Van Cleave v. Estate of Fairchild

• Decision Date: 27 February 2007
• Docket Number: No. 2005-CA-01958-COA.,2005-CA-01958-COA.
• Citation: 950 So.2d 1047
• Parties: Tommy VAN CLEAVE and Marie F. White, Appellants v. ESTATE OF Grace FAIRCHILD, Deceased, Perry M. Fairchild, Executor, Appellee.
• Court: Mississippi Court of Appeals

950 So.2d 1047

Tommy VAN CLEAVE and Marie F. White, Appellants v. ESTATE OF Grace FAIRCHILD, Deceased, Perry M. Fairchild, Executor, Appellee.

No. 2005-CA-01958-COA.

Court of Appeals of Mississippi.

February 27, 2007.

William B. Jacob, Joseph A. Kieronski, Jr., Daniel P. Self, Jr., Meridian, attorneys for appellants.

Robert J. Bresnahan, Meridian, attorney for appellee.

Before KING, C.J., IRVING and GRIFFIS, JJ.

GRIFFIS, J., for the Court.

¶ 1. The estate of Grace Fairchild, represented by executor Perry M. Fairchild, contested two warranty deeds to Tommy Van Cleave and Marie F. White. Van Cleave and Marie counterclaimed for a constructive trust on a $60,000 transfer to Perry. The chancellor held the deed to Van Cleave was void because of Marie's undue influence. The chancellor held the transfers to Marie and Perry were valid. Van Cleave and Marie appeal and argue (1) the chancellor erred in using Marie's conduct to invalidate Van Cleave's deed, (2) Marie did not exert undue influence on Grace, and (3) there was a confidential relationship between Perry and Grace. We find no error and affirm.

FACTS

¶ 2. James and Grace Fairchild were married with three children: Marie, Ed and Perry. James and Grace owned two pieces of real property, their 2.7 acre homestead at 9331 Whippoorwill Road, Meridian, and a sixty acre tract in Lost Gap, Lauderdale County. The Lost Gap property was Fairchild family land, which James had inherited. It was once part of a 240 acre tract, which was divided into four sixty acre tracts.

¶ 3. James died testate on September 19, 1993. Although his will was never probated, the children recognized that his will left everything to Grace. In January of 1993, James gave $60,000 to Perry. This money was part of an inheritance James had received that day of over $72,000, which came from the sale of another sixty acre tract of Lost Gap land. James's sister, Dorothy McFarland and, Marie's daughter, Karen Royal testified that this money was given to Perry in trust to take care of Grace. Grace was a long time sufferer of lung ailments, eventually developing chronic obstructive pulmonary disease ("COPD"). Perry testified that the money was a gift.

¶ 4. In 1996, Grace executed her will. She named Marie as the executrix and Perry as the alternate executor. In the will, Grace left the homestead, along with all furniture, appliances, household goods, and residual personal property to Marie. She left the Lost Gap property and her car to Perry. She bequeathed her porcelain bird collection to Royal. As for Ed, she wrote, "I am not overlooking him in this will as I am providing for him by other means." Grace made gifts of money to Ed during her lifetime.

¶ 5. Perry lived next door to Grace and helped care for her until December of 1996, when he moved out of state. Marie moved into a trailer on the homestead property in 1988. Eventually Van Cleave, Marie's live-in boyfriend of sixteen years, moved into the trailer. Marie took care of Grace after Perry moved away. As a registered nurse, Marie had to work away from home three to four nights a week.

¶ 6. In April, 2001, Grace sold the Lost Gap property to Van Cleave for $5,000. At the time, the land was worth $70,400. Marie set up the entire deal within a twenty-four hour period and brought her mother to Van Cleave's attorney rather than to Grace's long time estate attorney. Marie was present the entire time, and no one mentioned the purchase price to Van Cleave's attorney.

¶ 7. In July, 2001, Grace transferred the homestead property to Marie, with a reservation of a life estate for herself. The purpose was to avoid estate taxes. This time, Grace's estate attorney handled the transfer. Although Marie drove her mother to Grace's attorney's office, Marie was not present in the room while Grace consulted with him.

¶ 8. Besides Marie and Grace, no one in the Fairchild family knew of the two property transfers. In fact, as late as September 2003, Grace told Perry that the Lost Gap property was still coming to him through her will. It was not until after Grace's death on November 20, 2003, that Perry and the other family members found out about the transfers. When asked, both Marie and Van Cleave refused to reveal the purchase price of the Lost Gap property. Marie refused to give the Lost Gap property to Perry, but offered to sell it to him for $1,000 an acre.

¶ 9. On December 5, 2003, Perry brought this action to void the two land transfers as product of Marie's, Van Cleave's, or both's undue influence. Later, Perry was allowed to substitute Grace's estate as the party plaintiff. Marie and Van Cleave counterclaimed to place a constructive trust on the 1993 $60,000 transfer to Perry.

¶ 10. Trial was held July 25-27, 2005. The chancellor found that at the time of the 2001 land transfers, Marie was in a confidential relationship with Grace. Marie was Grace's primary caretaker. Grace was often depressed and physically weak. He also found that Marie was a beneficiary of the Lost Gap transfer. With regard to the Lost Gap property, he held that neither Van Cleave nor Marie were able to overcome the presumption of undue influence. The purchase price was less than one-tenth the value of the land, Marie and Van Cleave set up the entire arrangement, both kept the transfer a secret for over two years, and Grace later told Perry that he was still inheriting the Lost Gap property through her will. As for the homestead property, Grace was represented by counsel, and Grace and her attorney handled the transfer. Also the effect of the transfer closely resembled the effect of Grace's 1996 will.¹ Finally, the chancellor found that at the time of the 1993 cash transfer, Perry was not in a confidential relationship with Grace, because her health and mental spirits were much better then, and she was surrounded by other family as well (James and Marie). Therefore, the chancellor refused to impose the constructive trust on Perry's transfer.

¶ 11. Van Cleave and Marie appeal and argue Marie did not exert any undue influence, and even if she did, it is irrelevant to the Van Cleave/Lost Gap deed. Finally, they argue that Perry was in a confidential relationship with Grace, and a constructive trust should be placed upon the $60,000 he received from James.

STANDARD OF REVIEW

¶ 12. Undue influence is a question of fact. Watkins v. Watkins, 142 Miss. 210, 229, 106 So. 753, 755 (1926). A chancellor's findings of fact will not be disturbed unless manifestly wrong or clearly erroneous. Sanderson v. Sanderson, 824 So.2d 623, 625(¶ 8) (Miss.2002). This Court will not disturb the findings of a chancellor when supported by substantial credible evidence unless the chancellor abused his or her discretion, was manifestly wrong, clearly erroneous, or an erroneous legal standard was applied. Id. at 625-26(¶ 8). "The determination of the existence of a constructive trust is a matter of law and thus, subject to de novo review." Allred v. Fairchild, 785 So.2d 1064, 1068(¶ 7) (Miss.2001).

ANALYSIS

I. Did the chancellor err in using Marie's conduct to evaluate Van Cleave's deed?

¶ 13. Van Cleave argues that the chancellor cannot bootstrap Marie's undue influence onto Van Cleave's deed. Perry counters that Van Cleave's deed was actually for Marie's benefit, and that Van Cleave was merely a strawman.

¶ 14. A party claiming an inter vivos transfer is void because of undue influence must show by clear and convincing evidence that a confidential relationship existed between the grantor and grantee/beneficiary. Estate of Hawkins, 737 So.2d 432, 434(¶ 9) (Miss.Ct.App.1999). When such a relationship exists, the presumption of undue influence arises automatically. Lancaster v. Boyd, 803 So.2d 1285, 1289(¶ 9) (Miss.Ct.App.2002); Hawkins, 737 So.2d at 434(¶ 9).

¶ 15. Although Van Cleave's name appears on the deed, there was substantial credible evidence that Marie was the actual beneficiary, if not a co-beneficiary. This is the implied finding of the chancellor. Indeed, the chancellor found that Van Cleave and Marie consider themselves married and "they `share most everything.'" For example, in a taped conversation between Marie and Perry about the Lost Gap property, Marie states, "I bought that property." Later in the same conversation, she affirms, "We [she and Van Cleave] bought that property." Marie and Van Cleave testified they consider themselves married, and they consider that they jointly own each other's property. To Van Cleave, this includes the Lost Gap property. Van Cleave testified that it was Marie who suggested to both he and Grace that he buy the Lost Gap property. He also testified that Marie was the one who negotiated the deal. After Perry found out about the transfer, it was Marie who offered to sell him the property for $1,000 an acre. Therefore, contrary to Van Cleave's assertion, the issue of Marie's undue influence was relevant to his deed. See Estate of McRae, 522 So.2d 731, 740 (Miss.1988) (holding deeds to dominant party's children void where dominant party was the actual beneficiary). This issue has no merit.

II. Did Marie exert undue influence to obtain the Van Cleave deed?

¶ 16. Having established that her conduct was relevant, we examine Van Cleave's alternative argument that Marie did not exert any undue influence. Perry argues that the chancellor had substantial evidence to find that she did.

¶ 17. A confidential relationship is defined by the supreme court:

Whenever there is a relation between two people in which one person is in a position to exercise a dominant influence upon the other because of the latter's dependency upon the former, arising either from weakness of the mind or body, or through trust, the law does not hesitate to characterize such relationship as fiduciary in character.

Madden v. Rhodes, 626 So.2d 608, 617 (Miss.1993). The relationship "must reflect `a dominant, overmastering influence [which] controls over a dependent person or trust...