Pense v. Lindsey , 316 Mont. 429 ( 2003 )

No. 01-666
IN THE SUPREME COURT OF THE STATE OF MONTANA
2003 MT 182ROSIE PENSE,
Plaintiff and Respondent,
v.
JACK LINDSEY and LEE LINDSEY,
Defendants and Appellants.
APPEAL FROM: District Court of the Tenth Judicial District,
In and for the County of Fergus, Cause No. DV-2000-132
The Honorable E. Wayne Phillips, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Thomas J. Pardy, Oliver, Pardy & Associates, Billings, Montana; James L.
Carbone, Kelly, Harvey & Carbone, Clinton, Washington
For Respondent:
Torger S. Oaas, Lewistown, Montana
Submitted on Briefs: April 18, 2002
Decided: July 10, 2003
Filed:
__________________________________________
Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.
¶1 Rosie Pense (Pense) conveyed her 258-acre Fergus County homestead property to
Jack and Lee Lindsey (Jack, Lee, or the Lindseys) by Warranty Deed. Shortly thereafter she
requested that the Lindseys return the property to her. The Lindseys offered to return the
land provided their names remained on the deed as joint tenants with rights of survivorship.
This offer was rejected and Pense sued the Lindseys claiming they had exerted undue
influence over her. The District Court agreed and set aside the conveyance. The Lindseys
appeal. We affirm.
ISSUE
¶2 The dispositive issue in this case is whether the District Court erred when it concluded
that the conveyance of land from Pense to the Lindseys was obtained by undue influence.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Pense led a sheltered life on a ranch in one of Montana's most rural counties, Garfield
County. Born in 1911, Pense lived, unmarried, on her parents' 14,000-acre ranch with them
until their deaths in 1972 and 1973, at which time she inherited the ranch, as well as 446
acres in Fergus County which included her grandfather's beloved 258-acre homestead which
is at issue in this case (homestead property). Approximately two years after her parents'
deaths, at the age of 64, Pense married neighboring ranch-owner Paul Berger (Berger).
Pense and Berger combined their Garfield County ranch lands and worked the combined
ranches as one unit until 1998 when Pense and Berger separated. Pense, who was 87 years
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old at the time of the separation, then began managing her own affairs and living on her own
for the first time in her life.
¶4 Pense and Berger were divorced in 2000 after 25 years of marriage. The net worth
of the parties at the time of dissolution was $4,461,920. After equitable distribution of
marital assets, Pense had a net worth of $2,490,498 with her grandfather's homestead
property being valued at $170,000.
¶5 During her marriage to Berger, Pense met Jack Lindsey, a legal investigator, who was
working with an attorney representing Berger in an unrelated Federal District Court matter.
Upon conclusion of that matter in 1994, Pense and Jack had little or no contact until the
spring or summer of 1998 by which time Pense was suffering from mild to moderate age-
onset dementia according to her longtime physician. Pense's doctor explained that while
Pense could continue to remain independent, her level of dementia would make it very
difficult, if not impossible, to grasp and deal with complex situations such as wills or deeds.
The doctor further opined that, as a result of Pense's sheltered upbringing, the dementia, and
the difficulty in handling complex situations, Pense was quite "possibly susceptible to
influence."
¶6 According to Garfield County Sheriff Charles Phipps, Jack called him in mid-to-late
summer of 1998, having heard that Pense and Berger had recently separated, expressed an
interest in buying Pense's Fergus County homestead property, and asked Phipps how to
contact Pense. This call set in play a relationship between Pense and Jack, and a course of
events that saw Pense authorize and then revoke no less than five wills over a period of
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eighteen months. The wills were prepared first by her divorce attorney Bryan, whom Pense
later said prepared a will without being asked to do so; by Jack's employer Stephens, who
prepared wills #2 and 5 in the sequence to the benefit of Jack; and by Murnion, who acted
as "local counsel" for both Bryan and Stephens, and who prepared two wills falling between
the Stephens' wills that omitted any reference at all to Jack. The various wills were
remarkable for their disparity--Pense went from endowing to disinheriting her cousins, ranch
employees and Jack, usually without any apparent triggering events. One factor above all
struck the District Court about these changes in bequest: when Stephens wrote the wills, Jack
figured prominently in them, being named personal representative of Pense's estate and
inheriting the homestead.
¶7 On November 30, 1999, Pense entered into a Land Lease Agreement with Calvin
Paulson, Lee Lindsey's son. Under this Lease Agreement, Paulson could graze cattle, hunt
and enjoy other recreational activities on the homestead property for a period of five years.
As "payment" for these privileges, Paulson agreed to construct a "homestead" cabin to
replace Pense's grandfather's homestead cabin. The following day, December 1, 1999, and
thirteen days after signing Murnion Will #2, in which Jack was not referenced, Pense
executed Stephens Will #2. In Stephens Will #2, Jack was reappointed Personal
Representative and was devised Pense's grandfather's homestead property.
¶8 In May 2000, the Lindseys took Pense for a picnic on her grandfather's homestead
property. While there, they told Pense of their plans to rebuild her grandfather's home. The
Lindseys testified that Pense was so grateful that she told them she wished them to have the
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property immediately rather than after her death. Very shortly thereafter, Jack requested that
the Stephens law firm prepare a Warranty Deed, and on June 12, 2000, Pense signed a
Warranty Deed giving Jack and Lee Lindsey her grandfather's homestead. The Warranty
Deed was filed one month later and a certified copy was sent to Pense.
¶9 Upon receiving her copy of the Deed, an agitated Pense went to her longtime
accountant, Fred Schell, and showed him the Warranty Deed. According to Schell's
affidavit, Pense explained that, if (she questioned whether the signature was hers) she signed
the Deed, she believed that she was signing an agreement giving the Lindseys access to her
grandfather's homestead property for recreational purposes. She stated she did not intend
to give this property to the Lindseys or to anyone else at that time. She requested his
assistance in getting the property back.
¶10 After initial attempts to recover the property failed, Pense filed a Complaint on
November 13, 2000. Subsequently, on November 17, 2000, the Lindseys, Pense, Schell and
Sheriff Phipps met to discuss the property, at which time the Lindseys proposed to put her
name on the deed with theirs as joint tenants with rights of survivorship. Schell
recommended that Pense consider the offer for a few days before accepting or declining it.
While not noted in the record, presumably the offer was rejected, as the law suit went
forward.
¶11 In the time between Pense's visit with Schell regarding the Warranty Deed and
December 21, 2000, Attorney Torger Oaas, at Schell's request, prepared a new Will for
Pense. Under the Oaas Will, Jack was no longer Pense's Personal Representative nor were
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the Lindseys devisees or testamentary recipients. Additionally, two former ranch hands,
Terry Kastner (Kastner) and Lonnie Dahl (Dahl), who between them had convinced Pense
to pay them approximately $93,000 in unearned "back wages," were also disinherited.
STANDARD OF REVIEW
¶12 In equitable cases like this one, findings of fact must be upheld unless they are clearly
erroneous. In re Estate of Bradshaw, 2001 MT 92, ¶ 11, 305 Mont. 178, ¶ 11, 24 P.3d 211,
¶ 11. A finding is clearly erroneous if it is not supported by substantial evidence, if the trial
court misapprehended the effect of the evidence, or if our review of the record convinces us
that the district court made a mistake. In re Estate of McDermott, 2002 MT 164, ¶ 22, 310
Mont. 435, ¶ 22, 51 P.3d 486, ¶ 22. Moreover, the evidence is reviewed in the light most
favorable to the prevailing party, and the credibility of witnesses and the weight assigned to
their respective testimony are up to the trial court. Bradshaw, ¶ 11 (citation omitted). Our
role in reviewing findings of fact is to determine whether the findings are clearly erroneous;
it is not to determine whether there is support in the evidence for findings which were not
made. Bradshaw, ¶ 11 (citation omitted). Lastly, we review a district court's conclusions
of law to determine whether they are correct. McDermott, ¶ 22.
DISCUSSION
¶13 We are asked to determine whether the District Court erred when it concluded that
the conveyance of land by Pense to the Lindseys was obtained by undue influence in the
form of friendship.
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¶14 Section 28-2-407, MCA (1999), defines undue influence as: (1) the use by one in
whom a confidence is reposed by another or who holds a real or apparent authority over him
of such confidence or authority for the purpose of obtaining an unfair advantage over him;
(2) taking an unfair advantage of another's weakness of mind; or (3) taking a grossly
oppressive and unfair advantage of another's necessities or distress.
¶15 In addition to the statutory definition, courts are also guided by the following five
criteria when attempting to discern whether there has been undue influence: (1) any
confidential relationship between the person alleged to be exercising undue influence and
the donor; (2) the physical condition of the donor as it may affect his or her ability to
withstand influence; (3) the mental condition of the donor as it may affect his or her ability
to withstand influence; (4) the unnaturalness of the disposition as it relates to showing an
unbalanced mind or a mind easily susceptible to influence; and (5) the demands and
importunities as they may affect the donor, taking into account the time, place and
surrounding circumstances. Bradshaw, ¶¶ 13-14 (citation omitted). As we stated in
Bradshaw, the statutory requirements control and these five criteria "are simply nonexclusive
considerations available to guide the trial court in its application of the statutory
requirements." Bradshaw, ¶ 16.
¶16 In the case at bar, the District Court first evaluated each of the five above-listed
criterion. It concluded that 1) Pense had a confidential relationship with Jack and Lee; 2)
Pense had both physical and mental conditions that affected her ability to withstand
influence; 3) the disposition of her grandfather's homestead to the Lindseys was unnatural;
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and 4) the Lindseys' request for a Warranty Deed and the presentation of it to Pense for
signature constituted demand and importunity" which play directly on the susceptibility of
this particular individual."
¶17 The court then analyzed the three statutory elements of undue influence and
concluded that the Lindseys took unfair advantage of Pense's weakness of mind. Section 28-
2-407(2), MCA (1999). The court stated,
Because of the nature of her upbringing, the focus of her whole personality
was upon "returning" the kindness of others. This personality was based on
a simple, naive disregard for the protection of wealth, that, as Garfield County
Attorney Nick Murnion stated, was susceptible to influence. The persistent
"friendship" of the Defendants from the date of the phone call inquiry to
Sheriff Phipps onward reflected an intensity which Rosie Pense's particular
weakness of mind could not resist. Such intensity reflected the taking of an
unfair advantage of this weakness of mind.
We review below the evidence relied upon by the District Court to support its findings of
fact and conclusions of law.
Confidential Relationship
¶18 There is no dispute that the Lindseys developed a confidential relationship with Pense
after her separation from her husband. They each testified that they assisted Pense in
numerous ways on many occasions. Jack explained legal documents to her, drove her to and
from meetings at the law office or to the grocery store or drug store. He installed helpful
appliances in Pense's home. Lee washed and colored her hair and helped Pense with other
personal or hygiene activities. The Lindseys hosted Pense in their home and took her for
scenic drives and picnics. They bought her gifts. They arranged for Pense to stay in their
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home or the home of other family members on various occasions. Moreover, Jack, at one
time, was given Power of Attorney over Pense's health affairs.
¶19 We have previously noted that in most confidential relationships, one party provides
to another party basic assistance in the form of personal care, transportation, and/or advice
in financial affairs. See Estate of DeCock v. DeCock (1996), 278 Mont. 437, 445, 925 P.2d
488, 492, overruled on other grounds by Bradshaw; Matter of Estate of Lien (1995), 270
Mont. 295, 304, 892 P.2d 530, 535, overruled on other grounds by Bradshaw; Matter of
Estate of Long (1987), 225 Mont, 429, 430-31, 732 P.2d 1347, 1348.
Physical and Mental Condition as it may Affect Her Ability to Withstand Influence
¶20 Pense's former husband, Berger, testified that in 1995 or 1996, Pense suffered "some
physiological event" that he characterized as "a multiple minor stroke event." He claimed
that she demonstrated short term memory loss and noticeable changes in her mental
functioning. He stated that a second such event occurred in 1997 or 1998, after which she
stopped driving, began walking with a walker, experienced difficulty remembering things,
and suddenly and without explanation, ended their marriage. Pense's doctor said he had no
medical knowledge of any stroke events but that, as early as 1993, Pense exhibited
symptoms of age-onset dementia that gradually decreased her mental capacity over time.
A CT scan in 1993 confirmed this diagnosis and a repeat scan in 2001 clearly showed
dementia and cerebral atrophy. Additionally, the doctor stated that Pense suffered from
hearing loss as well as severe degenerative arthritis causing significant physical pain
requiring medication.
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¶21 Moreover, the court was presented with substantial and credible evidence that Pense
had lived a very sheltered life in rural Montana with limited societal contact outside family
and neighbors. Several witnesses testified that she needed the friendship, companionship,
and personal attention of others desperately and was extremely generous, in a childlike
manner, when responding to even the smallest of kind acts. Additionally, she was naively
trusting of everyone. Kastner and Dahl, two former ranch hands, repeatedly approached
Pense over several months requesting money. They either convinced Pense that she owed
them back wages from when they worked for her former husband or convinced her to
indicate on the checks that they were back wages in order to lend an air of legitimacy to their
$93,000 ploy. The District Court was presented with several other examples of Pense's
"profligate generosity" that led it to conclude that Pense was susceptible to friendly, helpful,
or needy people taking advantage of her.
¶22 These physical and mental traits led the District Court to conclude that Pense
possessed a "unique weakness of mind," as well as a personality that focused upon her
"returning" the kindness of others without regard to the protection of her wealth and assets.
In addition to making her extremely susceptible to influence, the District Court concluded
that these combined characteristics affected her ability to withstand "persistent, albeit
friendly and possibly benign, influence" in the form of friendship.
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Unnaturalness of Disposition as it Relates to Showing a Mind Easily Susceptible to Influence
¶23 The District Court next concluded that, despite Pense having no living relatives other
than her disinherited cousins, her gifting of her grandfather's homestead to the Lindseys was
nonetheless unnatural. The court based this conclusion on 1) the irrevocable finality of the
gift; 2) the Lindseys' role in ensuring this irrevocable finality; 3) Pense's agitated state upon
recognizing that she had given away her beloved property; and 4) her intense desire to
retrieve it.
¶24 The court was persuaded by the evidence that each time Jack was involved in Pense's
will preparations, he got the property, and each time he was not involved, someone else got
the property. Moreover, Pense testified that she did not know she had deeded the property
to the Lindseys nor had she intended to do so.
¶25 In Christensen v. Britton (1989), 240 Mont. 393, 399, 784 P.2d 908, 912, we stated
that an unnatural disposition of property can be the "product of an unbalanced mind or one
that was easily susceptible to influence."
Demands and Importunities
¶26 Lastly, the court looked closely at the timing and circumstances surrounding the
demands and importunities that may have affected Pense's ability to withstand the Lindseys'
influence, beginning with Jack's call to Sheriff Phipps in the summer of 1998 though June
2000, when Pense signed the Warranty Deed prepared at Jack's behest. It noted that just
prior to Jack arranging to have the Deed prepared, the Lindseys took Pense for an outing on
her grandfather's homestead property. They allowed her to reminisce of her youthful time
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spent there, and listened attentively as she regaled them, with much excitement and emotion,
with stories of her grandfather and his beekeeping activities. They then promised to rebuild
the cabin and told her of plans they had for the land. As the Lindseys testified, Pense
suddenly announced that she wanted them to have the land before her death so that she, too,
could share in their plans. Jack, within a short time after this announcement, made
arrangements for the Deed to be prepared and executed.
¶27 The District Court noted that until Pense gave this land to the Lindseys, she was
fiercely possessive of her land holdings, to the point of borrowing money in order to buy
back some family land that had been distributed to Berger after the divorce. Berger also
testified that, during their twenty-five years together, Pense adamantly refused to sell her
grandfather's homestead property despite offers from prospective buyers. While specifically
stating that it did "not impute evil intent" to the Lindseys for befriending Pense, the court
nonetheless noted a "pattern in this case which may not constitute legal intent but which
creates a picture which a court of equity must evaluate: If one were intensely friendly with
Ms. Pense, she would, literally, give away the family farm."
¶28 Jack denies that he or Lee exerted undue influence over Pense and maintains that she
gave them the property willingly and knowingly. Moreover, the Lindseys claim there was
no evidence of any solicitation on their part to Pense regarding ownership of her land and
that without such solicitation, there is no demand or importunity. We disagree. Solicitation
need not be formal or overt. Jack, without question, influenced Pense in many decisions.
He influenced her choice of attorneys, where she stayed when traveling, how she spent much
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of her leisure time, and he convinced her to enter into a lease agreement for the homestead
property with his wife's son. Whenever Jack was involved in Pense's will-making, Jack was
devised the homestead property. Jack influenced her decision on her Personal
Representative and Power of Attorney. Jack and Lee arranged the picnic to the homestead
property and when Pense offered to give them the property, Jack had the Deed prepared,
executed and recorded. Moreover, when Pense asked for her land back, Jack attempted to
set the conditions for its return. We conclude that the timing and the circumstances under
which a very susceptible Pense ultimately gave this property to the Lindseys support the
District Court's conclusion that the fifth factor, demand and importunity, was met.
¶29 The District Court concluded that all five considerations used to assist a trier of fact
in identifying undue influence were present in this case. The court also concluded that Pense
possessed a weakness of mind and that the Lindseys' actions over these several months
constituted their taking an unfair advantage of that weakness under § 28-2-407(2), MCA
(1999).
CONCLUSION
¶30 The District Court carefully weighed the evidence and assessed the credibility of the
witnesses, observing their demeanor and discerning any motives or potential biases. We
conclude that there was substantial evidence presented to the court to support its findings of
fact. Based upon our review of this case, we cannot conclude that the District Court's
findings of fact are clearly erroneous or that its conclusions of law, founded upon these facts,
are incorrect. Therefore, we affirm the District Court.
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/S/ PATRICIA COTTER
We Concur:
/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ JIM RICE
/S/ JOHN WARNER
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