SUPREME COURT OF MISSOURI en banc
) ERIC WILLIAMS, ) ) Appellant, ) ) v. ) No. SC93853 ) WILLIAM L. HUBBARD, LIMITED ) ADMINISTRATOR AD LITEM ) OF THE ESTATE OF ) BETTY MARGARET REYNOLDS AND ) KENNETH NELSON AND ) SANDRA K. NELSON, ) HUSBAND AND WIFE, ) ) Respondents. )
APPEAL FROM CIRCUIT COURT OF JACKSON COUNTY The Honorable Kathleen A. Forsyth, Judge
Opinion issued February 3, 2015
Eric Williams sued attorney Kenneth Nelson and his wife, Sandra Nelson. He
alleges they violated their fiduciary duties to Betty Reynolds by unduly influencing her to
give Sandra joint ownership of (or to designate Sandra as the “payable on death” or POD
beneficiary for) most of Reynolds’ assets. The trial court granted summary judgment in
favor of the Nelsons on the ground that Williams did not have standing to bring these
claims because “the undisputed facts demonstrated show that [Williams] has suffered no
harm and has no right to any of the assets at issue.” This judgment is affirmed in part and
vacated in part, and the matter is remanded. Background
In 2000, Reynolds retained Kenneth Nelson to advise her in achieving her estate
planning objectives. She requested that Kenneth draft a beneficiary deed transferring
certain real property upon her death to Williams, Reynolds’ second cousin. She executed
that deed in March 2000. Reynolds also asked Kenneth to draft a will naming Williams,
together with her friends Norma Lamp (mother of Sandra Nelson) and Erma Louise
Baughman, as her beneficiaries. She executed that will in May 2000.
In 2006, Reynolds wrote a letter to Kenneth instructing him to prepare a durable
power of attorney naming Sandra as Reynolds’ attorney-in-fact. She also wanted
Kenneth to change her will to remove Lamp and Baughman as beneficiaries and name
Sandra in their stead. Finally, Reynolds wanted Sandra to be her personal representative.
Reynolds signed the power of attorney and the new will in 2006.
Reynolds made no further changes to her will before she died on April 28, 2010.
At that time, however, her will was of little practical significance because she had few
assets that became part of her probate estate. Instead, most of Reynolds’ personal
property consisted of bank accounts that passed directly to Sandra, either by virtue of
Sandra being a joint owner (with right of survivorship) or because Reynolds had
designated Sandra as the “payable on death” (“POD”) beneficiary on those accounts.
When Reynolds first approached Kenneth in 2000 for estate planning advice,
Kenneth had her fill out a questionnaire identifying her assets. Reynolds listed four bank
accounts (one with Bank of America and three with the Kansas City Police Credit Union
(“KCPCU”)) and three brokerage accounts (one with AARP Scudder and two with American Century). Reynolds noted that she owned one of the accounts jointly with
Lamp and that she either owned the other six accounts jointly with Baughman or had
designated Baughman as the POD beneficiary on those accounts.
Between the time she filled out Kenneth’s questionnaire in 2000 and her death in
2010, Reynolds closed four of these seven accounts (i.e., the Bank of America account,
two of the three KCPCU bank accounts, and the AARP Scudder brokerage account). The
remaining three accounts (i.e., one KCPCU bank account and the two American Century
brokerage accounts) remained open until her death, but with significant changes. On
July 10, 2006, Reynolds revoked Baughman’s POD beneficiary designation on the
KCPCU account and instead gave Sandra joint ownership of that account with the right
of survivorship. 1 Similarly, on April 29, 2008, Reynolds terminated Baughman’s joint
ownership interests in the two American Century accounts and made Sandra the joint
owner of these accounts.
Reynolds also opened a new checking account at United Missouri Bank (“UMB”).
She originally designated Baughman as the POD beneficiary but, on July 20, 2006,
Reynolds revoked Baughman’s POD beneficiary designation and made Sandra a joint
owner with the right of survivorship. In 2008, Reynolds purchased two certificates of
deposit (“CDs”) at UMB and made Sandra a joint owner of these deposits with
1 This KCPCU account, which had contained deposits, CDs, and IRAs totaling $200,859 in April 2000, contained only two IRAs totaling approximately $60,000 in 2010 when Reynolds died.
3 survivorship rights. 2 Finally, in 2009, Reynolds purchased a third CD at UMB. Instead
of making Sandra a joint owner of this CD as she had the previous two, Reynolds
designated Sandra as the POD beneficiary for this asset.
As summarized in the following table, Reynolds’ estate planning decisions from
2006 until her death in 2010 were: (1) to replace Baughman (as her POD beneficiary)
with Sandra (as her joint owner) on all three of the accounts which remained from the
seven accounts Reynolds owned in 2000; (2) to replace Baughman (as her POD
beneficiary) with Sandra (as her joint owner) on the new UMB checking account; and
(3) to make Sandra the first and only joint owner of, or her first and only POD
beneficiary on, the three new CDs from UMB.
Account Final Balance Final Beneficiary Previous Beneficiary (type) (type) Baughman Bank of America closed n/a (unknown) Baughman KCPCU #1 closed n/a (POD) Lamp KCPCU #2 closed n/a (joint owner) Sandra Baughman KCPCU #3 $61,467.25 (joint owner) (POD) Baughman AARP - Scudder closed n/a (joint owner) Sandra Baughman American Century #1 $16,208.08 (joint owner) (joint owner) Sandra Baughman American Century #2 $13,226.21 (joint owner) (joint owner) Sandra Baughman UMB Checking $2,483.81 (joint owner) (POD)
2 It appears that, when Reynolds purchased UMB CD #1, she originally designated Sandra as the POD beneficiary. The next day, when Reynolds purchased UMB CD #2, Reynolds changed this and declared Sandra as the joint owner of both UMB CD #1 and UMB CD #2. 4 Account Final Balance Final Beneficiary Previous Beneficiary (type) (type) Sandra UMB CD #1 $118,684.86 None (joint owner) Sandra UMB CD #2 $41,468.75 None (joint owner) Sandra UMB CD #3 $202,916.99 None (POD)
In 2011, Williams filed suit in the Circuit Court of Jackson County. In the first
three counts of his second amended petition, he alleges that the Nelsons, acting in
concert, exerted undue influence to cause Reynolds:
… to place Sandra Nelson as payable on death beneficiary and/or joint tenant with right of survivorship and/or transfer on death beneficiary to substantially all of Betty M. Reynolds’ personal property, consisting of certificates of deposit, bank accounts, investment accounts and a motor vehicle.
As a result, Williams seeks a declaration that the assets to which Sandra succeeded
upon Reynolds’ death – either as joint owner with the right of survivorship or as POD
beneficiary – should be made a part of Reynolds’ probate estate under section 473.340
(Count I), 3 or are subject to a constructive trust (Count III). In Count II, Williams seeks
to have Reynolds’ transfers of joint ownership to Sandra, and her designation of Sandra
as POD beneficiary, set aside and declared void.
The remaining counts are against Kenneth alone. Williams alleges that Kenneth
breached his fiduciary duty as Reynolds’ attorney (Count IV) and/or committed legal
malpractice (Count V) by causing Reynolds to name Sandra as her attorney-in-fact and
3 Unless otherwise indicated, all statutory citations are to the Revised Statutes of Missouri, as amended though the Cumulative Supplement 2011.
5 by causing her to transfer joint ownership to Sandra of, or designate Sandra as POD
beneficiary on, most of Reynolds’ personal property.
Kenneth and Sandra Nelson filed motions for summary judgment. They argue that
no one can challenge their alleged use of undue influence regarding Reynolds’ estate
planning decisions unless that person was a joint owner or POD beneficiary of Reynolds’
accounts at the time the Nelsons’ undue influence was alleged to have occurred. Because
they insist Williams had no such interest, the Nelsons contend he suffered no harm from
their alleged undue influence over Reynolds and lacks standing to challenge them.
Williams opposed the Nelsons’ motions on the ground that, but for the Nelsons’
undue influence, Reynolds would not have made Sandra a joint owner of (or designated
her as the POD beneficiary on) these accounts and, therefore, Sandra would not have
become the sole owner of those accounts when Reynolds died. Instead, Williams
contends those assets would have become part of Reynolds’ probate estate and been
distributed (at least in part) to him. The trial court sustained the Nelsons’ motions.
Williams timely appealed, and this Court has jurisdiction of the case pursuant to article
V, section 10, of the Missouri Constitution.
Standard of Review
Appellate review of summary judgment “is essentially de novo.” ITT Commercial
Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). The
Court reviews the record in the light most favorable to the non-movant and affords that
party the benefit of all reasonable inferences from the record. Id. “The propriety of
6 summary judgment is purely an issue of law,” and “an appellate court need not defer to
the trial court’s order granting summary judgment.” Id.
Analysis
Before reaching the merits of Williams’ appeal, the Court first considers whether
to dismiss this appeal on its own motion due to the defects in Williams’ substitute brief.
This appeal is before this Court because the Nelsons, aggrieved by the court of appeals’
opinion (which reached the same conclusion this Court reaches here), filed an application
to transfer pursuant to Rule 83.04.
After this Court granted the Nelsons’ application, Williams filed a substitute brief
pursuant to Rule 83.08(b). However, all four of the points relied on in Williams’
substitute brief fail to comply with the requirements of Rule 84.04 because each of them
fails to “identify the trial court ruling or action that the appellant challenges.”
Rule 84.04(d)(1)(A) (emphasis added). Instead, the substitute points only identify
various aspects of the court of appeals’ decision with which Williams agrees. 4
Rule 83.09 provides that, unless the matter is retransferred, every appeal that
comes to this Court from the court of appeals – whether by certification, transfer (before
or after opinion), or certiorari – will be decided “the same as on original appeal.” This
means that the transfer immediately renders the court of appeals’ decision (if any) a
nullity and the parties must proceed in this Court as though the appeal properly had been
4 For example, Williams’ first point relied on states: “The Western District Court of Appeals correctly held that appellant has standing to pursue his claim that three UMB Bank certificates of deposit were obtained by Sandra Nelson by undue influence of Sandra Nelson and Kenneth Nelson.” The remaining points use this same approach. 7 filed here in the first instance. The record filed in the court of appeals becomes the
record in this Court. Rule 83.08(a).
Rule 83.08(b) provides that a “party may file a substitute brief in this Court.”
Though the Court encourages such briefs, they are not required and a party may choose to
stand on the brief(s) filed in the court of appeals. If a party chooses to file a substitute
brief, however, Rule 83.08(b) provides that the “substitute brief shall conform with
Rule 84.04, [that it] shall include all claims the party desires this Court to review, [and
that it] shall not alter the basis of any claim that was raised in the court of appeals
brief[.]” Finally, Rule 83.08(a) provides that the parties are to retain the same appellant
or respondent designations they had before the transfer. This emphasizes that the
question is not whether the court of appeals was correct but whether the trial court’s
judgment should be affirmed, reversed, or vacated and remanded.
The defect in Williams’ points is not subtle or technical. By focusing solely on
what he argues the court of appeals did correctly, he fails to identify – let alone challenge
– any error by the trial court. Accordingly, Williams’ points violate Rule 84.04(d) and
preserve nothing for appellate review. See Smith v. Brown & Williamson Tobacco Corp.,
410 S.W.3d 623, 638 (Mo. banc 2013) (“questions for decision on appeal are those stated
in the points relied on, and a question not there presented will be considered to be
abandoned on appeal and no longer an issue in the case”) (internal quotation marks
omitted). The Nelsons contend the Court should affirm on this basis alone, without
addressing the merits of Williams’ claims. See Thummel v. King, 570 S.W.2d 679, 688
(Mo. banc 1978); J.A.D. v. F.J.D., 978 S.W.2d 336, 338 (Mo. banc 1998). The Court
8 will not do so. Under Rule 83.03(b), if Williams had not filed a substitute brief, the
Court would proceed on the basis of the brief Williams filed in the court of appeals.
Accordingly, the Court will strike Williams’ substitute brief and proceed as though it had
not been filed. This approach best balances the need to enforce Rule 84.04(d) and the
Court’s policy “to decide a case on its merits” whenever possible. 5 J.A.D., 978 S.W.2d at
338.
In Williams’ court of appeals brief, he claims the trial court erred in granting the
Nelsons’ motions for summary judgment for lack of standing. Most of Williams’
arguments turn on whether the Nelsons’ alleged undue influence over Reynolds’ estate
planning decisions harmed Williams directly. But for their undue influence, Williams
claims that Sandra would not have become the sole owner of these accounts upon
Reynolds’ death. Instead, if Reynolds’ transfers of joint ownership of (or her
designations of Sandra as POD beneficiary on) these accounts are not valid, Williams
contends those accounts would have become a part of Reynolds’ probate estate and been
distributed (at least in part) to him according to Reynolds’ will. The Court agrees, and
holds that Williams has standing to challenge the Nelsons’ conduct and Sandra’s
resulting ownership. This holding is limited, however, only to those accounts for which
5 The Court perceives no prejudice to the respondents in this holding. Their brief in the court of appeals does an excellent job addressing Williams’ claims, and has been considered here. Their substitute brief in this Court further elucidates the issues most in dispute and it, too, has been considered. The only party injured by Williams’ failure to abide by Rule 84.04(d) is Williams, and then only to the extent he lost the benefit of honing his arguments as respondents did theirs.
9 there was no valid joint ownership or POD designation in effect at the time the Nelsons
allegedly unduly influenced Reynolds to give Sandra her interests. 6
A. UMB CD #3
Williams alleges that the Nelsons unduly influenced Reynolds to designate Sandra
as the POD beneficiary for UMB CD #3. Because the designation of a POD beneficiary
is a “nonprobate transfer” as defined in section § 461.005(7) and (15), Reynolds’
designation of Sandra as the POD beneficiary for UMB CD #3 is governed by sections
461.003 to 461.081 (the “Nonprobate Transfers Law” or “NTL”).
Section 461.028.5 provides that Reynolds’ designation is “conclusive evidence in
the absence of fraud, duress, undue influence or evidence of clerical mistake by the
transferring entity [UMB] that the direction was regularly made by the owner [Reynolds]
and accepted by the transferring entity [UMB], and was not revoked or changed prior to
the death giving rise to the transfer.” But, under section 461.054.1, any “beneficiary
designation or a revocation of a beneficiary designation that is procured by fraud, duress
or undue influence is void.” Accordingly, if the Nelsons exerted undue influence to
cause Reynolds to designate Sandra as the POD beneficiary for UMB CD #3, as Williams
alleges, then that designation is void.
If Reynolds’ designation of Sandra as the POD beneficiary for UMB CD #3 is
void, then that CD would have become part of Reynolds’ estate when she died because
6 The Nelsons do not seek summary judgment on the basis that Williams cannot make a submissible case on whether undue influence occurred. Accordingly, the Court assumes that he can do so, but makes no determination in that regard. This opinion should not be read to suggest that he will do so or that any undue influence, in fact, occurred. 10 there was no valid POD beneficiary (or joint ownership) prior to Reynolds’ designation
of Sandra that Williams is challenging. Accordingly, Williams has standing to challenge
Sandra’s ownership of, and the Nelsons’ conduct concerning, UMB CD #3.
The Nelsons seek to avoid the logic of this result by extending it. They argue that,
if Reynolds’ designation of Sandra as the POD beneficiary for UMB CD #3 is void due to
undue influence, then Reynolds’ decision to buy that CD (and her decision to withdraw
funds from other accounts for that purchase) must also be void. As a result, the Nelsons
claim that the Court cannot determine who has standing to challenge their conduct until it
returns (at least theoretically) the money Reynolds used to buy that CD to whatever
account(s) it was in before the Nelsons unduly influenced Reynolds to use the funds to
buy UMB CD #3.
The Nelsons did not prove which account(s) this was, but they contend – and
Williams concedes – that it must have been one of the four accounts (out of the original
seven) that Reynolds owned in 2000 but closed prior to her death. Because Lamp or
Baughman was the joint owner of (or POD beneficiary on) all four of these accounts, the
Nelsons reason that – but for their alleged undue influence – the money Reynolds used to
buy UMB CD #3 would have stayed in the original account(s) and passed to Lamp or
Baughman when Reynolds died. Accordingly, the Nelsons insist that only Lamp or
Baughman – but not Williams – can have standing to challenge their conduct because
only Lamp or Baughman – but not Williams – was harmed by the Nelsons’ alleged undue
influence over Reynolds.
11 The Nelsons’ argument misconstrues Williams’ allegations. He does not allege
that the Nelsons unduly influenced every facet of every decision that Reynolds made
from 2006 to her death. 7 Instead, Williams alleges only that the Nelsons unduly
influenced Reynolds’ estate planning decisions. The decision whether to use cash in one
bank to purchase an investment in another is not an estate planning decision. On the
other hand, the decision whether (and to whom) to give joint ownership of the new asset,
or whether (and to whom) to make a POD beneficiary designation on the new asset, is an
estate planning decision.
Here, Reynolds’ decision to withdraw the money she needed to purchase UMB
CD #3 from whichever account was not an estate planning decision, and it is not within
Williams’ allegations. Instead, like every other action, it is presumed valid until someone
challenges it, and the Nelsons offer no proof in their motions for summary judgment that
Reynolds’ decision was invalid. Accordingly, the Nelsons’ effort to extend the effects of
their alleged wrongdoing beyond Williams’ reach is not a sufficient basis on which to
grant their motions for summary judgment.
The Nelsons’ argument also misconstrues the nature of their burden as the
summary judgment movants:
7 “Undue influence” does not refer to a permanent or pervasive state. Instead, it refers to control over the will of another that is exercised to such an extent or under such circumstances that it vitiates the controlled party’s intent to make a specific decision or to engage in a discreet transaction. See Gibony v. Foster, 130 S.W. 314, 324 (Mo. 1910) (“It may be that Mrs. Banfield as the daughter of Mrs. Gibony had an undue influence over her, but it is fundamental that it is not the existence of undue influence but the exercise of it in the execution of the will which invalidates such will.”) (emphasis added). 12 The prima facie showing required by Rule 74.04(c) is necessarily different where the movant is a “defending party.” Where a “defending party” will not bear the burden of persuasion at trial, that party need not controvert each element of the non-movant’s claim in order to establish a right to summary judgment. Rather, a “defending party” may establish a right to judgment by showing (1) facts that negate any one of the claimant’s elements facts, (2) that the non-movant, after an adequate period of discovery, has not been able to produce, and will not be able to produce, evidence sufficient to allow the trier of fact to find the existence of any one of the claimant’s elements, or (3) that there is no genuine dispute as to the existence of each of the facts necessary to support the movant’s properly- pleaded affirmative defense. Regardless of which of these three means is employed by the “defending party,” each establishes a right to judgment as a matter of law. Where the facts underlying this right to judgment are beyond dispute, summary judgment is proper.
ITT Commercial, 854 S.W.2d at 381 (emphasis in original).
The Nelsons’ motions fall into the second category described above. It is their
burden to show that Williams cannot make a submissible case on one or more of the
elements of his claim. They failed to do so. Instead, they assume – but do not set forth
uncontested facts proving – that Reynolds’ decision to withdraw funds from one or more
accounts to purchase UMB CD #3 resulted from undue influence and then insist that
Williams must prove their assumption wrong. 8 This is incorrect. Until the Nelsons meet
their burden under Rule 74.04(c) by showing that Williams cannot make a submissible
case as to harm and causation, Williams does not have to show anything. ITT
Commercial, 854 S.W.2d at 381. He may have the burden of proof at trial, but the
8 The Nelsons do not offer uncontested facts proving that their undue influence was so pervasive that they would not have allowed her to purchase UMB CD #3 (and, therefore, would not have allowed her to withdraw money from another account for that purpose) unless Reynolds designated Sandra as the POD beneficiary on that asset. If so, their motions would have belonged under the first category of summary judgment motions identified in the ITT Commercial quote above. Instead, their motions merely assert Williams lacks standing because he cannot make a submissible case on the issues of harm and causation at trial. 13 burden under Rule 74.04 is on the movant to show both that there is no genuine dispute
as to the material facts and that the movant is entitled to judgment as a matter of law. Id.
Finally, the Nelsons’ argument misconstrues the nature of section 461.054.1.
Under section 461.054.1, the designation of a POD beneficiary is void if procured
through undue influence. The 1995 Committee Comment to Section 461.054 states that
property that is subject to a void beneficiary designation as a result of fraud, duress, or
undue influence “will become part of the probate estate.” 4A John A. Borron Jr.,
MISSOURI PRACTICE: PROBATE AND SURROGATE LAW MANUAL (2001) (“MANUAL”), at
597. Even though the Comment may not always be accurate, 9 it is correct where – as
here – there is no prior valid beneficiary designation or valid contingent beneficiary
designation on which to fall back. Accordingly, Williams does not have to show that this
money still would have been withdrawn from earlier accounts in the absence of undue
influence by the Nelsons. It is sufficient that he show, as he has alleged, that – but for the
9 In Crocker v. Crocker, 261 S.W.3d 724, 727-28 (Mo. App. 2008), the court notes that Judge Borron expands on this Comment by stating that section 461.054 only applies to an original beneficiary designation, not a subsequent one. Id. at 728 (citing MANUAL at 598). This is not correct. Plainly, nothing in section 461.054 limits its application to an original beneficiary designation. Read in full, the Comment merely notes that, in the absence of a prior valid contingent beneficiary designation, section 461.054 requires that property subject to a void beneficiary designation becomes part of the probate estate instead of passing to the decedent’s spouse and children as the previous NPT law had required. MANUAL at 598. Accordingly, it appears that Judge Borron intended to say that the Comment – rather than the statute – applies only to an original beneficiary designation, and so it does. On the other hand, Crocker rightly holds that section 461.054 is not limited only to the original designation and, instead, applies to a second or subsequent beneficiary designation as well. Crocker, 261 S.W.3d at 727-28. When such a designation is void under section 461.054, courts must give effect to a valid prior designation. Id. at 727 (even though “a subsequent beneficiary designation revokes a prior beneficiary designation, … a void subsequent beneficiary designation [does not] revoke a valid prior beneficiary designation”) (emphasis in original). 14 Nelsons’ undue influence over Reynolds’ estate planning decisions – UMB CD #3 would
have become part of Reynolds’ probate estate.
B. UMB CD #1 and UMB CD #2
In 2008, Reynolds obtained UMB CD #1 and UMB CD #2 and gave Sandra joint
ownership (with the right of survivorship) in both assets. Like UMB CD #3, there was no
prior joint owner of, or POD beneficiary designation on, either of these assets. But,
unlike UMB CD #3, Reynolds’ transfer of joint ownership interest in UMB CD #1 and
UMB CD #2 to Sandra is not a “nonprobate transfer” and, therefore, it is not governed by
the NTL.
Even though section 461.054 does not apply to Reynolds’ transfer of joint
ownership interests in UMB CD #1 and UMB CD #2 to Sandra because they were not
“nonprobate transfers” under section 461.005(7), such transfers, nevertheless, are void if
procured by fraud or undue influence. Designations of joint ownership in deposit records
are controlled by section 362.470. This statute provides that the designations Reynolds
made concerning Sandra’s joint ownership of these two CDs are conclusive evidence of
the joint owner’s title only “in the absence of fraud of undue influence.” This is because
the creation of the joint owner’s interest by such instructions is considered a gift, and “all
of the common-law elements [must] be present in order for the account to constitute a
valid gift inter vivos.” In re LaGarce’s Estate, 487 S.W.2d 493, 500 (Mo. banc 1972).
Fraud or undue influence negates the elements of intent and capacity and render the title
instructions (i.e., the purported gift) void. Though LaGarce’s Estate involved a different
15 statute, this Court noted specifically that the legislature “amended § 362.470 to
incorporate the LaGarce holding.” Fix v. Fix, 847 S.W.2d 762, 768 (Mo. banc 1993).
If Reynolds’ gifts to Sandra of joint ownership interests in UMB CD #1 and
UMB CD #2 are void, they must be disregarded entirely. Thus, like a designation of a
POD beneficiary that is void under 461.054, a transfer of joint ownership that is void
under section 362.470 has no effect on the status quo ante. In this case, that means that
UMB CD #1 and UMB CD #2 would have become part of Reynolds’ estate upon her
death because Reynolds made no prior transfer of joint ownership (and no prior valid
POD beneficiary designation) for these assets. Because these CDs would have become
part of Reynolds’ probate estate and been distributed (in part) to Williams, he has
standing to challenge Sandra’s ownership of, and the Nelsons’ alleged undue influence
regarding, these assets.
As with UMB CD #3, the Nelsons argue that Williams cannot challenge
Reynolds’ transfers to Sandra of joint ownership interest in UMB CD #1 and UMB CD
#2 without also challenging Reynolds’ decision to purchase these CDs. For that reason,
the Nelsons argue that – to determine who has standing to challenge their actions – the
Court must look only to those who would have had standing to challenge Reynolds’
decision to purchase these CDs. Because the money Reynolds used to purchase these
assets came from an (unidentified) account(s) on which either Lamp or Baughman was
designated the POD beneficiary, the Nelsons conclude only one of these two ladies has
standing because only she was injured directly by the Nelsons’ alleged undue influence
causing Reynolds to withdraw the money used to buy UMB CD #1 and UMB CD #2.
16 Again, the Nelsons’ argument rests on unproven facts and an unjustified
assumption. Reynolds made two separate decisions. The first was whether to withdraw
funds from the existing account(s) to purchase these CDs. The second was whether to
transfer joint ownership of those deposits to someone and, if so, whether to give it to
Sandra. The Nelsons insist this is one indivisible decision and Williams cannot challenge
any part of it unless he challenges the whole. But Williams distinguishes these decisions
even if the Nelsons do not. He alleges only that the Nelsons exerted undue influence
over Reynolds’ estate planning decisions. This allegation encompasses Reynolds’ second
decision, but it does not encompass the first. The decision whether to purchase the CDs
was an investment decision, not an estate planning decision.
If Reynolds’ every act and thought was under the control of the Nelsons from
2006 on, as the Nelsons unjustly characterize Williams’ claim, they did not have to go
through this complex process to steal these funds; they simply could have had Reynolds
replace Lamp and/or Baughman as the joint owner of the original account(s). In fact,
they did this for other accounts, but they did not do so here. One reasonable explanation
is that the Nelsons did not exert undue influence over all of Reynolds’ actions, only her
estate planning decisions. Whether this is true is not a question for summary judgment.
What matters in this context is that this is all that Williams alleges and it is all that he has
to prove. His ability to do so is not challenged in these summary judgment motions.
If the Nelsons seek summary judgment because Reynolds’ decision to withdraw
funds from other accounts and purchase these CDs was inextricably bound to the decision
to give joint ownership of them to Sandra, and because their undue influence over
17 Reynolds would not have allowed Reynolds to do the former without the latter, then the
Nelsons must support that motion with evidence of undisputed facts. They fail to do so.
They do not prove anything about Reynolds’ decisions to buy these CDs. They do not
prove the accounts from which Reynolds withdrew the money or whether the withdrawal
of the funds and purchase of the CDs were contemporaneous or separated by hours, days
or weeks. More importantly, they do not prove that Reynolds’ decision to buy these CDs
was the result of undue influence so pervasive that it controlled both this decision and the
decision to name Sandra as the joint owner of the assets as a single decision. Again, the
burden at trial will be on Williams to prove his claims, but he has no burden – there, or in
response to the Nelsons’ motions for summary judgment – to disprove every hypothetical
alternative the Nelsons can assert.
To prove his allegations – including his standing – regarding Counts I to III,
Williams need only prove that the Nelsons unduly influenced Reynolds’ decisions: (1) to
designate Sandra as the POD beneficiary of UMB CD #3; and (2) to give Sandra joint
ownership with the right of survivorship of UMB CD #1 and UMB CD #2. If so, they are
void and must be disregarded. Then, Williams must prove that there was no prior valid
joint ownership of, or POD beneficiary designation on, any of these three CDs which
would take effect upon Reynolds’ death and prevent the asset from becoming a part of
her probate estate. The Nelsons have not shown that Williams cannot make a
submissible case on any of these issues and, therefore, failed to carry their initial burden
under Rule 74.04(c).
18 C. The Remaining Assets 10
The analysis regarding Williams’ standing to challenge the Nelsons’ use of undue
influence to manipulate Reynolds’ other estate planning decisions follows the same path
but reaches a different result. Reynolds gave Sandra joint ownership of the two
American Century brokerage accounts, the remaining KCPCU account, and the UMB
checking account. Like Reynolds’ gift to Sandra of joint ownership of UMB CD #1 and
UMB CD #2, Reynolds’ decisions to give Sandra joint ownership of these remaining
assets was not a “nonprobate transfer,” and it is not governed by section 461.054 and the
other NPT statutes. Instead, joint ownership of the KCPCU and UMB accounts is
governed by section 362.470, and joint ownership of the brokerage accounts is governed
by the common law. See In re Estate of Hayes, 941 S.W.2d 630, 633 (Mo. App. 1997)
(common law and not § 362.470 applies to brokerage accounts because statute is limited
to “banks” and “trust companies”). It makes no practical difference which of these
governs, however, because Reynolds’ decisions are void under any of these schemes to
the extent they resulted from fraud or undue influence.
But, unlike Reynolds’ decision to make Sandra joint owner of UMB CD #1 and
UMB CD #2, or her decision to designate Sandra POD beneficiary on UMB CD #3,
10 Williams abandoned his arguments with respect to these remaining assets when he did not address them in his substitute brief. See Rule 83.03(b) (“material included in the court of appeals brief that is not included in the substitute brief is abandoned”). But, because the Court has stricken Williams’ substitute brief and limited its review to the claims raised in his brief to the court of appeals, it is not clear that his substitute brief should be effective for purposes of a Rule 83.03(b) waiver when the Court has found it ineffective for any other purpose. The Court need not resolve this question, however, because the issues Williams abandoned in his substitute brief (i.e., the issues regarding the “remaining assets”) are ruled against Williams here as they were in the court of appeals. 19 Reynolds’ decision to make Sandra a joint owner of these remaining assets was not her
first and only estate planning decision concerning these assets. Instead, before Reynolds
made Sandra a joint owner of these assets, she already had made Baughman a joint owner
of them. To be clear, Reynolds’ subsequent designation of Sandra as the joint owner – if
valid – was sufficient to divest Baughman of her prior joint ownership interest.
Burkholder ex rel. Burkholder v. Burkholder, 48 S.W.3d 596, 598 (Mo. banc 2001)
(under section 362.470, a “sole contributor can also terminate a joint tenancy by having
the bank or savings association make physical changes on the certificate, or other tangible
representation of the account, with corresponding changes in the institution’s records”).
But, if Reynolds’ gifts to Sandra of joint ownership of these four accounts are void
due to the Nelsons’ undue influence, then those transfers are of no legal effect. Not only
are they not effective to make Sandra a joint owner of these accounts, but they are also
not effective to divest Baughman of her joint ownership interests in the same accounts.
Thus, the Nelsons rely on Crocker, 261 S.W.3d at 727 (prior valid beneficiary deed
survives subsequent void beneficiary deed), and Skidmore v. Back, 512 S.W.2d 223, 231
(Mo. App. 1974) (prior valid joint owner of savings account survives subsequent void
effort to terminate ownership interest), to claim that – even if Williams succeeded in
proving that the Nelsons unduly influenced Reynolds to give Sandra joint ownership of
these four remaining accounts – the accounts would have passed to Baughman and not to
Reynolds’ probate estate. On those assets, the Nelsons are correct. 11 Baughman has
11 Because Crocker and Skidmore concern circumstances in which there is a prior valid declaration of joint ownership or designation of a POD beneficiary, these cases offer no support 20 standing to challenge the Nelsons’ actions with respect to these four remaining accounts,
but Williams does not. Accordingly, the trial court properly dismissed Counts I, II, and
III with respect to those assets.
Conclusion
For the reasons set forth above, the trial court’s dismissal of Williams’ claims
pertaining to the three UMB CDs is vacated, and the case is remanded. With respect to
all claims relating to the KCPCU IRAs, the American Century Accounts, and the UMB
Checking Account, the trial court’s dismissal is affirmed. 12
________________________________ Paul C. Wilson, Judge
Russell, C.J., Breckenridge, Fischer and Teitelman, JJ., concur; Draper, J., dissents in separate opinion filed; Stith, J., concurs in opinion of Draper, J.
for the Nelsons concerning UMB CD #1, UMB CD #2, and UMB CD #3, none of which had such a prior valid declaration or designation. 12 Because the trial court dismissed Counts IV and V on the ground that Williams did not have standing with respect to any of the identified assets, the Court vacates the judgment with regard to these counts because he has standing to bring those claims, at least as they pertain to the three CDs. The Nelsons, as respondents, have not persuaded the Court that any of their other claims for summary judgment on these counts is a sufficient alternative basis on which to affirm the trial court’s judgment. 21 SUPREME COURT OF MISSOURI en banc
ERIC WILLIAMS, ) ) Appellant, ) ) v. ) No. SC93853 ) WILLIAM L. HUBBARD, LIMITED ) ADMINISTRATOR AD LITEM ) OF THE ESTATE OF ) BETTY MARGARET REYNOLDS AND ) KENNETH NELSON AND ) SANDRA K. NELSON, ) HUSBAND AND WIFE, ) ) Respondents. )
DISSENTING OPINION
I respectfully dissent from the principal opinion in that I believe the trial
court did not err in granting summary judgment in favor of Kenneth Nelson
(hereinafter, “Attorney”) and Sandra Nelson (hereinafter, “Nelson”). Following
multiple years of discovery, Eric Williams (hereinafter, “Williams”) failed to
present evidence demonstrating that he had a legally protectable interest in the ownership of Betty Reynolds’ (hereinafter, “Decedent”) accounts that did not pass
through probate. Accordingly, I would affirm the trial court’s judgment.
Substitute briefs
The principal opinion aptly notes that Williams’ substitute brief in this case
is less than a model of clarity and fails to comply with Rule 83.08. However, the
principal opinion then decides, without authority, to dismiss Williams’ substitute
brief and review the claims he made in his court of appeals brief. The principal
opinion’s renegade decision to do so creates a broader review of Williams’ claims
than this Court’s rules provide.
Rule 83.08(b) clearly provides that, “Any material included in the court of
appeals brief that is not included in the substitute brief is abandoned.” Williams’
substitute brief challenges only three UMB Bank certificates of deposit. Williams’
original appellate brief challenges, and the principal opinion addresses, seven
accounts. Clearly, since Williams limited the claims in his substitute brief filed in
this Court to the three UMB Bank certificates of deposit, those are the only
challenged assets properly before this Court; any other claim regarding any other
account has been abandoned. See State v. Davidson, 982 S.W.2d 238, 243 n.2
(Mo. banc 1998); Kauzlarich v. Atchison, Topeka, and Santa Fe Ry. Co., 910
S.W.2d 254, 256 (Mo. banc 1995); State v. Doolittle, 896 S.W.2d 27, 28 n.1 (Mo.
banc 1995).
The principal opinion’s action, while not supported by authority, also
detrimentally affects an opposing party’s position upon the reinstatement of
2 Williams’ court of appeals’ brief. Nelson and Attorney could have varied their
response to the substitute brief. Nelson and Attorney could be prejudiced by this
Court’s reinstatement of the court of appeals’ brief in that they would be precluded
from responding to the exact arguments presented to this Court in Williams’
substitute brief.
In this case, the substitute brief’s points on appeal addressed the court of
appeals’ opinion, which is incorrect as the principal opinion notes. However, the
arguments in the substitute brief were understandable and did not rise to the level
necessitating striking of the brief, especially considering the opposing party was
able to discern those arguments and respond properly. Cf. Kim v. Kim, 431
S.W.3d 524, 526 (Mo. App. W.D. 2014) (dismissing a brief only when the court
could not conduct a review of the case without becoming the party’s advocate);
Executive Bd. of Missouri Baptist Convention v. Windermere Baptist Conference
Center, Inc., 430 S.W.3d 274, 286 (Mo. App. S.D. 2014) (same); and Richard v.
Wells Fargo Bank, N.A., 418 S.W.3d 468, 476 (Mo. App. E.D. 2013) (recognizing
deficiencies in the brief but review was not so hampered that the court would
advocate for the appellant).
Background
The principal opinion notes that Decedent changed her will in 2006. At
that time, the primary change Decedent made to her will was to the beneficiaries.
Her prior will contained three beneficiaries, while the 2006 will designated only
two: Williams and Nelson. Decedent indicated she was doing so because she
3 wanted to replace the beneficiaries with younger people. This change also
increased Williams’ share of her will from one-third to one-half. Not surprisingly,
Williams does not challenge this change to Decedent’s estate planning as being
unduly influenced. Williams asserts any undue influence exercised upon
Decedent began twenty-two days later.
The principal opinion highlights several facts, which while not technically
inaccurate, bias the ultimate outcome of its decision. While neither of these
distinctions directly implicate the issues on appeal, the principal opinion has
highlighted this limited factual background further advocating for and
supplementing Williams’ position, which was not raised before this Court in his
At the time of Decedent’s death in April 2010, the principal opinion asserts
that “her will was of little practical significance because she had few assets that
became part of her probate estate.” (Slip Op. at 2). The principal opinion
insinuates that Decedent’s subsequent changes to her estate intentionally divested
funds and assets away from her probate estate and into non-probate assets and
these changes were an anomaly. Yet, this is contrary to the record. Williams set
forth facts demonstrating that Decedent’s 2000 will contained $5,000 or less of
assets, while there was over $464,000 in accounts with POD or joint tenancy
designations. At the time of her death, Decedent’s will still contained few assets
and there were over $456,000 in nonprobate assets.
4 Further, the principal opinion makes note of the diminished value of a
specific account between April 2000 and April 2010. The legal file does not state
Decedent’s age at the time she died, but all indications were that she was an
elderly woman at the time of her death. Accordingly, it is natural that an account
would diminish in value as she drew money from it to support herself. Given the
recent state of the economy and the low interest rates, many who used to draw
only interest off of financial accounts for expenses had to reach into the capital,
which decreases the amount of the account. There was no indication that
Decedent was gainfully employed after her retirement from the Kansas City Police
Credit Union. There was no indication in the record that any of the accounts were
mismanaged or the funds misappropriated. 1 This is a red-herring meant to cast
Nelson and Attorney’s alleged influence over Decedent in a more sinister light.
Undue Influence
Viewing the record in the light most favorable to the party against whom
judgment was entered, I believe Williams presented evidence to support his
assertion that Attorney and Nelson exercised undue influence over her estate
planning in that she was unduly influenced to close accounts that were subject to
valid joint ownership or POD designations. See Lewis v. Gilmore, 366 S.W.3d
522, 524 (Mo. banc 2012). The undisputed material facts demonstrate that all the
funds for the UMB CDs originated from accounts that Decedent closed. Williams
1 The dissent is perplexed at the principal opinion’s discussion of one account because at the time of her death, an aggregate of Decedent’s accounts that were not subject to probate were valued at more than $456,000. 5 failed to present any evidence that Nelson and Attorney subsequently exerted
undue influence over Decedent to open any account—only that there was undue
influence in the closing of the accounts.
Without authority, the principal opinion decides that “the decision whether
(and to whom) to give joint ownership of the new asset, or whether (and to whom)
to make a POD beneficiary designation on the new asset, is an estate planning
decision.” (Slip Op. at 12). However, this proclamation overlooks the fact that
closing an account with either a POD beneficiary designation or joint ownership
designation equally constitutes an estate planning decision. Logically and
statutorily, divesting a person of an interest or removing a person from an account
is an estate planning decision as it determines who does not receive the proceeds
of that account. See sections 461.054 and 461.037, RSMo 2000. 2
In support of its theory that Decedent was unduly influenced in the opening
of the UMB CDs, the principal opinion states that under section 461.054.1 “the
designation of a POD beneficiary is void if procured through undue influence.”
(Slip Op. at 14). However, the principal opinion has chosen to selectively cite this
statutory provision. Section 461.054.1 provides, “A beneficiary designation or a
revocation of a beneficiary designation that is procured by fraud, duress or undue
influence is void.” (Emphasis added).
As a contingent beneficiary of Decedent’s will, Williams concedes he had
no personal interest in the accounts when Decedent was forced to close them. At
2 All further statutory references herein are to RSMo 2000. 6 the point in time wherein Williams potentially can demonstrate undue influence by
forcing Decedent to close various accounts, those accounts were all subject to
valid joint ownership or POD designations. Williams, as he admits, had no
interest in those accounts. The persons divested of their interests by any alleged
undue influence were Louise Baughman (hereinafter, “Baughman”) and Norma
Lamp (hereinafter, “Lamp”).
According to the facts as presented by Williams, Nelson and Attorney
exercised undue influence over Decedent by forcing her to close the accounts
which designated Baughman and Lamp, thereby revoking Baughman and Lamp’s
status. Nelson and Attorney would have forced Decedent to cancel the estate
planning choice Decedent made of her own free will. See Crocker v. Crocker, 261
S.W.3d 724, 727 (Mo. App. W.D. 2008) (finding that taking summary judgment
allegations as true, creation of a new beneficiary deed was a nullity as undue
influence was exerted to revoke the prior deed); Hammons v. Eisert, 745 S.W.2d
253, 258 (Mo. App. S.D. 1988) (finding the beneficiary of a revocable trust has a
cause of action against a person who exerted undue influence and induces a settlor
to revoke the trust and divert funds). Because Williams presented evidence that
the closing of these accounts was due to undue influence exerted upon Decedent,
Decedent’s revocation of Baughman and Lamp’s beneficiary status should be
declared void. Section 461.054.1. Decedent’s subsequent action of opening new
accounts is of no import in this analysis because at the time Attorney and Nelson
are alleged to have forced her to close those accounts, Decedent’s free choice of to
7 whom to leave her money was overridden; all subsequent matters were tainted by
the initial exercise of undue influence that Williams presented in his response to
Attorney and Nelson’s summary judgment motion. Williams failed to present
genuine issues of material fact to overcome Attorney and Nelson’s summary
judgment motion.
I would affirm the trial court’s judgment.
__________________________ GEORGE W. DRAPER III, JUDGE