richard-william-as-personal-rep-of-the-estate-of-mary-lee-enlow-and ( 2012 )

Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEYS FOR APPELLANTS: ATTORNEY FOR APPELLEE:
BRYAN RUDISILL S. ANTHONY LONG
Rockport, Indiana Long & Mathies
Boonville, Indiana
MARK K. PHILLIPS
Boonville, Indiana FILED
Feb 14 2012, 9:36 am
IN THE CLERK
of the supreme court,
court of appeals and
tax court
COURT OF APPEALS OF INDIANA
RICHARD WILLIAMS, AS PERSONAL )
REPRESENTATIVE OF THE ESTATE OF )
MARY LEE ENLOW, Deceased, and )
VICKIE LEE WILLIAMS, )
)
Appellants-Defendants, )
)
vs. ) No. 87A05-1104-PL-235
)
KEVIN HEAVNER, AS PERSONAL )
REPRESENTATIVE OF THE ESTATE OF )
NORMAN HEAVNER, Deceased, )
)
Appellee-Plaintiff. )
APPEAL FROM THE WARRICK SUPERIOR COURT
The Honorable Robert R. Aylsworth, Judge
Cause No. 87D02-0511-PL-387
February 14, 2012
MEMORANDUM DECISION – NOT FOR PUBLICATION
RILEY, Judge
STATEMENT OF THE CASE
Appellants-Defendants, Richard Williams, as personal representative of the Estate
of Mary Lee Enlow, Deceased, and Vickie Lee Williams (collectively, the Williamses),
appeal the trial court‘s judgment in favor of Appellee-Plaintiff, Kevin Heavner, as
personal representative of the Estate of Norman Heavner, Deceased, with respect to the
transfer of certain assets from Norman Heavner (Norman) to Mary Lee Enlow (Mary)
upon Norman‘s death.
We affirm.
ISSUES
The Williamses present four issues on appeal, which we consolidate and restate as
the following two issues:
(1) Whether the trial court abused its discretion when it concluded that Mary was not
entitled to certain monetary withdrawals from a bank account jointly owned by
Mary and Norman prior to Norman‘s death; and
(2) Whether the trial court abused its discretion when it concluded that Mary was not
entitled to the proceeds of certain annuities and insurance policies because of
undue influence.
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FACTS AND PROCEDURAL HISTORY1
Mary and Norman met after Mary placed a newspaper advertisement seeking male
companionship in a local newspaper. They met for the first time on or about December
31, 2002 and immediately began living together. At the time of their meeting, Mary was
76 years of age and Norman was 78 years of age; both Mary and Norman had been
involved in several prior relationships.
In the Spring or Summer of 2004, Norman met with Randy Voight (Voight) a
financial advisor at Edward Jones, who helped Norman with several change of
beneficiary requests. Specifically, on or about June 1, 2004, Norman executed an annuity
policy change form to make Mary the beneficiary of his Transamerica Life Insurance.
Also, on or about November 24, 2004, Mary recorded with the Warrick County
Recorder‘s Office a Request for Change of Beneficiary to an AXA Equitable Life
insurance policy in Norman‘s name.
Mary and Norman also had a joint bank account. On December 30, 2004, Mary
withdrew $8,903.50 to prepay her funeral arrangements. Also, on January 5, 2005, Mary
withdrew $3,620.93 from their joint account. She transferred from the joint account
$18,000 on January 13, 2005 and another $2,000 on February 4, 2005.
On February 11, 2005, Norman died. On June 1, 2005, Kevin Heavner (Heavner),
one of Norman‘s surviving children, opened an estate on Norman‘s behalf. On
1
We remind both parties that the Statement of the Facts section of an appellate brief is not an appropriate
place to litigate or develop argument but rather should contain the facts relevant to the issues presented
for review. See Ind. Appellate Rule 46(A)(6).
3
November 14, 2005, Mary died and Richard Williams (Williams), Mary‘s son-in-law,
was appointed the personal representative of Mary‘s estate.
On November 1, 2005, Heavner, as personal representative of Norman‘s estate,
filed a Complaint against Mary2 and Mary‘s daughter, Vickie Lee Williams. In his
Complaint, Heavner alleged undue influence and fraud in the change of beneficiary on
Norman‘s insurance policies and in the withdrawal of money from Mary and Norman‘s
joint bank account. A bench trial was conducted on October 27-30, 2008; December 1-2,
2008; February 26, 2009; November 16-17, 2009; June 22, 2010; and November 22,
2010. On January 28, 2011, the trial court issued its findings and conclusions, entering
judgment in favor of Heavner. On February 28, 2011, the Williamses filed a motion to
correct error, which was denied on March 22, 2011.
The Williamses now appeal. Additional facts will be provided as necessary.
DISCUSSION AND DECISION
I. Standard of Review
Here, the trial court entered findings of fact and conclusions of law. As such, we
apply a two-tiered standard of review: first, we determine whether the evidence supports
the findings and, second, whether the findings support the judgment. Meyer v. Wright,
854 N.E.2d 57, 59 (Ind. Ct. App. 2006), trans. denied. The trial court‘s findings and
conclusion will be set aside only if they are clearly erroneous. Id. Findings of fact are
clearly erroneous when the record lacks any evidence or reasonable inferences from the
evidence to support them. Id. A judgment is clearly erroneous when it is not supported
2
Upon her death, Mary was substituted by Williams, the personal representative of her estate.
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by the findings of fact. Id. at 60. Put another way, a judgment is clearly erroneous when
a review of the record leaves us firmly convinced that a mistake has been made. Id. In
determining whether the findings or judgment are clearly erroneous, we consider only the
evidence favorable to the judgment and all reasonable inferences flowing therefrom. Id.Moreover, we will not reweigh the evidence or assess witness credibility. Id.II. Joint Bank Account Transfers
First, the Williamses contend that the trial court erred by awarding Heavner the
sums that Mary had transferred from the account she owned jointly with Norman.
Specifically, the trial court concluded
8. Count VI (motion to set aside transfer of Fifth Third Bank accounts) –
[Heavner] has proved by a preponderance of the evidence that [Mary] did
on December 30, 2004 pay from funds in [Norman‘s] Fifth Third account
the amount of $17,863.70 for prepaid funeral expenses for herself and
[Norman], the sum of $8,903.50 paid toward her own prepaid funeral
expenses through Browning Funeral Home in Evansville, Indiana.
Although by this time [Mary] was shown on accounts 759 and 852 as a
joint owner with [Norman], the evidence establishes that all funds in these
accounts originated from [Norman] and none of these funds originate from
[Mary]. As such, [Heavner] is entitled to judgment in this count in the
amount of $8,903.50 plus prejudgment interest at the rate of 8% per annum
from December 30, 2004 to the date of this judgment.
***
10. Count VIII (complaint to set aside transfer of checking account
proceeds) – [Heavner] has proved by a preponderance of the evidence the
right to judgment as to the amounts taken by [Mary] from [Normans‘s]
account number 759 and 852 prior to his death on February 11, 2005. Even
though she was shown as a joint owner of these accounts at that time, as
stated before the evidence shows that all funds in these accounts originated
with [Norman], and none originated with [Mary]. As such, [Heavner] is
entitled to judgment in this count for the $3,620.93 taken by [Mary] to
close account number 852 on January 5, 2005, the $18,000.00 transferred
from account number 759 to [Mary‘s] account number 5473 on January 4,
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2005. [Heavner] is also entitled to recover prejudgment interest at the rate
of 8% per annum on each of these amounts from the date of each transfer to
the date of this judgment on Count VIII.
(Appellant‘s App. pp. 17-18).
In response to the trial court‘s judgment, the Williamses assert that based on the
evidence that Mary and Norman lived as husband and wife even though they were never
married and Norman‘s indication not to leave any property to his children, it was
Norman‘s intent ―that Mary should be able to use the account assets as her own.‖
(Appellant‘s Br. p. 11).
In Indiana, the nature of joint accounts is statutorily defined in Ind. Code § 32-17-
11-17. In particular, I.C. § 32-17-11-17(a) stipulates the ownership of joint accounts
during the lifetime of the account owners as ―[u]nless there is clear and convincing
evidence of a different intent, during the lifetime of all parties, a joint account belongs to
the parties in proportion to the net contributions by each party to the sums on the
deposit.‖ In other words, the general rule is joint ownership in proportion to the
respective contributions unless a different intent can be shown.
In support of their argument that Mary and Norman indicated a different intent, the
Williamses point to testimony establishing the shared affection and care between Mary
and Norman and their living together as if they were husband and wife. They also focus
on testimony by David Krueger (Krueger), Mary and Norman‘s accountant, who testified
during trial that
This is oh, roughly six months after they were living together, and this is
what she told me. She said that [Norman] didn‘t want his children to
inherit anything, and that he wanted her, and she said, either to have his
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money or take care of his money for him. Which I thought was unusual
‗cause they didn‘t know each other very long.
(Appellant‘s App. p. 274).
Based on this evidence, we do not find that the applicability of the general rule has
been avoided. A simple reference by Krueger to Mary‘s self-serving statements is not
enough to evince a clear and convincing ―different intent.‖3 See I.C. § 32-17-11-17(a).
Moreover, turning to the ownership of the joint account in proportion to the contribution
by each party, we note that the Williamses do not refer us to any evidence establishing
that Mary financially contributed to the joint account—nor does the record contain any—
or that the sums transferred by Mary were used to take care of Norman‘s needs.
Therefore, the trial court‘s findings and conclusions are not clearly erroneous and we will
not disturb the trial court‘s judgment.
III. Undue Influence
Next, the Williamses dispute the trial court‘s conclusion that Heavner ―has proved
by a preponderance of the evidence the right to a judgment‖ regarding the Transamerica
Life Insurance Company annuity and the proceeds of the AXA Equitable Policy.
(Appellant‘s App. p. 19). During his lifetime, Norman was the sole owner of an annuity
with Transamerica Life Insurance Company and with AXA Equitable Company. Prior to
his death, Mary, acting as Norman‘s attorney-in-fact, executed a change of beneficiary
form naming herself the primary beneficiary to the proceeds of both policies. After
3
Although the Williamses also point to similar testimony by Randy Voight (Voight), Norman‘s financial
advisor, Voight‘s testimony relates to the change in beneficiaries on Norman‘s insurance policies, not to
the joint account.
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Norman‘s death, Heavner challenged this change of beneficiary on the basis of fraud and
undue influence. Specifically, Heavner noted that during her deposition testimony prior
to her death, Mary admitted to signing Norman‘s name to the Power-of-Attorney she
used to get the primary beneficiary changed. However, in its judgment, the trial court
expressly stated that
5. [] [Heavner] proved by a preponderance of the evidence that [Mary]
altered, forged or wrongfully created one or more documents purportedly
created or signed by [Norman], including a purported power of attorney
showing an execution date of the 8th of September. The evidence further
proves by a preponderance of the evidence that [Mary] copied and
transferred notary blocks/acknowledgments from one document to another
during the time she and [Norman] cohabited with one another. Even with
this finding by the court, the existence or non-existence of a valid power of
attorney does not relate to or affect the court‘s findings and judgment on
the most significant issues un this case, since they were not generated by
her use of a purported power of attorney.
(Appellant‘s App. p. 16). Moreover, after excluding Mary‘s fraud in the creation of a
Power-of-Attorney, the trial court was silent with regard to the actual basis of its
conclusion that Heavner was entitled to the proceeds of both policies and merely noted
that Heavner had proved by a preponderance of the evidence the right to a judgment. As
Heavner alleged both fraud and undue influence in his Complaint and both parties briefed
the issue based on undue influence, we will proceed under the assumption that the trial
court found undue influence in the change of beneficiary on both insurance policies.
In Indiana, various legal and domestic relationships raise a presumption of
confidence and trust as to the subordinate party on the one hand and a corresponding
influence as to the dominant party on the other. In re Estate of Wade, 768 N.E.2d 957,
961 (Ind. Ct. App. 2002). These relationships include, among others, attorney and client,
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guardian and ward, principal and agent, pastor and parishioner, and parent and child. In
re Supervised Estate of Allender v. Allender, 833 N.E.2d 529, 533 (Ind. Ct. App. 2005),
reh’g denied, trans. denied.4 However, this list is not necessarily exhaustive. Id. In such
cases, if the plaintiff‘s evidence establishes (a) the existence of such a relationship and
(b) the questioned transaction(s) between the parties resulted in an advantage to the
dominant party in whom the subordinate party had placed his or her trust and confidence,
the law imposes a presumption that the transaction was the result of undue influence
exerted by the dominant party, constructively fraudulent and, therefore, void. Meyer, 854
N.E.2d at 60. The burden of proof then shifts to the dominant party to rebut the
presumption by clear and unequivocal proof that the questioned transaction was made at
arm‘s length and was thus valid. Id. Undue influence has been defined as ―the exercise
of sufficient control over the person, the validity of whose act is brought into question, to
destroy his free agency and constrain him to do what he would not have done if such
control would not have been exercised.‖ Id.A. Existence of Fiduciary Relationship
In this case, a fiduciary relationship existed between Mary, as caregiver, and
Norman, as the recipient of Mary‘s care. The record establishes that Mary did the
household chores, she got water for him when he needed it—even though he was able to
get it himself—and answered the phone ―even if the phone was sitting next to []
4
The relationship of husband and wife is no longer included in this category. See Womack v. Womack,
622 N.E.2d 481, 483 (Ind. 1993) (stating that presumption of undue influence is an antiquated rule of law
and holding that courts of this state no longer recognize presumption of undue influence in transaction
between spouses such that the burden of proof is with a spouse seeking to set aside a transaction to
establish that the other spouse exercised undue influence). Here, although Mary and Norman held
themselves out as husband and wife, they were not actually married.
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Norman.‖ (Appellant‘s Suppl. App. p. 30). When Norman incurred physical problems
getting around the house, Mary put in a wheelchair ramp, installed handrails in the
hallways, and replaced the carpet so Norman could continue to reside in her house.
When Norman was hospitalized, Mary stayed overnight at the hospital and helped feed
him. Moreover, when questioned about the relationship, Krueger stated that based on his
observations Mary was dominant in the relationship as ―she did all that talking. She
brought in all the paperwork . . . and [Norman] – [Norman] said very little.‖ (Appellant‘s
App. p. 276). We find that the existence of this fiduciary relationship coupled with the
transfer of substantial assets from Norman to Mary as beneficiary of his insurance
policies, resulted in an advantage to Mary, raising the presumption of undue influence.
B. Rebuttal of Presumption
Because the presumption of undue influence is raised, the burden of proof shifts to
the Williamses to establish by clear and unequivocal proof that the questioned
transactions were made at arm‘s length and thus valid. See Meyer, 854 N.E.2d at 60. To
satisfy this burden, the Williamses refer to the testimony of several individuals with close
ties to both Mary and Norman who stated that the relationship was one of mutual respect
and affection and was presented to the outside world as a committed relationship
tantamount to marriage.
Also, Randy Voight (Voight), Norman‘s financial adviser at Edward Jones, stated
that on several occasions, Norman had told him that ―he did not have a good relationship
with his children, and wanted to change all of his beneficiaries[.]‖ (Appellant‘s App. p.
567). Voight also testified that when Norman was completing the beneficiary
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designation for his Edward Jones account5, he overheard Mary encouraging Norman to
leave something to his children. Norman refused and asked Mary to leave the room.
Likewise, Wanda Powell, a financial services representative with Fifth Third Bank who
notarized Norman‘s signature on the Edward Jones paperwork, stated that she would not
have notarized the signature if she had perceived Norman to be incompetent or under
duress.
The evidence further reflects that prior to meeting Norman, Mary typically visited
her daughter every five to six weeks, After Norman started to reside with her, he refused
to make the trip, therefore, Mary stopped going as well. While Norman was living with
Mary, Mary‘s only grandson, who she was close to, got married in Las Vegas. Mary did
not attend the wedding because Norman did not want to go, even though her daughter
offered to pay for her and Norman‘s travel and accommodations.
In response, Heavner draws this court‘s attention to the testimony of Arlene Berry
(Berry), Norman‘s daughter. Berry stated that when Norman gave her money Mary
―wouldn‘t say too much in front of me at first, she‘d give him a look, and then he told me
that he caught hell for [it].‖ (Appellant‘s App. p. 97). She added that she was not
allowed to see her father alone. Phyllis Hughes (Hughes), one of Mary‘s tenants,
testified that the assistant pastor of Mary‘s church ―got Norman‘s money through Mary.
He got his house paid off. Mary overpaid for it, giving the pastor‘s wife some of
Norman‘s money too. She used Norman‘s money to buy a truck for him.‖ (Transcript p.
5
It should be noted that the trial court‘s award of the proceeds of the Edward Jones account to Mary is not
disputed by Heavner on appeal.
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336). Hughes also stated that after she gave her deposition in this case, Mary came up to
her and told her that she had blown ―it now, I‘m going to lose all that money, everything,
because of you.‖ (Tr. p. 338). Mary would get angry and on one occasion, Mary took
out a gun and pointed it toward her own head. Leedra Adams (Adams), also one of
Mary‘s tenants, testified that immediately prior to Hazel Moore‘s (Moore) deposition,
Adams drove Mary to the bank where she withdrew $3,000. When she returned to
Adam‘s car, Moore contacted Mary on her cell phone and Mary told her that ―I have the
$3,000.‖ (Tr. p. 385). When Adams inquired after Mary‘s plans for the $3,000, Mary
responded ―you can‘t know nothing about none of this[.]‖ (Tr. p. 385). Finally, Heavner
references Krueger‘s statement during trial that based on his observations Mary was the
dominant party in the relationship.
Mindful of our standard of review, we cannot say that we are firmly convinced
that a mistake has been made. Although a presumption of undue influence arose because
Mary was in a fiduciary relationship with Norman at the time of the questioned
transactions, and the transactions benefitted her; we find that the evidence presented by
the Williamses did not rebut the presumption. We affirm the trial court.
CONCLUSION
Based on the foregoing, we find that the trial court did not abuse its discretion
when it concluded that Mary was not entitled to certain monetary withdrawals from a
bank account jointly owned by Mary and Norman prior to Norman‘s death; and the trial
court did not abuse its discretion when it concluded that Mary was not entitled to the
proceeds of certain annuities and insurance policies because of undue influence.
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Affirmed.
FRIEDLANDER, J. and MATHIAS, J. concur
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