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HomeMy WebLinkAbout2007-338 Civil - Perry County case CRIS N. SMITH AND : IN THE COURT OF COMMON PLEAS OF MABEL G. SMITH, : PERRY COUNTY, PENNSYLVANIA PLAINTIFFS : : V. : : RICHARD G. SMITH, : DEFENDANT : No. 2007-338 IN RE: MOTION OF DEFENDANT FOR POST-TRIAL RELIEF 1 BEFORE BAYLEY, J. OPINION AND ORDER OF COURT Bayley, J., March 17, 2009:-- There is an old saying that blood is thicker than water. That may or may not be true. When, however, it comes to blood and money, money will win out every time. Plaintiffs instituted this suit against defendant to have a deed declared null and void. A trial was conducted on October 1 and 2 and November 17 and 18, 2008. On November 24, 2008 , the following general findings were entered pursuant to Pa. Rule of Civil Procedure 1038: (1) Through words, acts, and conduct over a substantial period of time, Richard G. Smith created a confidential relationship with his mother, Mabel G. Smith, whereby there was an overmastering influence by him and a weakness of her in which an unfair advantage was created. (2) Richard G. Smith received a substantial benefit when in a deed, for nominal consideration, dated July 12, 2004, but not actually executed until October 16, 2006, and recorded on October 16, 2006, in Perry County in Instrument No. 2006-09-613, Mabel G. Smith, an unmarried widow, granted to Richard G. Smith all of her interest in three tracts of land in Toboyne Township, Perry County, Pennsylvania, being the same tracts conveyed by Richard D. Smith and Mabel G. Smith, his wife, to Richard D. Smith and Mabel G. Smith, his wife, and Cris N. Smith, as joint tenants with rights of survivorship, in a deed dated November 1, 1990, and recorded on October 9, 1991, in Perry County Record Book 637, Page 292. (3) Mabel G. Smith transferred all of her interest in said tracts to Richard 1 Specially presiding. No. 2007-338 G. Smith through undue influence exerted against her by Richard G. Smith. The following verdict was entered: The transfer by Mabel G. Smith to Richard G. Smith of all her interest in three tracts of land in Toboyne Township, Perry County, Pennsylvania, in a deed dated July 12, 2004, and executed on October 16, 2006, and recorded on October 16, IS DECLARED NULL AND VOID 2006, in Instrument No. 2006-09-613, , the title to said property reverting to Mabel G. Smith and Cris N. Smith as joint tenants with rights of survivorship as set forth in a deed into them and Richard D. Smith dated November 1, 1990, and recorded on October 9, 1991, in Perry County Record Book 637, Page 292, (Richard D. Smith having died on September 6, 2003). . . . December 4, 2008 On , defendant filed a motion for post-trial relief in the form of a motion for a judgment notwithstanding the verdict. The issue was briefed and argued on March 11, 2009 . Plaintiff, Mabel G. Smith, (Mabel), who was 84 years old in August, 2008, is the widow of Richard D. Smith (Dick), who died on September 6, 2003. They were married for fifty-nine years. They had two children born over eighteen and a half years apart: defendant Richard G. Smith (Richard), born June 15, 1945, and plaintiff Cris N. Smith, (Cris), born February 3, 1964. The sons have never gotten along. To say that at this stage of their lives they hate each other is not an exaggeration. Dick was always in charge of the family. Sometimes Mabel feared him. As Attorney Gerald Morrison testified, Dick had a good heart and a bad temper. What happened to produce this litigation involving a mother and her two sons is inextricably tied to Dick. February 28, 1949 On , Dick and Mabel purchased a farm, known as the lower farm, in Toboyne Township, Perry County, where they lived with Richard and later with Cris. Dick was March 26, 1954 a full-time dairy farmer and Mabel was a full-time housewife. On , Dick and -2- No. 2007-338 Mabel purchased a farm, known as the upper farm or the Johnson farm, in Toboyne Township, 2 Perry County. In 1976, Dick, Mabel and Cris, who was 12 years old, started living on the upper farm. There was little infrastructure on this farm. Richard, with his wife and son Scott, continued to reside on the fully operational lower farm. Richard still lives on the lower farm and 3 Cris and Mabel still live on the upper farm. It was the intention of Dick, to which Mabel agreed, that each son would ultimately have a farm: Richard the lower farm and Cris the upper farm. Dick set the financial obligations that August 5, 1985 Richard and Cris would have with respect to fulfilling this purpose. On , Mabel and Dick deeded the lower farm to Richard. On the same date, Richard executed a mortgage to his parents for $130,000 payable in ten years. This mortgage was actually to cover the costs of a herd of cattle, equipment, feed and other property of the parents left on the lower farm. Richard made all of the payments on this mortgage although it was not satisfied until June 13, 2001 . August 31, 1989 On , Dick and Mabel, with Cris present, executed codicils to their wills November 1, 1990 devising the upper farm to Cris for $80,000 payable to their estate. On , Mabel and Dick executed a deed to the upper farm into themselves and Cris as joint tenants 2 The farm was in the estate of Dick’s father. 3 Since 1976Cris has lived on the upper farm for all but a few years in the late 1990s, , from when he was married until he was divorced. During that time he and his wife lived close by. -3- No. 2007-338 4 with rights of survivorship. Cris generally took over the operation of the farm in 1991. On October 9, 1991 , Dick, Mabel and Cris executed a mortgage to the Bank of Landisburg in the amount of $125,000, the proceeds of which were used to construct calf barns and a wing on an existing barn and make other improvements on the upper farm. September 6, 2003 Dick died on . A few days later, Richard came to the upper farm and talked to his mother and Cris. Richard testified that he said that he was not comfortable with Cris paying only $80,000 for the upper farm. Cris testified that Richard said the farm was worth a million dollars and he wanted a half a million. Cris said that all he was going to pay was $80,000. February 27, 2004 On , Richard arranged for and took Mabel to a meeting in a New 5 Bloomfield law office shared by Gerald Morrison and his son Scott Morrison. Gerald Morrison testified that Mabel wanted to even out her estate between her sons and to try to get them to agree to a settlement. Mabel testified that she did not remember this meeting. Richard then arranged for another meeting at the Morrison’s law office which took place May 14, 2004 on . Richard took Mabel and asked her to have Cris there, which she did. Mabel testified that she believed that the purpose of the meeting was to see if Cris would pay more for the upper farm. Cris testified that Richard wanted him to pay his mother a half a million dollars for her interest in the farm. He stated that Gerald Morrison said that if an agreement 4 July 30, 1986 Almost three years earlier, on , Dick and Cris had been deeded two tracts of woodland as joints tenants with the right of survivorship. These tracts of 43 acres 20 perches and 38 acres 120 perches adjoin the upper farm. Cris became the sole owner of these tracts when his father died. 5 Gerald Morrison is the husband of a niece of Dick. -4- No. 2007-338 could not be reached the farm could be partitioned. Gerald Morrison testified that Mabel wanted to even out her estate and have her sons settle the matter. Tempers flared. Morrison testified that he could see that they were not going to get anywhere on creating an estate plan for the upper farm. As time past, Richard testified that his mother was telling him that she was upset about how Cris was treating her and that she wanted to get out of the house on the upper farm. He testified that he told her that if she was upset with Cris she should put him, Richard, on the July 1, 2004 deed to the upper farm. On , Richard again took Mabel to Gerald Morrison’s law office. Richard testified that he had called the office ahead of time and said that his mother wanted to put him on the deed and change her will. Morrison testified that they brought the deed to the upper farm. He was instructed to prepare a new deed transferring Mabel’s interest to Richard, and a new will naming both sons as her beneficiaries. Morrison testified that he suggested that Richard execute a $100,000 demand note to his mother. Richard agreed to sign it. Mabel testified that there was discussion about changing her will, but she does not believe that a deed was discussed. July 12, 2004 On , Mabel and Richard came back. Gerald Morrison testified that he had prepared a deed and a will but Mabel did not sign either document because she wanted more time to think about it and to talk to Cris about it. Mabel testified that she refused to sign either document because it put her “in a spot” and it was against the wishes of Dick because Cris was to receive the upper farm. Mabel further testified that Gerald Morrison wanted her to sign the deed as it would have brought peace to the situation. Richard and Mabel testified that he stopped speaking to her because he was disappointed that she did not place his name on the -5- No. 2007-338 deed to the upper farm. December 14, 2004 On , Cris and Mabel executed a $200,000 mortgage refinancing on 6 the upper farm with M&T Bank. The 1991 mortgage to the Bank of Landisburg was satisfied. 7 All of the mortgage payments and expenses on the upper farm have been paid by Cris. March 17, 2005 On , Mabel gave Richard $14,200 which she hoped would make him happy because she wanted him to be part of the family again. Gerald Morrison testified that August 23, 2005 on , he met with Mabel in his office because she wanted a new will bequeathing $80,000 to Richard up front. Morrison believed that Richard was present. He testified that he did not know Mabel’s motive. He prepared the will, and she returned on September 7, 2005 . He testified that he believed that Mabel signed the will. Mabel did not remember these events and did not believe that she ever indicated that she wanted to bequeath Richard $80,000 up front. Mabel did not sign a will. Richard testified that he did not know anything about the events on August 23 or September 7. Richard testified that he gave his mother the “cold shoulder” and avoided talking to her because she kept telling him of problems she was having with Cris. He believed that she should move from the upper farm. She would not move and he did not know what to do. Mabel testified that she likes her life on the upper farm although at times it was hectic. Two of her grandchildren, ages four and eleven, are there and sometimes Cris’s girlfriend Ann is 6 The mortgage now has a balance of approximately $160,000. 7 Cris provided significant financial support to his father and mother from 1991 through his father’s death in 2003. Thereafter, he has financially and otherwise supported his mother . -6- No. 2007-338 there. Mabel testified that she has never feared Cris and she has no reason to leave the upper farm. She testified that Richard stopped speaking to her because he was disappointed that his name was not on the upper farm. As early as August 2004 he came to a party she hosted at a Blain hotel to celebrate her eightieth birthday. He was not speaking with her and he left right away. Mabel testified that in October 2006, Richard asked her if it was okay to make up a list of equipment, guns and other items that were on the upper farm. She did this and took the list to the office of Gerald Morrison. Morrison confirmed that Mabel and her brother came in and asked him to retain the list. He believes that this was the only time that Mabel was in his office when Richard was not present. He testified that he told Mabel that there was going to be a fight at some point between Cris and Richard, and if there was he was going to be out of it. October 16, 2006 On , Richard again took Mabel to the Morrison law office. Mabel testified that she kept going back to appointments to keep Richard happy as she does not like th problems. She testified that on October 16 she was asked to sign the deed transferring her interest in the upper farm to Richard. She was hesitant. She did not want to sign it because she wanted Cris to have the upper farm, which was what Dick wanted, since Richard received the lower farm. She testified that she knew they expected her to sign the deed, and they would not be happy with her if she refused. At one point Richard said: “Aren’t you going to sign again mom?” Mabel testified that she finally signed the deed but knew the minute she did that she should have not done so. After Richard took her home, he asked her to go out and eat but she said no because she regretted what she did. Mabel testified that when she signed the deed she did not realize that she was giving up her absolute right to live on the farm. -7- No. 2007-338 Mabel testified she never talked to Cris about deeding her interest in the upper farm to Richard, and she did not tell Cris after she signed the deed because she knew that he would be upset after having cared for her and his father for years. Scott Morrison recorded the deed on the day it was signed, October 16, 2006. The deed was dated July 12, 2004, because it had remained in Morrison’s file after Mabel refused to sign it on that date. Cris was not notified by anyone that a deed was signed and recorded. Nor did he receive a copy of the deed despite the fact that he now owned the upper farm with his estranged brother Richard, rather than his mother Mabel, and he and Mabel were still the obligors on the M&T Bank mortgage 8 January 30, 2007 that encumbers the property. Cris did not learn about the deed until . Gerald Morrison testified that on October 16, 2006, Richard brought Mabel to his office to sign the deed that he had prepared on July 12, 2004. Mabel told him that she did not want Richard to sign the $100,000 note that he had previously prepared because she did not want her children to owe her anything. Morrison testified that he did not know that there was an outstanding mortgage to M&T Bank executed by Cris and Mabel on December 14, 2004, that Cris was paying. He did not ask about any liens because he considered this a family matter. Gerald, Scott and the notary testified that they did not hear Richard try to influence Mabel or speak harshly to her. Gerald Morrison testified that Mabel was intelligent but he does not think 8 Richard testified that he called a State Trooper, Rodney Anderson, and told him that he was concerned because his brother Cris would be getting a real estate tax statement with his [Richard’s] name on it. Cris testified that the State Trooper called him and said that Richard was concerned that he [Cris] was going to shoot him, and that he understood Mabel had signed the paper and that they were trying to draw a line through the farm and sell half of it. It was after this telephone call that he learned about the deed recorded on October 16, 2006. -8- No. 2007-338 she is strong willed. However, at all times it was apparent to him that Mabel knew what she was doing. th Richard testified that Mabel had him make the appointment for October 16 because there was some trouble and she wanted to transfer her half of the upper farm to him, so he took her to the Morrison law office. He testified that he did not know there was a mortgage on the farm. Mabel did not want $100,000 from him so he did not sign the promissory note that Morrison had prepared. He testified that he said nothing to her about signing the deed that day. After she did sign it he encouraged her to move from the upper farm either into his home, the home of her sister, or a retirement home. He testified that from July, 2004 until October, 2006 he never discussed with his mother her deeding to him her interest in the upper farm. th Gerald Morrison testified that on October 16, after Mabel signed the deed, she asked him to prepare a will which left everything equally to Cris and Richard. Mabel testified that she never asked for a new will. Morrison did not remember if Mabel signed a new will. The record shows that she did sign the will when she came to his office on October 24, 2006. Attached to the will is the list of equipment, guns and other property at the upper farm which she had previously left at the office. Mabel testified that she did not remember signing the will. Mabel testified that she did not ask Morrison to prepare a will, it was not her intention to sign it, and it was not her idea to go to the office for that purpose. She testified that she let others, specifically Richard, decide things for her. DISCUSSION A judgment notwithstanding the verdict can only be entered if the moving party is entitled to a judgment as a matter of law or the evidence was such that no two reasonable -9- No. 2007-338 minds could disagree that the outcome should have been rendered in favor of the movant. Nogowski v. Alemo-Hammad , 691 A.2d 950 (Pa. Super. 2007). The evidence must be viewed in the light most favorable to the verdict winner, who must be given the benefit of every reasonable inference of fact arising therefrom, and any conflict in the evidence must be Id. resolved in his favor. A judgment n.o.v. should only be entered in a clear case and any Id. doubts must be resolved in favor of the verdict winner. Initially, Richard maintains that his testimony when called by plaintiffs as if under cross- 9 examination must be considered conclusive. The Judicial Code at 42 Pa.C.S. Section 5935 provides in a civil action that a party “may be compelled to testify as if under cross- examination, subject to the rules of evidence applicable to witnesses under cross-examination Piwoz v. Iannacone, . . . .” This statute replaced the former 28 P.S. Section 381. In 406 Pa. 588 (1962), the Supreme Court of Pennsylvania stated: It is well established that where a litigant calls his adversary as for cross- examination pursuant to the Act of May 23, 1887, P.L. 158, §7, 28 PS §381, that the testimony thus obtained is conclusively taken to be true if it is not rebutted by other evidence: Rogan Estate, 404 Pa. 205, 171 A.2d 177 (1961). It may always be contradicted by other testimony and if this is accomplished all of the testimony and the truth thereof is for the jury’s consideration. Under such circumstances, the testimony of the adversary given on cross-examination is not conclusive: Morgan v. Phillips, 385 Pa. 9, 122 A.2d 73 (1956); Smith v. Farver, 173 Pa. Superior Ct. 391, 98 A.2d 247 (1953). Again, this general rule that a party calling his opponent as for cross-examination is concluded by this testimony is subject to the exceptions that there may be such a degree of improbability in the statements themselves as to deprive them of credit, or that the circumstances themselves may constitute sufficient contradiction: Matthews v. Derencin, 360 Pa. 349, 62 A.2d 6 (1948). In short, it is not necessary that the contradiction be in the form of direct testimony: Burke v. Kennedy, 286 Pa. 344, 133 Atl. 508 (1926); Bogdanoff v. Manis, 346 Pa. 243, 30 A.2d 321 (1943). 9 Richard also testified on direct examination during the presentation of his case. -10- No. 2007-338 In the present case, Richard’s testimony was rebutted by other evidence, much of it was improbable as to deprive it of credit, and the circumstances themselves constituted sufficient contradiction. We were not required to consider that part of his testimony given as if under cross-examination as conclusive. We note further that Pennsylvania Rule of Evidence 607(a) provides: “Who may Impeach. The credibility of any witness may be attacked by any party, including the party calling the witness.” We found that Richard created a confidential relationship with Mabel whereby there was an overmastering influence by him and a weakness of her in which an unfair advantage was created and that Mabel transferred all her interest in the upper farm to Richard through undue Thomas v. Seaman influence exerted against her by Richard. In , 451 Pa. 347 (1973), the Supreme Court of Pennsylvania set forth that: “[u]ndue influence which will avoid a deed is such influence as is obtained by excessive importunity, superiority of will or mind, or by any other means constraining the grantor to do what he is unable to refuse. Whether such improper influence was exercised must usually be inferred from the facts and circumstances of the particular case, such as the situation of the grantor and his relation to others, his condition of health and its effect upon body and mind, his dependence upon, and subjection to, the persons claimed to have influenced him and their opportunity to wield such influence . . . .” Withers v. Withers, 363 Pa. 431, 434, 70 A.2d 331, 333 (1950), quoting from Teats v. Anderson, 358 Pa. 523, 528, 58 A.2d 31, 33 (1948). (Emphasis added.) 10 “Importunity” is the quality of being overly persistent in request or demand. To 10 Merriam-Webster Online Dictionary (2009), at http://www.merriam- webster.com/dictionary/importunity. -11- No. 2007-338 11 “importune” is to press or urge with troublesome persistence. A confidential relationship exists when it is clear the parties do not, or did not, deal on Weir v. Estate of Ciao, equal terms. 521 Pa. 491 (1989). Such a relationship “is not limited to any particular association of parties” but exists when one party occupies “a position of advisor or counselor as reasonably to inspire confidence that he will act in good faith for the Frowen v. Blank, other’s interest.” 493 Pa. 137 (1981). Rather than dealing on equal terms, there exists in a confidential relationship “an overmastering influence” on the one side, or, on Id. the other side, “weakness, dependence or trust, justifiably reposed.” When an overmastering influence exists or where there is weakness, dependence or trust, justifiably Id. reposed, unfair advantage is possible. In slightly different language, a confidential relationship “is any relation existing between parties to a transaction wherein one of the parties is bound to act with the utmost good faith for the benefit of the other party and can take no Id. advantage to himself from his acts relating to the interest of the other party.” However, in the context of family relations, “care must be used not to confound acts springing from natural love and affection with confidential relations, and, while the line of demarcation may in some cases be narrow, nevertheless, to sustain the integrity of gifts based on such affection in family Weir, supra. relations, it is necessary the distinction should exist.” Because of the possibility of an unfair advantage being obtained through a confidential relationship, the law presumes that a transaction executed between parties of a confidential relationship is “voidable, unless the party seeking to sustain the validity of the transaction affirmatively demonstrates that it was 11 Merriam-Webster Online Dictionary (2009), at http://www.merriam- webster.com/dictionary/importune. -12- No. 2007-338 Weir, supra. fair under all of the circumstances and beyond the reach of suspicion.” Thomas v. Seaman, supra As set forth in : [t]he burden of proving undue influence rests upon the party asserting it unless that party can prove a Confidential relationship between the grantor and grantee, in which case the burden of proof must shift to the party asserting the validity of the deed to prove it was obtained by the free, voluntary and intelligent act of the grantor. sub judice, In his brief in the case defendant states: “If a confidential relationship between Richard G. Smith and his mother, Mabel Smith, was sufficiently established by the evidence, the Defendant has not ‘rebutted’ that evidence to establish that the transaction in question was not the result of ‘undue influence.’” Richard never tried to change his father’s mind as to his plans for the farms. Upon his father’s death on September 6, 2003, it was only a few days before he voiced his displeasure to Mabel and Cris about those plans. He then embarked on an effort to get those plans changed. First, he tried to get Cris to agree to a change. At the meeting he arranged at the Morrison law office on February 27, 2004, his effort was unsuccessful. Mabel would not agree to a change because she wanted what Dick had wanted. It took many trips by Mabel arranged by Richard back to the law office before he got what he wanted on October 16, 2006. Even then he overcame Mabel’s continued final resistance after telling her: “Aren’t you going to sign 12 again mom?” She reluctantly signed the deed that had been prepared two and a quarter years earlier on July 12, 2004. In the interim, Richard had given her the cold shoulder and 12 Richard denied making this statement. Those who were in and out of a room at the Morrison law office testified that they never heard the statement. Mabel remembered every word. We believe her. -13- No. 2007-338 withheld his love from her which caused her heartbreak. Mabel was unable to appease him with a gift of $14,200. Mabel kept going back to the Morrison law office only to keep Richard happy. Gerald Morrison testified that Mabel was intelligent but not strong willed, but it was apparent to him that she knew what she was doing. What is apparent to this court is that at all times Mabel knew what she did not want to do. It was Richard’s conduct, his persistence and superior will that caused her to do what she finally was unable to refuse. Based upon the evidence we find credible, Mabel signed the deed because there was an overmastering influence by Richard and a weakness on her part in which an unfair advantage was created by Richard in a confidential relationship. Richard’s position that he only suggested to her that he be a joint owner of the upper farm to take care of her and protect her from what he believed was her mistreatment by Cris is not believable. His testimony that Mabel wanted to sign the deed because of the way Cris has treated her was rebutted by Mabel. We believe Mabel and reject Richard’s position that the credible evidence showed that she signed the deed because of Cris’s conduct and not because of what he wanted. Our finding that there was a confidential relationship between Richard and his mother at the time she signed the deed only shifted the burden of proof. There was substantial evidence in the record which we found credible to support our finding that Mabel transferred her interest in the upper farm to Richard through undue influence exerted against her by him. Therefore, defendant is not entitled to judgment notwithstanding the verdict. ORDER OF COURT AND NOW, this day of March, 2009, the motion of defendant for post- IS DENIED. trial relief in the form of a judgment notwithstanding the verdict, -14- No. 2007-338 By the Court, Edgar B. Bayley, J. Specially Presiding Guy P. Beneventano, Esquire 200 North Third Street PO Box 840 Harrisburg, PA 17108-0840 For Plaintiffs Dale F. Shughart, Jr., Esquire 10 West High Street Carlisle, PA 17013 For Defendant :sal -15- No. 2007-338 PROTHONOTARY’S OFFICE PERRY COUNTY COURTHOUSE 25 WEST MAIN STREET NEW BLOOMFIELD PA 17068 -2-