STATE OF MAINE SUPERIOR COURT CIVIL ACTION R E -03-001 KNOX, ss. DOCKETUdm08-MAINE Knox. S.S., Clerks Office; SUPERIOR COURT ROBERT S. KEEFER, JR., as Personal Representative APR 13 2005 of the Estate of Robert S. Keefer, Sr., mf;46 4 Plaintiff .,- os' . t. . 5" Q .& $, F"d' ' <%! . *\:++ Q! .;;,,: RECEIVED AND FILED Susan Guillette, Clerk v. as) DECISION AND ORDER (Title to Real Estate is Involved) i s JOHN W. KEEFER, i p',.P-
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Defendant C e ' -
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I. Introduction.
In this case, Robert S. Keefer, Jr. has brought a two-count amended complaint
against his son, John W. Keefer, by which he seeks an order imposing a constructive
trust on property in Camden, titled to h m and his son, for the benefit of his father's
estate.
Specifically, in count I of the amended complaint, the plaintiff1 alleges that h s
father, Robert S. Keefer, Sr. and his son, John W. Keefer, entered into an agreement by
which the latter agreed to hold record title to property in Malibu, California, as the
former's nominee. The plaintiff says the defendant was paid for t h ~ sservice and that
h s father paid for the expenses relating to this property such as taxes, insurance and
maintenance.
Robert S. Keefer, Jr. was originally a plaintiff in his individual capacity and the text of the amended complaint reflects his personal claim. Summary judgment, however, was entered against him in his personal capacity so the only plaintiff left is the Estate of Robert S. Keefer, Sr., for whom Robert S. Keefer, Jr. is the personal representative. Accordingly, this decision and order, when it refers to the plaintiff, it is referring to Robert S. Keefer, Jr. but in his role as the personal representative of his father's estate. Further, according to the plaintiff, the defendant, acting at the direction of the
plaintiff and his father, exchanged the Malibu property for property in Camden, Maine.
Because, however, the proceeds from the sale of the Malibu property were insufficient
to complete the purchase of the Camden property, the plaintiff says he provided the
sums needed and took title to an undivided interest in the Camden property.
Thereafter, the plaintiff alleges that he and h s father instructed the defendant to
transfer record title to the Camden property to the plaintiff, but he refused to do so.
The plaintiff claims that the defendant is not the beneficial owner of the Camden
property and his failure to transfer it to the plaintiff, as personal representative of h s
father's estate, "is wrongful and constitutes a breach of a confidential and fiduciary
relationship." Amended Complaint, 1 9. Accordingly, the plaintiff asks h s court to
impose a constructive trust on the Camden property and order it conveyed to the
plaintiff.
Count I1 of the amended complaint is similar to count I. It alleges that John W.
Keefer holds an 89.27% undivided interest in the Camden property but asks the court to
declare that he holds the property as nominee for Robert S. Keefer, Sr. and order him to
convey it to the estate of Robert S. Keefer, Sr.
For h s part, John W. Keefer presents a counterclaim which was amended at trial.
There he alleges that he and his father cannot resolve their differences concerning the
Camden property and therefore asks the court to partition the property and order its
sale either pursuant to 14 M.R.S.A. 5 6501 or via the common law remedy of equitable
partition.
The case was tried without a jury on March 28, 29, 30 and April 1, 2005, and is
now in order for disposition. 11. Facts.
Based on the testimony adduced, 'and the court's evaluation of the credibility of
the witnesses, and after an examination of the exhibits admitted at trial, the court makes
the following findings of fact:
Robert S. Keefer, Sr. ("Senior" or "Stuart") was the father of Robert S. Keefer, Jr.
("Junior" or "Bob"). The latter was the father of the defendant John W. Keefer ("John")
and his brother, Robert S. Keefer, 111 ("Robbie"). Accordingly, Senior was the
grandfather of John and Robbie.
Junior divorced the mother of his two sons and married Dee Mattox ("Dee" or
"Mattox"). The two moved to California in 1974 after their marriage. There they
bought the property at Broad Beach, Malibu, which is the subject of this litigation. They
also bought other property in California, including other parcels in Malibu, a portion of
an apartment building, and three parcels in Palm Springs.
The Broad Beach property was financed in part by Junior's mother Jean W.
Keefer, and initially titled in Junior's name. In return for her financing, Jean Keefer
received a secured interest in the property in the form of a trust which was secondary to
a first mortgage to a bank. The property was purchased for just under $100,000.
Approximately six months after the Broad Beach property was purchased, or in
1977, Junior conveyed his interest to Dee by quitclaim deed. The ostensible reason for
this transfer was to assist Dee in her career in real estate because at the time she was
pursuing a real estate license. After h s conveyance, only Dee Mattox had title to this
property in Malibu.
Sometime thereafter, Junior purchased an interest in Vive Nuger Hydraulics, a
company which produced hydraulic presses. Ultimately, he became the sole owner of the company, but its success was sporadic and it carried significant debt which was
personally guaranteed by Junior and Dee.
As had been Senior's practice over the years, he assisted Junior with his business
problems. He paid off a large company debt to Gulf and Western, and extended money
to the company for which he was given security liens on its equipment. Eventually the
business was sold, but significant company debts remained for which Junior was
responsible via his personal guarantees. These resulted in liens on the Malibu property.
In the mid-1980's, Junior commenced divorce proceedings against Dee whch
were complicated by their ownership of various properties in California and the liens
and encumbrances against them, particularly the property at Broad Beach, Malibu.
During this time, Senior had been making mortgage payments on this property for his
son and Dee whle he also held liens on the property which he had purchased from
other creditors.
By 1995, Junior was living at the Broad Beach property and Dee had moved out.
Nevertheless, the property was titled to Dee and it was decided that Senior would
foreclose his mortgage and other interests on the property, including deeds of trust, as a
tactic in the pending divorce in order to recover the property for the Keefer family, and
to terminate Dee's interest in it. Attorney Thomas Cairns, Jr., who was Junior's divorce
lawyer, also represented Senior in tlus cooperative effort between father and son to gain
advantage for the latter in h s domestic litigation. Indeed, Cairns assisted Senior in
acquiring the notes secured by the Broad Beach property as h s client wanted the
divorce to be over and was determined to enforce h s rights as a beneficiary under
several deeds of trust or as a mortgagee.
As a result of Cairns' and Senior's efforts, Dee sought to enjoin Senior's
foreclosure action and he became a party to the divorce proceedings. As a result, Senior did not complete the foreclosure process. Nevertheless, Senior's participation in the
divorce case served as a catalyst to effectuate a settlement of all three parties' interests,
Senior's, Junior's and Dee's.
Originally, the settlement plan as to the Broad Beach property would have had
Dee convey the property to Senior in lieu of foreclosure but Senior did not want h s
name on the title because of a previous incident in which a lien was placed on h s
Florida property by the IRS who had confused h s name with Junior's.
Consideration was also given to having the property conveyed to the Jean W.
Keefer Trust12but that idea, too, was rejected.
As a h r d plan, Senior wanted to have John and/or Robbie go on the title to the
Broad Beach property. Although it is unclear from the testimony which grandson was
approached first, Robbie rejected the opportunity, but John accepted it. In any case,
Senior and Cairns decided that the former or his nominee, namely John, would be the
party named on the deed to the Broad Beach property as part of the settlement between
Senior and Dee. Accordingly, Cairns spoke with John and the latter agreed that he
would serve in the capacity of nominee for h s grandfather and father when the Broad
Beach property was transferred and in order to consummate the divorce settlement. At
the time, John's only concern was the potential of any adverse tax consequences to him
of this conveyance.
After John agreed to serve as Senior's nominee, Junior told him that Senior
would pay the taxes and insurance on the property and any mortgage payments. He
also told him he would be compensated for holding the property for Senior.
Jean Keefer had died before these events in 1995. These discussions and agreements took place between November of 1995 and
February of 1996. In the meantime, Junior had moved to Palm Beach, Florida, whle h s
father lived in Vero Beach, Florida, approximately 80 miles away.
On February 14 and February 20,1996, Senior and Dee, respectively, signed their
settlement agreement with the latter date being its effective date. The agreement recited
that it was made concurrently with the separate marital agreement between Junior and
Dee. It also provided that, based upon the divorce settlement, "it is now appropriate
for Mattox to return the Broad Beach property to Keefer, Sr., or his nominee, and ...
Mattox agrees to do so as set forth hereinafter." 131.'s exh. 13, p. 2, ¶ 4.
The conveyance by Mattox of the Broad Beach property, however, was
conditioned on the execution of the divorce settlement and Junior's obligation to pay
Mattox $140,000 as part of the distribution of the couple's property, a sum whch was
paid by Senior.
As Senior had desired, however, he would maintain liens on the property as he
wished to control it. The property would also remain encumbered by a lien held by
Coast Federal Trust.
Finally, the agreement contained a paragraph which recited that, "This
Agreement is entire and includes all representations of every kind of (sic) nature made
by each of the parties to the other. This Agreement may not be altered, amended or
modified except by an instrument in writing executed by both parties hereto." Pl.'s exh.
13, p. 4, 9 10. The divorce agreement contained an identical provision.
On February 20, 1996, the same day as the effective date of Mattox's agreement
with Senior, and consistent with its terms, Dee conveyed the Malibu property to John.
The deed accomplishing the transfer is stamped, "Bonafide Gift" and bears handwriting
whch recites, "No consideration interfamily transfer." T h s deed, whch was prepared by attorney Cairns, also has an instruction on this form to mail the deed when it is
recorded and the tax statement to R. Stuart Keefer, Sr. at his address in Vero Beach.
Accordingly, John never got the orignal deed.
The result of h s settlement and conveyance was to have the title to the Malibu
property go to John. This was consistent with Senior's intent expressed to h s attorney
that the property would be held for the benefit of Junior who had returned to live at the
Malibu house in May of 1996, and that John would serve as "a legal titleholder or really
a straw man.. . to hold legal title to the property." Cairns dep., p. 87, lines 12-18.
As part of the divorce settlement, in addition to the Malibu property, Dee also
received the couple's property in Santa Monica and Junior received their property in
Palm Springs.
In July of 1996, a hearing on the divorce petition was conducted and the divorce
judgment, whch incorporated the parties' agreement, was filed on August 12,1996.
That autumn, consistent with Senior's wishes, John and Junior listed the Malibu
property for sale with a broker selected by Junior. John signed the original listing
agreement, but when that listing agreement expired, Junior renewed it by signing
John's name to it. The property was listed for $725,000.
On January 27, 1997, Junior quitclaimed h s interest in the Malibu property to
John. He did this because the title company requested it and because it was important
to keep Junior's name off t h s property because of his financial troubles. According to
Junior, h s was not a g f t to John because he had no interest to give because he had
conveyed all his interest in the property to Dee years before. Nevertheless, the deed
bears the same stamp as had the deed from Dee to John, namely, "Bonafide gift" and
"No consideration / Interfamily." On March 5, 1997, the deeds from Dee to John, and from Junior to John, were
recorded at the Recorder's Office in Los Angeles.
Although later John provided labor and effort to improve the Malibu property,
he never paid Senior, Junior or Dee for his interest in this property.
On August 13, 1997, Junior filed for Chapter 7 bankruptcy projection. He did not
list the Malibu property as an asset, but did list h s property in Palm Springs and the
lien held by Senior on this property.
On November 22, 1997, Senior wrote to John telling him to correspond with
Coast Federal Bank, which held a mortgage on the Malibu property, and tell the bank
that he, John, is the owner and that all correspondence should be directed to h m .
Senior also wrote that he has made the mortgage payments in 1997, will make the
payment for December, and "that I am willing to pay the mortgage interest, up to the
date the property is sold but not more than six months." Def.'s exh. 30.
John interprets this letter to be advice from h s grandfather that he, John, needs
to be prepared to take over the mortgage and will be tahng responsibility for the
property. In the court's view, however, t h ~ sletter reflects Senior's impatience with
holding and paying for h s property and that he wanted it sold.
John did not sell the property within six months as instructed, and Senior
continued to service the mortgage and paid all the taxes.
LTltimately, Junior was discharged in bankruptcy and Senior reiterated h s wish
that the Malibu property be sold.
Sometime in late 1999 or early 2000, it was suggested to Junior that the Malibu
property could be exchanged for other property tax free via section 1031 of the Internal
Revenue Code. Accordingly, Junior, who believed the Malibu property would
ultimately become h s by a transfer from John, began loolung for property on the East Coast for whch he could exchange the Malibu property. He found what he was
looking for in Carnden in a house owned by Richard and Denise Gilliam and located on
Chestnut Street in that town.
According to Junior, John was cool to this idea because he did not favor Maine
but agreed to this like-lund exchange for the property in Malibu. John testified that he
agreed to the exchange because he was living in Santa Monica and would not lose
anything by h s transaction because it required an exchange for property of equal or
greater value.
Thus, once a buyer for the Malibu property had been secured, the proceeds from
the sale of that property were used to ~urchasethe Carnden property. Because,
however, this sum was inadequate to fully meet the price of the Camden property,
Junior contributed $100,000 to its purchase. As a result, the title to the Maine property
shows that John has an 89.27% interest, reflecting the sum netted from the Malibu sale
invested in the property, and Junior has a 10.73% interest, reflecting h s $100,000
contribution to the property's purchase.
Before the like-kind exchange occurred, Senior caused the liens and the debts
associated with the Malibu property to be discharged.
Since the purchase of the Camden property, Junior and h s female companion
have made significant improvements in the property. They have also lived there from
June to November each year since 2001. John has made no investments in this property
and has never visited it. According to Junior, the fair market value of t h s property
today is $1.3 to $1.5 million.
At a time near to the like-kind exchange or thereafter, John approached Junior
and asked h m to speak with Senior about loaning h m $40,000 wluch he needed for the property in Santa Monica. Junior instructed h m to write Senior directly and offered to
discuss the letter with him.
During this same time period, Junior asked John to transfer his interest in the
Camden property to him and would pay h m for doing so. John replied that Junior
owed him money for talung on the Malibu property and that he needed it to purchase a
house. Senior and Junior did discuss John's letter and Senior replied on August 5,2000.
There he told his grandson that he would be willing to give him $20,000 which would
be deducted from h s inheritance and wrote, "I want you to take the necessary steps to
transfer the Malibu property to your father . . . The title should bear the name of your
father as the owner." Pl.'s exh. 63.3
John did not obey these instructions and in an apparent effort to satisfy John's
demands for the promised compensation to hold the Malibu property and to encourage
cooperation with the proposed transfer of the Camden property, Junior gave h m
$10,000 in April, 2001 and the same sum in December, 2001.
During this time, John continued to decline to effectuate a transfer of h s interests
in the Maine property, expressing concerns for the tax consequences of such a
transaction.
Apparently Senior learned of his grandson's lack of cooperation and wrote h m a
typed letter on May 23, 2002. The letter asks that John transfer the Maine property to
the Jean W. Keefer Trust and telling h m that the Maine property was never intended as
a gift to him.
At trial, John disputed the authenticity of this letter suggesting that Junior had it prepared and caused his grandfather to sign it. The court rejects this contention and concludes that the letter was authored and signed by Senior. In this regard, the court finds the deposition testimony of Gigi Beasley that she assisted Senior with this letter to be credible and that his mistaken reference to the Malibu property instead of the Maine property was the likely product of a man who was then 97 years old. John told Junior that he chd not h n k Senior had written h s letter and Junior
told Senior h s . As an apparent answer to h s concern, Senior sent John a handwritten
letter on June 3, 2002, telling him, in part, "I am aslung you now to transfer the Maine
property to the J.W.K. Trust." Pl.'s exh. 65.
John visited h s grandfather each year at either his college spring break or on the
latter's birthday including the years 1996 through 2002. Robbie visited as often as twice
a year when he was living in Florida and later once a year at Senior's birthday.
According to Robbie, he and John were treated alike by Senior and each of them
got $10,000 each Christmas for four Christmases, but this was reduced to $5,000 in 2001
and then nothing in 2002.
Pursuant to his estate plan, Senior had established a trust which was to make
cash gifts on h s death. By an amendment to that trust, dated April 28, 1998, Robbie,
John and his attendant, Gigi Beasley, were to be given $50,000 each. On March 17,2003,
Senior amended h s trust again and eliminated the g f t provisions for John and Robbie.
Senior died on May 10, 2003. Junior is his sole heir, but the estate has been left
"open" pending resolution of h s case.
Even though Senior relied on the assistance of Junior in his financial affairs
during the last year of h s life, the court finds the testimony of Gigi Beasley and Todd
Fennell, Senior's estate planning attorney, to- be persuasive so that there is no reason to
doubt Senior's competence to oversee h s affairs and the plan for the disposition of h s
property before and after his death. Moreover, the court has no basis to find that Junior
exercised undue influence over h s father's actions and decision-malung in this regard.
From all this, the court finds that the plaintiff's version of what transpired among
the parties is the correct one. That is, Senior arranged to implement a divorce settlement between Junior and Dee w h c h included h s settlement with her resulting in her conveyance of the Malibu property to him or his n ~ m i n e e .Senior ~ selected John to
be his nominee and the latter acceded to Senior's and Junior's plans for the property
and was compensated for doing so. Once he had title, however, he did not obey
Senior's instructions as his principal to convey either the Malibu or Camden properties
to Junior or the Jean W. Keefer Trust.
The court's factfinding supports h s conclusion as do the following inferences
whch the court has drawn from these findings:
The court finds the testimony of attorney Cairns credible that Senior's intent in
entering into the settlement agreement was that he would "take" the property but that
John would be his nominee. The court also accepts as true his testimony that he called
John about this plan and the latter agreed to serve in the capacity contemplated.
Further, Cairns' role in drafting the deed from Mattox to John including, it may be
inferred, the provision that the original was to be sent to Senior, supports the conclusion
that h s was a transaction orchestrated by Senior as he would have it carried out.
John also did not treat the Malibu property as though it were his. True, he lived
in the property for a while and did provide labor for its improvements. But, for most of
the time after he was deeded this property he lived in Santa Monica where he was
worlung to buy another house. In the meantime, his father lived in the Malibu house
and treated it as his own.
John also spent no money on the Malibu property and accepted Senior's
payment of all overhead expenses. Moreover, the fact that John wanted to be paid and
was compensated for "holding" the Malibu property confirms that he understood that
he was not its true owner.
4 The court applies here the same definition of "nominee" as it did in its Decision and Order of June 25, 2004, pp. 11-12, when acting on the defendant's motion for summary judgment. Moreover, the fact that John wanted money from Senior and Junior to buy or
improve property in Santa Monica shows that his interest was there and not in
cultivating or using property in Malibu, even though, ostensibly, he owned it. Indeed,
if John had believed he owned the Malibu property as an outright gift from Dee or
Senior, he could have sold it and grossed approximately $700,000 which would have
eliminated any need to ask for much smaller sums from Senior and Junior to
accommodate h s property plans in Santa Monica. Instead, because he knew he was
Senior's nominee, he knew he was not free to sell the Malibu property and retain the
proceeds. Rather, he was instructed to sell the property and initially cooperated in t h s
endeavor with Senior and Junior as to the sale of the Malibu property.
John's role in the like-lund exchange for the Camden property also supports the
conclusion that he understood that he was merely a straw man as to both properties.
He had no role in selecting the property for which the Malibu property would be
exchanged. Because he "owned" the Malibu property, not only could he have vetoed
h s transaction, had he agreed to it he would have had full authority to select the new
property as he would be its owner with all the privileges and responsibilities that
accompany such a transaction. Instead, even though he had little interest in Maine, and
had not seen the Camden property, he agreed to the sale of "his" property in California
and the acceptance of a diluted interest in property across the country. Indeed, he
understood that Maine is where Junior wanted to be and acceded, albeit grudgingly, in
h s transaction because he knew he was not the true owner of the Malibu property and
was duty-bound to follow instructions as to its disposition. Thus, John's explanation
that he was satisfied with the like-lund exchange because he would be getting property
of equal or greater value rings hollow. Whle all three men in this dispute are intelligent, capable people, there is no
doubt that Senior was the dominant player and that he favored his son in every
instance. He was a man of considerable business acumen and wealth. He "bailed out"
Junior from his business errors and arranged to pay off his multiple debts while
assisting in the financing of his lifestyle. Whle some parents might grow weary or
bitter over the lack of care shown by a child for financial management, Senior
advocated for Junior up until the last year of his life and left h s estate to him.
By contrast, whle Senior was generous to his grandsons, when he learned that
John was disobeying h s instructions as to the transfer of the Malibu and Maine
properties, he reduced and then eliminated any bequests to John, and gave similar
treatment to Robbie who had declined to assist in that portion of the settlement
agreement with Dee whch would have him hold the Malibu property.
All of this shows that Senior intended to benefit Junior in these affairs and that
the MalibuICamden property was eventually to become Junior's either by John
acceding to Senior's request to convey it to him or its return to Senior or his wife's trust
whch would result in Junior's obtaining the property by inheritance.
The evidence, as here interpreted, also supports the conclusion that John knew
he was to serve as Senior's nominee in the disposition of the Malibul Maine properties
and treated the transactions and the properties accordingly except when it came time to
transfer the properties as their principal directed.
111. Law.
A. Application of Parole Evidence Rule.
Via his motion in limine and pretrial memorandum, John cites the parole
evidence rule as a basis to exclude from the court's consideration any agreement
between Senior and John as to the latter serving as Senior's nominee to take title to the Malibu property. In this regard, it is the court's understanding that the defendant
objects to the testimony of Thomas Cairns and various documents whch would show
that Senior intended that John serve in this capacity and that the latter agreed to t h s
role.
Assuming that the parole evidence applies in t h s case, the defendant is correct
that California law would apply as it was there that the agreement in question was
entered into over land situated in that State. While California undoubtedly benefits
from a rich body of law on t h s topic, the defendant has cited only one case from that
State concerning parole evidence. See Esbensen v. Useware International, Inc., et al., 11
Cap. App. 4' 631,637 (1992).
Whle that case is useful, the court will decline to undertake a thorough research
of California law and will, instead, rely on the RESTATEMENT (SECOND) OF CONTRACTS for
guidance because it is nationally recognized as an authoritative source on contract law
including, it may be presumed, the parole evidence rule.
To begin with, the court views the written agreement between Senior and Dee
and Dee and Junior and the deed from Dee to John as one, unitary agreement. That is
because the agreement between Senior and Dee recites that it is concurrently executed
with the divorce settlement agreement between Dee and Junior and it is plain that the
two are related and consistent with each other. By similar reasoning, the deed from Dee
to John was also executed on this occasion and was unquestionably designed to carry
out the other two agreements. That is, Junior and Dee agreed that the Malibu property
would be set aside to her as her separate property and the related, concurrent
agreement between her and Senior provided that she would convey that property to
him "or his nominee." These agreements were fulfilled when, consistent with their
terms, Dee, as titleholder to the Malibu property by virtue of the 1977 quitclaim deed and the divorce settlement, conveyed the property to Senior or his nominee. No one
has suggested that Dee violated her covenants with Senior or Junior, so the only
possible conclusion from the face of these three documents is that Dee conveyed the
property to Senior's nominee, John Keefer. That is because, as noted, the property was
not conveyed to Senior, so that it must be concluded that it was conveyed to John as his
nominee. That being the logcal and factual construction of these interrelated
documents, there is no ambiguity in them and John must be seen as Senior's nominee.
Accordingly, there would be no need to turn to evidence outside these agreements to
establish that John, as Dee's grantee to the Malibu property, was serving as h s
grandfather's nominee in talung title to that property.
Assuming, however, that h s construction of the parties' agreements needs
expansion or explanation, we may turn to the parole evidence rule. The rule, as
expressed by the Restatement, is recited, in part, as follows:
(1) A bindng integrated agreement discharges prior agreements to the extent that it is inconsistent with them. (2) A binding completely integrated agreement discharges prior agreements to the extent that they are within its scope.
Applying these two precepts to this case, the court, as discussed infra, would
conclude that the three agreements cited are one binding and completely integrated
agreement. Accordingly, they would discharge any other prior agreement within its
scope. However, because the only other prior agreement within its scope is the oral
agreement between Cairns, Senior's attorney, and John to serve as Senior's nominee,
whch is fully consistent with the integrated agreement, there is no need to "discharge"
that agreement. If, however, the court has erred in this interpretation of this unitary agreement
and it is not completely integrated, it would only discharge an agreement that is
inconsistent with its terms. Because the court has concluded that the agreement
between Senior's attorney and John is not inconsistent with the terms of the agreement,
then it is not discharged and may be considered part of this agreement.
If this second interpretation is correct, then, as the Restatement teaches, "[tlhe
existence of the prior agreement [between Senior's attorney and John] may be a
circumstance which sheds light on the meaning of the integrated agreement, but the
integrated agreement must be given a meaning to which its language is reasonably
susceptible when read in light of all the circumstances." Id. comment b. So, because the
agreement between Senior's representative and John sheds light on and does not detract
from the meaning of the integrated agreement, it is a circumstance w h c h may be
considered in the interpretation of the latter agreement.
Said differently, if the oral agreement between Cairns and John contradicted the
partially integrated agreement, it would be excluded under the rule. See id. 5 209,
illustration 3. And, if the contract is fully integrated, the oral agreement is also
excluded. Id. However, because the court has found that the contract is completely
integrated and can only be interpreted as designating John as Senior's nominee on the
deed, Cairns' testimony as to the agreement with John is excluded under the rule but is
unnecessary to prove that he is the nominee. But, as discussed infra, if the agreement is
partially integrated because the agreement between Cairns and John is not inconsistent
with its terms, it may be considered under the parole evidence rule.
In the end, then, the court concludes that the construction of the contract, or the
evidence extrinsic to it, shows that John was Senior's nominee and held the Malibu
property for h m and the parole evidence does not interfere with that conclusion. Before leaving h s topic, it is worth addressing the defendant's parole evidence
argument as to the other two deeds. First, the quitclaim deed from Junior to John has
little bearing in this debate. It is a fully integrated contract in which Junior surrendered
any claims he personally had to the Malibu property. He had already done so 20 years
earlier and neither document or anything said about them would deprive h m of his
standing to recover the property on behalf of his father's estate.
A similar conclusion can be made as to the Camden like-lund exchange
transaction. Because the court here concludes that the parole evidence rule does not
serve to interfere with the conclusion that John was Senior's nominee in holding the
Malibu property, he therefore had the same role vis-a-vis the Camden property when
he exchanged the former for the latter. That is to say, when John exchanged the Malibu
property in April of 2000, he did so as Senior's nominee and his role as to his principal
was not extinguished. That he participated in this transaction at Junior's behest does
not change this conclusion.
Nor would the parole evidence rule bar this finding. Assuming that the like-
lund exchange transaction is fully integrated, although it does not so recite, John's role
in this matter, as noted, was as his grandfather's nominee and it is unnecessary to
inquire further as to this status. If, however, this agreement was not completely
integrated, John's oral agreement to participate does not contradict the agreement and
by virtue of the rationale offered herein, is admissible to establish his role in h s
In sum, the application of the parole evidence rule does not serve to vitiate John's
role as Senior's nominee in the transactions at issue. B. Constructive Trust.
The defendant argues that even if the factual disputes are resolved in the
plaintiff's favor, the latter cannot establish by clear and convincing evidence the breach
of a confidential relationshp whch might yield the imposition of a constructive trust.
For h s proposition, he cites the court to the case of Estate of Campbell, 1997 ME
212, ql 8; 704 A.2d 329, 331, where the Law Court held that a claim for a constructive
trust may be maintained "on the independent basis of an abuse of a confidential
relationshp.. ." Id. (emphasis supplied). In order to show the abuse of a confidential
relationship, the party seeking the imposition of the trust must show the actual placing
of trust and confidence by one party in another "and a great disparity of position and
influence between the parties to the relation." Id. (quoting Xuebsamen v. Maddocks, 340
A.2d 31,35 (Me. 1975) (emphasis supplied)).
While the existence of a family relationshp may suffice to establish a confidential
relationship, id., "a finding of great disparity of position and influence remains a
necessary prerequisite to a determination that a confidential relationshp exists, even
where the parties are related." Estate of Sylvester v. Benjamin, 2001 ME 48, 'J 8, 767 A.2d
297, 300. Moreover, a constructive trust may be imposed when title to property is
acquired by fraud, duress or undue influence. Gaulin v. Jones, 481 A.2d 166, 168 (Me.
1984).
The court concurs with the defendant that the plaintiff has not established that
John obtained title to the Malibu or Camden properties by virtue of great disparity of
position and influence between him and his grandfather. Indeed, the evidence would
show that it was Senior who held the dominant position in the family and had sway
over its members, including John. It is also true that there is no evidence of duress or undue influence imposed by John on Senior. Accordingly, a constructive trust may not
be imposed on these bases.
The alternative basis for a f i n l n g of a constructive trust exists where, in making the conveyance, the grantor trusts the grantee to hold the property for the benefit of the grantor or a h r d party. In such situations, the grantee abuses the resulting fiduciary relationship if he fails to perform, and he will then be treated by the court as a constructive trustee for the beneficiary.
Id. at 169.
So, in a situation where the transferor acts in "reliance on a relationshp of trust
whch may be founded on moral, social, or personal, as well as legal duties," id., and
that relationship is abused by the wrongful disposition of the property, a constructive
trust may be imposed. In such a case, which is independent of a constructive trust
based on the breach of a confidential relationship, the constructive trust "arises by
operation of equity without regard to the parties' intentions. Its objective is to prevent
unjust enrichment." Estate of Campbell, 1997 ME 212, ¶ 5, 704 A.2d at 331 (quoting
Horton & McGehee, Maine Civil Remedies 5 9-3 at 221 (2"dEd. 1996)).
These principles were applied in the case of Baizley v. Baizlq, 1999 ME 115, 734
A.2d 1117 which bears some resemblance to the case at bar in that there the defendant
promised the grantor of property conveyed to h m that he would share the property
with h s siblings, but then reneged. In that case there was no evidence of disparity of
position and influence or of duress, but the Law Court found that a constructive trust
could be imposed based on these facts whch amount to a constructive fraud.
Whle the facts in the case at bar differ from those in Baizley and Gaulin, they bear
the same essential elements. That is, the plaintiff has proven by clear and convincing
evidence that a party, Senior, caused property over whch he had control to be
conveyed to another, John, based on the latter's agreement to serve as h s nominee, but the latter reneged on his agreement and has sought to keep the property or its substitute
for himself whle retaining the other benefits of that agreement. The court finds, also by
the requisite standard of proof, that this amounts to a constructive fraud as it abused a
relationship between grandson and grandfather which was founded on "moral, social,
personal, ... [or] legal duties." Gaulin, 481 A.2d at 169. Accordingly, the court also
concludes that h s has resulted in unjust enrichment to John who retained the property
although he was a fiduciary to h s grandfather which must be remedied by the
imposition of a constructive trust.
Because the court so concludes, and because the resolution of the other legal
issues in h s case at trial and in this decision support a disposition in favor of the
plaintiff, judgment will be entered for Senior's estate as hereinafter expressed.
Thus, the court concludes that a constructive trust must be imposed on John's
89.27% interest in the property in Camden in favor of the Estate of Robert S. Keefer, Sr.
for which he has held that property as the nominee of the deceased. As articulated by
the plaintiff in h s proposed abstract, Junior's interest of 10.73% in this property is
unaffected by this decision.
V. Conclusion.
For the reasons stated herein, the clerk is DIRECTED to enter judgment for the
plaintiff as follows:
Count I. A constructive trust is impressed on the 89.27% undivided interest of the defendant, John W. Keefer, in the property described in attachment A hereto for the benefit of the plaintiff, the Estate of Robert S. Keefer, Sr.
The interest of Robert S. Keefer, Jr. in said property is unaffected by this judgment.
Count 11. The court FINDS and DECLARES that defendant John W. Keefer is holding the property in Camden, Maine, as more particularly described in attachment A hereto, as nominee for the Estate of Robert W. Keefer, Sr., the plaintiff herein.
Judgment for the plaintiff is entered on the defendant's counterclaim.
So ordered.
V Justice, Superior Court ATTACHMENT A
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E x c e p t i n g t h e r e f r o m t h e p r e m i s e s conveyed b y Helen T a y l o r t o J o s e p h i n e H . J i n n o b y d e e d d a t e d May 15, 1947, and r e c o r d e d a t t h e s a i d R e g i s t r y i n Book 296, Page 5 0 9 . 04/14/2005 M A I N E J L I D I C I A L INFORMATION SYSTEM ebridges KNOX COUNTY SUPERIOR COURT mjxxi013 PAGE A - ATTORNEY BY CASE V I E W ROBERT 5 KEEFER J R V . JOHN W KEEFER UTN:AOCSsr - 2 0 0 3 - 0 0 1 1 5 0 0 CASE #:ROCSC-RE-2003-00081 ................................................................................ SEL VD REPRESENTATION TYPE DATE 01 0 0 0 0 0 0 3 2 3 2 ATTORNEY:PERKINS, D A V I D ADDR:30 M I L K STREET PO BOX 449 PORTLAND ME 0 4 1 1 2 - 0 4 4 9 F F0R:JOHN W KEEFER DEF RTND 02/26/2003
0 2 0 0 0 0 0 0 0 4 3 7 ATTORNEY:WATKINSON, RANDAL ADDR:10 MASONIC S T PO BOX 2 4 8 ROCKLAND ME 0 4 8 4 1 - 0 2 4 8 F F0R:ROBERT S KEEFER, J R PL RTND 02/05/2003
E n t e r O p t i o n : A=Add, B+Sel=Browse, M=More, R+Sel=RltnEdit:
S e l e c t t h e E X I T KEY f o r p a g e s e l e c t i o n l i n e .