Smith v. Smith (In Re Estate of Smith)

IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 45313
In the Matter of the Estate of Victoria H. )
Smith, Deceased. )
_______________________________________ )
)
VERNON K. SMITH, JR., individually, and )
in his capacity as the former attorney-in-fact, )
agent and/or fiduciary for Victoria H. Smith )
and/or the Estate of Victoria H. Smith, and in )
any other capacity relevant to these )
proceedings; and DOES 1-20, )
Boise, June 2018 Term
)
Plaintiff-Appellant- )
Filed: December 18, 2018
Appellant on Appeal, )
)
Karel A. Lehrman, Clerk
v. )
)
JOSEPH H. SMITH, an intestate heir of the )
SUBSTITUTE OPINION. THE
Estate of Victoria H. Smith, Deceased, )
COURT’S PRIOR OPINION
)
DATED JULY 30, 2018, IS
Defendant-Respondent- )
HEREBY WITHDRAWN.
Respondent on Appeal, )
)
and )
)
NOAH G. HILLEN, in his capacity as )
Personal Representative of the Estate of )
Victoria H. Smith, )
)
Intervenor-Respondent on Appeal. )
_______________________________________ )
Appeal from the Magistrate Court of the Fourth Judicial District of the State of
Idaho, Ada County. Honorable Cheri C. Copsey, Senior District Judge, presiding
as Magistrate Judge.
The magistrate court’s orders are affirmed.
Jones Gledhill Furhman Gourley, PA, Boise, for appellant. Erika P. Judd argued.
Ellis Law, PLLC, Boise, for respondent. Allen B. Ellis argued.
_____________________
BRODY, Justice.
This case centers on the estate of Victoria H. Smith. The magistrate court ruled that
Victoria died intestate after finding that her will was a product of the undue influence of her son,
Appellant Vernon K. Smith Jr. Vernon appeals from that ruling, as well as an earlier partial
summary judgment ruling that invalidated a series of transactions that transferred all of
Victoria’s assets to a limited liability company that Vernon owned and a corresponding judgment
entered pursuant to Idaho Rule of Civil Procedure 70(b). We affirm the decisions of the
magistrate court.
I. FACTUAL AND PROCEDURAL BACKGROUND
Victoria H. Smith was nearly 100 years old when she died on September 11, 2013.
During her life she married Vernon K. Smith Sr., a lawyer who died of a heart attack in 1966.
The couple had three children: Joseph H. Smith, Vernon K. Smith Jr., and Victoria A. (Smith)
Converse. The Smith family members are referred to throughout this opinion as Victoria, Vernon
Sr., Joseph, Vernon, and Victoria Converse.
Victoria and Vernon Sr. accumulated substantial real estate and business interests during
their lifetimes. Vernon, who is also a lawyer, managed Victoria’s legal and business affairs from
the time he was licensed to practice law in 1971 until the time she died.
On February 14, 1990, more than twenty years before her death, Victoria prepared a
holographic will. Vernon was the only person present when Victoria signed the document. The
will stated in full:
In event of my death I give all my property, real and personal, to my son Vernon
with the right to serve as Executor with-out bond. I have given my son Joseph real
and personal property in my life time. I have given my daughter, Victoria
Converse, personal property in my life time.
Holographic Will.
Dated February 14, 1990.
Victoria H. Smith
In 1999, Victoria executed a durable power of attorney making Vernon her attorney in
fact. In 2008, following hospitalization for a fall, Victoria executed a second, more robust power
of attorney. Vernon drafted both of these documents. The 2008 power of attorney read in full:
I, Victoria H. Smith, residing at 5933 Branstetter Street, Boise, Ada
County, Idaho, born October 31, 1913, Social Security Number [] does herewith
reaffirm, reconfirm and continue the ongoing appointment of my son, Vernon K.
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Smith Jr., born [], from the original appointment I made in 1999, and to remain
authorized to act as my unconditional attorney in fact and agent under this
Durable and Irrevocable Power of Attorney, and he is authorized to exercise all
powers and authority I otherwise possess and could exercise in my own name and
on my own behalf.
The power and authority vested in him is unconditional, unlimited and all
inclusive, and he shall have the full and exclusive power and authority to manage
and conduct all of my affairs, and to exercise all of my legal rights and powers,
including any rights and powers I may acquire in the future, and specifically
including, but without any intended limitation, to collect all funds, hold, maintain,
improve, invest, lease, or otherwise manage or dispose of any or all of my real or
personal property, or any interest therein; purchase, sell, mortgage, encumber,
grant, option or otherwise deal in any way in any real property or personal
property, tangible or intangible, or any interest therein; to borrow funds, to
execute promissory notes, and to secure any obligation by mortgage, deed of trust
or pledge; to conduct any and all business and banking needs, of any nature or
kind, including the right to sign checks and draw funds on any and all my
accounts, with the same authority as my own signature, to sign any and all
agreements and documents in my behalf, to continue any corporations, limited
liability companies and venture entities I presently have, and to organize,
reorganize, merge, consolidate, capitalize, recapitalize, close, liquidate, sell, or
dissolve any business interest, and to vote all stock, including the exercise of any
stock options and any buy-sell agreements; to receive and to endorse checks and
other negotiable paper, to deposit and to withdraw funds from any accounts, by
check or by withdrawal slips, or otherwise, to transfer funds from any account and
to do so from any bank, savings and loan, or any other financial institution in
which I have funds now or in the future; to prepare, sign and file any and all tax
returns and other governmental reports and documents, and to represent me in all
matters before the Internal Revenue Service or State Tax Commission; to have
access to all certificates of deposit, and any safety deposit box registered in my
name, whether alone or with others, and to remove any property or papers located
therein; to act unconditionally with regard to any funds, stocks, bonds, shares,
investments, interests, rights, benefits or entitlements I may now have or hereafter
come to have and hold; to engage in any administrative or legal proceedings or
lawsuits regarding any rights and interests I have on matters therein; to create
trusts and to transfer any interest I may have in property, whether real or personal,
tangible or intangible, to the trustee of any trust, to engage and to dismiss agents,
counsel, and employees, in connection with any matter, and for purposes, this
power and authority vested in my son, Vernon K. Smith Jr., is unlimited,
unconditional and all inclusive, and with the same authority and effect as though I
had caused the action to be undertaken.
This Durable Power of Attorney is irrevocable and shall remain in full
force and effect, having been coupled with adequate consideration, and shall not
be affected, altered or impaired by the event of my death or disability, and shall
continue in effect for all time, as it has been my long-standing intention and desire
that my son, Vernon K. Smith Jr., shall be the sole and exclusive heir of my entire
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estate, as I have so declared openly in the past many years, because of his
commitment, dedication, and devotion to my best interests, welfare, and financial
well being.
On July 3, 2012, Vernon formed a limited liability company, VHS Properties, LLC
(“VHS” are Victoria’s initials). He named his mother and himself as the only members of the
company. The next day, Vernon used the 2008 power of attorney to transfer all of Victoria’s real
and personal property to VHS Properties. He signed the transfer document on behalf of Victoria,
as her attorney in fact, and on behalf of VHS Properties, as a member. Vernon then used the
2008 power of attorney to execute a second document, by which he transferred to himself all of
Victoria’s interest in VHS Properties. He once again signed the document on behalf of Victoria
and also signed for himself. By the end of the day on July 4, 2012, Vernon had exclusive
ownership and control of all of Victoria’s assets.
In 2014, following Victoria’s passing, Sharon Bergmann filed a petition seeking the
probate of Victoria’s estate. In her petition, Bergmann claimed that Vernon, her ex-husband, was
in possession of Victoria’s will and sought its probate for purposes of satisfaction of an
outstanding judgment against him. Soon thereafter, Joseph filed a petition for formal
adjudication of Victoria’s intestacy and for his appointment as the personal representative of her
estate. Within his petition, Joseph acknowledged the existence of the will—which he also
claimed was in Vernon’s possession—but asserted that Victoria’s estate should be subject to
intestate administration because the will was invalid as a product of Vernon’s undue influence.
Vernon filed responses and objections to both petitions. Bergmann eventually withdrew
her petition, acknowledging Joseph’s priority, and remained in the proceedings as an interested
party. Specific to Joseph’s petition, Vernon denied the claim of undue influence and asserted
that, regardless of that claim, intestate administration of Victoria’s estate would prove
meaningless because the estate did not hold any assets as a result of the series of transactions he
completed using the 2008 power of attorney. Vernon also separately applied for formal probate
of the holographic will and for his appointment as personal representative. Joseph objected to
Vernon’s petition. He did not contest the will’s authenticity, but once again claimed that it was
executed as a result of Vernon’s undue influence.
Joseph later filed a second petition in conjunction with his earlier request for intestate
administration, in which he claimed that Vernon was liable for breach of fiduciary duty and
conversion of property. This petition sought, among other things, the restitution of Victoria’s
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estate in light of Vernon’s series of transactions, and an accounting of Victoria’s income and
expenditures made by Vernon. Vernon moved to dismiss the petition pursuant to Idaho Rule of
Civil Procedure 12(b)(6) claiming that Joseph lacked standing to bring such claims where he was
not a named beneficiary in the holographic will. Joseph voluntarily dismissed his conversion
claim. The magistrate court reserved its decision on the dismissal of the breach of fiduciary duty
and accounting claims so as to allow Joseph to proceed with his contest of Victoria’s will.
Vernon later moved for summary judgment on the issue of undue influence, requesting
the dismissal of all of Joseph’s claims. The magistrate court denied the motion, finding that there
remained genuine issues of material fact regarding the issue of undue influence. Vernon then
once again moved to dismiss all of Joseph’s claims pursuant to Rule 12(b)(6) or for a judgment
on the pleadings pursuant to Idaho Rule of Civil Procedure 12(c). The magistrate court also
denied this motion.
Following all of these motions, Joseph moved for partial summary judgment. In his
motion, Joseph requested a ruling that Victoria’s property was not gifted to VHS Properties
because the power of attorney Vernon drafted and used did not expressly authorize the making of
gifts. The magistrate court granted Joseph’s motion. As part of its ruling, the magistrate court set
aside the series of transactions involving Vernon and VHS Properties and ordered Vernon to
provide an accounting of the estate’s property. Vernon’s subsequent motion for reconsideration
was denied. Later, after finding that Vernon had failed to provide a satisfactory accounting of the
estate’s assets and that said assets appeared to be dissipating, the magistrate court appointed a
special master and ordered supervised administration of the estate to ensure its assets were
preserved.
In October 2016, the magistrate court held a two-day bench trial on the issue of undue
influence. The parties then submitted post-trial briefing. On March 9, 2017, the magistrate court
issued its Findings of Fact and Conclusions of Law, in which it ruled that Victoria’s will was
invalid because it was a product of Vernon’s undue influence, and that Victoria died intestate.
The court later amended its decision to correct minor typographical and clerical errors. In June
2017, the court entered a judgment pursuant to Idaho Rule of Civil Procedure 70(b), which
vested title to all of Victoria’s real and personal property in the personal representative who had
been appointed.
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Vernon appealed these decisions, and this Court granted Joseph’s motion for acceptance
of appeal directly from the magistrate court pursuant to Idaho Appellate Rule 44. This appeal
follows the parties’ stipulation to bifurcate the appeal to first address any matters occurring up to
and including the post-trial judgment under Rule 70(b) before considering any matters occurring
thereafter. The personal representative of the estate, Intervenor-Respondent Noah Hillen, is not
participating in this portion of the appeal.
II. ANALYSIS
Vernon asserts that the magistrate court erred in granting Joseph partial summary
judgment (and the corresponding Rule 70(b) judgment) and then erred again in its ruling that the
will was invalid. Not surprisingly, Joseph argues that these decisions were correctly made.
Joseph also contends that Vernon’s appeal from the order granting partial summary judgment
should be dismissed as untimely. We will start there.
A. Joseph’s Motion to Dismiss Appeal.
In his motion to this Court requesting acceptance of a direct appeal, Joseph explained that
Vernon was appealing from the magistrate court’s order granting partial summary judgment and
its order invalidating Victoria’s will and declaring Victoria’s intestacy. He acknowledged that
both orders were appealable pursuant to Idaho Code section 17-201. After this Court granted that
motion, and thereby allowed the appeal to proceed on both issues, Joseph filed another motion
seeking the dismissal of Vernon’s appeal from the order granting partial summary judgment,
which he contended was untimely. His argument was that the order granting partial summary
judgment was appealable when it was entered in November 2016 under Idaho Code section 17-
201(5). Because the notice of appeal was not filed until April 13, 2017, his argument was that
Vernon’s appeal was untimely. We rejected that argument and denied the motion to dismiss.
Now, Joseph once more asks this Court to dismiss Vernon’s appeal from the order granting
partial summary judgment. He does so without advancing any new argument in support. Finding
no reason to depart from our earlier decision, we will allow the appeal to proceed.
B. Joseph’s Motion for Partial Summary Judgment.
In granting partial summary judgment, the magistrate court found that the series of
transactions conducted by Vernon using the 2008 power of attorney constituted gifts. Because
the 2008 power of attorney did not specifically authorize Vernon to gift Victoria’s property, as
required under the Uniform Power of Attorney Act, Idaho Code section 15-12-201(1)(b), the
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magistrate court concluded that the transactions were invalid. Using the remedial provisions of
the Act, the magistrate court further declared that Victoria’s estate included the gifted property
and ordered that no further actions could be taken as to that property prior to a determination on
the validity of Victoria’s will. The magistrate court also directed Vernon to prepare a complete
accounting of the relevant property pursuant to the Act, Idaho Code section 15-12-114(8).
Vernon now appeals from that order.
1. Standard of review
Appeals from an order of summary judgment are reviewed de novo, and this Court’s
standard of review is the same standard applied by the trial court. Trotter v. Bank of N.Y. Mellon,
152 Idaho 842, 845–46, 275 P.3d 857, 860–61 (2012). Summary judgment is appropriate if the
movant shows that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law. I.R.C.P. 56(a). The Court is to liberally construe all disputed
facts and draw all reasonable inferences from the record in favor of the nonmovant. Mackay v.
Four Rivers Packing Co., 145 Idaho 408, 410, 179 P.3d 1064, 1066 (2008). The movant carries
the burden of proving the absence of a genuine issue of material fact. Banner Life Ins. v. Mark
Wallace Dixson Irrevocable Tr., 147 Idaho 117, 123, 206 P.3d 481, 487 (2009).
This action was set to be (and eventually was) tried before the trial court without a jury.
In that situation, the trial court can rule upon summary judgment despite the possibility of
conflicting inferences arising from undisputed evidentiary facts. Riverside Dev. Co. v. Ritchie,
103 Idaho 515, 519, 650 P.2d 657, 661 (1982). This is permissible because under such
circumstances the court would be responsible for resolving the conflict between those inferences
at trial. Id. Even with this permission, however, conflicting evidentiary facts must still be viewed
in favor of the nonmovant. Banner Life Ins., 147 Idaho at 124, 206 P.3d at 488. This Court
exercises free review over the entire record that was before the trial court to determine whether
either side was entitled to judgment as a matter of law and reviews the inferences drawn by the
trial court to determine whether the record reasonably supports those inferences. Intermountain
Forest Mgmt., Inc. v. La. Pac. Corp., 136 Idaho 233, 236, 31 P.3d 921, 924 (2001).
Vernon essentially raises six legal challenges to the magistrate court’s order: (1) the
magistrate court lacked subject matter jurisdiction over the transferred property; (2) the
magistrate court lacked personal jurisdiction over VHS Properties; (3) Joseph lacked standing
under the Uniform Power of Attorney Act; (4) Joseph’s summary judgment claim was barred by
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res judicata or judicial estoppel; (5) the 2008 power of attorney was exempt from adjudication
under the Uniform Power of Attorney Act; and (6) the transactions at stake were not gifts. We
find none of these arguments to be persuasive.
2. The magistrate court had subject matter jurisdiction.
Vernon argues that the magistrate court’s partial summary judgment decision was beyond
its authority under Idaho Code section 1-2208(2). That statute provides that magistrate courts
may be assigned matters involving “[p]roceedings in the probate of wills and administration of
estates of decedents, minors and incompetents.” I.C. § 1-2208(2). In the summary judgment
order, the magistrate court acknowledged that it was acting as a court of general jurisdiction and
therefore had authority to adjudicate matters ancillary to its probate assignment. Vernon
disagrees, claiming that Joseph’s motion was essentially an effort to quiet title under Idaho Code
section 6-401, which was beyond the scope of section 1-2208(2). For support, he cites to Pincock
v. Pocatello Gold & Copper Mining Co., 100 Idaho 325, 597 P.2d 211 (1979). Vernon’s reliance
on the Pincock decision is misplaced.
In Pincock, this Court reviewed a quiet title action that arose following the distribution of
six mining lode claims through a probate decree. 100 Idaho at 326–27, 597 P.2d at 212–13. The
decedent had been one of the original subscribing stockholders of a since-defunct corporation
that had held the lode claims. Id. at 326, 597 P.2d at 212. The decedent’s sole beneficiaries, the
Pincocks, attempted to quiet title on the lode claims in the district court, asserting that the decree
from the probate court demonstrated their ownership of the claims. Id. at 327, 597 P.2d at 213.
The district court granted summary judgment in the Pincocks’ favor, but this Court remanded the
case due to numerous unresolved issues of material fact. Id. at 328, 331, 597 P.2d at 214, 217.
Amongst those issues was the unanswered question of whether the defunct corporation had ever
transferred title to the lode claims to the decedent. Id. at 328, 597 P.2d at 214. The Court
explained that this deficiency was significant, as the probate court’s “jurisdiction” to distribute
the property depended on the decedent being the record owner of that property. Id. at 328–29,
597 P.2d at 214–15. The Court quoted the following language from a prior decision:
[T]he probate courts have exclusive, original jurisdiction in the settlement of
estates of deceased persons, and it is within the jurisdiction of those courts to
determine who are the heirs of a deceased person and who is entitled to succeed to
the estate and their respective shares and interests therein. The decrees of probate
courts are conclusive in such matters. A probate court, however, does not have
jurisdiction to determine adverse claims or an adverse title to real estate, except in
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so far as such questions arise between the heirs or devisees of an estate, and are
necessary to be determined in the administration of the estate. No such
jurisdiction, however, exists in the probate court to determine and adjudicate
adverse and conflicting claims to title to real estate as between the estate or heirs
thereof and third parties, and such issues can only be tried in a court of competent
jurisdiction where the issue as to title and interest is directly and squarely made
and presented to the court.
Id. at 329, 597 P.2d at 215 (quoting Miller v. Mitcham, 21 Idaho 741, 745, 123 P. 941, 942
(1912)).
While the Pincock decision uses the term “jurisdiction” it is important to recognize what
was at issue in that case and in Miller, the case upon which the Pincock decision relied. The
question presented to the Court in those cases was whether a probate decree distributing real
property interests to an heir had any preclusive effect in a subsequent dispute over whether the
decedent owned the property. While this Court couched its opinions in terms of jurisdiction, a
careful reading of the Pincock and Miller decisions reveals that the Court decided that there is no
preclusive effect to a decree of distribution—not necessarily because the probate court did not
have jurisdiction, but because the decedent’s actual ownership of the property was not at issue or
actually decided during the probate proceedings. In the typical case, when a probate decree
distributes Blackacre to son and daughter, it only passes whatever interest the estate had. To put
it plainly, Pincock is not about the magistrate court’s subject matter jurisdiction—it is about the
effect of a decree of distribution.
This Court explained the subject matter jurisdiction of the magistrate courts in Carr v.
Magistrate Court of the First Judicial District, 108 Idaho 546, 700 P.2d 949 (1985). In Carr, we
stated that article V, section 2 of the Idaho Constitution gave the Legislature the authority to
create inferior courts and to specify the jurisdiction of those courts. 108 Idaho at 547, 700 P.2d at
950. The Legislature exercised that authority by creating the magistrate division of the district
court and specified through Idaho Codes sections 1-2208 and 1-2210 the cases that are
assignable to magistrates. Id. at 548, 700 P.2d at 951.
Section 1-2208(2) states that magistrate courts may be assigned matters arising from the
“[p]roceedings in the probate of wills and administration of estates of decedents, minors and
incompetents.” I.C. § 1-2208(2). With this assignment, the Uniform Probate Code—Idaho Code
sections 15-12-101 to 15-12-403—broadly provides that “[t]he court has exclusive jurisdiction of
formal proceedings to determine how decedents’ estates subject to the laws of this state are to be
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administered, expended and distributed.” I.C. § 15-3-105. Idaho Code section 15-3-106 enables
the magistrate court to consider “any other controversy” arising from a probate matter that is not
covered by Idaho Code section 15-3-105. I.C. § 15-3-106; In re Estate v. Peterson, 157 Idaho
827, 832, 340 P.3d 1143, 1148 (2014). “Since magistrate judges have been assigned
responsibility for probate proceedings, all matters related to decedent’s [sic] estates should first
be considered and determined by the magistrate judge in the probate proceeding.” Miller v.
Estate of Prater, 141 Idaho 208, 213–14, 108 P.3d 355, 360–61 (2005).
This case arose from the parties’ petitions for formal probate of Victoria’s estate. In his
motion for partial summary judgment, Joseph sought a ruling that Vernon did not have authority
under the 2008 power of attorney to gift Victoria’s property. Joseph asserted that Vernon’s
unauthorized gifting left the estate with no assets to probate and violated the Uniform Power of
Attorney Act. Considering that the Act is found under the Uniform Probate Code it necessarily
follows that the magistrate court’s determination of this issue was a controversy related to the
probate proceeding. As such, the magistrate court had subject matter jurisdiction to rule on the
motion.
3. Vernon’s argument that the magistrate court did not have personal jurisdiction
over VHS Properties is an improper attack on the failure to join an
indispensable party.
Vernon also argues that the magistrate court erred because it did not have personal
jurisdiction over VHS Properties. The record confirms that VHS Properties has never been a
party to this action. Vernon’s argument is not really about a lack of personal jurisdiction. Rather,
his claim of error stems from the fact that VHS Properties was not joined as an indispensable
party even though it was a party to Vernon’s 2008 transfer of Victoria’s property. The problem
with this argument is that the failure to join an indispensable party is an affirmative defense that
must be raised in a responsive pleading or by motion. See I.R.C.P. 12(b)(7), 19. Vernon made a
motion to join Victoria Converse as an indispensable party, but the record does not show that he
ever made such a motion with respect to VHS Properties or raised the defense in his responsive
pleading. Vernon is raising this argument for the first time on appeal and it is improper.
4. Joseph had standing to petition the series of transactions under the Uniform
Power of Attorney Act.
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Vernon next contends that the magistrate court erred by finding that Joseph had standing
to challenge the series of transactions pursuant to the Uniform Power of Attorney Act. Section
15-12-116 sets forth which parties may use the Act to petition a court:
(1) The following persons may petition a court to construe a power of attorney or
review the agent’s conduct, and grant appropriate relief:
(a) The principal or the agent;
(b) A guardian, conservator or other fiduciary acting for the principal;
(c) A person authorized to make health care decisions for the principal;
(d) The principal’s spouse, parent or descendant;
(e) An individual who would qualify as a presumptive heir of the
principal;
(f) A person named as a beneficiary to receive any property, benefit or
contractual right on the principal’s death or as a beneficiary of a trust
created by or for the principal that has a financial interest in the principal’s
estate;
(g) A governmental agency having regulatory authority to protect the
welfare of the principal;
(h) The principal’s caregiver or another person that demonstrates
sufficient interest in the principal’s welfare; and
(i) A person asked to accept the power of attorney.
(2) Upon motion by the principal, the court shall dismiss a petition filed under this
section, unless the court finds that the principal lacks capacity to revoke the
agent’s authority or the power of attorney.
(3) The court may award reasonable attorney’s fees and costs to the prevailing
party in a proceeding under this section.
I.C. § 15-12-116.
The magistrate court found Joseph had standing to petition Vernon’s use of the 2008
power of attorney under subsection (1)(d), as it was undisputed that he was one of Victoria’s
descendants.
Vernon first argues that Joseph was required to have sought relief under the Act while
Victoria was still alive. In support of this argument, Vernon cites to an unpublished opinion from
the Delaware Court of Chancery that found a challenge to a power of attorney to be time barred
under Delaware’s complementary statutory scheme. In re Edward J. Burke Estate, C.A. No.
10768-MA, 2016 WL 4217752, at *4–5 (Del. Ch. Aug. 10, 2016). This opinion has no
precedential effect on this Court; however, we will consider Vernon’s argument with respect to
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the language of our statute to determine whether it has any merit. Even though section 15-12-116
uses certain phrasing that lends support to the interpretation suggested by Vernon, nothing in the
statute’s plain language expressly requires petitions to have been made prior to the principal’s
death. The statute’s accompanying uniform law comments are similarly silent as to an express
requirement; however, they do acknowledge that the statute “sets forth broad categories of
persons who have standing to petition the court for construction of the power of attorney or
review of the agent’s conduct.” I.C. § 15-12-116 cmt. Given this statement of broad intent, we
decline to severely circumscribe the reach of the Act by imposing a time limitation on the filing
of petitions where one cannot be found in the statutory text.
Vernon next argues that Joseph lacked standing because, under section 15-12-117, he was
not a “successor in interest.” The statute Vernon cites to addresses an agent’s liability for
violating the Act, and states that when a violation is found the agent “is liable to the principal or
the principal’s successors in interest.” I.C. § 15-12-117. Vernon is correct that Joseph was
neither the principal, nor a “successor” under the Uniform Probate Code’s definition because at
the time of the summary judgment proceeding Joseph was not entitled to property under the will.
I.C. § 15-1-201(50). Even so, section 15-12-117 is not designed as a second standing
requirement that Joseph needed to meet. The statute instead prescribes the means by which a
court can impose liability against an agent who is found to have violated the Act. This includes
requiring the agent to restore the value of improperly transferred property. I.C. § 15-12-117(1).
The magistrate court used this provision, but its determination that the value of the transferred
assets was to be restored by Vernon did not disturb Joseph’s standing to seek judicial relief
through section 15-12-116.
Vernon’s final standing challenge is that Joseph did not have the requisite interest to
demand an accounting under Idaho Code section 15-12-114(8). The relevant statutory language
reads:
Except as otherwise provided in the power of attorney, an agent is not required to
disclose receipts, disbursements or transactions conducted on behalf of the
principal unless ordered by a court or requested by the principal, a guardian,
conservator, other fiduciary acting for the principal, a governmental agency
having authority to protect the welfare of the principal or, upon the death of the
principal, by the personal representative or successor in interest of the principal’s
estate.
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I.C. § 15-12-114(8) (emphasis added). Regardless of whether Joseph fit one of the roles that the
statute enables to request an accounting, Vernon’s argument neglects the fact that the accounting
here was ordered by the magistrate court pursuant to its own statutorily provided authority.
5. Joseph’s motion was not barred by res judicata or judicial estoppel.
Vernon also contends that Joseph’s motion for partial summary judgment should have
been barred by res judicata because it was based on the same facts and theories as Joseph’s
former claim for conversion. In his reply brief, Vernon claims that if Joseph’s motion was not
barred by res judicata, it should have been barred by judicial estoppel.
The doctrine of res judicata includes both issue and claim preclusion. Ticor Title Co. v.
Stanion, 144 Idaho 119, 124, 157 P.3d 613, 618 (2007). While there are separate tests for the two
forms of preclusion, each requires there to have been a final judgment on the merits. Id. Joseph
voluntarily dismissed his conversion claim before filing his summary judgment motion, and
nothing in the record suggests that the subject of Joseph’s motion was previously adjudicated on
the merits.
Vernon’s alternative theory is also unconvincing. This Court detailed the doctrine of
judicial estoppel in a recent decision:
Judicial estoppel precludes a party from advantageously taking one position, then
subsequently seeking a second position that is incompatible with the first. The
policy behind judicial estoppel is to protect the integrity of the judicial system, by
protecting the orderly administration of justice and having regard for the dignity
of the judicial proceeding. Broadly accepted, it is intended to prevent parties from
playing fast and loose with the legal system. Judicial estoppel protects the
integrity of the judicial system, not the litigants; therefore, it is not necessary to
demonstrate individual prejudice.
McCallister v. Dixon, 154 Idaho 891, 894, 303 P.3d 578, 581 (2013) (citations and internal
quotation marks omitted).
In making his flawed res judicata challenge, Vernon correctly explained that the
arguments in Joseph’s initial claim for conversion and his subsequent argument under the
Uniform Power of Attorney Act were very similar in nature. It does not therefore follow that
those positions were “incompatible.” If anything, it shows Joseph’s slightly unsuccessful
navigation of complicated areas of law before landing on the right vehicle for requesting the
remedy that he always desired. This does not qualify as “fast and loose,” prejudicial, or a threat
to the judicial system’s integrity and dignity.
6. The 2008 power of attorney was not a power coupled with an interest.
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Vernon’s fifth challenge is that the magistrate court erred by applying the Uniform Power
of Attorney Act to the 2008 power of attorney because it was exempted by the Act. Idaho Code
section 15-12-103 excludes from the Act certain delegations of authority “because the subject
matter of the delegation, the objective of the delegation, the agent’s role with respect to the
delegation, or a combination of the foregoing, would make application of the Act’s provisions
inappropriate.” I.C. § 15-12-103 cmt. In particular, subsection (1) excludes “[a] power to the
extent it is coupled with an interest in the subject of the power, including, but not limited to, a
power given to or for the benefit of a creditor in connection with a credit transaction.” I.C. § 15-
12-103(1). This provision is further explained in an accompanying uniform law comment:
Paragraph (1) excludes a power to the extent that it is coupled with an interest in
the subject of the power. This exclusion addresses situations where, due to the
agent’s interest in the subject matter of the power, the agent is not intended to
act as the principal’s fiduciary. See Restatement (Third) of Agency § 3.12 (2006)
and M.T. Brunner, Annotation, What Constitutes Power Coupled with Interest
within Rule as to Termination of Agency, 28 A.L.R.2d 1243 (1953). Common
examples of powers coupled with an interest include powers granted to a creditor
to perfect or protect title in, or to sell, pledged collateral. While the example of “a
power given to or for the benefit of a creditor in connection with a credit
transaction” is highlighted in paragraph (1), it is not meant to exclude application
of paragraph (1) to other contexts in which a power may be coupled with an
interest, such as a power held by an insurer to settle or confess judgment on behalf
of an insured. See, e.g., Hayes v. Gessner, 52 N.E.2d 968 (Mass. 1944).
I.C. § 15-12-103 cmt. (emphasis added).
Section 15-12-103(1) essentially describes powers of attorney that are irrevocable
because the benefit of the power rests not with the principal but rather solely with the agent. See
Bailey v. Asta Tech, Inc., 999 N.E.2d 138, 146–47 (Mass. App. Ct. 2013) (“In a principal-agent
relationship, the principal receives the benefit; for a power coupled with an interest, the benefit
inures to the donee himself (or to a third party), but not to the donor.”).
Vernon contends that the 2008 power of attorney satisfies the criteria for a power coupled
with an interest. The executed document is styled throughout as being “irrevocable,” and Vernon
has continuously claimed such to be the case. Yet, this alone is not determinative: “A statement
in a power of attorney that it is recognized as being irrevocable does not in and of itself establish
an interest in the thing upon which the power is to act.” What Constitutes Power Coupled with
Interest within Rule as to Termination of Agency, 28 A.L.R.2d 1243, § 2[c]. Rather, such a
determination must be made from the entire agreement and from the facts and circumstances
14
surrounding the parties’ relationship. Id. § 2[b]. Turning to the record here, it is clear that Vernon
acted as Victoria’s fiduciary. The language of the 2008 power of attorney further shows that it
was designed to benefit both the principal and the agent because Vernon was authorized to act on
behalf of Victoria. As emphasized in the comment above, section 15-12-103(1) is meant for
situations where a fiduciary relationship does not exist. This contradiction notwithstanding,
Vernon argues that he had an equitable interest in Victoria’s estate by virtue of remodeling work
he had completed on certain estate property. The magistrate court acknowledged this claim, but
found that nothing suggested that Vernon held legal or equitable title in the estate property
consistent with section 15-12-103(1). 28 A.L.R.2d 1243, § 2[d]. Given the record before this
Court, we reach the same conclusion. The 2008 power of attorney was not coupled with an
interest and therefore the magistrate court did not err by applying the Act.
7. The series of transactions were gifts and were not authorized by the 2008 power
of attorney.
Finally, Vernon contests the magistrate court’s conclusion that the series of transactions
constituted gifts under the Act. Idaho Code section 15-12-201(1)(b) requires that gift-making
authority be expressly granted in a power of attorney:
(1) An agent under a power of attorney may exercise the following authority on
behalf of the principal or with the principal’s property only if the power of
attorney expressly grants the agent the authority and exercise is not otherwise
prohibited by other agreement or instrument to which the authority or property is
subject:
....
(b) Make a gift[.]
I.C. § 15-12-201(1)(b); see also id. cmt.; I.C. § 15-12-217 (“Gifts”). “Under Idaho law, a ‘gift’ is
defined to mean ‘a voluntary transfer of property by one to another without consideration or
compensation therefore.’” Banner Life Ins. v. Mark Wallace Dixson Irrevocable Tr., 147 Idaho
117, 123, 206 P.3d 481, 487 (2009) (quoting Stanger v. Stanger, 98 Idaho 725. 728, 571 P.2d
1126, 1129 (1977)).
Vernon first contends that the transactions were not gifts because sufficient consideration
was provided. Both of the transfers of Victoria’s property—her assets and her membership
interest in VHS Properties—were executed “in consideration of the sum of ten dollars and other
good, valuable, and lawful consideration.” Vernon describes the latter consideration as including
the value of commitment, investment, and services he had previously provided to Victoria. Prior
15
to the summary judgment proceedings, Vernon claimed the value of the estate’s real property to
be between $1,000,000 and $2,000,000, while Joseph introduced evidence suggesting an
estimated value of $27,000,000.
Ordinarily, this Court will not inquire as to the adequacy of consideration that is
bargained for under a private agreement. Sirius LC v. Erickson, 150 Idaho 80, 85, 244 P.3d 224,
229 (2010) (quoting Boise Tower Assocs. v. Hogland, 147 Idaho 774, 780, 215 P.3d 494, 500
(2009)). This Court has also explained, however, that it will entertain the issue in instances
where an inadequacy of consideration “is so gross as to shock the conscience and amount in
itself to conclusive evidence of fraud.” Dingler v. Ritzius, 42 Idaho 614, 619, 247 P. 10, 11
(1926) (quoting 13 C.J. § 329, p. 366). Moreover, in this specific context, other jurisdictions
have held that a transfer of property constitutes a gift, as opposed to a sale, if the principal
benefits from only nominal consideration. E.g., Estate of Stephens, 49 P.3d 1093, 1097 (Cal.
2002) (quoting Shields v. Shields, 19 Cal. Rptr. 129, 130–31 (Cal. Dist. Ct. App. 1962)); Brown
v. Laird, 291 P. 352, 354 (Or. 1930); see also Restatement (Second) of Contracts § 79 cmt. d
(“Disparity in value, with or without other circumstances, sometimes indicates that the purported
consideration was not in fact bargained for but was a mere formality or pretense. Such a sham or
‘nominal’ consideration does not satisfy the requirement of [exchange].”).
In this case, the entirety of Victoria’s assets, which included at least $1,000,000 in real
property, was transferred to VHS Properties for $10 and other nominal and past consideration.
These same values were then once again on the move when Vernon transferred Victoria’s
membership interest in VHS Properties to himself. This disparity is enough for us to inquire into
the adequacy of consideration and to conclude that the transactions were indeed gifts.
Vernon also argues that the 2008 power of attorney expressly authorized his ability to gift
Victoria’s property. This argument turns on the specificity of language required to authorize gift-
making ability and satisfy the requirement under section 15-12-201(1)(b). Language in the 2008
power of attorney certainly overlaps with many instances that generically could be considered
gift making; however, on its face, the power of attorney does not use the explicit statutory phrase
“make a gift.” Compare, for instance, the statutory form power of attorney, which offers the
following language:
GRANT OF SPECIFIC AUTHORITY (OPTIONAL)
16
My agent MAY NOT do any of the following specific acts for me UNLESS I
have INITIALED the specific authority listed below:
(CAUTION: Granting any of the following will give your agent the authority to
take actions that could significantly reduce your property or change how your
property is distributed at your death. INITIAL ONLY the specific authority you
WANT to give your agent.)
....
(...) Make a gift, subject to the limitations of the uniform power of attorney
act, chapter 12, title 15, Idaho Code, and any special instructions in this
power of attorney
(...) Make a gift without limitations except any special instructions in this
power of attorney
I.C. § 15-12-301 (emphasis added); see also 3 Am. Jur. 2d Agency § 27 (“Generally, a power of
attorney must be strictly construed. . . . A court cannot imply authority of an attorney-in-fact
which the power of attorney itself does not express.”).
Given the clear mandate under section 15-12-201(1) and the significance the Act places
on unmistakably defining grants of specific authority, we hold that the 2008 power of attorney
did not expressly authorize gift-making ability and that therefore Vernon’s transactions were
correctly invalidated by the magistrate court.
C. Amended Findings of Fact and Conclusions of Law
After a two-day bench trial, the magistrate court found in favor of Joseph’s claim that
Victoria died intestate because her will was a product of Vernon’s undue influence. In reaching
this conclusion, the magistrate court determined first that Vernon failed to rebut a presumption of
undue influence, and second that a preponderance of the evidence established the existence of
Vernon’s undue influence regardless. Vernon argues that the court was incorrect to apply the
presumption and that its subsequent determination that he failed to rebut that presumption was
also erroneous.
This Court reviews a trial court’s conclusions following a bench trial by determining
whether the evidence supports the trial court’s findings of fact, and whether those findings
support the conclusions of law. Or. Mut. Ins. Co. v. Farm Bureau Mut. Ins. Co. of Idaho, 148
Idaho 47, 50, 218 P.3d 391, 394 (2009). “This Court will not disturb findings of fact on appeal
that are supported by substantial and competent evidence, even if there is conflicting evidence at
trial.” Green River Ranches, LLC v. Silva Land Co., 162 Idaho 385, 389, 397 P.3d 1144, 1148
(2017). Substantial and competent evidence is relevant evidence that a reasonable mind might
17
accept to support a conclusion. Id. (quoting Lamar Corp. v. City of Twin Falls, 133 Idaho 36,
42–43, 981 P.2d 1146, 1152–53 (1999)). Our view of the facts will not be substituted for that of
the trial court and only erroneous findings will be set aside. Id. On the other hand, we will freely
review conclusions of law and will draw our own conclusions based on the factual record. Id.
1. The magistrate court did not err in applying a rebuttable presumption of undue
influence.
Prior to trial, the magistrate court ruled that Vernon’s pleadings and the record created a
rebuttable presumption of undue influence that would be in effect at trial. The court also
explained its basis for imposing the presumption in its post-trial order. “[A] rebuttable
presumption of undue influence is created where a beneficiary of the testator’s will is also a
fiduciary of the testator.” Green v. Green, 161 Idaho 675, 680, 389 P.3d 961, 966 (2017)
(quoting In re Estate of Conway, 152 Idaho 933, 939, 277 P.3d 380, 386 (2012)).
There is no dispute that Vernon was the sole beneficiary under Victoria’s will. Despite
some protestations from Vernon, the record also plainly shows that he served as Victoria’s
fiduciary given his own assertions that at the time of the will’s creation he was acting as
Victoria’s lawyer and Victoria had been relying on him for legal and business advice for nearly
two decades. Skinner v. U.S. Bank Home Mortg., 159 Idaho 642, 647–48, 365 P.3d 398, 403–04
(2015). With the two elements of the presumption established, Vernon rests his argument on
appeal in the Court’s explanation in Green that triggering the presumption requires a showing of
“some nexus between the fiduciary relationship and the execution of the donative instrument.”
161 Idaho at 681, 389 P.3d at 967.
The dispute in Green arose from an amendment to a trust that distributed all of the trust
assets to one of four siblings following their parents’ deaths. Id. at 678, 389 P.3d at 964.
Amongst those assets was a majority stake in the family corporation, which held sizeable
property. Id. at 677, 389 P.3d at 963. The three siblings argued that the amendment was a
product of their fourth sibling’s undue influence. Id. After affirming the district court’s finding
that the fourth sibling did not have an opportunity to exert undue influence, the Court considered
the siblings’ argument that the district court erred in failing to apply a presumption of undue
influence. Id. at 680–81, 389 P.3d at 966–67. The Court rejected this argument because the
siblings failed to connect their sibling’s fiduciary duty as a director for the family corporation to
the execution of the trust amendment. Id. at 681, 389 P.3d at 967. Instead, the amendment was
prepared at the request of the parents by an attorney who had little contact with the fourth
18
sibling. Id. (“A presumption of undue influence arises if the alleged wrongdoer was in a
confidential relationship with the donor and there were suspicious circumstances surrounding the
preparation, formulation, or execution of the donative transfer . . . .” (quoting Restatement
(Third) of Property (Wills & Don. Trans.) § 8.3 cmt. f (2003))).
Here, in contrast to Green, the record establishes a clear connection between Vernon’s
fiduciary relationship with Victoria and the creation of his mother’s will. At the time of the will’s
execution, Vernon had been acting as Victoria’s lawyer for nearly twenty years. When the will
was signed, Vernon was the only other person present. The record does not show that Victoria
received independent or disinterested advice prior to the will’s creation. Vernon argues that the
magistrate court did not refer to or rely upon any facts showing a nexus between his fiduciary
role and the creation of Victoria’s will; however, the magistrate court emphasized these very
facts in making its ruling on the presumption. These facts alone clearly set this case far apart
from the situation presented in Green. With that being so, Vernon’s argument that the magistrate
court erred in applying a presumption of undue influence fails.
2. The magistrate court’s conclusion of undue influence was proper.
With the presumption in place, Vernon faced the burden to present evidence to rebut it at
trial. The magistrate court found that he could not. The magistrate court also found that even if
Vernon had successfully rebutted the presumption, Joseph met his burden to prove by a
preponderance of evidence that Victoria’s will was a product of Vernon’s undue influence.
Establishing that undue influence produced an instrument requires proof of four
elements: “(1) a person who is subject to influence; (2) an opportunity to exert undue influence;
(3) a disposition to exert undue influence; and (4) a result indicating undue influence.” Green,
161 Idaho at 680, 389 P.3d at 966 (quoting Gmeiner v. Yacte, 100 Idaho 1, 6–7, 592 P.2d 57, 62–
63 (1979)). “Once the presumption is applied, the proponent of the instrument bears the burden
of rebutting the presumption.” Id. (citing Estate of Conway, 152 Idaho at 939, 277 P.3d at 386).
This Court has explained that
[t]o rebut the presumption, the proponent must come forward with that quantum
of evidence that tends to show that no undue influence existed. Once that burden
has been met, the matter becomes one for the trier of fact. The existence of undue
influence will be determined accordingly, and on appeal such determination will
only be disturbed if not supported by substantial, competent evidence.
Id. (quoting In re Estate of Roll, 115 Idaho 797, 799, 770 P.2d 806, 808 (1989)).
19
Thus, at trial, Joseph carried the burden of proof but Vernon faced an initial burden of
production to rebut the presumption. Had he rebutted even one of the four elements of undue
influence, Joseph would have had to prove all of the elements by a preponderance of the
evidence. Swaringen v. Swanstrom, 67 Idaho 245, 253, 175 P.2d 692, 697 (1946). On the other
hand, if Vernon failed to do so, the presumption of undue influence would become proven fact.
I.R.E. 301; see also Bongiovi v. Jamison, 110 Idaho 734, 738–39, 718 P.2d 1172, 1176–77
(1986) (citing Idaho Rule of Evidence 301 and discussing the shifting of burdens of production
and proof in undue influence cases).
Broadly, Vernon argues that the magistrate court erred in finding that (1) he did not rebut
the presumption, and (2) Joseph sustained his burden of proving all four elements of undue
influence. Joseph responds to each of these arguments, asserting that Vernon did not produce a
quantum of evidence sufficient to rebut the presumption and that, even so, substantial and
competent evidence supported the magistrate court’s finding of undue influence.
Before considering the individual elements, it bears emphasizing that establishing undue
influence is often heavily reliant on circumstantial evidence and resulting inferences:
It follows from the very nature of the thing that evidence to show undue influence
must be largely, in effect, circumstantial. It is an intangible thing, which only in
the rarest instances is susceptible of what may be termed direct or positive proof.
The difficulty is also enhanced by the fact, universally recognized, that he who
seeks to use undue influence does so in privacy. He seldom uses brute force or
open threats to terrorize his intended victim, and if he does he is careful that no
witnesses are about to take note of and testify to the fact. He observes, too, the
same precautions if he seeks by cajolery, flattery, or other methods to obtain
power and control over the will of another, and direct it improperly to the
accomplishment of the purpose which he desires. Subscribing witnesses are called
to attest the execution of wills, and testify as to the testamentary capacity of the
testator, and the circumstances attending the immediate execution of the
instrument; but they are not called upon to testify as to the antecedent agencies by
which the execution of the paper was secured, even if they had any knowledge of
them, which they seldom have. Only general rules concerning the amount and
character of evidence required to establish undue influence in the execution of a
will can be laid down. As to what is sufficient must depend upon the facts and
circumstances of each particular case. These general rules have been stated and
restated in many hundreds of different cases in the courts of every jurisdiction
considered authority in this country. Different language is used by the different
courts, but one main, underlying principle, whatever the phraseology, is found in
all; and that is that the evidence required to establish it need not be—indeed,
cannot be—of that direct, affirmative, and positive character which is required to
establish a tangible physical fact. The only positive and affirmative proof required
20
is of facts and circumstances from which the undue influence may be reasonably
inferred.
In re Randall’s Estate, 60 Idaho 419, 429, 93 P.2d 1, 5 (1939) (quoting Blackman v. Edsall, 68 P.
790, 792 (Colo. App. 1902)).
a. Susceptibility
“Susceptibility, as an element of undue influence, concerns the general state of mind of
the testator: whether he was of a character readily subject to the improper influence of others.”
Gmeiner, 100 Idaho at 7, 592 P.2d at 63. “Because of inevitable problems in establishing the
subjective state of mind of a decedent, it is said to be the most difficult element to establish.” Id.“The court will look closely at transactions where unfair advantage appears to have been taken of
one who is aged, sick or enfeebled.” Id. This Court has explained that undue influence cannot be
presumed simply because the grantor is old, physically infirm or uneducated. Id. at 7–8, 592 P.2d
at 63–64 (citing Englesby v. Nisula, 99 Idaho 21, 576 P.2d 1055 (1978); Kelley v. Wheyland, 93
Idaho 735, 471 P.2d 590 (1970)). Instead, determining whether a testator was susceptible to
undue influence
requires a consideration of many circumstances, including his state of affections
or dislike for particular persons, benefited or not benefited by the will; of his
inclinations to obey or to resist these persons; and, in general, of his mental and
emotional condition with reference to its being affected by any of the persons
concerned.
King v. MacDonald, 90 Idaho 272, 279, 410 P.2d 969, 972 (1965) (quoting 6 Wigmore, Evidence
§ 1738, p. 121 (3d ed. 1940)).
The magistrate court found that the totality of the evidence supported an inference that
Victoria was susceptible to Vernon’s undue influence. In reaching that conclusion, the magistrate
court relied on its factual findings that Victoria prepared her will with Vernon’s advice and that
Victoria had long-standing trust in and reliance upon Vernon. The magistrate court also looked
to temporally relevant examples of Victoria’s susceptibility, including her participation in a
“straw man” scheme that Vernon had devised during his pending divorce to deprive his then-
wife from a house she had owned prior to their marriage (“the Raymond Street transaction”), an
affidavit she filed on Vernon’s behalf during his divorce wherein she testified that significant
property at issue in the divorce was hers so that it could not be considered community property
of the marriage, and her disproportionate provision of gifts and loans to Vernon.
21
To counter this evidence, Vernon argues that the record instead shows that Victoria was
more than capable of managing her own affairs. In particular, he points to evidence indicating
that Victoria was not aged, sick, or enfeebled, and that she was self-dependent and active in the
community. He also contends that language in Victoria’s affidavit directly established that she
had an ability to resist his influence and contests the magistrate court’s conclusions regarding the
Raymond Street transaction and his influencing Victoria to participate in those events. Finally,
he asserts that the fact his mother gave him gifts during the relevant time period is meaningless,
as she also gave gifts to Joseph at that time.
The magistrate court’s conclusion on this element is supported by substantial and
competent evidence. It is undisputed that at the time of the will’s creation, Victoria was
competent and not aged, sick, or enfeebled. Moreover, as the magistrate court acknowledged,
evidence showing Victoria’s strong-willed nature may be suggestive of the fact that she was not
susceptible to influence generally. On the whole, however, the evidence gives rise to a strong
inference that she was susceptible to Vernon’s specific influence. Vernon explained as much in
his pleadings, asserting that he had been the “sole responsible individual for the management and
control of all assets and interests owned by Victoria.” While Vernon has his own opinions with
regard to the events that Victoria participated in on his behalf, the magistrate court’s factual
finding that he was not a credible witness given his actions and testimony at trial is supported by
the record. The findings regarding Victoria’s creation of her will with Vernon’s assistance and
her participation in other dealings of questionable circumstances that benefitted Vernon also lead
to the conclusion that she was subject to his influence.
b. Opportunity
In Gmeiner, the Court explained that this element is the “easiest to establish.” 100 Idaho
at 8, 592 P.2d at 64 (noting that very frequently the beneficiary is found to have lived with the
testator). As noted above, the element was not established in Green because the instrument was
drafted by an independent attorney at the testators’ request and without involvement of the
alleged wrongdoer. 161 Idaho at 680, 389 P.3d at 966; see also Estate of Conway, 152 Idaho at
940, 277 P.3d at 387 (stressing the importance of the testator receiving independent and
disinterested advice in the creation of the will and the distance between the testator and alleged
wrongdoer at the time of the instrument’s execution).
22
The magistrate court found that the totality of the evidence supported an inference that
Vernon had an opportunity to subject Victoria to undue influence. Most notable was Victoria’s
long-standing reliance on Vernon for legal and business advice and his solo presence at the will’s
execution. Vernon acknowledges that he was present when Victoria executed her will, but argues
that such presence was prompted by her and involved no active participation on his part. Despite
this theory, Vernon has not produced evidence to overcome the relevant factual findings of the
magistrate court, and therefore his argument is left without support. While he did not live with
Victoria during the relevant time period, that fact alone is not dispositive. The rest of the
evidence clearly evinces that Vernon had an opportunity to exert undue influence consistent with
this Court’s explanations of the element in Gmeiner and Green.
c. Disposition
When considering this element, “the court examines the character and activities of the
alleged undue influencer to determine whether his conduct was designed to take unfair advantage
of the testator.” Gmeiner, 100 Idaho at 8, 592 P.2d at 64.
One factor which assumes critical importance is whether or not the alleged undue
influencer took an active part in preparation and execution of the will or deed.
The beneficiary of a grantor’s largesse will be viewed more suspiciously if he has
been active in encouraging the transfer, in contacting the attorney or in preparing
and typing the documents.
Id. (highlighting that undue influence is less likely with inactive grantees and when the grantor
receives disinterested advice from third parties) (citing McNabb v. Brewster, 75 Idaho 313, 272
P.2d 298 (1954); Estate of Randall, 60 Idaho 419, 93 P.2d 1).
Another broad area of judicial concern in dealing with the element of
“disposition” is the alleged influencer’s attempts at undermining bequests to the
natural heirs. The court will look closely at situations where the recipient of a
deed or bequest has apparently been responsible for alienating the affections of
the testator-grantor from the other members of his or her family. The situation is
further exacerbated if the grantee has isolated the grantor from all contact with
family or with disinterested third parties.
Id.This Court has also noted the possibility of case-specific behavior that may give rise to an
inference of undue influence or, on the other hand, show good faith and honesty:
For example, in the McNabb case, the recipient of a deed first denied receiving it,
later said she didn’t remember receiving it, and then concealed its existence from
county authorities in requesting indigent aid for the grantor. 75 Idaho at 317, 272
P.2d at 300. In the Randall case, the recipients of the bequest were found to have
23
retyped and altered the testator’s will. The original, which was less favorable to
them, was said to have been “lost.” 60 Idaho at 442, 93 P.2d at 11. Conversely, in
the Englesby case, the court was impressed by the fact that a deed of one’s farm to
a son rather than to a daughter was in keeping with the Finnish-American custom
that the elderly grantor might have been expected to follow. 99 Idaho at 22, 576
P.2d at 1056.
Id.The magistrate court found that the totality of the evidence supported an inference that
Vernon had a disposition to exert undue influence. The magistrate court emphasized the lack of
disinterested advice in the will’s creation, the lack of outside knowledge of the will’s existence
for many years, and Vernon’s active involvement in the will’s preparation and execution. The
magistrate court also returned to the character and activities of Vernon, noting that the Raymond
Street transaction and the 2012 power of attorney transactions demonstrated a propensity to take
unfair advantage of others, and that other evidence showed that he made consistent efforts to
isolate his mother and alienate her affections. Vernon argues that the magistrate court
erroneously applied the law to reach its conclusion that he had a disposition to exert an undue
influence. His primary complaint is that the magistrate court relied on evidence that was not
temporally proximate to the creation of the will. He also disputes the magistrate court’s inference
that he isolated Victoria, noting that his brother lived very close to their mother at the time of the
will’s creation.
Vernon’s arguments are not persuasive. To start, he inaccurately describes the nature of
the magistrate court’s consideration of this element. The magistrate court first looked to the
circumstances surrounding Victoria’s creation of her will, which it found showed Vernon had a
disposition to exert undue influence. Contrary to Vernon’s contention, the magistrate court’s
conclusion was well supported by evidence regarding the will’s creation. Once that foundation
was established, the magistrate court then stated that this inference was corroborated by evidence
from outside of the relevant time period that showed that Vernon had such a disposition. In so
doing, the magistrate court explained that Vernon’s undue influence could alternatively be
described as the long-lasting retention of control over Victoria that Vernon had captured prior to
her creation of the will. Vernon’s argument that Joseph lived near Victoria fails to effectively
rebut the evidence showing that he was involved in the will’s creation, he was the primary cause
of the eventual estrangement of his mother from Joseph, and he engaged in efforts to alienate and
24
isolate his mother and her affections. Collectively, these facts lead to the conclusion that Vernon
was disposed to exert undue influence.
d. Result
The final element requires the court to look to the outcome of the will in question. “A
result is suspicious if it appears ‘unnatural, unjust or irrational.’” Gmeiner, 100 Idaho at 7, 592
P.2d at 63 (quoting In re Lunders’ Estate, 74 Idaho 448, 451, 362 P.2d 1002, 1004 (1953)). “A
property disposition which departs from the natural and expected is said to raise a ‘red flag of
warning,’ and to cause the court to scrutinize the entire transaction closely.” Id. (citing In re
Culver’s Estate, 126 N.W.2d 536, 540 (Wis. 1964)). Seemingly unnatural dispositions are not
per se products of undue influence, however:
[T]he law must respect even an “unequal and unjust disposition” once it is
determined that such was the intent of the grantor or testator. Thus, for example,
the grantee may be particularly deserving by reason of long years of care and the
fact that the grantor was motivated by affection or even gratitude does not
establish undue influence. The fact that the grantor’s natural heirs received sizable
bequests will make it difficult for them to challenge grants to another. And the
fact that the grantor was known to be displeased with those who were disinherited
will serve to explain why they were cut off, whereas a sudden shift in the object
of the grantor’s choice coincidental with the creation of a confidential relation
with the new beneficiary will merit strict court scrutiny.
Id. (citations and quotation marks omitted).
The magistrate court found the result of Victoria’s will was unnatural, unjust, and
irrational, and that evidence intimated that it was a product of Vernon’s undue influence. In
reaching this conclusion, the magistrate court pointed to its findings that there was no credible
evidence showing that Victoria was estranged from Joseph or Victoria Converse at the time of
the will’s creation and that Vernon was instrumental in creating any estrangement that
subsequently occurred. Vernon claims that he at least sufficiently rebutted the presumption that
Victoria’s will was unnatural by producing evidence that explained the will’s unequal
distribution was consistent with his mother’s intent.
The magistrate court’s conclusion is correct. The result of Victoria’s will is unnatural
given the size of the estate (which also included the still-open estate of Vernon Sr.). While that
alone does not tip the element, evidence showing that Victoria was not estranged from Joseph
and Victoria Converse at the time of the will’s creation is suggestive. Moreover, with respect to
Joseph, the record indicates that in many ways he and his family carried on a strong and positive
25
relationship with Victoria for several years following the execution of her will. When these facts
are compared with the disposition of Victoria’s will that completely disinherits Joseph and
Victoria Converse, an inference arises that the will was a product of undue influence. Vernon did
not produce sufficient evidence to overcome that suspicion.
e. Other factors
The magistrate court concluded that the four elements of Vernon’s undue influence were
established. Vernon contends it still erred by failing to apply “the remaining Conway factors.” In
Gmeiner, this Court adopted the foregoing four-element analysis from the American
Jurisprudence treatise on duress and undue influence. 100 Idaho at 6–7, 592 P.2d at 62–63
(quoting 25 Am. Jur. 2d Duress and Undue Influence § 36, at p. 397 (1966)). In addition to those
elements, the treatise provided a host of other considerations to account for in situations of
possible undue influence:
Among the factors taken into consideration in determining the existence of undue
influence are the age and physical and mental condition of the one alleged to have
been influenced, whether he had independent or disinterested advice in the
transaction, the providence or improvidence of the gift or transaction, delay in
making it known, consideration or lack or inadequacy thereof for any contract
made, necessities and distress of the person alleged to have been influenced, his
predisposition to make the transfer in question, the extent of the transfer in
relation to his whole worth, failure to provide for his own family in the case of a
transfer to a stranger, or failure to provide for all of his children in case of a
transfer to one of them, active solicitations and persuasions by the other party, and
the relationship of the parties.
Id. Vernon’s description of these considerations as the “Conway factors” seems to arise from the
Court’s restatement of this excerpt in Estate of Conway, 152 Idaho at 939, 277 P.3d at 386.
Vernon argues that among these factors evidence showed that Victoria made it known to
other parties that she had drafted a will and was leaving her entire estate to Vernon. He also
contends that Joseph’s own correspondence with Victoria implied that he was aware of her
intent. As this Court explained in Conway, this list of additional considerations is “[e]vidence
relevant to the question of undue influence.” Id. While the magistrate court did not proceed
through these considerations in piecemeal fashion—which makes sense given that they are not
individualized factors akin to the four-element analysis adopted in Gmeiner—it is disingenuous
to state that the magistrate court did not account for evidence of this nature in its analysis when
relevant. This includes the evidence Vernon cites to. While conflicting evidence and testimony
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exists in the record and was presented at trial, Vernon has failed to show that the magistrate
court’s legal conclusions are not supported by substantial and competent evidence.
3. The magistrate court did not abuse its discretion in its evidentiary rulings.
Vernon also contests two evidentiary rulings that were made by the magistrate court.
“This Court reviews challenges to a trial court’s evidentiary rulings under the abuse of discretion
standard.” Vreeken v. Lockwood Eng’g, B.V., 148 Idaho 89, 106, 218 P.3d 1150, 1167 (2009)
(quoting Perry v. Magic Valley Reg’l Med. Ctr., 134 Idaho 46, 50, 995 P.2d 816, 820 (2000)).
“Error is disregarded unless the ruling is a manifest abuse of the trial court’s discretion and
affects a substantial right of the party.” Id. (quoting Perry, 134 Idaho at 51, 995 P.2d at 821). To
determine if a trial court abused its discretion, this Court considers whether the trial court (1)
perceived the issue as one of discretion, (2) acted within the outer boundaries of that discretion,
(3) acted consistently with the legal standards applicable to the specific choices available to it,
and (4) reached its decision by an exercise of reason. Lunneborg v. My Fun Life, 163 Idaho 856,
63, 421 P.3d 187, 195 (2018).
a. Admission of certain temporally distant evidence
Vernon challenges the magistrate court’s admission of certain evidence as being far
removed from the will’s creation and execution. He specifically disputes the admission of
evidence regarding the 2008 power of attorney transactions and the trial testimony of Victoria’s
priest. This argument is consistent with a pair of motions in limine that Vernon filed before trial
for the purpose of identifying and limiting the scope of admissible evidence on the issue of
undue influence. During a pretrial hearing, the magistrate court deferred its ruling on the motions
and explained that such matters would be better adjudged at trial. Then, following trial, the
magistrate court partially granted the motions. Specifically, the magistrate court explained that
for purposes of assessing the existence of undue influence, it would only consider competent
evidence, and inferences drawn therefrom, from approximately one year prior to and six months
after the will was executed. The magistrate court also explained that this ruling did not limit its
ability to consider evidence and inferences falling outside of that window for other purposes,
such as to corroborate an already made finding of undue influence or to establish an unbroken
chronology of the relationship between Vernon and Victoria.
As discussed above under the disposition element, when considered, the magistrate court
made clear that it was using temporally distant evidence for corroborating or reinforcing
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purposes only. Admission of evidence for these purposes is consistent with other jurisdictions
who have considered the same issue. See, e.g., In re Estate of Laitinen, 483 A. 2d 265, 268 (Vt.
1984) (“[E]vidence which tends to show that the beneficiary acquired control over the testator’s
mind before the will was made, and retained such control beyond the period at which the will
was executed, is admissible . . . .” (citation omitted)). With appropriate constraints in place, the
magistrate court’s admission of the disputed evidence was proper.
b. Refusal of admission of Victoria Converse email
Vernon also contends that the magistrate court erred in its refusal to admit an exhibit at
trial, which was purported to be an email from Victoria Converse to Vernon and Joseph
regarding her relationship with the siblings’ mother. The email was sent following Victoria’s
passing in 2013. The magistrate court refused admission of the email, finding that it was hearsay
and not relevant to the issue of Vernon’s undue influence. Vernon argues that the email was
relevant because it offered justification for Victoria Converse’s disinheritance in the will, which
ran contrary to the magistrate court’s factual finding that no such evidence existed. Given its
relevance, Vernon contends that it should have been admitted despite being hearsay either as an
admission by party opponent, I.R.E. 801(d)(2), or through the hearsay exception for statements
against interest, I.R.E. 804(b)(3). The magistrate court did not abuse its discretion in refusing to
admit the email.
There was a lengthy exchange between counsel and the magistrate court concerning the
admissibility of the email. While the magistrate court concluded that the email was not relevant
and contained inadmissible hearsay, it also left the door open for Vernon to redact the hearsay
portions and seek to re-admit the exhibit:
Quite frankly, counsel, I don’t agree with you. This was written some 20
years after this will was put in place. The issue is what was – whether the mother
was unduly influenced back in the early 90s when she – or just prior to her writing
this holographic will. It is not relevant that this daughter upon her death bed some
20 years later has certain feelings and is expressing it. She is also not a party in
this case. I understand that she may benefit, but there is no evidence that she is
actually participating in this case. So I am going to sustain the objection and I am
not going to consider it at all.
Now, if the parties want to work out some way to redact those portions
which are clearly not hearsay, and I have not read this document so I don’t know
what portions those might be. So I just don’t see this as admissible. This is all
about – these are all her statements. You want me to accept it for the truth of the
matter asserted so it is clearly an out of court statement. It is hearsay. And the
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only issue is, does it fall within the exception? And so far the only exception you
have given, it seems to me, an admission of a party opponent. She is not a party to
this case by your own statement.
Counsel: Well, it’s also an admission against interest because she has an
interest in this case and a punitive (sic) heir under the statute. Whether she is here
to advance or not.
Court: I am not going to admit this at this time. You have to provide an
awful lot of support for it for me to admit it.
After testifying the next day that Converse was unavailable as a witness because she lived
out-of-state and was beyond the court’s subpoena power, Vernon again moved to admit the
email, arguing that it was a statement against interest and advancing other grounds for admission
that are not raised on appeal. The magistrate court again refused to admit the exhibit.
The magistrate court’s refusal to admit the exhibit was consistent with I.R.E. 801(d)(2)
because Converse is not a party to this action. The fact that she might possibly have some
interest in the outcome as a putative heir does not make her a party.
The magistrate court’s decision was also consistent with I.R.E. 804(b)(3) which provides
that an out of court statement is not hearsay if the declarant is unavailable and it is:
[a] statement which was at the time of its making so far contrary to the declarant’s
pecuniary or proprietary interest, or so far tended to subject declarant to civil or
criminal liability, or to render invalid a claim by declarant against another, that a
reasonable man in declarant’s position would not have made the statement unless
declarant believed it to be true. A statement tending to expose the declarant to
criminal liability and offered in a criminal case is not admissible unless
corroborating circumstances clearly indicate the trustworthiness of the statement.
I.R.E. 804(b)(3). We recently addressed the application of this exception in the criminal
context in State v. Robins, explaining that this rule requires the court to consider each statement
included in a broader narrative to determine whether the statement is in fact one that is so far
contrary to the declarant’s interests that a reasonable person in the declarant’s position would not
have made it unless the declarant believed it to be true. No. 44296, 2018 WL 6254427, at *1
(Idaho Nov. 30, 2018). In Robins, we went through a letter sentence by sentence and determined
that only one sentence was genuinely self-inculpatory and met the requirements of I.R.E.
804(b)(3). Id. at *12–14.
Even without the benefit of our decision in Robins, the magistrate court recognized how
I.R.E. 804(b)(3) operates when it ruled that Vernon could redact the hearsay from the email and
seek to admit those portions which reflected statements against interest. It does not appear from
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the record that Vernon ever did so. As a result, the magistrate court’s decision was consistent
with applicable legal standards, and no abuse of discretion has been shown.
D. Attorney’s Fees and Costs
Joseph requests attorney’s fees on appeal pursuant to Idaho Code sections 12-121 and 15-
8-208. Vernon asserts that the magistrate court erred by determining Joseph the prevailing party
below, and requests that this Court remand the case to make a finding that he was the prevailing
party. He also seeks costs below and on appeal. Joseph is the prevailing party on appeal and
nothing suggests that the magistrate court’s prevailing party determination was incorrect.
Turning to Joseph’s requests, in reverse order, section 15-8-208 allows for discretionary
costs and reasonable attorney’s fees for proceedings governed by the Trust and Estate Dispute
Resolution Act (“TEDRA”), Idaho Code sections 15-8-101 to 15-8-305. The statute permits the
court to award costs and fees from any party, assets of the estate or trust, or nonprobate asset that
is subject of the proceedings. I.C. § 15-8-208(1); Quemada v. Arizmendez, 153 Idaho 609, 617,
288 P.3d 826, 834 (2012). Unlike in Quemada, Joseph did not file his initial petition for probate
pursuant to TEDRA, Idaho Code section 15-3-302. As such, this was not a TEDRA proceeding
and its costs and fees provision does not have applicability here.
Section 12-121 allows for an award of reasonable attorney’s fees to the prevailing party
in cases that have been brought, pursued or defended frivolously, unreasonably or without
foundation. I.C. § 12-121. Although some of Vernon’s arguments on appeal misconstrue certain
findings and conclusions of the magistrate court, other issues have been reasonably raised in an
attempt to sort out a procedurally complex action. Given this, it cannot be said that this appeal
was pursued frivolously, unreasonably, or without foundation, and we will decline to award fees
pursuant to section 12-121.
III. CONCLUSION
In light of the foregoing, the decisions of the magistrate court are affirmed. Costs are
awarded on appeal to Joseph.
Chief Justice BURDICK, Justices HORTON, BEVAN, and Justice Pro Tem TROUT
CONCUR.
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