Randall v. Randall

Decision Date30 August 2016
Docket NumberWD 79070
Parties Evelyn J. Randall, By Thomas Randall, Personal Representative of the Estate of Evelyn Randall, Respondent, v. Eddie D. Randall and Donald Orville Randall, Appellants.
CourtMissouri Court of Appeals

Diane Hook, St. Joseph, MO Counsel for Appellants.

Gary Myers, St. Joseph, MO Co-Counsel for Appellants.

John Burns, St. Joseph, MO Counsel for Respondent.

Before Division Four: Mark D. Pfeiffer, Chief Judge Presiding, James Edward Welsh, and Edward R. Ardini, Jr., Judges

James Edward Welsh
, Judge

Eddie Randall and Donald Randall appeal the circuit court's judgment in favor of Evelyn Randall (by Thomas Randall, personal representative of her Estate) setting aside a warranty deed executed by Eddie as Evelyn's attorney in fact.1 We affirm.

Background

Evelyn Randall and Donald Randall, Sr. were married for over sixty years and had three sons, Donald Jr., Eddie, and Thomas. Evelyn and Donald Sr. bought their home at 4011 Pickett Road in St. Joseph in May of 1962. Twenty years later they bought the house next door at 4015 Pickett Road for use as rental property. Those properties are the subject of the underlying lawsuit.

By 2000, Donald Sr. required full-time nursing home care. Due to Donald Sr.'s condition and Evelyn's lack of experience with financial matters, they both executed durable powers of attorney (“DPOAs”) in favor of their son, Eddie, on August 17, 2000. Evelyn's DPOA included a provision that permitted Eddie, as the attorney in fact, to make gifts to Evelyn's descendants (including himself) only if the amount of such gift does not exceed “the amount as may then qualify for the federal gift tax annual exclusion” and to “make such gifts to himself ... only if any identical gift is also made at such times to each of my other then living children.”

A little over three years later, Eddie and Donald Jr. proposed a plan to transfer their parents' property into the sons' names to shield Evelyn's estate from any potential liens for long-term care. Under the plan, Evelyn would maintain control of the property, would live there as long as she wanted, would pay the taxes and insurance, and could dispose of the property as she wished. Thomas objected and declined to be involved because he thought the plan was fraudulent and because he did not want to encumber his parents' property with any potential liens of his own. The proposed agreement was never reduced to writing, and Evelyn never gave written authorization for Eddie, as her attorney in fact, to transfer the property.

Nevertheless, in November of 2003 Eddie contacted a lawyer to prepare a deed conveying his parents' interest in the Pickett Road property to himself and Donald Jr. On November 20, 2003, Eddie executed that deed, purportedly acting as attorney in fact for his parents. Neither Evelyn nor Donald Sr. was present at the execution of the deed, and Evelyn was unaware of the deed until several years later. Donald Sr. passed away on March 10, 2004.

In 2006, Donald Jr. and Eddie sought to purchase some commercial real estate together as part of a proposed business venture. Eddie drafted an agreement whereby Evelyn would give her permission to him and Donald Jr. to pledge the Pickett Road property as collateral for a loan on the commercial property. Eddie presented that document (referred to herein as “Exhibit 4”) to Evelyn, and Evelyn signed it on March 17, 2006. That document provided, inter alia , that Evelyn and her deceased husband owned their home at 4011 Pickett Road “until it was gifted to my two sons, Eddie Randall and Donald O. Randall, on November 20, 2003 .” The document further stated that Evelyn was of sane mind and fully understood “that this property will be used as collateral for purchase of commercial property by Eddie Randall and Donald O. Randall and that she would “reside at the above named property as long as I desire.” Donald and Eddie's business venture never materialized, and the property was never pledged as collateral.

In 2008, Eddie was charged with and eventually convicted of a federal crime involving child pornography and sentenced to prison. In November 2008, Evelyn revoked her DPOA that named Eddie as attorney in fact and executed a new DPOA naming Thomas as attorney in fact.

In January of 2009, prior to Eddie's incarceration, Evelyn, Eddie, and Thomas went to Evelyn's bank to retrieve all the documents from her lockbox. Among those documents (but unknown to Evelyn and Thomas at the time) was the 2003 warranty deed executed by Eddie. Several months later, while reviewing the documents from the lockbox, Thomas found the recorded deed transferring his mother's property to his two brothers. Thomas discussed the matter with his mother, and on June 29, 2009, sent a formal letter to Donald Jr. on Evelyn's behalf demanding that he and Eddie reconvey the property to Evelyn. Evelyn also informed Eddie and Donald that she wanted the real estate conveyed back into her name. Both sons refused to do so.

In May 2014, Evelyn filed a lawsuit seeking to have the deed set aside. Her sons' defense and theory of the case was that Evelyn had “gifted” the property to them in 2003 and then “ratified” that gift in 2006 when she executed the document in Exhibit 4 stating that she and Donald Sr. owned the property “until it was gifted to my two sons.”

Evelyn died on April 3, 2015, twenty-five days prior to trial. Thomas was appointed as personal representative of Evelyn's estate and was substituted as party plaintiff. At trial, Evelyn testified, via deposition, interrogatory answers, and stipulated affidavit, that the value of her Pickett Road property in 2003 was “well in excess of $100,000” and included over 18 acres of land; that she never intended to give that property to Eddie and Donald Jr.; and that she did not discover that their names were on her property until 2009. She further asserted that she did not remember signing Exhibit 4, but that, had she thought at the time that she was acknowledging a “gift” of her property to Eddie and Donald Jr., she would not have signed it.

Following trial, the court entered judgment setting aside the deed on the basis that the conveyance was not authorized in writing, and, thus, was void, in accordance with In re Estate of Lambur , 397 S.W.3d 54 (Mo.App.2013)

. The court held that “the conveyance was void ab initio as a violation of Missouri's statutes limiting the authority of attorneys in fact to transfer their principals' property to themselves. The court also held that, regardless of any oral agreement to transfer the property into her sons' names, there was no donative intent by Evelyn to make a “gift.” The court further held that the document in Exhibit 4 “did not and could not ratify a gift that never took place.” In addition, the court held that Evelyn told Eddie and Donald that she wanted the property conveyed back into her name, alone, and that Eddie violated his fiduciary obligation by refusing to do so. The court concluded that Thomas met his burden of proof to set aside the deed and was entitled to judgment “granting that relief.”

Standard of Review

As in any court-tried case, we will affirm the circuit court's judgment unless it is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.banc 1976)

. The judgment is presumed correct, and the appellant bears the burden of proving it erroneous. Hahn v. Tanksley , 317 S.W.3d 145, 153 (Mo.App.2010). As to claims that there is no substantial evidence to support the judgment or that it is against the weight of the evidence, we defer to the circuit court's credibility determinations, and we accept as true the evidence and inferences favorable to the prevailing party and disregard contrary evidence and inferences. Arambula v. Atwell , 948 S.W.2d 173, 176 (Mo.App.1997). We review a claim that the court erroneously declared or applied the law de novo . Pearson v. Koster, 367 S.W.3d 36, 43 (Mo.banc 2012).

Discussion

We address the Appellants' points in reverse order. In Point III, the Appellants contend that the circuit court misapplied and “granted relief inconsistent with” Estate of Lambur , 397 S.W.3d 54

, in that it “failed to recognize that the language in the Lambur DPOA with regard to gifts was almost identical to the Randall DPOA” and “found clear, cogent, and convincing evidence when none was offered.”

The gist of this claim, as we understand it, is that the circuit court erred in declaring, as a matter of law, that, because the DPOA did not authorize the conveyance of Evelyn's real estate in writing, it was void ab initio under Lambur , 397 S.W.3d 54

, and that Exhibit 4 “did not and could not ratify a gift that never took place.” This claim involves review of the circuit court's construction and application of the law and the interpretation of a written power of attorney. Id . at 63. These are questions of law, which we review de novo . Pearson, 367 S.W.3d at 43.

The duties of an attorney in fact under a DPOA are governed by the Durable Power of Attorney Act, §§ 404.700–.735, RSMo

.2 Section 404.714.1 of that Act provides, inter alia :

An attorney in fact who elects to act under a power of attorney is under a duty to act in the interest of the principal and to avoid conflicts of interest. ... A person who is appointed an attorney in fact ... has a fiduciary obligation ... to avoid self dealing and conflicts of interest.

This statute codifies the concept that [t]he relationship of principal and agent created by a power of attorney is by its nature one of trust and confidence, creating a fiduciary relationship and an obligation on behalf of the agent to act in the sole interest and for the sole benefit of the principal.” Arambula , 948 S.W.2d at 176

. Thus, it is clear that the DPOA executed by Evelyn created in Eddie a “fiduciary duty” and an obligation to act solely for her benefit.

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