Pense v. Lindsey - Case Law

No. 01-666

IN THE SUPREME COURT OF THE STATE OF MONTANA

2003 MT 182

ROSIE PENSE,

Plaintiff and Respondent,

JACK LINDSEY and LEE LINDSEY,

Defendants and Appellants.

APPEAL FROM: District Court of the Tenth Judicial District,
In and for the County of Fergus, Cause No. DV-2000-132
The Honorable E. Wayne Phillips, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Thomas J. Pardy, Oliver, Pardy & Associates, Billings, Montana; James L.
Carbone, Kelly, Harvey & Carbone, Clinton, Washington

For Respondent:

Torger S. Oaas, Lewistown, Montana

Submitted on Briefs: April 18, 2002

Decided: July 10, 2003
Filed:

__________________________________________
Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1 Rosie Pense (Pense) conveyed her 258-acre Fergus County homestead property to

Jack and Lee Lindsey (Jack, Lee, or the Lindseys) by Warranty Deed. Shortly thereafter she

requested that the Lindseys return the property to her. The Lindseys offered to return the

land provided their names remained on the deed as joint tenants with rights of survivorship.

This offer was rejected and Pense sued the Lindseys claiming they had exerted undue

influence over her. The District Court agreed and set aside the conveyance. The Lindseys

appeal. We affirm.

ISSUE

¶2 The dispositive issue in this case is whether the District Court erred when it concluded

that the conveyance of land from Pense to the Lindseys was obtained by undue influence.

FACTUAL AND PROCEDURAL BACKGROUND

¶3 Pense led a sheltered life on a ranch in one of Montana's most rural counties, Garfield

County. Born in 1911, Pense lived, unmarried, on her parents' 14,000-acre ranch with them

until their deaths in 1972 and 1973, at which time she inherited the ranch, as well as 446

acres in Fergus County which included her grandfather's beloved 258-acre homestead which

is at issue in this case (homestead property). Approximately two years after her parents'

deaths, at the age of 64, Pense married neighboring ranch-owner Paul Berger (Berger).

Pense and Berger combined their Garfield County ranch lands and worked the combined

ranches as one unit until 1998 when Pense and Berger separated. Pense, who was 87 years

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old at the time of the separation, then began managing her own affairs and living on her own

for the first time in her life.

¶4 Pense and Berger were divorced in 2000 after 25 years of marriage. The net worth

of the parties at the time of dissolution was $4,461,920. After equitable distribution of

marital assets, Pense had a net worth of $2,490,498 with her grandfather's homestead

property being valued at $170,000.

¶5 During her marriage to Berger, Pense met Jack Lindsey, a legal investigator, who was

working with an attorney representing Berger in an unrelated Federal District Court matter.

Upon conclusion of that matter in 1994, Pense and Jack had little or no contact until the

spring or summer of 1998 by which time Pense was suffering from mild to moderate age-

onset dementia according to her longtime physician. Pense's doctor explained that while

Pense could continue to remain independent, her level of dementia would make it very

difficult, if not impossible, to grasp and deal with complex situations such as wills or deeds.

The doctor further opined that, as a result of Pense's sheltered upbringing, the dementia, and

the difficulty in handling complex situations, Pense was quite "possibly susceptible to

influence."

¶6 According to Garfield County Sheriff Charles Phipps, Jack called him in mid-to-late

summer of 1998, having heard that Pense and Berger had recently separated, expressed an

interest in buying Pense's Fergus County homestead property, and asked Phipps how to

contact Pense. This call set in play a relationship between Pense and Jack, and a course of

events that saw Pense authorize and then revoke no less than five wills over a period of

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eighteen months. The wills were prepared first by her divorce attorney Bryan, whom Pense

later said prepared a will without being asked to do so; by Jack's employer Stephens, who

prepared wills #2 and 5 in the sequence to the benefit of Jack; and by Murnion, who acted

as "local counsel" for both Bryan and Stephens, and who prepared two wills falling between

the Stephens' wills that omitted any reference at all to Jack. The various wills were

remarkable for their disparity--Pense went from endowing to disinheriting her cousins, ranch

employees and Jack, usually without any apparent triggering events. One factor above all

struck the District Court about these changes in bequest: when Stephens wrote the wills, Jack

figured prominently in them, being named personal representative of Pense's estate and

inheriting the homestead.

¶7 On November 30, 1999, Pense entered into a Land Lease Agreement with Calvin

Paulson, Lee Lindsey's son. Under this Lease Agreement, Paulson could graze cattle, hunt

and enjoy other recreational activities on the homestead property for a period of five years.

As "payment" for these privileges, Paulson agreed to construct a "homestead" cabin to

replace Pense's grandfather's homestead cabin. The following day, December 1, 1999, and

thirteen days after signing Murnion Will #2, in which Jack was not referenced, Pense

executed Stephens Will #2. In Stephens Will #2, Jack was reappointed Personal

Representative and was devised Pense's grandfather's homestead property.

¶8 In May 2000, the Lindseys took Pense for a picnic on her grandfather's homestead

property. While there, they told Pense of their plans to rebuild her grandfather's home. The

Lindseys testified that Pense was so grateful that she told them she wished them to have the

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property immediately rather than after her death. Very shortly thereafter, Jack requested that

the Stephens law firm prepare a Warranty Deed, and on June 12, 2000, Pense signed a

Warranty Deed giving Jack and Lee Lindsey her grandfather's homestead. The Warranty

Deed was filed one month later and a certified copy was sent to Pense.

¶9 Upon receiving her copy of the Deed, an agitated Pense went to her longtime

accountant, Fred Schell, and showed him the Warranty Deed. According to Schell's

affidavit, Pense explained that, if (she questioned whether the signature was hers) she signed

the Deed, she believed that she was signing an agreement giving the Lindseys access to her

grandfather's homestead property for recreational purposes. She stated she did not intend

to give this property to the Lindseys or to anyone else at that time. She requested his

assistance in getting the property back.

¶10 After initial attempts to recover the property failed, Pense filed a Complaint on

November 13, 2000. Subsequently, on November 17, 2000, the Lindseys, Pense, Schell and

Sheriff Phipps met to discuss the property, at which time the Lindseys proposed to put her

name on the deed with theirs as joint tenants with rights of survivorship. Schell

recommended that Pense consider the offer for a few days before accepting or declining it.

While not noted in the record, presumably the offer was rejected, as the law suit went

forward.

¶11 In the time between Pense's visit with Schell regarding the Warranty Deed and

December 21, 2000, Attorney Torger Oaas, at Schell's request, prepared a new Will for

Pense. Under the Oaas Will, Jack was no longer Pense's Personal Representative nor were

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the Lindseys devisees or testamentary recipients. Additionally, two former ranch hands,

Terry Kastner (Kastner) and Lonnie Dahl (Dahl), who between them had convinced Pense

to pay them approximately $93,000 in unearned "back wages," were also disinherited.

STANDARD OF REVIEW

¶12 In equitable cases like this one, findings of fact must be upheld unless they are clearly

erroneous. In re Estate of Bradshaw, 2001 MT 92, ¶ 11, 305 Mont. 178, ¶ 11, 24 P.3d 211,

¶ 11. A finding is clearly erroneous if it is not supported by substantial evidence, if the trial

court misapprehended the effect of the evidence, or if our review of the record convinces us

that the district court made a mistake. In re Estate of McDermott, 2002 MT 164, ¶ 22, 310

Mont. 435, ¶ 22, 51 P.3d 486, ¶ 22. Moreover, the evidence is reviewed in the light most

favorable to the prevailing party, and the credibility of witnesses and the weight assigned to

their respective testimony are up to the trial court. Bradshaw, ¶ 11 (citation omitted). Our

role in reviewing findings of fact is to determine whether the findings are clearly erroneous;

it is not to determine whether there is support in the evidence for findings which were not

made. Bradshaw, ¶ 11 (citation omitted). Lastly, we review a district court's conclusions

of law to determine whether they are correct. McDermott, ¶ 22.

DISCUSSION

¶13 We are asked to determine whether the District Court erred when it concluded that

the conveyance of land by Pense to the Lindseys was obtained by undue influence in the

form of friendship.

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¶14 Section 28-2-407, MCA (1999), defines undue influence as: (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 advantage of another's weakness of mind; or (3) taking a grossly

oppressive and unfair advantage of another's necessities or distress.

¶15 In addition to the statutory definition, courts are also guided by the following five

criteria when attempting to discern whether there has been undue influence: (1) any

confidential relationship between the person alleged to be exercising undue influence and

the donor; (2) the physical condition of the donor as it may affect his or her ability to

withstand influence; (3) the mental condition of the donor as it may affect his or her ability

to withstand influence; (4) the unnaturalness of the disposition as it relates to showing an

unbalanced mind or a mind easily susceptible to influence; and (5) the demands and

importunities as they may affect the donor, taking into account the time, place and

surrounding circumstances. Bradshaw, ¶¶ 13-14 (citation omitted). As we stated in

Bradshaw, the statutory requirements control and these five criteria "are simply nonexclusive

considerations available to guide the trial court in its application of the statutory

requirements." Bradshaw, ¶ 16.

¶16 In the case at bar, the District Court first evaluated each of the five above-listed

criterion. It concluded that 1) Pense had a confidential relationship with Jack and Lee; 2)

Pense had both physical and mental conditions that affected her ability to withstand

influence; 3) the disposition of her grandfather's homestead to the Lindseys was unnatural;

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and 4) the Lindseys' request for a Warranty Deed and the presentation of it to Pense for

signature constituted demand and importunity" which play directly on the susceptibility of

this particular individual."

¶17 The court then analyzed the three statutory elements of undue influence and

concluded that the Lindseys took unfair advantage of Pense's weakness of mind. Section 28-

2-407(2), MCA (1999). The court stated,

Because of the nature of her upbringing, the focus of her whole personality
was upon "returning" the kindness of others. This personality was based on
a simple, naive disregard for the protection of wealth, that, as Garfield County
Attorney Nick Murnion stated, was susceptible to influence. The persistent
"friendship" of the Defendants from the date of the phone call inquiry to
Sheriff Phipps onward reflected an intensity which Rosie Pense's particular
weakness of mind could not resist. Such intensity reflected the taking of an
unfair advantage of this weakness of mind.

We review below the evidence relied upon by the District Court to support its findings of

fact and conclusions of law.

Confidential Relationship

¶18 There is no dispute that the Lindseys developed a confidential relationship with Pense

after her separation from her husband. They each testified that they assisted Pense in

numerous ways on many occasions. Jack explained legal documents to her, drove her to and

from meetings at the law office or to the grocery store or drug store. He installed helpful

appliances in Pense's home. Lee washed and colored her hair and helped Pense with other

personal or hygiene activities. The Lindseys hosted Pense in their home and took her for

scenic drives and picnics. They bought her gifts. They arranged for Pense to stay in their

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home or the home of other family members on various occasions. Moreover, Jack, at one

time, was given Power of Attorney over Pense's health affairs.

¶19 We have previously noted that in most confidential relationships, one party provides

to another party basic assistance in the form of personal care, transportation, and/or advice

in financial affairs. See Estate of DeCock v. DeCock (1996), 278 Mont. 437, 445, 925 P.2d

488, 492, overruled on other grounds by Bradshaw; Matter of Estate of Lien (1995), 270

Mont. 295, 304, 892 P.2d 530, 535, overruled on other grounds by Bradshaw; Matter of

Estate of Long (1987), 225 Mont, 429, 430-31, 732 P.2d 1347, 1348.

Physical and Mental Condition as it may Affect Her Ability to Withstand Influence

¶20 Pense's former husband, Berger, testified that in 1995 or 1996, Pense suffered "some

physiological event" that he characterized as "a multiple minor stroke event." He claimed

that she demonstrated short term memory loss and noticeable changes in her mental

functioning. He stated that a second such event occurred in 1997 or 1998, after which she

stopped driving, began walking with a walker, experienced difficulty remembering things,

and suddenly and without explanation, ended their marriage. Pense's doctor said he had no

medical knowledge of any stroke events but that, as early as 1993, Pense exhibited

symptoms of age-onset dementia that gradually decreased her mental capacity over time.

A CT scan in 1993 confirmed this diagnosis and a repeat scan in 2001 clearly showed

dementia and cerebral atrophy. Additionally, the doctor stated that Pense suffered from

hearing loss as well as severe degenerative arthritis causing significant physical pain

requiring medication.

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¶21 Moreover, the court was presented with substantial and credible evidence that Pense

had lived a very sheltered life in rural Montana with limited societal contact outside family

and neighbors. Several witnesses testified that she needed the friendship, companionship,

and personal attention of others desperately and was extremely generous, in a childlike

manner, when responding to even the smallest of kind acts. Additionally, she was naively

trusting of everyone. Kastner and Dahl, two former ranch hands, repeatedly approached

Pense over several months requesting money. They either convinced Pense that she owed

them back wages from when they worked for her former husband or convinced her to

indicate on the checks that they were back wages in order to lend an air of legitimacy to their

$93,000 ploy. The District Court was presented with several other examples of Pense's

"profligate generosity" that led it to conclude that Pense was susceptible to friendly, helpful,

or needy people taking advantage of her.

¶22 These physical and mental traits led the District Court to conclude that Pense

possessed a "unique weakness of mind," as well as a personality that focused upon her

"returning" the kindness of others without regard to the protection of her wealth and assets.

In addition to making her extremely susceptible to influence, the District Court concluded

that these combined characteristics affected her ability to withstand "persistent, albeit

friendly and possibly benign, influence" in the form of friendship.

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Unnaturalness of Disposition as it Relates to Showing a Mind Easily Susceptible to Influence

¶23 The District Court next concluded that, despite Pense having no living relatives other

than her disinherited cousins, her gifting of her grandfather's homestead to the Lindseys was

nonetheless unnatural. The court based this conclusion on 1) the irrevocable finality of the

gift; 2) the Lindseys' role in ensuring this irrevocable finality; 3) Pense's agitated state upon

recognizing that she had given away her beloved property; and 4) her intense desire to

retrieve it.

¶24 The court was persuaded by the evidence that each time Jack was involved in Pense's

will preparations, he got the property, and each time he was not involved, someone else got

the property. Moreover, Pense testified that she did not know she had deeded the property

to the Lindseys nor had she intended to do so.

¶25 In Christensen v. Britton (1989), 240 Mont. 393, 399, 784 P.2d 908, 912, we stated

that an unnatural disposition of property can be the "product of an unbalanced mind or one

that was easily susceptible to influence."

Demands and Importunities

¶26 Lastly, the court looked closely at the timing and circumstances surrounding the

demands and importunities that may have affected Pense's ability to withstand the Lindseys'

influence, beginning with Jack's call to Sheriff Phipps in the summer of 1998 though June

2000, when Pense signed the Warranty Deed prepared at Jack's behest. It noted that just

prior to Jack arranging to have the Deed prepared, the Lindseys took Pense for an outing on

her grandfather's homestead property. They allowed her to reminisce of her youthful time

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spent there, and listened attentively as she regaled them, with much excitement and emotion,

with stories of her grandfather and his beekeeping activities. They then promised to rebuild

the cabin and told her of plans they had for the land. As the Lindseys testified, Pense

suddenly announced that she wanted them to have the land before her death so that she, too,

could share in their plans. Jack, within a short time after this announcement, made

arrangements for the Deed to be prepared and executed.

¶27 The District Court noted that until Pense gave this land to the Lindseys, she was

fiercely possessive of her land holdings, to the point of borrowing money in order to buy

back some family land that had been distributed to Berger after the divorce. Berger also

testified that, during their twenty-five years together, Pense adamantly refused to sell her

grandfather's homestead property despite offers from prospective buyers. While specifically

stating that it did "not impute evil intent" to the Lindseys for befriending Pense, the court

nonetheless noted a "pattern in this case which may not constitute legal intent but which

creates a picture which a court of equity must evaluate: If one were intensely friendly with

Ms. Pense, she would, literally, give away the family farm."

¶28 Jack denies that he or Lee exerted undue influence over Pense and maintains that she

gave them the property willingly and knowingly. Moreover, the Lindseys claim there was

no evidence of any solicitation on their part to Pense regarding ownership of her land and

that without such solicitation, there is no demand or importunity. We disagree. Solicitation

need not be formal or overt. Jack, without question, influenced Pense in many decisions.

He influenced her choice of attorneys, where she stayed when traveling, how she spent much

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of her leisure time, and he convinced her to enter into a lease agreement for the homestead

property with his wife's son. Whenever Jack was involved in Pense's will-making, Jack was

devised the homestead property. Jack influenced her decision on her Personal

Representative and Power of Attorney. Jack and Lee arranged the picnic to the homestead

property and when Pense offered to give them the property, Jack had the Deed prepared,

executed and recorded. Moreover, when Pense asked for her land back, Jack attempted to

set the conditions for its return. We conclude that the timing and the circumstances under

which a very susceptible Pense ultimately gave this property to the Lindseys support the

District Court's conclusion that the fifth factor, demand and importunity, was met.

¶29 The District Court concluded that all five considerations used to assist a trier of fact

in identifying undue influence were present in this case. The court also concluded that Pense

possessed a weakness of mind and that the Lindseys' actions over these several months

constituted their taking an unfair advantage of that weakness under § 28-2-407(2), MCA

(1999).

CONCLUSION

¶30 The District Court carefully weighed the evidence and assessed the credibility of the

witnesses, observing their demeanor and discerning any motives or potential biases. We

conclude that there was substantial evidence presented to the court to support its findings of

fact. Based upon our review of this case, we cannot conclude that the District Court's

findings of fact are clearly erroneous or that its conclusions of law, founded upon these facts,

are incorrect. Therefore, we affirm the District Court.

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/S/ PATRICIA COTTER

We Concur:

/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ JIM RICE
/S/ JOHN WARNER