Krischbaum v. Dillon

• Decision Date: 13 March 1991
• Docket Number: No. 89-1585,89-1585
• Citation: 567 N.E.2d 1291,58 Ohio St.3d 58
• Parties: KRISCHBAUM et al., Appellants and Cross-Appellees, v. DILLON et al., Appellees and Cross-Appellants.
• Court: Ohio Supreme Court

Page 58

58 Ohio St.3d 58

567 N.E.2d 1291

KRISCHBAUM et al., Appellants and Cross-Appellees, v. DILLON et al., Appellees and Cross-Appellants.

No. 89-1585.

Supreme Court of Ohio.

Submitted Oct. 16, 1990.

Decided March 13, 1991.

Syllabus by the Court

1. A presumption of undue influence, rebuttable by a preponderance of the evidence, arises when (i) the relationship of attorney and client exists between a testator and an attorney, (ii) the attorney is named as a beneficiary in the will, (iii) the attorney/beneficiary is not related by blood or marriage to the testator, and (iv) the attorney/beneficiary actively participates in the preparation of the will.

2. Although R.C. 2107.74 provides that the order admitting a will to probate is prima facie evidence of the attestation, execution and validity of the will, that section does not create an irrebuttable presumption of validity.

3. Findings of fact made in one judicial or quasi-judicial proceeding are not admissible evidence in a second proceeding that does not involve the same parties, because to admit the findings of fact in evidence would be to invade the province of the finder of fact in the second proceeding.

4. Norms of behavior prescribed in the Code of Professional Responsibility are relevant to the issue of whether an attorney has brought undue influence to bear upon a testator.

5. Contestants in a will contest action who reach agreement with fewer than all the legatees do not necessarily hold both under and against a will.

6. When, after the commencement of a will contest action, the probate court substitutes an administrator with will annexed for the executor originally appointed, and further substitutes the administrator with will annexed as a party in the will contest action, the probate court does not lose jurisdiction simply because no motion to substitute the administrator as a party has been served upon the other parties.

Charles B., Ronald J. and Richard D. Krischbaum, plaintiffs-appellants and cross-appellees (hereinafter "contestants"), are the nephews and sole heirs at law of Daniel A. Krischbaum, who died testate on January 9, 1985, leaving an estate worth approximately $277,000. Defendant-appellee and cross-appellant Michael E. Dillon and Nelson H. Riker, deceased, are the sole beneficiaries under Daniel Krischbaum's will, which was prepared by Dillon, an Ohio attorney, and was executed on May 11, 1981. Riker was named executor in the will.

In December 1977, Dillon was contacted by Riker, an officer of First Federal Savings & Loan Co. in Findlay, Ohio, to prepare a power of attorney for Daniel Krischbaum ("Krischbaum"), giving Riker blanket authority to conduct Krischbaum's business and financial affairs. Riker introduced Dillon to Krischbaum, who had been admitted to Marlesta Nursing Home. The power of attorney was prepared by Dillon, and was executed on December 30, 1977. Krischbaum kept a passbook deposit at First Federal worth approximately $240,000, representing the proceeds of the sale of the Krischbaum farm after Krischbaum's wife died.

Dillon talked to Riker in 1980 about obtaining a loan to purchase a building in Findlay suitable for a law office. Riker used his power of attorney to make an $80,000 loan to Dillon from Krischbaum's savings account. The only security for the loan was Dillon's promissory note in the amount of $80,000 at twelve percent interest for a twenty-year term. Dillon and Riker testified at trial that Krischbaum had agreed to the loan. After one year, Dillon did not make any further payments of interest or principal on the note.

In May 1983, Dillon borrowed an additional $5,000 at five and one-half percent interest, due and payable in one year. No payments were made on this note.

Dillon visited Krischbaum three to four times a year, and during some of these visits the subject of a will was discussed. In May 1981, Dillon prepared a will for Krischbaum, which will was executed on May 11, 1981. Dillon testified that he researched Ohio law prior to drafting the will and concluded that a presumption of undue influence does not arise simply because a beneficiary drafts a will.

The will contained a bequest leaving the residue of the estate, after payment of debts and expenses, to Dillon and Riker equally. The will was kept at Riker's office at First Federal. Although Dillon testified that he urged Krischbaum to secure independent legal advice concerning the disposition of his estate, Krischbaum did not seek or obtain legal advice from any source other than Dillon.

At various times from September 1981 until December 1984, Riker made loans to himself totalling $19,000 from Krischbaum's savings account, acting under the authority granted by the power of attorney. Riker secured these loans with ten promissory notes, at six percent interest, payable on demand. No payments were ever made on these notes. All notes were held by Riker. The testimony of Dillon and Riker indicated that Krischbaum agreed to all the loans made from his savings account.

On January 9, 1985, Krischbaum died, testate by virtue of the will prepared by Dillon. The will was admitted to probate on January 22, 1985. The contestants filed a complaint against Dillon and Riker, individually and as executor of the estate, contesting the validity of Krischbaum's will, alleging lack of testamentary capacity to execute the will and undue influence. Dillon and Riker denied the allegations.

Prior to trial, Riker was removed as executor of the estate by the probate court. During the hearing, the probate court said that it was removing Riker as executor in order to avoid any appearance of a conflict of interest and that it was not making any allegation or finding of wrongdoing on Riker's part. This decision was affirmed on appeal. ¹ John H. Koehler was appointed administrator, with will annexed, in place of Riker, and Koehler entered his notice of appearance. The weekend before trial, Riker and the contestants reached a settlement agreement in which the contestants agreed that Riker was entitled to one half of the residuary estate, in exchange for Riker's agreement to pay them the sum of $45,000 out of his half of the residue. The agreement also provided that Riker's attorney would not participate in the trial as between Dillon and the contestants, but it did not purport to restrict or otherwise affect Riker's testimony as a witness at the trial. At trial, Riker testified in Dillon's behalf.

The jury returned a verdict in Dillon's favor. The trial court denied the contestants' motions for a new trial and for judgment notwithstanding the verdict. The contestants appealed both from the judgment on the verdict and from the denial of their motions, asserting eleven assignments of error. Dillon cross-appealed, asserting three assignments of error. The court of appeals overruled all assignments of error and affirmed the judgment of the trial court. This cause is now before us pursuant to the allowance of a motion and a cross-motion to certify the record.

Firmin, Sprague & Huffman Co., L.P.A., John C. Firmin and Thomas P. Kemp, Findlay, for appellants and cross-appellees.

Hackenberg, Beutler & Rasmussen and Robert A. Beutler, Jr., Findlay, for appellees and cross-appellants.

MIKE FAIN, Judge.

The principal issue in this case is whether a rebuttable presumption of undue influence should arise whenever an attorney, unrelated to a testator by blood or marriage, prepares a will in which he or she is named as a beneficiary. We answer this question in the affirmative.

I

We start by considering the contestants' fourth proposition of law, in which they contend that a presumption of undue influence arises whenever an attorney at law assists a client in the preparation of a will, and the attorney, who is not related to the testator by blood or by marriage, is a beneficiary under the will. The contestants claim that the trial court erred when it refused to charge the jury with either of their alternatively proposed jury instructions on the presumption of undue influence. ²

A

Dillon initially contends that contestants failed to preserve this issue of presumption of undue influence for review in accordance with Civ.R. 51(A). ³

Dillon maintains that because the contestants failed to object to the given jury instructions, they are precluded from asserting as error the failure of the trial court to give the proposed jury instructions.

Where the record affirmatively shows that a trial court has been fully apprised of the correct law governing a material issue in dispute, and that the complaining party has unsuccessfully requested the inclusion of that law in the trial court's charge to the jury, that party does not waive his objection to the court's charge by failing to make a formal objection to the charge as actually given by the trial court. Presley v. Norwood (1973), 36 Ohio St.2d 29, 65 O.O.2d 129, 303 N.E.2d 81, paragraph one of the syllabus. The purpose of Civ.R. 51(A) is to provide a trial court with an opportunity to correct any errors in the instructions as given, and that purpose is fully served where the appellant has formally requested an instruction to the contrary, and the issue has been argued to the trial court.

Krischbaum did not formally object to the trial court's failure to give the proposed jury instructions at issue or to the instructions the trial court gave the jury prior to retiring. However, the trial court and counsel for the parties engaged in a lengthy discussion regarding the proposed instructions at issue, making their positions clear to the trial court. Therefore, we agree with the court of appeals that Krischbaum did not waive his objections to the trial court's refusal to give the proposed instructions when he did not formally object to the given charge.

B

Although we have not addressed this issue of presumption of undue influence previously, Ohio appellate courts considering the issue have declined to hold that a...