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Graf v. Nelson

Court of Appeals of California, Second Appellate District, Division Seven.
Nov 19, 2003
B 160259 (Cal. Ct. App. Nov. 19, 2003)

Opinion

B 160259.

11-19-2003

BEVERLY GRAF, Plaintiff and Respondent, v. LOMA LEE NELSON et al., Defendants and Appellants.

Victoria Velarde and David Boros for Defendants and Appellants Loma Lee Nelson and Guy Mack. MacCarley & Rosen and Mark MacCarley, for Plaintiff and Respondent Beverly Graf.


Loma Lee Nelson (Nelson) and Guy Mack (Mack) appeal an order of the probate court voiding the will and trust of decedent Mae M. Vitous (Vitous). The court found that Vitous was unable to resist Macks undue influence in procuring provisions in her will that unduly benefited him, and that Vitous lacked the capacity to execute new estate plan documents by virtue of a pending conservatorship. Nelson, Vitouss conservator, and Mack, her caretaker, contend that the probate courts findings are not supported by substantial evidence. We affirm. Mack failed to overcome the presumption of undue influence raised by petitioner Beverly Grafs (Graf) evidence.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Vitous, who was widowed and in her nineties, resided in her own home on Hesby Street in North Hollywood until she died on September 5, 2001. Petitioner Graf, who is Vitouss niece, resides in Florida. Mack was Vitouss neighbor and became her live-in caretaker during the last year and a half of her life.

In February 2001, Vitous changed her estate planning documents to leave her estate to Mack. Graf filed a petition to (1) determine the validity of purported trust and to impose a constructive trust, and (2) quiet title to Vitouss North Hollywood residence. Graf contended that the estate documents of February 1, 2001, were void because: (1) Vitous made a donative transfer to "a care custodian of a dependent adult" (Prob. Code, § 21350, subd. (6)), which was not cured by the execution of a certificate of independent review (Prob. Code, § 21351, subd. (b)); (2) Vitous lacked legal capacity to transfer assets by trust because she was subject to pending conservatorship proceedings; and (3) Mack exercised undue influence over Vitous. Trial commenced March 19, 2002.

1. Initial relations Between the Parties

Graf had a good relationship with Vitous. Until Mack entered the picture, Graf was very close to her aunt. In 1998, Vitous was diagnosed with terminal stomach cancer, and Graf offered to care for Vitous. In October 1999, Graf spent approximately two weeks with Vitous in her home. At that time, Vitous was frail, but was able to provide for her own personal care and do her own shopping. Vitous agreed that Graf should pay her bills for her on a regular basis, and Graf set up a joint tenancy checking account to do so.

In March 2000, Graf returned to California because Vitous had fallen on the curb while walking her dog. Mack, who was Vitouss next-door neighbor, had called her to advise her of Vitouss fall. Graf asked Mack to "keep an eye" on Vitous until her arrival. When Graf got to California, Mack appeared to be living in Vitouss home. Although Graf asked Mack to leave, Vitous allowed him to stay. Graf did not want to put Vitous in a nursing home, and agreed to Macks request for $ 3,000 per month to care for Vitous at home. Initially Mack was paid for part-time services rendered in March and April 2000 in the amount of $1,300. In June 2000, Mack was paid $3,000; in July 2000, he was paid $3,000; and in August 2000, he was paid $2,000.

By September 2000, Mack was "100 percent moved in," and Vitouss house was a "total shambles." Macks computer equipment filled the living room, laundry was piled up, and garbage was stored underneath the sink. Mack was sleeping in the same bedroom as Vitous. He demanded additional compensation, was aggressive toward Graf, and directed Vitous to refuse to sign any documents Graf presented. Graf wanted to fund her aunts trust, so that she could continue to pay Mack. Vitouss attorney Thomas Doran took Graf, Vitous and Mack to Washington Mutual, one of the banks where Vitous had an account, to fund Vitouss trust. Once there, Vitous told the bank officer that she did not want Graf to have access to the account; rather, she wanted Mack to handle her affairs. Nonetheless, Graf was able to obtain access to funds at City Bank to place into the trust. After that time, Vitous was hostile to Graf during telephone conversations.

Grafs husband contacted Lawrence Yeagley, an attorney, for advice concerning Vitous in the spring of 2000. After Yeagley had several conversations with Mack, Yeagley was concerned about Macks lack of experience as a caregiver, his residence in Vitouss home, and the conflicts with Graf. Yeagley told the Grafs that it was not advisable to have Mack as a caregiver in Vitouss home, and that they should look for professional caregivers. Yeagley concluded that Mack was not providing the service that was needed, nor was Mack well intentioned.

2. The Conservatorship Proceedings.

In August 2000, Mack called Jim Schneiders, a professional conservator. Mack had previously contacted Lisa MacCarley, an attorney, to seek payment for his services to Vitous. MacCarley had given Mack the names of several professional conservators, including Schneiders.

Schneiders met with Vitous on August 22, 2000. Schneiders found Vitouss home to be unkempt, untidy, cluttered, and unsafe for an elderly individual. He concluded that a professional conservator would be appropriate for Vitous. Vitous was not capable of handling her affairs, and Schneiders found that Vitouss opinion "seemed to reflect what Mr. Mack was constantly and angrily presenting" to Vitous.

Schneiders met with Graf and her husband on September 27, 2000, concerning the conservatorship. Although they discussed Schneiders becoming conservator and hiring Mack as a caregiver, Schneiders found Mack overly demanding and believed Mack was seeking excessive compensation.

Mack at that time obtained independent counsel and threatened to sue Graf. Schneiders received a call from Norman Blaz, who identified himself as Macks counsel. Mack had gone to Blaz in May 2000 for advice relating to his compensation arrangement, and to meet with potential conservators.

On October 31, 2000, Vitous was evaluated by Daniel Osterweil, M.D. to assess her cognitive and functional status. Dr. Osterweil found Vitous capable of decision-making, although her memory was impaired and she needed help to manage her assets.

Vitous employed Blaz to represent her in the conservatorship proceedings. Nelson, Blazs secretary and a professional conservator, was appointed conservator over Vitouss person and estate on January 17, 2001. Letters were issued on February 9, 2001. After her appointment, Nelson investigated to see whether Mack had been misappropriating funds, but she did not find any evidence of misappropriation. Nelson continued to pay Mack $4,500 per month.

3. The Estate Documents.

Blaz referred Vitous to attorney Roxanna Boyle Kaz (Kaz). Kaz met with Vitous at her home on December 1, 2000. Vitous told Kaz that she wanted new estate planning documents, and gave her Dorans name as the attorney who had prepared her previous estate planning documents.

During her meeting with Vitous, Mack was present in the house, but Mack did not participate in determining the dispositive provisions of the will. Shortly after the meeting, Kaz received copies of the documents from Doran. She spoke to Doran on the telephone and reviewed Dr. Osterweils report.

At the end of December 2000 Kaz met with Vitous at her office. Vitous was enraged with Graf, and did not want to leave anything to her. Kaz recommended that Vitous leave Graf $10,000 to avoid a will contest, but Vitous refused. Because Vitous was leaving the bulk of her estate to a non-family member, Kaz had Vitous evaluated by a geriatric psychiatrist, Dr. Edward J. Spar. Dr. Spar issued a January 31, 2001 letter evaluating Vitous. He indicated that Vitous expressed happiness with Mack as her caretaker, anger with Graf, and a desire to leave everything to Mack.

Kaz prepared the February 1, 2001 Trust, which was a revocable living trust that named Vitous as trustee and Nelson as successor trustee. Kaz also prepared the February 1, 2001 Last Will and Testament, which left the bulk of her personal property to Mack, intentionally omitted heirs, and poured the residue of her estate into the Trust. Kaz was named as Executor. Norman Blaz executed a document entitled Certificate of Independent Review of the Will and Trust. On June 7, 2001, Vitous conveyed her North Hollywood house into the newly established trust.

Mack remained as Vitouss primary caregiver until her death. Subsequent to September 27, 2000 (the Grafs last visit to California), Mack received $22,000 from Vitous. He contended that Vitous filled out the checks and signed them herself. Mack had invoiced her for services rendered and expenses. These checks (or the invoices upon which they were based) were dated October 10, 2000 ($5,000), October 13, 2000 ($12,665), October 17, 2000 ($500 and $4,650.24). There was also October Monthly Expense Report, totaling $980; an invoice for services for November 2000, for $4,500; an invoice dated December 3, 2000, and a check to Mack for $5,500.

These exhibits are not part of the record on appeal.

After Vitouss death, Mack continued to live in Vitouss house. At the time of trial, Mack was still residing in the house, and had never paid any rent.

4. The Trial Courts Determination.

At the conclusion of the evidence, Graf argued that: (1) the June 2001 transfer of Vitouss residence into the trust was void under Probate Code section 1872, which prohibits a conservatee from transferring title to real property; (2) the January 17, 2001, inception of the conservatorship invalidated the trust and estate documents executed on February 1, 2001; (3) Mack exercised undue influence over Vitous; (4) the attorney-client relationship between Mack and Blaz disqualified Blaz as a disinterested attorney as required by Probate Code section 21351, subsection (d); and (5) under Probate Code section 21351, Mack had failed to meet his burden of proving by clear and convincing evidence that the testamentary documents were not procured by undue influence.

The trial court took the matter under submission and, after consideration of several versions of a proposed statement of decision and related objections, issued a statement of decision in which it found that Vitous was substantially unable to resist undue influence concerning the disposition of her assets and lacked the capacity to enter into the challenged transactions after the conservatorship order of January 17, 2001. The court further found that Vitouss will was the product of her lack of ability to resist the undue influence of the proposed beneficiary.

DISCUSSION

Defendants argue the evidence does not support the findings that Vitouss testamentary dispositions were the result of undue influence or lack of capacity. Instead, they contend the evidence demonstrates Vitous retained control over her affairs and made changes in her estate plan because of Grafs attempts to wrest control of Vitouss finances and put her in a rest home. We disagree.

I. MACK IS UNABLE TO OVERCOME THE PRESUMPTION OF UNDUE INFLUENCE RAISED BY GRAFS EVIDENCE.

Because we conclude the evidence supports a finding of undue influence, which is dispositive, we do not consider the second ground relied upon by the trial court, lack of capacity.

A. Standard of Review.

In applying the substantial evidence standard of review, we resolve all conflicts in the evidence in favor of the prevailing party, and we draw all reasonable inferences in a manner that upholds the verdict. (Holmes v. Lerner (1999) 74 Cal.App.4th 442, 445.) "`Substantial evidence is evidence of ponderable legal significance, evidence that is reasonable, credible and of solid value." (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.) It is not our task to weigh conflicts and disputes in the evidence. Our authority begins and ends with a determination of whether, on the entire record, there is any "substantial" evidence, contradicted or uncontradicted, that will support the judgment. (Grappo v. Coventry Financial Corp. (1991) 235 Cal.App.3d 496, 506-507.)

We will not find the trial courts findings unsupported merely because they rely on inferences which may reasonably be drawn from the evidence. (Hellman v La Cumbre Golf & Country Club (1992) 6 Cal.App.4th 1224, 1229.) Whether a certain inference can be drawn from particular evidence is a question of law, but whether the inference should be drawn is a question of fact for the fact finder. (California Shoppers, Inc. v. Royal Globe Ins. Co. (1985) 175 Cal.App.3d 1, 44.)

B. The Presumption of Undue Influence.

A presumption of undue influence arises where (1) the person alleged to have exerted undue influence had a confidential relationship with the testator; (2) the person actively participated in procuring the instruments preparation or execution; and (3) the person would benefit unduly by the testamentary instrument. Once the presumption arises, the proponent of the will must rebut the presumption by a preponderance of the evidence. (Estate of Sarabia (1990) 221 Cal.App.3d 599, 605; Estate of Gelonese (1974) 36 Cal.App.3d 854, 863; Evid. Code, §§ 600, 601.) "The effect of a presumption affecting the burden of proof is to impose upon the party against whom it operates the burden of proof as to the non-existence of the presumed fact." (Evid. Code, § 606.)

"Confidential and fiduciary relations are, in law, synonymous, and may be said to exist whenever trust and confidence is reposed by one person in the integrity and fidelity of another." (Estate of Cover (1922) 188 Cal. 133, 143.) Such relationship "likewise precludes the idea of profit or advantage resulting from the dealings of the parties and the person in whom the confidence is reposed." (Bacon v. Soule (1912) 19 Cal.App. 428, 434; see also GAB Business Services, Inc. v. Lindsey & Newsom Claim Services, Inc. (2000) 83 Cal.App.4th 409, 417.)

An unnatural disposition may be indicated by preference for strangers over relatives, exclusion of close relatives, or divergence from previously stated dispositive intentions. (See e.g., Estate of Clegg (1978) 87 Cal.App.3d 594, 603; Estate of Gelonese, supra, 36 Cal.App.3d 854, 866.) However, a seemingly unnatural disposition may be explained by the actual relationship of the testator to the beneficiaries and excluded parties. (Estate of Jacobs (1938) 24 Cal.App.2d 649, 652.)

Activity on the part of the proponent of the will to procure its dispositions may be established by inference and the use of circumstantial evidence. (Estate of Baker (1982) 131 Cal.App.3d 471, 481.) "`That the alleged wrongdoer had power or ability to control the testamentary act may be established by a variety of circumstances, — such as . . . dependency of the decent upon the beneficiary for care and attention, or domination on the part of the beneficiary and subserviency on the part of the deceased." (Estate of Washington (1953) 116 Cal.App.2d 139, 145-146.) Merely procuring an attorney, however, for the testator is insufficient to establish undue influence. (Estate of Swetmann (2000) 85 Cal.App.4th 807, 821.) There must be some evidence that the beneficiary influenced the dispositions of the will. (Estate of Mann (1986) 184 Cal.App.3d 593, 608 [beneficiary urged decedent to make a will "if she was so inclined;" no evidence beneficiary influenced disposition].)

Determining when influence becomes undue requires a qualitative assessment of the testators relationship with the beneficiary and the will contestant. "These determinations cannot be made in an evidentiary vacuum. The trier of fact derives from the evidence introduced an appreciation of the respective relative standings of the beneficiary and the contestant to the decedent in order that the trier of fact can determine which party would be the more obvious object of the decedents testamentary disposition." (Estate of Sarabia, supra, 221 Cal.App.3d at p. 607.)

The trial courts determination is consistent with findings in earlier cases.

In Estate of Franco (1975) 50 Cal.App.3d 374, the decedent was illiterate and had the mental maturity of a 14-year-old. He had purchased $20,000 worth of AT&T stock which was held in joint tenancy with his sister. (Id. at pp. 377-379.) The decedents nephews began to visit regularly, and conspired to make him believe his sister, whom he trusted implicitly, was trying to cheat him. (Id. at p. 378.) The nephews took the decedent to a lawyer for the purpose of making a will which left them the bulk of his estate, and had the sister, who was also illiterate, sign away her interest in the stock believing she was signing a dividend check. Franco found sufficient evidence the nephews procured the will on the grounds that they induced the decedent to make the will and suggested its provisions. (Id. at p. 384.)

Similarly, in Estate of Clegg, supra, 87 Cal.App.3d 594, the decedent was in her eighties, had dementia, was in failing health, and resided in a senior facility. The director of the facility admitted her to a convalescent hospital, but believed a conservatorship should be established for her and took her to an attorney; the director of the facility and his personal secretary were appointed her conservators. (Id. at pp. 598-599.) The attorney prepared a will naming the senior center as her beneficiary, although she had other living relatives. (Id. at p. 599.) Clegg found improper procurement of the will because the director and attorney, who stood in a confidential relation to her, suggested the decedent have a will, and told her that her property would escheat, which was incorrect because she had relatives. Furthermore, because the decedent had living relatives, her will, which left her estate to the senior facility, was an unnatural disposition. (Id. at pp. 602-603.)

In Estate of Baker, supra, 131 Cal.App.3d 471, the decedent was never married, and lived for most of her life with her adoptive mother and brother. After they died, a "psychic" who had previously been a casual acquaintance of the decedent assumed a more important role in her life, and persuaded her to, among other things, sell her unproductive securities and permit the psychic to manage her funds; the decedent for the most part did as the psychic advised. (Id. at pp. 477-478.) When the decedent was in declining health, the psychic took her to an attorney of the psychics choosing. (Id. at p. 479.) The will left the bulk of the decedents estate to the psychic, $9,000 to the decedents brother and his wife, and excluded relatives to whom the decedent had previously stated she would leave her property. (Id. at pp. 478-479.) Baker found improper procurement through the psychics activities; the evidence supported an inference that the psychic exerted total control over the decedent and unduly profited from her domination of the decedents free will. (Id. at pp. 481-482.)

Substantial evidence supports the finding that each of the tests for undue influence, as applied in earlier cases, is met in this case.

Mack was in a confidential relationship with Vitous, having assumed the role of her caretaker and "protector" — the one Vitous could rely on to fend off her relatives and others whom he convinced her wanted to put her in a home. He lived with Vitous 24 hours a day, took care of her, did her shopping, and looked after her house, effectively isolating Vitous from Graf.

The will and trusts disposition was unnatural because Mack was not a relative or long-time friend. He was a late entry into Vitouss life at a point when she was dying, frail, and alone, and displaced Vitouss niece as her beneficiary. Furthermore, the evidence showed that Mack had an overbearing personality, had completely "taken over" Vitouss residence, and regularly expressed significant personal animosity towards Graf.

Lastly, Mack did much more than merely take Vitous to an attorneys office. He chose the attorney who had given Mack legal advice concerning disputes arising out of his employment as Vitouss caretaker. The chosen attorney was closely involved with both Vitouss conservator and the drafter of her new estate documents. The evidence supports an inference that Mack was behind Vitouss "enraged" desire to cut her formerly "favorite" niece of out of her will and trust, given that his relationship with Graf was fueled by his own personal animosity towards her. Lastly, as Schneiders testified, Vitouss opinion "seemed to reflect what Mr. Mack was constantly and angrily presenting" to her.

Macks evidence does not overcome the presumption raised by these facts. The fact that Vitous wanted Mack to take care of her in her home does nothing to dispel the presumption created by his closeness to her, his procurement of her estate documents, and the unnatural disposition of her will. There was a close relationship between Vitouss conservator, her will drafter, and her conservators attorney. This supports an inference that Mack so dominated Vitous that he controlled the disposition of her will and obtained counsel and others to facilitate her new estate plan. In addition, Vitouss statements to Dr. Spar reflecting her fury with Graf, and her belief that Graf wanted to put her in a rest home, support an inference that Macks constant harangues shaped her beliefs.

Macks statutory argument does not compel a different result. Probate Code section 21350 provides that "no provision . . . of any instrument shall be valid to make any donative transfer to [& para;] . . . [¶] . . . a care custodian of a dependent adult," except as specified. (Prob. Code, § 21350, subd. (a)(6).) "Care custodian" is defined with reference to Welfare and Institutions Code section 15610.17, and means "persons providing care or services for elders or dependent adults." A finding that a person is prohibited from receiving a transfer under section 23150 creates a rebuttable presumption that the transfer was the product of fraud, duress, menace, or undue influence.

Section 21351, subdivision (b) does provide a mechanism to rebut the presumption. The donee may have the instrument reviewed by independent counsel who advises the donor of the nature and consequences of the intended transfer and who attempts to determine if the transfer is the result of fraud, menace, duress, or undue influence. The independent counsel must execute a "certificate of independent review." (Prob. Code, § 21351, subd. (b); Estate of Shinkle (2002) 97 Cal.App.4th 990, 993.)

Any argument that the Certificate of Independent Review executed by Blaz supports the validity of the documents is unsupported by the evidence. Mack was a "caregiver" under Probate Code section 21351, subdivision (6) and therefore disqualified from taking. While Blaz executed a Certificate of Independent Review, Blaz was not legally independent, nor is there any evidence that he attempted to determine whether the transaction was free of fraud, undue influence, menace, or duress. Thus, the statutory prohibition bars the transfer.

II. ANY DEFECTS IN THE REVISED STATEMENT OF DECISION ARE IMMATERIAL AND DO NOT MERIT REVERSAL.

At the outset of trial, the court advised the parties it would enter a statement of decision. At the conclusion of trial, the court advised the parties it would take the matter under submission and requested a proposed statement of decision from the prevailing party. Graf filed two proposed statements of decision; defendants objected to both and requested specific findings relating to Vitouss mental capacity and the execution of the Certificate of Independent Review. The trial court ultimately issued a Revised Statement of Decision.

On appeal, defendants contend that the findings in the Revised Statement are "at best ambiguous." They assert that, while the court apparently found that Vitous was susceptible to undue influence, there is no specific finding that Mack exerted such influence. We disagree with defendants evaluation.

Code of Civil Procedure section 632 requires that the "court shall issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial." The trial court is not required to list every evidentiary fact forming the basis for its decision; only "ultimate" facts are required. While not precisely defined, ultimate facts lie somewhere between detailed evidentiary facts and conclusions of law; the difference between evidentiary facts and ultimate facts "involves at most a matter of degree." (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6.)

Furthermore, only factual findings as to material issues are required. (In re Marriage of Garrity and Bishton (1986) 181 Cal.App.3d 675, 686-687.) "Even then, if the judgment is otherwise supported, the omission to make such findings is harmless error unless the evidence is sufficient to sustain a finding in the complaining partys favor which would have the effect of countervailing or destroying other findings." (Hellman v. La Cumbre Golf & Country Club, supra, 6 Cal.App.4th at p. 1230.) Thus, the trial court need not discuss each fact or legal conclusion a party requests; "all that is required is an explanation of the factual and legal basis for the courts decision regarding the principal controverted issues at trial as are listed in the request." (Id. at p. 1230.)

Here, the principal controverted issues were whether Vitous was susceptible to undue influence and whether, by virtue of the conservatorship proceedings, she was incapable of amending or altering her estate plan. The trial court made the necessary findings on these issues; the other factual and legal issues identified by defendants are merely corollary to the main issues and are thus not material.

DISPOSITION

The judgment of the superior court is affirmed. Respondent is to recover costs on appeal.

We concur: JOHNSON, Acting P. J. and WOODS, J.


Summaries of

Graf v. Nelson

Court of Appeals of California, Second Appellate District, Division Seven.
Nov 19, 2003
B 160259 (Cal. Ct. App. Nov. 19, 2003)
Case details for

Graf v. Nelson

Case Details

Full title:BEVERLY GRAF, Plaintiff and Respondent, v. LOMA LEE NELSON et al.…

Court:Court of Appeals of California, Second Appellate District, Division Seven.

Date published: Nov 19, 2003

Citations

B 160259 (Cal. Ct. App. Nov. 19, 2003)