Moore v. Moore

• Decision Date: 24 August 2018
• Docket Number: No. 117,499,117,499
• Citation: 429 P.3d 607
• Parties: John A. MOORE and Joyce E. Moore Trust, Joyce E. Moore, Trustee, and Joyce E. Moore, Individually, Appellants, v. Jebidiah MOORE and Steven L. Moore, Appellees.
• Court: Kansas Court of Appeals

429 P.3d 607

John A. MOORE and Joyce E. Moore Trust, Joyce E. Moore, Trustee, and Joyce E. Moore, Individually, Appellants,

v.Jebidiah MOORE and Steven L. Moore, Appellees.

No. 117,499

Court of Appeals of Kansas.

Opinion filed August 24, 2018.

Michael R. Ong and Caroline Ong, of Ong Law Firm, P.A., of Overland Park, for appellants.

John W. Fresh, of Farris & Fresh Law Offices, of Atchison, for appellees.

Before Atcheson, P.J., Pierron and Standridge, JJ.

Atcheson, J.:

SUMMARY OF CASE AND DISPOSITION

The central issue in this case turns on whether Steven Moore manipulated John and Joyce Moore, his parents, to part with land they owned, thereby gutting a trust they had set up as an estate plan to benefit all four of their children. Joyce contends Steven beset John on his deathbed and exploited her depleted physical and emotional condition to get them to sign a contract selling their homestead to his son (and their grandson) Jebediah Moore. She says that several months later Steven improperly induced her to sell farmland to Jebediah. Those two contracts enabled Jebediah to acquire real estate worth $1.4 million with a down payment of $25,000 and an agreement to pay Joyce and the trust an additional $377,000 over as long as 30 years at nominal interest. Those transactions left Joyce with little of immediate value to pass on to her other children or grandchildren.

Joyce and the trust she and John established sued Steven and Jebediah in Brown County District Court in September 2015 to set aside the two contracts. Joyce and the trust have been jointly represented throughout this case and are united in legal interest, so from here on we dispense with repeated references to the trust as a distinct party. Steven and Jebediah are similarly unified in their defense, and the evidence points to Steven as the driving force behind the transactions. At trial, about a year later, Joyce specifically claimed that she and John lacked the capacity to enter into the contract for the homestead and she lacked the capacity to sell the farmland. She pressed an alternative claim that the contracts should be set aside because Steven exerted undue influence over John and her after cultivating their confidence that he would look out for their best interests. The jury considered four specific claims: (1) Whether John and Joyce had the capacity to enter into the contract to sell their homestead to Jebediah; (2) whether Joyce had the capacity to enter into the contract to sell farmland to Jebediah; (3) whether Steven unduly influenced John and Joyce to sell their homestead to Jebediah; and (4) whether Steven unduly influenced Joyce to sell farmland to Jebediah.

As we explain, the district court incorrectly instructed the jury in a way materially disadvantaging Joyce on her undue influence claims, rendering its verdicts in favor of Steven and Jebediah on that theory deficient. We, therefore, reverse that part of the judgment the district court entered for Steven and Jebediah and remand the case with directions. On appeal, Joyce also disputed the jury verdicts for Steven and Jebediah on the claim she and John lacked the capacity to enter into the contracts. We find her arguments do not require reversal of those verdicts and affirm that part of the judgment.

Because Joyce pursued equitable claims rooted in upending the contracts rather than legal claims for monetary damages and Steven and Jebediah asserted no counterclaims, no one was entitled to a jury trial as a matter of right then or now. The parties were and are owed a fair hearing of their dispute in front of the district court sitting as the finder of fact—that is, in a bench trial. On remand, a new trial is unnecessary. The district court should promptly make findings of fact and conclusions of law resolving Joyce's undue influence claims based on the evidence admitted during the jury trial and consistent with this opinion. That directive corrects for the erroneous jury result and affords the parties the fact-finding they have always been procedurally due.

REVERSIBLE INSTRUCTIONAL ERROR ON UNDUE INFLUENCE

District Court Mishandled Burden of Proof of Undue Influence

The district court committed reversible error in instructing the jurors on the law applicable to the claims the contracts should be set aside because Steven exerted undue influence over John and Joyce. As we explain, the error deprived Joyce of fair consideration of her contention that Steven should have been required to prove the absence of undue influence. Had the burden of proof been shifted to Steven, the jurors reasonably could have reached a different conclusion.

We begin with the test for assessing instructional error, since that drives how we review the evidence. As the party asserting the jury had been erroneously instructed, Joyce must show: (1) she raised and preserved the instructional issue in the district court; (2) she requested the jury be instructed on a legally appropriate matter; and (3) the facts supported giving the instruction. Foster v. Klaumann , 296 Kan. 295, 301-02, 294 P.3d 223 (2013). With that showing, an appellate court may conclude the district court erred in failing to instruct the jury on the particular point. The appellate court must then consider whether the error can be discounted as harmless. Here, we assume the applicable standard of review on harmlessness to be the one for an instructional error impinging on a nonconstitutional right of the complaining party. Steven and Jebediah would be entitled to no more favorable a standard. As the parties benefiting from the error, they have to establish there was " ‘no reasonable probability’ " the instructional foul-up contributed to verdicts in their favor. 296 Kan. at 305, 294 P.3d 223 (harmlessness standard for error not implicating constitutional right) (quoting State v. Ward , 292 Kan. 541, 565, 256 P.3d 801 [2011] ); accord Siruta v. Siruta , 301 Kan. 757, 771-72, 348 P.3d 549 (2015) (burden of proving harmlessness); State v. Williams , 295 Kan. 506, 516, 286 P.3d 195 (2012) (burden of proving harmlessness).

1. Issue Preservation

Joyce requested an instruction informing the jury that when one party to a contract has placed confidence or trust in the other party, the party in whom that trust or confidence has been reposed bears the burden of proving the contract was not the product of undue influence. In a case such as this, that reverses the typical allocation of proof, since the party seeking relief from a contract typically would be required to prove undue influence. Joyce specifically asked the district court to instruct the jury on that legal principle and offered a proposed instruction. The district court's instructions failed to give the jurors meaningful guidance on the point. Joyce sufficiently raised the issue in the district court to preserve any error for appellate review.

2. Legal Appropriateness

Kansas courts have long recognized that contracts between parties in a confidential or fiduciary relationship require particular scrutiny should their fairness be challenged. The danger, of course, lies with the party in whom trust has been placed and his or her ability to exploit the relationship to gain unfair advantage in any transaction with the other party. As an antidote, the courts have required the trusted party to prove the absence of undue influence over the trusting party in bargaining and contract formation. Frame, Administrator v. Bauman , 202 Kan. 461, 467, 449 P.2d 525 (1969) ; Smith v. Smith , 84 Kan. 242, 244-45, 114 P. 245 (1911). In effect, the courts presume undue influence in contracts between parties occupying a confidential relationship. The Frame court captured the rule this way: When parties occupying a confidential relationship enter into a contractual transaction, "the burden rests upon the person [in whom confidence has been placed] to show that the transaction was conducted in good faith and did not result from the exercise of undue influence." 202 Kan. 461, Syl. ¶ 5, 449 P.2d 525 ; see Curtis v. Freden , 224 Kan. 646, 651, 585 P.2d 993 (1978) (recognizing rule and citing Frame ); PIK Civ. 4th 124.09 Comment (noting ruling). The principle bears obvious legal relevance to Joyce's allegations attacking the contracts.

Kansas courts, however, apply a different rule to wills and other testamentary instruments. If the recipient of a bequest in a will had a confidential or fiduciary relationship with the testator, a court should presume undue influence when "suspicious circumstances" surround the making of the will. Cresto v. Cresto , 302 Kan. 820, 833-34, 358 P.3d 831 (2015). So in a will contest, unlike a contract dispute, the burden to prove the absence of undue influence shifts to a legatee only when he or she occupied a confidential relationship with the testator and the bequest invites suspicion.

As we discuss, the district court failed to appreciate the differing rules governing contracts and wills involving parties occupying confidential relationships. And that likely contributed to the instructional error. In any event, an instruction or instructions addressing confidential relationships between contracting parties and the burden of proof on undue influence in those circumstances were legally appropriate here.

3. Factual Appropriateness

In assessing the sufficiency of the factual basis for an instruction, both the district court in the first instance and this court on appellate review must look at the record in the best light for the party asking for the instruction, here Joyce. Foster , 296 Kan. at 301, 294 P.3d 223. We summarize the evidence that way.

As they grew older, John and Joyce set up a trust that provided for the disposition of three quarter sections of land they owned in Brown County, including farmland and the house they lived in. The trust permitted the surviving spouse to use the house and all of the land. Upon his or her death, the trust assets were to be divided among John and Joyce's four adult...