CLAUDE H. SIMMONS, WILMA ANN BARKER, OSCAR WAYNE SIMMONS, AND ADDIE L. POWERS, INDIVIDUALLY AND ON BEHALF OF THE ESTATE OF GERTRUDE SIMMONS APPELLANTS
HERBERT WENDELL SIMMONS; VANESSA GAYE MAGGARD; HAROLD D. SIMMONS; AND THE ESTATE OF GERTRUDE SIMMONS APPELLEES
APPEAL FROM ELLIOTT CIRCUIT COURT HONORABLE REBECCA K. PHILLIPS, JUDGE ACTION NO. 07-CI-00052
BRIEFS FOR APPELLANTS: Dwight O. Bailey
BRIEF FOR APPELLEES: M. Benjamin Shields
BEFORE: CLAYTON, LAMBERT, AND VANMETER, JUDGES.
This appeal arises from a dispute between seven siblings related to transfers of real and personal property by their mother prior to her death. Four of the siblings contended that the other three siblings exerted undue influence over their mother to transfer the property to themselves. Following a trial, the jury returned a verdict in favor of the defendants, finding that they had not exerted any undue influence and that their mother retained the mental capacity to make the contested transfers. The Elliott Circuit Court entered a trial verdict and judgment dismissing the plaintiffs' complaint and denied the plaintiffs' post-trial motions for relief. Finding no error in the trial court's rulings, we affirm the judgment and orders on appeal.
Gertrude and James Simmons were the parents of seven children; namely, Claude H. Simmons, Wilma Ann Barker, Oscar Wayne Simmons (Oscar), Addie L. Powers, Vanessa Gaye Maggard (Gaye), Herbert Wendell Simmons (Wendell), and Harold D. Simmons. In 1996, Gertrude and James executed mutual wills in which each spouse left everything to the surviving spouse. If one died without a surviving spouse, the wills devised real estate to Oscar, Claude, Gaye, and Gaye's husband, and devised personal property to Claude (a Ford SU 4000 tractor) and to Wendell (all other farm equipment except the tractor listed above, livestock, and the contents of the house). The remainder of the property would be bequeathed to all seven children, jointly, share and share alike. Gertrude named James as the executor of her will, and in the event he predeceased her, named Wendell and Gaye as co-executors. James passed away on November 23, 2004. His will was probated in Elliott District Court, and his property passed automatically to Gertrude.
After James' death, Gertrude made several property transfers that are the subject of this litigation. On November 29, 2004, Gertrude placed money in joint bank accounts, naming Wendell and Gaye as co-owners. In early January, Gertrude listed Wendell and Gaye as agents on her accounts. Two days later, Gertrude executed a durable power of attorney naming Wendell and Gaye as her attorneys-in-fact. Later that month, Gertrude changed the accounts back to a joint account with Wendell and Gaye, and then to Wendell's and Gaye's individual accounts. The amount in the accounts totaled $245, 545.68.
In addition to bank accounts, Gertrude conveyed several pieces of other property. On March 13, 2005, Gertrude transferred real estate adjoining the property where she and her husband lived to Gaye. On May 17, 2006, Gertrude transferred an interest in the farm where she lived to Wendell. She retained a life estate in that property, with the remainder interest going to Wendell. She also transferred her interest in livestock, farm equipment (except one tractor), machinery, and tools to Wendell. In September 2005, Gertrude transferred her interest in Brown Ridge Farm to Harold.
In October 2005, four of the siblings, Claude, Oscar, Wilma, and Addie, filed a petition in Elliott District Court to determine whether Gertrude was statutorily disabled and needed a court-appointed guardian. A three-member interdisciplinary team concluded that she was not disabled and did not need a guardian, and the petition was dismissed.
Gertrude passed away on June 6, 2006, at the age of 87, and her will was probated in Elliott District Court. Wendell and Gaye were named the co-executors.
On April 21, 2007, Claude, Oscar, Wilma, and Addie (hereinafter "the plaintiffs" or "the appellants") filed a complaint against Wendell, Gaye, and Harold ("the defendants" or "the appellees") seeking compensatory and punitive damages for claims of tortious interference with an inheritance, breach of fiduciary duty, breach of contract to make a will, breach of contract to devise property, and for enforcement of a constructive trust. They also sought to settle the estate, to cancel the prior property conveyances, and to remove the co-executors. The plaintiffs contended that the defendants began exercising dominion, control, and custody over Gertrude after James died and that they misled Gertrude or exercised undue influence to persuade her to transfer her property. Based upon Wendell and Gaye's positions as attorneys-in-fact, the plaintiffs labeled their relationship as confidential.
After the defendants filed their answer to the complaint, both parties began discovery. Several trial dates were set, and a jury trial was eventually scheduled for June 2, 2009. In April 2009, the defendants moved for a partial summary judgment, arguing that Gertrude's mental capacity had already been litigated in Elliott District Court and any additional litigation would be barred by collateral estoppel; that any claims against Harold should be dismissed as unsupported by any evidence; that the plaintiffs failed to establish a prima facie case for breach of contract to devise property; and that Kentucky does not recognize the tort of interference with an inheritance. In their response, the plaintiffs indicated that they would not be pursuing any breach of contract claims at trial, but otherwise objected to the motion. By order of stipulation entered April 4, 2009, the claims for breach of contract to make a will and to devise property were dismissed.
Shortly before the June 2009 trial date, the plaintiffs moved to change venue pursuant to Kentucky Revised Statutes (KRS) 452.030. As grounds for the motion, the plaintiffs stated that the jury list revealed a large number of potential jurors who were related to or were associated with the defendants or the defendants' witnesses. In response, the defendants argued that the grounds given were insufficient to justify a change in venue, stating that the mere fact that they were well known in the county was not enough to establish that the plaintiffs would not receive a fair trial. The trial date was later rescheduled for February 4, 2010.
In a motion in limine filed in January 2010, the defendants raised the burden of proof issue and whether the burden would be shifted to them. They also argued that it was improper to comment upon any shift in the burden of proof to the jury. The plaintiffs, in turn, argued that because of the confidential relationship between Wendell and Gaye and their mother, the burden of proof would shift to them and an elevated standard of proof of clear and convincing evidence would apply.
The matter went to trial on February 4, 2010, but the court declared a mistrial when a jury could not be seated. In May 2010, the plaintiffs' new attorney entered an appearance and the firm formerly representing them withdrew in July. By order entered July 26, 2010, the court scheduled a trial date for late November 2010, noting that a larger panel of jurors would be seated and that the jury trial would be held in Elliott County without objection from the parties. If a sufficient number of qualified jurors could not be obtained in Elliott County, the court permitted the parties to renew the motion to change venue. The trial was again rescheduled for March 15, 2011, at the request of the plaintiffs, due to their attorney's recent entry into the case and the need to review the volumes of material and witnesses.
On March 3, 2011, the defendants filed a third supplement to their exhibit list, which included a letter dated May 30, 2005, from Gertrude to attorney Steve Gray.
At the pretrial conference held on March 7, 2011, the parties addressed the filing of the new exhibit, the letter purportedly from Gertrude to attorney Gray. Defense counsel had just received the letter from attorney Gray, one of the planned witnesses in the case. Gray told him that he had inventoried the office safe for the first time in forty years and found the letter. He sent the letter to defense counsel, who had one of his clients verify that the handwriting was Gertrude's. Plaintiffs' counsel requested to see the original letter as well as the opportunity to seek an expert opinion on handwriting. The court noted that the 2005 letter was written after the deeds were made to Gaye and Wendell, but before the deed to Harold was made. Attorney Gray had prepared these deeds and an acknowledgement of gift made in March 2005.
The discussion shifted to whether the trial should be delayed, and the court and the parties developed a plan to address the existence of the letter. Plaintiffs' counsel indicated that he had discussed the issue with his clients and had made an initial contact with an expert, who could have a response by the following Wednesday, the first day of trial, if the letter and exemplars were overnighted to him. The court agreed that the plaintiffs had a right to have the letter examined, and suggested that to maintain the scheduled trial date, the trial would begin on Tuesday with the seating of the jury, and they would take the day off on Wednesday to confer regarding the expert's opinion and determine whether further opinions would be sought. If favorable to the plaintiffs, but unfavorable to the defendants, the defendants would then have the opportunity to perform their own review and a mistrial would be declared. If found to be valid, the plaintiffs would have had their opportunity to examine the validity of the document.
In addition to discussing the issue of the letter, the parties discussed whether the burden of proof should shift as well as the tortious interference with an inheritance claim. The defendants argued that this cause of action had not been adopted in Kentucky and that the plaintiffs only cited to the Restatement; no Kentucky case had addressed this particular claim. The court indicated that it would consider the pending issues and wait to hear back from the parties regarding the handwriting expert.
On March 10, 2011, counsel for the plaintiffs sent correspondence by fax to counsel for the defendants and the court stating, in part:
I wanted to let everyone know our expert's review is not helpful to the Plaintiffs' case. Therefore, I do not intend to present any additional proof from him. Therefore, I assume we will proceed as scheduled.
The matter proceeded to trial on March 15, 2011. Prior to the start of the trial, the court summarized its rulings on several pretrial motions. The court denied the motion for partial summary judgment as to Harold and for the tortious interference claim, noting that such claim had not been disallowed in Kentucky. The court addressed the motion for change in venue, stating that the plaintiffs were improperly attempting to change the venue of the trial based upon potential juror disqualification prior to voir dire. The court noted that a large pool had been called for the March trial date. The trial court spent the first day seating a jury, and thereafter the parties called witnesses for several days.
At the conclusion of the testimony, the plaintiffs renewed their motion for directed verdict, and the defendants moved for a directed verdict as well. The court ultimately denied both motions and permitted the matter to go to the jury. The court decided to omit the instruction for tortious interference with an inheritance because of the posture of the case and because the plaintiffs failed to establish a prima facie case; the mere existence of a will was not enough. On breach of fiduciary duty, the court held that Gertrude's estate would be entitled to damages, not the individual plaintiffs. The court also held that the proof in this case did not rise to the level of punitive damages. The plaintiffs objected to both the omission of the instructions for tortious interference and punitive damages. The parties also discussed jury instructions. Regarding the shift in the burden of proof, the court noted that the heightened standard of proof must be enumerated in the instructions, but not which party has the burden of proof. Further, the clear and convincing standard may not be defined in the instructions. Finally, based upon the shift in the burden of proof because of the confidential relationship, counsel for the defendants moved the court to present his closing argument last. The court agreed. Counsel for the plaintiffs questioned whether this was correct because the jury would not be informed about the shift in the burden of proof. He thought this affected only the jury instructions, not the procedural order of the arguments. The court explained that in civil trials, the party with the burden of proof presents his argument last and that it would be appropriate to shift the order of the closing arguments.
The jury returned a verdict in favor of the defendants, finding that Gertrude had sufficient mental capacity to convey her property and that the defendants had not exerted undue influence over her. The trial ...