Fulk v. Fulk
| Decision Date | 21 September 2022 |
| Docket Number | CV-20-394 |
| Citation | 2022 Ark.App. 338 |
| Parties | BAUCUM FULK APPELLANT/CROSS-APPELLEE v. MARION FULK; MARTIN FULK; AND AUSTIN FULK APPELLEES/CROSS-APPELLANTS |
| Court | Arkansas Court of Appeals |
APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, THIRTEENTH DIVISION [NO. 60PR-19-703] HONORABLE W. MICHAEL REIF JUDGE
Barber Law Firm, PLLC, by: Mark W. Hodge and Rachel E. Hildebrand for appellant/cross-appellee.
Rose Law Firm, a Professional Association, by: David S. Mitchell Jr., and Joseph Hall, for appellees/cross-appellants.
This is an appeal from a probate proceeding involving a dispute between the four children of the late Augustus "Gus" Marion Fulk and his wife Anne. The primary dispute concerns ownership of Gus's stock in the LaGrue Land and Irrigation Company ("the Duck Club"), a hunting club that has profitable farmland as well. The surviving children are a daughter, Marion; and three sons Martin, Baucum, and Austin. On April 1, 2019, Marion, Martin, and Austin filed a petition for probate of will and appointment of executors in the probate division of the Pulaski County Circuit Court. Although Gus's will named Baucum as executor, the petitioners asked that Marion and Martin be named as co-executors instead; they argued that Baucum was unsuitable for the position because of his conduct in convincing Gus to convey the Duck Club stock to him before their father's death. Four months later, Marion, Martin, and Austin filed a petition to have that Duck Club transfer set aside on the grounds of incapacity and undue influence.
Following a bench trial, the circuit court admitted Gus's will to probate and appointed Baucum as executor, but set aside the Duck Club stock transfer to Baucum, finding that it was the result of incapacity and undue influence. Baucum filed the instant appeal from the circuit court's ruling setting aside the transfer; and the other three siblings filed the instant cross-appeal from the circuit court's appointment of Baucum as executor. We affirm on both direct appeal and cross-appeal.
On January 18, 2019, eighty-seven-year-old Gus executed an affidavit of lost stock (the "Affidavit") conveying stock that he owned in the Duck Club to his son, Baucum. Present were Gus, Baucum, William "Hank" Griffin III (a family friend), and Anna Swallow (Baucum's girlfriend). Testimony established that following the death of Gus's wife, Anne,'s death, on December 31, 2016, Gus's mental and physical health began to deteriorate significantly. He was diagnosed with Alzheimer's-type dementia in 2017 and eventually came to reside in a senior living community in Pulaski County where he received around-the-clock care and supervision.
Gus had executed a general durable power of attorney, appointing Marion and Baucum as his attorneys-in-fact on December 3, 2018. This was drafted by Gus's long-time estate-planning lawyer, Christopher Rogers. It required that any gifts made under its authority to Gus's descendants must be made equally to all descendants of the same generation and class.
Rogers had also previously prepared estate plans for Gus and Anne. He prepared their wills as well as the Fulk Family Revocable Living Trust dated November 24, 1994 ("the Trust"). The Fulks' estate plan employed pour-over wills, which provided that upon their deaths, any of their (Gus's and Anne's) assets that were outside of the Trust would be transferred into the Trust. The Trust also provided that its assets would then be divided equally between their four children.
In 2017, Marion began working with Rogers to transfer assets into the Trust pursuant to memos of instruction that he gave her. Consistent with the instructions she received from Rogers, in July 2018, she asked the Duck Club's officers to list a transfer-on-death clause on Gus's Duck Club stock certificate providing that the stock would be transferred to the Trust upon Gus's death, but they apparently took no action on her request. Baucum emailed Rogers in December 2018, claiming that Gus wanted Baucum to inherit his ownership interest in the Duck Club. This initiated a round of emails between Rogers and Baucum's siblings in which the siblings took the position that Gus's estate plan should not change, and the Duck Club stock should be transferred into the Trust with the rest of Gus's assets.
Gus initially purchased 8 and 8/11 shares of stock in the Duck Club on June 29, 1983. Testimony presented established that Baucum also hunted at the Duck Club and enjoyed it for many years. On January 18, 2019, Baucum picked up Gus from Woodland Heights, the senior living center where he resided, and took him to lunch, where Baucum presented him with the prepared Affidavit. The Affidavit averred that Gus had lost the stock certificate for his Duck Club shares and authorized the president and secretary of the Duck Club to cancel his lost certificate and transfer his shares of stock to Baucum. Baucum then took Gus to a notary, and Gus signed the Affidavit. The day after he signed the Affidavit, Gus went to a hospital emergency room and was admitted to the intensive care unit, where he remained for nearly a week.
After his release, he had no recollection of his hospitalization and frequently did not know where he was or what day it was. Roughly five months before procuring Gus's signature on the Affidavit, Baucum remarked in an email to his siblings that Gus "has utterly ceased to be able to connect cause and effect." Gus died two months after signing the Affidavit.
On direct appeal, Baucum argues that he sufficiently rebutted the presumption that the Affidavit resulted from Gus's lack of capacity or Baucum's undue influence. We disagree. Arkansas appellate courts do not reverse decisions of probate courts unless they are clearly erroneous, but they do review legal rulings de novo. See Edwards v. Hart, 2020 Ark.App. 182, at 5, 598 S.W.3d 543, 545-56. In conducting its review, an appellate court must give "[d]ue deference . . . to the superior position of the probate judge to determine the credibility of the witnesses and the weight to be accorded their testimony." See Medlock v. Mitchell, 95 Ark.App. 132, 135, 234 S.W.3d 901, 904-05 (2006).
"Ordinarily, the party challenging the validity of [an instrument] is required to prove" incapacity or undue influence "by a preponderance of the evidence." See Harbur v. O'Neal, 2014 Ark.App. 119, at 5, 432 S.W.3d 651, 656. However, when the assignee procured the assignment and had a confidential relationship with the assignor, this gives rise to a rebuttable presumption of incapacity and undue influence. See Montigue v. Jones, 2019 Ark.App. 237, at 16, 576 S.W.3d 46, 56. To rebut this presumption, the party defending the assignment bears "the burden of proving beyond a reasonable doubt that the testator enjoyed both required mental capacity and freedom of will." See Harbur, 2014 Ark.App. 119, at 5, 432 S.W.3d at 656. We have long held that "[d]ue deference will be given to the superior position of the probate judge to determine the credibility of the witnesses and the weight to be accorded their testimony." Medlock, 95 Ark.App. at 135, 234 S.W.3d at 904-05.
On appeal, Baucum argues that the witnesses who were present on January 18, 2019, all testified that Gus was mentally competent and understood that he was conveying the Duck Club stock to Baucum and that there was no undue influence. He specifically cites the evidence of Gus's condition during the precise moment he decided to sign the Affidavit. We agree that the issue "is not the mental capacity of the testator before or after a challenged [instrument] is signed, but rather the level of capacity at the time the [instrument] was signed." Pyle v. Sanders, 344 Ark. 354, 360, 39 S.W.3d 774, 778 (2001). We also acknowledge that this court has held that a person who might occasionally lack capacity may nevertheless make a valid execution of an instrument "during a lucid interval." Green v. Holland, 9 Ark.App. 233, 236, 657 S.W.2d 572, 575 (1983). But in light of our deferential standard of review, we agree with Marion, Martin, and Austin that this does not mean that when all the witnesses to an instrument's execution have an interest in seeing it upheld, a finder of fact must simply accept their self-serving testimony at face value and throw out all other relevant evidence and common sense.
Instead the circuit court had an obligation to consider all the relevant evidence, which is what it did. "Undue influence on a testator may be inferred from the facts and circumstances." M...
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