Finks v. Middleton

795 S.E.2d 789, 251 N.C. App. 401, 2016 N.C. App. LEXIS 1355, 2016 WL 7976111
CourtCourt of Appeals of North Carolina
DecidedDecember 30, 2016
DocketCOA16-630
StatusPublished
Cited by2 cases

This text of 795 S.E.2d 789 (Finks v. Middleton) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Finks v. Middleton, 795 S.E.2d 789, 251 N.C. App. 401, 2016 N.C. App. LEXIS 1355, 2016 WL 7976111 (N.C. Ct. App. 2016).

Opinions

ELMORE, Judge.

*401This appeal arises from a bitter sibling dispute between Marshelle Middleton Finks and her brother, Colin Humphrey Middleton, over Marshelle's expected inheritance of their elderly mother Sylvia Middleton's ("Sylvia") estate, which purportedly diminished in value from a net worth of over $800,000.00 in real and personal property to $0.00 in the four years preceding her death. In 2009, Sylvia allegedly *402executed a will (the "2009 Will") naming Colin and Marshelle as co-executors and contemplating a virtually equal estate distribution among her three children: Colin, Marshelle, and Lexa Middleton Herzog. In early 2012, however, Sylvia created an inter vivos revocable trust (the "Sylvia Middleton Revocable Trust"), naming herself initial trustee and Colin successor trustee; executed a new continuing power-of-attorney, naming Colin attorney-in-fact; and executed a new will (the "2012 Will"), naming Colin executor and transferring her entire residuary estate into the Sylvia Middleton Revocable Trust. Over the next few months, Sylvia engaged in a series of transactions conveying multiple parcels of realty by deed to herself as initial trustee of the trust, to a business entity owned and operated by Colin, and to Colin, individually. In 2013, Sylvia was admitted into a nursing home due to advanced dementia. Sylvia died in 2015 with an estate value of $0.00.

Shortly after Sylvia's death, after discovering the changes to her estate plan, Marshelle sued Colin individually, as executor of Sylvia's estate, as trustee of the Sylvia Middleton Revocable Trust, and as Sylvia's attorney-in-fact, for fraud, constructive fraud, conversion, unjust enrichment, and punitive damages. Marshelle alleged that since January 2012, Colin had exploited Sylvia's diminished cognitive ability due to her progressive dementia and had unduly influenced Sylvia to revise her estate plan to benefit Colin to the exclusion of Marshelle and Lexa and to convey multiple parcels of realty to Colin or to entities within Colin's control. Colin moved to dismiss Marshelle's claims for lack of standing, failure to state a claim, and failure to plead with sufficient particularity. Hours before his motions to dismiss were heard, he filed an application to probate the 2012 Will, which was approved that day. Subsequently, Colin submitted the probated 2012 Will for consideration during the hearing on his motions *792to dismiss. The trial court denied Colin's motions to dismiss on all grounds. Colin appeals.

I. Background

Marshelle's complaint generally alleged the following facts. When the parties' father died in 2009, he left Sylvia an estate of approximately $800,000.00 consisting of both real and personal property. Sylvia, an only child, also inherited her parents' considerable estate, consisting of multiple parcels of real property, homes, barns, and cash.

On 2 February 2009, Sylvia executed the 2009 Will. According to its terms, Sylvia "desired that her three children[, Colin, Marshelle, and Lexa,] use the assets and property that they receive from her, in part, for the education and maintenance of their children"; that her "three children *403... receive equal shares of certificates of deposit, IRA accounts and stocks, mutual funds, cash, etc."; that her "residuary estate ... be given to the three children ... equally"; and that Marshelle and Colin would serve as co-executors. Additionally, the 2009 Will devised certain homes and parcels of real property among the three siblings. After executing the 2009 Will, Sylvia began exhibiting noticeable signs of dementia.

Shortly before January 2012, Colin urged Sylvia to revise her estate plan and brought her to a law firm for that purpose. On 9 January 2012, Sylvia created the Sylvia Middleton Revocable Trust, naming herself initial trustee and Colin successor trustee. Additionally, Sylvia executed a new continuing power-of-attorney, naming Colin attorney-in-fact and Colin's wife, Davina, successor attorney-in-fact; a healthcare power-of-attorney; and the 2012 Will, appointing Colin executor and Davina successor executor.

According to its terms, the 2012 Will revoked all prior wills; bequeathed all tangible personal property to Sylvia's residuary estate; and transferred all real and personal property of her residuary estate to the Sylvia Middleton Revocable Trust. Additionally, the 2012 Will directed that Sylvia's "residuary estate ... be added to and administered as a part of the [Sylvia Middleton Revocable] Trust created ... for the benefit of my children, [Colin], [Marshelle], and [Lexa]...."

Over the next few months, several relevant events occurred. On 1 February 2012, Colin formed "Humphrey's Ridge Resort, LLC," a business entity naming Colin as manager and member, and naming Davina, Sylvia, and the Sylvia Middleton Revocable Trust as members. On 14 March 2012, Colin brought Sylvia back to a law firm, where Sylvia executed four quitclaim deeds conveying six parcels of realty: three parcels-134.48, 39.90, and 31.60 acres-were conveyed to Humphrey's Ridge Resort, LLC; two parcels-77.53 and 0.703 acres-were conveyed to Sylvia as initial trustee of the Sylvia Middleton Revocable Trust; and one parcel-21.67 acres-was conveyed to Colin individually. On 5 June 2012, Colin brought Sylvia to a different law firm, where she executed two non-warranty deeds conveying two parcels of realty: one for a parcel of 0.572 acres, conveying an interest of one-half to Marshelle and one-half to Sylvia, as trustee of the Sylvia Middleton Revocable Trust; the other clarifying a clerical error in recording one of the previous quitclaim deeds. On 10 December 2012, Colin brought Sylvia back to the first law firm, where she as trustee of the Sylvia Middleton Revocable Trust executed a quitclaim deed conveying the 77.53-acre parcel to Humphreys Ridge Resort, LLC. In addition to these conveyances, Marshelle alleged that since January 2012, Colin "acquired numerous items of personal *404property that ... were beyond his apparent means, including ... several cars and a new boat."

In April 2013, Colin placed Sylvia into Countryside Manor Nursing Home ("Countryside"). Sylvia's treating doctor at Countryside informed Colin that Sylvia had memory problems and needed to remain admitted due to her progressive dementia. Although Colin never informed Marshelle, Marshelle learned about Sylvia's dementia and admission into Countryside from her cousin. On 18 September 2013, when Marshelle first visited Sylvia at Countryside, Sylvia stated that she could not remember virtually anything that had occurred over the last three years, "and did not know how she got to Countryside, who brought her there and why." On approximately 31 December 2013, Marshelle met with a Countryside doctor who informed her *793

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Bluebook (online)
795 S.E.2d 789, 251 N.C. App. 401, 2016 N.C. App. LEXIS 1355, 2016 WL 7976111, Counsel Stack Legal Research, https://law.counselstack.com/opinion/finks-v-middleton-ncctapp-2016.