Paskvan v. Mesich

• Decision Date: 04 June 1969
• Docket Number: Nos. 913,921,s. 913
• Citation: 455 P.2d 229
• Parties: Thomas J. PASKVAN, Jr., Appellant, v. Drago MESICH et al., Appellees. Drago MESICH et al., Appellants, v. Paul DRAZENOVICH, Appellee.
• Court: Alaska Supreme Court

Page 229

455 P.2d 229

Thomas J. PASKVAN, Jr., Appellant, v. Drago MESICH et al., Appellees.

Drago MESICH et al., Appellants, v. Paul DRAZENOVICH, Appellee.

Nos. 913, 921.

Supreme Court of Alaska.

June 4, 1969.

Millard F. Ingraham, Fairbanks, for Thomas J. Paskvan, Jr.

Mike Stepovich, Fairbanks, Peter A. Schwabe, Portland, Or., for Drago Mesich, and another.

Sherman A. Noyes, Fairbanks, for Paul Drazenovich.

Before NESBETT, C. J., and DIMOND and RABINOWITZ, JJ.

DIMOND, Justice.

This is a dispute among three parties over a dead man's property.

Thomas Paskvan, Jr. claims the property as sole beneficiary under a will executed by decedent, Pete Mesich, on September 18, 1946. The probate master, after a hearing, found that this will was a product of undue influence exercised by Paskvan and was not entitled to probate, a finding which was concurred in by the superior court on appeal from the master's findings. Paskvan has appealed to this court from the superior court's order rejecting the 1946 will.

Paul Drazenovich claims the property as sole beneficiary under a will executed by decedent on August 25, 1952. The probate master found that decedent was incompetent at the time of the execution of this will and that it was not entitled to probate as decedent's last will and testament. The master's findings were rejected by the superior court. After a hearing at which evidence was introduced, the superior court found that decedent was competent to make the 1952 will, that there was no proof of undue influence in connection with its execution, and that it was entitled to be admitted to probate.

Certain relatives of decedent, consisting of five nieces and two grandnephews, claim the property as decedent's heirs, such claim being based on the contention that neither of the two wills was valid and that decedent died intestate. The heirs, Drago Mesich, et al, have appealed from the superior court's judgment recognizing as valid and admitting to probate the will of August 25, 1952.

The Paskvan Will.

The probate master found that a confidential relationship existed between Paskvan and Mesich, that the evidence raised an inference that Mesich's will of September 18, 1946 leaving all his property to Paskvan was a product of undue influence exercised by the latter, and that Paskvan had not produced evidence sufficient to overcome that inference. The superior court accepted and adopted these findings of the master. ¹

Since the findings of a master, to the extent that the superior court adopts them, are considered as findings of the court, ² Civil Rule 52(a) applies and we may not set aside such findings unless we determine them to be clearly erroneous. ³ Clear error will not be found unless we are convinced on the whole record that a mistake has been committed. ⁴

A confidential or fiduciary relationship exists when one imposes a special confidence in another, so that the latter, in equity and good conscience, is bound to act in good faith and with due regard to the interests of the one imposing the confidence. ⁵

Mesich was the owner of the Arctic Hotel in Fairbanks. In the spring of 1946 he and Paskvan formed a partnership for the operation of the hotel, with Paskvan to get 50 percent of the revenue from the hotel. There is no evidence that Paskvan invested any money in this enterprise. On the same day the will was executed September 18, 1946, Mesich executed a general power of attorney in favor of Paskvan. Paskvan testified that the purpose of the power of attorney was to enable him to handle Mesich's affairs as to the Arctic Hotel-to 'act for him' and 'to speak for him and everything'. Paskvan was the managing partner.

Also in the spring of 1946 Paskvan and Mesich decided to develop some property on Second Avenue in Fairbanks where they built a combination restaurant and bar called the Elbow Room. Paskvan invested $10,000 in the venture which he had obtained as a loan from the Veteran's Administration. Mesich worked on the project and invested several thousand dollars in it. Mesich's contribution came in part from his share of the revenues from the operation of the Arctic Hotel.

Mesich's will, leaving all his estate to Paskvan, was executed in September 1946. Paskvan testified that the will was executed 'so that we could go ahead and develop this property (the Elbow Room property on Second Avenue) so that there would be * * * some basis for starting the the (sic) business partnership.' The property belonged to Mesich. Paskvan used the will as evidence of his interest in the property when he attempted to secure a veteran's loan with respect to the property, but he was told that the will was not the answer to being able to borrow money. He was told that he had to be a part owner of the property in order to borrow money on it. Paskvan then went to Mesich and had him convey to Paskvan a half interest in the property by deed. After this conveyance, Paskvan obtained a veteran's loan on the property.

In the light of these facts we cannot say that the probate master was mistaken in finding that a confidential relationship existed between Mesich and Paskvan. Mesich's actions in making Paskvan the managing partner in the Arctic Hotel enterprise, in giving Paskvan his power of attorney so that Paskvan could act and speak for Mesich, in executing his will in favor of Paskvan so that there would be a basis for their partnership venture, and in conveying to Paskvan a one-half interest in the Elbow Room property shows quite clearly that Mesich trusted Paskvan and reposed confidence in him-that he relied upon Paskvan to act in Mesich's best interests in handling his affairs.

The remaining question is whether the probate master was clearly mistakenin finding that, because of the confidential relationship and other factors, the will was a product of undue influence exercised by Paskvan. The initial burden is on the contestant of a will to establish undue influence, and the existence of a confidential relationship alone does not suffice to raise a presumption that undue influence was present. ⁶ But when the principal or sole beneficiary under a will, who had a confidential relationship with the testator, participated in the drafting of the will, then a presumption of undue influence arises. It requires the beneficiary to come forward with a satisfactory explanation for his actions. He must show that he did not take advantage of the confidential relationship in influencing the testator to execute the will in his favor. ⁷

Such a presumption arises in this case. A fiduciary or confidential relationship existed between Mesich and Paskvan, and the evidence shows that Paskvan participated in the execution of the will. Paskvan testified that the will was prepared by an attorney, the it took about three days conferring with the attorney to get the will prepared, that at several meetings in the attorney's office Paskvan was present with Mesich, and that Paskvan was present when the will was executed. Paskvan indicated his interest in having the will made at one point by saying, in answer to the question of why he had gone to the attorney's office with Mesich: 'Well, Pete (Mesich) was the one that uh wanted to draw this thing up, because we had planned on developing this property * * *.' (Emphasis added.) At another point in his testimony Paskvan said:

Well, I suppose we uh-I know we both went up there and uh told him exactly what uh we wanted, and Mr. Hurley took his notes down in-in longhand * * *. (Emphasis added.)

The presumption that undue influence existed is strengthened by other factors. Mesich was a Croatian who emigrated to the United States in 1902. At the time he executed the Paskvan will in 1946 he was 65 years old. He was unable to read or write the English language and spoke English with a heavy Slavic accent. In 1942 he was attacked by an unknown assailant who hit him on the head with a heavy instrument, inflicting serious wounds. He was required to be hospitalized for 42 days during much of which time he was unconscious or semiconscious. There was considerable testimony that after this blow to his head Mesich deteriorated mentally, had difficulty communicating with people, did not seem aware of what was going on around him, and was not competent to handle his business affairs.

Paskvan did not carry his burden of overcoming the presumption of undue influence. It is true that he testified that Mesich had made the will in his favor as a reward for Paskvan's willingness to help Mesich-because Mesich was happy with the way Paskvan did things and thought Paskvan was worthy of his consideration. But this was not enough. The presumption of undue influence was a strong one because of the age and mental condition of Mesich, the fiduciary or confidential relationship that existed between Mesich and Paskvan, Paskvan's opportunity to exercise undue influence because of his partner', the fact that Paskvan appeared to be the dominant party in their partner', the fact that Paskvan appeared relationship, Paskvan's participation in the procurement of the will, the fact that Paskvan became the sole beneficiary under the will, ⁸ Paskvan's possession of the will after its execution, and the fact that the will seemed to have been executed so that Paskvan could utilize it in order to obtain a real estate loan.

The totality of these circumstances points to a situation where Paskvan took advantage of a trust and confidence that Mesich had in him in order to acquire all of Mesich's property upon his death. Paskvan had no satisfactory explanation for his actions in this regard. He did not show that in regard to the confidential relationship between him and Mesich he had acted with entire good faith and with due regard to the interests of Mesich. In the absence of such a showing, the presumption of undue influence prevails, and therefore the probate master and the superior court were not clearly erroneous in finding that the 1946 will was...