Malousek v. Meyer

• Decision Date: 30 July 2021
• Docket Number: No. S-20-470.,S-20-470.
• Citation: 309 Neb. 803,962 N.W.2d 676
• Parties: Mark J. MALOUSEK, Successor to Eric Rees, as Special Administrator of the Estate of Molly R. Stacey, deceased, et al., appellees and cross-appellants, v. Steven Greg MEYER and Mark A. Meyer, appellants and cross-appellees.
• Court: Nebraska Supreme Court

309 Neb. 803

962 N.W.2d 676

Mark J. MALOUSEK, Successor to Eric Rees, as Special Administrator of the Estate of Molly R. Stacey, deceased, et al., appellees and cross-appellants,

v.Steven Greg MEYER and Mark A. Meyer, appellants and cross-appellees.

No. S-20-470.

Supreme Court of Nebraska.

Filed July 30, 2021

Travis M. Jacott, Patrick J. Sullivan, and C.G. (Dooley) Jolly, of Adams & Sullivan, P.C., L.L.O., Papillion, for appellants.

Thomas M. White and Amy S. Jorgensen, Omaha, of White & Jorgensen, for appellees.

Mark J. Malousek, pro se.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Papik, J. Steven Greg Meyer (Greg) and his adult son, Mark A. Meyer, appeal an order of the district court for Sarpy County that declared the marriage between Greg and Molly R. Stacey, deceased, to be null and void and ordered them to execute instruments to relinquish certain property interests they obtained from Molly before her death. They contend that Molly's children lack standing to challenge certain transactions at issue and that the party that had standing to challenge those transactions, the special administrator of Molly's estate, did not join the action. Greg and Mark also allege that the district court incorrectly found that Molly lacked the requisite mental capacity and acted under undue influence. Finding no error by the district court on these issues, we affirm in part.

Molly's children and the special administrator of her estate cross-appeal, assigning that the district court erred in failing to rule that a boat Molly purchased and titled in Mark's name should be regarded as held in a resulting trust by Mark for Molly's benefit. We agree and in part reverse, and remand with directions.

I. BACKGROUND

Molly and Greg began living together, unmarried, in 2009. Each had children from previous marriages. In 2015, Molly was diagnosed with cancer

and underwent treatment, but the cancer spread and her condition deteriorated. On October 12, 2017, with Greg's involvement, Molly made Greg a joint owner on two of her bank accounts. On October 14, Molly and Greg married. In the following days, again with Greg's involvement, Molly changed beneficiary designations on other accounts and an insurance policy to favor Greg, rather than her adult children, or to include Mark; executed quitclaim deeds in both her homes to vest ownership in Greg upon her death; and changed a recently executed power of attorney from her son to Greg. On October 23, Molly died intestate. She was 60 years old.

Molly's adult children, Austin J. Stacey (A.J.) and Courtney R. Stacey, believed that Molly's actions in October 2017 resulted from undue influence and that she lacked capacity due to her illness. They filed a declaratory judgment action in the district court against Greg and Mark seeking declarations that all of the above property interest changes and the marriage of Molly and Greg were void and invalid. Greg and Mark responded with motions and pleadings alleging that Molly's children were not the real parties in interest and seeking dismissal of the complaint for lack of standing. The district court denied the motions to dismiss.

Later in the action, Molly's children obtained leave to file an amended complaint in which the special administrator of Molly's estate would be joined as an additional plaintiff. In the ensuing second amended complaint, Molly's children and the special administrator added allegations that a boat Molly had purchased was titled in Mark's name by Molly in 2015 and that the boat belonged to Molly when she died.

Following a trial, the district court generally found in favor of Molly's children and the special administrator, whom the court recognized as the plaintiffs. It expressly found their witnesses more credible than Greg and Mark's and determined that Molly's children and the special administrator had met their burden of proving that the marriage and the October 2017 transactions were procured by undue influence by Greg or his family and while Molly lacked mental capacity. However, the district court concluded that the boat purchased by Molly and titled in Mark's name was a gift and declined to find that it amounted to a resulting trust. It declared the marriage null and void and ordered Greg and Mark to execute any instruments necessary to convey interests they had acquired to Molly's children and her estate, with the exception of the boat.

Greg and Mark appealed, asserting that the district court had erred in its findings that did not involve the boat. Molly's children and the special administrator have cross-appealed to challenge the district court's ruling as to the boat.

II. ASSIGNMENTS OF ERROR

Greg and Mark assign that the district court erred in (1) holding that Molly's children had standing to challenge the validity of the real and personal property transfers Molly made, (2) holding that Molly's estate is a party to the action, (3) applying a greater weight of the evidence standard to claims of undue influence and lack of mental capacity rather than a clear and convincing evidence standard, and (4) making the factual finding that Molly lacked mental capacity and was subject to undue influence.

On cross-appeal, Molly's children and the special administrator assign that the district court erred in (1) imposing a duty on them to prove that the boat was not a gift from Molly to Mark to avoid it being held in a resulting trust and (2) failing to hold that Mark held title to the boat as trustee for Molly's benefit.

III. STANDARD OF REVIEW

We address the relevant standard of review in each subsection of the analysis below.

IV. ANALYSIS

1. JURISDICTION

In Greg and Mark's first two assigned errors, they contend that Molly's children did not have standing to challenge Molly's real and personal property transfers and that the party with standing to challenge those transactions—the special administrator of Molly's estate—was not a party to the action. The question of whether a party who commences an action has standing and is therefore the real party in interest presents a jurisdictional issue. Valley Boys v. American Family Ins. Co. , 306 Neb. 928, 947 N.W.2d 856 (2020). Therefore, we consider this issue first.

(a) Additional Background

As noted above, Molly's children alone initiated the declaratory judgment action. They did so before any special administrator or personal representative was appointed for Molly's estate. However, after Greg and Mark filed answers and motions to dismiss alleging that Molly's children were not real parties in interest and lacked standing to commence the suit, Molly's children sought and obtained leave to add the special administrator of Molly's estate, Eric Rees, as a plaintiff. Their motion asserted that the special administrator was recently appointed, had an interest in the proceeding, and was a necessary party.

The resulting second amended complaint named the special administrator as a plaintiff and stated that his "presence in this action is nominal only, and solely for the purpose of allowing an action to proceed to determine the nature and extent of the probate estate of Molly." All requests for relief and supporting legal conclusions were by "Plaintiffs." Rees signed the second amended complaint as special administrator, along with the attorney representing Molly's children.

At the opening of trial, the district court invited the parties to address preliminary matters. Mark Malousek, Rees’ successor as special administrator, identified himself as acting special administrator and responded, "I hereby will adopt the arguments and claims of [Molly's children]." Greg and Mark's counsel objected, referred to their arguments based on standing, and noted that the estate had not filed any "affirmative pleadings."

In its order following trial, the district court explained that it was not persuaded by Greg and Mark's arguments regarding standing. It recognized Molly's estate as a full party to the action that had, at the beginning of trial, adopted all claims made by Molly's children.

(b) Standard of Review

[2] Standing is a jurisdictional component of a party's case, because only a party who has standing may invoke the jurisdiction of a court; determination of a jurisdictional issue which does not involve a factual dispute is a matter of law which requires an appellate court to reach its conclusions independent from those of a trial court. Egan v. County of Lancaster , 308 Neb. 48, 952 N.W.2d 664 (2020).

(c) Analysis

Greg and Mark's argument that Molly's children lacked standing to challenge Molly's real and personal property transfers is based on our decision in In re Estate of Hedke , 278 Neb. 727, 775 N.W.2d 13 (2009). In that case, we held that under the Nebraska Probate Code, the right and duty to sue and recover assets for an estate reside in the estate's appointed personal representative, not the devisees. Id. We went on to explain that the Nebraska Probate Code allows for the appointment of a special administrator to administer an estate when a personal representative cannot or should not act. There is no dispute that a special administrator was appointed to administer Molly's estate.

We agree with Greg and Mark that under In re Estate of Hedke , any claims to recover assets for Molly's estate could have been brought only by the special administrator of the estate. For reasons we will explain, however, that does not lead to the conclusion that the district court lacked jurisdiction.

First, Greg and Mark do not dispute that Molly's children were the proper parties to assert some of the claims at issue notwithstanding our decision in In re Estate of Hedke . For example, the operative complaint sought to void changes to the beneficiary designations on Molly's life insurance policy from Molly's children alone to include Mark as well. Life insurance benefits are generally a type of nonprobate transfer and would thus not pass through Molly's estate. See, e.g., In re Trust of...