Ivie v. Smith
| Decision Date | 20 November 2013 |
| Docket Number | No. SD32222,SD32222 |
| Parties | RICHARD E. IVIE, JIMMIE R. IVIE, LADONNA SMALL, and BERNARD IVIE, Plaintiffs-Respondents, v. ARNOLD L. SMITH and SIDNEY B. SMITH, Defendants-Appellants. |
| Court | Missouri Court of Appeals |
APPEAL FROM THE CIRCUIT COURT OF SCOTT COUNTY
AFFIRMED
This appeal arises from the trial court's decision in a matter involving a trust and the beneficiary designations on several bank and retirement accounts. Patricia Watson ("Watson") created a trust in 2002. She later signed amendments to it in 2007 and 2008. During the winter of 2007 to 2008, Watson also signed changes to the pay on death beneficiary listed on a number of her accounts. Watson's husband, Arnold Smith ("Smith"), was the primarybeneficiary of these purported changes.1 Watson's siblings—Richard, Jimmie, Ladonna, and Bernard (collectively "the Ivies")—filed an action challenging these amendments to the trust and pay on death designations. The trial court found the trust amendments and beneficiary designation changes made by Watson to be void. Smith appeals raising seven points. Six of the points relate to the trial court's findings of undue influence and lack of testamentary capacity, and a seventh (Point V) relates to the application of an in terrorem clause contained in the trust amendments. We disagree with Smith's arguments and affirm the trial court's judgment.
"On review of a court-tried case, we will affirm the trial court's judgment unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law." Watermann v. Eleanor E. Fitzpatrick Revocable Living Trust, 369 S.W.3d 69, 75 (Mo. App. E.D. 2012). In conducting our review, "[w]e accept as true the evidence and inferences favorable to the prevailing party and disregard all contrary evidence." Id. Furthermore, "[w]e defer to the trial court's resolution of conflicts in the evidence and its assessment of witness credibility." Id. The following statement of facts has been prepared in accordance with the foregoing standard of review.
Watson was the older half-sister of the Ivies. The siblings lived together until Watson left home to attend high school. Watson became a teacher and later moved to California. Nevertheless, Watson retained close ties with the Ivies by talking on the phone with them and visiting them every summer. Although Watson had four different husbands at different times in her life, she had only one child, a daughter who was murdered in 1980.
Watson met Smith in March 2001. The two began dating and were married on February 20, 2002, in California. At the time of their marriage, Watson was 70 years old and Smith was 60 years old. Smith had no assets at the time because he had filed for bankruptcy in 1997.
On May 9, 2002, Watson executed a trust prepared for her by her attorney Reginald Young ("Young"). Various bank accounts and parcels of real estate were included in the trust estate. Under the terms of the trust, after Watson's death, the trust property was to be sold and the proceeds divided among the Ivies. The trust further provided:
The Grantor is married to Arnold L. Smith and the Grantor has no children. In preparing this Trust Agreement, the Grantor is aware of the existence of Arnold L. Smith and has remembered him with love and affection. It is expressly the Grantor's intention that her husband, Arnold L. Smith, not receive any part of the Trust Estate.
In January 2003, Watson visited her doctor, complaining, among other things, that Smith was trying to poison her. The physician suspected paranoia and made a referral to another doctor "for further recommendations."
Watson and Smith moved to Missouri in 2004 in part so Watson could be near the Ivies. She was already having trouble with memory and word recall. During this time, Watson told one of her brothers she thought she was losing hermind. Watson told her sister she wanted to divorce Smith because he had ruined her life. Watson believed Smith was misusing her money.
In February 2005, Watson reported her memory difficulties to her doctor. Her doctor prescribed Namenda, a drug used to treat moderate or severe dementia.
Watson continued to believe Smith was trying to poison her. In June 2005, one of her brothers took her to the doctor to assess the situation. The doctor did not believe Watson was being poisoned, but ordered some tests to assuage her fears. The results were within normal limits, although Watson was apparently not satisfied nor convinced by the test results.
During October 2005, Watson went to the Mayo Clinic for an extensive evaluation. When giving her history to the physician, Watson reported concerns about her memory. She said she could not think, and while she was able to perform daily activities, she did not take care of any of her finances. During the neuro-psychological consultation, the doctor spoke with Smith. Smith stated he had noticed a gradual worsening of Watson's word-finding abilities over the past six months. He reported Watson had difficulty figuring out instructions and remembering things she was told. He also stated Watson allowed him to take over the checkbook in 2004 because of her memory difficulties. During the neuro-psychological testing, Watson was impatient with long test instructions, and the instructions often needed to be simplified so she could understand. The results of the testing showed a mild to moderate degree of cognitive impairment. The report stated Watson would "require continued supervision and assistance with complex activities of daily living, including assistance with any medical,legal, or financial decision-making." The doctors concluded the cognitive difficulties were consistent with vascular dementia but recommended ongoing monitoring in case a degenerative process was involved.
In March 2006, Watson began seeing Dr. Fred Uthoff ("Dr. Uthoff"). In providing him her history, she stated she had one child who was alive and well. In October 2006, Dr. Uthoff diagnosed probable Alzheimer's dementia. A definitive diagnosis of Alzheimer's dementia was made in November 2006.
In May 2007, Watson attended a family celebration. At that celebration, Watson was unable to recognize several previously known family members.
On June 19, 2007, Dr. Uthoff admitted Watson to the Missouri Delta Medical Center for complications involving Watson's diabetes. Records from the hospital visit showed Watson experienced confusion and made inappropriate statements which suggested impaired memory during the hospitalization. Watson left the hospital against medical advice on June 29, 2007.
On July 27, 2007, Watson signed an amendment to the trust. The amendment, like the original trust, had been prepared by Young. Under the terms of the amendment, when Watson died, each of Watson's half-siblings would receive $25,000 and Smith would receive the remainder of the proceeds from the trust estate.
In November 2007, Watson began receiving in-home nursing care from Home Advantage Home Health Care Services. On November 11, 2007, Smith signed the documentation for the start of care because Watson had zero cognitive retention. The nurse reported Watson's dementia was poorly controlled. Watson answered questions inappropriately, was paranoid, and cried at inappropriatetimes. Watson needed assistance in grooming, dressing, and bathing. The nurses reported Watson experienced forgetfulness and mood swings. Watson had bouts of confusion and was dependent on Smith.
On December 7, 2007, Watson signed a change in the title on her Alliance Bank checking account and on her Alliance Bank money market account from her trust to herself individually with a pay on death designation in favor of Smith. On December 21, 2007, Watson signed a change to her Montgomery Bank savings account taking it out of the trust and putting it in her individual name with a pay on death designation in favor of Smith. On January 14, 2008, she signed a change in the beneficiary on her US Bank IRA from the trust to Smith.
Throughout the spring and early summer of 2008, the home health care nurses chronicled Watson's condition. In March 2008, the nurses reported Watson got lost in her own home and sometimes could not find the bathroom. On April 7, 2008, the nurse reported Watson was extremely upset, stating Smith was only with her for her money.
On June 5, 2008, Watson again entered the Missouri Delta Medical Center, this time because she had fallen and was unable to sit up, stand, or walk. On June 9, 2008, Watson "seemed confused about where she was and about her husband, her home and finances." Watson was discharged from the hospital on July 2, 2008.
That same day, Watson signed a second amendment to the trust. The second amendment to the trust was also prepared by Young. This amendment further reduced the shares of the trust estate the Ivies would receive. Under the second trust amendment, each of the Ivies would receive $5,000, Smith's sonfrom a previous marriage, Sydney B. Smith, would receive $5,000, and Smith would receive the remainder of the trust proceeds. Later that month the beneficiary on Watson's California State Teacher's Retirement ("CALSTRS") was changed from the Ivies to Smith.
Shortly thereafter, Smith sought several doctor's opinions regarding Watson's mental state. On July 22, 2008, Dr. Uthoff executed an affidavit stating Watson was "by reason of advanced age, physical incapacity or mental weakness, incapable of managing his or her own estate." Identical affidavits were executed by other doctors on August 27, 2008, September 20, 2008, September 30, 2008, and February 19, 2009.
Watson died on April 10, 2009. After her death, Smith obtained approximately $288,000 from her various bank accounts.
The Ivies then filed the instant action seeking to have the trust amendments and beneficiary designations set...
To continue reading
Request your trial