Miller v. Paul , 2014 Ohio 5789 ( 2014 )

[Cite as Miller v. Paul, 2014-Ohio-5789.]
COURT OF APPEALS
MUSKINGUM COUNTY, OHIO
FIFTH APPELLATE DISTRICT
JUDGES:
MICHAEL B. MILLER : Hon. William B. Hoffman, P.J.
: Hon. W. Scott Gwin, J.
Plaintiff-Appellant : Hon. Sheila G. Farmer, J.
:
-vs- :
: Case No. CT2014-0024
JEFFREY D. PAUL, EXECUTOR OF :
THE ESTATE OF PHYLLIS J. :
MURPHY, DECEASED : OPINION
Defendant-Appellee
CHARACTER OF PROCEEDING: Civil appeal from the Muskingum County
Court of Common Pleas, Case No.
CH2011-0437
JUDGMENT: Reversed and Remanded
DATE OF JUDGMENT ENTRY: December 29, 2014
APPEARANCES:
For Plaintiff-Appellant For Defendant-Appellee
JAMES SILLERY MARK STUBBINS
35 North College Street 59 North Fourth Street
P.O. Drawer 958 Box 488
Athens, OH 45701 Zanesville, OH 43702-0488
[Cite as Miller v. Paul, 2014-Ohio-5789.]
Gwin, J.
{¶1} Appellant appeals the April 25, 2014 judgment entry of the Muskingum
County Court of Common Pleas granting appellee’s motion for summary judgment and
the July 3, 2013 judgment entry denying appellant’s motion to join new parties.
Facts & Procedural History
{¶2} Dorothy Haser (“Haser”) lived in Zanesville with her brother Paul. Haser
never married, had no children, and her brother predeceased her. Phyllis Jean Murphy
(“Murphy”) and her husband Charles Murphy were friends with Haser as Charles
Murphy and Haser were cousins. Appellant Michael Miller is Haser’s second cousin
who found Haser in 1993 after doing a genealogy search. On April 4, 2008, Haser
purchased a New York Life annuity for $302,228.73 and named Miller as the
beneficiary. On May 27, 2008, Haser named Miller as the transfer on death beneficiary
on a Huntington Bank account then worth $13,813.21. On May 6, 2009, Haser named
Miller as the transfer on death beneficiary of a PNC bank account then worth
approximately $52,378. On July 20, 2009, Haser purchased a Sun Life of Canada
annuity for $100,000 and named Miller as the beneficiary. Haser’s history of making
gifts prior to January of 2010 consisted of a number of gifts to the Zanesville Eagles and
to St. Nicholas Church. Haser also gave Murphy $50.00 gifts on her birthday and at
Christmas.
{¶3} Prior to January of 2010, Haser was independent, paid her own bills, and
handled all of her own finances. In January of 2010, Haser fell out of bed and Murphy
found Haser lodged up against a register with burns to her body. Haser was taken to
Muskingum County, Case No. CT2014-0024 3
the hospital on January 8, 2010. Haser was transferred to Autumn Health Care on
January 18, 2010 where she remained until her death on September 1, 2010.
{¶4} After Haser was transferred to Autumn Health Care, Murphy set up an
appointment with Attorney Thom Cooper (“Cooper”). Utilizing the instructions given to
him by Murphy and her husband, Cooper prepared a power of attorney for Haser to sign
appointing Murphy as Haser’s attorney-in-fact. The power of attorney contained the
right of the attorney-in-fact to make gifts to herself and specifically allowed the attorney-
in-fact to self-deal with respect to any or all of Haser’s real or personal property.
Cooper had no communication with Haser prior to or after the preparation of the power
of attorney. On January 29, 2010, Cooper sent his associate attorney, Ashley Sorgen
(“Sorgen”) to meet with Haser to sign the power of attorney. Cooper also put Murphy in
touch with Jim Zifer (“Zifer”), a financial planning investment specialist.
{¶5} Several weeks after Haser signed the power of attorney document,
Murphy attempted to consolidate assets by transferring funds from a PNC account, but
the bank required that Haser execute PNC’s own power of attorney form and a new
signature card for the account that continued to list Miller as the payable on death
beneficiary. Norma Brookover, a friend of Haser’s, took the PNC forms to Haser at the
nursing home on February 12, 2010, and Haser signed the documents. On February
22, 2010, Murphy closed two PNC bank accounts of $53,642.80 and $10,911.80 and
put them into a Huntington Bank checking account in Haser’s name. On March 5, 2010,
Murphy closed four Huntington accounts with an approximate total amount of
$218,779.00 and placed the funds into the Huntington checking account with the PNC
funds already in it. On March 26, 2010, Murphy closed a Century National Bank IRA
Muskingum County, Case No. CT2014-0024 4
with $2,796.58 and a Century National account of $105,712.47, and placed the funds
into the Huntington checking account.
{¶6} In April of 2010, when Murphy was reviewing Haser’s mail, Murphy found
a statement from New York Life annuity, an annuity that Murphy had no knowledge of,
with an approximate balance of $300,000. Murphy met with Zifer on April 26, 2010,
and, after the meeting, withdrew $120,000 from the annuity and deposited the amount
into Haser’s Huntington checking account. Miller received the amount remaining in the
annuity after Haser’s death, which was approximately $212,056.58.
{¶7} On April 26, 2010, Murphy, as power of attorney for Haser, wrote herself a
$400,000 check from Haser’s remaining Huntington checking account designating it as
a “gift” in the memo line. On May 11, 2010, Haser signed a statement naming Murphy
the transfer-on-death beneficiary on the Huntington checking account. Also on the
same day, Jennifer Morningstar (“Morningstar”), Cooper’s legal assistant, took a trust
document to Haser to sign. The Haser Keystone Inheritance Trust named Murphy as
both the lifetime and death beneficiary of the trust. On May 17, 2010, Murphy, as power
of attorney for Haser, wrote herself a check for $80,000 designating it in the memo line
as a “gift.”
{¶8} In July of 2010, Murphy learned about Haser’s annuity at Sun Life. On
July 20, 2010, Murphy surrendered the Sun Life annuity in the amount of $100,884.83
and placed the funds into the Huntington checking account. On August 18, 2010,
Murphy, as power of attorney for Haser, wrote herself a $100,000 check from Haser’s
Huntington checking account. Murphy stated that the gifting of this approximately
Muskingum County, Case No. CT2014-0024 5
$580,000 to herself was suggested by Zifer to accommodate Medicaid planning for
Haser.
{¶9} Miller filed a complaint on August 25, 2011, against Murphy seeking
declaratory judgment that Haser was not competent to sign the power of attorney or
trust document and that such documents are invalid and void; to set aside inter vivos
transfers pursuant to the power of attorney and trust and to award damages as a result
of such invalid transfers; and to find that Haser was the subject of undue influence and,
as a result, the power of attorney and trust are invalid and void. Miller requested
damages of $300,537.92 (the amount of the accounts that previously listed Miller as the
beneficiary upon death until Murphy changed them as power of attorney, plus surrender
and early withdrawal penalties), plus interest, punitive damages, costs, and attorney
fees.
{¶10} Murphy died on January 19, 2013, and a suggestion of death was filed in
this case on February 20, 2013. Miller filed a motion to substitute the executor of
Murphy’s estate as a party defendant on February 27, 2013. The trial court granted
Miller’s motion and appellee Jeffrey Paul was substituted as the party defendant. On
March 8, 2013, Miller filed a motion to join new parties to add the adult children of
Murphy, who were each beneficiaries of an annuity established by Murphy with the
funds she gifted to herself from Haser pursuant to the power of attorney. The trial court
held a hearing on the motion and, on July 3, 2013, denied Miller’s motion to join new
parties.
{¶11} On July 31, 2013, appellee filed a motion for summary judgment on
appellant’s claims. Appellant filed his own motion for summary judgment on March 15,
Muskingum County, Case No. CT2014-0024 6
2013. Numerous depositions were submitted in support of each party’s motion for
summary judgment, including depositions of Julie Cameron, licensed speech
pathologist, Zifer, Miller, Julie Ball, licensed social worker, Morningstar, Sorgen, Cooper,
Murphy, Dr. Albirini, Barbara Palmer, a friend of Haser’s, Dorothy Rucker, a friend of
Haser’s, and Mylinda Woodland-Phillips, a licensed social worker. Appellee also
submitted the affidavit of nurse Andrew Hooks in support of his motion for summary
judgment. On April 25, 2014, the trial court granted appellee’s motion for summary
judgment and denied Miller’s motion for summary judgment.
{¶12} Miller appeals the April 25, 2014 and July 3, 2013 judgment entries of the
Muskingum County Court of Common Pleas and assigns the following as error:
{¶13} “I. THE TRIAL COURT COMMITTED ERROR WHEN IT FAILED TO
GRANT APPELLANT MILLER SUMMARY JUDGMENT DECLARING THE POWER OF
ATTORNEY AND TRUST, AND ALL ACTS TAKEN PURSUANT THERETO, INVALID
DUE TO THE INCOMPETENCY OF DOROTHY HASER.
{¶14} "II. THE TRIAL COURT ERRED IN FAILING TO DECLARE THE
ACTIONS TAKEN PURSUANT TO THE POWER OF ATTORNEY AND TRUST
INVALID DUE TO THE BREACH OF CONFIDENTIAL AND FIDUCIARY
RELATIONSHIP PHYLLIS JEAN MURPHY HAD WITH DOROTHY HASER.
{¶15} "III. THE TRIAL COURT ERRED IN FAILING TO GRANT MILLER’S
MOTION FOR SUMMARY JUDGMENT BECAUSE THE POWER OF ATTORNEY AND
TRUST WERE THE PRODUCT OF MURPHY’S UNDUE INFLUENCE ON HASER.
Muskingum County, Case No. CT2014-0024 7
{¶16} "IV. THE TRIAL COURT COMMITTED PREJUDICIAL ERROR WHEN IT
DENIED MILLER’S MOTION TO JOIN MURPHY’S CHILDREN AS PARTIES IN THE
LAWSUIT.
{¶17} "V. THE TRIAL COURT COMMITTED PREJUDICIAL ERROR IN
GRANTING APPELLEE PAUL’S MOTION FOR SUMMARY JUDGMENT AS GENUINE
ISSUES OF MATERIAL FACT EXIST AS TO WHETHER DOROTHY HASER HAD THE
MENTAL AND TESTAMENTARY CAPACITY TO SIGN THE POWER OF ATTORNEY
AND TRUST.
{¶18} "VI. THE TRIAL COURT COMMITTED PREJUDICIAL ERROR IN
GRANTING APPELLEE PAUL’S MOTION FOR SUMMARY JUDGMENT AS GENUINE
ISSUES OF MATERIAL FACT EXIST AS TO WHETHER DOROTHY HASER
RATIFIED THE ACTS OF HER ATTORNEY-IN-FACT.
{¶19} "VII. THE TRIAL COURT ERRED IN GRANTING APPELLEE PAUL’S
MOTION FOR SUMMARY JUDGMENT AS GENUINE ISSUES OF MATERIAL FACT
EXIST AS TO WHETHER THE POWER OF ATTORNEY AND TRUST WERE THE
PRODUCT OF MURPHY’S UNDUE INFLUENCE ON HASER.”
Summary Judgment Standard
{¶20} Civ.R. 56 states, in pertinent part:
“Summary judgment shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, written admissions, affidavits,
transcripts of evidence, and written stipulations of fact, if any, timely filed
in the action, show that there is no genuine issue of material fact and that
the moving party is entitled to judgment as a matter of law. No evidence or
Muskingum County, Case No. CT2014-0024 8
stipulation may be considered except as stated in this rule. A summary
judgment shall not be rendered unless it appears from the evidence or
stipulation, and only from the evidence or stipulation, that reasonable
minds can come to but one conclusion and that conclusion is adverse to
the party against whom the motion for summary judgment is made, that
party being entitled to have the evidence or stipulation construed mostly
strongly in the party’s favor. A summary judgment, interlocutory in
character, may be rendered on the issue of liability alone although there is
a genuine issue as to the amount of damages.”
{¶21} A trial court should not enter a summary judgment if it appears a material
fact is genuinely disputed, nor if, construing the allegations most favorably towards the
non-moving party, reasonable minds could draw different conclusions from the
undisputed facts. Hounshell v. Am. States Ins. Co., 67 Ohio St.2d 427, 424 N.E.2d 311(1981). The court may not resolve any ambiguities in the evidence presented. Inland
Refuse Transfer Co. v. Browning-Ferris Inds. of Ohio, Inc., 15 Ohio St.3d 321, 474
N.E.2d 271 (1984). A fact is material if it affects the outcome of the case under the
applicable substantive law. Russell v. Interim Personnel, Inc., 135 Ohio App.3d 301,
733 N.E.2d 1186 (6th Dist. 1999).
{¶22} When reviewing a trial court’s decision to grant summary judgment, an
appellate court applies the same standard used by the trial court. Smiddy v. The
Wedding Party, Inc., 30 Ohio St.3d 35, 506 N.E.2d 212 (1987). This means we review
the matter de novo. Doe v. Shaffer, 90 Ohio St.3d 388, 2000-Ohio-186, 738 N.E.2d
1243.
Muskingum County, Case No. CT2014-0024 9
{¶23} The party moving for summary judgment bears the initial burden of
informing the trial court of the basis of the motion and identifying the portions of the
record which demonstrates absence of a genuine issue of fact on a material element of
the non-moving party’s claim. Drescher v. Burt, 75 Ohio St.3d 280, 662 N.E.2d 264(1996). Once the moving party meets its initial burden, the burden shifts to the non-
moving party to set forth specific facts demonstrating a genuine issue of material fact
does exist. Id. The non-moving party may not rest upon the allegations and denials in
the pleadings, but instead must submit some evidentiary materials showing a genuine
dispute over material facts. Henkle v. Henkle, 75 Ohio App.3d 732, 600 N.E.2d 791(12th Dist. 1991).
I. & V.
{¶24} In his first assignment of error, appellant argues the trial court erred in
failing to grant his motion for summary judgment declaring the power of attorney and
trust invalid due to the incompetency of Haser. Alternatively, appellant argues in his
fifth assignment of error that genuine issues of material fact exist as to whether Haser
was competent to sign the power of attorney and trust documents.
{¶25} The creation of a power of attorney requires that the principal be mentally
competent at the time the power is executed. Testa v. Roberts, 44 Ohio App.3d 161,
542 N.E.2d 654 (6th Dist. 1988). “The test to be used to determine mental capacity is
the ability of the principal to understand the nature, scope, and extent of the business
he is about to transact.” Id. Mere confusion “and the infirmities of old age are not of
themselves determinative of an incapacity to transact one’s business, they are
Muskingum County, Case No. CT2014-0024 10
competent proof of capability to understand the nature of the transaction and the ability
of one to protect his own interests.” Id.{¶26} In support of summary judgment on the issue of Haser’s mental capacity,
appellee pointed to the deposition testimony of Murphy, Palmer, Rucker, Sorgen,
Woodland-Phillips, and Morningstar. Murphy testified that Haser was competent when
she signed the power of attorney and trust documents. Though Sorgen had no
independent recollection of the day Haser signed the power of attorney, her notes
indicate Haser understood the grant of the power of attorney and wanted Murphy to
receive her assets at her death. Palmer and Rucker both testified they saw Haser on
the date when she signed legal documents and that Haser was competent and of sound
mind on the date they visited her. Woodland-Phillips testified that Haser’s mental
function varied and that Haser might have been able to understand a power of attorney.
In his affidavit, Hooks stated that he saw Haser on the day she signed the power of
attorney and that she was competent, understood what she was signing, and wanted
Murphy to have her money when she died. Morningstar testified that, with respect to
the trust documents, she would not have notarized Haser’s signature if she thought
Haser was not capable of understanding the documents.
{¶27} To counter appellee’s evidence and in support of his motion for summary
judgment, appellant presented the testimony of other witnesses to suggest that Haser
may have lacked the ability to understand the nature and scope of the extent of the
business she was about to transact. Cameron testified that Haser’s short-term memory
fluctuated and when she administered a SLUMS exam to get a general idea of cognitive
functioning, Haser’s score indicated dementia and memory/cognitive impairment.
Muskingum County, Case No. CT2014-0024 11
Cameron stated that though there was a possibility that Haser could understand a
simple concept on a good day with lots of explanation and repetition, based on
Cameron’s training, education, and experience and to a reasonable degree of medical
probability, Haser would not have been able to read and understand the power of
attorney document. Dr. Albirini, who treated Haser at the hospital and nursing home,
diagnosed Haser with dementia and, in February of 2010, filled out a statement of
expert evaluation recommending a guardianship for Haser due to irreversible
Alzheimer’s dementia. Though Dr. Albirini did not see Haser on January 29th, he saw
her before and after that date and stated that, throughout the time he saw her and to a
reasonable degree of medical probability, she was not capable of signing legal
documents because her judgment was impaired and she needed help with decision-
making. Dr. Albirni testified that from the first time he saw Haser in January, she was
not capable of making and understanding any decision that had any legal ramifications.
Cooper testified that he never met or spoke with Haser with regards to her mental
capacity or her desire to establish a power of attorney or a trust.
{¶28} Also in support of appellant’s position is the fact that though Palmer and
Rucker testified Haser was competent when she signed legal documents, neither knew
what the legal documents were, both stepped out into the hallway when Haser signed
the documents, and neither could recall the date on which they visited Haser when the
documents were signed. Appellant further contends that, based on Hooks’ affidavit,
Haser thought she had plenty of money to pay for her long-term care at Autumn and
thus Haser did not fully understand the power of attorney and trust documents were
allegedly intended to facilitate extensive planning to qualify her for Medicaid.
Muskingum County, Case No. CT2014-0024 12
{¶29} There is conflicting testimony as to Haser’s mental state at the time she
signed the power of attorney and trust documents and as to whether Haser fully
understood the nature and scope of the extensive Medicaid planning and significant
gifting she was about to transact with the power of attorney and trust documents.
Accordingly, there are factual issues that require a trier of fact to weigh evidence and
resolve issues of credibility. Thus, summary judgment is inappropriate. See Cook v.
Reising, 181 Ohio App.3d 546, 2009-Ohio-1131, 910 N.E.2d 1 (9th Dist.). Construing
the evidence in favor of appellant, we find that there are genuine issues of material fact
as to whether Haser had the requisite mental capacity to execute the power of attorney
and the trust documents. Appellant’s first assignment of error is overruled, but
appellant’s fifth assignment of error is sustained.
II. & VI.
{¶30} In his second assignment of error, appellant argues that the trial court
erred in failing to declare the actions taken pursuant to the power of attorney and trust
invalid due to the breach of the confidential and fiduciary relationship Murphy had with
Haser. Alternatively, in his sixth assignment of error, appellant argues that there are
genuine issues of material fact as to whether Murphy breached her confidential and
fiduciary relationship with Haser and whether Haser ratified the acts of Murphy.
{¶31} “The holder of a power of attorney has a fiduciary relationship with his or
her principal.” In re Scott, 111 Ohio App.3d 273, 675 N.E.2d 1350 (6th Dist. 1996). A
fiduciary relationship is “one in which special confidence and trust is reposed in the
integrity and fidelity of another and there is a resulting portion of superiority or influence,
acquired by virtue of this special trust.” Stone v. Davis, 66 Ohio St.2d 74, 419 N.E.2d
Muskingum County, Case No. CT2014-0024 13
1094 (1981). A fiduciary owes the utmost loyalty and honesty to his principal. Testa v.
Roberts, 44 Ohio App.3d 161, 542 N.E.2d 654 (6th Dist. 1988).
{¶32} Appellee argues summary judgment was appropriate because the power
of attorney Haser gave to Murphy specifically allowed for self-gifting and self-dealing.
When a gifting clause is present, the attorney-in-fact bears the initial burden of proving
the validity of the transfer to themselves pursuant to the power of attorney, while the
party attacking the transfer retains the ultimate burden of proving undue influence by
clear and convincing evidence. In re Estate of Buckner, 12th Dist. Clermont No.
CA2008-07-074, 2009-Ohio-2447. “In determining whether the initial transfer was valid,
a court must first look to the express grant of authority in the language of the power of
attorney. A court must then look to other considerations, based upon the unique facts
of the case” that may include the following:
(W)hether a transfer depleted assets necessary to maintain the
principal’s lifestyle; whether the principal knew of the gift and authorized it
in some manner; whether the recipient of the transfer was the natural
object of the principal’s bounty and affection; whether the transfer was
consistent with the principal’s estate plan; whether the gift was a
continuation of the principal’s pattern of making gifts; and whether the
transfer was made for another legitimate goal, such as the reduction of
estate taxes.
Id. Further, “notwithstanding any express authority included in a power of attorney to
make gifts to oneself and create trusts, a fiduciary remains subject to a standard of care
* * * [and] continues to be bound by the overriding duty of loyalty to act for the benefit of
Muskingum County, Case No. CT2014-0024 14
the principal and not for the benefit of himself.” Bacon v. Donnet, 9th Dist. Summit No.
21201, 2003-Ohio-1301.
{¶33} Appellant argues that Cooper prepared the documents without having any
communication with Haser, that Haser was told nothing about the power of attorney until
Sorgen came to the nursing home with the documents prepared for execution, Haser
never knew of the gifts to Murphy, and Murphy never knew of all the assets Haser had
and failed to property investigate her assets. Further, that Haser knew she had
sufficient assets to pay for her nursing home expenses and she intended to use those
assets for that purpose and not for Medicaid planning, that no one discussed Medicaid
planning with Haser, that such gifting was not part of a continuing pattern since she only
gave Murphy small birthday and Christmas gifts, and since she had no will her only
estate plan was placing Miller as beneficiary on various annuities. Appellant also
argues Haser’s assets were depleted due to the withdrawal penalties assessed due to
Murphy’s gifting and the attorney fees charged by Cooper.
{¶34} Appellee argues that, based upon the affidavit of Hooks, Haser wanted
Murphy to be her attorney-in-fact and wanted Murphy to have her money when she
died. Further, that Rucker testified that Haser knew what she wanted and there was
nothing wrong with her mind. Also, that the power of attorney contains self-gifting
provisions and was prepared by Cooper to protect Haser’s assets from Medicaid
seizure and that Murphy did not violate her fiduciary duty to Haser by protecting her
assets from Medicaid seizure.
{¶35} We first note that, based upon our disposition of assignment of error VII,
there is a genuine issue of material fact as to whether Murphy unduly influenced Haser
Muskingum County, Case No. CT2014-0024 15
in the making of the power of attorney and trust documents. Thus, necessarily, there is
a question of material fact as to whether the transfers were valid since, when a gifting
clause is present, the party attacking the transfer retains the burden of proving undue
influence.
{¶36} Further, we find the evidence submitted raises genuine issues of material
fact regarding whether the transfers depleted assets necessary to maintain Haser’s
lifestyle, whether Haser knew of the gifts and authorized them, whether the transfer was
consistent with Haser’s estate plan, whether the gift was a continuation of Haser’s
pattern of making gifts, and whether the transfer was made for another legitimate goal,
such as Medicaid qualification. Accordingly, there are genuine issues of material fact as
to whether Murphy breached her duty to Haser. Appellant’s second assignment of error
is overruled. Appellant’s sixth assignment of error is sustained.
III. & VII.
{¶37} In his third assignment of error, appellant argues the trial court erred in
failing to grant his motion for summary judgment because the power of attorney and
trust were the product of Murphy’s undue influence on Haser. Alternatively, appellant
argues in his seventh assignment of error that genuine issues of material fact exist as to
whether the power of attorney and trust were the product of Murphy’s undue influence
on Haser.
{¶38} A finding of undue influence requires the following: (1) a susceptible
testator, (2) another’s opportunity to exert influence on the testator, (3) improper
influence exerted or attempted, and (4) a result showing the effect of such influence.
Redman v. Watch Tower Bible & Tract Soc. of Pennsylvania, 69 Ohio St.3d 98, 630
Muskingum County, Case No. CT2014-0024 16
N.E.2d 676 (1994). “General influence, however strong or controlling, is not undue
influence unless brought to bear directly upon the act * * *.” West v. Henry, 173 Ohio
St. 498, 184 N.E.2d 200 (1962). “Because the person who could give the best evidence
is now deceased, most evidence will be circumstantial, leaving the factfinder to draw
permissible inferences.” Redman v. Watch Tower Bible & Tract Soc. of Pennsylvania,
69 Ohio St.3d 98, 630 N.E.2d 676 (1994).
{¶39} In support of his motion for summary judgment, appellee submitted the
testimony of Sorgen that there was no indication Haser was unduly influence by Murphy
when she signed the power of attorney, the testimony of Morningstar that she had no
evidence that Haser was unduly influenced by Murphy when she signed the trust
document, and the affidavit of Hooks, who stated that, in his opinion, Haser was not
influenced by anyone.
{¶40} In his motion for summary judgment, appellant submitted evidence that
the hospital social worker recommended a guardianship for Haser, that Haser was
diagnosed with dementia during January and February of 2010, and that Dr. Albirini
recommended a guardianship for Haser due to the irreversible condition of dementia
and Alzheimer’s in early February of 2010. Further, that when Ball, the hospital social
worker, advised Murphy that Haser needed a guardian, Murphy made an appointment
with Cooper to obtain a power-of-attorney without informing him that Ball told Murphy
Haser needed a guardian and failed to inform Cooper that other relatives of Haser’s
existed. In addition, appellant argued that Murphy actually exerted her influence by
having Haser sign the power of attorney which allowed gifting and self-dealing and such
gifting of the significant sum to Murphy was a change from what Haser had previously
Muskingum County, Case No. CT2014-0024 17
done as she previously made modest gifts to her church, the Eagles, and to Murphy on
holidays and birthdays. Appellant also argued that Haser had no understanding that
Murphy was reallocating funds to herself through “Medicaid planning” as Hooks stated
in his affidavit that she had “lots of money and could afford to live comfortably at
Autumn Health Care until her long term care ended.”
{¶41} Construing the allegations most favorably towards appellant, we find that
reasonable minds could draw different conclusions from the undisputed facts as to
whether the power of attorney and/or trust documents were the product of undue
influence upon Haser by Murphy. Accordingly, appellant’s third assignment of error is
overruled, but appellant’s seventh assignment of error is sustained.
IV.
{¶42} Appellant argues the trial court erred when it denied his motion to join
Murphy’s children as parties to the lawsuit. We agree.
{¶43} Civil Rule 19 states, in relevant part, as follows:
A person who is subject to service of process shall be joined as a
party in the action if: (1) in his absence complete relief cannot be accorded
among those already parties, or (2) he claims an interest relating to the
subject of the action and is so situated that the disposition of the action in
his absence may (a) as a practical matter impair or impede his ability to
protect that interest or (b) leave any of the persons already parties subject
to a substantial risk of incurring double, multiple, or otherwise inconsistent
obligations by reason of his claimed interest, or (3) he has an interest
Muskingum County, Case No. CT2014-0024 18
relating to the subject of the action as an assignor, assignee, subroger, or
subrogee * * *.
{¶44} Likewise, R.C. 2721.12 provides that “when declaratory relief is sought, all
persons shall be made parties who have or claim any interest which would be affected
by the declaration.”
{¶45} Civil Rule 19 “encourages, and Ohio decisional law favors, a policy of
liberally granting joinder.” Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179, 465
N.E.2d 1298 (1984). In addressing motions pursuant to Civil Rule 19(A), a trial court is
vested with discretion in determining whether a party is necessary for a just
adjudication. Id. In order to find an abuse of that discretion, we must determine the trial
court’s decision was unreasonable, arbitrary, or unconscionable and not merely an error
of law or judgment. Blakemore v. Blakemore, 5 Ohio St.3d 217, 450 N.E.2d 1140(1983).
{¶46} We concur with appellant that Murphy’s children are indispensible parties.
Murphy invested $480,000 of the $580,000 she gifted to herself into an annuity. Her
children are the beneficiaries of this annuity. Murphy died on January 19, 2013 and,
after a suggestion of death was filed on February 20, 2013, Miller timely sought to join
Murphy’s children pursuant to Civil Rule 19. Murphy’s children, as beneficiaries of the
annuity with a significant portion of the gifted funds in it that appellant seeks to declare
invalid, claim an “interest relating to the subject of the action” and “are so situated that
the disposition of the action in their absence may * * * as a practicable matter impair or
impede their ability to protect that interest.” Further, if Murphy’s estate does not have
sufficient assets to potentially satisfy a finding in Miller’s favor on his claims for
Muskingum County, Case No. CT2014-0024 19
$300,537.92 plus interest, punitive damages, costs, and attorney fees, then in the
children’s absence, complete relief cannot be accorded among those already parties.
Accordingly, we find the trial court erred in denying appellant’s motion to join Murphy’s
children as parties to the action. Appellant’s fourth assignment of error is sustained.
{¶47} Based upon the foregoing, appellant’s first, second, and third assignments
of error are overruled and appellant’s fourth, fifth, sixth, and seventh assignments of
error are sustained. The April 25, 2014 and July 3, 2013 judgment entries of the
Muskingum County Court of Common Pleas are reversed and we remand the matter to
the trial court for further proceedings in accordance with the law and this opinion.
By Gwin, J.,
Hoffman, P.J., and
Farmer, J., concur