Challenging transactions of a decedent.

• Author: Studer, Larry P.
• Position: Florida

When a person dies, there may be grounds to challenge actions taken by the decedent prior to death. These transactions can include the making of a will, the making of a gift, the making of a deed, and the making of a contract, such as a nuptial agreement. There are various grounds to challenge transactions, such as fraud and deception, coercion and duress, incompetence, overreaching, and undue influence. Other grounds to challenge transactions are based on the required formalities for executing the document: Whether a will was executed with the formalities required for a will; (1) whether a deed was executed with the required formalities; (2) and whether a nuptial agreement was executed in accordance with the formalities required for such an agreement. (3) The subject of this article is challenging wills, gifts, deeds, and contracts on the grounds of incompetence and undue influence. The article will address the meaning and elements of these actions, various presumptions, the effect of a presumption, burden of proof, and standard of proof.

The proponent of a will has the initial burden to prove the will was executed in accordance with the required formalities. (4) A person seeking enforcement of a contract has the initial burden to prove the existence of the contract. (5) At that point, there is a presumption that the testator, the grantor of a deed, and the contracting party, respectively, were competent; (6) the burden of proving incompetence or undue influence, or both, is on the contestant. (7)

Undue Influence

The Florida Supreme Court, in Peacock v. Dubois, 105 So. 321 (Fla. 1925), explained the meaning of undue influence and stated:

The rule seems to be well settled that undue influence justifying the setting aside of the will, deed, or other contract must be such as to dethrone the free agency of the person making it and rendering his act the product of the will of another instead his own. The character of the transaction, the mental condition of the person whose ace [sic] is in question, and the relationship of the parties concerned to each other are all elements that may be taken in consideration in applying the rule. (8)

The central idea of undue influence is that a second person has overcome the will of the acting party and the action taken is, in reality, the action of the second person, not the free and voluntary act of the acting party. Evil motives are not required. Rather, the focus is on whether the action is, in fact, the free and voluntary act of the acting party. (9) However, mere affection, kindness, or attachment of a person to another may not, by itself, constitute undue influence. (10)

A factor that the courts frequently consider when evaluating whether a transaction is the result of undue influence is the mental state of the person. (11) The weakened mental state of a person is a significant factor in many cases in which undue influence was found. (12)

The existence of undue influence can be proven through direct evidence of domination, such as in the case of In re Estate of Winslow, 147 So. 2d 613 (Fla. 2d DCA 1962). (13) However, in many cases, it is impossible to determine the facts of a transaction because, when there is undue influence, often the only persons with knowledge of the facts are the decedent and the person who influenced the decedent. (14) As a result, the courts recognize certain patterns of conduct, which give rise to a presumption of undue influence. The most common of these is the Carpenter presumption.

Presumptions

* Carpenter Presumption of Undue Influence--In the case of In re Estate of Carpenter, 253 So. 2d 697 (Fla. 1971), the Florida Supreme Court addressed the issue of proving undue influence, set forth elements that give rise to a presumption of undue influence, and discussed the facts required to prove each element. The Carpenter presumption has three elements: 1) The influencing party was a substantial beneficiary of the transaction; 2) a confidential relationship existed between the influencing party and the acting party; and 3) the influencing party was active in procuring the transaction. (15) As the Carpenter court acknowledged, subsequent decisions have found the existence of substantial beneficiary, (16) confidential relationship, (17) and active procurement, (18) based upon a broad variety of circumstances.

The mental condition of the acting party is a factor that courts consider when evaluating whether there was undue influence. In Cripe v. Atlantic First National Bank of Daytona Beach, 422 So. 2d 820 (Fla. 1982), Joe Cripe and his wife lived in an apartment building belonging to Carrie Hare. She and he reached an agreement whereby he managed the apartment building for her. The relationship between Joe Cripe and Carrie Hare was described as follows:

[A] close and dependent relationship had developed between herself and Joe Cripe. There was evidence to show that after he had been managing her affairs for some time, she became dependent upon him for financial services and advice and that she placed her trust in him. A confidential relationship had developed.... The condemnation proceeds were deposited in a joint account because Mr. Cripe asked Mrs. Hare to do so. Since there was a confidential relationship and active procurement of a financial benefit, a presumption of undue influence arose. This presumption placed upon the defendants the burden of providing a reasonable explanation of the gift. (19)

Concerning the condemnation proceeds, Joe Cripe explained he assisted Carrie Hare with the condemnation transaction, which is the reason she placed them in a joint account. However, he had done nothing more than routine administrative services, which he was already obligated to do as manager of the apartment complex. On the issue of active procurement, the court stated: "There was evidence, however, that Mrs. Hare's mental condition had deteriorated and she had become totally dependent on the Cripes. Where there is such an inequality of mental strength, active procurement can be shown by evidence, as there was here, of a request or suggestion by the dominant party." (20)

Carpenter involved a will contest. Subsequent court decisions have applied this presumption to other transactions. In Cripe, the Florida Supreme Court applied the Carpenter presumption to an inter vivos transaction consisting of a gift of a substantial sum of money. (21)

In Gorman v. Harrison, 559 So. 2d 643 (Fla. 3d DCA 1990), the Carpenter presumption was applied to a series of transactions involving preparation of various wills, a trust, a codicil to a will, a warranty deed, and a power of attorney. The instruments were declared void and the acts performed under the power of attorney were nullified. (22)

In Thomas for Fennell v. Lampkin, 470 So. 2d 37 (Fla. 5th DCA 1985), the Fifth District applied the Carpenter presumption to an action to rescind deeds and for an accounting of funds that had been spent. Fennell was a widow and lived alone. While she was on amiable terms with her sister (the grantee under the deeds in dispute), the sister visited her only once or twice a year. When Fennell began to deteriorate mentally, to the point she could no longer care for herself, the sister began to visit her on a frequent basis, and she obtained a power of attorney from Fennell, purportedly so she could pay Fennell's bills. The sister was the more dominant and better educated of the two.

The sister contacted an attorney to prepare and supervise the execution of two deeds by Fennell, which transferred her real property to the sister. The sister was present when both deeds were executed. The sister also withdrew funds from Fennell's bank accounts. Subsequently, Fennell was hospitalized due to injuries, and while there, her nephew visited and explained she no longer owned the house. Fennel expressed surprise, revoked the power of attorney in favor of the sister, and made a new power of attorney in favor of the nephew, who brought an action to rescind the transactions. The Fifth District held these facts were sufficient to establish a Carpenter presumption and stated:

We think this case is a classic situation in which the presumption of undue influence in the procurement of the deeds arose. A confidential relationship existed between Fennell and the defendant, and Fennell was clearly slipping mentally at the time of the conveyances. One deed, in fact, was signed by Fennell's "X" because she was feeling so "shaky" that day. The defendant was also clearly the moving force behind procuring and executing the conveyances, as she obtained an attorney to draft the deeds and subsequently brought him to Fennell's house in order to execute them. (23)

While the Carpenter presumption is the best known and most commonly cited presumption, it is not the only pattern of conduct that gives rise to a presumption of undue influence. There are pre-Carpenter decisions that deal with two other patterns of conduct that gave rise to a presumption of undue influence. The principal factor in one of these is an unexplained departure from a fixed intention. The second presumption is based on circumstances that are suspicious and for which there is no satisfactory explanation. The first will be referred to as the fixed intention presumption, and the second as the suspicious circumstances presumption.

* Fixed Intention Presumption--Two older cases hold a presumption of undue influence arises when there is an unexplained departure from a fixed, long-held intention, together with other circumstances. These cases have not been applied to the issue of undue influence in any recent decision, perhaps because of the availability of the Carpenter presumption. However, neither decision has been overturned.

Newman v. Smith, 82 So. 236 (Fla. 1919), involved a will contest on the bases of incompetence and undue influence. The decedent had one child, a daughter, was divorced from his first wife, and had remarried. He had...