Keul v. Hodges Blvd. Presbyterian Church

• Decision Date: 24 November 2015
• Docket Number: No. 1D15–135.,1D15–135.
• Citation: 180 So.3d 1074
• Parties: Pennie L. KEUL, Appellant, v. HODGES BLVD. PRESBYTERIAN CHURCH, In re Estate of Aiko Okamua Lampp, Appellee.
• Court: Florida District Court of Appeals

180 So.3d 1074

Pennie L. KEUL, Appellant,

v.HODGES BLVD. PRESBYTERIAN CHURCH, In re Estate of Aiko Okamua Lampp, Appellee.

No. 1D15–135.

District Court of Appeal of Florida, First District.

Nov. 24, 2015.

Jeb T. Branham, Jacksonville Beach, for Appellant.

John F. Callender, Jacksonville, for Appellee.

KELSEY, J.

Appellant challenges the trial court's order requiring Appellant, as personal representative of the estate of Aiko Okamua Lampp, to return to the estate funds disbursed from Mrs. Lampp's credit union accounts. The trial court invalidated the payable-on-death (POD) designation pursuant to which the funds were disbursed to Appellant and her son, daughter, and former daughter-in-law, on grounds that Appellant had procured the POD designation through undue influence. Appellant argues that a POD designation cannot, as a matter of law, be invalidated for undue influence, and that the trial court also erred by requiring Appellant to return the funds to the estate instead of entering a money judgment against Appellant in the amount of the disbursed funds. We reject these arguments as well as Appellant's other arguments, and affirm.

Procurement of the POD Designation.

Mrs. Lampp and her late husband executed a family trust and pour-over wills in 2009, several months before he died. The trust document provided that, if Mr. Lampp died first, then upon Mrs. Lampp's death the entire estate would go to Appellee, Hodges Boulevard Presbyterian Church. When she died, Mrs. Lampp had $333,497.56 in Navy Federal Credit Union accounts that she had jointly owned with her husband before he died. Two disinterested witnesses testified that it was always Mrs. Lampp's intention to leave the entire estate to the church. No document existed purporting to take these accounts out of the estate left to the church—until a few days before Mrs. Lampp died.

The trial court found that Appellant had a fiduciary or confidential relationship with Mrs. Lampp, as her "neighbor, friend, paid caregiver, attorney in fact and health care surrogate." Appellant had hired her former daughter-in-law to help care for Mrs. Lampp. In contrast to the disinterested witnesses who testified that the entire estate was intended to go to the church, Appellant and her former daughter-in-law testified that Mrs. Lampp told them she did not want the church to have the money from the credit union accounts. They testified that Mrs. Lampp never expressed this contrary intention in the presence of other people. They said that Mrs. Lampp asked Appellant to get a POD form from the credit union and fill it out to give Appellant 75% of the credit union accounts, 10% each to Appellant's son and daughter, and the remaining 5% to Appellant's former daughter-in-law. Appellant obtained the POD form and completed it in this manner, with the beneficiary information appearing only on the first page of the form. Appellant obtained Mrs. Lampp's signature on the second page. The trial court found that Mrs. Lampp did not lack mental capacity at the time she signed the POD form. Appellant procured the POD designation, however, while Mrs. Lampp was suffering from her final illness, the symptoms of which were worsening; and only days before her death at age 87.

Appellant's former daughter-in-law took the POD form back to the credit union the next day, which was the day Mrs. Lampp was hospitalized because of her final illness. After Mrs. Lampp died, and about a week after Appellant was appointed personal representative of the estate, the credit union disbursed the credit union account funds pursuant to the POD designation.

The church filed an Objection to Inventory and petition to remove Appellant as personal representative, arguing that Appellant had wrongfully failed to include the credit union accounts in the inventory. The trial court "evaluated the credibility of the testimony of [Appellant and her former daughter-in-law] on these points and [ ] found it unconvincing." The court found that Appellant used her confidential relationship with Mrs. Lampp and actively procured the gift at issue. As a result of its findings, the court invalidated the POD designation and removed Appellant as personal representative.

Invalidating A POD For Undue Influence.

Contrary to Appellant's arguments, Florida law allows a POD designation to be invalidated for undue influence. Florida has a legitimate public policy interest in preventing abuse of fiduciary or confidential relationships, and has codified this interest and protected it through case law. See, e.g., § 733.107, Fla. Stat. (2013) (implementing "public policy against abuse of fiduciary or confidential relationships"); In re Estate of Carpenter, 253 So.2d 697, 701 (Fla.1971) ("[I]f a substantial beneficiary under a will occupies a confidential relationship with the testator and is active in procuring the contested will, the presumption of undue influence arises.").

A POD designation or Totten trust,¹ like a transfer-on-death (TOD) provision, is a "will substitute" that does not transfer ownership of funds until the death of the account holder. E.g., Blechman v. Estate of Blechman, 160 So.3d 152, 157 (Fla. 4th DCA 2015) (recognizing the existence of these and other will substitutes). These are generally considered inter vivos transfers, although they also have attributes of testamentary transfers because they have no effect until the death of the owner. Under Florida law, they are subject to challenge on grounds such as undue influence, fraud, duress, and overreaching. See, e.g., Cripe v. Atl. First Nat'l Bank of Daytona Beach, 422 So.2d 820, 823 (Fla.1982) (finding a joint account invalid as the result of undue influence); Estate of Kester v. Rocco, 117 So.3d 1196, 1200 (Fla. 1st DCA 2013) (applying undue influence analysis to ownership of POD accounts, among others); Laushway v. Onofrio, 670 So.2d 1135, 1136 (Fla. 5th DCA 1996) (holding probate court had authority to invalidate inter vivos gifts procured by undue influence); Fogel v. Swann, 523 So.2d 1227, 1229 (Fla. 3d DCA 1988) (holding that Carpenter applies to inter vivos transfers); Majorana v. Constantine, 318 So.2d 185, 186 (Fla. 2d DCA 1975) (applying will contest principles to inter vivos gifts); Pate v. Mellen, 275 So.2d 562, 565 (Fla. 1st DCA 1973) (On Petition for Rehearing) (holding that Carpenter applied to dispute about validity of decedent's signatures on inter vivos gifts).

Pursuant to these authorities and the guiding principles they apply, we affirm the trial court's conclusion that a POD designation can be challenged on grounds of undue influence. On these facts, we agree with the trial court's conclusion that Appellant failed to prove that the POD designation was not obtained by undue influence; and that even if the burden of proof had remained with the church, the church had met its burden of proving undue influence that invalidated the POD designation.

Appellant misplaces reliance on our decision in Brown v. Brown, 149 So.3d 108 (Fla. 1st DCA 2014). The issue in Brown was whether the decedent's intent in establishing joint accounts was consistent with property distribution provisions in her will. We held that the magistrate incorrectly applied section 655.79 of the Florida Statutes, as it relates to ownership of funds after death of any joint account owner, to POD designations. Brown did not involve, and does not preclude, an undue influence challenge to a POD designation.

Likewise, Appellant misplaces reliance on the absence of express undue influence provisions in Florida's banking law on POD designations. The banking statute, section 655.82 of the Florida Statutes, defines a POD designation; and further provides that, "On the death of the sole party or the last survivor of two or more parties, sums on deposit belong to the surviving beneficiary or beneficiaries." § 655.82(3)(b), Fla. Stat. (2013). Appellant argues that a POD designation cannot be invalidated for undue influence because this statute does not contain the same undue influence provision that the Florida Probate Code contains. The fact that the banking regulatory statute does not expressly address grounds for invalidating a POD designation is not controlling. Seymour v. Seymour, 85 So.2d 726, 727 (Fla.1956) (holding that banking laws, designed primarily to regulate banks, "are not necessarily conclusive of the ownership of deposited money"). We reject Appellant's argument because a POD account, although not in the strictest sense a testamentary device and not subject to the formalities required of wills, functions as a will substitute and partakes of many of the same...