Kemp v. Kemp, 04CA011.

• Decision Date: 17 June 2005
• Docket Number: No. 04CA011.,04CA011.
• Citation: 831 N.E.2d 1038,2005 Ohio 3120,161 Ohio App.3d 671
• Parties: KEMP; Taylor, Appellee and Cross-Appellant, v. KEMP, Appellant and Cross-Appellee.
• Court: Ohio Supreme Court

831 N.E.2d 1038

161 Ohio App.3d 671

2005 Ohio 3120

KEMP; Taylor, Appellee and Cross-Appellant, v. KEMP, Appellant and Cross-Appellee.

No. 04CA011.

Court of Appeals of Ohio, Fifth District, Coshocton County.

Decided June 17, 2005.

COPYRIGHT MATERIAL OMITTED

William C. Hayes, Pataskala, for appellee and cross-appellant.

Thomas W. Fox, Dover, for appellant and cross-appellee.

HOFFMAN, Judge.

{¶ 1} Appellant and cross-appellee, Doris Pauline Kemp, appeals from the April 21, 2004 judgment entry of the Coshocton County Court of Common Pleas in favor of appellee and cross-appellant, Ronald Taylor. Taylor cross-appeals from that portion of the judgment entry in favor of Kemp.

STATEMENT OF THE FACTS AND CASE

{¶ 2} Prior to their marriage on September 28, 1992, Ralph E. Kemp and Doris Kemp executed a prenuptial agreement on July 10, 1992. No children were born of the marriage, but Ralph had a stepson, Ronald Taylor, from a previous marriage.

{¶ 3} On September 22, 2000, Ralph, who was in poor health, executed a power of attorney, giving Doris the authority to act on his behalf. On September 26, 2000, Doris used the power of attorney to close three bank accounts titled in Ralph's name, which held a total of approximately $82,000. She deposited the money in a separate bank account solely in her name.

{¶ 4} Ralph died on September 26, 2000. However, prior to his death and prior to executing the power of attorney, Ralph established or changed the beneficiary designations on several payable-on-death bank accounts, making Doris the beneficiary.

{¶ 5} On October 2, 2000, Doris applied to the probate court to be appointed as administrator of Ralph's estate, alleging that Ralph had died intestate. Doris did not inform the probate court of the premarital agreement, nor did she report the $82,000 that she had taken from Ralph's bank accounts on September 26, 2000.

{¶ 6} On February 11, 2001, Taylor filed a motion to remove Doris as administrator and to appoint a successor. On April 16, 2001, the court removed Doris as administrator and appointed attorney Timothy France. On August 24, 2001, Taylor applied to probate a lost, spoliated, or destroyed will. On February 28, 2002, a copy of a 1956 will of Ralph Kemp was admitted to probate. The 1956 will named Ralph's first wife, Ethel, as his sole heir and Taylor as the sole contingent beneficiary. As a result, Taylor was appointed executor of Ralph Kemp's estate on March 25, 2002.

{¶ 7} On March 28, 2002, Taylor filed a statutory action pursuant to R.C. 2109.50 against Doris. On July 25, 2002, the probate court entered judgment on the petition, ordering that the $82,000 withdrawn by Doris be returned to the estate. The probate court denied Taylor's remaining requests for recovery, including $229,000 from the payable-on-death accounts.

{¶ 8} On May 3, 2002, Taylor, individually, and Floyd Kemp filed a civil action in the court of common pleas seeking damages caused by Doris as a result of fraud, fraudulent conveyance, conversion, and intentional interference with the expectancy of inheritance. On February 10, 2003, they amended their complaint, adding Karma Miller and Allen Bickel as defendants. On November 17, 2003, Floyd Kemp voluntarily dismissed his claims against all parties, leaving Taylor as the sole plaintiff.

{¶ 9} On January 16, 2004, and January 22, 2004, the matter proceeded to a bench trial. On April 21, 2004, the trial court granted judgment in favor of Taylor against Doris in the amount of $270,000 and dismissed the complaint as to Bickel and Miller. The trial court further denied Taylor's demand for punitive damages and attorney's fees. On July 23, 2004, the trial court entered findings of fact and conclusions of law, which both parties stipulated to being transmitted to this court for inclusion in the appellate record.

{¶ 10} It is from the April 21, 2004 judgment entry of the Coshocton County Court of Common Pleas that both parties now appeal.

{¶ 11} Appellant and cross-appellee, Doris, assigns as error:

{¶ 12} "I. The trial court committed prejudicial error when it permitted hearsay testimony about Ralph Kemp's `probate avoidance and tax avoidance plan.'

{¶ 13} "II. The trial court's conclusion that Doris Kemp's breach of promise related to the [payable-on-death] bank accounts is not supported by the evidence."

{¶ 14} "III. The trial court's conclusion that Doris Kemp committed fraud by her promise of future conduct regarding the [payable-on-death] accounts is error as a matter of law."

{¶ 15} "IV. The trial court's conclusion that Ronald Taylor had a reasonably certain expectation of `inheritance' as it relates to the $229,000 in [payable-on-death] accounts is not supported by the evidence."

{¶ 16} "V. The trial court's conclusion that the plaintiff can recover non-probate assets by demonstrating the tort of `intentional interference with expectancy of inheritance' is error as a matter of law."

Assignment of Error No. I

{¶ 17} In the first assignment of error, Doris maintains that the trial court committed prejudicial error when it permitted attorney Paul Miller's hearsay testimony concerning Ralph Kemp's "probate avoidance and tax avoidance plan."

{¶ 18} Doris cites the following exchange at trial during examination of attorney Paul Miller:

{¶ 19} "Q. Did you participate in the implementation of the probate avoidance and tax avoidance plan in any respects with regard to the Belmont County real estate?

{¶ 20} "A. Yes. That was then a second item of discussion.

{¶ 21} "Q. All right. And what was the plan there? Was it any different from the plan with Nellie, or was it the same?

{¶ 22} "A. No, that was very different in that that property — he wanted that property to eventually —

{¶ 23} "MR. WRIGHT: Object.

{¶ 24} "THE COURT: What is the basis for your objection Mr. Wright?

{¶ 25} "MR. WRIGHT: Hearsay. I think the court's ruled and this would go back to the testimony of any statements made by the decedent.

{¶ 26} "THE COURT: The question was: `Did he express an intent as to what he wanted done with the Belmont property?' The witness may testify as to what he heard. The objection is overruled. You may answer.

{¶ 27} "A. He wanted the Belmont property to go to his stepson, Ron Taylor, whom I had never met before but I saw his name in the will.

{¶ 28} "Q. And that understanding was based on the conversations you had with him and directives that you had received from him?

{¶ 29} "A. That's true.

{¶ 30} "* * *

{¶ 31} "Q. Were there any discussions in your presence about the plan with the Belmont County property and the ultimate beneficiary and what was to happen as far as the transfer of the property?

{¶ 32} "A. Yes, we did discuss that and —

{¶ 33} "Q. — I would caution you not to say what Mr. Kemp said but what your understanding of the arrangement was to be as far as transfer.

{¶ 34} "A. My understanding was that the property was jointly titled with the specific understanding that at some time in the future if Pauline Kemp survives him, that it would be surveyed and transferred to Ronald Taylor, the stepson.

{¶ 35} "Q. To what extent did you hear any discussions between Mr. and Mrs. Kemp regarding this arrangement, and I'm interested in any comments Mrs. Kemp might have made to Mr. Kemp in that setting.

{¶ 36} "A. I was reluctant with this option that they chose, and we had extensive discussion. And Mrs. Kemp expressed no interest whatsoever in his property and also convinced me that she understood what her role would be as a fiduciary in carrying out this plan.

{¶ 37} "Q. Did she make any comments to Mr. Kemp about this plan?

{¶ 38} "A. Yes, she did.

{¶ 39} "Q. What did she say?

{¶ 40} "Q. `I will do whatever you ask me to do.'

{¶ 41} "Q. During this process, did Mrs. Kemp make any statements to you out of the presence of Mr. Kemp?

{¶ 42} "A. Yes, she did.

{¶ 43} "Q. And what were the circumstances there?

{¶ 44} "A. As I specifically recall, he excused himself from my conference room and went to the restroom. And it was on that occasion that I took the opportunity to talk to Mrs. Kemp about the decision he is about to make. And, at least from my perspective, I tried to emphasize the weightiness of the responsibility and to which I received affirmation, at least to my satisfaction, that she would do that.

{¶ 45} "Q. Now, then did these discussions occur, again, just in general time, the discussions about the Nellie and the Belmont County? Is this all happening at the same time?

{¶ 46} "A. Yes. Approximately the same time. See, one of the issues in the Nellie life estate was that I think there was also discussion with regard to Mrs. Kemp's estate, which was, from my perspective, always considered a separate situation. But there was discussion, as I recall, on the part of Mrs. Kemp, about transferring her assets, of which I didn't know what all the details were, but I was led to believe that it's real estate near Fender's Fish Hatchery and so forth, that she may be transferring it to her children. And if they live together in Nellie, well, at least my discussion with her with them was maybe she would be out of a home or something if he would die or whatever. And I think that's one of the reasons that we began to discuss that that should just be transferred to her outright.

{¶ 47} "Q. And, as I recall, you said those discussions were in the spring of 2000?

{¶ 48} "A. Yes, they were.

{¶ 49} "Q. And did you participate in the implementation of any probate and tax avoidance plan by assisting Mr. Kemp with any other assets?

{¶ 50} "A. No, I did not. Other than just a discussion — I think we did discuss forms of ownership.

{¶ 51} "Q. Did you inquire as to whether you were to assist with the probate and tax avoidance plan with any other assets, like bank accounts?

{¶ 52} "A. I don't know whether I specifically asked whether he wants my services, but I was advised that there were other assets, but I did not know the...