concluded that the Defendants did not exercise undue influence over Lou and Lou was competent at the time of the transactions. Judgment was therefore entered in their favor. From this judgment, the plaintiff appeals.

The plaintiff advances two theories, either of which if proven would operate to invalidate the transfers of property by Lou Neidigh to the Defendants. She maintains that either Lou lacked the capacity necessary to make a valid gift or, in the alternative, that the gifts were obtained through the use of undue influence. The evidence does not support her claim that Lou lacked the capacity to make a valid gift. In fact Lou's doctor testified to his belief that Lou did have the mental capacity to understand and manage his financial affairs at the time the transfers were made. We, therefore, will examine the appellant's claim that the gifts were obtained through the use of undue influence.

Proof of undue influence does not depend upon a showing of mental incapacity on the part of the donor. In re Estate of Aageson (1985), 217 Mont. 78, 702 P.2d 338. Undue influence is never presumed and must be proven like any other fact. Adams v. Allen (1984), 209 Mont. 149, 679 P.2d 1232. Therefore, we must review the evidence to determine whether the plaintiff has carried her burden of proving that the gifts were a product of the Defendants' use of undue influence.

In Montana, the question of whether undue influence was exercised on a donor making a gift is determined by the same criteria used in deciding whether undue influence was exercised on a testator making a will. Cameron v. Cameron (1978), 179 Mont. 219, 587 P.2d 939. These criteria, as set out in Montana case law, are:

(1) Confidential relationship of the person attempting to influence the testator;

(2) The physical condition of the testator as it affects his ability to withstand influence;

(3) The mental condition of the testator as it affects his ability to withstand the influence;

(4) The unnaturalness of the disposition as it relates to showing an unbalanced mind or a mind easily susceptible to undue influence, and

(5) The demands and importunities as they may affect the particular donor taking into consideration the time, the place, and all the surrounding circumstances.

Cameron, 587 P.2d at 945, see also Sec. 28-2-407, MCA.

To prove an assertion of undue influence one must satisfy each of these criteria. We...