Present: All the Justices
CLAUDE A. AYERS, ET AL.
OPINION BY JUSTICE A. CHRISTIAN COMPTON
v. Record No. 972356 September 18, 1998
GARLAND E. MOSBY
FROM THE CIRCUIT COURT OF HENRICO COUNTY
George F. Tidey, Judge
In this chancery suit, there is an effort to rescind a deed
upon the grounds of mutual mistake of fact or coercion. On
appeal, we consider whether the chancellor erred in sustaining
defendant's motion to strike the evidence following presentation
of the plaintiffs' case-in-chief during an ore tenus hearing.
The facts are virtually undisputed; the controversy is over
the inferences to be drawn from the facts. The chronology is
important, as is the identity of the players in this narrative.
The ownership of residential property located in Henrico
County is at issue. Warner M. Mosby and Mary M. Mosby, his
wife, had acquired the property in 1968 and resided there.
In 1990, the Mosbys executed mutual wills. Each will
devised the property "in equal shares" to William Wray Matthews
and appellee Garland Eugeen Mosby, if they survived the
testators. Matthews is Mary Mosby's son and has suffered from
many health problems all his life. Mosby, the defendant below,
is her stepson. The wills nominated defendant as executor.
Warner Mosby died in November 1994 and fee simple title to
the property vested in his widow. In January 1995, the widow
executed the instrument in question. By "Deed of Gift," she
conveyed the property in fee simple to defendant.
In September 1995, Mary Mosby executed another will. She
purported to devise a life estate in the property to her son, if
he survived her, with remainder to Sidney Alvis Matthews, her
brother, and his wife. She nominated her brother as executor of
this will.
In August 1996, Mary Mosby executed yet another will. She
purported to devise the property "fifty percent . . . in fee
simple absolute" to her son and "the remaining fifty percent
. . . in equal shares and in fee simple absolute" to appellants
Claude A. Ayers, Jr., and Rebecca P. Ayers. She nominated the
Ayerses, who were her neighbors, as executors of this will.
In October 1996, Mary Mosby died at age 73. The Ayerses
qualified as executors of the decedent's estate, and filed the
present suit in their representative capacity against defendant.
In a bill of complaint, the plaintiffs alleged decedent
"discovered" prior to her death "that a Deed of Gift bearing her
signature," and "ostensibly" conveying the fee simple interest
in her property to defendant, had been recorded. They asserted
that the alleged conveyance "was the result of the Defendant's
coercion" and that the deed was executed "by mistake." The
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plaintiffs sought rescission of the deed, reconveyance of the
property, attorney's fees, and costs. Answering the bill of
complaint, defendant filed a general denial that plaintiffs were
entitled to the relief sought.
Following discovery, the ore tenus hearing was held in May
1997, at which the plaintiffs' case-in-chief consisted of
testimony by an attorney who drew the decedent's second will and
by decedent's brother. The plaintiffs also presented
defendant's answers to interrogatories, defendant's responses to
requests for admissions, and excerpts from defendant's March
1997 discovery deposition.
At the conclusion of this evidence, the chancellor
sustained defendant's motion to strike. The court ruled
plaintiffs failed to establish by clear and convincing evidence
they were entitled to rescission of the deed. We awarded
plaintiffs an appeal from the August 1997 final decree
dismissing the bill of complaint.
Summarized in the light most favorable to the plaintiffs,
their evidence showed that during Warner Mosby's 1994 "final
illness," when he was hospitalized in the Richmond area, a
question arose whether he could remain in the hospital for
necessary treatment because the federal Medicare program would
no longer fund the hospitalization. "[F]earing the worst," a
hospital administrator "arranged a meeting between Mary Mosby
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and a social worker to discuss the pros and cons of [a] nursing
home alternative." The decedent asked defendant to attend the
meeting.
Upon defendant's arrival at the hospital from his Urbanna
home, decedent advised him she already had met with the social
worker. The decedent had learned, according to the evidence,
that the Medicare program would fund only a small portion of
nursing home charges and that a patient could become eligible
for substantial funding under the federal Medicaid program only
after the patient's assets had been "exhausted."
The decedent then asked defendant "to transfer the house,"
which "was her single largest asset," and a certificate of
deposit to his "name" so that defendant could "look out for her
needs in the event she should be confined to a nursing home
later in life." Defendant, a partner in a firm "which manages
medical practices," advised decedent, who was in "bad health,"
to arrange for her son, William Matthews, to "move in with her"
to reduce the living expenses of both.
The week following Warner Mosby's funeral, defendant had
the deed of gift drawn by a Saluda attorney. During the first
week of January 1995, defendant accompanied the decedent to a
Richmond-area bank. There, the certificate of deposit was
transferred to defendant and the deed that decedent had executed
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was acknowledged before a notary public. On February 7, 1995,
defendant recorded the deed.
Defendant's "understanding of the transfer that took place"
was that he "was care taker of those assets to take care [of]
Mary, and once she was gone that I would divide those equally
with Billy," decedent's son. Defendant stated he would decide
at decedent's death "what to do with the property" by referring
to the 1990 mutual will.
The decedent continued to live in the home on the property.
Her brother, a North Carolina resident, furnished her with
financial advice. Even though defendant was executor of his
father's estate, the decedent "kept herself busy attending to
the settlement of [Warner Mosby's] affairs," advising defendant
frequently "as to where things stood."
In July 1995, decedent had a "heat stroke," followed later
by "ministrokes," which caused her to be "confused" at times.
In September 1995, the brother accompanied the decedent to the
office of an attorney to draw a will that omitted defendant as a
beneficiary. When asked why she was "deleting" defendant from
her will, she told her brother that defendant "doesn't do a damn
thing for me . . . I can't get him on the phone." Other
evidence offered by the plaintiffs showed decedent told
defendant during the Fall of 1995 that "you don't have to visit
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me. You have your mother in the nursing home, you live in
Urbanna now."
Following execution of this second will, decedent asked her
brother to "look through my papers" to determine if they "are in
order." Among the documents, the brother found the deed in
question. According to the brother, "I asked her when did she
give away her house. She said, I haven't given away my house.
I said, well, this paper here says you have. I said, that would
make all these Wills void and null." The brother notified the
attorney who had drawn the second will of discovery of the deed.
In January 1996, the attorney prepared and filed a bill of
complaint styled "Mary M. Mosby vs. Garland E. Mosby" alleging
fraud, misrepresentation, failure of consideration, and unjust
enrichment. The subpoena in chancery never was served. Counsel
testified that during discussions with his client, she
"confirmed" the signature on the deed was hers, although "she
never remembered signing the deed," and told him she "never had
any intention of transferring her property."
In awarding this appeal, the Court framed the issue to be
debated. It is whether the trial court erred in finding
plaintiffs failed to present clear and convincing evidence that
decedent signed the deed as the result of mutual mistake of fact
or coercion. Arguing the affirmative, plaintiffs contend the
"heart" of their appeal is that the evidence clearly established
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decedent did not intend to transfer fee simple ownership of the
property to defendant. Plaintiffs point out that "at every
significant point in the course of this lawsuit, the Defendant
himself admits that he was not the fee simple owner of the
Property and that it was not his stepmother's intent to transfer
fee simple ownership of her home."
Elaborating, plaintiffs say their allegation of mistake was
established by the following evidence: The deed was prepared by
defendant's attorney; the decedent never had possession of the
deed until after defendant recorded it; the decedent continued
to pay the home mortgage, real estate taxes, and insurance on
the property; the decedent remained in possession of the
property; she continued to devise the property as part of her
estate planning; and decedent, upon learning of the deed's
existence, not only denied "giving" the property to defendant,
but also filed suit during her lifetime to have the deed
rescinded. This evidence, coupled with defendant's testimony
that he was only a "care taker" of the property, shows,
according to plaintiffs, there was no present intent when the
deed was executed to transfer fee simple ownership to defendant.
They say: "The deed of gift, by Defendant's own sworn
testimony, therefore, contains a mistake."
In support of their charge that defendant coerced decedent
to sign the deed, plaintiffs argue defendant acted in a
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fiduciary capacity to his stepmother. Thus, according to
plaintiffs, the very nature of the transaction furnishes the
most satisfactory proof of "fraud" and outweighs evidence to the
contrary. Plaintiffs exclaim: "It simply defies rational
explanation that the Decedent would convey her single largest
asset solely to a step-son and not provide at all for her own
natural son, especially when the decedent's estate planning
evidenced a consistent intent to provide for her natural son."
We reject plaintiffs' contentions. In order to withstand a
motion to strike, the plaintiffs had the burden of establishing
prima facie by clear and convincing evidence that the decedent
executed the deed as a result of mutual mistake of fact or
coercion. See Langman v. Alumni Ass'n of the Univ. of Virginia,
247 Va. 491, 502-04, 442 S.E.2d 669, 676-77 (1994); Carter v.
Carter, 223 Va. 505, 509, 291 S.E.2d 218, 221 (1982).
As pertinent here, the rule is that a trial court under its
equitable jurisdiction may give relief on the ground of mistake
in connection with a written instrument if "there has been an
innocent omission or insertion of a material stipulation,
contrary to the intention of both parties, and under a mutual
mistake." Wilkinson v. Dorsey, 112 Va. 859, 869, 72 S.E. 676,
680 (1911).
In the present case, there has been no mutual mistake
warranting rescission of the deed. To carry out her plan to
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dispose of her assets in order to qualify for Medicaid funding,
the decedent intentionally transferred the fee simple interest
in her real property to defendant so that he could "take care"
of her. There was no mistake on her part; she accomplished just
what she intended, that is, to liquidate her assets but have
them remain available for support during her life. The
defendant took delivery of the deed and recorded it, acting upon
his understanding that he would be "care taker" of the property.
There was no mistake on his part; he accomplished just what he
intended, that is, to hold title to the property in trust for
her life. Thus, paraphrasing Wilkinson, there was no omission
or insertion, innocent or otherwise, of a material stipulation
contrary to the intention of the parties under a mutual mistake.
Decedent's statements made months after the deed was
executed that she did not intend to transfer fee simple
ownership to defendant are belied by her execution,
acknowledgement, and delivery of the instrument. In the absence
of fraud, duress, or mutual mistake, a person having the
capacity to understand a written instrument who reads it, or
without reading it or having it read to her, signs it, is bound
by her signature. Metro Realty of Tidewater, Inc. v. Woolard,
223 Va. 92, 99, 286 S.E.2d 197, 200 (1982). See Ashby v.
Dumouchelle, 185 Va. 724, 733, 40 S.E.2d 493, 497 (1946). Thus,
her personal representatives cannot now successfully rely on her
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oral statements to nullify the deed's provisions and to support
rescission of the written instrument.
Parenthetically, we note that on brief and at the bar
during argument of the appeal, counsel for defendant stated that
while the foregoing facts "do not support voiding of the deed,"
nonetheless the facts "may" be the basis for enforcement of a
"trust created by parol" or the basis for otherwise reforming
the deed to reflect the intent expressed in the mutual will,
that is, to benefit the decedent for life, and defendant and
William Matthews thereafter. See Hanson v. Harding, 245 Va.
424, 427-28, 429 S.E.2d 20, 22 (1993); Malbon v. Davis, 185 Va.
748, 757, 40 S.E.2d 183, 188 (1946). This type of relief cannot
be accomplished in the present suit, however, because
beneficiary William Matthews is not a party.
Finally, there is not even a hint that defendant coerced
decedent into executing the deed. There is no evidence of
duress or conduct by defendant that destroyed decedent's free
agency. See Martin v. Phillips, 235 Va. 523, 527, 369 S.E.2d
397, 399 (1988). Under these facts, defendant did not stand in
a fiduciary capacity to his stepmother. See Nuckols v. Nuckols,
228 Va. 25, 36-37, 320 S.E.2d 734, 740 (1984). Indeed, she
initiated his involvement in her plan to assure eligibility for
Medicaid funding and cooperated with its fulfillment by
voluntarily accompanying him for the signing and acknowledgement
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of the deed. These events transpired when decedent had the
capacity to understand the instrument and before she began
having a series of strokes, which commenced six months after she
executed the deed, rendering her "confused" at times.
Consequently, we hold the chancellor did not err in
sustaining defendant's motion to strike the plaintiffs' evidence
and in entering summary judgment for the defendant. Thus, the
final decree dismissing the bill of complaint will be
Affirmed.
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