Kraemer v. Maniscalco, 325 S.W.3d 427 (Mo. App. E.D. 2010)

Will & Trust Contests

Factual Background:

When decedent died, her 2004 will was admitted to probate and her sister was appointed the personal representative of her estate.  Decedent’s niece then filed an application to probate the 2003 will, which was rejected by the circuit court.  Niece then filed a petition to contest the 2004 will and have the 2003 will admitted probate.  Sister then filed a motion to dismiss the niece’s petition for failure to join all necessary parties.  Sister asserted that the niece had failed to join two heirs of the decedent.

 St. Louis County Circuit Court, J. Seigel, Held:

The circuit court granted the sister’s motion to dismiss, finding the heirs were necessary parties.  The niece appealed.

Court of Appeals, J. Dowd, Jr., Held:

Reversed and remanded.  Section 473.083.3 states that “[i]t is not necessary to join as parties in a will contest persons who interests will not be affected adversely by the result thereof.”  The omitted heirs are not legatees under either will, and therefore they do not stand to lose some protected benefit if the will contest succeeds.  Thus, the omitted heirs would not be adversely affected by the result of the will contest and are not necessary parties.

Hanson v. Vanniewaal, 322 S.W.3d 574 (Mo. App. S.D. 2010)

Will & Trust Contests

Factual Background:

Pursuant to a will decedent executed two days before he died, his three daughters and his niece’s husband were named to share equally in the will.  The niece’s husband was appointed personal representative of the estate.  One of the daughters brought an action for discovery of assets against the personal representative, alleging that certain assets should belong to the estate, but were unlawfully obtained by the personal representative by fraud, undue influence, or decedent’s lack of capacity.  In part, she alleged that proceeds from two bank accounts owned by decedent were assets of the estate and had been adversely withheld by the personal representative.

Barry County Circuit Court, J. Woods, Held:

The circuit court found that the personal representative’s exercise of undue influence caused certain bank accounts to be created in the joint names of the decedent and the personal representative.  The court entered judgment in favor of the estate and against personal representative for $46,265.52.  The personal representative appealed.

Court of Appeals, P.J. Lynch, Held:

Affirmed.  The personal representative argues that the trial court’s decision was not supported by substantial evidence.  To prove that a court’s decision was not supported by substantial evidence requires completion of three steps: (1) identify a challenged factual proposition, the existence of which is necessary to sustain the judgment, (2) identify all of the favorable evidence in the record supporting the existence of that proposition, and (3) demonstrate why that favorable evidence, when considered along with the reasonable inferences drawn from that evidence, does not have probative force upon the proposition such that the trier of fact could not reasonably decide the existence of that proposition.  Instead of following these steps, the personal representative did the opposite:  he identified evidence favorable to his position and attempted to demonstrate why his evidence supports a judgment in his favor.  Because he did not fulfill the necessary steps, his point is denied.

Even assuming he did fulfill the steps, the court’s decision was supported by substantial evidence.  There was considerable evidence that decedent’s physical and mental condition deteriorated significantly in the last year of his life.  Evidence was presented that decedent was an alcoholic and that the personal representative knew he was an alcoholic; yet, the personal representative encouraged decedent’s drinking.  Also, there was evidence that decedent had represented that he wanted to leave his money to his daughters.  Taking this evidence into account, the court’s finding of undue influence was supported by substantial evidence.

In the Matter of the Estate of M. Stanley Ginn v. Almond, 323 S.W.3d 860 (Mo. App. W.D. 2010)

Will & Trust Contests

Factual Background:

Personal representative of testator’s estate, the testator’s daughter, filed a six-count petition for will construction, asking in one of the counts that the court determine the testator’s intent regarding who should pay the estate taxes.  Personal representative argued that because the testator’s will did not clearly express who should bear the burden of paying estate taxes, the doctrine of equitable apportionment should apply.  Testator’s grandchildren filed a motion for judgment on the pleadings as to the claim for equitable apportionment, arguing that the doctrine would not apply.

 Chariton County Circuit Court, J. Midyett, Held:

The circuit court granted the grandchildren’s motion for judgment on the pleadings and found that the testator’s intent was that the estate taxes were not to be equitably apportioned but were to be paid from the residuary estate.  Personal Representative appealed.

Court of Appeals, P.J. Welsh, Held:

Appeal dismissed.  Generally, orders from the probate division of the circuit court are interlocutory and not subject to appeal until final disposition of the matters before the court.  An order is only deemed final for purposes of appeal if it falls within the enumerated exceptions in section 472.160.1.  Personal Representative argues that the circuit court’s order falls within subsections (3) and (13) of section 472.160.1, which say that orders are appealable “(3) On all apportionments among creditors, legatees, or distributes;… (13) On all orders denying any of the foregoin requested actions.”  However, this action was a will construction case and not an apportionment case.  This is not a case where the court apportioned or refused to apportion property or shares as to make it an appealable order pursuant to 472.160.1(3) and (13).  Will construction matters are appealable in connection with appealable matters set forth in section 472.160, but this case has no appealable matter.  Therefore, the appellate court does not have jurisdiction to hear this appeal.

Shea v. Gaither 389 S.W.3d 725 (Mo. App. E.D. 2013)

Will & Trust Contests

Factual Background:

Grantor created a lifetime trust and named her nephews as beneficiaries. Grantor named her late husband’s niece and the niece’s husband as trustees. In June 2007, Grantor purportedly executed several amendments to the trust which the beneficiaries claim were not properly executed. These amendments gave property to the trustees and other persons, including family members of the trustees. The property conveyed by these amendments included two farms. Grantor died shortly thereafter.

The beneficiaries sued the trustees seeking a number of remedies. Following a consent judgment that dismissed a number of claims and parties, the beneficiaries filed an amended petition seeking a declaratory judgment voiding the amendment based on undue influence and failure to comply with the express terms of the trust, and seeking to set aside the deed conveying one of the farms. Meanwhile, the trustees filed a final accounting in accordance with the consent judgment. The beneficiaries filed objections to this accounting.

Warren County Circuit Court, Hamlett, J., Held:

The court issued its judgment on the final accounting and ruled that “this Judgment is final for the purpose of appeal pursuant to Section 512.020 RSMo.” The trustees appealed, though the action involving the gifts of the farms remained pending at the time of appeal.

Court of Appeals, Mooney, J., Held:

Dismissed for lack of jurisdiction. Appellate review requires a final judgment and where the judgment lacks finality, the court lacks jurisdiction to hear the case. A final, appealable judgment leaves nothing for future determination. The only exception is under Rule 74.01(b) where a trial court may enter judgment on a single claim and certify its judgment as final and appealable upon an express determination that no just reason for delay exists.

Here, the trial court did not designate its judgment as a final judgment under Rule 74.01(b) and made no express finding that there was no reason for delay. Even if the court had made an express finding of no reason for delay, the designation would have been improper. Rule 74.01 requires “one claim” to be disposed of. The trial court did not dispose of “one claim” here, but instead merely entered judgment on the final accounting, disposing of one of several remedies. The court considered the “claims” to be breach of fiduciary duty and self-dealing by the trustees. The final accounting alone did not dismiss either claim and was interwoven with the open issue of the deeds to the farms. Thus, the judgment was not final and not appealable.

Watermann v. Eleanor E. Fitzpatrick Revocable Living Trust, 369 S.W.3d 69 (Mo. App. E.D. 2012)

Will & Trust Contests

Factual Background:

Settlor died, survived by Daughter, the plaintiff, and her three sons and their families, the defendants.  Settlor executed a will in 1996 leaving her assets to all four children in equal shares.  In May of 2007, Settlor sent a written request to her bank removing Daughter as a beneficiary on 3 CDs.  The same week, Settlor met with her attorney and asked to exclude Daughter from her St. Charles property due to their long-standing, troubled relationship.  As a result, Settlor’s attorney prepared a new Trust whereby Settlor’s St. Charles property would be split among her sons while Settlor’s Franklin County property and the residue of her estate were to be divided among all four children, including Daughter.  The Trust also included a no-contest clause providing that if any beneficiary contested the trust, they would be entitled to one dollar and all other provisions in favor of that beneficiary would be cancelled.

Daughter sued for an accounting, removal of trustee, imposition of a constructive trust, and damages for tortious interference. Defendants counterclaimed, seeking $25,000 under the trust’s no-contest clause.

Franklin County Circuit Court, Hoven, J., Held:

Following a bench trial, the court entered judgment for the defendants and awarded them $24,999 on their counterclaim.  Plaintiff appealed.

Court of Appeals, Crane, P.J., Held:

Affirmed.  Daughter argued that the 2007 changes were the result of undue influence and that the trial court misapplied the law of “mental competency” to this claim.  While a finding of mental competency does not preclude a finding of undue influence, a settlor’s mental and physical condition is highly material to the issue of undue influence; therefore a trial court may consider evidence of a settlor’s mental competency in such a case.

Further, Daughter argued she established elements that give rise to a presumption of undue influence.  However, the prima facie case for a presumption of undue influence is for use in a jury-tried case.  In a court-tried case, the court has considerable discretion, and even if a plaintiff makes a prima facie case, it does not mean she is entitled to recover.

Finally, Daughter argued the court ignored overwhelming evidence of undue influence because Settlor and one of her sons had a confidential relationship.  However, the mere existence of a confidential relationship is not sufficient to prove undue influence.  Non-coercive influence that does not deprive the settlor of her free agency is not improper.

Bridges v. White, 223 S.W. 3d 195 (Mo. App. S.D. 2007)

Non-Probate Transfers

Factual Background:

Beneficiary of two certificates of deposit (CDs) purchased by decedent before her death brought action against decedent’s attorney-in-fact to impose a constructive trust on the proceeds of the CDs, which, prior to decedent’s death, attorney-in-fact had transferred to an account to which she was a joint tenant with a right of survivorship.

Held:

The Circuit Court, Jasper County, Jon A. Dermott, J., entered summary judgment in favor of beneficiary. Attorney-in-fact appealed.

On Appeal:

Reversed and Remanded.  The Court of Appeals, Nancy Steffen Rahmeyer, P.J., held that a triable issue existed as to whether attorney-in-fact withdrew funds from principal’s certificates of deposit (CDs) for an appropriate purpose.  The trial court erred in granting summary judgment on the basis that Appellant did not have the right to withdraw the funds from the CDs. An issue of fact remains whether the funds were withdrawn for the benefit of Ms. Walker.  A genuine issue of material fact existed as to whether attorney-in-fact withdrew funds from principal’s certificates of deposit (CDs) for an appropriate purpose, such as to benefit principal.  V.A.M.S. §§ 404.710(6), 461.035.

The court engaged in a two-part analysis. Keeping in mind that this was a summary judgment, and not a trial on the merits, the court found that the trial court erred in finding as a matter of law that Appellant did not have the right to withdraw the funds from the two CDs on the basis that there was no written authorization within the power of attorney to do so. The critical second question of the analysis-for what purpose were the funds withdrawn-was not ripe for a summary judgment.

Antrim v. Wolken, 228 S.W. 3d 50 (Mo. App. E.D. 2007)

Non-Probate Transfers

Factual Background:

Brother sued sister alleging she breached her fiduciary duty under power of attorney for mother by naming herself as transfer-on-death (TOD) beneficiary of mother’s assets.

Held:

On competing motions for summary judgment, the Circuit Court, St. Louis County, Colleen Dolan, J., entered judgment for brother, awarding him half of assets of mother’s estate, but denied his motion for attorney fees. Sister appealed.

On Appeal:

The Court of Appeals, Cohen, J., held that: (1) naming herself as beneficiary of mother’s assets was a breach of sister’s fiduciary duty, and (2) brother was not entitled to attorney fee award in absence of bad faith showing. Affirmed. Attorney-in-fact’s designation of herself as the transfer-on-death (TOD) beneficiary of her mother’s assets was a breach of fiduciary duty, given that durable power of attorney designating daughter as attorney-in-fact did not specifically authorize daughter to name herself as a beneficiary to receive her mother’s property after death. V.A.M.S. § 404.710(6).

The court held that the brother failed to prove that his sister, acting as their mother’s attorney-in-fact pursuant to a durable power of attorney, acted in bad faith in naming herself as the transfer-on-death (TOD) beneficiary of mother’s assets. This bad-faith showing was required for an award of reasonable attorney fees to the brother who prevailed on a claim for one-half of assets of mother, who died intestate. V.A.M.S. § 404.717(5).

In re Estate of Hayden, 258 S.W.3d 505 (Mo. App. E.D. 2008)

Non-Probate Transfers

Factual Background:

On June 11, 1979 Leonilda Hayden executed a Quit Claim Deed conveying real property in Maryland Heights to herself “for and during her natural life, with full power in her to sell, mortgage or lease the fee simple title, but with remainder as to any part undisposed of to Suazanne Kateman, Phyliss Audrain, Mary Ann Prueitt and Kenneth Hayden, and to the heirs and assigns of said remaindermen forever.”  From 2003 to 2005 Leonilda Hayden applied for and received Medicaid through the Department of Social Services.  In 2005 Leonilda Hayden died without having exercised her power of sale under the 1979 deed.  After her death the Department of Social Services filed a petition for issuance of letters testamentary or of administration, as well as a claim against the estate for all Medicaid benefits paid by the Department to the decedent.  The appointed personal representative of the estate filed a petition seeking to take charge and sell the Maryland Heights property and an action in accounting to take all proceeds therefrom and bring it into the estate to satisfy the Department’s claim.  Drumm Jr., J., granted the personal representative’s petition to sell the property, holding that the transfer of the property to the remaindermen was a recoverable transfer which could be brought back into the decedent’s estate.  The remaindermen appealed.

On Appeal:

Where a decedent holds a life estate with the power to revoke, the life estate is subject to satisfaction of the decedent’s debts immediately prior to death, and therefore constitutes a transfer which may be recovered to satisfy creditors claims.  However, a life estate with mere power of disposition is not so subject to revocation.

Rationale:

RSMo. §461.300.1 provides that a transfers of a decedent’s property may be recovered by the personal representative of the estate to the extent necessary to discharge claims remaining unpaid after application of the decedent’s estate.  This is a “recoverable transfer”.  RSMo. §461.300.10(4) defines a “recoverable transfer” as a non-probate transfer of a decedent’s property and any other transfer of a decedent’s property other than the administration of the decedent’s probate estate that was subject to satisfaction of the decedent’s debts immediately prior to death.  As a result, a “recoverable transfer” is not limited to non-probate transfer listed in RSMo. §461.300.8 or by the exclusions to non-probate transfers listed under RSMo. §461.005(7).  Therefore, a recoverable transfer includes both non-probate transfers, as well as those transfers which were subject to satisfaction of the decedent’s debts.  The grant of a remainder to a remainderman constitutes a “transfer” and is therefore subject to the revocable transfer statute, additionally, the form of life estate granted here constitutes a valuable interest in property which is subject to seizure by creditors.  By granting herself a life estate with the power of disposition, the decedent provided her remaindermen with a vested defeasible remainder which could be destroyed by any sale, either voluntary or involuntary, during the decedent’s life.  Therefore, decedent’s life estate was subject to satisfaction of her debts immediately prior to her death, and therefore meets the definition of “revocable transfer” in §461.300.10(4).

Hardt v. Vitae Foundation, Inc.,302 S.W.3d 133 (Mo.App. W.D. 2009)

Non-Probate Transfers

Factual Background:

Edwin and Karl Hardt are executors of the estate of Selma J. Hartke.  Ms. Hartke’s will gave the executors discretion to distribute the remainder of her estate to charitable organizations of their choosing.  The Hardts determined to use a large portion of the estate to support the pro-life cause.  In 2001, the Hardts met with representatives from Vitae, a non-profit charitable corporation describing itself as an advertising campaign for the pro-life cause.  Vitae presented a grant proposal, stating that the funds would be used to expand Vitae’s media campaigns to ten new markets and that the gift would be a “matching gift,” to be spent in equal proportions to funds raised by Vitae in each of the ten markets.  By using the funds as a “matching gift,” Vitae said the grant would entice other donations in the markets to ensure a lasting donor base for future campaigns.  Following the meeting, the Hardts gave Vitae $4,242,000, accompanied by a letter of intent detailing the grant was to be used as a matching gift to permit development of the new markets.  In 2002, the Hardts gave an additional $3,000,000 to be used as a matching gift.

In 2003, the former National Project Director of Vitae contacted the Hardts’ counsel and informed him that portions of their gift was not being used in accordance with the conditions placed on the gift, but were instead being expended for administrative expenses and without the receipt of matching funds.  The Hardts requested an accounting of their gift from Vitae, and they were then informed of the different development strategy implemented subsequent to their gift.  The Hardts claimed that the last accounting provided to them by Vitae in 2005 shows extensive misuse of the 2001 gift.  On August 6, 2008, the Hardts filed a petition seeking detailed accountings of both gifts, the restoration of any part of the gifts spent in contravention of the conditions, an injunction preventing any future misuse of the gifts, or in the alternative, the transfer of the 2001 gift to another organization of their choosing.  On September 22, 2008, Vitae filed a motion to dismiss the petition.

Held:   

The Circuit Court of Cole County granted Vitae’s motion to dismiss, stating that the Hardts lacked standing to enforce the conditions on their charitable gift.  The Hardts appealed.

On Appeal:

Affirmed.  Donors of charitable gifts do not have standing to enforce the conditions of their charitable gifts.  According to common law charitable trust principles, and by the newly-adopted Uniform Prudent Management of Institutional Funds Act (UPMIFA), only the Attorney General has the ability to enforce restrictions on charitable gifts.

Rationale:

The Missouri Uniform Trust Code specifically grants settlers of charitable trusts the ability to enforce the trust.  RSMo. §456.4-405.3.  This law applies only to trusts, not to charitable gifts.  Though common law charitable trust principles have often applied to charitable corporations, that is not enough to authorize an extension of the MUTC—a statute that, on its face, only applies to trusts—to gifts made outright to charitable corporations.  Moreover, Missouri adopted the UPMIFA this year, and the prefatory note of the UPMIFA explicitly acknowledges that the Attorney General “continues to be the protector both of the donor’s intent and of the public’s interest in charitable funds.”  Prefatory Note, Uniform Prudent Management of Institutional Funds Act, at 4 (2006).  And, while there may be times when the Attorney General does not sufficiently represent a donor’s interest, such an argument cannot even be attempted when the Attorney General was never involved at all.

The doctrine of cy pres can act to amend a charitable gift to prevent the gift from failing, usually when a donee ceases to exist.  Where, however, the gift was completed to the organization of the donor’s choosing but the donor simply feels that the organization is not using the gift pursuant to the restrictions imposed upon it, cy pres is not applicable.  Even if cy pres was applicable, a donor of a charitable gift still faces the standing challenge.

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