Rose v. Ackerson

• Decision Date: 27 July 2012
• Docket Number: No. 2010–CA–001094–MR.,2010–CA–001094–MR.
• Citation: 374 S.W.3d 339
• Parties: Linda ROSE a/k/a Linda Webb, Appellant v. Jon ACKERSON, Administrator for the Estate of William Bale, and Sherry Graff, Appellees.
• Court: Kentucky Court of Appeals

374 S.W.3d 339

Linda ROSE a/k/a Linda Webb, Appellant

v.Jon ACKERSON, Administrator for the Estate of William Bale, and Sherry Graff, Appellees.

No. 2010–CA–001094–MR.

Court of Appeals of Kentucky.

July 27, 2012.

Braxton Crenshaw and Joseph Andrew Rugg, Lexington, KY, for appellant.

Brent Thomas Ackerson, Louisville, KY, for appellees.

Before ACREE, Chief Judge; STUMBO, Judge; LAMBERT,¹ Senior Judge.

OPINION

LAMBERT, Senior Judge:

Linda Webb, appeals from the May 17, 2010, Jefferson Circuit Court findings of fact, conclusions of law, and order of final judgment. That judgment awarded the proceeds of an annuity, valued at $30,734.89, to Sherry Graff and Jon Ackerson on behalf of the estate of William Bale. We affirm.

Bale was the payee of an annuity. Ackerson served as Bale's attorney and attorney-in-fact under a power of attorney over his affairs from 2000 until Bale's death in 2008. He drafted Bale's will and also served as executor of his estate. On February 14, 2000, Bale executed a power of attorney designating Graff as his attorney-in-fact. Bale and Graff then entered into an oral agreement in which Graff agreed to utilize the proceeds of the annuity to meet Bale's living needs and then use any remainder of the annuity to pay the debts of Bale's estate upon his death. It was further agreed that should any funds remain, Graff would retain those funds for her own benefit. Bale discussed this agreement with Ackerson, designated Graff as the beneficiary of the annuity, and then placed the funds into a trust with Graff. This arrangement between Bale and Graff continued until the end of 2001, when Graff became engrossed in caring for several sick friends.

On January 28, 2002, Bale executed a new power of attorney designating Webb as his attorney-in-fact. According to Ackerson, Bale and Webb also entered into an agreement regarding the proceeds of the annuity. Per that agreement, Webb agreed to utilize the proceeds of the annuity to meet Bale's living needs and then use any remainder of the proceeds to pay any debts of Bale's estate upon his death. It was further agreed that should any funds remain after the settling of Bale's estate, that Webb was entitled to retain those funds for her own benefit. On July 26, 2002, Bale executed a beneficiary form and named Webb as the beneficiary of the annuity. Also on July 26, 2002, Bale forwarded a notarized document to Ackerson that expressed his desire that any remainder in the annuity and certificates of deposit be made part of his estate upon his death. In August of 2006, Webb moved to New York and was no longer available to assist Bale. At that time, Graff resumed her care of Bale and continued to care for him until his death on February 27, 2008.

Following Bale's death, Ackerson contacted the annuity company and identified himself as executor of Bale's estate. The annuity company refused to disclose the name of the beneficiary to Ackerson and instead contacted Webb to notify her of Bale's passing and to inform her that she was the last named beneficiary to the annuity. Webb then contacted Ackerson to inform him that she was the beneficiary of the annuity. Ackerson testified that Webb agreed that Bale had intended for the annuity funds to be used towards his estate's debts. Ackerson provided Webb with a power of attorney for her to sign, so the annuity funds could be released to Bale's estate. After failing to have the document signed, Webb ceased contact with Ackerson.

On July 25, 2008, Ackerson and Graff, acting on behalf of Bale's estate, filed a complaint against Webb and West American Insurance Company (“West American”) in Jefferson Circuit Court. That complaint made the following allegations: that Webb had relinquished any right to the annuity proceeds when she failed to continue caring for Bale; that Webb had acknowledged and agreed that the proceeds should be transferred to Bale's estate; that Webb had failed to have the funds transferred to Bale's estate; and that West American had failed to change the beneficiary to the annuity in conformity with a change of beneficiary form executed by Bale. As relief, Ackerson and Graff sought to have any remaining proceeds from the annuity transferred to Bale's estate. An amended complaint was filed on August 5, 2008.

At trial, Webb denied that she had ever acknowledged that the annuity proceeds belonged to the estate and testified that she had never made such an agreement with Bale. She also maintained that Bale wanted the annuity paid to her, not his estate, and that he wanted her to be the beneficiary of his certificates of deposit as well. Webb testified that she received the power of attorney form from Ackerson, went to the annuity company to have it signed, but then changed her mind and contacted an attorney.

On May 17, 2010, the trial court issued its findings of fact, conclusions of law, and order of final judgment, in which it found that a constructive trust had been created between Bale and Webb, and that Webb had agreed to pay the debts of Bale's estate with the remaining annuity funds. The trial court further concluded that the failure of Webb to use the funds in this manner would be unconscionable and contrary to the clear intent of Bale, and would result in the unjust enrichment of Webb. The estate was therefore awarded the full amount of the annuity. This appeal followed.

Webb's first argument on appeal is that the trial court abused its discretion when it failed to dismiss Ackerson and Graff's action for failure to state a claim and when it provided a claim for relief that was never pled or argued by Ackerson and Graff. More specifically, Webb asserts that the complaint failed to clearly state the grounds upon which they based their claim and that the trial court improperly provided the claim of unjust enrichment on behalf of Ackerson and Graff. We do not agree.

A trial court has abused its discretion when its decision is “arbitrary, unreasonable, unfair or unsupported by sound legal principles.” Miller v. Eldridge, 146 S.W.3d 909, 914 (Ky.2004). A pleading which sets forth a claim for relief must contain “a short and plain statement of the claim showing that the pleader is entitled to relief and ... a demand for judgment for the relief to which he deems himself entitled.” Kentucky Rules of Civil Procedure (CR) 8.01. This Court has clarified that “[t]he true objective of a pleading stating a claim is to give the opposing party fair notice of its essential nature.” Cincinnati, Newport & Covington Transp. Co. v. Fischer, 357 S.W.2d 870, 872 (Ky.1962). The complaint and amended complaint at issue before us were sufficient to give Webb notice of their essential nature: to recover the annuity funds in order to pay the debts of Bale's estate. The purpose of CR 8.01 is to give notice and formulate issues without the requirement of detail. Stewart v. Lawson, 437 S.W.2d 733, 734 (Ky.1969). It was plainly alleged that Webb was asserting a claim for the annuity proceeds which she had acknowledged were to be used for the debts of the Bale estate. Accordingly, the trial court did not abuse its discretion when it determined that the complaint was sufficient to state a cause of action.

Webb further asserts that the trial court abused its discretion when it determined that Webb would be unjustly enriched if she were to retain the annuity funds. Webb argues that such a determination was inappropriate because Ackerson and Graff never asserted a claim of unjust enrichment. The equitable doctrine of unjust enrichment “is applicable as a basis of restitution to prevent one person from keeping money or...