Owens v. Dominguez (In re Estate of Owens)

• Decision Date: 20 April 2017
• Docket Number: Court of Appeals No. 15CA1557
• Citation: 413 P.3d 255
• Parties: IN RE the ESTATE OF Arlen E. OWENS, deceased. David Owens, Petitioner-Appellee, v. Angela Dominguez, Respondent-Appellant.
• Court: Colorado Court of Appeals

413 P.3d 255

IN RE the ESTATE OF Arlen E. OWENS, deceased.

David Owens, Petitioner-Appellee,

v.Angela Dominguez, Respondent-Appellant.

Court of Appeals No. 15CA1557

Colorado Court of Appeals, Div. I.

Announced April 20, 2017

Craig Wagner Law Firm, Craig E. Wagner, Denver, Colorado, for Petitioner-Appellee.

Azizpour Donnelly, LLC, Katayoun A. Donnelly, Denver, Colorado, for Respondent-Appellant.

Opinion by JUDGE TAUBMAN

¶ 1 Appellant, Angela Dominguez, appeals the district court's judgment granting the petitions of appellee, David Owens, for determination of testacy and to set aside nonprobate transfers. Dominguez also appeals a subsequent district court judgment holding her in contempt. We affirm.

I. Background

¶ 2 After he was discharged from a recovery center for health issues, Dr. Arlen E. Owens (the decedent) hired Dominguez as his private caregiver in 2010. The decedent was diagnosed with "memory impairment

" upon his release and returned home despite medical advice to move to assisted living. The decedent died in July 2013.

¶ 3 After the decedent's death, his brother and only living heir, Owens, filed a petition for informal probate of the decedent's will and informal appointment of personal representative. He was then appointed the personal representative of the estate. In March 2014, Owens filed a petition for determination of testacy and for determination of heirs, alleging that the will that the decedent had signed in July 2012 was the product of undue influence by Dominguez and that the decedent had lacked the capacity to execute the will. Owens also filed a complaint for recovery of estate assets and asked that the court invalidate the will and order that the decedent's estate be administered under intestate distribution statutes.

¶ 4 In March 2015, Owens filed a petition to set aside nonprobate transfers. He contended that payable-on-death (POD) designations on three accounts, executed by the decedent with Dominguez as the beneficiary, should be set aside on the ground that Dominguez had exerted undue influence on the decedent, who had lacked the capacity to execute the POD designations. In response, Dominguez filed a motion to dismiss the petition to set aside the POD designations for lack of jurisdiction, arguing that the POD designations were nonprobate transfers not governed by the probate code. The district court denied Dominguez's motion.

¶ 5 At the request of Owens and over Dominguez's jurisdictional objections, the district court imposed a constructive trust over the three POD accounts at issue. Then in July 2015, the court held an evidentiary hearing on the issues of testamentary capacity and undue influence. Krueger v. Ary , 205 P.3d 1150, 1154 (Colo. 2009). In a written order, the court found that the decedent had not had the capacity to execute the POD designations and had been unduly influenced by Dominguez. However, it found that the decedent had had the testamentary capacity to execute his will and had not been unduly influenced by Dominguez in signing his will.

¶ 6 After the court issued its final judgment, it issued a contempt order against Dominguez for violation of the constructive trust as it related to $ 140,000 from the State Farm Bank account. Dominguez objected on the grounds that the court did not have jurisdiction to impose the constructive trust. The court sentenced her to six months in county jail, with the condition that she could purge the contempt by making $ 50,000 monthly payments until she paid $ 140,000.

II. Standing

¶ 7 Dominguez contends that the district court did not have jurisdiction to set aside the POD designations and impose a constructive trust on the POD accounts because Owens and the estate did not have standing to make such requests. Owens responds that Dominguez cannot raise her standing claims on appeal, and that her standing claims do not relate to the court's authority in this case. We conclude that Dominguez can raise her standing claims on appeal based on the holding of In re Estate of Murphy , 195 P.3d 1147, 1150-51 (Colo. App. 2008).

A. Standard of Review

¶ 8 "[S]tanding is a jurisdictional prerequisite to every case and may be raised at any stage of the proceedings, including on appeal." HealthONE v. Rodriguez , 50 P.3d 879, 891 n.5 (Colo. 2002). We review issues of standing de novo. Ainscough v. Owens , 90 P.3d 851, 856 (Colo. 2004).

¶ 9 Owens argues that Dominguez never raised the issue of standing in the district court and never disputed that he had a legally protected right to pursue a correct probate determination of his brother's estate. He asserts that as a result, Dominguez has not preserved this issue for appeal and that we may not review it. However, "lack of standing is a jurisdictional issue and may be raised at any time." Peters v. Smuggler-Durant Mining Corp. , 910 P.2d 34, 38 (Colo. App. 1995), aff'd , 930 P.2d 575 (Colo. 1997).

B. Applicable Law

¶ 10 "The question of standing involves a consideration of whether a plaintiff has asserted a legal basis on which a claim for relief can be predicated." Bd. of Cty. Comm'rs v. Bowen/Edwards Assocs., Inc. , 830 P.2d 1045, 1052 (Colo. 1992). To establish standing, a plaintiff must demonstrate that (1) he or she was injured in fact and (2) the injury was to a legally protected interest. See Hickenlooper v. Freedom from Religion Found., Inc. , 2014 CO 77, ¶ 18, 338 P.3d 1002, 1006 ; Wimberly v. Ettenberg , 194 Colo. 163, 168, 570 P.2d 535, 539 (1977).

¶ 11 Under Colorado law, a POD designation is defined as follows:

[T]he designation of (i) a beneficiary in an account payable on request to one party during the party's lifetime and on the party's death to one or more beneficiaries, or to one or more parties during their lifetimes and on death of all of them to one or more beneficiaries, or (ii) a beneficiary in an account in the name of one or more parties as trustee for one or more beneficiaries if the relationship is established by the terms of the account and there is no subject of the trust other than the sums on deposit in the account, whether or not payment to the beneficiary is mentioned.

§ 15-15-201(8), C.R.S. 2016. In Colorado, POD accounts are not considered a part of the probate estate, although the probate code does permit POD designations. See id. (defining "POD designation"); see also § 15-15-203, C.R.S. 2016 (authorizing POD accounts); § 15-15-212(2), C.R.S. 2016 (explaining rights on death concerning POD accounts).

¶ 12 A district court sitting in a probate matter has the same jurisdiction as the Denver Probate Court. In re Estate of Lembach , 622 P.2d 606, 607 (Colo. App. 1980). Probate courts, and by extension, district courts sitting in probate, have broad jurisdiction "to determine every legal and equitable question arising in connection with decedents' ... estates, so far as the question concerns any person who is before the court by reason of any asserted right in any of the property of the estate." In re Estate of Murphy , 195 P.3d at 1151 (emphasis added) (quoting § 13-9-103(3)(a), C.R.S. 2016 ). Such courts also have jurisdiction

[i]n any case in which a district court could grant such relief in a separate action brought therein, to impose or raise a trust with respect to any of the property of the decedent or any property in the name of the decedent, individually or in any other capacity, in any case in which the demand for such relief arises in connection with the administration of the estate of a decedent[.]

§ 13-9-103(3)(b) (emphasis added).

¶ 13 The Murphy division held that, based on the language of section 13-9-103(3)(a) and (b), "the phrase ‘in connection with’ [was] a grant of authority to resolve disputes logically relating to the estate," and it found that resolving the question regarding the joint tenancy property at issue there—not considered part of a probate estate—was "essential to the proper and orderly distribution of estate property." In re Estate of Murphy , 195 P.3d at 1151-52 (citations omitted); see also § 15-10-302(2), C.R.S. 2016 (The probate court "has full power to make orders ... necessary and proper to administer justice in the matters which come before it."). Thus, a district court's jurisdiction—and its authority to impose restrictions on nonprobate assets—may extend even to property claimed by the estate that may ultimately not belong to the estate. See In re Estate of Lembach , 622 P.2d at 608.

C. Analysis

¶ 14 Consequently, the Denver Probate Court—and, as interpreted in Lembach , a district court—has jurisdiction to determine every legal and equitable question arising in connection with an estate, when any person comes before the court with any asserted right in the property of the estate. In re Estate of Murphy , 195 P.3d at 1151-52. The court has the power to resolve such questions that are "essential to the proper and orderly distribution of estate property." Id. at 1152 (citing § 15-10-302(2) ). Thus, the governing statutes and case law indicate that the district court has broad jurisdiction over any probate and nonprobate matters that are essential to proper administration of an estate.

¶ 15 In this case, resolving the issues surrounding the POD designations was essential to the proper and orderly administration of the decedent's estate. Because the money subject to the POD transfers would otherwise be a part of the decedent's estate, the court was required to determine whether Owens' allegations of undue influence and lack of testamentary capacity were true. Owens petitioned to determine testacy and heirs, to recover estate assets, and to set aside the POD designations. As relevant here, he alleged that Dominguez had asserted undue influence over the decedent and that the decedent had lacked the testamentary capacity to designate Dominguez as the beneficiary of the POD accounts. Thus, Owens' claims regarding the POD designations were legal and equitable questions that arose in connection with the estate.

¶ 16 We conclude that the reasoning...