Graham v. Underwood

• Decision Date: 04 October 2017
• Docket Number: No. CV–16–1148,CV–16–1148
• Citation: 532 S.W.3d 88
• Parties: Laura L. GRAHAM, Individually and as Beneficiary of the Samuel R. Ludington, Jr., Revocable Living Trust Agreement U/D December 8, 2006, Appellant v. Lana Louise UNDERWOOD, Trustee and Beneficiary of the Samuel R. Ludington, Jr., Revocable Living Trust Agreement U/D December 8, 2006, Appellee
• Court: Arkansas Court of Appeals

532 S.W.3d 88

Laura L. GRAHAM, Individually and as Beneficiary of the Samuel R. Ludington, Jr., Revocable Living Trust Agreement U/D December 8, 2006, Appellant

v.Lana Louise UNDERWOOD, Trustee and Beneficiary of the Samuel R. Ludington, Jr., Revocable Living Trust Agreement U/D December 8, 2006, Appellee

No. CV–16–1148

Court of Appeals of Arkansas, DIVISION II.

Opinion Delivered: October 4, 2017

Richard F. Hatfield, P.A., by: Richard F. Hatfield, Little Rock, for appellant.

Jones, Jackson & Moll, PLC, Fort Smith, by: Mark Moll and Kathryn A. Stocks, for appellee.

BART F. VIRDEN, Judge

Appellant Laura Graham filed a complaint against her sister, appellee Lana Underwood, to cancel amendments their now deceased father, Samuel R. Ludington, made to a trust agreement. Graham alleged that the amendments were the product of undue influence by Underwood. Underwood filed a motion for summary judgment. Following a hearing, the Sebastian County Circuit Court granted summary judgment to Underwood and granted Underwood's motion to strike affidavits that were untimely submitted by Graham. Graham argues that the trial court abused its discretion in not allowing further evidence and that summary judgment was inappropriate. We affirm.

I. Background and Procedural History

Samuel (Sam) and Elizabeth Ludington have two children, Graham and Underwood. On December 8, 2006, Sam executed a revocable living trust agreement, which provided that, if Elizabeth predeceased him, the daughters would receive equal shares of his estate. On July 31, 2013, Sam amended the trust to make a specific devise of all his stock in Eastern Tank Services, Inc., and Johnson County Disposal Well Services, Inc., to Underwood. Elizabeth died suddenly on August 22, 2013.

Sam made a second amendment to the trust on December 19, 2013, to direct that his Sandalwood Apartments property be sold and the proceeds distributed in the following manner: one-half to Underwood "outright and free of trust"; one-sixth to the trustee of the Laura Lynn Graham Trust; and one-sixth to the trustees of trusts set up for each of Graham's two daughters.¹ Sam died on April 3, 2014.

Graham filed a complaint against Underwood on May 1, 2015, alleging that Underwood had exercised undue influence over Sam to amend the trust agreement. Specifically, she alleged that she and Sam had a good relationship, that Sam was greatly affected by his wife's death and was influenced by Underwood to execute amendments changing the distribution "basically all to [Underwood]," that Underwood was "very forceful, and Sam was in deep distress over his wife's death, as they were very close," and that Underwood "constantly misrepresented Laura's actions to Sam and harassed him to execute the Trust Amendments." Underwood answered the complaint, generally denying the allegations, pointing out that Elizabeth was still living at the time Sam made the first amendment, and asserting that it was well known that Sam did not approve of Graham's "lifestyle and some of her life choices."

Underwood then moved for summary judgment and attached to her motion deposition testimony of Graham and Polly Lawson, Sam's business partner. In her response to Underwood's motion, Graham submitted exhibits including, among other things, deposition testimony from her, Underwood, Underwood's husband Delbert, and Lawson; affidavits from Don and Debbie Bradshaw; and memos and handwritten notes from attorney Randy McGinnis, who had assisted Sam with his estate planning. On May 4, 2016, a hearing was held on Underwood's motion.

II. Evidence Supporting and Opposing Summary Judgment

In Graham's deposition, she said that Underwood had been very forceful and controlling all of her life, that Underwood had harassed their parents her whole life to get what she wanted, that she nagged and bullied their parents, and that she would yell, throw fits, and threaten to make their parents' lives miserable.

Graham conceded that Sam had told her that he wanted Underwood to take over as the owner of Eastern Tank when he died and that she knew why. She explained, "I have a master's degree in English and I like to teach college. I like to write books. He knows that. He understood my passion. She wanted to run his company, Eastern Tank."

Graham testified that she was not aware of any of the amendments to Sam's trust at the time they were made. Graham said that, although her mother had told her that Underwood was trying to persuade Sam to change his will, she had no personal knowledge that Underwood had unduly influenced their father. Graham was asked,

Q: So you never saw [Underwood] do anything that you would consider to be—to have unduly influenced [Sam] to sign the first, second or third Amendment?

A: All I know is her behavior our whole lives. I don't see why her behavior would have changed in that moment.

Q: So you—would it be fair to say it like this, you're firmly convinced that Lana unduly influenced your father to do the first, second, and third Amendments, you just don't know specifically how she did it?

A: Absolutely.

Graham stated that the only evidence she had that Underwood unduly influenced their father was the fact that Underwood "totally isolated [her] from [Sam]." Graham conceded that she called her father every day and traveled to see him as often as she could, but she insisted that she was not "able to get near him." Graham asserted that Lawson was present when Underwood influenced, persuaded, and forced Sam to change the trust agreement.

Polly Lawson testified that Sam feared that Elizabeth would sell everything if he predeceased her. She said that Eastern Tank was Sam's "legacy" and that Underwood became his succession plan for the company. According to Lawson, Sam's relationship with Graham was "non-existent," and Lawson claimed that Sam was angry when he discovered that Graham had gotten a degree in English because he thought he had paid for a four-year degree in accounting. Lawson said that Graham had never gotten a job and that Sam "totally" supported her. She said that Sam had "an incredible work ethic" and that Graham was a disappointment. Lawson said that she had not personally seen Underwood influence Sam with anything and that she did not think Sam would have been susceptible to that.

In Underwood's deposition, she stated that she began working at Eastern Tank in 2006. She said that, although her father had mentioned his estate plan to her, they did not discuss it because she did not want to talk about it and that she had learned from her mother that Sam planned to leave his Eastern Tank stock to her. Underwood insisted that she did not ask, pressure, or coerce Sam to make any changes to his trust; that she did not take Sam to his lawyer's office to change his estate plan or make an appointment for him to do so; and that she did not do anything to cause Sam to fear her.

In Debbie Bradshaw's affidavit, she attested that Sam is her cousin and good friend; that she had worked at Sam's businesses; and that she and her husband had often dined with Sam and Elizabeth. She said that Sam had expressed that he loved his daughters equally and had helped both daughters with certain expenses. Mr. Bradshaw's attestations were similar. Mrs. Bradshaw further stated that

7. I observed Sam's interaction with Lana over the years and saw her "charm and influence" him. She named her son after him.

8. Several times I heard Lana talk to Sam badly about Laura.

9. Lana told me that she told Sam that after Elizabeth's funeral that someone had "ransacked" Elizabeth's and Sam's home looking for property. I know that this was untrue.

10. I saw Lana try to "con" Sam out of property or cash.

....

12. I saw Lana's action to "overtake Sam's mind" after Elizabeth's death.

In a memo dated August 28, 2013, attorney McGinnis noted that Elizabeth had suddenly died and that Sam's health was not good. He said that he had received an unexpected visit from Underwood and her husband, who had relayed to him that Graham and her boyfriend had come to Fort Smith and were "essentially ransacking" the Ludingtons' home looking for assets, valuables, and cash.

In a memo dated October 2, 2013, McGinnis noted that Lawson had called to say that Sam was back in the hospital and that she

advised me that Sam has now learned how his daughter Laura ransacked the house after Elizabeth's funeral. That obviously has him very upset and he is looking at further ways to restrict Laura's inheritance as well as her control. He has already executed new powers of attorney to remove any authority Laura has to make decisions with regard to finances and property as well as with regard to healthcare decisions for him. We were also in the midst of drafting some changes to his trust to create a trust for Laura and her share of his estate that he intends for her to receive. There may be some more change to that and I need to talk with Sam about that.

At the conclusion of the May 4, 2016 hearing, Graham's counsel requested one week to supplement his response, which the trial court granted. On May 26, 2016, Graham filed a motion to extend the time to submit further evidence and attached additional affidavits from the Bradshaws dated May 20, 2016, which Graham asserted contained newly discovered evidence. Underwood moved to strike the evidence as untimely submitted.

On July 20, 2016, the trial court entered an order granting Underwood's motion to strike the affidavits and her motion for summary judgment. Graham now appeals to this court from that order.

III. Discussion

A. Motion to Strike Affidavits

Trial courts have considerable discretion in the control and management of proceedings before them. Lagios v. Goldman, 2016 Ark. 59, 483 S.W.3d 810. Trial courts have broad discretion to reopen a case for further proof after both sides have rested, particularly to "ascertain the truth of the matter to be determined" on a material issue. Id. at 14, 483 S.W.3d at 821. The timetable of Arkansas Rule of Civil Procedure 56(c) controls unless the...