Hilsmeier v. Chapman

192 S.W.3d 340, 2006 Ky. LEXIS 143, 2006 WL 1358469
CourtKentucky Supreme Court
DecidedMay 18, 2006
Docket2003-SC-0281-DG, 2003-SC-0303-DG
StatusPublished
Cited by11 cases

This text of 192 S.W.3d 340 (Hilsmeier v. Chapman) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hilsmeier v. Chapman, 192 S.W.3d 340, 2006 Ky. LEXIS 143, 2006 WL 1358469 (Ky. 2006).

Opinion

Opinion of the Court by

Justice JOHNSTONE.

These cases arise from a judgment of the Warren Circuit Court in favor of Ap-pellee, Joe A. Chapman, Administrator of the Estate of J.G. Chapman. In an action against Lucille Hilsmeier and Debbie Allen, Joe A. Chapman (hereinafter Appel-lee) alleged that Allen and Hilsmeier had procured an inter vivos gift from J.G. Chapman (hereinafter Chapman) as a result of either their own undue influence or, alternatively, Chapman’s unsound mind. Following a trial, the jury returned a verdict in favor of the estate. The Court of Appeals affirmed the judgment. For the reasons set forth herein, we reverse.

Allen was a financial advisor employed by A.G. Edwards from 1992 to 1998. During this period, Allen developed a business relationship with Chapman, which later developed into a personal friendship. In February 1996 and again in April 1996, after Chapman was no longer a client of A.G. Edwards, Allen assisted Chapman in placing a large sum of money in an account with Putnam Investments of Providence, Rhode Island. This account is the subject of the present actions.

In 1995, Chapman’s wife passed away and, soon thereafter, Chapman himself was hospitalized due to a hernia. During this period, Chapman’s children — Joe Chapman, James Chapman, and Margaret Chapman Adams — sought appointment of a guardian for their father in Warren District Court. It is undisputed that Chapman was very distressed by this action, and his relationship with his children consequently became strained.

A jury trial concerning the guardianship was conducted in May 1995. A Warren District Court jury ultimately found that Chapman was competent to handle his own financial affairs, but believed that he should not be driving an automobile. Chapman’s children agreed that Allen could serve as a limited guardian for purposes of ensuring that he did not drive.

After the competency hearing, Chapman began liquidating a substantial portion of his assets. He deposited significant sums of money into various accounts between 1995 and 1997, and also sold a valuable farm. Following a bad fall in March 1997, Chapman passed away. He died intestate, and Appellee was appointed administrator of his father’s estate.

Following his appointment, Appellee learned that his father had transferred $198,593.36 into an account owned by Allen’s mother, Lucille Hilsmeier, and held with Putnam Investments. By letter dated April 29, 1996, Chapman had directed Putnam to transfer this sum from his own account into Hilsmeier’s. (Chapman had opened his Putnam account a few months prior.) According to Hilsmeier’s testimony, Chapman had attempted on several occasions to give money directly to Allen as a gift, but she declined. He confided to Hilsmeier that he was going to put money into an account in her name, with the intention that she pass it on to Allen. Thereafter, by a series of transfers conducted by Hilsmeier, the funds were eventually moved into accounts held solely by Allen.

Appellee initiated a lawsuit against Hil-smeier and Allen on behalf of the estate, alleging that Chapman lacked the requisite *343 mental capacity to open the Putnam account, and that Allen had exerted undue influence upon Chapman causing him to open the account and causing him to transfer the funds into Hilsmeier’s account. A Warren Circuit Court jury returned a verdict in the estate’s favor and judgment was entered accordingly. Allen and Hilsmeier appealed, claiming that the trial court improperly received evidence, that they were entitled to a directed verdict, and that the jury was improperly instructed. The Court of Appeals affirmed, and this Court thereafter granted Allen’s and Hilsmeier’s motions for discretionary review.

On appeal, Hilsmeier and Allen again raise three issues, all of which were considered by the Court of Appeals: (1) that the trial court improperly received evidence concerning Chapman’s mental capacity, (2) that the trial court erred in denying their motion for a directed verdict, and (3) that the trial court erred in instructing the jury. Because we conclude that the jury was improperly instructed, we reverse. Furthermore, as this issue is determinative of the matter, we address only the jury instructions.

The issue is preserved by counsels’ objections to the tendered instructions, which were made before the trial court instructed the jury. CR 51(3). The jury was instructed, in relevant part, as follows:

(1) You will find for Joe A. Chapman, Administrator of the Estate of J.G. Chapman, Deceased (the J.G. Chapman Estate) and award the estate the sum of $198,593.36, less any amounts that you believe from the evidence that were returned to J.G. Chapman prior to his death, unless you believe from the evidence that J.G. Chapman, on May 7, 1996, transferred an interest in his Putnam High Yield Trust Account, valued at $198,593.36 to Lucille Hil-smeier’s (Hilsmeier) Putnam High Yield Trust Account with the intention of giving it to Debbie Allen (Allen) and Hilsmeier, in which event you will find for Allen and Hilsmeier.
(2) Even though you might otherwise believe the transaction to be a gift, if you further believe from the evidence that J.G. Chapman was of unsound mind at the time of the transaction or that the gift of the Putnam Investment Account was obtained under undue influence by Allen and/or Hilsmeier, in both or either of which events, you will find for the J.G. Chapman Estate.

The remaining instructions defined the terms “sound mind” and “undue influence.”

Allen and Hilsmeier correctly argue that these instructions are erroneous for two reasons. First, subsection (2) of the instructions fails to provide the jury the opportunity to specify whether its findings of liability were based on undue influence, unsound mind, or both. Because the jury ultimately ruled in favor of Chapman, it presumably believed that the transfer was not a valid gift, though even this conclusion is tenuous as the instructions neither defined the term “gift” nor provided the jury an opportunity to specifically state that it rejected the gift theory. Nevertheless, even assuming that the jury did not find a valid gift, it is unclear whether it believed that the invalid gift was the result of undue influence, unsound mind, or both. Moreover, if the jury had determined that the gift was the result of undue influence, it is impossible to distinguish exactly which defendant is liable, as the instructions only required that the jury believe that Hil-smeier “and/or” Allen exerted undue influence.

*344 The fundamental function of jury instructions is to set forth what the jury must believe from the evidence in order to return a verdict in favor of the party bearing the burden of proof. Webster v. Commonwealth, 508 S.W.2d 33, 36 (Ky.1974). We acknowledge Kentucky has long employed the use of “bare bones” jury instructions that avoid an abundance of detail, providing only a framework of the applicable legal principles. Olfice, Inc. v. Wilkey, 173 S.W.3d 226 (Ky.2005). However, instructions may not be so vague or diluted as to obscure the jury’s findings.

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Cite This Page — Counsel Stack

Bluebook (online)
192 S.W.3d 340, 2006 Ky. LEXIS 143, 2006 WL 1358469, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hilsmeier-v-chapman-ky-2006.