No. 04-847
IN THE SUPREME COURT OF THE STATE OF MONTANA
2005 MT 332
SCOTT STAVE, CONSERVATOR OF THE
ESTATE OF LENORA O. RUTLEDGE,
A PROTECTED PERSON,
Plaintiff and Appellant,
v.
ESTATE OF ARVID B. RUTLEDGE, a/k/a BILL RUTLEDGE,
Deceased, and GERALD E. RUTLEDGE, CHERYL LYNN ANDERSON
and KELLY RUTLEDGE,
Defendants and Respondents.
APPEAL FROM: The District Court of the Twelfth Judicial District,
In and For the County of Chouteau, Cause No. DV 02-07,
Honorable David G. Rice, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
K. Dale Schwanke, Jardine, Stephenson, Blewett & Weaver, P.C.
Great Falls, Montana
For Respondents:
Ward Taleff, Taleff Law Office, Great Falls, Montana
Patrick L. Paul, Attorney at Law, Great Falls, Montana
Submitted on Briefs: October 11, 2005
Decided: December 20, 2005
Filed:
__________________________________________
Clerk
Justice James C. Nelson delivered the Opinion of the Court.
¶1 Scott Stave, as Conservator of the Estate of Lenora Rutledge, appeals from the
Findings of Fact, Conclusions of Law and Decree of the District Court for the Twelfth
Judicial District, Chouteau County, wherein the court concluded that Lenora was competent
to effect the transactions about which Stave now complains. We affirm.
¶2 We address the following issue on appeal: Did the District Court err in concluding
that Lenora was competent to execute documents which affected the transactions at issue?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Lenora brought this action in the District Court against her deceased husband Bill’s
estate, Bill’s two adult children, Gerald Rutledge and Cheryl Anderson, and Bill’s
grandchild, Kelly Rutledge (collectively, “the Rutledges”). The Complaint sought to cancel a
quitclaim deed to real property, to cancel the transfer of a vehicle title and to recover funds
transferred from a joint bank account. Several months after the Complaint was filed, Scott
Stave, Lenora’s son, was appointed as her conservator and substituted as the plaintiff in this
action.
¶4 Bill and Lenora were married in 1985 when Bill was 62 and Lenora was 64. This was
the second marriage for Bill and the third for Lenora. Bill and Lenora each had adult
children from their prior marriages. Gerald Rutledge and Cheryl Anderson are Bill’s
children from his first marriage. Kelly Rutledge is Gerald’s son and Bill’s grandson. Scott
Stave, Jim Stave, Judy Jurenka, Gwen Kane, Ron Sternberg and Marilyn Williamson are
Lenora’s children from her previous marriages.
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¶5 Lenora and Bill each had assets at the time they married. After their marriage, Bill
sold his farm and the home on it and he and Lenora lived in Lenora’s home in Big Sandy. In
1987, Bill bought real property in Lake County. Although there was some evidence that Bill
paid for this property entirely from his own funds, the deed was prepared in the names of Bill
and Lenora as joint tenants with the right of survivorship.
¶6 During their marriage, Bill and Lenora opened and maintained a number of bank
accounts at Wells Fargo Bank in Big Sandy. The accounts were variously opened as “Bill
and/or Lenora Rutledge” or “Lenora and/or Bill Rutledge.” Diana Webster, a bank
employee, testified that the first person named on an account signified who opened the
account and who the bank considered the owner as between Bill and Lenora. However,
Webster also testified that because they were joint accounts, either party could remove funds
from these accounts.
¶7 In the early part of 2001, Bill was diagnosed with malignant cancer. His physicians
advised him that he could expect to live for only another six months. After receiving this
news, Bill and Lenora began to make known their estate planning desires and to take steps to
memorialize their wishes. As part of that process, Bill asked his son Gerald to contact
attorney Tom Sheehy to prepare Living Wills and Powers of Attorney for both Bill and
Lenora.
¶8 Bill was hospitalized in April 2001. On April 30, 2001, a meeting took place in Bill’s
hospital room involving Bill, Lenora, Sheehy and some of Bill’s and Lenora’s children. At
this meeting, Bill told the group how he and Lenora would like certain portions of their
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property distributed. Bill requested that Sheehy prepare a new deed for the property in Lake
County wherein the property would be held by Bill and Lenora as tenants in common with
the property 60% in Bill’s name and 40% in Lenora’s name. Bill also stated that Lenora was
to receive Bill’s Ford Expedition and Bill’s grandson Kelly was to receive Bill’s pickup.
¶9 After this meeting, Sheehy prepared a quitclaim deed for the lake property transferring
it from Bill and Lenora as joint tenants with the right of survivorship to Bill and Lenora as
tenants in common with a 60/40 division of interest. Both Bill and Lenora signed the new
deed in Sheehy’s presence on May 7, 2001. A few days later, Webster went to the hospital to
obtain Bill’s and Lenora’s signatures to transfer the vehicle titles.
¶10 Bill also had Webster transfer funds from one of their joint bank accounts to an
account in his name along with the names of Gerald and Cheryl. Bill passed away on May
10, 2001, and a part of the funds in this account were used to pay the expenses of Bill’s last
illness and his burial.
¶11 On February 11, 2002, Lenora filed her Complaint in this matter wherein she
maintained that she was “mentally infirm” at the time of the April 30, 2001 meeting and
incapable of transacting business or entering into agreements. Several months after the
Complaint was filed, Lenora’s son Scott was appointed as her Conservator and substituted as
the plaintiff in this action.
¶12 Following a bench trial, at which the District Court received extensive testimony, the
court determined that although Lenora’s medical records showed some problems with
memory, there was no finding of incompetency in May 2001, when the deed and the titles
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were executed, and that a finding by the court in July 2002, that a conservator should be
appointed for Lenora did not establish her incompetency in May 2001. The court further
determined that there was sufficient credible evidence from several witnesses establishing
that Lenora understood and appreciated the transactions at issue and that they reflected her
wishes. Hence, the court concluded that Scott had not met his burden of proof that Lenora
lacked competency to effect the transfers. The court entered judgment in favor of the
Rutledges and Scott appealed.
STANDARD OF REVIEW
¶13 We review a district court’s findings of fact to determine whether those findings are
clearly erroneous. Pankratz Farms, Inc. v. Pankratz, 2004 MT 180, ¶ 44, 322 Mont. 133,
¶ 44, 95 P.3d 671, ¶ 44 (citing Hidden Hollow Ranch v. Fields, 2004 MT 153, ¶ 21, 321
Mont. 505, ¶ 21, 92 P.3d 1185, ¶ 21). A district court’s findings are clearly erroneous if
substantial credible evidence does not support them, if the trial court has misapprehended the
effect of the evidence or if a review of the record leaves this Court with the definite and firm
conviction that a mistake has been committed. Pankratz, ¶ 44 (citing Ray v. Nansel, 2002
MT 191, ¶ 19, 311 Mont. 135, ¶ 19, 53 P.3d 870, ¶ 19). In determining whether a trial
court’s findings are supported by substantial credible evidence, this Court views the evidence
in the light most favorable to the prevailing party. DeNiro v. Gasvoda, 1999 MT 129, ¶ 9,
294 Mont. 478, ¶ 9, 982 P.2d 1002, ¶ 9 (citing Roberts v. Mission Valley Concrete Industries
(1986), 222 Mont. 268, 271, 721 P.2d 355, 357).
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¶14 In addition, we review a district court’s conclusions of law for correctness. Pankratz,
¶ 44 (citing Hidden Hollow, ¶ 21).
DISCUSSION
¶15 Did the District Court err in concluding that Lenora was competent to execute
documents which affected the transactions at issue?
¶16 Scott argues on appeal that the totality of the evidence supports a finding that by the
time the deed and the vehicle titles were signed, Lenora had lost the ability to reason and to
make informed judgments and was thus incapable of understanding the nature of the
transactions at issue and to make reasoned decisions concerning them.
¶17 The Rutledges argue, on the other hand, that the District Court’s decision is supported
by the record, that Scott did not meet his burden of proof to establish that Lenora was
incompetent when she signed the deed and the title to the pickup, and that Scott is barred by
estoppel from asserting that the deed and the title should be set aside.
¶18 After an extensive review of the record in this case, we hold that there was sufficient
credible evidence to support the District Court’s determination that Lenora was competent to
execute the documents in question. While Lenora’s medical records indicate that she had
been diagnosed with early Alzheimer’s, her medical records also indicate that it was the
mildest form of the disease until October or November 2001, six months after Bill’s death.
Moreover, a conservator was not appointed for Lenora until July 2002, more than a year after
Bill’s death.
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¶19 In Matter of Estate of West (1994), 269 Mont. 83, 95, 887 P.2d 222, 229, we noted
that the fact that an individual has mental health problems does not per se make him or her
incompetent. We have also pointed out that even the fact that a conservator has been
appointed does not mean that a protected person lacks the capacity to make certain decisions,
including executing a will. West, 269 Mont. at 95, 887 P.2d at 229; In re Estate of Prescott,
2000 MT 200, 300 Mont. 469, 8 P.3d 88; § 72-5-421(5), MCA.
¶20 In this case, there were no findings in any of Lenora’s medical records that she was
incompetent at the time the deed and the titles were signed. Even though Lenora’s physician,
Dr. Forrest Lanchbury, testified at trial that Lenora was incompetent, he had Lenora sign an
informed consent for a medical procedure only a few days before she signed the deed and the
titles. In addition, Dr. Lanchbury testified that the death of a spouse can accelerate dementia.
¶21 “Expert testimony is opinion evidence which the finder of fact is entitled to disregard
if it finds the testimony unpersuasive.” Koeppen v. Bolich, 2003 MT 313, ¶ 51, 318 Mont.
240, ¶ 51, 79 P.3d 1100, ¶ 51 (quoting Magart v. Schank, 2000 MT 279, ¶ 10, 302 Mont.
151, ¶ 10, 13 P.3d 390, ¶ 10). As the Rutledges point out in their brief on appeal, Dr.
Lanchbury’s actions at the time the deed was signed were far more indicative of his view of
Lenora’s mental state than an opinion created many months later. Had Dr. Lanchbury felt
that Lenora was not competent, he would not have solicited and accepted an informed
consent from her.
¶22 The District Court heard conflicting testimony regarding Lenora’s mental capacity.
However, as we have frequently held, the District Court is in the best position to observe and
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examine the demeanor and candor of the witnesses, judge their credibility, and decide
whether the plaintiffs have met their burden of proof, therefore, we will not second guess the
District Court’s determination regarding the strength and weight of conflicting testimony. In
re Marriage of Mease, 2004 MT 59, ¶ 50, 320 Mont. 229, ¶ 50, 92 P.3d 1148, ¶ 50 (citing
Double AA Corp. v. Newland & Co. (1995), 273 Mont. 486, 494, 905 P.2d 138, 142).
¶23 Furthermore, a party asserting incompetence bears the burden of proof on that point.
Sections 26-1-401 and 402, MCA; Koerner v. Northern Pac. Ry. Co. (1919), 56 Mont. 511,
186 P. 337. We agree with the District Court that Scott failed to meet his burden in that
regard.
¶24 Consequently, viewing the evidence in the light most favorable to the prevailing party,
the Rutledges, as we are constrained to do, Deniro, ¶ 9, we hold that there was sufficient
credible evidence to support the District Court’s determination and that the District Court did
not misapprehend the effect of that evidence.
¶25 Accordingly, we hold that the District Court did not err in concluding that Lenora was
competent to execute the documents which affected the transactions at issue.
¶26 Affirmed.
/S/ JAMES C. NELSON
We Concur:
/S/ KARLA M. GRAY
/S/ JOHN WARNER
/S/ W. WILLIAM LEAPHART
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/S/ PATRICIA O. COTTER
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