Estate of Herbert v. Herbert

• Citation: 152 S.W.3d 340
• Decision Date: 12 October 2004
• Docket Number: No. WD 63031.,WD 63031.
• Parties: In the ESTATE OF Dollie Marie HERBERT, Deceased Crystal Denise Herbert and Lacey Diann Mayer, Appellants, v. Estel Don HERBERT, Respondent.
• Court: Court of Appeal of Missouri (US)

152 S.W.3d 340

In the ESTATE OF Dollie Marie HERBERT, Deceased Crystal Denise Herbert and Lacey Diann Mayer, Appellants, v. Estel Don HERBERT, Respondent.

No. WD 63031.

Missouri Court of Appeals, Western District.

October 12, 2004.

Motion for Transfer to Supreme Court Denied November 23, 2004.

Application for Transfer Denied January 25, 2005.

Creath S. Thorne, St. Joseph, MO, for appellant.

Lee C. Tieman, St. Joseph, MO, for respondent.

Before LOWENSTEIN, P.J., and EDWIN H. SMITH and HOWARD, JJ.

EDWIN H. SMITH, Chief Judge.

Sisters Crystal Denise Herbert and Lacey Diann Mayer appeal from a judgment of the Probate Division of the Circuit Court of Buchanan County denying their petition for the discovery of assets, filed pursuant to § 473.340,¹ in the decedent's estate (the estate) of their grandmother, Dollie Marie Herbert (the decedent). In their petition, they alleged that the respondent, their uncle, Estel Don Herbert, was wrongfully withholding from the estate of the decedent, his mother, approximately $135,110.02 in proceeds from the sale of her farm and certain personalty (sale proceeds). In that regard, they claimed in their petition that the respondent, acting under a durable power of attorney executed by the decedent (the POA), in violation of the Durable Power of Attorney Act (POA Act), §§ 404.700-.735, made a gift to himself of the sale proceeds by depositing them in a joint account he owned with the decedent (the joint account), which, pursuant to the right of survivorship provision of the account, became his sole property upon the decedent's death.

In their sole point on appeal, the appellants claim that the probate court erred in denying their petition for discovery of assets as to the sale proceeds deposited by the respondent in the joint account, because in doing so, the court misapplied §§ 404.712 and 404.714 of the POA Act and the provisions of the POA, which prohibited the respondent from commingling the decedent's accounts with his and making gifts of her assets to himself.

We reverse and remand.

Facts

The decedent had two children, the respondent and the appellants' father, Gerald Dwayne Herbert, who died on April 9, 1998. On July 13, 1998, the decedent executed a "General Power of Attorney," designating the respondent as her attorney-in-fact. The POA included a provision, which authorized, inter alia, the respondent:

To make gifts of any of my property or assets to members of my family; and to make gifts to such other persons or religious, educational, scientific, charitable or other nonprofit organizations to whom or to which I have an established pattern of giving; provided, however, that my Attorney-in-Fact may not make gifts of my property to himself.

On August 14, 1998, the decedent executed a second codicil to her will, which she executed on September 4, 1981. That codicil provided, in pertinent part:

I do further state that it is my intention to reinstate the provisions of my Last Will and Testament of September 4, 1981 which provides that upon my death, all of my property shall be divided equally between my son, Estel Don Herbert, or to his lawful heirs should he predecease me, and my two beloved granddaughters, Crystal Denise Herbert and Lacey Diann Herbert, or to their lawful heirs should they predecease me; meaning that one-half of my said estate is bequeathed to my son, Estel Don Herbert, or to his lawful heirs, and the other half of my estate is bequeathed to my granddaughters, Crystal Denise Herbert and Lacey Diann Herbert.

During the week of Thanksgiving 1998, the decedent suffered a stroke while she was visiting the respondent and his family in St. Joseph, Missouri. At the time, she was residing by herself in Bloomfield, Iowa, on the farm that she had owned with her deceased husband. She was hospitalized after the stroke and then moved to a nursing home in St. Joseph, Missouri.

On November 9, 1999, the joint bank account, with right of survivorship, was opened at the Mercantile Bank in St. Joseph, Missouri, in the names of the decedent and the respondent. The decedent died on September 26, 2001.

Sometime in late 1999 or early 2000, the decedent made the decision to sell the farm. Accordingly, a farm auction was conducted on September 9, 2000, at which the household goods, equipment, tools, etc. were sold. On September 12, 2000, a check in the amount of $16,265.88, representing the sale proceeds from the farm auction, was deposited in the account. The check, dated September 11, 2000, was made out to "Dollie Herbert," and the endorsement on the back read "Estel D. Herbert POA." On October 12, 2000, a check, in the amount of $118,844.14, representing the proceeds from the sale of the decedent's farm was deposited in the joint account. The check, dated October 9, 2000, was made out to "Dollie Herbert, Estel Herbert, POA," and the endorsements on the back read "Dollie Herbert" and "Estel Herbert POA."

On November 16, 2001, the decedent's last will and testament and an application for probate were filed in the Probate Division of the Circuit Court of Buchanan County. On May 23, 2002, the appellants filed a petition for discovery of assets, alleging that the respondent had improperly deposited the sale proceeds in the joint account. The probate court appointed Steve Tyrell as the personal representative ad litem of the decedent's estate to represent its interests in the proceeding. In that capacity, Tyrell conducted an investigation of the assets of the estate and prepared a written inventory of those assets.

The case was tried to the court on May 9, 2003. The respondent testified at trial that, in late 1999 or early 2000, the decedent decided to sell her farm and all that went with it, so she could use the proceeds to pay the continuing costs of residing in the nursing home. The respondent testified that pursuant to the decedent's request, he auctioned off the property as directed. As to what was to be done with the $16,265.88 in proceeds from the sale of the farm personal property, he was asked at trial by his trial counsel: "Was there any discussion about where the sale of that proceeds check should go?" He answered, "Yeah. She told me to put it in the joint account. `Our account' is what she told me." The respondent was also asked whether he and the decedent discussed what to do with the $118,844.14 in proceeds from the sale of the farm, and the following exchange occurred:

Q. Did you have a discussion about what should be done with the land sale check?

A. I asked her, I said, Mom, where do you want it?

Q. And what did she tell you?

A. She said, put it in our account.

Q. Did you ever have any discussions, either before the joint account was opened or afterwards, about what would happen if one of you died?

A. Yeah.

Q. What was that — what was the substance of that conversation?

A. Well, she said that we were the only two left of the immediate family. And she wasn't going to be around forever. And she wanted me to have it.

The respondent further testified that he withdrew funds from the joint account to pay the decedent's nursing home and medical expenses, but he never withdrew any funds for his personal use.

The personal representative ad litem testified at the trial that he had conducted an investigation of the assets of the estate. A written inventory of those assets, prepared by him, was admitted into evidence. He also testified that "all of the money that was spent out of the joint account was used for [the decedent's] use and benefit." The written inventory, which was dated April 28, 2003, stated that, as of April 25, 2003, a balance of $122,238.41 remained in the account.

On May 30, 2003, the probate court entered a judgment finding that only $2,199.45 had been improperly withheld by the respondent from the decedent's estate, an amount which apparently represented some utilities stock that the decedent had owned and was not mentioned in the appellants' discovery of assets petition. The judgment assessed the costs of the action, including Tyrell's personal representative fees of $6,862.28, against the appellants. On June 25, 2003, the court's judgment was amended to assess $1,502.50 in attorney's fees incurred by Tyrell against the appellants. In addition, the amended judgment ordered that "[a]ll other claims of [the appellants] are denied."

This appeal followed.

Standard of Review

The standard of review in a discovery of assets proceeding is governed by Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). In re Estate of Boatright, 88 S.W.3d 500, 504 (Mo.App.2002). Consequently, the decree or judgment of the probate court will be sustained by the appellate court unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law. Id. In this case, there was no request for findings of fact and conclusions of law, and so the probate court is presumed to have made its findings in accordance with the decree entered and its judgment will be affirmed under any reasonable theory supported by the evidence. Rule 73.01(c); In re Estate of Newman, 58 S.W.3d 640, 645 (Mo.App.2001).

I.

In their sole point on appeal, the appellants claim that the probate court erred in denying their petition for discovery of assets as to the sale proceeds deposited by the respondent in the joint account because in doing so, the court misapplied §§ 404.712 and 404.714 of the POA Act and the provisions of the POA, which prohibited the respondent from commingling the decedent's accounts with his and making gifts of her assets to himself. Specifically they claim that the sale proceeds belonged solely to the decedent at the time of her death in that their deposit in the joint account by the respondent, acting as the decedent's attorney-in-fact, constituted an unauthorized gift to himself of the decedent's assets, voiding the deposit, such that title of...