Hill v. Burris
| Decision Date | 22 August 2014 |
| Docket Number | NO. 2013-CA-001087-MR,2013-CA-001087-MR |
| Parties | GARY L. HILL, EXECUTOR OF THE ESTATE OF CHESTER HILL APPELLANT v. DARLA BURRIS; LORI S. LEE; ANGELA C. DEAN; PEOPLE'S EXCHANGE BANK OF BEATTYVILLE, KENTUCKY, INC.; BANK OF COLUMBIA; THE FIRST NATIONAL BANK OF COLUMBIA, A SUBSIDIARY OF ALBANY BANCORP, INC.; WELLS FARGO BANK, N.A.; UNITED CITIZENS BANK OF SOUTHERN KENTUCKY, INC.; AND TERRY HARVEY APPELLEES |
| Court | Kentucky Court of Appeals |
NOT TO BE PUBLISHED
APPEAL FROM ADAIR CIRCUIT COURT
ACTION NOS. 08-CI-00048 AND 09-CI-00258
OPINION AFFIRMING
BEFORE: CAPERTON, COMBS, AND DIXON, JUDGES.
CAPERTON, JUDGE: Gary Hill, Executor of the Estate of Chester Hill, appeals from the judgment entered by the trial court on July 26, 2012, in favor of the Appellees. After a thorough review of the parties' arguments, the record, and the applicable law, we affirm.
The facts of this appeal were heard before the trial court during a bench trial held on January 11, 2012. Thereafter, the trial court entered its findings of fact, conclusions of law, and judgment in favor of Appellee, People's Exchange Bank of Beattyville, Kentucky, Inc. The court was presented evidence that Chester Hill was an octogenarian who had Parkinson's disease, was impaired by a stroke, and was vision impaired.1 Darla Burris, his niece, took care of Hill's finances, drove him around, and helped go through his mail. Burris took care of Hill for seven years. While Burris claimed that Hill had given her a power of attorney, Hill stated that he did not grant her such power. Burris was later imprisoned for forgery based on forging both her mother's and Hill's names on checks.
The court was presented evidence that Burris and Hill went to the bank on five or six occasions for the purpose of obtaining a loan. Lori Lee met with Hill and got information needed for a loan of $96,000. Part of the proceeds of the loan was used to pay off a vehicle that Hill purchased for Burris. Lee testified that Hill was aware of the transaction taking place and that there was a monthly payment. Hill always responded when asked about the loan, either by nodding his head or saying yes. Both Hill and Burris were present at the closing of themortgage. Hill signed the HUD statement. After signing, Hill told Lee he was too shaky, could not see well enough to sign the rest of the documents, and directed Burris to finish signing his name to the documents, which she did. Lee notarized Hill's signature even though Burris actually signed the documents. Lee did not read the entirety of the documents to Hill but instead went over the key points of the mortgage, including the amount, description of the property, and interest. Lee read the entire HUD statement to Hill.
The court found that Burris did not have a power of attorney and that Hill understood everything about the closing. The court concluded that Burris was an authorized agent of Hill and had the express authority to sign all the documents on his behalf. The court found that People's Bank did not act with malice, gross negligence, or fraud towards Hill. Lee did not commit fraud when she notarized Hill's signature, as Hill had expressly authorized Burris to sign his name, thereby making her his agent. By executing the HUD statement, Hill indicated his desire to go forward with the loan, and his health and vision explain why he authorized Burris to complete the transaction. Thus, the court awarded a judgment in favor of People's Bank. It is from this final judgment that Hill now appeals.
On appeal Hill argues: (1) People's Bank did not have a valid claim to a mortgage; (2) no evidence of apparent agency existed; (3) the trial court failed to make its own factual findings; and (4) factual issues barred summary judgment. People's Bank disagrees with the arguments raised by Hill and instead urges this Court to affirm the trial court's final judgment.
In reviewing the arguments of the parties, we note that Kentucky Rules of Civil Procedure (CR) 52.01 provides that findings of fact made by the trial court shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to determine the credibility of the witnesses before it. See CR 52.01. A factual finding is not clearly erroneous if supported by substantial evidence. See Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414 (Ky. 1998). Substantial evidence is that which has sufficient probative value to induce conviction in the mind of a reasonable person when taken alone or in light of all the evidence. Golightly at 414. The trial court's conclusions of law, reached after making its findings, are subject to an independent, de novo review. Gosney v. Glenn, 163 S.W.3d 894, 898 (Ky. App. 2005). A determination or decision by the trial court is an abuse of discretion if it is arbitrary, unreasonable, unfair, or unsupported by sound legal principles. Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999). We now turn to the first issue raised by the parties.
First, Hill argues that People's Bank did not have a valid claim to a mortgage and relies upon Kentucky Revised Statutes (KRS) 446.060(1)2 in support thereof. Hill argues that People's Bank did not inform him that the documents were loans, did not read the documents to him, did not require a valid power ofattorney for any third-party signature, and had the documents improperly notarized and improperly signed by a third party.3
Below, the trial court was presented evidence that People's Bank employee, Lori Lee, discussed the terms of the mortgage with Hill and that Hill understood the terms of the mortgage and requested that Burris sign for him. While there do appear to be discrepancies with the notarization, Hill has not provided this Court with jurisprudence that such problems invalidate the contract. Thus, we decline to reverse on this ground.
As to whether the trial court properly determined that Hill knew what Burris was signing for him and the legal implications thereof, we believe the trial court did not err as discussed infra.
Second, Hill argues that no evidence of apparent agency existed, with which People's Bank disagrees. Hill argues that People's Bank acted in bad faith in relying on Burris's representations, particularly where the bank employee admitted that Hill was confused about the nature of the documents, and that he could not read them nor did he personally sign them. Hill's deposition testimony shows unequivocally that he did not give Burris a power of attorney, did not consent to her taking a mortgage out on his property, did not agree to her taking funds from his account, and did not consent to her theft. Further, Burris signed theloan documents and mortgage applications, and the bank employee notarized Burris's signature instead of Hill's signature.
People's Bank argues that Burris was Hill's agent specifically for the purpose of signing the loan documents and the mortgage. People's Bank does not argue that Burris had a written power of attorney from Hill but instead argues that Hill expressly made Burris his agent for the purpose of signing the documents and induced Lee into believing that Burris had the authority to do so. Lee testified that at the closing, Hill told Lee he was too shaky to sign the documents and that he could not see them well. Lee asked Hill what he would like to do and he responded that he wanted Burris to finish signing the papers. All the signatures from February 3, 2006, were that of Burris signing for Hill except the HUD document which was signed by Hill. Hill was present in the room while Burris was signing his name. The court concluded that Burris was an authorized agent of Hill and had the express authority to execute all the documents on his behalf. We agree.
"Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act." McAlister v. Whitford, 365 S.W.2d 317, 319 (Ky. 1962), citing Restatement, Second, Agency, Volume I, Section 1, page 7; Palmer & Hardin v. Grand Lodge K. of P. of Kentucky, 121 S.W. 678 (Ky. 1909).
There is no doubt that a principal is liable for the acts of his agent acting within the scope of his authority. Strader's Adm'rs v. President & Directors of Lexington Hydraulic & Mfg. Co., 146 Ky. 580, 142 S. W. 1073. An agent is one who acts for, or in the place of, another by authority from him, or who undertakes to transact some business or manage some affair for him by authority from him, and to render an account of what he has done. Jeffrey Co. v. Lockridge, 173 Ky. 282, 190 S. W. 1103. The principal is bound by the contract of his agent when at the time it was made the agent acted within the limits of his express authority, or the scope of his implied authority. Dark Tobacco Growers' Cooperative Association v. Garth, 218 Ky. 391, 291 S. W. 367.
Hatcher-Powers Shoe Co. v. Kirk, 233 Ky. 19, 24 S.W.2d 903, 905 (1930).
Actual authority is granted to the agent by the principal.4 A trial court may find actual authority if "there has been a manifestation by the principal to the agent that the agent may act on his account, and consent by the agent so to act." Terbovitz v. Fiscal Court of Adair County, Ky., 825 F.2d 111, 116 (6th Cir.1987) () (internal citation omitted). See also Restatement (Third) of Agency § 2.01 (2006) () Apparent authority is created when the principal holds out toothers that the agent possesses certain authority that may or may not have been actually granted to the agent. See Mill Street Church of Christ v. Hogan, 785 S.W.2d 263, 267 (Ky. App. 1990) () Moreover, "[i]t is a rule, universally...
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