In re Rudell Estate

• Decision Date: 10 December 2009
• Docket Number: Docket No. 287330,287332.
• Citation: In re Rudell Estate, 780 N.W.2d 884, 286 Mich. App. 391 (Mich. App. 2009)
• Court: Court of Appeal of Michigan
• Parties: In re RUDELL ESTATE. In re Rudell Trust.

780 N.W.2d 884

286 Mich. App. 391

In re RUDELL ESTATEIn re Rudell Trust.

Docket Nos. 287330, 287332.

Court of Appeals of Michigan.

Submitted November 3, 2009, at Detroit.

Decided December 10, 2009, at 9:00 a.m.

COPYRIGHT MATERIAL OMITTED

The Giles Law Firm(by Thomas V. Giles and Molly Giles), Birmingham, and Jaffe, Raitt, Heuer & Weiss, P.C.(by Brian G. Shannon and Elizabeth Luckenbach Brown), Southfield, for petitioner.

Lauren M. Underwood, P.C.(by Lauren M. Underwood, Priscilla V. Hirt, Bingham Farms, and Kristin A. Edwards), for respondent.

Before: SHAPIRO, P.J. and JANSEN and BECKERING, JJ.

JANSEN, J.

In these consolidated appeals, respondentWilliam A. Rudell appeals by right the probate court's order quieting title to a certain parcel of real property in the Jane E. Rudell Trust (the trust).¹For the reasons set forth in this opinion, we reverse and remand for further proceedings.

I.BASIC FACTS AND PROCEDURAL HISTORY

Jane E. Rudell(the decedent) died testate on July 2, 2003.The decedent was survived by her daughter Carla Bufe, her son William A. Rudell, and two children of her deceased daughter Lucinda Maunder.The decedent's will was admitted to probate in October 2003.The will listed the trust as the sole residual beneficiary of the decedent's estate.PetitionerCarla Bufe is both the personal representative of the decedent's estate and a trustee of the trust.

During her lifetime, the decedent owned a certain parcel of residential real property located at 1170 Chesterfield in Birmingham, Michigan (the property).In 1982, the decedent properly transferred ownership of the property to the trust.According to the complaint filed in this matter, the decedent began to exhibit symptoms of dementia and had become mentally incapacitated by 1999.Between 1999 and the time of the decedent's death in 2003, respondentWilliam A. Rudell cared for the decedent and managed her financial and personal affairs.According to petitioner, the decedent's memory had greatly deteriorated by this time.For example, petitioner alleged that the decedent had forgotten how to sign her name on a check and had begun referring to respondent as her "husband," even though he was actually her son.Petitioner asserted that the decedent "required 24-hour supervision due to her feeble and infirm condition...."It is beyond serious factual dispute that respondent provided such 24-hour supervision during the final years of the decedent's life.

A quitclaim deed was executed on February 6, 2000, purporting to transfer the property from the trust to "Jane E. Rudell, a single woman" for the consideration of ten dollars.The quitclaim deed was signed by the decedent as a "Trustee" of the trust.The deed was witnessed and signed by Harold J. Meloche and Susan Joyce Everhart.A second quitclaim deed was also executed on February 6, 2000.This second deed purportedly transferred the property from the decedent to respondent for the consideration of "$400,000 paid by the respondent."The second deed was signed by the decedent in her individual capacity.Like the first deed, the second deed was also witnessed and signed by Harold J. Meloche and Susan Joyce Everhart.Everhart, who was a notary public, notarized both deeds.

Neither the first deed nor the second deed was recorded during the decedent's lifetime.Respondent recorded the deeds on July 2, 2003, the very day of the decedent's death.A real estate transfer tax of $440 was paid on the second deed.Following the decedent's death, respondent claimed exclusive fee simple ownership of the property.

Petitioner, as personal representative of the estate and as trustee of the trust, sued in October 2003, alleging, among other things, that the property had never been properly transferred to respondent.In count II of the amended complaint, petitioner alleged that respondent had never paid the decedent the consideration of $400,000 due under the second deed.Petitioner further alleged that "on the dates set forth in the purported deeds, the decedent was not of sound mind nor of sufficient competence to execute such conveyances," that the decedent "never intended to vest respondent with sole and exclusive fee simple ownership of her residence, thereby disinheriting the other surviving members of her family," that "the deeds, themselves, and the circumstances surrounding their execution, lack circumstantial guarantees of trustworthiness required to evidence the decedent's purported intent to transfer her residence outright to respondent as the sole and exclusive owner of the property," and that respondent had procured the deeds through "fraud, overreaching, undue influence and/or coercion...."Petitioner asserted that the deeds were "invalid and of no legal force or effect," and that title to the property should therefore be returned to and quieted in the trust or the estate.²

During discovery, in response to petitioner's requests for admission, respondent admitted that he had "never paid Jane E. Rudell $400,000.00 in exchange for all her rights, title and interest in the Property" and that he had "never paid Jane E. Rudell or any Trustee of the Jane E. Rudell Trust $400,000.00 for any ... rights, title and interest in the Property."However, respondent denied petitioner's suggestion that the decedent had been "incapable of managing her own financial affairs" at the time the deeds were executed.In response to petitioner's first set of interrogatories, respondent asserted that he had received the property as a "gift" from the decedent on February 6, 2000.

On June 15, 2005, petitioner moved for summary disposition of count I of the complaint pursuant to MCR 2.116(C)(10).Petitioner contested respondent's assertion that the property had been given as a gift.Petitioner argued that such an assertion was unsupported by the record because there was no evidence that the decedent had acted with donative intent.Moreover, petitioner argued that respondent had never paid the decedent the $400,000 due under the second deed.Accordingly, petitioner asserted that the deed was invalid for failure of consideration.

Petitioner submitted medical records indicating that, as of 1999, the decedent was "suffering from multi-infarct dementia," was "mildly confused," was suffering from "episodes of confusion and memory loss," and had occasional "difficulty expressing herself."Petitioner also argued that it was highly unlikely that the decedent had given her principal residence to respondent as a gift because such a large gift, as compared to the decedent's relatively few other assets, "would have dispossessed Mrs. Rudell of 80% of her assets, rendering her virtually indigent."Petitioner pointed to the terms of the decedent's trust, which expressed an intent that the decedent's surviving children Carla Bufe and William A. Rudell would share equally in her assets upon her death.³Petitioner argued that because the property was far and away the decedent's single largest asset, a gratuitous transfer of the property to respondent would have defeated this intent.

Petitioner noted that respondent had paid a real estate transfer tax of $440 at the time the second deed was recorded.According to petitioner, this tax payment established that the property was sold to respondent for value rather than given to him as a gift.Petitioner also argued that the second deed's recital of valuable consideration in the amount of $400,000 was unmistakable evidence that the decedent had intended to sell the property to respondent rather than give it to him as a gift.Petitioner contended that respondent could not demonstrate that the decedent had orally waived the $400,000 price because evidence of any such oral waiver would violate the statute of frauds.

Respondent opposed petitioner's motion.He noted that he had been the decedent's caretaker for the final years of her life and asserted that the decedent had given him the property as a gift.Respondent argued that the decedent was not mentally infirm at the time the deeds were executed in February 2000, and contended that she had been fully aware that she was transferring the property to him as a gift.According to respondent, it was petitioner's "burden to come forward with something that would indicate that the decedent didn't want respondent to have the property, and she hasn't met that burden."In response to petitioner's motion, respondent submitted his own affidavit, as well as the affidavits of Harold J. Meloche and Susan Joyce Everhart.

Respondent averred in his affidavit that "Mom wanted to put the property in my name because I promised to take care of her until the day she died, and that she would never go into a nursing home."According to respondent, petitioner insisted that the decedent should be placed in a nursing home, and this "scared" the decedent.Respondent averred that petitioner's insistence on placing the decedent in a nursing home caused the decedent to change her mind about the terms of her trust; respondent contended that the decedent no longer "wanted petitioner to have anything" but "did not trust her attorney to write the trust up this way."However, according to respondent, the decedent "knew that if the house was in my name, I would get it and petitioner would not.She knew she could put the house in my name and she would not have to change her trust."Respondent maintained that the decedent had given him the property as a gift and that the decedent had been coherent and lucid at the time the deeds were executed in February 2000.According to respondent, "Mom knew that I was not paying her $400,000, she did not want any money from me.She wanted me to have the house as a gift."

Harold J. Meloche averred that he had known the decedent since 1980 and had been present in the decedent's home on multiple occasions.Meloche asserted that he was physically present at the time the deeds were executed on February 6, 2000, and that he...