No. 83-427
IN THE SUPREME COURT OF THE STATE OF MONTANA
1984
CURTIS R. ADU4S, as personal representative
of the Estate of IDA MAY ADAMS, Deceased,
Plaintiff and Respondent,
ILA ALLEN, a/k/a ILA ANDERSON,
Defendant, Third Party Plaintiff
and Appellant,
CURTIS ADAMS and JOHN FAIRBAIRN,
Third Party Defendants and
Respondents.
APPEAL FROM: District Court of the Nineteenth Judicial District,
In and for the County of Lincoln,
The Honorable Robert PI. Holter , Judge presiding.
COUNSEL OF RECORD:
For Appellant:
John L. Petersen, pe is sou la, Montana
For Respondents:
David W. Harman, Libby, r~lontana
Submitted on Briefs: December 22, 1983
Decided: April 5, 1984
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Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
Ila Allen, a/k/a Ila Anderson appeals the judgment of
the District Court for the Nineteenth Judicial District,
Lincoln County, which declared void a trust agreement, a deed
and a power of appointment signed by Allen's friend, Ida
Adams. We affirm the judgment.
Ida Adams was a resident of Libby, Montana, and at her
death, the owner of the Cherry Creek Trailer Court. During
her lifetime she undertook various businesses and
occupations. She had two natural sons and numerous foster
children. Dora Fairba-irn was a very close friend and Adamc
treated her like a daughter. Fairbairn lived in Adams'
trailer court and during Adams' last years, spent
considerable time taking care of Adams.
On March 17, 1974, Ada.ms executed a will granting Dora
Fairbairn a life estate in the trailer court, with the
remainder to Adams' sons, Curtis and Robert.
Adams suffered from diabetes, angina pectoris and
cerebral strokes for at least the Last two years of her life.
As a result of the diabetes, she lost her sight almost
completely; thus, she required much assistance in getting
around. Adams was hospitalized in the Libby Hospital nine
times between December of 1978 and February of 1980 and her
treating physician was Dr. W. D. Matthews.
In March of 1980, Adams traveled to Spokane, Washington,
with Ila Allen to attend a wedding and to undergo physical
examinations by Spokane physicians. When not in Sacred Heart
Hospital, Adams stayed with Allen. Sometime during Adams '
stay in Spokane, Allen telephoned Charles Cruikshank, her
attorney in Great Falls, Montana. Based on the call,
Cruikshank prepared a quitclaim deed and a trust agreement
which would transfer the Libby trailer court to a trust, with
Allen as trustee. The income from the trust was to go to
Adams during her lifetime; the property was to be transferred
to Allen upon Adams' death.
Cruikshank drove to Spokane on March 16, 1980 and
visited Adams in the hospital. While there, Cruikshank first
spoke with Adams' doctors and reviewed her records. He then
spent approximately one hour explaining the trust agreement
to Adams. She signed the agreement, the deed and a
handwritten power of appointv-ent and the deed was
acknowledged by Cruikshank as a Montana notary public.
Allen, who was at the hospital, signed both the
agreement and the power of appointment. At the same time,
Adams assigned a potential- Black Lung case to Allen, as
trustee, which was then transferred to the trust. The
parties also discussed a potential malpractice case a.qainst
Adams ' Libby physician.
On April 6, 1980, Dora Fairbairn arrived in Spokane and
took Adams out of the hospital and back to Libby.
Approximately nine hours later Adams died while at
Fairbairn's home.
Curtis Adams, as the personal representative of Ida
Adams' estate, brought suit against Allen, seeking to have
the trust agreement and the deed set aside. Allen
counterclaimed against Adams' estate and crossclaimed against
Curtis Adams and John Fairbairn (Dora's brother) seeking rent
due. After a hearing held June 7, 1983, the District Court
entered its findings, conclusions and order. It found that
Ida Adams "evidenced a decline in mental capacity, i.ncluding
increased forgetfulness, hallucinations and instability. She
was incapable of making major decisions because of the
fluctuating condition of her mind." As to Allen's
relationship with Adams, the court found that although Allen
had been acquainted with Adams for a number of years, she had
not previously been a part of the circle of Adams' closer
friends. The District Court found that Adams did not talk to
anyone but Cruikshank regarding the papers she signed while
in Spokane, and that the only evidence presented as to Adams'
condition at the time of signing was testimony by Cruikshank
and Allen. The court rejected the testimony as inconsistent
with the descriptions of Adams' condition just prior to and
after the date of signing.
Based on the foregoing, the District Court concluded
that (1) Adams' physical condition prevented her from
withstanding the influence of Allen; (2) Adams' mental
condition before, on, and after March 16, 1980 "afflicted"
her ability to withstand Allen's influence; (3) Adams'
disposition of her property by execution of the deed and
trust agreement was unnatural, as it did not include gifts to
the natural objects of her bounty, her two sons and Dora
Fairbairn; and (4) the trust agreement was not based on
consideration, was not properly notarized or timely filed and
was signed by Adams as a mistake as she thought she was
signing some other papers.
The District Court declared the trust agreement, the
deed and the power of appointment void. Allen appealed,
raising the following issues:
1. Did the District Court properly find that Allen
exerted undue influence over Adams so as to make her sign the
trust agreement, power of appointment, and deed?
2. Did the District Court properly find the trust
agreement void because (1) no consideration passed from Adams
to Allen; (2) it was improperly notarized; and (3) Adams was
mistaken as to what she signed?
The standard of review in this case is whether there was
substantial evidence to support the District Court's
findings. Viewing the evidence in a light most favorable to
the prevailing party, we are free to reverse the judgment
only if there is a 1-ack of substantial evidence to support
the judgment. Dybvik v. Dyhvik (Mont. 1982), 654 P.2d 989,
39 St.Rep. 2184; In re LaTray's Estate (1979), 183 Mont. 141,
598 P.2d 619. The findings of fact must be clearly
erroneous. Rule 52(a), M.R.Civ.P.
It is well settled in Monta.na case law that undue
influence must be proven by the person contesting a will or
contract. Blackmer v. Blackmer (1974), 165 Mont. 69, 525
P.2d 559; In re Maricich's Estate (1965), 145 Mont. 146, 400
P.2d 873. Undue influence negates the free consent necessary
for the proper formation of a contract. Sections 28-2-301
and 28-2-401, MCA. Section 28-2-407, MCA, defines undue
influence:
"Undue influence consists in:
" (1) the use by one in whom a confidence is reposed
by another or who holds a real or apparent
authority over him of such confidence or authority
for the purpose of obtaining an unfair advantage
over him:
" (2) taking an unfair advanta-ge of another's
weakness of mind; or
" (3) taking a grossly oppressive and unfair
advantage of another's necessities or distress."
This Court, in Maricich, 145 Mont. at 161, 400 P.2d at
881, held that the following factors are to be considered in
determining whether undue influence exists:
" (1) Confidential relationship of the person
attempting to influence the testator;
" (2) Th.e physical condition of the testator as it
affects his ability to withstand the influence;
"(3) The mental condition of the testator as it
affects his ability to withstand influence;
"(4) The unnaturalness of the disposition as it
relates to showing an unbalanced mind or a mind
easily susceptible to undue infl-uence; and
" (5) The demands and importuniti.es as they may
affect particular testator taking into
consideration the time, the place, and all the
surrounding circumstances."
Allen concedes that a confidential relationship existed
between Adams and her and that the disposition of Adams'
property under the trust agreement was unnatural.
As to Adams' physical condition, there was testimony at
trial that her illness had greatly affected her ability to
move around freely. She required aid because she could not
see and because medication had to be administered regularly.
The time spent in the Libby hospital and then the Spokane
hospital is evidence of her serious illnesses.
There was also testimony presented as to Adams'
deteriorating mental condition. Her treating physician in
Libby, Dr. W. D. Matthews, testified. that because her life
was becoming so inhibited by her illnesses, she was
considerably unhappy. Moreover, she was forgetful and would
sometimes hallucinate. Testimony by one of the registered
nurses who cared for Adams in the Libby hospital indicated
that, during the nights of her last stay in Janua-ry and
February, Adams would exhihit forgetfulness and irritability.
Other friends of Adams testified that she was getting harder
to converse with as she was forgetful and unable to maintain
a train of thought. She appeared overly concerned about
being taken care of by friends and family rather than being
placed in a nursing home.
As to the fifth factor, we must consider the time, pla.ce
and circumstances of any demands and importunities made by
Allen. There was no evidence presented at the trial of this
case of specific demands or importunitj-es by Allen. But
there was no testimony by anyone other than Allen and
Cruikshank as to the circumstances surrounding the
solicitation of Cruikshank as Adams-ttorney or the signing
of the papers at the Spokane hospital. The District Court
concluded that the sequence of events, starting with Adams'
travel to Spokane with Allen, was evidence sufficient to find
that Allen had. influenced Adams unduly to have papers drawn
to transfer her property to Allen.
The District Court went a step further and declared in a
post-trial memorandum that the case involved a presumption
that evidence - produced as to Adams1 mental capacity at
not
the time she signed the papers was adverse to Allen's case.
The court stated tha.t:
". . . In cases of incompetency, or suspected
incompetency, the usual practice is to call upon
doctors and nurses from the confining hospital to
clearly show mental capacity at that time. Because
Defendant [Allen], through her attorney, chose the
trust dispositional device, the whole transaction
becomes odious. Hence, and under these special
circumstances, the failure to involve persons
knowledgeable of decedent's condition at the time
of signing and as witnesses at this trial certainly
raises the presumption under Section 2 6 - 1 - 6 0 2 (6)
MCA, in spite of the fact that the burden is on the
Plaintiff to show undue influence. Thus, and again
in these peculiar circumstances, the lack of
evidence is in itself evidence."
Section 26-1-602(6), MCA, states as a disputable presumption
that "[mlore satisfactory evidence would be a.dverse if weaker
and less satisfactory evidence is offered and it is within
the power of the party to offer more satisfactory evidence."
Allen contends that the lack of evidence produced on
this issue should be held against the plaintiff as a failure
to sustain the burden of proof of undue influence.
Therefore, she argues that the Lack should not be the basis
for a presumption which works against Allen. Adams argues
that, although this Court has denounced such a presumption in
previous cases, it would be appropriate in cases like this.
It is true that in Blackmer v. Blackmer (1974), 165
M.ont. 69, 74, 525 P.2d 559, 562, this Court stated:
"Argument by the parties concerns the connotation
of the presumption as used by the trial court in
its conclusion of law No. 2. Disregarding matters
raised outside the record we will only comment that
these circumstances in Montana raise no presumption
of any kind. Undue influence or incompetence is
never presumed and must be proven, like any other
fact. In re Cocanougherls Estate, 141 Mont. 16,
375 P.2d 1009."
This holding is consistent with previous Montana case law,
including In re Cocanougher's Estate (1962), 141 Mont. 16,
375 P.2d 1009, which rejected any shifting of burdens of
proof as to undue influence.
The presumption noted and used by the District Court in
this case regards only a presumption as to the type and lack
of evidence of demands and importunities by Allen. The
presumption does not effect Adams1 burden of proof of undue
influence. We find no error in use of the section
26-1-602 (6), MCA, presumption where it leaves undisturbed a
plaintiff's burden of proof.
The r e c o r d p r o v i d e s e v i d e n c e of A l l e n ' s a l l e g e d p u r p o s e s
for taking an interest in I d a Ad.ams. Claiming t h a t she
wanted to know what Adams' medical condition was before
agreeing to take care of: h e r , and that Adams' preferred
t r e a t m e n t i n a Spokane c l i n i c t o t h a t s h e g o t i n Libby, A l l e n
t o o k h e r t o Spokane. A s t o how h e r a t t o r n e y became i n v o l v e d ,
Al.len t e s t i f i e d :
"Q. You s a i d M r . Cruikshank r e p r e s e n t e d you i n a
p r i v a t e m a t t e r , i s t h a t c o r r e c t ? A. Yes.
"Q. A l l right. Was h e r e p r e s e n t i n g you, a t t h e
t i m e , F e b r u a r y and March o f 1980? A. I don't
t h i n k so.
"Q. How l o n g a. p e r i o d o f -- b e f o r e t h a t , had h e
r e p r e s e n t e d you? A. A c o u p l e of y e a r s , I t h i n k .
"9. Now, d i d you c a l l him and -- i n r e g a r d t o I d a
Adams? A. Yes. I c a l l e d him an.d a s k e d him i f h e
would c o n s i d e r r e p r e s e n t i n g h e r .
"Q. And d i d s h e t e l l you t o c a l l him? A. Yes.
"Q. Did you discuss Mr. Cruikshank with her?
A. Yes.
"Q. What -- where d i d you c a l l from? A. The
f i r s t t i m e I -- I t h i n k I c a l l e d from t h e h o u s e ,
h e r e i n Libby.
"Q. Uh-huh. Did you d e s c r i b e what was g o i n g on t o
him? A. I d o n ' t remember.
"Q. Did he e v e r meet w i t h I d a Adams b e f o r e m e e t i n g
w i t h h e r i n t h e h o s p i t a l i n Spoka.ne? "A. Not
personal-ly. H e t a l k e d t o h e r over t h e telephone.
"Q. And he h a s r e p r e s e n t e d you s i n c e t h a t t i m e , a s
I understand it, i s tha.t c o r r e c t ? "A. No -- o t h e r
t h a n i n t h i s c a s e ? No.
Mr. Cruikshank t e s t i f i e d . r e g a r d i n g h i s v i s i t w i t h Adams
i n t h e Spokane h o s p i t a l :
". . . I d i d have e x t e n s i v e d i s c u s s i o n s w i t h h e r
f o r , a p p r o x i m a t e l y an h o u r , where I went p a r a g r a p h
by p a r a g r a p h o f t h e T r u s t Agreement and d i s c u s s e d
it w i t h h e r , r e a d i t t o h e r , e x p l a i n e d i t t o h e r ,
answered h e r q u e s t i o n s , which I r e c a l l were n o t
v e r y much, and f i n a l l y s a i d , 'Do you want I l a t o
take care of you and worry about your property and
get this Black Lung thing collected and manage the
trailer court, and just make it so you don't have
any problems a-nd you would never have to go in the
trailer court?' And she said, 'That's exactly what
I want. ' I said, 'I am competent [sic] with you
signing the Trust and Assignment.' And she did
execute it at that point.
"Q. In your estate planning of Ikey [Ida], did you
ever ask her about her Will? A. Yes, sir, I did.
"Q. Did you obtain a copy of that Will? A. No, I
did not.
"Q. When Ikey and you were in the day room, did
she have her gl.asses on? A. I don't recall her
having glasses on.
"Q. Did she have a magnifying glass? A. JJt that
!o
I know of.
"Q. Was she dressed in hospital garb at that time?
A. Yes, sir.
"Q. Did you read the Trust Agreement to her?
A. Yes, sir.
"Q. Did she read it? A. NO, sir.
"Q. I believe your testimony was that you had
asked Ikey if she wanted Ila to take care of her
affairs and then had the Agreement signed, is that
correct? A. That was at the tail end of the
conversation -- or something to that affect, yes."
Cruikshank's testimony that Adams , the hospital meeting,
was lucid and acting voluntarily does not negate the fact
that she was seriously ill and incapable of even reading what
she was signing.
The nature of undue influence is that the will of the
persuading person substituted for the will the person
who is unable to withstand the persuasion. When free agency
and free consent are lost, the agreement in question must be
declared void. Applying the five factors of Maricich here,
we conclude that the findings of the District Court are
supported by substantial evidence and are not clearly
erroneous. Therefore, consideration of the second issue is
unnecessary.
Affirmed.
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4 Justice
We Concur:
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