Divver v. D.C. Department of Insurance, Securities & Banking ( 2023 )

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 22-AA-169
DANNY P. DIVVER, PETITIONER,
V.
D.C. DEPARTMENT OF INSURANCE, SECURITIES & BANKING, RESPONDENT.
On Petition for Review of a Final Decision and Order of the
Commissioner of the Department of Insurance, Securities and Banking
of the District of Columbia
(Case No. SB-1516(A))
(Argued September 19, 2023 Decided December 28, 2023)
Stuart M.G. Seraina, for petitioner.
Thais-Lyn Trayer, Deputy Solicitor General, with whom Brian L. Schwalb,
Attorney General for the District of Columbia, Caroline S. Van Zile, Solicitor
General Ashwin P. Phatak, Principal Deputy Solicitor General, and Ethan P. Fallon,
Assistant Attorney General, were on the brief, for respondent.
Before BLACKBURNE-RIGSBY, Chief Judge, and DEAHL and HOWARD,
Associate Judges.
DEAHL, Associate Judge: Danny Divver was a financial adviser and insurance
broker whose now-deceased client, Marianne Delin, left him nearly the entirety of
her roughly $500,000 estate. That drew the attention of regulators, including the
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Department of Insurance, Securities, and Banking (“DISB”), which investigated
Divver. After an evidentiary hearing, the DISB concluded that Divver had exerted
undue influence over Delin’s decision to name him the beneficiary of her estate,
ordered Divver to repay the ill-gotten funds, imposed a civil penalty against him,
and permanently barred him from engaging in the securities and investment advisory
business in the District.
Divver now petitions this court for review, arguing that the DISB made three
principal errors: (1) it applied incorrect legal standards when determining that he
engaged in undue influence; (2) under the correct standards, there was insufficient
evidence to conclude that Divver engaged in undue influence; and (3) the DISB had
no authority to order restitution under the circumstances of this case because there
was no victim who could be made whole through an order of restitution. We agree
with him on the first point, reserve judgment on the second, and disagree with him
on the third. We therefore vacate the DISB’s order and remand for further
consideration in light of this opinion.
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I. Facts and Procedural Background
Divver Becomes the Beneficiary of Delin’s Estate
At the core of this case is how Divver came to be the beneficiary of Delin’s
estate. Before the events underlying this case, Divver was a licensed investment
adviser and insurance broker. He first met Delin when he sold her a Medicare
Supplement policy in 1990, when Delin was in her mid-60s. Divver testified that
over the ensuing decades he would regularly visit Delin to help her file Medicare
claims, and through those visits they became close friends, with Delin vacationing
with the Divver family in 1997. In addition to being Delin’s insurance broker,
Divver became her securities broker, financial adviser, and emergency contact, and
he held her durable power of attorney. Over the years he sold her various financial
instruments, including an annuity from Transamerica Life Insurance that eventually
accounted for the bulk of her assets, worth over half-a-million dollars.
In 2005, Delin was on the cusp of turning 80 years old and sought to make
end-of-life preparations. Divver introduced her to Thomas Downs, an attorney
specializing in trusts and estates, to help. Downs was Divver’s own estate planning
attorney as well as his friend, and the two of them often referred clients to each other.
Downs prepared a living trust for Delin in which she was the trustee and she named
Divver the successor trustee. In her living trust, Delin listed just ten “family”
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members, three of whom—including Divver—were identified as friends. The trust
specified that upon Delin’s death, Divver would receive $10,000—the same amount
as each of Delin’s five nieces and nephews and another one of her friends—as well
as the vast bulk of her personal property (not including her jewelry, which Delin had
earmarked for another friend, Lisa Leval). Delin also named Divver the executor of
her estate and designated him as her agent under a medical power of attorney. The
remainder of Delin’s estate would go to her sister, Sonja Lewin, and Lewin’s
husband.
Delin was close with her sister, who (like Delin’s nieces and nephews) lived
in Sweden. Delin had no family in the United States but was close friends with some
of her neighbors, as she had lived in her apartment building for almost 50 years and
had strong social ties to the community there. One neighbor with whom she was
close, Brant Levine, helped Delin with a variety of needs over the years: shopping,
running errands, calling Ubers, and the like. In 2013, when Delin was in her late
80s, she fell at home and was hospitalized. Levine encouraged her to move into an
assisted living center, and Delin ultimately heeded that advice.
In April 2014, in what turned out to be the final year of her life, Delin moved
into an assisted living center. Levine testified that after the move, Delin
communicated less frequently with her former neighbors, and that her health
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appeared to be in decline. At the same time, Divver became heavily involved in her
care. He accompanied her to doctors’ appointments, ran errands for her, and helped
her manage her medications. In July 2014, Divver contacted Downs’s office to say
that “there may well be some changes to be made” to Delin’s will. Over the
following months Downs and Delin discussed those changes, and in October of that
year, Divver drove Delin to Downs’s office, where Delin executed new trust and
estate documents. These documents made Divver the nearly sole beneficiary of
Delin’s estate, giving him everything except for her jewelry and some porcelain
dishes, which she earmarked for her friend, Leval. The documents explicitly stated
that Delin was intentionally not leaving money to any family members because she
“believe[d] they already have sufficient assets.” A few days later, Divver drove
Delin to her bank where she removed her sister as joint owner of her checking
account and added Divver as joint owner instead. Delin told Divver that she had
made him the beneficiary of her estate after making those changes to her will.
By January 2015, Delin was visibly unwell and there was mounting evidence
that she was suffering from mental decline. Around that time she was diagnosed
with late-stage pancreatic cancer and she opted for hospice care. On March 2, 2015,
Delin slipped into a coma and her doctors told Divver she had but a short time to
live. In the days that immediately followed, as Delin was comatose, Divver
transferred $76,000 from Delin’s bank account to his and his son’s bank accounts.
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Delin then died on March 7, 2015. Within weeks, Divver attempted to collect the
death benefit from her Transamerica annuity.
The Fallout After Delin’s Death
Following Delin’s death, Divver’s beneficiary status came under heavy
scrutiny. Levine had been suspicious of Divver for some time, given that Divver
had become more involved in Delin’s care when she was increasingly vulnerable.
Levine asked Divver if he was a beneficiary of Delin’s estate, and Divver said he
was not. Still suspicious, Levine reported his concerns to the DISB, the Financial
Industry Regulatory Authority (“FINRA”), and the police; he contacted the Legal
Counsel for the Elderly; and he wrote a letter to Divver’s employer, SagePoint
Financial. SagePoint had a policy against its advisers being the beneficiaries of their
clients’ estates or holding their powers of attorney without the company’s approval.
But Divver, who was aware of this policy and knew he was Delin’s beneficiary and
held her power of attorney for some time, did not apprise SagePoint of that
information.
Meanwhile, Divver moved quickly to collect the $547,358.02 death benefit
from Delin’s Transamerica annuity. He filed a claim for the lump-sum payment of
that amount on March 24—seventeen days after Delin’s death—and Transamerica
issued the check to Divver two days later. But just before Divver could cash the
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check, SagePoint notified Transamerica that Divver had sold Delin the annuity he
was trying to collect on, and Transamerica stopped payment on the check so that
Divver was ultimately never able to cash it. Transamerica then filed an interpleader
action in Maryland to determine whether Divver or Delin’s sister, Lewin, was
entitled to Delin’s annuity death benefit. Divver and Lewin settled that dispute in
2016, splitting the estate evenly: Divver received $233,818.20 and was permitted to
keep the $76,000 he had already withdrawn from Delin’s account, while Lewin
received the remaining $309,818.20. That settlement agreement explicitly released
all claims Lewin had against Divver. FINRA also investigated Divver and
concluded that his failures to disclose his power of attorney and beneficiary status
violated FINRA rules. Divver eventually agreed to a $10,000 fine and a nine-month
suspension from associating with any FINRA member, without admitting to the
violations FINRA had found.
The DISB also commenced this action, alleging that Divver violated a variety
of laws relating to the provision of securities and insurance. A hearing officer heard
five days of testimony, after which she concluded that Divver had engaged in
unethical and dishonest conduct and had violated D.C. law. 1 The hearing officer
1
As permitted by regulation, the DISB Commissioner delegated her authority
to conduct a hearing to a hearing officer, who made proposed findings of facts and
conclusions of law. 26-B D.C.M.R. § 301. The Commissioner then issued a final
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credited the testimonies of Levine and Dr. Peter Lichtenberg—the DISB’s expert
witness on undue influence—and generally found Divver to be not credible. The
Commissioner’s order largely adopted the hearing officer’s findings, including that
Divver “employ[ed] a device, scheme, or artifice to defraud” Delin, in violation of
D.C. Code § 31-5605.02(a)(1)(A), by exerting undue influence over her. The
Commissioner ordered that Divver’s insurance producer’s license be revoked, that
he be permanently barred from the securities business in the District, that he pay a
civil penalty of $40,000 and hearing costs of $10,000 to the District of Columbia,
and that he pay $233,818.20 plus interest—the amount he received in his settlement
with Lewin—in restitution “to the estate of [] Marianne Delin.”
In an earlier petition to this court, Divver pointed out that Delin’s 2014 will
made Divver himself the beneficiary of Delin’s estate, so that he had effectively been
ordered to pay restitution to himself. On the DISB’s motion we remanded to the
Commissioner, who amended her order so that it directed Divver to pay restitution
to “the descendants of Marianne Delin” instead.
Divver now petitions this court to review the amended order.
order based on the hearing officer’s report and the parties’ responses to it. Id. at
§ 316.
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II. Undue Influence
A. The DISB Misconstrued the Law of Undue Influence
Divver first argues that the DISB applied the incorrect legal standard when it
concluded that he exerted undue influence over Delin. We will “affirm an agency’s
decision ‘if the decision contains findings on each material, contested issue of fact;
substantial evidence supports each factual finding; the decision’s legal conclusions
flow rationally from the factual findings; and the decision is not arbitrary, capricious,
an abuse of discretion, or otherwise contrary to law.’” Fort Myer Constr. Corp. v.
Briscoe, 298 A.3d 770, 775-76 (D.C. 2023) (quoting Tyler v. George Washington
Med. Fac. Assocs., 75 A.3d 211, 213 (D.C. 2013)). “Undue influence is a mixed
question of fact and law,” and we review Divver’s legal complaints de novo. In re
Ingersoll Trust, 950 A.2d 672, 692 (D.C. 2008).
Divver argues that the DISB Commissioner made two vital legal errors when
articulating the law of undue influence: (1) she misstated the core definition of undue
influence, and (2) she mistakenly opined that there is a presumption of undue
influence when the alleged influence is exerted by a fiduciary. Because undue
influence is the only basis under which the Commissioner concluded that Divver
“employ[ed] a device, scheme, or artifice to defraud” Delin in violation of D.C. Code
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§ 31-5605.02, Divver argues that these errors leave the Commissioner’s rulings
unsustainable. We agree.
1. The Commissioner applied the incorrect legal test
The Commissioner’s first legal error was that she articulated a much more
relaxed standard for undue influence than what is recognized in the District. Under
our precedents, “undue influence consists of ‘physical or moral coercion that forces
the testator to exercise the judgment of another rather than [their] own.’ . . . ‘[T]he
pressure on the testator must destroy [their] agency and free will.’” Roberts-Douglas
v. Meares, 624 A.2d 405, 418 (D.C. 1992), modified on reh’g, 624 A.2d 431 (D.C.
1993) (citations omitted). Where “no facts show[] that [the testator’s] free agency
was destroyed or that the will was a direct result of force or coercion,” there can be
no finding of undue influence. Himmelfarb v. Greenspoon, 411 A.2d 979, 984 (D.C.
1980). In short, “there must be proof of coercion,” In re Ingersoll Trust, 950 A.2d
at 692, and “[m]ere suspicion [of it] is insufficient,” Himmelfarb, 411 A.2d at 984.
The Commissioner’s brief statement of the law of undue influence did not
align with those relevant standards or cite to any relevant precedents. Instead, the
Commissioner described a very different inquiry. Here it is in its entirety, with the
penultimate sentence doing most of the work:
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The general rule regarding undue influence is when a
“dominant party or influential party on one side may exert
influence against a dependent or submissive one on the
other. The parties are frequently in a relationship that
justifies the dependent party in trusting the other, in
relying on his judgment, and in assuming that the
dominant party will be motivated by the dependent[]
party’s welfare and interests.” Dan B. Dobbs, Law of
Remedies, Damages, Equity, Restitution, § 10.3 (2d ed.
2001). The dominant[] party’s conduct counts as undue
influence when he uses his position to sway the judgment
of the other by advice or suggestion, or even by
implication. Much of the law of undue influence appears
to be part of the law of confidential relationships. Id.
Order at 55 (cleaned up, emphasis added). Where our precedents require “pressure
[that] destroy[s] [another’s] agency and free will,” Meares, 624 A.2d at 418 (citation
omitted), the Commissioner’s definition would find undue influence when a
dominant party “sway[s] the judgment of the other.” Although undue influence
cannot exist without “coercion,” In re Ingersoll Trust, 950 A.2d at 692, the
Commissioner’s definition would find it in “advice or suggestion.”
To illustrate the chasm between the correct standard and the one adopted by
the Commissioner, consider Meares, in which a group of parishioners sued their
church leaders for undue influence because the leaders coerced members to donate
beyond their means to help finance a new church building. 624 A.2d at 408. The
parishioners alleged that church leaders badgered them from the pulpit to donate,
purported to be channeling the “voice of God” while doing so, threatened them with
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divine retribution and excommunication, and made some walk a “gauntlet” of hostile
church members and face public shaming when they did not make sufficient
contributions. Id. at 411-12. There was no question that the church leaders, who
“occupied a position of trust and confidence vis-a-vis their parishioners,” id. at 409,
420-21, used those positions to sway the judgment of the parishioners by advice or
suggestion (to put it mildly). The Commissioner’s averred test here thus would have
been readily satisfied. We nonetheless upheld a grant of summary judgment against
the parishioners after concluding that the evidence was insufficient to show that their
“free agency” had “been destroyed” so that their donations were “effected by the
will of the [church leaders], not of the [parishioners].” Id. at 419. 2
By contrast, when we have upheld undue influence findings, the facts show
something far starker than the mere advice or suggestion of somebody in a position
of trust. For example, in Ross v. Blackwell, Ross was a roofing contractor who was
hired to do some work for an elderly, disabled, “nearly blind and bed-bound” woman
2
We initially reversed the grant of summary judgment as to one couple who
alleged that in addition to being aggressively solicited and having to walk the
gauntlet, church leaders also came to their home and pressured them to sell it to raise
funds for the church. Id. at 425-26. We later, on petition for rehearing, revised our
judgment and upheld the grant of summary judgment against even that couple, after
they conceded (1) they were made to walk the gauntlet only after making their
donation in question, and (2) the pressure to sell their house was little more than a
“suggestion.” Meares, 624 A.2d at 432.
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named Hamilton. 146 A.3d 385, 388-90 (D.C. 2016). Ross and his wife then “cut
Hamilton off from her previous friends,” and within a few months of being hired to
do roofing work, Ross had become Hamilton’s guardian and his wife had become
her conservator, despite neither one having any prior relationship with Hamilton. Id.
at 389. Shortly thereafter, Hamilton named Ross and his wife the sole beneficiaries
of her estate. Id. at 389. Meanwhile, Ross’s wife took out a considerable mortgage
against Hamilton’s home. Id. at 390. When the whole affair came under judicial
scrutiny, Ross and his wife “repeatedly misled or lied to the court, with one or both
[of them] telling the court that there was no mortgage on the house, which was
‘patently false,’” along with a host of other misrepresentations. Id. In total, we
found that evidence was sufficient to support the conclusion that Ross and his wife
had “destroy[ed Hamilton’s] free agency,” id. at 391 (citation omitted), through
actions that went far beyond mere advice or suggestion.
At bottom, people are generally free to advise and persuade others to their
own ends, even if those ends are noxious, the advice is self-serving, and they gained
influence only through manipulative ingratiation. 3 The law of undue influence is
3
When a fiduciary doles out self-serving advice against their client’s interests,
that of course might constitute a breach of fiduciary duties, and it can obviously be
grounds for professional discipline. But those are distinct questions from whether
they have exerted undue influence and destroyed their client’s free will—not every
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not a guardrail against being steered into bad decisions by opportunistic dirtbags.
MacMillan v. Knost, 126 F.2d 235, 236 (D.C. Cir. 1942) (“One has the right to
influence another to make a will in his favor . . . us[ing] argument and persuasion so
long as it is fair and honest and does not go to an oppressive degree where it becomes
coercive.”). It is concerned only with coercion so severe that it can fairly be said
that the person’s free agency has been destroyed and displaced by another. The
Commissioner announced a far more sweeping view of undue influence that is
irreconcilable with our precedents. When applied to financial advisers like Divver,
that erroneous definition would seem to sweep in a great deal of their legitimate
work—they are, after all, paid to make suggestions and offer advice on financial
decisions. The Commissioner’s application of this incorrect legal test was error.
2. The Commissioner mistakenly invoked a presumption of undue influence
The Commissioner’s second legal error was that she erroneously invoked a
presumption of undue influence where a fiduciary relationship exists. This court has
expressly rejected any such presumption: “Confidential relations [such as fiduciary
relations] existing between the testator and the beneficiary do not alone furnish any
presumption of undue influence; there must be proof of coercion.” In re Ingersoll
breach of fiduciary duty or act of professional misconduct constitutes an exertion of
undue influence.
15
Trust, 950 A.2d at 692 (citations omitted). Although “[i]t generally takes less to
establish undue influence when a confidential relationship exists between the
parties,” Meares, 624 A.2d at 421 (citation omitted), that lower bar is not tantamount
to creating a presumption of undue influence.
The District counters that it is not obvious that the Commissioner in fact gave
any weight to this erroneous presumption in her legal analysis. The Commissioner
noted only that the District’s expert (Lichtenberg) opined that there was a
presumption of undue influence where a fiduciary relationship exists, but the
Commissioner’s own legal conclusions did not expressly say anything about such a
presumption. That is true so far as it goes, but it does not alleviate our concerns,
given that (1) the Commissioner expressly credited Lichtenberg’s testimony,
without noting any reservation as to this point in her extremely brief legal analysis;
(2) she never expressly disavowed this presumption, as our precedents have; (3) the
Commissioner’s own articulation of the relevant legal standards was so cursory that
it appears that she simply accepted the legal framework articulated by Lichtenberg;
and (4) the Commissioner’s application of a more relaxed standard of undue
influence than what this court recognizes seems of a piece with the application of
this erroneous presumption.
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At the very least, and given that we would vacate the Commissioner’s order
based on the first error identified above in any event, it is enough here to say that we
have no assurance that the Commissioner did not apply this erroneous presumption.
So we now reiterate that there is no presumption of undue influence stemming from
fiduciary relationships. It instead remains the DISB’s burden to establish that Divver
exerted undue influence over Delin under the standards articulated above. Because
the Commissioner did not address that relevant and exacting legal test, and seemed
to invoke an erroneous presumption along the way, we vacate her order and remand
for reconsideration. 4
B. Sufficiency of the Evidence of Undue Influence
Divver next argues that the evidence before the Commissioner could not
support a finding of undue influence under the appropriate legal standards. If he
were correct about that, we could direct judgment in his favor rather than remanding
for further consideration. We conclude that it would be premature for us to resolve
4
Divver hints at one more error in the Commissioner’s legal analysis,
suggesting that the DISB was required to provide “clear and convincing evidence”
of undue influence, whereas the Commissioner applied a preponderance of the
evidence standard. He makes no effort to develop this argument on appeal and so
we do not address it. Comford v. United States, 947 A.2d 1181, 1188 (D.C. 2008)
(“It is not enough merely to mention a possible argument in the most skeletal way,
leaving the court to do counsel’s work.” (citation omitted)).
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this question without the benefit of the Commissioner’s application of the correct
legal test, and so we reserve judgment on this question. But we nonetheless offer
the following comments on the record evidence as guidance to the Commissioner.
There is rarely a smoking gun establishing undue influence. Such influence
is usually exerted behind a veil of secrecy and often the most critical witness who
could pierce that veil is deceased. That is why our precedents recognize that
“[u]ndue influence is nearly always a matter of inference from facts and
circumstances disclosed by the evidence of the conditions and surroundings of the
parties.” Wiggins v. Smith, 183 F.2d 831, 832 (D.C. Cir. 1950) (quoting Barbour v.
Moore, 10 App. D.C. 30, 46 (D.C. Cir. 1897)). In other words, “undue influence
may be established by circumstantial evidence,” and its “existence may be inferred
from such factors as disproportionate gifts made under unusual circumstances, the
age and health of the donor, and the existence of a confidential relationship.”
Meares, 624 A.2d at 422 (quoting In re The Bible Speaks, 869 F.2d 628, 642 (1st
Cir. 1989)). There is a fair bit of circumstantial evidence that could support a finding
of undue influence here, but there is likewise circumstantial evidence that militates
against such a finding, as we now explain.
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1. Factors favoring a finding of undue influence
There are at least seven aspects of this case that provide some support for a
finding of undue influence, and in combination, they might provide sufficient
evidence of coercion to support an undue influence finding. They are (1) the sheer
size of Delin’s gift to Divver, as she channeled nearly her entire estate to him; (2) the
fact that she did so just five months before her death, during which there was some
evidence of her mental decline; (3) the fact that Divver was her fiduciary; (4) the
evidence of Delin’s near-total reliance on Divver during her final year; (5) her
relative isolation from her social network; (6) the fact that Divver is the person who
apparently initiated review of Delin’s will and estate plans and brought her to her
appointment with Downs; and (7) Divver’s efforts to conceal what he was doing.
The first three factors do not require much elaboration. Divver had been listed
as a beneficiary of Delin’s estate since 2005, but up until the final months of her life,
he stood to inherit a relatively modest sum of $10,000, in addition to most of her
personal property. Just five months before her death, Delin altered her estate plan
to leave Divver nearly all of her assets, worth over half a million dollars. That drastic
change and its timing provide support for a finding of undue influence, as do the
limited findings that Delin was experiencing some degree of cognitive decline at the
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time. 5 Divver’s fiduciary status further supports a finding of undue influence, and
“[w]here such a relationship is implicated, the validity of a purported gift is closely
scrutinized” and “may be set aside . . . even though the transaction could not have
been impeached in the absence of a confidential relationship.” Meares, 624 A.2d at
421. These three factors alone are far from conclusive—it is not so unusual for
people to make drastic changes to their wills as death nears, which is precisely when
estate planning most naturally comes into focus. But in the panoply of circumstantial
evidence, each of these three factors weighs in favor of finding undue influence.
Meares, 624 A.2d at 422 (listing the size of the gift, its timing, and confidential
relationships as factors in the inquiry).
The next three factors—Delin’s extreme reliance on Divver, her relative
isolation during her final year, and his apparent initiation of the review of her will—
are interrelated. After Delin moved into the assisted living center, Divver became
5
On remand, it would be helpful if the Commissioner provided more detailed
findings on the degree of cognitive decline that Delin was suffering at the time she
made changes to her will, to the extent that is possible. There was conflicting
evidence on that topic, it is hotly disputed, and it could prove critical to the undue
influence inquiry. For similar reasons, it would be helpful to gauge the value of
Delin’s personal property that Divver stood to inherit under the 2005 will, because
that figure affects how drastic the 2014 change in Delin’s will was. Finally, the
Commissioner might wish to explain in more detail the degree to which Downs’s
testimony is credited, as he generally supported Divver’s position that Delin
voluntarily and intelligently chose to make him the beneficiary of her estate, at least
so far as Downs could tell.
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much more involved in many aspects of Delin’s decisionmaking and care; as Delin
told Levine, Divver “was taking care of everything now.” This stands in contrast to
the situation in In re Ingersoll Trust, where we held that there was no undue
influence in part because nothing in the record suggested one person took over the
“day-to-day financial decisions” of the other, or generally “controlled her assets
during her lifetime.” 950 A.2d at 695 (citation omitted). Here, by contrast, Divver
was a co-owner of Delin’s bank account, and as her financial adviser, he was largely
responsible for the fact that substantially all of her assets ended up in a single
financial instrument, the Transamerica annuity. There is reason to believe that
Divver himself was the impetus for Delin changing her will in the final year of her
life. Plus, during that final year Delin was largely isolated from others. While the
degree and cause of that isolation is not clear—Delin told Levine that she simply did
not want visitors—the mere fact of her isolation made her more susceptible to undue
influence. See Ross, 146 A.3d at 389-90 (testator’s isolation “supported an inference
that appellants were exerting undue influence over her”). 6
6
These factors can cut both ways. It would be one thing if Divver had taken
affirmative steps to isolate Delin from her social circle, as was the case in Ross. 146
A.3d at 389. But there was little evidence of that. And it is quite another thing if
Delin’s social circle effectively abandoned her once she moved into her assisted
living center, which could prompt somebody in Delin’s position to divert her estate
to the one person who was taking care of everything toward the end of her life,
namely, Divver.
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The seventh factor is Divver’s concealment of his activities, a factor that we
have given considerable weight to in past cases. Ross, 146 A.3d at 390 (“efforts at
concealment” could “support an inference of undue influence”). Divver failed to tell
his employer that he had been entrusted with Delin’s power of attorney and had been
named a beneficiary of her estate, despite knowing that he was required to disclose
those facts. When Levine asked Divver directly whether he was the beneficiary of
Delin’s estate, Divver lied and said he was not. And while it is now undisputed that
Divver was the one who called Downs’s office in July 2014 and indicated that Delin
wanted to make some changes to her will, Divver initially lied about that during his
deposition testimony in the Divver/Lewin litigation. And most damning of all,
Divver transferred $76,000 from Delin’s bank account during the final days of her
life without informing anybody—Delin herself was comatose—and he took steps to
apparently cover his tracks, such as funneling some of that money to his son’s bank
account. These facts, in combination, are at least arguably sufficient to support a
finding of undue influence.
2. Factors disfavoring a finding of undue influence
There are also at least six counterweights to a finding of undue influence
worth cataloging, none of which we need to belabor here: (1) Divver had known
Delin for decades before he became a beneficiary of her estate, not for mere months
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(as was the case in Ross); (2) the evidence is undisputed that Divver and Delin were
friends during those decades, and there is some evidence that they were quite close
friends, including seemingly undisputed evidence that Delin had vacationed with
Divver’s family; (3) Delin had initially made Divver a beneficiary of her estate,
identifying him as “family” back in 2005, a decade before her death when there was
no question she was of sound mind and long before any suggestion of undue
influence; (4) Delin made Divver the primary beneficiary of her estate after
independent consultations with an attorney, Thomas Downs, who detected no
evidence of mental frailty and no apparent coercion; (5) there is evidence that Divver
did in fact “take care of everything” for Delin during her final year, as she herself
put it, providing an explanation for why she might have freely chosen to divert her
estate to him; and (6) there is evidence that there was simply no other obvious
candidate to be Delin’s beneficiary, as her sister was nearing death and Delin’s
nieces and nephews apparently did not need the money. 7
7
In Delin’s 2005 will, she expressly noted one person who she was excluding
as a beneficiary—Maud Carlsson—on the grounds that “she is financially secure.”
When Delin revised her will in 2014, she offered the same explanation for why she
was omitting Lewin and her nieces and nephews as beneficiaries: she “believe[d]
they already have sufficient assets.” That is a facially plausible basis for Delin’s
2014 changes to her will.
23
In short, there are a number of factors that cut both for and against a finding
of undue influence here. We will not hazard a judgment about whether the evidence,
when taken together, is sufficient to support a finding of undue influence under the
appropriate legal standards. The Commissioner should take those relevant factors
into account when applying the correct legal test for undue influence.
III. The Commissioner Has Authority to Order Restitution
Divver argues that even if he had unduly influenced Delin, it was beyond the
scope of the Commissioner’s authority to direct him to pay restitution to Delin’s
descendants. While Divver acknowledges that the Commissioner is generally
authorized to order restitution, see D.C. Code § 31-5606.02(b)(5), he argues that
there is simply nobody to make whole in this case. The argument is a bit convoluted,
but it is roughly (1) that Delin had no direct descendants; (2) so the order that Divver
provide restitution to her descendants is effectively a directive to reimburse Lewin’s
estate, which had stood to inherit Delin’s estate absent the 2014 changes to her will;
and (3) because Divver and Lewin already settled all claims between them as part of
the Maryland interpleader action, there is nobody to make whole through an order
of restitution. We disagree, for three reasons.
First, it is simply not true that Lewin’s willingness to accept a settlement of
less than the entirety of Delin’s estate means that she has been made whole absent
24
any further restitution. While Lewin may have relinquished any additional private
causes of action against Divver through the 2016 settlement agreement, that private
agreement does not bind the DISB in exercising its regulatory functions. The DISB
remained free to conclude that Delin’s estate had not been made whole, as private
settlement agreements generally will not constrain an agency’s enforcement powers.
See U.S. Commodity Futures Trading Comm’n v. Kratville, 796 F.3d 873, 889 (8th
Cir. 2015) (“[Q]uite apart from whether the individual victims are satisfied with their
private settlements, full and ample restitution, and other equitable remedies such as
disgorgement of profits, serve distinct deterrence functions that are vital to the
‘[]public interest.’” (citation omitted)). And people frequently settle claims at a
discount, factoring in considerations of time, energy, and litigation risk, so the mere
fact that Lewin settled her claims does not conclusively establish that she had been
made whole. Divver has cited no authority for his novel position to the contrary, nor
did he argue before the DISB that the settlement agreement had any preclusive effect
on its ability to award restitution.
Second, restitution’s central purpose is not simply to make a victim whole,
but also to disgorge the wrongdoer of ill-gotten funds. In re Hager, 812 A.2d 904,
923 (D.C. 2002) (“the objective of restitution” is “preventing unjust enrichment”
(quoting In re Robertson, 612 A.2d 1236, 1241 (D.C. 1992))); see also Restatement
(Third) of Restitution and Unjust Enrichment § 1, cmt. a (2011) (the “tradition from
25
which we receive the modern law of restitution authorizes a court to remedy unjust
enrichment wherever it finds it”); Dan B. Dobbs, Law of Remedies, Damages,
Equity, Restitution § 1.1 (2d ed. 2001) (“[R]estitution today is a general term for
diverse kinds of recoveries aimed at preventing unjust enrichment of the defendant
and measured by the defendant’s gains.”). The restitution order here can be justified
on the sole basis of disgorging Divver of ill-gotten funds, even if the proper recipient
of those ill-gotten funds might be up for debate. That debate does not truly concern
Divver—he is no worse or better off no matter who the funds are directed to. 8
Third, in Lewin’s settlement with Divver, Lewin did not purport to release
any claims that Delin’s estate had against him. It is Delin’s estate, not Lewin
personally, which the DISB reasoned was wrongfully deprived by Divver’s actions,
and the restitution directed to Delin’s descendants was directed at making the estate
whole (while carving Divver out of the estate’s beneficiaries). The fact that Lewin—
8
Divver complains that it is impossible to pay restitution to Delin’s
“descendants” because she has none, so “the Commissioner has ordered that Divver
pay restitution to unspecified individuals whose existence is uncertain.” If Divver
is genuinely in need of guidance about how to comply with the Commissioner’s
order, he can seek that guidance from the Commissioner herself if, after remand, the
restitution order remains in place. But this does not appear to be an instance of
genuine uncertainty. Divver instead seems to think that if it is unclear whom he
must pay restitution to, then he should not have to pay restitution at all. That is
wrong, as we have held that disgorging Divver of ill-gotten funds is justification
enough for the DISB’s restitution order.
26
or, now, Lewin’s estate—might be the first in line to benefit from that restitution
order is of no moment; she is simply not the same legal entity as Delin’s estate. 9
IV.
We vacate the DISB’s order and remand for reconsideration in light of this
opinion.
So ordered.
9
Divver’s final argument is that the Commissioner did not have authority to
amend her order after this court’s initial remand because, in his view, the
Commissioner’s amendments exceeded the bounds that D.C. Superior Court Rule
60 places on the amendment of judgments. As an initial matter, Rule 60 is a court
rule that has no direct application to the Commissioner’s abilities to amend her
orders. While the Commissioner nonetheless relied on Rule 60 as authority for her
amended order, that was entirely unnecessary and we need not explore the bounds
of Rule 60 now because the Commissioner’s authority to amend her order on remand
was already decided by this court in the prior appeal. In that prior appeal we
expressly “remanded to the [DISB] for further proceedings consistent with the
statements made in [the DISB’s] motion,” and as the DISB explained in its motion,
the purpose of a remand was to permit the Commissioner “to issue an amended Final
Decision and Order” along the very lines that it ultimately issued. Whatever bounds
that Rule 60 places on the amendment of judgments in the abstract, even assuming
those bounds might constrain the DISB, this court is clearly empowered to authorize
an agency to amend its orders and judgments (just as sure as it is empowered to
vacate those orders and judgments entirely). And in this case, this court already
approved the Commissioner’s amendment, so Divver’s Rule 60 argument is
meritless.