IMO The Estate of Aldon S. Hall

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
)
IMO The Estate of Aldon S. Hall ) C.A. No. 8122-MA
)
MASTER’S REPORT
Date Submitted: May 23, 2014
Draft Report: September 22, 2014
Final Report: October 2, 2014
This is an estate dispute between the three adult children and second wife of
Aldon S. Hall (“Mr. Hall” or “the decedent”), who died on January 21, 2012.
Petitioners Anthony Hall, Felicia Lake, and Aaron Hall are the decedent’s children,
and Respondent Catherine Taylor Hall, is the decedent’s second wife. Decedent’s
Last Will and Testament was executed in 1976, long before his second marriage,
which occurred on January 1, 2008. In his will, decedent left his entire estate to
Anthony,1 expressing the confidence that Anthony would provide adequately for
decedent’s other children. However, after decedent’s death, his children
discovered that the bulk of their father’s real and personal property, valued at
nearly $600,000.00, was held by the entireties or jointly with his second wife,
leaving them almost nothing. The children now have taken exception to the First
and Final Accounting filed by Catherine, claiming that the transfers of real
Page 1 of 30
property to Catherine and the creation of joint accounts were the product of
Catherine’s undue influence or, in the alternative, that the joint bank accounts were
intended to be convenience accounts.
Procedural History
This matter began on December 19, 2012, when petitioners filed a Demand
for Bond under 12 Del. C. § 1524, alleging that respondent had exerted undue
influence on the decedent in order to persuade him to change account titles and
execute deeds, and that without a bond in the amount of $575,000.00, petitioners
would suffer irreparable harm.2 Petitioners amended their demand on May 29,
2013,3 to include their exception to the First and Final Account that was filed in the
Register of Wills Office in Sussex County on March 25, 2013. In her response to
the amended complaint filed on July 31, 2013,4 Respondent denied the allegations
of undue influence and other wrongdoing, and counterclaimed for waste,
misappropriation and other claims related to petitioners’ continued occupancy of
decedent’s real property, which had passed by operation of law to respondent.
Petitioners denied having committed any waste or misappropriation, and alleged
that they had an agreement with their late father regarding the possession and use
1
I use first names only to avoid repetition and confusion, and mean no disrespect
by this practice.
2
Docket Item (“DI”) 1.
3
DI 8.
4
DI 10.
Page 2 of 30
of the real property located at 32244 Powell Farm Road, Frankford, Delaware
19945 (the “Powell Farm Road Property”).5
Factual Background
Mr. Hall and his first wife divorced when their children were quite young.
Anthony, who is the oldest of the three children, recalled that he was nine or ten
years old when his parents separated. Mr. Hall was a member of the United States
Air Force and was sent to Vietnam. Anthony’s mother remarried and moved to
Dover, taking Felicia and Aaron to live with her while Anthony resided with his
paternal grandparents at the Powell Farm Road Property. When Mr. Hall returned
from overseas, he was stationed at McGuire Air Force Base in New Jersey, and
Anthony moved to New Jersey to live with his father. After Anthony graduated
from high school in New Jersey, he attended college in Baltimore, Maryland,
spending his school vacations and holidays with his grandparents, his father or his
siblings. After he graduated from college, Anthony remained in Baltimore, got
married, and raised a family there. Felicia followed Anthony to college in
Baltimore, and also remained there to work and raise a family.
Mr. Hall served in the Air Force for 23 years, retiring in 1983 or 1984. After
he retired, Mr. Hall returned to live with his parents, Mr. and Mrs. Aldon D. Hall at
5
DI 13.
Page 3 of 30
the Powell Farm Road Property.6 Anthony recalled meeting Catherine
occasionally when he and his young family would visit Mr. Hall in Frankford.
During those visits, he observed Catherine staying in a mobile home behind the
main residence at the Powell Farm Road Property. Even though he knew the
couple had a long-standing committed relationship, Anthony was surprised when
his father and Catherine announced in December 2007 that they were getting
married.
Upon his return to Delaware, Mr. Hall worked with his father mowing lawns
and doing handyman chores for other people. Mr. Hall subsequently established a
solely-owned business known as “Hall’ing” doing lawn and general maintenance
work.7 When Aaron returned to Sussex County in 1987 with his own family,
Aaron worked in his father’s business, initially as a crew chief with other
employees. Around 2005 or 2006, as Mr. Hall began losing his physical strength
and suffering some memory loss, Aaron took over the logistical and financial side
of his father’s business. While Mr. Hall was still in his prime, whenever any of his
grandsons reached the age of ten years, they would spend several summers at the
Powell Farm Road Property helping out in the business. Mr. Hall loved having his
grandchildren with him, and took them on excursions to Ocean City to play
miniature golf.
6
Mrs. Aldon D. Hall died in September 2006. Trial Transcript (“TT”) 158.
Page 4 of 30
On December 21, 2006, Mr. Hall had a fainting spell during which his heart
stopped beating. He was resuscitated by paramedics, taken to the hospital for
emergency treatment, and had a pacemaker installed.8 Mr. Hall apparently had
experienced a similar episode of fainting the month before this incident. On
February 1, 2007, Mr. Hall was seen by a neurologist, Dr. Paul Peet, because Mr.
Hall was having difficulty with his short-term memory.9 According to Dr. Peet’s
trial deposition, Mr. Hall’s history suggested that he had suffered some injury to
the brain following his cardiac arrest.10 Catherine accompanied Mr. Hall on this
initial visit and each subsequent visit to Dr. Peet. In August 2007, the couple
returned to Dr. Peet and Catherine reported that Mr. Hall was having difficulty in
remembering the directions to places he previously had been or remembering
people he should have known.11 Mr. Hall, on the other, did not think his memory
loss was significant.12
On December 5, 2007, Mr. Hall was taken to the hospital by paramedics
after Catherine had noticed that he was having difficulty speaking on the
telephone, and Mr. Hall had a seizure while in the emergency room. 13 At some
7
TT 88-89.
8
Joint Exhibit (“JX”) 24 at 1.
9
Id.
10
Peet Deposition at 14.
11
JX 24 at 5.
12
Id.
13
Id. at 6.
Page 5 of 30
point during this month, Anthony, Felicia, and Aaron received invitations
announcing their father’s upcoming wedding to Catherine, which was scheduled to
take place on January 1, 2008. On December 31, 2007, Mr. Hall executed two
deeds in which he transferred two small parcels of solely-owned property to
himself and his three children in undivided equal shares as tenants in common.14
That same day, Mr. Hall was seen by Dr. Peet in a follow-up visit to his December
5th hospitalization.15
On January 1, 2008, Mr. Hall and Catherine were married with petitioners
and other family members in attendance. Mr. Hall was nearly 67 years old and
Catherine, then in her mid-fifties, was still working as a full-time administrative
assistant in the Delaware Department of Correction. Catherine moved into the
Powell Farm Road Property with her husband and his father (“Aldon D.”), who by
then was in his late 90s. Catherine helped Mr. Hall in caring for his elderly father,
but she apparently was not interested in the lawn maintenance business that Mr.
Hall conducted from his home office. According to Aaron, Catherine refused to
take messages when customers telephoned the residence so Aaron gave them his
telephone number.16
14
JX 10.
15
JX 24 at 6.
16
TT 103-104.
Page 6 of 30
On June 19, 2008, Mr. Hall visited Dr. Peet with a complaint of blurred
vision and dizziness.17 Catherine wanted her husband to be evaluated at Johns
Hopkins Department of Neurology so Dr. Peet provided a referral. Up until this
point, according to Dr. Peet, Mr. Hall had remained active and was still mowing
lawns.18 On September 23, 2008, Mr. Hall stood up and fell, apparently triggering
another seizure that lasted about three minutes.19 On October 2, 2008, Mr. Hall
was seen by Dr. Paul Dash, a neurologist at Johns Hopkins, who made a clinical
diagnosis of Parkinson’s disease and some form of dementia other than
Alzheimer’s, which likely stemmed from the brain injury that occurred when his
heart had stopped beating.20
On October 22, 2008, Catherine drove her husband, who was no longer able
to drive an automobile, to Citizens Bank where he added Catherine’s name as joint
owner with right of survivorship to his three bank accounts.21 On October 31,
2008, Catherine’s name was added to a checking account already titled in the
names of Aldon D. Hall and Aldon S. Hall at PNC Bank.22 On January 22, 2009,
Catherine’s name was added to her husband’s three accounts at the Bank of
17
JX 24 at 8.
18
Peet Deposition at 24-25.
19
JX 24 at 9.
20
Id. at 12.
21
JX 13.
22
JX 14.
Page 7 of 30
Delmarva as a joint owner with right of survivorship.23 In June of that year,
Catherine retired after 30 years of employment with the State. On December 22,
2009, Mr. Hall executed a durable power of attorney document naming his wife as
his agent.24 On December 24, 2009, Catherine was added to a membership account
or accounts already titled in the names of Aldon S. Hall and Anthony S. Hall at the
Dover Federal Credit Union.25 On February 17, 2010, Catherine’s name was
added to an account at PNC Bank owned solely by her husband.26
Dr. Peet saw Mr. Hall again on April 1, 2010, after Catherine noticed that
her husband had a cough and was having some difficulty breathing. 27 Dr. Peet
suspected that he might have pneumonia. During this visit, Dr. Peet observed that
Mr. Hall was using a four-wheel walker whereas on previous visits, he had been
28
able to walk independently. On May 6, 2010, during a follow-up visit after Mr.
Hall’s hospitalization for pneumonia, Dr. Peet noted that Mr. Hall had arrived in a
wheelchair.29
23
JX 16.
24
JX 6.
25
JX 18. It is unclear from the documentation how many accounts Mr. Hall had at
this institution.
26
JX 14.
27
JX 24 at 18.
28
Peet Deposition at 55-56.
29
JX 24 at 19.
Page 8 of 30
Upon his discharge from the hospital, Mr. Hall was admitted to a
rehabilitation facility in Oak Orchard.30 Catherine had a house that was handicap-
accessible in Millsboro, and believed that Mr. Hall would have more room to move
around there and that she could provide better care for her husband in the
Millsboro house than at the Powell Farm Road Property. 31 Catherine also felt that
she could not take care of both Mr. Hall and Aldon D.32 Following a family
meeting during which the parties arranged for other relatives to care for Aldon D.
in his home,33 Catherine and Mr. Hall moved into her Millsboro house. In the
process of removing her husband’s personal belongings from the Powell Farm
Road Property, Catherine removed her husband’s computer on which the current
business records were maintained, without giving Aaron any warning of her
intentions.34
Relations between Aaron and Catherine apparently had been strained for
some time. Aaron testified that he and Catherine did not see “eye to eye” on a lot
of issues and that she was fairly combative, which upset his father and
grandfather.35 Aaron also accused her of disparaging him in front of other
30
TT 249.
31
Id.
32
TT 277.
33
TT 171, 200-203.
34
TT 104-105, 294.
35
TT 105-106.
Page 9 of 30
people.36 Catherine denied this accusation, and countered with her belief that
Aaron had taken advantage of her husband, who always gave Aaron extra money
even though Aaron was just an employee of his father’s business.37 Mr. Hall’s
three children continued to visit him at Catherine’s house in Millsboro, but Aaron
only visited when his siblings were present because he felt unwelcome there.38
Petitioners also were able to call and talk with their father using Catherine’s cell
phone after she disconnected Mr. Hall’s cell phone because he could no longer
handle it by himself.39 Catherine and Mr. Hall still attended the church near the
Powell Farm Road Property, and after church they visited with Mr. Hall’s father
and other family members living nearby. 40
The Sunday church-going and visits ceased after Aldon D. died on August
17, 2010, five days short of his 100th birthday.41 On September 2, 2010, Mr. Hall
executed a deed transferring his real property on Blackwater Road to himself and
Catherine as tenants by the entirety.42 Aldon D. had died intestate survived by Mr.
Hall and the two daughters of Mr. Hall’s deceased brother. On November 3, 2011,
Mr. Hall and his two nieces executed a deed transferring the Powell Farm Road
36
TT 135.
37
TT 240, 248.
38
TT 106-107.
39
TT 174.
40
TT 44, 172.
41
TT 27, 75.
42
JX 8.
Page 10 of 30
Property to Mr. Hall and Catherine as tenants by the entirety. 43 On December 7,
2011, in her capacity as agent for Mr. Hall, Catherine added her name to her
husband’s accounts at the Andrews Federal Credit Union.44 Shortly thereafter, on
January 21, 2012, Mr. Hall died at the age of 70.45
Analysis
A. Undue Influence
At trial, decedent’s three adult children expressed their displeasure and
disappointment with the fact that Catherine, who only was married to their father
for four years, had received essentially all of Mr. Hall’s assets.46 Aaron had
understood that he was going to take over the business after his father retired. 47
Felicia had told her father not to sign anything after he got married.48 Anthony,
who never discussed finances with his father,49 acknowledged that Catherine
should receive something, but felt it was unfair that she was getting everything.50
Petitioners concede that there is no “smoking gun” in this case showing Catherine
directly influencing Mr. Hall. Instead, petitioners argue that the circumstantial
43
JX 20.
44
JX 18.
45
JX 22.
46
During the trial, Catherine admitted that she had not contributed any funds to
Mr. Hall’s joint accounts. TT 290. She had her own separate bank accounts. TT
266-267.
47
TT 94.
48
TT 175.
49
TT 56.
Page 11 of 30
evidence demonstrates that Catherine effectively isolated her husband from his
family at a time when he was cognitively impaired and deteriorating physically,
and influenced him to transfer nearly all of his assets into their joint names.
Undue influence is a claim often raised in will contests to challenge a
testator’s change of beneficiaries or dispositions of property. Proving undue
influence requires a challenger to demonstrate: (1) a susceptible testator; (2) the
opportunity to exert influence; (3) a disposition to do so for an improper purpose;
(4) the actual exertion of such influence; and (5) a result demonstrating its effect.51
Undue influence has been described as an:
excessive or inordinate influence considering the circumstances of the
particular case. The degree of influence to be exerted over the mind of the
testator, in order to be regarded as undue, must be such as to subjugate his
mind to the will of another, to overcome his free agency and independent
volition, and to compel him to make a will that speaks the mind of another
and not his own. It is immaterial how this is done, whether by solicitation,
importunity, flattery, putting in fear or some other manner. Whatever means
employed, however, the undue influence must have been in operation upon
the mind of the testator at the time of the execution of the will.52
Furthermore, undue influence must be established by a preponderance of
evidence.53 While circumstantial evidence may be considered, if the evidence
50
TT 68.
51
See In re Estate of Gardner, 2012 WL 5287948, at *10 (Del. Ch. Oct. 14, 2012)
(Master’s Final Report) (citing In re Estate of West, 522 A.2d 1256, 1264 (Del.
1987); In re Kohn, 1993 WL 193544, at *6 (Del. Ch. May 19, 1993); In re
Langmeier, 466 A.2d 386, 403 (Del. Ch. 1983)).
52
Langmeier, 466 A.2d at 403.
53
West, 522 A.2d at 1264.
Page 12 of 30
discloses one or more plausible alternative explanations for a testator’s change of
beneficiaries, then undue influence has not been established. 54
Petitioners argue that as soon as Catherine moved in with her new husband,
she took complete control over him. According to petitioners, Catherine alienated
Aaron who was the only adult child living nearby, disconnected Mr. Hall’s land
line and cellular phone, removed his computer, and forced Mr. Hall to move to
Millsboro, thereby separating him from his elderly father. Once she realized that
Mr. Hall was not going to change his will, petitioners claim, Catherine made every
effort to influence her husband to transfer approximately $500,000.00 in assets into
her name for the alleged purpose of taking care of her. While Mr. Hall was in
hospice care, Catherine had her name added as tenant by the entirety to the family
homestead, i.e., the Powell Farm Road Property, and then used the power of
attorney to add her name to his accounts in Maryland at the Andrews Federal
Credit Union. Even after Mr. Hall’s death, petitioners argue, Catherine’s actions in
collecting rent from a property solely- owned by her husband that passed under his
will to Anthony, and in selling the classic automobile that her husband and Aaron
had restored, demonstrate her greed and undue influence over her husband.
Although the parties strenuously dispute whether Mr. Hall was, in fact,
susceptible to undue influence, I do not need to address this element because, after
54
Id. at 1264-1265; see also In re Estate of Konopka, 1988 WL 62915, at *5 (Del.
Page 13 of 30
reviewing the record, I conclude that petitioners have failed to establish by the
preponderance of evidence the actual exertion of undue influence by Catherine.
Over a period of three years following his marriage, Mr. Hall personally executed
two deeds transferring real property to himself and his wife and personally
authorized the addition of his wife’s name to his numerous financial accounts with
his signature on the bank application forms. There has been no demonstration that
Mr. Hall’s free will was overborne by Catherine during these trips to the bank or
his attorney. Petitioners were not present during these events and, with the
exception of Aaron who saw some bank statements at the Powell Farm Road
Property, petitioners had no inkling of what Mr. Hall was doing with his property
during his marriage. They were also unaware that Mr. Hall had transferred two-
solely owned properties to them on the eve of his marriage to Catherine.
While it was true that Mr. Hall was somewhat isolated from his adult
children, Anthony and Felicia visited their father in Millsboro about as frequently
as they visited him at the Powell Farm Road Property, and on a few occasions they
also accompanied Catherine and Mr. Hall on trips to medical specialists. Anthony
and Felicia lived some distance away in Baltimore and had busy lives by virtue of
their own families and employment. Aaron lived behind the Powell Farm Road
Property and was in and out of the house frequently when his father lived there.
Ch. June 23, 1988).
Page 14 of 30
The reduced frequency of Aaron’s visits to his father in Millsboro, however, Aaron
attributed not only to his feeling unwelcome at Catherine’s home but also to his
own work schedule.55
The attorney, who drafted the deeds to the Blackwater Road and Powell
Farm Road properties and witnessed Mr. Hall’s execution of these documents on
two separate dates,56 previously had represented Mr. Hall in a tax ditch dispute
with a relative.57 This attorney also prepared a durable power of attorney
document for Mr. Hall and served as notary public when Mr. Hall executed the
power in favor of Catherine on December 22, 2009.58 During the trial, Catherine
testified that she had no involvement in the transfers of the Blackwater Road and
Powell Farm Road properties to her and her husband as tenants by the entirety. 59
Had Catherine been involved in the arrangements or somehow had influenced her
husband to make these transfers, I would have expected to hear testimony from the
attorney or the two nieces who joined in the conveyance of the Powell Farm Road
Property to Mr. Hall and Catherine.
55
TT 106-107.
56
JX 8 & 20.
57
TT 135-136.
58
JX 6.
59
TT 255-256.
Page 15 of 30
Catherine testified that when they got married, Mr. Hall had told her that he
wanted to take care of her.60 Petitioners point to the fact that Catherine was much
younger than Mr. Hall and was earning good salary; therefore, she did not need to
be taken care of, unlike their father. Even though Catherine’s testimony is self-
serving, there is no evidence to contradict it and, furthermore, it is entirely
consistent with their legal relationship as husband and wife.61 This was a couple
who had been in a committed relationship for approximately 25 years. Mr. Hall
was having health issues when they married, and as his symptoms became worse,
he began to add Catherine’s name to his financial accounts. Petitioners view this
as undue influence and control by Catherine. It is equally plausible that Mr. Hall
added his wife’s name to his accounts because he loved her and wanted his wife to
have his assets in the very likely event that he predeceased her.
However, petitioners also argue that if Mr. Hall had wanted to take care of
his wife, he could have executed a new will. Catherine had asked Mr. Hall to
make a will shortly after they were married to let everyone know where they
stood,62 but he never made a new will. After Mr. Hall’s death, Aaron found Mr.
Hall’s 1976 will in a filing cabinet at the Powell Farm Road Property and he and
60
TT 253.
61
See 13 Del. C. § 502.
62
TT 176.
Page 16 of 30
Anthony attempted to probate it.63 Petitioners argue that Catherine, unable to get
Mr. Hall’s will changed, simply found another way to get control of his assets.
However, the fact that on the eve of his marriage, Mr. Hall transferred two solely-
owned real properties to himself and his three children suggests that he already had
begun the process of estate planning without having to change his will, and simply
continued this same process over the next several years.
Since petitioners have failed to demonstrate by the preponderance of the
evidence that the disputed property transfers and additions of Catherine’s name to
Mr. Hall’s bank accounts were the product of undue influence, I recommend that
the Court deny this exception to the First and Final Accounting.
B. Joint Bank Accounts
In the alternative, petitioners argue that the accounts to which Mr. Hall
added Catherine’s name were intended only as convenience accounts by Mr. Hall,
to enable Catherine to pay his bills, with the exception of three accounts at Citizens
Bank which petitioners concede are true joint accounts. Not surprisingly,
Catherine argues that the evidence demonstrates that all accounts listed on the
63
TT 55-56, 111.
Page 17 of 30
amended estate inventory were true joint accounts with right of survivorship, and
that petitioners should not be allowed to attempt to demonstrate otherwise.64
In claiming that all except three Citizens Bank accounts were intended to be
convenience accounts, petitioners rely mainly on Aaron’s testimony regarding a
conversation that he had one time with his father or Catherine when they were
working on the computer. Apparently, without his asking Mr. Hall a direct
question, Aaron was told that Catherine’s name was on the accounts to pay bills
and to do what needed to be done around the property. 65 It is difficult to reconcile
Aaron’s self-serving testimony with the documentary evidence. Petitioners have
conceded that the three Citizens Bank signature cards signed by Mr. Hall on
October 22, 2008, unequivocally changed three accounts from individual to “joint
with survivorship” with Catherine.66 As will be discussed below, some of the other
bank documents in the record contain similar unequivocal language.67 Petitioners
64
See Walsh v. Bailey, 197 A.2d 331 (Del. 1964) (parol evidence is not admissible
to contradict a joint tenancy with right of survivorship where the signature card
evidence is “sufficiently clear to impart the creation of a joint tenancy with right of
survivorship.”).
65
TT 137-139.
66
JX 13.
67
The bank documents in the record also do not appear to be complete. For
example, although the amended estate inventory lists a fourth account at Citizens
Bank, a certificate of deposit (acct. no. ending in 2425), as jointly held with
Catherine, JX 3, there are no bank documents in the record showing title to this
Citizens Bank certificate of deposit.
Page 18 of 30
have failed to proffer any reason why those accounts should be treated differently,
i.e., as convenience accounts and not as true joint accounts.
Shortly after Mr. Hall added Catherine’s name to his three Citizens Bank
accounts, Catherine’s name was added to a checking account (no. 5797102233) at
PNC Bank owned by Aldon D. and Mr. Hall.68 This account was listed on the
amended estate inventory as jointly held with Catherine.69 It appears to have been
in the sole name of Aldon D. Hall when it opened on November 30, 2004 at the
Mercantile Peninsula Bank under a different account number. It appears that Mr.
Hall’s name was added to this account on February 24, 2005, based on the scan
date of the Mercantile Peninsula Bank consumer signature card containing both
signatures.70 The type of account ownership is not explicitly shown on the
signature card. On October 31, 2008, Mr. Hall and Catherine signed a PNC Bank
account registration and agreement card listing this account in the names of Aldon
D. Hall, Aldon S. Hall and Catherine B. Taylor Hall.71 Again, there is no explicit
68
JX 14.
69
JX 3. The amended estate inventory lists three PNC Bank accounts as joint with
Catherine: (1) check acct. no. 57954462; (2) certificate of deposit no.
31200335805; and (3) checking acct. no. 5797102233. The first checking account
listed has the same account number except for the last digit as the account bearing
the names of Mr. Hall and Catherine in JX 14. There is no bank documentation
showing title to the PNC Bank certificate of deposit. The second checking account
listed in the inventory has the same account number as the account bearing the
names of Aldon D., Mr. Hall, and Catherine.
70
Id. at 7.
71
Id. at 6.
Page 19 of 30
indication of ownership on the card. Another scan of this card on November 18,
2008, reveals that Aldon D. also signed the card authorizing the addition of
Catherine’s name to the account.72
Approximately 16 months later, Catherine’s name was added to a second
checking account at PNC Bank (no. 5797544621) which, according to the account
registration and agreement card scanned on February 16, 2010, listed the
typewritten names of Aldon S. Hall and Catherine B. Taylor Hall and contained on
the second signature line a check mark with Catherine’s signature next to it and a
check mark on the line above where Mr. Hall was supposed to sign. 73 The
following day, February 17, 2010, a copy of this card was scanned which
contained Mr. Hall’s signature next to the check mark on the first line. 74 Again,
there is no explicit indication of ownership on this card.
There is a PNC booklet in the record entitled “Account Agreement for
Personal Checking, Savings and Money Market Accounts,” effective October 21,
2013, which states that “[i]f your Account is a joint Account, then you own your
Account as joint tenants with the right of survivorship and not as tenants in
common.”75 Catherine argues that this booklet, in conjunction with the account
72
Id. at 5.
73
Id. at 4.
74
Id. at 3.
75
JX 15 at 9.
Page 20 of 30
records, demonstrates that these were both true joint accounts with right of
survivorship.
There is no evidence that Aldon D. ever received a booklet containing this
information when he added his son’s name and, later, Catherine’s name to his
checking account. There is no evidence that Aldon D. intended to create a true
joint account with right of survivorship with either his son or Catherine.76
Therefore, in determining the ownership of checking account no. 5797102233, I
must rely on the following legal presumptions. First, joint tenancies with right of
survivorship are not favored in Delaware and there is a rebuttable presumption that
people do not own property under a true joint tenancy unless they make their
intentions explicit in the language used to create title to the property. 77 Second, a
transfer of property for no consideration between close family members, such as a
husband and wife or a parent and child, is presumed to be a gift.78
Applying these rebuttable presumptions here, when Aldon D. added his
son’s name to his account at Mercantile Peninsula Bank (predecessor to PNC Bank
account no. 5797102233), he created a tenancy in common and made a gift of 50
percent of his funds in this account to his son. When Catherine was later added to
76
See In re Estate of Rufus Barnes, Sr., 1998 WL 326674 (Del. Ch. June 18, 1988)
(evidence as to the creation of the joint bank account included testimony from the
employee of PNC Bank who opened the account for the decedent and gave him a
booklet that explained joint accounts).
77
Id. at *4.
Page 21 of 30
this account in 2010, Aldon D. and Mr. Hall each made a gift one-third of his
undivided share of the funds in this account respectively to Catherine as his
daughter-in-law and spouse. Applying the legal presumptions, Aldon D., Mr. Hall,
and Catherine were tenants in common, each owning an undivided one-third share
of the funds in this account.
When Aldon D. died on August 17, 2010, one-third of the value of account
no. 5797102233 on the date of his death should have been included in his estate.
After Aldon D.’s death, Mr. Hall and Catherine, presumably still as tenants in
common, each then owned an undivided 50 percent share of the funds. Similarly,
when Mr. Hall added Catherine’s name to PNC Bank checking account no.
5797544621, Mr. Hall is presumed to have given his wife 50 percent of the funds
in this account as a tenant in common. When Mr. Hall died on January 21, 2012,
50 percent of the value of checking account no. 5797102233 and checking account
no. 5797544621 on the date of Mr. Hall’s death should have been listed on the
amended estate inventory as an estate asset, and not jointly held with Catherine.
Aaron’s testimony implying that Mr. Hall only intended to add his wife’s
name to his accounts to pay his bills does not rebut the presumption that they held
the accounts as tenants in common. Prior to Mr. Hall adding his wife’s name to
account no. 5797544621, he had added her name as joint owner with right of
78
See Hudak v. Procek, 727 A.2d 841, 843 (Del. 1999).
Page 22 of 30
survivorship to his three accounts at Citizens Bank, and he went on to add her as a
joint owner of his accounts at The Bank of Delmarva and Dover Federal Credit
Union. In other words, he established a pattern of adding his wife as joint tenant
with right of survivorship and not as tenants in common.79
Moreover, Mr. Hall’s pattern of adding his wife’s name to his accounts at
Citizens Bank, the Bank of Delmarva, and Dover Federal Credit Union as a joint
owner with right of survivorship reveals his intent, and is sufficient to rebut the
legal presumption that Mr. Hall held checking account nos. 5797544621 and
579710223 with his wife as tenants in common. Based on this evidence, I conclude
that Mr. Hall intended to hold the two PNC Bank accounts with his wife as joint
owners with right of survivorship. Since these two accounts were properly listed
as true joint accounts on the amended inventory of Mr. Hall’s estate, I recommend
that the Court dismiss petitioner’s exception to the First and Final Accounting as to
these two PNC Bank accounts.
On December 7, 2011, Catherine added her name as joint owner of Mr.
Hall’s membership at Andrews Federal Credit Union using the durable power of
attorney that Mr. Hall had executed in her favor on December 22, 2009.80
Petitioners argue that Catherine’s conduct was a breach of her fiduciary duty of
loyalty to Mr. Hall, who at the time was near death and unable to benefit from this
79
JX 16 and JX 18.
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transaction. The record shows that the power of attorney document was drafted by
the same attorney who drafted the two deeds transferring the real property at
Powell Farm Road and Blackstone Road to Mr. Hall and Catherine as tenants by
the entirety.81 Among the powers Mr. Hall had delegated to Catherine was the
unambiguous authority to make gifts to herself or any other person.82 Since Mr.
Hall was represented by counsel who both prepared the document and notarized
Mr. Hall’s signature, I do not find that Catherine breached her fiduciary duty to her
husband when she added her name as a joint owner of his membership account at
Andrews Federal Credit Union.83
Furthermore, while the membership application simply lists Catherine as a
“joint owner,” any ambiguity in this title is removed by the beneficiary designation
portion of the application – which was left blank here – that states: “The following
beneficiary(ies) are to receive the proceeds of my accounts in the event of my
death. If these accounts are jointly held, the beneficiary(ies) are to receive the
funds only in the event of the death of all account holders. ….”84 Therefore, these
accounts were properly listed as true joint accounts on the amended inventory of
Mr. Hall’s estate.
80
JX 6 and 17.
81
JX 6, 8, and 9.
82
JX 6 at 2, ¶ 18. See Schock v. Nash, 732 A.2d 217, 225-227 (Del. 1999).
83
Schock, 732 A.2d at 229.
84
JX 17.
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On December 24, 2009, Mr. Hall added his wife to his share/savings and
money market accounts at the Dover Federal Credit Union.85 The application that
the couple signed explicitly designated Catherine as a joint tenant with right of
survivorship.86 However, when this application was submitted, Anthony was also
a joint member/owner of his father’s account(s) at the Dover Federal Credit
Union.87 At trial, Anthony testified that his father had opened an account at the
Dover Federal Credit Union in 1977, and that Anthony himself had made deposits
into their joint account(s).88 Anthony also testified that he later found out that
Catherine had used the durable power of attorney to close out the account(s).89
85
JX 18. No account number is listed for the “share/savings” account on the
application. Id. at p21. The money market account number was listed as
80837688, which consisted of a suffix added to the end of the “member number.”
Mr. Hall’s member number was 808376000 on this application. The amended
inventory of Mr. Hall’s estate lists “Dover Federal Credit Union 6000” and Dover
Federal Credit Union Primary Shares Acct.” as jointly owned with Catherine. JX
3. However, Mr. Hall was listed as having a different “membership” number
(718520007) on the contact details entry form dated December 24, 2009, wherein
it was entered that Mr. Hall and Catherine wanted to close an account but were not
able to have “joint member Anthony sign to allow this….” JX 18 at p16. This
entry goes on to state that a manager “says it would be ok to leave the CD so the
members can keep their rate.” Id.
86
The application form had three boxes labeled “Individual,” “Joint Account with
Rights of Survivorship,” and “Joint Account without Rights of Survivorship.” The
box labeled “Joint Account with Rights of Survivorship” was checked above
Catherine’s name in the “joint owner” section. JX 18 at p22.
87
Id. at p16 and p20.
88
TT 30-31.
89
Id. at 32.
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Given this testimony, there may have been another account at Dover Federal
Credit Union that was the original joint account opened by Mr. Hall with Anthony
in 1977, which was closed by Catherine using her power of attorney sometime
prior to Mr. Hall’s death. If Catherine closed another account owned by Mr. Hall
and Anthony as joint tenants with right of survivorship or as tenants in common,
and disproportionately converted the funds in the account, Anthony may have an
equitable action against her.90
Although it appears that the two Dover Federal Credit Union accounts listed
in the amended estate inventory as jointly owned with Catherine are true joint
accounts, the lack of or the discrepancy in account numbers for the two Dover
Federal Credit Union accounts listed on the inventory, as compared to the
application forms in JX 18, makes me hesitate to dismiss this exception.
Therefore, I recommend that the Court order Catherine to request documentation
from Dover Federal Credit Union regarding the survivorship status of these
accounts to confirm that the two accounts listed in the amended inventory are the
same two accounts described on the application form in JX 18. Also, in the
interest of justice and a full resolution of the issues, I recommend that the Court
allow Anthony additional time to provide the Court with further documentation
concerning the joint account that he once held with Mr. Hall which may have been
90
See Mack v. Mack, 2013 WL 3286245, at **2-3 (Del. Ch. June 2013).
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closed by Catherine, including any information concerning the subsequent
disposition of those funds.
The record also contains an Infinex Financial Group brokerage account
monthly statement addressed to “Aldon S. Hall” and “Catherine B. Taylor Hall
JTWROS.”91 Although the initials suggest that this was a true joint account, there
is nothing in the record showing when the account was opened, by whom, or with
what authority. More evidence is needed before a determination can be made that
this asset was correctly listed as jointly held with Catherine on the amended estate
inventory. Therefore, I recommend that the Court order Catherine to request
documentation from Infinex regarding the survivorship status of this account.
At trial, Catherine admitted that she had been collecting monthly rental
income from the tenant of real property solely owned by Mr. Hall that, after Mr.
Hall’s death, had passed to Anthony under the terms of Mr. Hall’s 1976 will.
Some of the rents had been collected prior to Mr. Hall’s death. Catherine testified
that she had accumulated rental income in the amount of $6,240.00 as of January
2014, which was still “available.”92 None of these funds appear to have been
included on the First and Final Accounting. I recommend that the Court order
Catherine to provide an accounting of all the rental income she has collected no
later than 30 days after this report becomes a final order of the Court and,
91
JX 19.
Page 27 of 30
assuming the accounting is approved, to submit a revised First and Final
Accounting, if necessary, to reflect the amount of rental income that belongs to the
estate.
At trial, there was testimony concerning an antique car that had been owned
by Mr. Hall, which Catherine subsequently sold for $5,000.00 to pay estate debts.93
Aaron had worked with his father on restoring this car,94 and viewed its sale as an
act of pure spite by Catherine. Catherine denied this, claiming that she needed to
sell the car to provide cash for estate expenses.
In the amended estate inventory, Catherine listed this vehicle, a 1931
Plymouth Classic, on Schedule E as solely-owned personal property of the
decedent with a date of death fair market value of $5,425.00.95 The only other
solely-owned property was miscellaneous farm equipment of unknown value.
Since the jointly-held accounts and real estate passed outside of the estate, the total
of probate assets was $5,425.00.96 In the First and Final Accounting, additional
assets consisted of Catherine’s own contribution to the estate of $10,601.00.97 The
funeral expenses were $9,190.00, administrative expenses totaled $801.00,
92
TT 300-302.
93
TT 258-260.
94
TT 100-101.
95
JX 3.
96
Id.
97
JX 4.
Page 28 of 30
attorney fees were $6010.00, and closing costs were $25.00, leaving a zero balance
in the hands of the personal representative.
Depending upon the accounting and whatever additional bank
documentation is provided, revisions to the First and Final Accounting may be
necessary. In the end, it may turn out that there were sufficient liquid assets in the
estate to cover its expenses. While it may be impossible to recover the antique car
itself, it may be appropriate to surcharge Catherine, as personal representative, for
the difference between the sales price and the fair market value of the vehicle.
Finally, there are two accounts listed in the amended inventory as jointly
held with Catherine, for which there is no documentation whatsoever regarding
title. These are Citizens Bank Certificate of Deposit Ending 2425 (item 3 on
Schedule D) and PNC Certificate of Deposit 31200335805 (item 6 on Schedule
D).98 I recommend that the Court order Catherine to request documentation from
Citizens Bank and PNC Bank regarding the survivorship status of these certificates
of deposit. If Catherine is unable to obtain sufficient evidence regarding the
survivorship status of these accounts and of other accounts where I have made
similar recommendations, I will consider additional briefing from the parties
regarding what additional relief, if any, may be appropriate.
98
JX 3.
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Conclusion
For the above reasons, I recommend that the Court (1) dismiss petitioners’
exception to the First and Final Accounting based on their claim of undue of
influence; (2) dismiss petitioners’ exception based on their claim that the Bank of
Delmarva accounts and PNC Bank accounts discussed above are not true joint
accounts; (3) dismiss petitioners’ exception to the Andrew Federal Credit Union
accounts based on their breach of fiduciary claim; (4) order Catherine to obtain
additional documentation regarding Citizens Bank acct. no. ending in 2425, PNC
Bank acct. no. 311200335805, Dover Federal Credit Union 6000 and Primary
Shares accts., and Infinex Financial Brokerage acct. no. A6X-301523; (5) order
Catherine to account for the rental income from 32669 Jones Road; and (6) allow
Anthony additional time to obtain more documentation regarding the Dover
Federal Credit Union joint account or accounts that were opened in 1977.
Respectfully,
/s/ Kim E. Ayvazian
Kim E. Ayvazian
Master in Chancery
KEA/kekz
cc: Richard E. Berl, Esquire
Jason C. Powell, Esquire
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