Harbur v. O'Neal

• Decision Date: 19 February 2014
• Docket Number: No. CV–13–603.,CV–13–603.
• Citation: 432 S.W.3d 651,2014 Ark. App. 119
• Parties: Jeanne Simpson HARBUR, Appellant v. Sarah Shelton O'NEAL and John Carter Shelton, Appellees.
• Court: Arkansas Court of Appeals

2014 Ark. App. 119

432 S.W.3d 651

Jeanne Simpson HARBUR, Appellant

v.Sarah Shelton O'NEAL and John Carter Shelton, Appellees.

No. CV–13–603.

Court of Appeals of Arkansas.

Feb. 19, 2014.

Jeanne Harbur, pro se appellant.

Durrett and Coleman, West Memphis, by: Chadd L. Durrett, Jr., for appellees.

ROBERT J. GLADWIN, Chief Judge.

Appellant Jeanne Simpson Harbur appeals the March 14, 2013 declaratory judgment of the Crittenden County Circuit Court in favor of appellees Sarah Shelton O'Neal and John Carter Shelton (“Carter”). Jeanne argues that the circuit court failed to accommodate her hearing disability; improperly shifted the burden of proof to her related to undue influence regarding the trust amendments; erred in invalidating the May 2, 2011 trust amendment; erred in failing to recognize the handwritten documents from August 2011 as valid trust amendments; and committed reversible error in its assessment of her credibility in failing to address her hearing disability. ¹ We affirm.

The basis of this appeal is the Josephine Young Simpson Revocable Trust that was executed on March 6, 2004, by Josephine Young Simpson. Mrs. Simpson had two daughters, Sarah Ann “Sally” Simpson Shelton and Jeanne. On February 2, 2011, Sally passed away unexpectedly. Immediately upon the death of Sally, her husband, David Shelton, and daughter, appellee Sarah, asked Mrs. Simpson to sign over to them certain HH bonds, which had been purchased by Mrs. Simpson and had both Mrs. Simpson's and Sally's names on them. Mrs. Simpson chose not to sign over the bonds at that time, and according to Jeanne, when David learned that Mrs. Simpson would not sign the bonds, he tried to change her mind, and a confrontation ensued.

Mrs. Simpson executed a power of attorney (“POA”) on May 2, 2011, which allowed Jeanne to sign checks paying Mrs. Simpson's bills. Also on May 2, 2011, Mrs. Simpson signed a purported amendment to the trust that provided that, rather than Jeanne and Sally acting as co-trustees in the event of Mrs. Simpson's death or inability to continue serving, Jeanne alone would serve as trustee. It is undisputed that both the POA and the May 2, 2011 trust amendment were typed by Jeanne. The POA and trust amendment were witnessed and notarized by employees of Broadway Health Care (“BHC”), the nursing home where Mrs. Simpson resided.

In June 2011, Carter went to BHC with Martha Hunt, an employee of Fidelity National Bank, to supervise Mrs. Simpson signing over the HH bonds. According to Ms. Hunt, Mrs. Simpson told Ms. Hunt that she wanted the proceeds of the bonds to be deposited into her checking account. At some point after the funds were deposited into Mrs. Simpson's account, the value of the bonds was disbursed by two checks to Sarah and Carter, but neither admit to being the one who gave the checks to Mrs. Simpson to sign.

At Jeanne's next visit with her mother in early August 2011, she reviewed her mother's financial statements with her. Jeanne said that it was brought to Mrs. Simpson's attention that the checks had been written and that her signature appeared on them. Although she was insistent that she had not signed the checks, there is no dispute that it is Mrs. Simpson's signature on the checks and that Mrs. Simpson could not see very well.

On August 9, 2011, after Jeanne had returned to Missouri, Mrs. Simpson handwrote two documents, purporting to create a holographic will in which she stated that she wished that all her assets be given to Jeanne. On November 11, 2011, Mrs. Simpson signed a trust amendment that was typed by Jeanne but contained the exact words handwritten by Mrs. Simpson in the August 2011 documents.

Mrs. Simpson passed away in Crittenden County, Arkansas, on February 8, 2012. After Mrs. Simpson's death, Sarah filed her request to probate a will that Mrs. Simpson had executed in 2004, and to appoint Sarah as personal representative of Mrs. Simpson's estate. Sarah and Carter then filed a petition for declaratory judgment requesting that the circuit court strike the purported May and November 2011 trust amendments.

The petition for declaratory judgment proceeded to trial. The circuit court determined that because of the existence of the POA and because Jeanne had been helping her mother with her finances, a confidential relationship existed, which shifted the burden of proof to Jeanne to prove beyond a reasonable doubt that Mrs. Simpson had the mental capacity and free will to execute the 2011 trust amendments. The circuit court found that Jeanne failed to do so in its letter ruling dated January 10, 2013, and formalized in the March 14, 2013 declaratory judgment. A timely notice of appeal was filed on April 11, 2013.

I. Failure to Accommodate Jeanne's Hearing Disability and Effect on Credibility

Appellant's first issue of whether the circuit court failed to accommodate her alleged hearing disability was not raised in the circuit court and will not be considered. In Arkansas, it is a well-settled rule that issues not raised or ruled on in the circuit court will not be considered for the first time on appeal. Parker v. Advanced Portable X–Ray, LLC, 2014 Ark. App. 11, 431 S.W.3d 374. At no time did Jeanne or her counsel complain that Jeanne's hearing was so poor that she needed accommodation by the circuit court. In giving her testimony, she was responsive to the questions put to her by attorneys on both sides. The testimony indicates that on the few occasions where Jeanne complained that she had some difficulty hearing the question, the question was repeated and answered by her. This is a common practice in court proceedings, and it appears that everyone involved provided the relief requested by Jeanne.

Appellant also argues that she might not have been able to follow the testimony of others as they testified, which would have made her unable to effectively interact with her counsel regarding the testimony being given by others. If that occurred, the problem was not brought to the attention of the circuit court so that the circuit court had an opportunity to address the situation. Jeanne even acknowledges her inaction with respect to this issue in her brief. Accordingly, this issue is not preserved for this court's review.

Likewise, in her final point on appeal, Jeanne submits that the circuit court's silence on the issue of her obvious hearing disability negatively affected the circuit court's assessment of her credibility. She argues that some remedy is required to protect her due-process rights. We note that there is no evidence that Jeanne's alleged hearing disability had any effect on the circuit court's assessment of her credibility, but as with the previous discussion in this point, this issue was not raised in the circuit court and will not be addressed. Parker, supra.

II. Burden of Proof Shifted to Jeanne Regarding Undue Influence

The capacity required to create, amend, revoke, or add property to a revocable trust is the same as that required to make a will. Ark.Code Ann. § 28–73–601 (Repl.2012). “The test to determine whether a will is the product of undue influence is the same for a trust that takes effect, in part, at death.” Medlock v. Mitchell, 95 Ark.App. 132, 136, 234 S.W.3d 901, 905 (2006). Ordinarily, the party challenging the validity of a will is required to prove by a preponderance of the evidence that the testator lacked mental capacity or was unduly influenced at the time the will was executed. Bell v. Hutchins, 100 Ark.App. 308, 268 S.W.3d 358 (2007). But in a case where a beneficiary procures the making of a will, a rebuttable presumption of undue influence arises that places on the beneficiary the burden of proving beyond a reasonable doubt that the testator enjoyed both required mental capacity and freedom of will. Pyle v. Sayers, 72 Ark.App. 207, 34 S.W.3d 786 (2000).

Jeanne claims that, regarding the May 2, 2011 trust amendment, no evidence was offered by anyone that suggested that Mrs. Simpson was mentally incompetent at the time the amendment was signed. She notes that the mental capacity of the maker of a trust or deed is presumed and it falls to the contestants to prove incapacity by a preponderance of the evidence. Rose v. Dunn, 284 Ark. 42, 679 S.W.2d 180 (1984). Jeanne argues that the presence of the presumption of undue influence does not negate the presumption of mental capacity. Id.

The requisite level of mental capacity to create a trust is defined as having “sufficient mental capacity to retain in his memory, without promptings, the extent and condition of his property, and to comprehend how he is disposing of it, and to whom.” Rose, 284 Ark. at 46, 679 S.W.2d at 182. The definition of “undue influence”, on the other hand, is influence “such as results from fear, coercion, or any other cause that deprives the testator of his free agency in the disposition of his property.” Rose, 284 Ark. at 45, 679 S.W.2d at 182.

Jeanne notes that Carter admitted that Mrs. Simpson's mental capacity was excellent in May 2011, and that Sarah testified she did not start to wonder about her grandmother's mental capacity until October 2011. Accordingly, Jeanne claims that there is no basis for a finding that Mrs. Simpson was not mentally capable of executing the May 2011 trust amendment.

Jeanne submits that leaves only undue influence as a means available to Sarah and Carter to invalidate the May 2011 trust. Jeanne acknowledges that, because of the rebuttable presumption, she had the burden of moving forward and producing evidence to rebut this presumption. But she claims that the burden of proving the undue influence by the preponderance of the evidence remained on Sarah and Carter, see Rose, supra, and she maintains that no evidence was offered that, in May 2011, Mrs. Simpson was either in fear of Jeanne or felt coerced by her in any way. To the contrary, Sarah and Carter testified that their grandmother felt Jeanne was “a bit of a flake” and that she did not count on her...