In re Estate of Bradshaw

• Decision Date: 24 May 2001
• Docket Number: No. 99-618.,99-618.
• Citation: 305 Mont. 178,2001 MT 92,24 P.3d 211
• Parties: In re the ESTATE OF Daniel G. BRADSHAW, Deceased.
• Court: Montana Supreme Court

24 P.3d 211

305 Mont. 178

2001 MT 92

In re the ESTATE OF Daniel G. BRADSHAW, Deceased.

No. 99-618.

Supreme Court of Montana.

Submitted on Briefs October 19, 2000.

Decided May 24, 2001.

Scott B. Spencer, Attorney at Law, Libby, MT, for appellant.

James P. O'Brien; O'Brien Law Offices, John C. Schulte; John Schulte Law Office, Missoula, MT, for respondents.

Chief Justice KARLA M. GRAY delivered the Opinion of the Court.

¶ 1 The Fourth Judicial District Court, Missoula County, determined that Daniel G. Bradshaw (Daniel) died intestate and that his estate, including an annuity, will pass to his minor sons. Daniel's mother, Mary Bradshaw (Mary), appeals. We affirm.

¶ 2 We address the following dispositive issues:

¶ 3 1. Did the District Court err in concluding Mary was named the beneficiary of Daniel's annuity as a result of undue influence?

¶ 4 2. Did the District Court err in determining Daniel died intestate?

¶ 5 3. Did the District Court err in determining the beneficiaries of the constructive trust or in making other conclusions relating to Mary's status as constructive trustee of funds from Daniel's annuity?

BACKGROUND

¶ 6 Daniel was twenty-seven years old when he committed suicide in Missoula, Montana, in October of 1996. He had been paralyzed on his left side as the result of a head injury in a wrestling accident during high school. The head injury and a lifelong learning disability also impaired Daniel's speaking ability, memory, and thinking. Following settlement of a lawsuit arising out of the wrestling accident, Daniel received annuity payments of $1,200 per month. The face value of the annuity payments, which continue for a total of 360 payments, is over $600,000. The annuity, Daniel's primary asset at the time of his death, is the focal point of this case.

¶ 7 After graduating from high school, Daniel moved from his family home in Kalispell, Montana, to Missoula, Montana, where he worked and bought a home. Daniel's survivors include two young sons, Danny, Jr., who was born in 1992, and Tristan, who was born in 1995. Daniel's marriage to Danny, Jr.'s mother was dissolved in 1994. See Marriage of Bradshaw (1995), 270 Mont. 222, 891 P.2d 506. Daniel was later engaged to marry Tristan's mother, but she broke the engagement. Daniel's other survivors (his "family of origin") are his parents, a sister, a brother, three nephews and a niece.

¶ 8 After Daniel's death, Tristan's mother petitioned the District Court to appoint her as the personal representative of his estate and to determine that he died intestate, leaving Danny, Jr., and Tristan as his heirs. Danny, Jr.'s mother also sought appointment as personal representative or, in the alternative, as co-personal representative. Mary moved for an order declaring her the owner of Daniel's annuity, pursuant to his written instructions to the annuity company in November of 1996 that she was the beneficiary of the account. The District Court appointed Tristan's mother as Daniel's personal representative, recognized Danny, Jr.'s mother as an interested party, and placed Daniel's estate under supervised administration.

¶ 9 The District Court held a bench trial on Mary's claimed ownership of the annuity. It heard testimony from numerous witnesses, including Daniel's psychiatrist, divorce attorney and employment and parenting counselor; Mary; Bradshaw's sister; four of Bradshaw's neighbors in Missoula; friends of Mary's from Kalispell; and both Danny, Jr.'s and Tristan's mothers.

¶ 10 The District Court entered extensive findings of fact, conclusions of law, and an order. The court concluded that Daniel died intestate and that he named Mary as the beneficiary of his annuity as a result of her undue influence. The court also concluded the disposition of all annuity benefits to Daniel's family of origin, as advocated by Mary, was unnatural given the evidence of how important Daniel's sons were to him. Determining Mary was a constructive trustee of the annuity but that she had failed in that role, the court removed Mary as constructive trustee and ordered Mary to transfer and deliver to Daniel's estate all property, funds and interest she had received from him or from the annuity and that all future payments on the annuity be paid to the estate to be expended on behalf of Daniel's sons. Mary appeals.

STANDARD OF REVIEW

¶ 11 Section 3-2-204(5), MCA, and Rule 52(a), M.R.Civ.P., require that in equitable cases like this one, findings of fact must be upheld unless they are clearly erroneous. Hansen v. 75 Ranch Co., 1998 MT 77, ¶ 20, 288 Mont. 310, ¶ 20, 957 P.2d 32, ¶ 20 (citation omitted). The first part of that inquiry is whether the findings are supported by substantial evidence. Interstate Production Credit Ass'n v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287. The evidence is reviewed in the light most favorable to the prevailing party, and the credibility of witnesses and the weight assigned to their respective testimony are up to the trial court. In re Guardianship of Mowrer, 1999 MT 73, ¶ 36, 294 Mont. 35, ¶ 36, 979 P.2d 156, ¶ 36 (citation omitted). Further, our role in reviewing findings of fact is to determine whether the findings made are clearly erroneous; it is not to determine whether there is support in the evidence for findings which were not made. See, e.g., Cenex Pipeline L.L.C. v. Fly Creek Angus, Inc., 1998 MT 334, ¶ 35, 292 Mont. 300, ¶ 35, 971 P.2d 781, ¶ 35.

DISCUSSION

¶ 12 1. Did the District Court err in concluding Mary was named the beneficiary of Daniel's annuity as a result of undue influence?

¶ 13 Section 28-2-407, MCA, defines undue influence as:

(1) the use by one in whom a confidence is reposed by another or who holds a real or apparent authority over him of such confidence or authority for the purpose of obtaining an unfair advantage over him;

(2) taking an unfair advantage of another's weakness of mind; or

(3) taking a grossly oppressive and unfair advantage of another's necessities or distress.

To determine whether there has been undue influence, a court examines: (1) any confidential relationship between the person alleged to be exercising undue influence and the donor; (2) the physical condition of the donor as it may affect his or her ability to withstand influence; (3) the mental condition of the donor as it may affect his or her ability to withstand influence; (4) the unnaturalness of the disposition as it relates to showing an unbalanced mind or a mind easily susceptible to influence; and (5) the demands and importunities as they may affect the donor, taking into account the time, place and surrounding circumstances. Mowrer, ¶ 31 (citations omitted).

¶ 14 The proper consideration and application of these five criteria have become muddled in some of our recent cases on undue influence. Beginning in In re Maricich's Estate (1965), 145 Mont. 146, 161, 400 P.2d 873, 881, we set forth the five criteria listed above as factors a court "may consider" in determining a question of undue influence. We continued that approach in Cameron v. Cameron (1978), 179 Mont. 219, 229, 587 P.2d 939, 945. In In re Estate of Aageson (1985), 217 Mont. 78, 85, 702 P.2d 338, 342, we strayed slightly from the above approach, saying a court "must consider" the five above criteria.

¶ 15 Then, in Christensen v. Britton (1989), 240 Mont. 393, 398, 784 P.2d 908, 911, we cited Cameron in setting out the same five criteria. We went on to describe the standard for their consideration as one in which the proponent of the undue influence theory "must satisfy each of these criteria." Christensen, 240 Mont. at 398, 784 P.2d at 911. That description of the standard under which courts are to consider the criteria was not supported by any authority. Moreover, such an approach does not square with the alternative statutory definitions of undue influence set forth at § 28-2-407, MCA. We carried forward the erroneous and unsupported notion from Christensen that all five criteria must be satisfied to prove undue influence in In re Estate of Luger (1990), 244 Mont. 301, 304, 797 P.2d 229, 231; Taylor v. Koslosky (1991), 249 Mont. 215, 218, 814 P.2d 985, 987; In re Estate of Jochems (1992), 252 Mont. 24, 28, 826 P.2d 534, 535; Flikkema v. Kimm (1992), 255 Mont. 34, 40, 839 P.2d 1293, 1297; In re Estate of Lien (1995), 270 Mont. 295, 304, 892 P.2d 530, 535; In re Estate of DeCock (1996), 278 Mont. 437, 444-45, 925 P.2d 488, 492; In re Estate of Lande, 1999 MT 162, ¶ 42, 295 Mont. 160, ¶ 42, 983 P.2d 308, ¶ 42; and Luke v. Gager, 2000 MT 377, ¶ 35, 303 Mont. 474, ¶ 35, 16 P.3d 377, ¶ 35.

¶ 16 These statements, beginning in Christensen and ending in Luke, are overruled and we return to the standard expressed in Cameron: that a court may consider the five criteria in determining the existence of undue influence. The five criteria may, but need not, be present in any given undue influence case. The statutory requirements control. The five criteria are simply nonexclusive considerations available to guide the trial court in its application of the statutory requirements.

¶ 17 In determining that Mary's status as the beneficiary of the annuity was a result of undue influence, the District Court found all five criteria were present. Mary admits she had a confidential relationship with her son. As to the remaining four criteria, however, she disputes the court's determinations.

¶ 18 Mary contends there is no evidence in the record to support the court's determination that Daniel's physical and mental conditions made him susceptible to influence. In Conclusions of Law 7 and 8, the District Court determined:

7. The Decedent's physical condition affected his ability to withstand influence. The Decedent suffered from significant paralysis on his left arm and hand, a left-sided limp, and his cognition and memory were impaired.

8. The Decedent suffered from various mental conditions including narcissistic personality disorder and organic explosive

...